Amid rising foreclosures, Virginia's housing markets are struggling, but aided by first time home buyers most of Virginia is experiencing more home sales. Virginia is one of those rare states that may be aided by the increasing size of the government pay-roll.
In Northern Virginia markets have picked-up as buyers take advantage of falling prices. However, new home construction has been particularly hard hit with less than half of the number of building permits issued for the year compared to four years ago. The national financial crisis is hurting Virginia as foreclosures increase and home values tumble.
In Arlington, which serves as a bedroom community for the nation's capitol, the market has been declining for more than three years. But housing sales have been boosted by lower interest rates and cheaper prices. As values decline further, Arlington will see more sales activity due to the increasing size of government. However, prices are projected to decline through at least the end of 2009 at a forecast rate of 13.8% on average.
Home sales are also up slightly in Alexandria outside of Washington D.C., where the market has been suffering. Although Alexandria will make inroads towards stabilizing through 2009, the over-supply of foreclosures waiting to be placed on the market will out weigh the fundamentals of a recovery during the year.
The cascade of falling home values may be aided in Virginia by more government jobs, but that will take time under the government's current economic plan as markets suffer.
 |
| City |
Forecast |
| Arlington |
− 13.8% |
| Alexandria |
− 14.7% |
| Richmond |
− 16.4% |
| Roanoke |
− 12.8% |
| Norfolk |
− 12.7% |
| Virginia Beach |
− 14.3% |
Alexandria will see sluggish home sales as more and more homes become vacant as a result of foreclosures from adjusting interest rates and owners that are unable to refinance their homes. Housing Predictor forecasts Alexandria home values to deflate 14.7% in 2009.
In Richmond housing values are tumbling at double-digit rates as the community suffers from fall out of the financial crisis. During the hey-day Richmond was one of the banking epicenters, but now the majority of those who worked in banking have been let go or left the area for other work.
Foreclosures are on the rise as the once booming bank capital feels the damage from the credit crisis. As more and more homes hit the market the inventory of properties will swell through the remainder of 2009. Richmond is forecast to hit 16.4% in average housing deflation by the end of the year.
In Roanoke slower home sales have translated to falling values but not as much as other places in the state. The foreclosure epidemic is helping to boost sales, but having a severe affect on home prices. Roanoke is forecast to see values fall an average of 12.8% for the year.
The recessionary economy is being felt in Norfolk as job losses mount. There isn't much incentive for many to sell their homes in Norfolk, unless homeowners are unable to refinance their mortgages. Norfolk is suffering through a sluggish real estate market in 2009 on forecast deflation of 12.7%.
Housing sales have picked-up slightly in Virginia Beach, which is both a second home resort market and conventional housing market that easterners flock to during the summer. Virginia Beach is the most heavily populated area in Virginia and as real estate prices fall it's having a severe impact on the economy. Home values are forecast to deflate 14.3% on average with an abundance of low-priced foreclosures.
