Summer is right around the corner, a time when many people think about heading to the beach and about how nice it would be to own a vacation home in the sun. With Phase 1 of the Governor’s plan to ease public health restrictions in place, thousands of Virginians flocked to local beaches over the long Memorial Day weekend. Despite concerns about whether beaches are opening up too soon in Virginia and around the country, beach communities obviously still have a strong pull for many individuals and families.
What is the market for beach properties in Virginia looking like in light of the COVID-19 pandemic? Is demand for the beach vacation home still going strong? Or, are the economic and public health uncertainties making people delay a vacation home purchase?
In April 2020, the number of home sales statewide was down 7% compared to last April. Home sales also declined in many, but not all, beach communities in Virginia. For example, sales in the beachfront areas in Virginia Beach were down 5% compared to last April; however, sales were up in the Sandbridge Beach community. In the Ocean View area in Norfolk, sales were down 11%, and sales in the Buckroe Beach area of Hampton were down 13%. So, some beach communities saw relatively steep declines in sales in April.
Statewide, the number of new pending sales in April was down 28%. Generally speaking, new pendings were down even further in the beach communities examined here. For example, the number of new pendings in Colonial Beach was down 34% in April compared to last April. The decline in pending sales suggests that buyers are not as active in the beach community markets as they would be in a typical April.
The data on new listings also suggests that sellers are also holding off on listing their beach properties. Statewide, the number of new listings was down 28% in April 2020 compared to April 2019. In the beach communities examined here, the number of new listings was down even further. In Sandbridge Beach, for example, the number of new listings in April was down 52% compared to last year. On Chincoteague Island, new listings were down 65%.
Beach Communities: April Housing Market
|Community||Zip Code(s)||Percent Change – Comparing April 2020 to April 2019|
|Sales||New Pendings||New Listings|
|Virginia Beach||23451, 23455||-5%||-45%||-36%|
|Ocean View/Norfolk||23502, 23518||-11%||-62%||-51%|
|Chincoteague Island||23336, 23356||-7%||-7%||-65%|
Source: Virginia REALTORS®, data accessed May 26, 2020
Note: Community names and zip codes are used here to be illustrative and may not be the same names and zip codes used in other housing market reports.
Outlook for Virginia’s Beach Properties
- Despite the slowdown in the housing market this spring, there are signs that buyer and seller activity is increasing in some markets. Statewide, the spring market that was “missed” in April and May could be recouped over the summer months, suggesting a shift in the housing market rather than an overall decline in sales transactions over the year.
- The beach property market here in Virginia could be somewhat different than the overall market. Typical spring sales may not be pushed into the summer, but rather may be delayed until the fall or even until next spring’s market.
- Declines in the stock market could take the edge off of some of the buyer activity, if buyers had been planning to use stock market gains to purchase a second home or vacation home. However, very low interest rates will continue to be an incentive to second home or vacation home buyers who want to take advantage of those low rates to invest in a beach property.
There will always be demand for beach property in Virginia. COVID-19 may put a slowdown on the market during summer 2020; however, the market could surge next spring when beaches will hopefully be 100% open and ready for fun in the sun.