With a massive surge in home sales, to a shortage of supply, to a drastic increase in home prices – the past couple of years have been a roller coaster in Virginia as well as the U.S real estate market in general – and with the start of a new year, we bring you a 2022 forecast of the Northern Virginia housing market.
In this forecast, we will take a look at the housing market’s performance in the past two years, both in the U.S and in the North Virginia market, to get a better picture of where the market is headed and how the different cities in Virginia are looking in terms of their viability for investment.
I will also provide you with lists of top cities in terms of the fastest growing and best cities for investing in rental properties as part of this Northern Virginia housing market forecast 2022.
2022 U.S Housing Market Forecast
The U.S housing market saw a big increase in home prices in the past two years.
While this increase was at its highest during 2020 when the wave of buyers rippled across the U.S, the increase in prices continued throughout 2021, although at a slightly slower pace.
According to most sources, the U.S housing market is predicted to see rising home prices in 2022. Zillow’s latest report predicts an increase of 11% in overall home prices across the U.S, while other sources offer more conservative predictions:
- Fannie Mae predicts a 7.9% increase
- Freddie Mac predicts a 7% increase
- Redfin predicts a 3% increase
- Realtor.com predicts a 2.9% increase
The only exception is the Mortgage Bankers Association forecast model which projects a 2.5% decrease in the median price of existing homes by the end of 2022.
This last projection is an interesting one because, in the current situation, mortgage rates are among the biggest factors that can directly affect the market and the rate at which people are buying houses, as will be seen next in our Northern Virginia housing market forecast for 2022.
Read: Mortgage Rates Hit a 6-Month Low
But, from what we know so far about the U.S housing market going into 2022, all indicators show that it will continue to be a sellers’ market in general and that prices will continue to increase across most markets.
Real Estate Market in Virginia 2021
It’s hard to do a Northern Virginia housing market forecast for 2022 without talking about the housing market inventory shortage that took place in the past two years.
In 2021, the supply of houses on the market was around 54% lower than what it was during the same period in 2019.
This massive shortage of supply was the main driver behind the increase in housing prices in the last two years, which increased by 7% in the last year.
In 2022, it is expected that the supply will start to catch up with the demand again, which will deaccelerate the increase in house prices. It is projected that house prices will still increase by 4% in Northern Virginia’s housing market in 2022.
Additionally, mortgage rates are also expected to rise by around 4% in 2022 according to the Virginia Association of Realtors.
Northern Virginia Housing Market 2022 – Trends
Our Northern Virginia housing market forecast 2022 predicts three major trends to take place this year:
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Home Prices Increase
Despite a small number of predictions that home prices might decrease in 2022, most indicators show that the trend of increasing home prices will continue in 2022, but at a slower pace.
Firstly, the interest rates on mortgages are expected to increase further this year, which means that fewer buyers will be able to enter the market, therefore bringing the demand down, which eventually leads to slowing down the increase of home prices.
Secondly, due to the sudden soaring of home prices in the past year and a half, this led to prices becoming too high in certain markets making it a challenge to sell homes. This will likely lead to home prices going down to more competitive prices this year as sellers try to navigate the decreasing demand in these markets.
Read: How to Sell Your House Fast: 11 Tips
With all of that said, it is most likely that we won’t see a crash in prices this year, as all the indicators and the fundamentals of the market are still looking strong, and there is no shortage of buyer demand across the market.
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Back to Urban Trend
It is also predicted that in 2022, demand will shift back from suburban and rural areas toward urban areas and near employment centers in cities.
In the past year and a half, with the COVID-19 lockdowns and remote work lifestyles, employees no longer had a reason to live in urban areas close to their employment locations, and city life lost its appeal due to lockdowns and social distancing.
This led people to move to rural and suburban areas where life was more appealing at the time.
However, now that life is slowly heading back to normal, it is expected that offices will reopen and employees will be expected to have hybrid work schedules that include office days. This means that they will need to move back to urban areas in order to resume their lives.
While this is a trend that is highly likely to take place this year, new variants of COVID-19 such as the Omicron make it hard to really predict the future as people are cautious about resuming normal life while there’s a chance of new lockdowns happening in the future.
