Virginia’s housing market is heating up this spring, with April sales increasing 14.1% from sales in April 2023, according to Virginia Realtors data released Tuesday.
Last month, 9,416 homes sold in Virginia, up 1,164 sales from the same month last year. Sales activity in Virginia has been trending up in 2024, except for a dip in March, when sales dropped 7.3% from March 2023.
April’s year-over-year increase in closed sales is the largest increase in monthly sales that the Virginia market has had in nearly three years, although the 10-year average for closed sales in April is around 10,500 sales, according to Virginia Realtors.
Although 66% of municipalities in the state had an increase in sales compared with April 2023, the markets with the strongest sales growth were in the Shenandoah Valley, particularly the Winchester region, and the Roanoke Valley.
The Virginia market had 16,047 active listings at the end of April, an 18.1% increase from the same time last year. April was the fifth consecutive month that the number of active listings grew, according to Virginia Realtors.
There were 13,309 new listings, up 19.1% from April 2023. The jump in new listings is the largest increase in about three years, according to Virginia Realtors.
Homes in Virginia stayed on the market for a median of seven days in April, the same median reported in April 2023.
Home prices also rose in April. The statewide median sales price last month was $416,548, up $25,548, or 6.5%, from April 2023. Although listings and sales have increased, pent-up demand is putting pressure on home prices, according to Virginia Realtors.
“Rising prices are likely to continue as demand for housing is stronger than the increase in supply of listings,” Ryan Price, Virginia Realtors’ chief economist, said in a statement.
The statewide housing market had 9,819 pending sales last month, up 710 pending sales, or 7.8%, from April 2023.
Mortgage rates decreased for the second consecutive week in the week ending May 16, according to Freddie Mac data. For that week, the average 30-year fixed-rate mortgage rate was 7.02%, down 0.07 percentage points from the previous week. The four-week average rate for a 30-year fixed-rate mortgage was 7.13%.
“Mortgage rates have been trending down a little in May but are still higher than when 2024 began,” Virginia Realtors CEO Terrie Suit said in a statement. “Though rates have continued to hover above the 7% mark for a 30-year fixed, there are some signs consumers are adjusting to the higher interest rates.”
Northern Virginia home sales in April rose 13.5% from April 2023, the region’s first double-digit growth in sales since November 2021, according to data the Northern Virginia Association of Realtors released Tuesday.
In April, the region had 1,623 closed sales, up year-over-year and up 36% from the 1,191 homes sold in March, reflecting a spring market uptick. In November 2021, the last time NVAR recorded double-digit year-over-year growth in home sales, 2,124 homes sold in Northern Virginia, which was an 11% increase from November 2020.
“As April and February’s market data show, we are experiencing a thawing in our region, as we break through post-pandemic market conditions and see a little more inventory and inspired homebuyers,” Rob Carney with TTR Sotheby’s International Realty, an NVAR board officer, said in a statement. “Consumers are accepting that higher mortgage rates are a reality for now and are choosing to sell and buy anyway.”
New pending sales last month totaled 1,843 units, up 5.3% from April 2023. Active listings in the region numbered about 1,830 units last month, up 9.7% from the same month last year, while new listings reached 1,504 units, down roughly 4% from the 1,565 new listings recorded in April 2023.
Houses sold quickly last month, remaining on the market an average of 14 days, down from 18 days in April 2023 and from 16 days in March. The month’s supply of inventory (MSI) — a measure of how many months there would be homes on the market if no new inventory were added — stood at 1.1 months, up slightly from April 2023’s MSI of 1.0 and March’s MSI of 0.9.
High demand and low supply have helped drive increases in home prices, despite higher mortgage rates, according to NVAR. The median sold price last month was $751,000, up 8.8% compared with April 2023 and up about 2.88% from the median sold price in March. The total sold volume in April was close to $1.39 billion, up 22.6% from April 2023.
NVAR reports home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church, and the towns of Vienna, Herndon and Clifton.
