Slow, steady improvements have occurred across the Virginia housing market through the past two years. Some of the state’s areas saw home sales rise and fall tremendously as the market tried to recover from the worst real estate collapse since the Great Depression. It was only in 2013 when the state finally began to benefit after two straight months during which housing market predictions increased along with the official numbers. That moment can now be considered the turning point following numerous difficult times that affected the entire state as a whole. You can check out the defining moments in the 2013 and 2012 Virginia housing markets in our report.
Housing market predictions alone cannot guarantee proportional and certified growth in a state’s markets. Instead, the state’s government policy standards and preoccupation for an equal treatment of cities and counties is to thank for this growth. Consumer confidence began growing again and, consequently, home equity developed which further attracted investors. Some areas of Virginia definitely rose faster than others.
Influencing Factors of the 2015 Virginia Housing Market
- Housing market predictions currently appear quite positive for the Commonwealth of Virginia. The state market currently holds a median home value of $231,000 and is experiencing an uptick of 1.7 percent over the past year according to Zillow. We predict another 1.1 percent increase within this year. On average, most properties for sale spend 118 days on the market in Virginia.
- Compared to a national value of foreclosures (3.0 homes per every 10,000), Virginia has 1.5 foreclosures. Compared to the national value of delinquent mortgages (6.3 percent), Virginia stands at 3.8 percent. Unfortunately, 18.5 percent of Virginia homeowners are underwater on their mortgage.
- The last 12 months show an appreciation rate of 4.05 percent according to our research. The last quarter pushed this rate up by 1.04 percent.
- Virginia Association of Realtors showed relevant data from February 2015 comparing the same period of the previous year. The results of the Virginia Monthly Sales Report show that both the number of sales and the median sales price began rising back in February as the market warmed up in spring. Historically, the rhythm is remarkably slower than other similar intervals. From January 2015 to February 2015, there was a modest increase of only 3%. After the turmoil of the financial crisis, any increase was considered a win. Even if median sales prices only rose by 2.5 percent between January and February, that number is still an encouraging 5.7 percent annual rise.
- According to the same report cited above, Virginia’s unemployment rate gradually decreased. These numbers signal a healthier economy. Rising interest rates reflect a stronger U.S. economy. This naturally translates to good news for the real estate sector as well. There is reason to believe that the entire year (particularly summertime) will bring good news to the Virginia housing market (especially if buyers feel motivated to take advantage of the already well known historically low rates before mortgage interest rates begin rising).
Let’s evaluate the results after browsing for “housing market Northern Virginia”. This year, it seems as if increasing listings attracted potential buyers in the area. That, however, does not mean at all that traffic would mirror sales, which did not even happen. Homes sit on the market even longer than one year ago, in spite of this big listing jump. It seems that at the beginning of the year, there were not enough listings available, which generated several contract situations which drove up prices. By the time spring sellers got to make an ad and put their property on the market, the prices were not able to hold, apparently. That simply prolonged the period houses remain on the market and also increased inventory, according to realtors. October 2014 met a 40 percent higher inventory compared to 2013, so Virginia Association of Realtors. Due to an extension of time spent on the market, the elevation was increased from 35 to 53 compared to the previous year. Closed sales decreased by 6 percent. However, according to data summarized by the Northern Virginia Association of Realtors, between March 2014 and March 2015, the median sales price in Norther Virginia escalated with 4.4 percent to $475,000. With around 1,500 properties sold, Norther Virginia marks a 13.84 percent increase in terms of closed sales. Analysts remarked that properties above $1 million stay longer on the market and need significant price dropping before sellers could actually seal the deal.
Examining the Virginia Beach Housing Market
As for Virginia Beach housing market, let us start with some figures. The median house value is $244,900, according to Zillow, with a rise of 1.1 percent compared to the previous year and a predicted 1.8 percent for 2015. 3.7 homes per 10,000 are foreclosed, greater than the average Virginia Beach Metro value of 1.1 and even higher than the rest of the nation’s value of 3.0. A quarter of Virginia Beach homeowners are underwater on their mortgage and the percent of delinquent mortgages is 3.5 percent. These figures might seem pessimistic, but looking at the units sold, there was an increase to 541 during the third month of the year compared to 411 in February, and a rise of 16 percent compared to March 2014. We have good news also in regards to the total number of homes available this month, which elevated by 5 percent. If it weren’t for the long waiting time on the market, prospects could totally indicate a firm expectation that the local real estate market is going to develop positively. The Center For Housing Research Virginia Tech put together the “Virginia Beach Housing Needs Assessment and Market Analysis 2000-2020”, where some pertinent realities are underlined. Affordable housing is decreasing, as housing prices escalated quickly. It seems there are virtually no houses below $50,000 and only few under $100,000. First-time home buyers are competing with repeat buyers or home buyers with higher incomes. They could also opt for a choice on the rental market, where prices are obviously proportional to the area – and by that we do not mean low.
The Virginia Beach housing market is facing another problem rooted in a socio-demographic issue: civilian jobs started becoming available, but affordable housing for workers with low and modest income is harder and harder to find. That means that the housing demand does not meet the housing market and some low wage workers need to work two jobs to afford housing in Virginia Beach. Perhaps that is why commuting out of Virginia Beach is decreasing.
Fairfax County Housing Market
We cannot forget to make a brief analysis of the Fairfax county housing market for our overall housing market predictions for Virginia. Starting off with the figures, the median home value currently stands at $499,400, with a 0.8 percent elevation versus last year. Figures seem encouraging on the matter of foreclosure: 0.9 homes are foreclosed in Fairfax, significantly lower than the national average of 3.0 per 10,000. The percent of delinquent mortgages is 2.3, while 9.4 percent of all homeowners are underwater, which is far better than the majority of the surroundings. Perhaps Fairfax presents a more stable housing market because of the high budgets pointed at the properties worth several millions of dollars.
The local authorities are also preoccupied with long term supportive services, which means that among the Priorities for the Consolidated Community Funding Pool there are some goals to attain in the next years, like obtaining stable long-term housing at an affordable price.
A trend noticed in Richmond underlines the orientation for urbanization among the ones who afford living in apartments in major metropolitan areas, among both buyers and renters. Realtors keep a moderate opinion and still believe there is value in the suburban markets.
The government of Virginia has been repeatedly ranked most effective and unique in treating cities and counties equally. The requirements for equity have made themselves heard also among real estate developers and some believe it is the most important thing that took them out of the downturn. That is what’s likely driving more sellers to the market: the return of consumer confidence and home equity. We predict a steady and conscious evolution for Virginia’s housing market, in spite of strong variations depending on the area or county, like, perhaps, the differences between Virginia Beach and Fairfax in terms of median values, foreclosure or mortgage delinquency. However, general or overall forecasts for the state as a whole cannot be negative after such a gradual and apparently healthy growth in the past months, to the extent of one year.