Thursday, November 30, 2023

Virginia’s Housing Market Slowdown Likely to Continue into 2023

RICHMOND — Home sales activity continues to slow across the commonwealth, according to the November 2022 Virginia Home Sales Report released by Virginia REALTORS.

There were 7,681 sales statewide in November, 4,453 fewer than the same time last year — a 36.7% decrease and the sharpest decline in more than a decade.

Pending sales (homes that went under contract in the month) can provide a preview of future home sales activity.

In November, there were 6,057 pending sales in Virginia, 3,781 fewer than a year ago, a 38.4% decrease. Virginia’s pending sales, homes that went under contract, have been slowing down since July 2021. Pending sales can often provide a preview of future home sales activity, according to the trade association.

On average, homes are staying on the market longer, with homes that sold in November on the market an average of one month — four days slower than a year ago. According to the trade association, it’s taken longer to sell homes for four consecutive months, the first this has happened since early 2015.

Virginia REALTORS sees this cooldown continuing into the new year, with fewer buyers in the market than the same time last year. The trade association blames reduced purchasing power caused by rapidly rising mortgage rates in 2022 and the upward pressure on home prices.

“In the current economic environment, some buyers and sellers are taking a wait-and-see approach,” says Virginia REALTORS 2023 President Katrina M. Smith. “However, other buyers are choosing to take advantage of the decline in competition and the slight uptick in inventory occurring in most markets across the state.”

According to data, 63% of counties and cities across Virginia had more active listings at the end of November compared to a year ago.

“The decreased confidence in the market on both sides of the table will take some time to overcome,” says Virginia REALTORS Chief Economist Ryan Price. “Consequently, sales activity will likely be sluggish in the coming months. Numerous variables, such as inflation, the health of the job market, interest rate trends, and consumer confidence will determine how the market moves in 2023.”

View the full November 2022 Virginia Home Sales Report.

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