Rising interest rates and economic unpredictability have caused buyers and sellers nationwide to pause during the second half of 2022, creating a significant cooldown in the market.
What will the housing market look like in 2023?
Northern Virginia Housing Market
According to Bright MLS, Northern Virginia and the rest of the Mid-Atlantic region is in a much better situation than many other parts of the country.
The Mid-Atlantic region comprises Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia, and the District of Columbia.
Home Sales Projections
Once all the data is compiled and analyzed, Bright MLS expects home sales in 2022 to see a 19% decline from 2021.
High-interest rates played the most significant role in this downward trend in home sales. Rates are expected to decline but remain around 6% for 2023.
With lower interest rates, expect greater housing demand in the upcoming year.
Bright MLS predicts a 5% drop in home sales nationwide in 2023 compared to 2022. The real estate industry database anticipates a 4.1% dip in the Washington metro area.
Home Prices Projections
There is good news for Northern Virginia, Washington DC, and the rest of the Mid-Atlantic region.
Since 2019, Mid-Atlantic home prices have steadily risen, seeing a 29% increase between 2019 and 2022. However, this region saw a lower home price increase than other major metro areas throughout the COVID-19 pandemic.
Nationally, during the pandemic years, home prices rose by 40%.
Because home prices did not see as steep of an increase as other regions across the country, the Mid-Atlantic region is at less risk of significant home price declines, which is good news for sellers.
Northern Virginia Trends and Forecasts
Northern Virginia Association of Realtors (NVAR) forecasts that Fairfax County will see a home price gain of 0.4%, total sales decline by 9.7%, and inventory remain low.
The NVAR forecasts a rise in condominium inventory, with prices staying the same and sales decreasing by 11%.
Alexandria City is predicted to see a decline in price market volatility and experience flat prices, a slight decrease in sales, and continue its tight housing inventory.
What Does All This Mean?
While these projections may not sound like great news, they show the market is trending in the right direction.
Northern Virginia generally experiences a more secure housing market due to the Boeing, Amazon HQ2, and federal government jobs here.
Ryan McLaughlin, CEO of NVAR, says, “The rapid pace of home sales and rising prices in both the Northern Virginia and national housing market wasn’t sustainable.” He states, “A stable, more reasonably paced housing market is good for both Realtors and their clients—here and nationally. What we are experiencing now is a market adjustment returning to sustainable levels. It’s healthy for the housing market to return to normal.”
If you are a buyer or seller and have questions about the market, please get in touch with us.
