It’s March Madness, one of America’s most entertaining post-season tournaments! This year’s NCAA March Madness has been entirely unpredictable. There were zero perfect bracket predictions across the country by the third round of games this year. Like the NCAA basketball tournament, the housing market can also be quite unpredictable. Colleges have a great impact in their respective areas and are eye-catching for investors. In this blog, we’ll go over some of the college towns in Virginia and how they currently compare to each other.
The college towns we’ll focus on are:
Charlottesville – University of Virginia
Fairfax County – George Mason University
Fredericksburg – Mary Washington University
Hampton – Hampton University
Harrisonburg – James Madison University
Lynchburg – Liberty University
Blacksburg – Virginia Tech
Norfolk – Old Dominion University
Radford – Radford University
Richmond – Virginia Commonwealth University
Salem – Roanoke College
Winchester – Shenandoah University
1. Home Sales In Most College Markets Have Declined From Last Year
Compared to a year ago, sales dropped across most college towns in Virginia. From January through February of 2023, there were 2,630 home sales across these college towns, 1,072 fewer sales than last year (3,702), a 29% decline. There were 1,262 home sales around George Mason University so far this year (January-February), a 29% decline compared to last year, which is 510 fewer sales. Year-to-date home sales from January through February fell the sharpest in Salem (-54%), Fredericksburg (-48%), and Hampton (-35%) compared to last year. Lynchburg was the only college market with a growth in sales compared to a year ago (+6%).
2. The Median Home Price Has Surged in Radford So Far This Year And Is Up In Most College Towns
Across these college towns, the median sold price was $289,725 from January through February this year, $19,725 more than this time last year ($270,000), a 7% price increase. Prices increased the most in Radford (+48%), Harrisonburg (+11%), and Winchester (+9%) so far in 2023 compared to a year ago. Home prices inched down this year around Roanoke College
(-$15,000) and Virginia Tech (-$15,150) from last year. At $325,000, home prices in Radford rose by $106,050 from January to February compared to last year, showing a 48% price growth.
3. Inventory Is Building Up in Most College Markets
At the end of February, there were 2,073 active listings throughout these college towns, 348 more than a year ago, a 20% increase. At 619, George Mason’s surrounding area (Fairfax County) rose by 16% from a year ago (+85). At the end of February, active listings increased sharply in Salem (+138%) and Winchester (+144%) compared to last year. In the VCU area (Richmond), there were 262 active listings by the end of February, 124 more than last year, reflecting a significant rise of 90%.
4. Pending Sales Activity Is Down in Most College Town Markets
Pending sales activity is a great indicator of future closed home sales in the market. More closed sales will likely occur if there are more pending sales in an area. In contrast, lower pending sales indicate that there will probably be fewer closed sales in the coming months. At 3,030, year-to-date pending sales activity across these college town markets fell by 23% compared to last year, which is 898 fewer pending sales. Compared to last year, pending sales fell the sharpest near Roanoke College (-41%), Mary Washington University (-39%), and the University of Virginia
(-35%). Fairfax County had 1,611 pending sales from January through February, 612 fewer than last year, reflecting a 28% decline. Surprisingly, pending sales activity from January through February rose in Lynchburg (+37), Radford (+10), and Winchester (+6) compared to a year ago—another surprise in the college markets.
5. Rent Prices in Most College Markets Continue to Rise Steadily
Effective rent price is the actual rent rate that a landlord will receive after deducting the value of the concession from the rental rate that is either paid or given to the tenant. Students are more likely to rent than purchase a home while obtaining their degree. Rent prices near the University of Virginia, George Mason University, and Mary Washington University remain relatively high compared to other college towns in Virginia. In Fairfax County, rent prices were around $2,173 during the fourth quarter of 2022, a 2% gain from the previous year, which is $35 more. During quarter four of 2022, rent prices inched over $1,000 near Roanoke College (+$92), Liberty University (+62), and James Madison University (+$63) compared to 2021.
Much like the NCAA tournament, predicting what will happen in today’s housing market can be tricky. But if you keep your eye on the key market indicators, patterns can be seen, and the dynamics of the market can be uncovered.
Do you want to see how these local markets will trend by the end of March? Stay updated with our housing and economic data at Virginia REALTORS® and find out!