Two years after the Covid-19 pandemic affected the nation, local home buyers are now seeing more available options as the housing market slows down.
According to a December 2022 Virginia Home Sales Report by Virginia REALTORS — the largest trade association in Virginia, — Virginia’s housing market has slowed “considerably” in 2022 after two “very busy” years, almost returning to pre-pandemic levels.
The report stated that there were about 123,000 houses sold in Virginia in 2022, which is 20 percent fewer than the annual total in 2021. In December 2022, 7,492 houses were sold statewide, a “sharp” drop of nearly 38 percent from the same time last year. A “significant” role in this slowdown could be the rapid rise of interest rates over much of 2022.
Other factors for this decrease in the market is far fewer contracts occurring each month, houses stayed on the market longer and sellers were not getting their asking price, on average, as the year came to a close.
Ryan Price, the chief economist at Virginia REALTORS, said the company produces home sales reports monthly on the Virginia housing market conditions and economic conditions of the state. He stated the City of Falls Church’s housing market has slowed down “considerably,” along with 90 percent of other Virginia counties and cities.
“Smaller markets like Falls Church tend to be more volatile in terms of changes,” Price said. “Because there’s fewer home sales overall, just a few extra or few less can really tip the scales on whether or not it’s shrinking or growing.”
Overall, 87 percent of counties and cities in Virginia had fewer home sales in 2022 compared to 2021, which from an annual perspective, statewide sales activity is back to pre-pandemic totals, near market levels seen in 2018. These shifts, paired with increases in inventory that remains “tight”, could come as “welcome news” to potential buyers active in the market as houses are taking longer to sell and supply is increasing.
The report also added that the December median sales price in Virginia was $359,000, up 2.6 percent from last year, an $9,100 increase. There was approximately $3.3 billion of sold volume in Virginia in December, which is $1.9 billion less volume than a year ago, a 36.9 percent drop.
Price further stated that the City of Falls Church has been slowing down “dramatically” in the housing market since the summer of 2022, which can be a negative thing for an economy such as the city’s because there’s “residual economic activity” generated from a home sale. However, a buyer in Falls Church can benefit from this as the market slowing can allow one to purchase a house in an easier fashion.
“Our outlook is continued moderation in the market,” Price said. “We expect that will continue in Falls Church.”
In Virginia, there were 16,115 active listings on the market at the end of December. This is a “supply jump” of nearly 20 percent over the same time last year.
The outlook of this report signals that sales activity will “likely be slower” than in 2022, net job growth will likely “flatten out” as economic conditions weaken and prices will remain “relatively stable,” though in some markets they will continue to climb, and prices declines are possible in some pockets of the state.