Rising prices, low inventory among topics discussed at 3rd Annual VCU Spring Housing Forum
By: Sarah Murphy
The VCU Kornblau Real Estate Program’s 3rd annual Spring Housing Forum brought together a range of panel guests from different sectors of residential real estate to share their thoughts and observations on the housing market today in Central Virginia.
The webinar, hosted on Thursday, April 13, 2023, saw more than 600 people in attendance and was moderated by Jim Napier, president of Napier Realtors.
Panel guests included Dawn Bradley, managing broker at Long & Foster; Jovan Burton, executive director at the Partnership for Housing Affordability; Brian Haug, executive vice president, chief retail production officer at Prosperity Home Mortgage; Ryan Price, chief economist at Virginia REALTORS®; and Todd Rogers, owner of Hometown Realty.
Each panelist gave a brief presentation covering their area of expertise, beginning with Ryan Price, who covered the status of the economy and housing marketing. Given factors such as supply issues, high inflation and a tight labor market, Price suggests that 2023 will be a period of resetting expectations for home buyers.
“We’re recalibrating what buyers are looking for in a home, changing the search criteria, looking at different locations,” said Price. Overall, Price shared that while home sales are slowing down across Virginia, prices are still climbing. Virginia has seen a 32% price increase in homes since 2018.
Brian Haug contributed to Price’s presentation, saying there is a lot of fear and hesitation in the market today.
“Younger generations especially are asking themselves, ‘what’s going to happen if I buy today?’” said Haug. “They budgeted for that 3% rate, and now all of a sudden they have to come to terms with 6%. It’s our job to give buyers the education and confidence they need.”
Dawn Bradley shared hyper-local data from Central Virginia that showed home listings trending down, pending sales trending down and closing sales down, though average sale prices continue to be steady. She attributes it all to three components: home value, lack of inventory and mortgage rates.
“2022 is the first year since 2011 that sales did not exceed the year before,” said Bradley. “You think about folks who might be selling high, but then have to turn around and purchase high. This is something to think about.”
In terms of new home construction, Todd Rogers discussed how housing production still has yet to recover to pre-pandemic levels. Since 2008, Virginia’s population has grown 10.2% while housing supply has expanded only 8.7%.
“There are less lots, less competition, higher prices,” said Rogers. “There is also an influx of rental units in the mix, and in some cases, because of the zoning restrictions of some localities, some builders are actually building single family detached townhouses now and keeping them.”
Jovan Burton discussed affordable housing in the Richmond region and how the pandemic in particular impacted the market for both rental and single family homes. Overall, Burton says the region’s supply of dedicated, affordable rentals is up, but remains far below current and projected needs.
“This is an issue that needs to be addressed holistically; it’s not one thing, one solution,” said Burton. “The rental gap in terms of affordable units in the Richmond region currently stands at about 39,000. We will continue to see more and more people moving here, the demand will continue to be high for rental and multifamily, but the supply is just not there.”