Hampton Roads Housing Market for 2021 and Beyond

While the previous 12 months saw unprecedented economic and job losses, there’s still a resilient surge in the housing market in Hampton Roads.

Real estate agents were able to maintain this growth by adopting new solutions to overcome unique challenges. These new innovative solutions have revolutionized the real estate game, with developments such as virtual viewings becoming a new norm.

This adaptive spirit meant that a strong housing market grew. The majority of the industry can agree that demand for homes has been high, even during the pandemic. 

A large reason behind the demand was related to the historically low mortgage rates, which in turn have fuelled this boom, and have driven prices upwards above the average asking price. 

Also contributing to this rise in housing prices is a lack of inventory for homeowners looking to get out of cramped cities or looking to upgrade to larger houses to fit their adapted lifestyle of working from home.

Looking at the current market, and predicting the reactions of the economy, is going to be tricky. Even at the best of times, it’s tough to call, but in the current market, it’s more difficult, due mainly to COVID-19.

But what drives these economic factors that affect the Hampton Roads housing market?

Economic factors that affect the housing market

There are two main economic factors that will affect the home prices in Hampton Roads.   

These include: 

Employment

Employment is still lower today in 2021 than it was in 2007, before the recession.

At the end of 2020, there were a total of 3.88 million jobs in Virginia. This is up compared to the 2020 summer figures, although they were still below the pre-2008 recession levels.

Even with the pandemic, 2021 promises to deliver more employment opportunities in Virginia, with the number climbing to 3.91 million. This is up 2.2% over the previous year. 

However, this is still below the 2019 level, and we could only see proper gains coming in 2022 with a possible return to the pre-recession levels. 

The next indicator is the unemployment rate.

Unemployment rate

The peak unemployment rate in Virginia was in April 2020, at around 11.2%. This is still below the national rate, but unemployment in the state surged from below 3%, the unemployment rate from 2019. 

The unemployment rate has decreased steadily over the last year and is expected to improve even more in 2021. It is projected that the unemployment rate in virginia house buyers will drop to 5%. 

While we’ve spoken about the main economic factors, we need to dive into the housing market indicators and what it means for the Hampton Roads area. 

Housing market indicators in Hampton Roads

There are a number of factors that drive the housing market. These include: 

Home Sales

The demand for homeownership will continue to be a strong drawcard in Virginia in 2021. The lack of inventory, though, will be the biggest hurdle over the next year. 

In some instances, homebuyers might become discouraged at the limited selection of homes on the market and put off their search until the inventory improves. This being said, waiting for new inventory means witnessing the prices on these houses escalate to record highs. 

Escalating home prices create a large problem for home buyers, especially first-time buyers. 

Home Prices

Prices are being driven upwards in Virginia. The lack of supply, growing demand, and low mortgage rates have all contributed. All these factors will continue to drive home prices higher in 2021. 

Increased demand in smaller markets will ultimately lead to very strong growth in the median statewide home sales price as well.

So, those located outside of the main metropolitan hubs will see increases as well, and arguably better growth. 

New Housing Permits

Taking on a construction project during the first part of 2020 would have been a nightmare due to the pandemic. But in the second part of the year, there was an increase in applicants looking for permits for new housing construction. 

This uptake in permits was taking place even with the higher costs of lumber, a lack of labor, and COVID-19 regulations remaining in place, and constraints on new residential construction. 

In 2021, we’re bound to see an upward trend in new home construction projects.

Mortgage Rates

During 2020, the rate on 30-year fixed-rate mortgages hit historic lows, plunging to new lows 13 times over the summer and fall. 

Even with the economy improving in 2021, there is no sign that the mortgage rates will move higher, at least within the next few months. 

As we peer into the future, it might not be 100% clear what will happen but the outlook for 2021 looks to be positive for the economy and housing market. 

While this is a general overview, what does the overall view of the Hampton Roads housing market look like?

Hampton Roads housing market forecast  

As with the rest of the state of Virginia, interest rates are at an all-time low, demand is strong, and average selling prices are higher than average. 

Our prediction for the Hampton Roads area housing are:  

Demand will increase for property 

Experts predict that there will be a 6-8% growth in existing home sales during the course of the year. This is due, in part, to millennials with growing families, downsizing baby boomers, and seasoned investors all looking for new properties. Currently, there is a healthy supply of buyers in the market. 

An increase in stock 

With an uptick in interest in property in Hampton Roads, we’ll see more options being listed on the market. The main reason for more homes being listed ranges from homeowners worried about COVID-19, landlords now looking to switch from renting to selling their house fast, and owners facing new financial situations where they need cash. 

