A lack of inventory remains the biggest challenge in the housing market today. At the end of February, there were just 12,142 homes listed for sale statewide in Virginia. Inventory was down 22% compared to last year at this time, and the number of active listings is less than a third of what it was five years ago. There are different ways to measure housing supply in the market, but by any measure, buyers today have few options.

How Do We Measure Inventory?

Total Listings

One quick way to look at inventory is simply to look at the number of homes listed for sale in each local market. This gives an indication of what a potential buyer in that county or city would see when they meet with their REALTOR® or search for properties online. In our data, there are several counties and independent cities where we have only one home listed for sale at the end of February. However, several local markets in Virginia are located on the border with other states (e.g., Tennessee, North Carolina) and some inventory may be listed in non-Virginia-based MLSs.

Excluding these border counties and independent cities, Charles City County has the lowest inventory in Virginia, with just two active listings at the end of February. The City of Falls Church, Craig County, King and Queen County, and the City of Manassas Park all had seven or fewer homes listed for sale at the end of last month.

But simply looking at total active listings is probably not the best way to understand how competitive local markets are. It is just as important to know how many buyers there are in the market and how fast they are acting to make offers on existing homes for sale.

Months of Supply

The months of supply metric is a common way to track inventory levels. The months of supply statistic is calculated by taking the average monthly sales over the preceding 12-month period and dividing it by the inventory of active listings. While historically, five or six months of supply has been indicative of a healthy housing market, we have not seen inventory at that level for more than five years in Virginia. At the end of February, there was less than a month’s supply statewide in Virginia.

There are some places where we are measuring supply in terms of “days of supply” rather than “months of supply.” In Prince William County, there were 178 homes listed for sale at the end of February, which translates to 0.23 months of supply—or seven days of supply. This means that if no new homes were listed for sale in Prince William County, the existing inventory would be completely drawn down in seven days if the pace of home sales activity stayed about the same as it had been over the past year.

Measuring inventory by months of supply shows that many of the most competitive markets in the state are in Northern Virginia. There is less than 10 days of supply in Loudoun County, the City of Winchester, and the City of Manassas. The City of Harrisonburg is also in this “less than 10 days of supply” cohort.

10 Most Competitive Housing Markets – As Measured by Months of Supply

As of the end of February 2022

County/City Months of Supply Days of Supply
Prince William County 0.23 7
Loudoun County 0.24 7
Winchester City 0.27 8
Manassas City 0.29 9
Harrisonburg City 0.33 10
Fairfax County 0.33 10
Fairfax City 0.34 10
Manassas Park City 0.34 10
Falls Church City 0.36 11
Stafford County 0.37 11

Source: Virginia REALTORS®

For a fun look at the months of supply measure, check out our March Market Madness video, where counties and cities face off bracket-style to win the title of most competitive local housing market.

Inventory Compared to Population

What if we simply compared the number of homes available for sale to the total overall population in a county or city?  Statewide, there are 12,142 homes listed for sale. Virginia has a population of about 8.5 million. That means that there is just one home available for sale for every 700 residents of the commonwealth. (In 2017, that ratio would have been one home available for sale for every 215 residents.)

But in some markets, the population-to-inventory ratio is much higher. In the City of Harrisonburg, there is one home available for sale for every 3,701 residents. In Charles City County, there is one home for sale for every 3,387 residents, and in the City of Winchester, the ratio is one to 3,124.

In general, the population-to-inventory measure lines up pretty closely with the months of supply. But it provides a different—and sort of startling—way to look at how inventory is in Virginia.

Population-to-Inventory – Top 10 Markets

As of the end of February 2022

County/City One Home Available for Sale for this Many Residents
Harrisonburg City 3,701
Charles City County 3,387
Winchester City 3,124
Prince William County 2,709
Loudoun County 2,521
Manassas Park City 2,460
Falls Church City 2,443
Manassas City 2,376
Fairfax County 2,154
Prince George County 2,151

Source: Virginia REALTORS®

 New Listings Compared to Pending Contracts

When we report end-of-the-month inventory or months of supply, we miss a lot of market activity that goes on during the month. So, instead of looking at what is left on the market at the end of the month, we could take a look at new listings coming onto the market compared to how fast new contracts are being offered. This type of measure—along with days on market—provides a picture of how fast moving local housing markets are.

Statewide, in February, a total of 10,710 new listings came onto the market. During the month, there were 9,130 pending contracts. So, the ratio of new listings to pending contracts was 1.17 for the state as a whole. However, in many local markets, the number of pending contracts far outpaced the number of new listings coming onto the market. Any ratio below one means that new listings are being snatched up before they can be recorded as month-end inventory.

In Floyd County, nine new listings came onto the market in February, but there were 18 homes going under contract in the month. So, the ratio of new listings to pending contracts was 0.5 in Floyd County. Other fastest-moving markets in February included Northampton County on the Eastern Shore, and Dinwiddie County and Caroline County in the Richmond region.

10 Fastest-Moving Markets – As Measured by the Ratio of new Listings to Pending Contracts

February 2022

County/City New Listings Pending Contracts Ratio
Floyd County 9 18 0.50
Northampton County 12 19 0.63
Dinwiddie County 16 25 0.64
Caroline County 56 81 0.69
Salem City 21 29 0.72
Alleghany County 14 19 0.74
Charles City County 3 4 0.75
Covington City 3 4 0.75
Prince Edward County 26 33 0.79
Amelia County 13 16 0.81

Source: Virginia REALTORS®

No matter how you measure it, inventory is at historically low levels across the state. What this means is a lot of competition among buyers, strong upward pressure on prices (+8.9% year-over-year in February statewide), and short transaction periods (half of all homes sold in Virginia in February sold in under a week). Stay up to date on market conditions across Virginia and in your local market by check out all of the resources available from Virginia REALTORS®.