Home sales across Hampton Roads were up in April, as the region also racked up near-record median sales prices, the Real Estate Information Network (REIN) reported Friday.
There were 2,189 settled sales for the month, up from 2,057 in March and 2,053 in April 2023, according to REIN. There were 2,569 pending sales, compared with 2,317 in March and 2,363 in April 2023.
The median sales price of homes sold regionally in April was $344,000, the second-highest MSP on record in the region and up from $332,000 in March and $320,000 in April 2023.
“Even though mortgage rates remain around 7%, consumers are willing to spend what they need to spend in order to get the home they want,” Gary Lundholm of the Real Estate Group and president of REIN’s board said in a news release announcing the data.
There were 3,837 active listings in April, compared with 3,574 in March and 3,156 in April 2023. The number of median days homes stayed on the market in April was 14, down from 18 in March, but up from 12 in April 2023, according to REIN.
The number of active listings was 3,837, up compared with 3,574 in March and up from 3,156 in April 2023.
“The combination of increased sales and increased inventory is a positive development for the local market,” Lundholm said.
REIN is the multiple listing service in Hampton Roads and has about 9,000 members. It serves an area that stretches from Williamsburg and Gloucester down to Edenton, North Carolina.
The pace of sales in Virginia’s housing market slowed in March, declining 7.3% over March 2023, according to data released by Virginia Realtors Tuesday.
In March, there were 8,075 home sales in the commonwealth, 634 fewer sales than this time last year. At the end of the month, there were 14,950 homes on the market, up by about 1,400 additional listings from a year ago — a 10.3% increase.
“This is the fourth consecutive month that the overall inventory of active listings has expanded in Virginia, which is welcome news for buyers in this competitive market,” Tom Campbell, Virginia Realtors’ 2024 president, said in a statement.
New listings decreased in March, totaling 11,470, which is 35 fewer than in March 2023. There were about 17.9% more new listings in March compared to February. However, this increase is lower than the typical February-to-March spring inventory bump.
“This pivot to a slowdown we’re seeing could signal hesitation with sellers who are watching interest rates just as closely as buyers,” Virginia Realtors CEO Terrie Suit said in a statement.
About 65% of cities and counties around Virginia had more listings on the market in March than during that time last year. The Harrisonburg and Lynchburg regions had the sharpest increase in active listings in March. The biggest drop in active listings occurred in the Northern Virginia and Williamsburg areas.
Homes in Virginia were on the market for a median of 10 days last month, the same time frame as during March 2023.
Home prices continue to rise even though sales volume has slowed. The statewide median sales price in March was $397,000, up more than $27,000 or 7.3%, from last year.
The Virginia housing market had 8,981 pending sales last month, up by 444 pending sales from last year, a 5.2% increase.
Mortgage rates have risen above the 7% mark for the first time since December 2023. For the week ending April 18, the average 30-year fixed-rate mortgage was 7.1%, up from 6.88% the previous week and up from 6.62% at the start of 2024, according to Freddie Mac data.
“If these upward trends continue, the spring market will likely be slower than last year, and last year was the slowest spring we’ve seen in a decade,” Ryan Price, Virginia Realtors’ chief economist, said in a statement.
Home sales in Northern Virginia and Hampton Roads dropped year-over-year in March, a reversal from sales growth seen in February. Median sales prices, though, continued to rise.
Northern Virginia
Northern Virginia home sales in March dropped 13.8% from March 2023, a reversal from the year-over-year sales growth seen in February, according to data the Northern Virginia Association of Realtors released Friday.
Closed home sales for the region last month totaled 1,191 units, down from March 2023 but up about 14.4% from the 1,020 homes sold in February. New pending sales numbered 1,606 sales, up 0.4% from the same month last year.
