Last year I wrote an article in January that predicted an increase in values from January to June 2022 - on the whole the prediction came through, but with the very large caveat that the Russian war in Ukraine was unknown at the time of writing. In short, I was "right" but perhaps for bad reasons.
May of 2022 to January 2023 has been the worst national housing market since the economic collapse. The Central Virginia MLS coverage area has seen a 10.5% decline in median home values since May of 2022. Richmond metro has seen a decline of 9.2% in that time frame. Hanover has declined 7.8%. Henrico has declined by 13.7%.
However, February say a sharp reversal in this trend in all major market indicators, as well as what I am hearing from agents. Further, Hanover County tended to outperform the rest of the area.
I've re-evaluated my prognostication multiple times over this week, and the only thing that I am sure of, is that I am not sure. Here is the case as I see it:
The most recent indicators seem to indicate that mid 2022 to early 2023 was the correction that we've needed for a few years, and not a collapse.
Fears of the "coming recession" have been pushed back nearly every quarter for the past year. Perhaps a "soft landing" is still in the cards.
The macroeconomic factors remain negative, with likely interest rates in 2023 being revised upwards in the last few weeks.
Global factors (China, Russia) remain negative.
The consensus seems to be that a "soft landing" is unlikely.
These factors cause me to pause. In total, I believe that I have to be conservative and view that 2023 will likely be stable to a slight increase with the following caveats: 1) if the current crisis in commercial real estate begins to affect large lenders, all bets are off. 2) if there is a spike in unemployment or interest rates above 8%, I would move towards stable to slight decline. These factors would likely affect the market later in 2023, so there would likely be a "top" in mid 2023.
Median Sale Price
Median Days on Market
Months of Housing Supply
Showings per Listing