Central Virginia housing market slows, prices rise

The Central Virginia housing market is continuing to slow, while price and active listings grow, according to the Richmond Association of Realtors.

At the end of 2022, there were 2,401 active listings in the region – or 1,042 more listings than last year (a 77% jump). Overall inventory levels have been building up for three straight quarters, and this quarter is by far the strongest growth the area has seen in years.

The Central Virginia housing market slowed down significantly in 2022 compared to what was a historically busy 2021. There were 4,367 home sales throughout the region in the fourth quarter, which was 1,940 fewer than 2021 (a 31% drop). It was the sharpest drop in sales the region has seen in years, but RAR officials attributed that in large part to the historically busy year of home sales in 2021.

Although sales activity was slower in the Central Virginia market in 2022, home prices continued to climb. The fourth quarter median sales price in the region has increased by 8% to $347,000 compared to 2021, which was a gain of $27,000.

Home sales in Central Virginia were sluggish for all of 2022 compared to the busy 2021 market, and RAR officials expect the trend will continue in the coming months, as buyers grapple with reduced purchasing power amid higher interest rates and a chronically tight inventory of homes on the market.

“At the end of 2022, the inventory grew rapidly because the increase in mortgage rates caused some buyers to leave the market,” said RAR President Kristin Beran Krupp. “That being said, we are already seeing strong demand in January, as buyers grow accustomed to the new interest rate normal and re-enter the market. For those that have been waiting, now may be the optimal time to buy or sell a home.”