“We had a reprieve in February as sales grew year-over-year for the first time since 2021, but March was a return to what we have been experiencing: lower sales from the previous year,” NVAR board member Christina Rice with Pearson Smith Realty said in a statement. “That said, I think February’s positive news represents a change that is going to slowly transform the housing market, getting us back to more normal market dynamics.”
Active listings in March totaled 1,210 units, down 14.6% from the 1,417 reported in the same month last year. There were 1,504 new listings in Northern Virginia last month, down from March 2023’s 1,744 new listings.
Reflecting the market’s high demand and low supply, homes stayed on the market an average of 16 days in March, down 27.3% from the 22-day average recorded in March 2023. The month’s supply of inventory (MSI) — a measure of how many months there would be homes on the market if no new inventory were added — stood at 0.9 months, the same MSI as March 2023 and roughly the same as February’s MSI.
The median sold price for a home last month was $730,000, up 9.8% compared to March 2023 and up from the February median price of $687,250. The total sold volume in March was $973.6 million, down 8.5% from March 2023.
“We are seeing less dramatic drops in year-over-year sales than in the past year,” NVAR CEO Ryan McLaughlin said in a statement. “Coupled with February’s good news, we expect to see more homeowners ready to sell in the height of the spring market.”
NVAR reports home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church, and the towns of Vienna, Herndon and Clifton.
Hampton Roads
In Hampton Roads, home sales in March were down year-over-year, but supply rose, according to Real Estate Information Network (REIN) data released Wednesday.
The Hampton Roads housing market had 2,057 closed sales last month, up from the 1,709 sales reported in February but down about 9.66% from the March 2023 total of 2,277 sales. Pending sales totaled 2,317, up from 2,138 pending sales in February but down from 2,454 in March 2023.
March 2024 statistics for the Hampton Roads housing market. Image courtesy Real Estate Information Network
The Hampton Roads market had 3,574 active listings last month, the highest number of active listings in a March since March 2020, when 6,820 homes were listed. The March 2024 total is also up 14.4% from the 3,124 listings reported in March 2023 and slightly up from February, which had 3,568 active listings.
Additionally, the month’s supply of inventory was 1.75, up slightly from the MSI of 1.73 in February and from March 2023’s MSI of 1.27.
“More inventory means more choices for consumers, which is a good thing,” Gary Lundholm with The Real Estate Group, president of REIN’s board of directors, said in a statement. “And as we head into spring and summer, having that additional inventory will hopefully help keep prices more affordable for buyers, while still ensuring home sellers get a fair return.”
Homes spent a median of 18 days on the market in March, down from 22 days in February but up from the 15-day median reported in March 2023.
The median sale price of homes in the region was $332,000 last month, up from $327,500 in February and from $320,000 in March 2023.
“The median selling price for homes in March 2020 was $249,900,” Lundholm said in a statement. “While that market was very different from today’s market, more choices for a buyer means that not only does that buyer have a better chance of finding the right home, but they might also have a bit less competition for the home they want.”
Founded in 1969, REIN is a regional multiple listing service that covers an area stretching from Williamsburg east to Virginia Beach and south across the North Carolina border.
The pace of sales in Virginia’s housing market picked up in February, increasing 3.5% over February 2023, according to Virginia Realtors data released Tuesday.
In February, there were 6,733 home sales in the commonwealth, 228 more sales than this time last year. At the end of the month, there were 16,004 homes on the market, up by 1,446 active listings from a year ago — a 9.9% increase.
New listings also increased in February, totaling 9,729, which is up 1,395 new listings, or 16.7%, from February 2023. The increase is the largest influx of new listings Virginia has had since summer 2021, Virginia Realtors Chief Economist Ryan Price said in a statement. Additionally, about 64% of cities and counties around Virginia had more listings on the market in February than this time last year, indicating an increase in supply.
“This increase is a welcome signal to buyers, but inventory levels are still tight, and market conditions remain very competitive in most parts of Virginia,” Price said in a statement.
Homes in Virginia were on the market for a median of 15 days last month, down one day from the 16-day median reported in February 2023.