This growth in new listings will open up more opportunities for buyers, but it will still remain a seller’s market.

Asking prices will remain high

In 2021, we anticipate home price growth will increase by 4.5-6.5% throughout Hampton Roads in areas such as Hampton, Chesapeake, Norfolk, Virginia Beach and Suffolk. Most of these gains should happen in the first half of the year before starting to slow. 

Now, what will the trends for the area be? 

Hampton Roads real estate trends 

Over the last 12 months, a few trends will affect buyers’, sellers’, and even investors' choices. These include: 

Housing affordability 

In a market that’s already spending around 25% of their income on their mortgage payments, housing affordability isn’t a new issue in the area. Historically low interest rates in 2020 helped keep these repayments lower and more affordable for buyers, even when the average purchase prices rose. 

With little room left for interest rates to drop, rising home prices will mean many potential buyers may see themselves priced out of the market. This is especially true for first time buyers. 

This problem will only get worse when the interest rates start to increase again. 

Multigenerational housing

The challenge of affordable homes and houses that can accommodate remote employment arrangements has sparked an interest in multigenerational housing. 

This means that in-laws can help with repayments and child-raising, while millennials can help their parents retire comfortably on the property. The arrangement, however, requires space. Property that can be expanded and provide additional dwelling units and separate living spaces will be in high demand. 

A return to seasonality 

In 2020, the Hampton Roads real estate market behaved oddly. While spring and summer are usually the busier seasons, fall and winter were far more active in 2020. In 2021, experts predict that this pattern will return to normal. 

But what’s happening in the surrounding areas? 

Hampton Roads neighborhoods and cities’ trends 2021 

Hampton Roads and the surrounding area can expect to see growth trends. Home prices in Norfolk, Virginia Beach, and Chesapeake will increase. Each of these cities also has its own trends. 

Norfolk

Experiencing a rejuvenation in the area, the city offers easy commuting possibilities, access to multiple shopping centers, and if you are an outdoor enthusiast, Norfolk offers fishing, boating, and in some areas surfing. 

Combine all these factors and the Norfolk housing market is set to boom. 

Then there’s the Virginia Beach real estate market. 

Virginia Beach 

Virginia Beach is a vibrant coastal city that offers residents and visitors loads to see and do. Also, it is primed to see growth in 2021. 

There are two main factors driving this growth; home pricing and access to locations. 

Virginia Beach has a flourishing local culinary scene, a rich and diverse history, and an amazing array of arts and entertainment  – as well as an aquarium.

And the last surrounding area is Chesapeake and Suffolk. 

Chesapeake and Suffolk

2020 saw many old norms fall by the wayside and ‘new normals’ taking over. One that’s here to stay is remote work. And Chesapeake and Suffolk offer the perfect setting for families in a suburban area with space and affordability, within driving distances of beaches and city amenities. So it’s an area that’s bound to see growth in demand. 

Also with job growth in the area getting an injection, young adults won’t be lacking career opportunities. 

But what if you’re unable to sell your home on the other side of Virginia? And you’re keen to move to these areas quickly? We have a solution for you. 

Avoid the noise and consider selling your house to House Buyers of America 

There’s nothing more frustrating than not being able to act on your desire to move. With numerous hurdles to overcome, you’ll be tempted to sell your home as-is or cut out the realtor fees by selling your home on your own.

But both these routes are labor-intensive and don’t guarantee you’ll reap any financial rewards. Especially, if you can’t find a cash buyer. 

Sell your home to us. House Buyers of America will buy your home for cash. But how does House Buyers of America work? 

How House Buyers of America works

Since 2001, House Buyers of America has been perfecting and streamlining every step of our home buying process. 

It starts when you contact us. Our Real Estate Consultants are ready to take your call at 855-659-3289, or you can use our online form, to get started!

As the perfect buyer for your house, we’re going to give you a fair cash offer within 10 minutes of your first phone call. Many of our clients couldn’t believe how efficient and hassle-free the process was. Then again don’t take our word for it, you can ask our customers. 

If you accept the offer, you will be assigned a dedicated Real Estate Consultant who will organize a time to meet at your house and will also bring along the paperwork to sign. 

House Buyers of America will handle all of the paperwork and we’ll do it quickly if you’re ready to sign on the dotted line. Once you’ve signed the contract, you will see the cash in your account in a matter of days. 

Currently, House Buyers of America will buy homes in  Washington DC, virginia house buyers, sell house fast in Maryland, and all throughout the Mid-Atlantic. 

There’s never been an easier way of getting cash for your Hampton Roads house! Get your fair cash offer today!