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Inventory Trends
Based on the Northern Virginia housing market forecast 2022, the home supply situation is expected to improve from the extreme shortage that took place in 2020-2021.
One factor that is affecting home supply is the lack of new homes being constructed due to challenges and restrictions that construction is facing, such as material price surges, regulations, labor shortage, and supply-chain problems.
Read: How to Find Deals When Housing Inventory is Low
However, when looking at existing homes, we’re seeing early signs that the supply is improving overall.
Additionally, while 2020 and 2021 saw a continuous growth in home sales, near the end of 2021 we started seeing that seasonality is affecting home sales again as the demand is slowing down, allowing the inventory to recover in many markets around the state.
Overall, however, the situation still remains that there are more buyers than there are homes available for sale.
Top Markets in Northern Virginia to Keep an Eye On
In this part of the Northern Virginia housing market forecast for 2022, let’s take a look at 24 of the most exciting markets to keep an eye on.
The first list is the top eight sellers’ markets in North Virginia going into 2022 – these markets have shown the highest rate of growth, and prices of homes have increased significantly, making them sellers markets where demand is high and properties are often selling at a higher price than what they were listed for.
The second and third lists are the top cities for investing in rental properties at the start of 2022. I separated these markets depending on their preferred rental strategy based on the cash on cash return that short-term or long-term rentals have in each market.
Northern Virginia Top Sellers Markets
These were the fastest-growing markets in 2021. Due to the surge of buyers across the state in 2020, and the inventory shortage that followed, prices in these cities soared due to the large number of investors who were flocking to these markets.
While the growth rate has slowed down in 2021, it by no means stopped or showed signs of stopping. For that reason, it is highly expected that these markets will continue to grow in both inventory and prices, which will maintain their status as seller’s markets in the Northern Virginia housing market forecast for 2022.
The following info is based on Mashvisor’s market data during the month of December 2021, and it reflects the market’s medians and averages based on the data that Mashvisor gets from several sources including the MLS, Airbnb, Zillow, and others.
Without further ado, here are the top or fastest-growing markets in the Northern Virginia housing market for 2022:
#1 Richmond, Accomack County
- Median Price: $426,598
- Square Footage: 249,75 Sq. Ft.
- Fore-Sale Listings: 748
- Traditional Listings: 1,123
- Airbnb Listings: 612
- Average Days on Market: 93
- Traditional Price-to-Rent Ratio: 23.65
- Airbnb Price-to-Rent Ratio: 10.44
- Average Walkscore: 45.54
#2 Virginia Beach, City of Suffolk County
- Median Price: $520,616
- Square Footage: 269.73 Sq. Ft.
- Fore-Sale Listings: 354
- Traditional Listings: 2,143
- Airbnb Listings: 705
- Average Days on Market: 48
- Traditional Price-to-Rent Ratio: 23.63
- Airbnb Price-to-Rent Ratio: 9.7
- Average Walkscore: 19.52
#3 Norfolk, City of Norfolk County
- Median Price: $401,044
- Square Footage: 212.4 Sq. Ft.
- Fore-Sale Listings: 273
- Traditional Listings: 1,142
- Airbnb Listings: 593
- Average Days on Market: 64
- Traditional Price-to-Rent Ratio: 23.7
- Airbnb Price-to-Rent Ratio: 10.7
- Average Walkscore: 38.85
#4 Newport News, City of Newport News County
- Median Price: $266,837
- Square Footage: 155.06 Sq. Ft.
- Fore-Sale Listings: 190
- Traditional Listings: 331
- Airbnb Listings: 57
- Average Days on Market: 47
- Traditional Price-to-Rent Ratio: 17.18
- Airbnb Price-to-Rent Ratio: 9.08
- Average Walkscore: 47
#5 Arlington, Arlington County
- Median Price: $593,471
- Square Footage: 486.88 Sq. Ft.
