Buying and Selling Homes

Buying and Selling Homes in Virginia’s Tough 2024 Housing Markets

ByAshu

Virginia Realtors like Claudette Spinelli-Schwartz anticipate a sharp difference in the 2024 Virginia housing market from last year. In 2023, sales took a dip, but construction starts and lower mortgage rates could help sales rebound, according to Virginia Realtors. 

Housing Starts, Increased Listings Help Regulate Supply and Demand

Although new construction slowed down in the multifamily sector, the industry expects single-family housing construction to increase. That could help right the imbalance in supply and demand in the state.  Besides housing starts, in March, individuals listed more homes for sale, but not as many as they usually do. From February to March, Virginia experienced an 18% increase in homes listed for sale. Historically, from February to March, between 30 and 50% more homes get listed for sale in the state. 

Realtors attribute this decrease to rising interest rates influencing sellers to hold onto their homes longer. This stems from two reasons. With interest rates above 7%, buyers become price-conscious. Those who sell their homes must move somewhere, and the high interest rates they would get on their own next mortgage don’t appeal to them.

Decreasing Sales Momentum as Year Wears On

According to Norada Real Estate Investments, the sales momentum seen early in 2024, will decrease as the year progresses. In March, Virginia home sales dropped 7.3% compared to March 2023 sales. That means 634 fewer homes sold in March. Although the sales figures refer to the whole state, some cities experienced a greater plummet, such as the Richmond Metro Area and Lynchburg. The Northern Virginia region also underwent a steep drop in home sales.  

Upwardly Creeping Home Prices

Markets in surrounding states have picked up in sales but expect Virginia home prices to climb slowly. While they won’t keep pace with surrounding states, the prices of homes in Virginia will creep higher, continuing the 2023 trend. In March, due to a lack of homes on the market, the median Virginia house price increased to $397,000. That’s up $27,000 from the same month last year. This makes the current market a seller’s market. 

Putting It All in Perspective

With rising interest rates and rising prices, Virginia’s real estate market contains fewer affordable homes. This makes it more challenging for first-time homebuyers to find a home for themselves. How can home buyers best weather this situation?

  • Find a caring Realtor who focuses on getting to know each buyer’s needs. An experienced real estate professional knows the state’s real estate market and can help you locate quality homes for less.
  • Research the town or city where you want to move. Expand your home shopping radius to surrounding towns. 
  • Consider purchasing a fixer-upper. Some homes look bad when you tour them but have few things actually wrong with them. Make a list of things that require repairs on any home you tour, then price the repairs. If it costs less than $10,000 to repair the home, consider making the purchase. Since the median home price in the state went up $27,000, you’d still nab a good deal. 

In Conclusion

Although projections for 2024 include a potential 11.4% increase in home sales from 2023, we expect that to occur mostly in the first half of the calendar year. With interest rates going up and home prices rising, this evens things out for home sellers. If they sell, they might get a better price for their home, but the higher interest rates could make their new home cost more, eroding the profit made on selling their existing abode.