The graph below shows the progression of the Virginia housing market from 2007 to 2014. 2007 (in blue) is the last year before recession. 2008, 2009, 2010, and 2011 (in grey) show the depressed housing market related to the Great Recession. 2012 (shown in orange) was the first year that the market showed signs of recovery, but 2013 (shown in green) is when the Virginia market strengthened enough to show significant recovery. This year (2014 shown in red) the Virginia market performance has also been solidly above recessionary levels, but the sales volume has not been at the level of 2013.
The performance of the 2014 residential real estate market is undeniably tied to the overall performance of the US economy: jobs still aren’t easy to come by, incomes have increased sluggishly, and market participants are still cautious. Nonetheless, the economy is growing, low mortgage interest rates remain a good incentive for buyers to enter the market, and stable prices will keep inventory flowing. The metrics included in the Virginia Home Sales Report indicate that supply and demand remain in sync. Stable prices indicate that our growth is healthy and not related to speculation or overbuying.
Although the market has entered a phase of slow growth, we believe that Virginia has achieved a solid recovery and we certainly prefer steady growth that matches the growth of the overall economy to a bubble based on speculation.Analysis and commentary by Ted Koebel, Senior Research Associate and Mel Jones, Research Associate of the Virginia Center for Housing Research at Virginia Tech