Home prices continue to rise as demand remains high. The statewide median sales price in February was $384,576, up more than $14,500, or 3.9%, from last year.
Pent-up demand and tight (though improving) inventory levels will likely “keep the market competitive as we head into spring, and prices will remain on an upward trajectory across most of the state,” Tom Campbell, Virginia Realtors’ 2024 president, said in a statement.
The Virginia housing market had 7,356 pending sales last month, up by 546 pending sales from last year, an 8% increase.
Mortgage rates moved slightly lower this week. For the week ending March 28, the average 30-year fixed-rate mortgage was 6.79%, down 0.08% from the previous week, and the four-week average was 6.82%, according to Freddie Mac data.
“February’s uptick in pending sales and new listings indicates renewed interest from sellers and move-up buyers,” Virginia Realtors CEO Terrie Suit said in a statement. “If mortgage rates drift downward later this year, as they are expected to, we could see even more sales volume growth across Virginia.”
But in Virginia at least, industry experts are taking a more measured — if not sanguine — response to the news.
“If the court approves the settlement — a process that could take several months — we do anticipate it will lead to changes in the real estate industry, but adapting to change is a strength of Realtors,” says Richmond Association of Realtors CEO Laura Lafayette, who also oversees the Central Virginia Regional Multiple Listing Service.
“As an association, we are doing our due diligence to ensure that our members will be educated and able to comply with the terms and spirit of the settlement agreement,” Tom Campbell, 2024 president of Virginia Realtors, the state’s largest trade association, said in a statement.
In a news release, Virginia Realtors CEO Terrie Suit pointed out that Virginia has already had in place one of the major changes coming as a result of the court case — requiring buyers and their agents to enter into a written brokerage agreement — for almost 30 years. “Virginia was the first state to formalize buyer agency at the behest of our association, because we believe it is in the best interest of buyers to be represented in what will likely be the largest financial decision of their lives,” Suit said in a statement. “We have and will continue to advocate updates to the law to ensure that the needs of consumers are being met.”
Over the course of a 21-year career, Sean Rooney, co-founder and president of Norfolk-based OWN Realty, said that he’s watched the industry weather several storms — including the 2008 Great Recession and the COVID-19 pandemic, both of which were predicted to decimate business — and that this will be no different. “We all were fearful of the big changes that might come,” he said, but “as an industry, we’re pretty resilient and we learned how to navigate it.”
On March 15, NAR proposed the settlement, which would end the industry’s longtime practice of allowing sellers to set commission rates for buyers’ agents as soon as mid-July. In October 2023, a Kansas City, Missouri, jury awarded $1.8 billion to Missouri home sellers against the NAR and large brokerages in an antitrust lawsuit alleging that the Realtors association and real estate brokerages had conspired to keep commissions high, and the NAR faced similar legal actions in other states. In a Chicago antitrust case that appeared to be heading for trial, possible damages could have climbed as high as $40 billion, according to The Wall Street Journal.
Under the traditional system, brokers representing the buyer and seller of a home split a commission of 5% to 6% that was baked into the price of the home. This practice, critics have complained, encouraged brokers to push clients toward more expensive homes and made it so that buyers were unable to negotiate fees, resulting in inflated commissions that are higher than in other nations. NAR would pay out the $418 million in damages over four years to about 50 million recent home sellers.
Whether or not federal courts agree to the settlement, the NAR has agreed to put in place rule changes that will radically change how homes are bought and sold, potentially resulting in buyers contracting directly with buyers’ agents, who could change fee structures to models such as hourly or flat fees that would cost less than current commissions. Experts say the changes could result in significant savings for both sellers and buyers.
“I do not believe we will see a 50% reduction in agent count,” said Rooney, who oversees 160 agents at OWN Realty. “You see people commenting about reductions in commissions. There may [be, or] there may not be, but we will figure out how to help our clients as best as we can and move forward from there.”
