If you have been flipping through the real estate section of your local newspaper, you may have seen houses listed and sold in the snap of a finger. The price home buyers and investors are willing to pay seems to be getting higher and higher, including in the red hot Hampton Roads housing market.
From Virginia Beach to Newport News, homes seem to be an even hotter commodity than usual these days. The housing market is so hot around the country, people are even buying homes without a proper home inspection, or without ever laying eyes on the home! In this blog, we will discuss the state of the housing market in Hampton Roads, what that means for you, and how this impacts the real estate business.
House Supply at New Lows
According to the Hampton Roads Realtors Association, the local housing supply is at historic lows. Compared to the last year, the supply of homes in the Tidewater area is down 10%. The homes available are selling at rates nearly 6% higher than last year. Furthermore, the amount of time a listed house is on the market is down significantly since the same time the previous year. Once houses are on the market, they are snatched up, and often for more money than the asking price.
This is reflected in the rising median purchase price across Hampton Roads. Norfolk, Suffolk, and Virginia Beach specifically have seen median price increases of nearly 10% relative to the year prior. Compared to four years ago, there has been a decrease in housing inventory of nearly 70%. Unless there is a large inventory of homes built somewhere in Hampton Roads, this is the way the housing market will look for the foreseeable future.
Essentially, it is a tough time to be a buyer and a great time to be a seller (for now).
Why is the Hampton Roads Housing Market so Hot?
You may be thinking about your own home buying or selling experiences and wondering, “Why is it so easy to sell now?”
There is no one exact answer, but rather a combination of variables that have put sellers in an advantageous market. Dr. Robert McNabb, an economist at Old Dominion University in Norfolk, hypothesizes that the market is a result of tight supply and inflation. Dr. McNabb says, “That means there are people out there upscaling, refinancing, buying, who might not have bought in the past because it was cheaper than renting.”
Will real estate prices continue to grow? Interest rates are projected to continue rising this year, and Dr. McNabb believes that will slow the trend. The interest rate hike will be in response to the record-breaking inflation the American consumer is currently facing.
“That will cool the market somewhat,” says Dr. McNabb, “but we are still not building enough housing for the population growth in Hampton Roads, and in Virginia, and in the United States.” The reality in our region is that there is a small supply of homes, and they are gone before the blink of an eye. Barring a drastic change in development, there simply will not be enough houses for the people who want to buy them.
How Does the Real Estate Market Impact You?
Whether you are a buyer or seller, you are being impacted by this unusual market environment, either for the better or the worse. If you are selling your home right now, it is possible you can get above asking price. On the flip side, if you are a buyer, things may feel impossible. First-time home buyers facing rising mortgage rates may get hit hardest and sales of lower-priced homes might decline.
As a buyer, you may have been to countless open houses, spent your waking hours refreshing brokerage websites and Zillow, stressed about the difficulties of buying a home. Hopefully, this will change soon, and the market will correct itself to a more natural balance. Unfortunately, so long as the housing supply in Hampton Roads is not increased, buying a home here will take time, effort, and a little luck.
Fortunately, there are a few things you can do to start preparing for the homebuying process.
What You Can Do to Buy a Home
The absolute most important thing you can do while buying a home in a market as competitive as Hampton Roads, is enlisting the service of a great real estate agent, like the team at ProActive Real Estate Services. A good agent will be in the know on local markets, be knowledgeable about different neighborhoods and cities, and be able to counsel you through the journey of buying a home.
The agents at ProActive have decades of experience buying, selling, listing, and investing in the Hampton Roads housing market. They will be able to help you select a desired city or neighborhood, walk you through the buying process, and most importantly, help you find your dream home in Coastal Virginia.
You will then want to know what mortgage you are prequalified for and how much you can spend. In a competitive market, it is important to be ready to throw your hat in the ring if you are serious about a house. Sometimes, waiting a few days means you lose your opportunity. To be ready, ensure you know what you can afford to offer a seller for their home.
Lastly, you will need to prepare yourself to be patient. In a hot housing market, the process may not be easy, and you do not want to force any real estate deal too soon. Rest assured, somewhere in Hampton Roads your dream home is waiting for you.
If you are ready to find it, be sure to contact the team at ProActive Real Estate Services if you are interested in buying a home in Hampton Roads. Thanks for reading our blog and happy house hunting!