Virginia Housing Updates 2022
Virginia Housing Updates 2022
As the pandemic lingered and people longed for more space in which to feel safer, the Virginia housing market experienced a boom. Buyers longed to leave congested urban areas so they could have lots of open space in which they could more comfortably spend time outside or enjoy a quiet moment to themselves. This sent many searching for that perfect home in the suburbs and beyond. The question on everyone’s mind now is will it remain a sellers market or will housing prices drop.
Supply and Demand
Heading into the second half of 2022, we will continue to see a sellers market here in Virginia. Due to the imbalance of homes available and people wishing to buy the trend of higher housing prices will not slow anytime soon. New home construction would go a long way in balancing out supply and demand and therefore leveling out housing prices. However builders are facing multiple issues that are preventing new homes from getting built. These issues include labor shortages, price increases and supply chain issues. These challenges are causing fewer homes to be built. Home prices will continue to increase but the increase will be at a slower rate than during the height of the pandemic when home prices increased by as much as 9.4%. Throw into the mix the fact that Millennials have now reached home buying age and this adds even more buyers into the already tight housing market mix.
Interest rates and housing prices
Home buyers may still be out there ready to scoop up the perfect home. However there are a couple of things that will slow the frenetic pace of pandemic buying. Interest rates have gone up and will continue to do so, perhaps reaching as high as 6% by year’s end. With this increase many may no longer be able to qualify for a home loan taking them out of the home buying competition. Housing prices may level off somewhat due to the increased interest rates however it is still a tight market and buyers will most likely be bidding against others for desirable properties. Millennials who have now reached peak home buying age, may be unable to afford the now higher housing prices. Due to this fact and because of the increasing cost of everything from food to clothes to gas, Millennials may put aside their home buying desires to save money and wait until the economy balances out again.
Condos and Townhomes Will Once Again Begin To Sell
At the height of the pandemic, home owners were flocking to more suburban and rural areas for safety, peace of mind and more space. This meant a run on single family homes which resulted in fierce bidding competitions. However condos and townhomes did not experience the same frenzied run to buy due to the fact that many are located in urban areas and the closeness of neighbors caused some anxiety especially during the height of the pandemic. Now with businesses opening up their office doors, schools providing in person learning and restaurants and bars opening to the public once more, people will be looking to return to the city. Homebuyers will once again begin looking seriously at townhomes and condos located in urban settings. These types of homes will look especially good to those who will no longer be eligible for a home loan due to rising interest rates. The lower price tag of condos and townhomes will provide them with the opportunity to purchase a home of their own without the high prices of a single family house.
Although the housing market will not be regaining its equilibrium any time soon, it is still a strong sellers market and those who can afford to look for and buy the home of their dreams will continue to do so. For those who have unfortunately been priced out of a single family home, the option of a condo or townhome is a real more affordable option. Those wishing to sell should not hesitate as now is the time and those who wish to buy should definitely do so sooner rather than later as interest rates may continue to rise. Remember to do your research, don’t settle out of fear of losing out and don’t overlook more affordable condos and townhomes when searching for your ideal new home.
FAQ
Will house prices go down in 2023 USA?
According to Fortune.com, Fannie Mae believes relief will come, it just won’t happen until 2023. By December 2023, Fannie Mae predicts that home price increases will become a more reasonable 4.2%.
What will the housing market look like in 2024?
Thetitlereport.com states that the housing market is expected to return to pre-pandemic norms in terms of inventory and the share of purchases made by first-time homebuyers by 2024.
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