What 2020 Hampton Roads real estate market trends, projections, and predictions can be noted this August? Read on to take a look at housing market graphs for 2020 in Virginia Beach, greater Hampton Roads, and beyond.
The 2020 real estate market in Hampton Roads has shown resilience despite months of surprises (including a global pandemic). In this article, we’ll dive deep into the Real Estate Information Network’s (REIN) housing statistics to identify trends, projections, and predictions for the rest of the year.
Statistics on the real estate market can fluctuate for a variety of reasons, so it’s wise to regularly step back and seek a better understanding of how the market is truly performing overall and what can be expected.
In this mid-year review, we’ll take a look at the Hampton Roads housing market since the start of 2020, consider the effects of the COVID-19 pandemic, and also analyze the greater market trends to help you understand and pursue your real estate investments with confidence.
Trend #1: Real estate demand is the highest it’s been in Hampton Roads in a decade.
You don’t have to look far to notice that demand for properties is high in Hampton Roads right now, and it’s not about to stop. Despite the current global pandemic, demand has continued its upward trend - up by 80.7% since 2009.
Settled sales in Virginia Beach and its surrounding cities (Figure 1) has exceeded the number of homes sold in the first half of 2019 despite the pandemic.
April and May of 2020 saw a dip in the number of homes sold (Figure 2), which had many people thinking that home sales would be down this year. However, demand began increasing again as June approached. Compared to the first half of 2019, the number of homes sold in the Tidewater region is up 4.54% in 2020.
There are many factors affecting the high demand right now:
Low Interest Rates: Over the past few months, mortgage rates have been driven down as lenders strive to show that their brand cares for potential homeowners during the pandemic. We’re seeing all-time lows on mortgage rates amid the economic unrest - a strong incentive for those on the fence about buying.
Millennial Buying: Many millennials are preparing to buy their first homes right now. This means they are looking to purchase but are not simultaneously selling, thus increasing demand while not bolstering the supply.
Trend #2: New listings have decreased noticeably in 2020, but are rebounding.
When global measures were first adopted to control the COVID-19 pandemic earlier this year, we saw the number of new listings per month in Hampton Roads begin to slip. April and May in particular saw significant year-over-year decreases compared to the 2019 market (Figure 3) .
While new listings are on the rise again, there is still a 9.32% decrease in total number of houses added to the Hampton Roads multiple listing service (MLS) from January to July 2020 compared to 2019.
Aside from the pandemic, several other factors are exacerbating the decrease in new supply:
Homeowners and investors hesitating to list their properties in the face of economic uncertainty
Low available inventory and increased competition, leaving many owners with few housing options if they were to sell
Low refinancing rates for current property owners
Keep in mind that new listings (and the entire real estate market) do tend to flow on a seasonal cycle. Figure 4 gives a good picture of this, and the rise in July 2020 suggests that the supply of new listings is rebounding.
Trend #3: Increased demand means that available inventory is at an all-time low and selling fast.
With unprecedented demand, the active inventory of homes not under contract is at its lowest point of all time in Hampton Roads. As you can see in Figure 5, the number of active listings has been dropping consistently over the last several years.
In July 2009, there were 14,860 active listings on the Hampton Roads MLS. Remarkably, July 2020 had only 5,846 active listings. That’s a 60.7% decrease in available monthly inventory in just eleven years.
This lack of available inventory has made it seem like supply has slipped much lower than it actually has. In fact, the staggering increase in demand is the most significant factor in this trend. Settled sales are climbing fast, consuming existing inventory.
In Figure 6, we see that new listings have just barely outpaced settled sales in 2020.
The effects of this unprecedented demand and lack of inventory are hard to miss. In the current real estate environment, there are multiple offers and a bidding war on a property within hours of it being listed. In fact, the average market time (from listing to closing) at the end of July 2020 was 42 days - compared to 62 days at the end of January.
Trend #4: The median sales price in Hampton Roads is climbing.
As could be predicted, increased demand and low supply means that property prices are rising in the Hampton Roads real estate market.
Figure 7 shows that in February 2012, the median sales price for a home in Hampton Roads was at a low of $193,000. Since then, we’ve seen an increase of 29%, with 2020 showing the biggest jump in median sales price (4%) from January to July alone.
Looking a bit deeper into the Hampton Roads housing market, we do see variations in average median prices and average market times among specific cities. Figure 8 shows the breakdown of the region’s three major cities:
Now’s a great time to sell or refinance.
With demand and prices high - and supply and mortgage rates low - it’s the perfect time to sell your property or refinance. The market will not stay like this forever. Contact our licensed associate broker to capitalize on the current environment and plan the sale of your home in Hampton Roads.
It’s a challenge for buyers and renters.
Right now, the market is competitive and inexperienced buyers often driven by emotion can easily make an offer based on the fear of missing out on a decent property. Working with an experienced professional real estate consultant gives you the confidence during a frantic market to aggressively pursue the right home and avoid overpaying for the wrong property.
Investors should exercise discipline and discernment.
Finding a property that meets your investment criteria in the current environment can be difficult. Prices will continue to rise as long as there is a lack of inventory. In order to be successful, investors must exercise patience and wisdom while looking for off-market deals and creative strategies. Work with our expert team to identify, purchase, and operate successful investment properties in Hampton Roads.
Want to stay on top of the trends? Subscribe to our monthly newsletter and never miss your perfect investment.
*Disclosure: The Hampton Roads Real Estate Information network (REIN) is the sole source of Listings Information for the statistics or analytics above. All interpretations, analytics, or derivations thereof are the sole responsibility of the CGP Real Estate Consulting and Anchor Realty Group, and not attributable to REIN. All statistical counts are based solely on listings entered into the REIN MLS system by REIN broker members. The geographical area represents southeastern Virginia (Norfolk, Virginia Beach, Chesapeake, Portsmouth, Suffolk, Franklin, Smithfield, Isle of Wight, Hampton, Newport News, York County and Poquoson) to Williamsburg, James City County, Gloucester, Middlesex, Virginia’s Eastern Shore and northeastern North Carolina. The Graphs are calculated on all property types, including new construction.