Jonathan Everett, assistant professor of practice at Virginia Tech’s Blackwood Department of Real Estate, stressed that commissions have always been negotiable. What would change under the settlement is that the commission the seller will provide for the buyer’s agent will no longer be posted on the MLS.
“Arguably debunking the age-old assumption that the seller will shoulder full burden of commissions, this change may also … allow buyers and sellers more control and flexibility in determining who paid what commissions as an additional lever in their negotiating tactics,” Everett said.
In a statement, Chris Kelly, executive vice president at HomeServices of America, parent company of Fairfax-based Long & Foster, one of the nation’s largest real estate companies, said that, in addition to the court needing to approve the settlement, there will also be “a subsequent objection period by class members, as well as potential interest by the Department of Justice. It is too early to determine the impact that these amended business practices will have on the compensation arrangements with consumers and those available via the myriad of brokerage business models that already exist in today’s market — from full-service brokerages to discount brokerages offering basic services.”
Going forward, Everett said, it will be important for buyers and sellers to approach commissions with pragmatism.
“While buyers and sellers can and certainly should negotiate,” he said, “it is important to remember that buyers and sellers are essentially making a job offer to the broker. The broker does not have to accept the offer, especially if it’s not representative of the services and expertise the broker brings to the transaction.”
Virginia Business Editor Richard Foster contributed to this story.
Editor’s note:This story was updated to include statements from Virginia Realtors, the state trade association.
The Northern Virginia, Hampton Roads and Central Virginia housing markets showed positive trends last month, with month-over-month and year-over-year increases in home sales and median sales prices.
Northern Virginia
Northern Virginia home sales in February grew 2.2% from February 2023, marking the first year-over-year growth in the market’s home sales since November 2021, according to data the Northern Virginia Association of Realtors released Tuesday.
Northern Virginia had 1,020 home sales in February, up year-over-year and up from 771 units sold in January. Total sold volume in February also rose from last year, increasing 16.3% to $841.159 million. Before February, NVAR’s last recorded month with year-over-year growth in home sales was November 2021, when 2,124 homes sold in the region, an 11% increase from November 2020.
“Spring is always strong for the Northern Virginia real estate market, but this one is looking particularly positive as we are seeing more listings coming on the market as compared to a year ago, and those who are buying are willing to spend a little more,” David Raffinengo with KW Metro Center, an NVAR board member, said in a statement. “People are getting over the mortgage rate sticker shock, and with the potential for rates easing more, I believe we will see even more sellers willing to put their houses on the market.”
Homes sold faster than last year, staying on the market an average of 22 days — down 31.3% from February 2023 and down from January’s 29-day average.
Regional supply remained tight in February but grew slightly. The month’s supply of inventory (MSI) — a measure of how many months there would be homes on the market if no new inventory were added — stood at 0.9 months, up from the January MSI of 0.74 and the February 2023 MSI of 0.8.
Northern Virginia had 1,153 active listings last month, down 6.56% compared with February 2023. New pending sales in February totaled 1,177, down 2% from a year ago.
High demand continued to push prices up, according to NVAR. The median sold price for a home in February was $687,250, up 11.8% from a year ago and up from January’s median sales price of $650,000.
One local market had a 68.5% increase in its median sales price from February 2023. According to multiple listing service Bright MLS, only five homes sold in Falls Church last month, and the median sold price of those was $1.115 million.
NVAR reports home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church, and the towns of Vienna, Herndon and Clifton.
The Bright MLS February housing market report on the Washington, D.C., metro includes a market outlook: “Buyers in the Washington, D.C., metro area have been frustrated by a lack of inventory, but it looks like there may be some relief on the way. In February, the number of new listings coming onto the market was 7.2% higher than a year ago; however, the market is still going to be very competitive across most of the region this spring,” according to the report.
Hampton Roads
The Hampton Roads market also had positive data points last month. The numbers of active listings, pending sales and settled sales increased month-over-month and year-over-year, according to the Real Estate Information Network (REIN).
