The housing market set records in Virginia in 2021, with more than 150,000 home sales, the statewide median home price up by nearly 10%, and record low inventories. The market was strong throughout the commonwealth, but, in some places, housing market conditions were truly unprecedented. Here is a look back at the local housing markets in Virginia that had the strongest sales, fastest price growth, and biggest inventory declines in 2021.
In 2021, there were 154,340 home sales statewide, which is up 10.2% compared to 2020. There were more home sales in 2021 than there were in 2020 in nearly every local market across Virginia. However, some markets saw a surge of activity. Buchanan County, in southwest Virginia, had the biggest surge in home sales in 2021. While there was just a total of 54 sales during the year, the number of transactions was up 74.2% compared to 2020. Other small markets posted strong sales activity in 2021, including Charlotte County, in south central Virginia, and Covington city and Highland County in the Virginia mountains. The city of Colonial Heights, in the Richmond regional market, is the largest community in the Top 10 busiest Virginia markets, with a 30% increase in home sales in 2021 compared to 2020.
BIGGEST PRICE INCREASES
Statewide, the median sales price in Virginia was $350,000 in 2021, which is an increase of 9.4% over the 2020 median sales price. Strong demand, historically low mortgage rates, and very limited inventory pushed home prices up in markets across the commonwealth. Brunswick County, on the southern border of Virginia, saw its median sales price more than double between 2020 and 2021 (+107.0%). Home prices were also up rapidly in small, mountain communities. The state’s Middle Peninsula saw rapid price growth, as well, with Middlesex, Mathews, and King and Queen counties all in the Top 10, with home prices rising more than three times faster than the state average.
The biggest challenge in Virginia’s housing market has been a lack of inventory. In 2021, the supply shortage got worse, with the number of available active listings down 24.2% compared to a year earlier. Inventory got tighter in nearly all jurisdictions in the commonwealth. The biggest drop was in the city of Fairfax, where 2021 year-end inventory was down 72.2% compared to the end of 2020. Inventory was also drawn down dramatically in the city of Harrisonburg, where the number of active listings at the end of 2021 was 65.9% lower than a year ago. The Top 10 jurisdictions with the biggest drops in inventory include markets in all parts of the state, from the mountain region (Craig County, Bath County) to the central Virginia region (Powhatan County) to the Hampton Roads region (Charles City County) to the Roanoke Valley (Roanoke County).
Inventory fell dramatically in markets across Virginia. However, the tights markets—as measured by months of supply—are concentrated in Northern Virginia. Statewide, at the end of 2021, there was an estimated 1.0 month of supply, which is down from 1.5 months of supply at the end of 2020. However, in some communities, this metric is much lower. The Prince William County area has faced the biggest inventory shortfall. In the city of Manassas Park, there was an estimated 0.18 months of supply (or, about 5.5 days of supply). In Prince William County itself, there is 0.23 months of supply (7 days) and in the city of Manassas, there is an estimated 0.28 months of supply (9 days). Other Northern Virginia counties and cities with the tightest inventory include Loudoun County, Fairfax City, Falls Church City, and Fairfax County.
It is likely that low inventory will remain a challenge this year. Demand may ease a bit as mortgage rates rise and affordability becomes a bigger issue. But it will still decidedly be a sellers’ market.
Click here to send any comments or questions about this piece to Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD.