Virginia housing market seeing huge demand

For Sale Sign On Property
Posted at 11:58 AM, Apr 19, 2021
and last updated 2021-04-19 23:56:21-04

NORFOLK, Va. - The competition to buy a new home right now is fierce.

"I think it's fair to call the housing market in Virginia pretty frenzied," said Dr. Lisa Sturtevant, Virginia REALTORS® Chief Economist. "Competition for homes is at pace we really haven't seen in many, many years."

In Hampton Roads, sales were up 11% in February compared to last year, and prices were up 12%.

Dr. Sturtevant says the pandemic has accelerated some of the demand, but a big part of it is because of competing demographics.

There's a lot of demand from millennials who are looking for homes; at the same time, there's a big population of baby boomers staying in their homes longer.

COVID-19 added to the demand because of lower interest rates and people who started reevaluating their housing situation after spending so much time at home.

So, how long can we expect this higher demand?

Dr. Sturtevant says we likely won't see things slow down right away, but there are some things that may lessen the demand.

One of those - it'll just become too expensive for some people.

"The folks who can afford to buy are going to be in the market, and those that can't are going to have to step aside, which is going to reduce demand and maybe give us a little breathing room," said Dr. Sturtevant.

Mortgage rates will also likely inch up later this year and take the edge off demand.

She says what we really need, though, is supply, and she doesn't see that changing soon.

So, what do you do if you want to buy a home now?

There are some concessions buyers are making so that their offer is more appealing.

Offering to temporarily rent the home back to the sellers is one option. That gives them time to look for a new house.

Sturtevant says you should also make sure you have your financing lined up with pre-approval letters, lending documents ready to go and and consider casting your net wider than you may have initially planned.

Just be careful you don't give up too much.

"Waving appraisals, waving home inspections, you need to be really careful with those kinds of things."