February 2024 statistics for the Hampton Roads housing market. Image courtesy Real Estate Information Network
In February, active residential listings in the region totaled 3,568, up from 3,538 in January and up 13.9% from the 3,130 listings reported in February 2023.
Pending sales totaled 2,138, up from 1,837 in January and up from 2,058 a year ago. The region had 1,709 settled sales, up from 1,470 sales in January and 1,684 sales in February 2023.
“These are some encouraging signs as we approach the spring season,” REIN Board President Gary Lundholm, with The Real Estate Group, said in a statement. “Of course, things can change quickly in real estate, but the median number of days properties are on the market also declined from January, which is good news for home sellers.”
Hampton Roads houses were on the market for a median of 22 days last month, down 10 days from January but up two days from February 2023.
In February, the median sales price for Hampton Roads homes also increased year-over-year and month-over-month, standing at $327,500. In January, the median sales price was $320,500, and in February 2023, the MSP was $313,650.
The month’s supply of inventory was 1.73, a slight increase from the January MSI of 1.72 and up from 1.24 a year ago.
Founded in 1969, REIN is a regional multiple listing service that covers an area stretching from Williamsburg east to Virginia Beach and south across the North Carolina border.
Central Virginia
In Central Virginia, February residential property sales totaled 1,134, up 0.1% from last year, according to data from the Central Virginia Regional Multiple Listing Service (CVR MLS). In January, the market had 862 closed sales.
Pending sales were also up, at 1,311 in February, up 3.9% from February 2023 and up from 1,284 in January. New listings on the CVR MLS totaled 1,516, up 7.7% from a year ago and up from 1,418 in January.
Homes stayed on the market slightly longer, averaging 33 days, up one day from February 2023 and up from 28 days in January. The month’s supply of inventory stood steady at 1.4, the same as January and up from 1.2 last year.
The median sales price of homes sold in February in the region was $377,140, up 6.2% from the MSP of $355,000 reported last year and from January’s MSP of $367,500.
In the Richmond metro area — Richmond city and the counties of Chesterfield, Hanover and Henrico — the median sales price was $390,000, up 7.7% from February 2023’s MSP of $362,000. The metro area had 914 closed sales last month, up 6.3% from the 860 sales recorded in February 2023.
The CVR MLS monthly indicators report covers residential real estate activity, including single-family homes and townhomes/condos, in the counties of Amelia, Charles City, Chesterfield, Dinwiddie, Goochland, Hanover, Henrico, King William, King and Queen, New Kent, Powhatan and Prince George and the cities of Colonial Heights, Hopewell, Petersburg and Richmond.
The housing market in Virginia had a relatively slow start in 2024, according to January data released Feb. 23 by Virginia Realtors.
In January, 5,640 homes sold in the state, only 31 more sales than January 2023. Overall in 2023, Virginia home sales dropped 20% compared with 2022 and were the lowest the market had seen since 2014.
Inventory remains tight, according to Virginia Realtors. At the end of January, Virginia had 15,229 active listings, up 362 listings — 2.4% — from a year ago. Although active listings have increased, the numbers reflect homes staying on the market longer, not necessarily more sellers listing homes, according to Virginia Realtors.
In January, the Virginia market saw 8,034 new listings, down 122 new listings from a year ago, a decrease of 1.5%.
“Many homeowners looking to buy another home remain reluctant to lose the low mortgage rates they are currently locked into,” Ryan Price, Virginia Realtors’ chief economist, said in a statement. “Because of this, many would-be sellers are choosing to pause their plans and not list their home for sale.”
For the week that ended Jan. 11, the national average 30-year fixed-rate mortgage was 6.66%, according to Freddie Mac data. In the week ending Jan. 18, the average 30-year fixed-rate mortgage was 6.6%, and in the week ending Jan. 25, that rate was 6.69%.
