Our August 2022 Virginia Home Sales Report is out! As the economy continues to show signs of weakening amid high inflation and rising interest rates, it will likely continue to have a cooling effect on the housing market, both nationally as well as here in Virginia.
There were 11,693 homes sold in Virginia in August 2022. This is 2,939 fewer sales than last August, a 20.1% slowdown. At $373,900, the August median sales price in Virginia rose 5.3% from a year ago, a gain of nearly $19,000. The median sales price in the state is now about $94,000 higher than it was at the same time five years ago.
There was about $5.3 billion of sold volume in Virginia in August, which is about $1.0 billion less volume than a year ago. This is a 16.5% drop in volume from last August. The drop in volume reflects fewer sales transactions. At the end of the month, there were 19,122 active listings across the commonwealth, which is 1,459 fewer listings than a year ago, a 7.1% supply reduction.
Mortgage interest rates have doubled in the past year and have increased more than one percentage point in just the past month. These rate trends, coupled with home prices that continue to rise, are creating affordability challenges in many local markets around Virginia. Even if rates flatten out or recede somewhat in the coming months, the reality is that many potential buyers are likely priced out of some markets. The same is true for potential sellers; it is likely becoming more difficult for existing homeowners to find a similar or move-up property that is on budget in today’s environment of climbing rates and climbing home prices.
The supply is starting to build up in many parts of Virginia as homes are staying on the market longer and fewer sales and contracts are occurring. These trends are likely to continue in the coming months, which is good news for buyers looking for more options in the market.