State of the Market: 2023 Forecasts higher prices, steady sales in Northern Shenandoah Valley

There is a lot of speculation around the real estate market in today’s society. Everyone with access to television or an internet connection is exposed to some kind of information about real estate. It’s all different, some good and some bad, but there is one common theme: regardless of the source or quality of the information, it all gets treated like gospel. Opinions aside, the simplest (and most reliable) way to settle the debate is to look at the numbers.

The Northern Shenandoah Valley comprises five counties and one city: Clarke, Frederick, Page, Shenandoah, Warren, and Winchester. All the data in this article is from public records from the Multiple Listing Service (MLS). The MLS is a database that real estate brokerages use to “host” their listings so that everyone can view them from one centralized location. When you look at real estate listings online, for example, you’re most likely viewing data that has been uploaded to the MLS. In order to understand what the future holds, it’s important to look at what’s already happened in the past. For that reason, I went back and looked at all the numbers from our region since 2019. There has undeniably been a rise and fall of total home sales in that time:

This can be attributed to a number of factors, including the push for homeownership in the “stay at home” phase of the COVID-19 pandemic and the slowdown from the recent increase in mortgage rates. Throughout this time, however, there has been another constant. Average prices have gone up – year over year – in every locality:

It’s important to remember that another factor that could explain the lower number of total sales is less inventory on the market. Basically, the demand for housing is eating through all the houses available for sale. Increasing prices have clearly not scared buyers away, as the average Days on the Market has reduced drastically over the last four years:

Simply put, while there may be fewer transactions taking place right now, they’re happening for more money in less time. So, what’s the cause of this stability in our real estate market? The answer is complex as there are several factors at play. The most significant factor is the continued growth of Washington, D.C., and Northern Virginia pushing out to the west. Along with that growth comes an increase in many different industries, with government; technology; manufacturing; and logistics being key contributors. As we continue to see the development of industries throughout the region, along with that will come more population growth and, inevitably, more activity in the housing market. According to Old Dominion University’s State of the Commonwealth Report for 2021, the Winchester region was the fastest-growing region in all of Virginia. In 2022, the Winchester region remained insulated from much of the economic woes experienced in other parts of the Commonwealth.

Some financial experts expect mortgage interest rates could continue to drop from the rate hikes we saw in the Fall of 2022. When rates drop, historically speaking, housing prices continue to rise. Spring Market (often the busiest time of year in real estate) is just around the corner, which means buyers will be positioned in the perfect place to achieve their goals in the real estate market – whether that might be to buy their first home, sell their current home to upgrade or downsize, or even take a chance on an investment property. No matter the desired outcome, the time to start preparing to buy is now, because the stars are aligned for another steady year in the real estate market for the Northern Shenandoah Valley.

Paul Bernd is a local REALTOR® from ERA Valley Realty in Woodstock, Virginia. If you have any questions about the real estate market, you can find him on social media @paulberndrealtor, call him at (540) 481-4825, or visit his website at www.PaulBernd.com.