The situation could change, though, if mortgage rates fall as the year continues, Virginia Realtors CEO Terrie Suit said in a statement: “More move-up buyers could be enticed to enter the market, and this could provide some much-needed inventory supply across the commonwealth.”
In February, however, mortgage rates rose. This week, mortgage rates increased for the fourth consecutive week, reaching a two-month high and nearing 7% again, according to a Freddie Mac summary. As of Feb. 29, the average 30-year fixed-rate mortgage was 6.94%, and the four-week average was 6.81%, according to Freddie Mac data.
Despite relatively flat sales, upward pressure on home prices continues, according to Virginia Realtors. The statewide median average sales price in January was $371,889, nearly $22,000 higher than in January 2023, a 6.3% increase. Of the state’s local markets, 67% had a higher median sales price this January than in the same month last year.
“The accelerated price growth has been driven by the low supply of homes for sale,” Tom Campbell, Virginia Realtors 2024 president, said in a statement. “We predict this trend will continue into the spring unless more listings come on the market.”
It was a rough year for prospective homebuyers, especially those seeking houses in Northern Virginia and the Richmond area.
Home sales in Virginia were the lowest the market has seen since 2014, dropping 20% from 2022 to 2023, according to data released in January by Virginia Realtors. Hampton Roads and Shenandoah Valley home sales also dropped precipitously. Across the state, 98,464 residences sold last year, down from 123,244 in 2022. And with fewer listings, prices went up too, with the median sale price at $390,000, up 4% from 2022.
High interest rates set by the Federal Reserve to lower inflation meant many borrowers stayed put, waiting for a better moment to make a move. That time may come for some buyers in 2024, as the Fed is expected to lower interest rates three times this year, likely starting in March or May.
Not only are high rates giving homebuyers pause, they’re also impacting Realtors, brokers, lenders and others in the industry. Laura Lafayette, CEO of the Richmond Association of Realtors, said last fall that “golden handcuffs” are keeping homeowners from selling, translating into less work for real estate professionals. “I think most Realtor associations across the state are budgeting for a modest loss in membership.”
Despite challenges in residential real estate, there was progress in commercial real estate over the past year. In Virginia Beach, the $335 million Atlantic Park project, led by Venture Realty Group and Pharrell Williams, broke ground in March 2023, and the $2.4 billion Diamond District project in Richmond was set to start phase one in early 2024. In February, Caesars Virginia topped off its permanent Danville casino, which is expected to be open by the end of this year.
Meanwhile in Arlington, the first two towers of Amazon.com’s HQ2 East Coast headquarters campus opened in June 2023 — although even the e-tailer is acknowledging the impact of work-from-home and hybrid employment, pausing construction on phase two of the campus.
Next door, in Alexandria, the opening of Virginia Tech’s first Innovation Campus building has been delayed until 2025 due to construction supply chain problems.
Data center growth continued strong in Loudoun, Prince William and Stafford counties, although some residents and elected officials have expressed outright opposition to massive data center campuses taking up rural and historic land.
Meanwhile, construction firms in Virginia and beyond are saying that labor shortages, interest rates and supply chain issues are likely to continue impacting their businesses this year.
Stephen E. Sandherr, CEO of Associated General Contractors of America until March 31, said that 2024 “offers a mixed bag for construction contractors. On one hand, demand for many types of projects should continue to expand. Meanwhile, they face significant challenges when it comes to finding workers, coping with rising costs and weathering the impacts of higher interest rates.”
Data centers, water and sewer infra- structure and roads are all among high- dollar projects contractors expect to compete for in 2024, and business owners and politicians are all pushing for more affordable housing.
“Everyone is struggling with this issue, but we can learn from each other,” notes Tom Barkin, president and CEO of the Federal Reserve Bank of Richmond. Land availability and cost, he notes, are key issues in Virginia, with finished lot costs accounting for nearly 20% of the average sales price of a new single-family home in 2022.
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