As the last article of the year, we prepared a great recap of 2022 and a glimpse into what to expect in the coming year in Northern Virginia. Here is the 2022 Year in Review and 2023 Forecast.
2022 YEAR IN REVIEW
Frenzied home buyers marked the first half of 2022. This is because of the historically low interest rates and lack of homes for sale. Because of this, home sellers experienced multiple offers, prices well over-asking, and waiving of home inspections and finance and appraisal contingencies.
As mortgage rates began to climb, buyers took a step back. Some found they could no longer afford the home they wanted. Home values in Northern Virginia continue to increase by around 4%.
The cooling effect is exactly what the real estate market needed. As interest rates stabilize around 7%, buyers got over the sticker shock and enjoyed house shopping without many competitors. For home sellers, the new climate is more reassuring. Buyers now have the time to carefully consider home sales and not change their minds in the middle of the transactions. This environment is a win-win for everyone.
Most experts agree that the new year will likely see mortgage interest rates rise a little more. Once inflation is under control, the expectation is for rates to lower again in latter part of 2023. More homeowners will put their homes on the market. Buyer demand is expected to increase. For all intents and purposes, the real estate market is forecasted to be more traditional in nature. This means that activity will pick up spring through summer. Home values are expected to be between 3-5% through 2023.
The 2022 Year in Review and 2023 Forecast show that real estate in Northern Virginia remains strong. It’s no mystery. The area is close to seat of Government in DC. It has low unemployment rates, good schools, and an amazing array of history and entertainment options.
For the latest market update, please read the article: Market Update – December 2022
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