Strong government employment levels and growing demand for housing have triggered home price inflation in some housing markets just outside of the nation's capital in Virginia, while prices are still declining in most of the rest of the state.
In Arlington just outside Washington, D.C. home prices are climbing modestly with the federal tax credit and are projected to see an improvement in 2010. Lower home prices and record low interest rates have triggered the surge after more than a two year slowdown. Arlington, which is the home to government workers who commute to the nation's capitol, is forecast to average housing inflation of 4.8% in 2010.
Home sales are also improving in Alexandria, also part of the D.C. metro area. The market saw the first signs of an improvement with higher sales due to the first time buyers' tax credit and reduction of inventory, but isn't projected to see much more pricing stability in 2010 as a result of move-up buyers. Prices are still too high to attract large numbers of buyers in the current economic climate and are forecast to deflate 5.3% in 2010. Another round of foreclosures will impede the market from improving much during the year.
The financial meltdown has had a massive impact on Richmond, home of one of the nation's banking centers. Lingering fall-out has resulted in climbing foreclosures in the community from rising job lay-offs. Home vacancies along James River neighborhoods are also increasing as more homeowners flee the area for other job opportunities.
| City |
Forecast |
| Arlington |
4.8% |
| Alexandria |
− 5.3% |
| Richmond |
− 10.8% |
| Roanoke |
− 8.9% |
| Norfolk |
− 9.0% |
| Virginia Beach |
− 10.2% |
The economic destruction may be aided by more good paying government jobs around the nation's capitol, but it's anything but good elsewhere in the state. Richmond is forecast to sustain average housing deflation of 10.8% in 2010.
In Roanoke home sales are also edging higher, but declining prices have put a stranglehold on the market for move-up buyers to take advantage of the federal government's expanded tax credit. Foreclosures triggered slightly more sales, but then wound down once bankers halted foreclosing on properties in mass in efforts to manipulate home values to rise. Roanoke is forecast to see home prices decline 8.9% in 2010.
Rising home sales should aid Norfolk in its economic recovery, but the inability to sell their homes is hurting many owners in hard hit Norfolk. Homeowners unhappy with the government's handling of the financial crisis are walking away from mortgages in increasing numbers in Norfolk. The pain doesn't look like it's going to stop for a while with forecast deflation of 9.0% for the year.
Higher employment levels usually translate to better housing values, but that isn't the case in Virginia Beach, the largest metropolitan area in the state. Unemployment levels rank as some of the best in the country, but do little to assist housing values, pressured by the deflationary spiral of the financial crisis.
As home prices fall in Virginia Beach the impact to the local economy should grow. Virginia Beach is forecast to see average home prices drop 10.2% in 2010, mainly as a result of more than 50,000 foreclosures projected to hit the market.
