Virginia Real Estate Market: Predictions for 2024?

Virginia homes continued to sell at eye-popping prices last month. The median home sale price rose 8.3% year-over-year from $366,500 to $397,000 in January.

The number of homes listed on the market declined by 2.7% YoY from 6,128 to 5,961 homes, with only 2 months of supply. Does the scarcity of houses make Virginia a seller’s market? Let’s look at the facts.

Lynchburg homes sold for a median sale price of $243,000 in January, up 17.3% year-over-year. Homes in Winchester sold for a median sale price of $371,250, a 23.8% increase year-over-year. In fact, there were no markets in Virginia where prices declined year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 28.9% of homes sold above the list price!

• If you are a home buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 7.28% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If you are a home seller: You can lock in Virginia’s high home prices. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current New Jersey real estate market statistics reflect the national trend of high demand and low supply. Despite the strong housing demand, home sales tanked. The property prices in Virginia have increased regardless.

So, How is the Real Estate Market in Virginia?

Sluggish! Home values in Virginia rose by 42.3% in the last 5 years.

But, home sales decreased by 2.7% in January 2024 YoY. Maybe due to the mortgage rate climbing to a two-decade high of nearly 8%! And the number of houses for sale in VA was 21,311 in the month, 3.4% less than in 2023. Virginia’s housing market is bearish.

The decrease in home sales can be attributed to not having enough properties in Old Dominion State. The months of supply is 2 months, which makes VA a seller’s market. So, if you want to sell a Virginia property, now is the right time to list it on MLS.

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Virginia Real Estate Market Statistics

• Average Home Prices: The average median home price in Virginia is $397,000, up by 8.3% YoY. In 2024, the median sale price will keep increasing marginally due to Virginia’s tight inventory. The sale-to-list price ratio is at 98.9%.
• Home Sales: As per January 2024 data, home sales decreased by 2.7% YoY! In January 2024, only 5,961 homes were sold, down from 6,128 in January 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Richmond pays $1,476, while the one living in Hampton pays $1,435.
• Median Days on Market: The median days on the market for homes for sale was 41 days, down by 9 days YoY.
• Pending Sales: The number of homes for sale dropped by 3.5% YoY compared to 2023. Currently, there are 21,311 homes for sale in Virginia.
• Months of Supply: The average month of supply is 2 months. VA’s demand can’t be satiated with the low supply. VA’s house scarcity is worse than the national housing market.

Virginia Housing Market Predictions 2024

Virginians have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Virginia’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.28% in January due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across VA YoY, reaching $397K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Construction Sales Will Increase:  12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for buyers in 2024.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on an NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Virginia?

A housing market crash in Virginia is unlikely.

Virginia is one of the fastest-growing states in the country, with a population growth rate of 12.57%. It is home to employees working for companies such as Amazon, Hilton Worldwide, Accenture, Capital One, and Sentara Healthcare.

Virginia’s job market is also strong. The unemployment rate is at 3%. In fact, Viriginia’s private sector employment grew by 3.3% in 2023, faster than the national average of 2.0%. And, Virginia’s friendly tax policies are a cherry on the top.

The average cost of living in Virginia is $48,249. The median household income is $73,000. Living on the mountainous landscape of Virginia is SUPER affordable. So it is unlikely that Virginia’s housing market would crash anytime soon.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Virginia are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in VA was 21,311 in January 2024. This is similar to 10K homes in the summer of 2023, a period that is regarded as the best time to sell a house in Virginia.

In November, the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28%, adding more new listings on the market. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Virginia MLS.

The increase in new home listings in Virginia has also brought back home shoppers who were hugging the sidelines. In fact, the recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Virginia houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Virginia will increase. So, whether you are looking for a condo in Richmond or a single-family primary home in Hampton, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions about Virginia Real Estate Market

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