Hampton Roads Housing Market Report 2022
As a seasoned real estate professional with expertise in appraisals, I would like to provide a detailed analysis of the real estate housing market in the Hampton Roads region in 2022. It is no secret that the market was marked by a dynamic interplay of highs and lows, with each month bringing its own unique set of challenges and opportunities. However, upon closer examination, it becomes apparent that the year can be more accurately described as a tale of two contrasting halves.
The Hampton Roads housing market in 2022’s start
At the beginning of the year, the market was fueled by the momentum from the previous year. The demand was high and the supply was extremely tight, as indicated by the Month’s Supply of Inventory (MSI) which hit all-time lows in January, February, and March. Three of the first six months saw settled sales surpass the 3,000 mark, with a total of 16,872 settled sales from January to June. In contrast, none of the final six months of the year saw settled sales reach this total, totaling 14,875 for July to December – a difference of about 12%.
The high demand and limited supply resulted in rising prices, with the Median Sales Price (MSP) of homes in the Hampton Roads region starting the year at $291,000 in January, but quickly climbing to a record high of $328,797 in May. This represents a 13% increase in just four months. Despite this peak, the MSP dropped steadily to $302,000 in November before rebounding to $306,000 in December. For the year, the MSP for the region overall was $312,000, a 7.2% increase from January to December.
Active listings increased during the second half.
Additionally, the number of active listings recorded during the first six months of the year was much lower compared to the second half of the year, with 18,555 active listings recorded from January to June and 23,602 recorded from July to December, a difference of 27%.
The Median Days on Market (DOM) is another data point used to gauge the health of the real estate market. The Median DOM during the first six months of 2022 looked like this: 16, 11, 7, 7, 8, 9. However, this changed during the second half of the year with the Median DOM being 12, 15, 18, 19, 20, and 24.
The housing market slow down
There were several factors that contributed to the slowdown in the market as the year went along. Firstly, prices had climbed and peaked during May and June, making it less affordable for some potential buyers. Secondly, inflation rates also impacted consumers, with the inflation rate starting at 7.5% in January, jumping to 9.1% in June, and ending the year at about 6.3% for December. Finally, after dropping to historic lows in 2021, mortgage rates started 2022 as low as about 3% for a 30-year fixed-rate loan, but climbed throughout the year, hitting 6% or more in September, before reaching more than 7% during parts of October and November. Freddie Mac reported that the 30-year fixed rate averaged about 6.42% as 2022 ended.
Despite these challenges, 2022 still saw approximately 31,747 total closings take place, making it the third-highest year in the region’s history, with fewer closings than only 2021 (38,276) and 2020 (33,697). This shows that even with the challenges faced, the real estate market in the Hampton Roads region remained strong, and continues to provide opportunities for buyers and sellers alike.
Conclusion
In conclusion, the real estate market in the Hampton Roads region in 2022 was marked by both highs and lows, but it remained strong overall. As a real estate appraiser, it is important to stay informed and up-to-date on the market trends to provide accurate and professional appraisals for clients. The information for this article was obtained from Rein/MLS.