‘Slow yet competitive’: In Virginia, housing prices remain high and supply tight

Even as the housing market in Virginia has slowed, prices remain high statewide, researchers told the Virginia Housing Commission Tuesday.

“The theme is slow yet competitive,” said Ryan Price, chief economist for Virginia Realtors. “A lot of things are driving that, primarily the increase in interest rates, which has deterred both buyers and would-be sellers, but also our inventory, the lack of inventory that we have out there.”

While new home construction in Virginia has continued to grow in 2022, building still lags levels seen in the state historically, said Hamilton Lombard, a demographer for the Weldon Cooper Center for Public Service at the University of Virginia.

Before the financial crisis of the late 2000s, “we were around 60,000 new homes annually,” he said. “We’re below 40,000 right now. … If you go back before that and look at the averages we had in the ‘90s and ‘80s, we were building about 50,000 new homes every year.”

Declines, however, aren’t even across Virginia. Data presented to the commission shows new home construction is down significantly in Northern Virginia and Hampton Roads compared to a decade ago and continues to be low in the coalfields region of Southwest Virginia. In contrast, Richmond and smaller metropolitan areas in places like Halifax and Danville have seen upticks in activity.