- Fore-Sale Listings: 251
- Traditional Listings: 2,454
- Airbnb Listings: 601
- Average Days on Market: 73
- Traditional Price-to-Rent Ratio: 21.75
- Airbnb Price-to-Rent Ratio: 18.66
- Average Walkscore: 57.69
#6 Falls Church, Fairfax County
- Median Price: $504,928
- Square Footage: 335.37 Sq. Ft.
- Fore-Sale Listings: 122
- Traditional Listings: 690
- Airbnb Listings: 132
- Average Days on Market: 65
- Traditional Price-to-Rent Ratio: 19.44
- Airbnb Price-to-Rent Ratio: 14.33
- Average Walkscore: 38.83
#7 Alexandria, Fairfax County
- Median Price: $636,679
- Square Footage: 438.86 Sq. Ft.
- Fore-Sale Listings: 414
- Traditional Listings: 2,206
- Airbnb Listings: 427
- Average Days on Market: 69
- Traditional Price-to-Rent Ratio: 20.81
- Airbnb Price-to-Rent Ratio: 14.81
- Average Walkscore: 54
#8 Ashburn, Loudoun County
- Median Price: $654,656
- Square Footage: 291.2 Sq. Ft.
- Fore-Sale Listings: 79
- Traditional Listings: 243
- Airbnb Listings: 18
- Average Days on Market: 54
- Traditional Price-to-Rent Ratio: 22.51
- Airbnb Price-to-Rent Ratio: 11.07
- Average Walkscore: 38
Northern Virginia Top Traditional Rentals Markets
While the above markets have become some of the most competitive markets in the U.S in 2021, there are other markets in North Virginia that have become prime investment markets for rental investors.
These markets have an easier entry-level due to their relatively low prices and high potential as traditional rentals.
Based on Mashvisor’s data, these cities are profitable for investors looking to turn their property into a traditional long-term rental home.
The data is calculated based on the average rent of similar property types across the market, while also taking into consideration the average expenses and costs related to the investment as well as the most common type of mortgage that investors use.
Without further ado, here are the top markets for investing in traditional long-term rentals based on our 2022 forecast for the North Virginia housing market:
#1 Jarratt, Greensville County
- Median Price: $149,540
- Square Footage: 118.13 Sq. Ft.
- Occupancy Rate: 90%
- Traditional Rental Income: $1,228
- Traditional Cash on Cash Return: 6.96%
#2 Emporia, Emporia County
- Median Price: $179,657
- Square Footage: 120.52 Sq. Ft.
- Occupancy Rate: 78.75%
- Traditional Rental Income: $1,306
- Traditional Cash on Cash Return: 5.88%
#3 Big Stone Gap, Wise County
- Median Price: $115,498
- Square Footage: 66.88 Sq. Ft.
- Occupancy Rate: 71%
- Traditional Rental Income: $709.64
- Traditional Cash on Cash Return: 5.63%
#4 Mc Kenney, Dinwiddie County
- Median Price: $184,657
- Square Footage: 116.86 Sq. Ft.
- Occupancy Rate: 64%
- Traditional Rental Income: $1,225
- Traditional Cash on Cash Return: 5.45%
#5 Topping, Middlesex County
- Median Price: $384,764
- Square Footage: 217.81 Sq. Ft.
- Occupancy Rate: 79.6%
- Traditional Rental Income: $1,114
- Traditional Cash on Cash Return: 5.3%
#6 Burgess, Northumberland County
- Median Price: $859,750
- Square Footage: 294.61 Sq. Ft.
- Occupancy Rate: 59%
- Traditional Rental Income: $1,300
- Traditional Cash on Cash Return: 4.83%
#7 Burkeville, Nottoway County
- Median Price: $154,043
- Square Footage: 105.66 Sq. Ft.
- Occupancy Rate: 85.33%
- Traditional Rental Income: $863.14
- Traditional Cash on Cash Return: 4.77%
#8 Bassett, Henry County
- Median Price: $300,838
- Square Footage: 112.82 Sq. Ft.
- Occupancy Rate: 57%
- Traditional Rental Income: $867.5
- Traditional Cash on Cash Return: 4.49%
Northern Virginia Top Short-Term Rentals Markets
While the above markets are great for investing in traditional rentals, if you’re a short-term rental investor and you’re looking for promising markets for renting out your property on Airbnb and other similar services, then the following markets are for you.
