Virginia’s Housing Market still favors sellers amid tight inventories and rising prices

A recent report released by Virginia REALTORS® illustrates a slower spring housing market in Virginia. This sluggish pace, attributed to hesitation from both buyers and sellers, has led to a decrease in home sales but not in prices. Indeed, the median sales price continued its upward trend, reinforcing Virginia’s status as a sellers’ market.

The Virginia Home Sales Report for May 2023 reported a total of 10,292 homes sold across the state – a marked decrease of over 21% compared to May 2022. This dip in sales returns the state to the sales totals last seen in 2015. The most substantial declines were observed in Northern Virginia, Hampton Roads, and the Roanoke region.

Despite this sales slowdown, the statewide median sales price for May clocked in at $410,000, a 2.2% increase from the previous year. This price stability amid a slower market reflects the ongoing tight inventory conditions in the state.

Katrina M. Smith, the 2023 President of Virginia REALTORS®, maintains, “It remains a sellers’ market here in the Commonwealth. While homes are taking about a week longer to sell, on average, compared to this time last year, most sellers are still getting more than the asking price for their home.” In fact, the average sold-to-list price ratio in May stood at 101.4%, a slight increase from the previous month.

Further emphasizing the sellers’ market, active listings shrank in May, marking the second consecutive month of decreasing inventory after six months of growth. At the end of the month, 15,441 listings were available on the market statewide – an 8.5% drop from the same time last year.

According to Virginia REALTORS® Chief Economist Ryan Price, “Despite the current mortgage rate conditions, which have kept some would-be buyers on the sidelines, the already tight inventory conditions worsened by stagnant seller activity has kept the market competitive for buyers here in Virginia.”

While the spring housing market in Virginia has seen lower-than-average activity from both buyers and sellers, local markets around the state remain highly competitive. Tight inventories and steadfast prices continue to characterize Virginia as a sellers’ market, a trend expected to persist in the face of current market hesitations.