After three years of skyrocketing home values, the Virginia housing market, as a whole, is starting to downshift to more sustainable growth. But some local markets are still seeing the intense gains of the pandemic-era seller’s market.
Let’s take a look at the fastest-growing real estate markets in Virginia in 2023, as well as a few state-wide trends to watch for.
2023 Fastest-Growing Real Estate Markets in Virginia
Despite higher mortgage rates and higher home prices than we’re used to, buyers still recognize the value in homeownership. And they are flocking to certain markets in search of healthy employment opportunities, strong school systems, community amenities, and low crime rates.
Here's a look at the top eight markets in terms of the fastest-growing median sales prices as listed by Redfin for Q1 2023.
1. Christiansburg
The 23,000 residents of Christiansburg saw the median sales price jump by 34.5% from the spring of 2022 to the spring of 2023. At $345,000, the current median sales price in Christiansburg is still well below the U.S. average of $400,000, making property a bargain in this community. Plus, with low crime rates, above-average schools, and easy access to Roanoke (just a 30-minute drive away), it’s easy to live in a town like Christiansburg.
2. Blacksburg
Blacksburg, home to Virginia Tech and an attractive labor market, makes this list of the hottest Virginia real estate markets for the second consecutive year. Located just north of Christiansburg, Blacksburg median home prices are up 17.6% compared to 2022. And, just like we saw last year, homes in this in-demand area are selling in just five days, often for more than the asking price.
3. West Springfield
Positioned toward the western edge of the DC/Arlington/Alexandria Metro Area, West Springfield is a desirable community because of the high-ranking public schools and family-friendly amenities like parks and trails. West Springfield sale prices increased by 14.2% from February 2022 to February 2023. As of March 2023, the average home sold after just four days on the market. One of the most expensive markets on our list, West Springfield homes go for around $630,000.
4. Lake of the Woods
Lake of the Woods has seen an impressive median sales price increase of 11.7% over the past year. But, unlike many of the other markets on this list, buyers may actually have some negotiating power here. Homes are taking over a month to sell on average, and they’re selling around .6% below the asking price. Compared to the other hot Virginia housing markets where homes are selling in a week for 1% or more over asking, Lake of the Woods offers a less-frenzied buyer experience.
5. Lake Monticello
Lake Monticello is a private, gated community of 10,000 residents, built around its namesake lake. The median home price in this area is up 11.5% year-over-year, with increased demand from retirees looking to enjoy their golden years in this summer resort environment.
6. Harrisonburg
After an unbelievable 45% boom in median sales price from May 2021 to May 2022 (which, naturally, earned Harrisonburg a spot on our list of the hottest Virginia real estate markets last year), home values are somehow continuing to climb in Harrisonburg. While the spring months are still being tallied, home values were up an additional 9.4% in February of 2023, compared to February 2022. And yet Harrisonburg is still among the most affordable markets on our list, with sales prices sitting well below the $300,000 mark.
7. Bailey's Crossroads
A suburb of Arlington, the desirable neighborhood of Bailey’s Crossroads saw home values increase by 6.4% over the past year. But the real growth can be found in the price-per-square-foot, which increased by 2.6% over the same period. In this competitive market, homes are selling at 1.4% above the list price on average. Just 10 miles from Capitol Hill in DC, homes in Bailey’s Crossroads sell for just $350,000 — an absolute steal compared to the $640,500 median price in the capitol.
8. Cave Spring
This suburb at the southwest corner of the Roanoke metro area enjoyed a 5.5% boost in median sales prices over the past year, bringing the median price up to $297,500. Cave Spring is one of the more affluent areas in Roanoke, presenting an impressive quality of life, without the high cost of living typically associated with that lifestyle.
2023 Virginia Real Estate Market Trends
Following years of excessive growth, the Virginia housing market is finally starting to stabilize. Not only is this good news for first-time buyers looking to get on the property ladder, but it’s also good news for homeowners who don’t want Virginia to become overpriced to the breaking point (like some West Coast markets). And it’s good news for real estate professionals as well. A stable market means strong prospects without the frenzy of an unprecedented seller’s market. Slow and steady growth is good for everyone!
Here’s what you can expect from the Virginia Real Estate market throughout 2023.
Home Values Level Off in Many Local Markets
In the spring of 2021 and 2022, the Virginia housing market was seeing double-digit growth in median sales prices. For 2023, we’ve seen low single-digit growth, for most months, with a slight dip in the year-over-year rate for March. This is exactly what we expected based on the 2022 interest rate hikes spurred by high inflation. In short, the rate hikes, combined with home value increases, made homeownership more expensive, leading to fewer buyers in the market. And the fewer buyers we have, the less demand there is to drive prices higher.
Stagnating, or even temporarily declining, home prices are not a cause for concern. This is simply a market “correction,” which is needed to bring housing prices back in line with what buyers are willing and able to pay. It’s a normal part of our economic cycle.
Inventory Remains Low
Some buyers have been waiting for the market to “crash,” in the hope that homes would suddenly become dramatically more affordable. But that is highly unlikely because low inventory is keeping the supply side of the equation in check. Between the lack of new construction and the lack of homeowner turnover as residents choose to age in place (rather than move to a condo or senior living facility), we barely have enough homes to cover the current buyer demand.
The number of homes for sale is down 11.5% statewide, and the number of new listings is down 24.8%. This is keeping the supply and demand balanced, which will help to hold home values relatively steady, despite lower buyer demand than we have seen in recent years.
Reasons to Join Virginia's Real Estate Industry Now
Real estate is an exciting career with flexible hours and unlimited income potential. And this shifting market is presenting new opportunities for those who want to launch their own career in real estate. The calming market presents a better work-life balance. And for buyer's agents, your buyers have a better shot at getting their offers accepted.
Plus, now is a good time to enter the industry with less competition. The opportunistic agents who only joined in the last two years to make a quick buck may be exiting the industry now that sales are slowing, which leaves more room for you to establish yourself as a reliable real estate professional.
Your new career is calling! Enroll in your Virginia online real estate course today to earn your real estate license and launch your new business as a real estate agent.
Updated 6/5/23