Similar to the previous list, this list of top cities for investing in the North Virginia housing market in 2022 is based on data that Mashvisor gets from Airbnb before calculating the results based on the market’s averages.
Please keep in mind that laws and regulations related to short-term and vacation rentals are constantly changing and evolving, and this type of renting can become heavily regulated at any moment based on your city and state’s laws.
Make sure to always consult your real estate agent or legal advisor so that you’re aware of all laws and regulations that might affect your investment in the short term and long term.
Without further ado, these are the top cities for investing in short-term rentals in the North Virginia housing market 2022 based on their projected cash on cash return:
#1 Pulaski, Pulaski County
- Median Price: $144,613
- Square Footage: 126.19 Sq. Ft.
- Occupancy Rate: 58.33%
- Airbnb Rental Income: $3,482.71
- Airbnb Daily Rate: $241
- Airbnb Cash on Cash Return: 9.88%
#2 Vinton, Roanoke County
- Median Price: $233,967
- Square Footage: 118.08 Sq. Ft.
- Occupancy Rate: 70.57%
- Airbnb Rental Income: $3,193.75
- Airbnb Daily Rate: $117
- Airbnb Cash on Cash Return: 9.63%
#3 Hopewell, Hopewell County
- Median Price: $238,613
- Square Footage: 154.09 Sq. Ft.
- Occupancy Rate: 63.5%
- Airbnb Rental Income: $3,444.99
- Airbnb Daily Rate: $360
- Airbnb Cash on Cash Return: 8.6%
#4 Maurer Town, Shenandoah County
- Median Price: $570,783
- Square Footage: 289.54 Sq. Ft.
- Occupancy Rate: 63.33%
- Airbnb Rental Income: $3,472.67
- Airbnb Daily Rate: $275
- Airbnb Cash on Cash Return: 8.15%
#5 Evington, Campbell County
- Median Price: $262,636
- Square Footage: 131.2 Sq. Ft.
- Occupancy Rate: 60.3%
- Airbnb Rental Income: $3,108.03
- Airbnb Daily Rate: $164
- Airbnb Cash on Cash Return: 8.09%
#6 Colonial Heights, Colonial Heights County
- Median Price: $263,775
- Square Footage: 151.32 Sq. Ft.
- Occupancy Rate: 89.14%
- Airbnb Rental Income: $2,752.1
- Airbnb Daily Rate: $107
- Airbnb Cash on Cash Return: 8.04%
#7 Haymarket, Prince William County
- Median Price: $833,195
- Square Footage: 293.85 Sq. Ft.
- Occupancy Rate: 73.6%
- Airbnb Rental Income: $7744.08
- Airbnb Daily Rate: $286
- Airbnb Cash on Cash Return: 7.96%
#8 Troy, Fluvanna County
- Median Price: $367,771
- Square Footage: 172.13 Sq. Ft.
- Occupancy Rate: 58.14%
- Airbnb Rental Income: $3800.56
- Airbnb Daily Rate: $143
- Airbnb Cash on Cash Return: 7.93%
Why You Should Use Mashvisor
Now that you’ve seen our forecast of the Northern Virginia housing market in 2022, perhaps you’re looking for a place to start your investment journey?
Mashvisor is a real estate platform that was designed for real estate investors to help them with everything related to their investment.
The platform allows you to search for real estate properties that are for sale, whether they’re listed on the MLS, rented out on Airbnb, foreclosed, or off-market properties.
Using our intuitive interface and simple-yet-effective filters, you can use our Investment Property Finder to easily narrow down your search based on your criteria, such as the property’s price, the projected returns, or the type of property you want to buy.
Once you’ve found properties for sale that you’re interested in, you can use our Investment Property Calculator tools to analyze each property and each neighborhood in order to find the perfect property for you that is projected to be a profitable investment.
So, need help buying a house in Northern Virginia? Or looking for the best place to buy a house there? Use Mashvisor to make your journey easier and faster, and to get an edge over your competition in the market.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
