Photo by STEPHEN POORE on Unsplash
Central Virginia is a visually-stunning place that attracts people with its gorgeous rural mountains, bustling cities like Charlottesville, and the cozy charm of its smaller towns.
As a result, the Central Virginia rental market has experienced significant growth and has been very competitive over the past years, as seen with rising rents across the area.
Let’s have a walkthrough of the current rental market trends and other local real estate market statistics you should be aware of if you plan to buy or rent a home in Central Virginia.
Central, VA Rental Market Trends
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The rental market across Virginia has been constantly strong, and Central Virginia rentals are no exception.
High rental costs and demand and a general upward trend in rent prices characterize the market of rentals in Central Virginia, particularly in metropolitan areas like Richmond and Charlottesville.
In this section, we will explore the current rental data and fair market rent in different cities in Central Virginia. Fair market rent is a statistic that tells us how much rent should be paid for a property based on its features, calculated by The United States Department of Housing and Urban Development.
There is still a very high demand for housing in cities, especially in metropolitan areas, because of the solid economic growth following the pandemic. This has initially caused a rise in rent prices.
The cost of renting a place in Charlottesville has become more steady after a significant increase of nearly 14% in 2021.
The fair market rent for an apartment with 2-beds in Charlottesville is $1,401 monthly. However, the current price of rental properties in the city is quite costly.
Charlottesville rent prices increased over the last month. From June to July, the city experienced a 3.29% increase in the price of a 1-bedroom apartment, from $1,549 to $1,600, while a 2.65% decrease for a 2-bedroom apartment from the same period, currently at $1,907.
Renters occupy almost 56% of the real estate market in Richmond, VA. The fair market rent in Richmond is very high compared to the national average.
A 2-bed apartment in Richmond has a fair market rent of $1,336 monthly, which has increased from $1,189 in the previous year.
For Lynchburg, although the city has an average rent that is considered lower than the national average, it is one of the areas in Virginia with the greatest rise in rent prices, with an increase of 17.3% between 2022 and 2023.
The fair market rent in Lynchburg, VA, is high, where the fair market rent for a 2-bedroom apartment is around $930 per month.
In Petersburg, the average rent is between $724 and $1,233 in 2023. A studio apartment has an average rent of $724, a 1-bedroom apartment has an average rent of $1,215, and a 2-bedroom apartment has an average rent of $1,233. The city also recorded a 7.1% rent increase compared to last year.
On the other hand, Farmville’s median rent for all bedrooms and property types is $1,200. As of July 2023, the average rent for a 1-bedroom apartment in Farmville increased by 7% to $634. The cost of renting a 2-bedroom apartment stayed the same at approximately $875.
Appomattox’s median rental rate is $1,236, which is 11% lower than the median rate for Appomattox County and 20% lower than the median rate for Virginia.
Finally, Wintergreen’s median rent for all types of properties and bedroom sizes is $2,500, which is $300 higher than the previous year.
Central, VA Housing Market
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Currently, the housing market of Central Virginia is experiencing moderate growth in terms of pricing and active listings.
Even though home prices in the area have increased, it is still difficult for many buyers to afford a home. With an index of 101.2 in December 2022, homebuyers in Central Virginia may face challenges finding affordable properties, especially in neighborhoods with high demand and competition.
There are around 2,122 homes for sale in Central Virginia. About 466 homes were listed for sale at the start of July 2023, which is 16% lower than the same month last year and 10% lower than the previous month.
Even though there are few houses available for sale and interest rates are not as low as home buyers want them to be, the intense competition caused by the pandemic has decreased. 44.4% of homes were sold in Central Virginia below the asking price last month, so buyers can anticipate a more steady situation and get a good deal.
Although there is still an opportunity to discuss and agree on terms through negotiation, there may still be situations where multiple people compete to buy or rent a property, so buyers and renters should act quickly.
Central, VA Market Statistics
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In the first quarter of 2023, Central Virginia rentals and the local housing market experienced significant changes and trends in pre-existing properties and newly built structures.
The area currently has higher interest rates than in the days of the pandemic. Historically, the relationship between the 10-year treasury yield and the 30-year mortgage rate has an average spread of 1.72%.
However, the relationship between the two is about 3.65% this year, double the normal relationship between the 10-year treasury yield as well as the 30-year mortgage rate.
Despite the high mortgage rate, the median price of properties remains steady. In June 2023, Central Virginia’s median home selling price was $585,000 or $223/sqft, 10% less than its market performance in May 2023.
The median sold price for 1-bed property in June 2023 is $129,000. This is about 7% down from May 2023, with a sold price of $139,000.
A 3-bed went down 9.4% with a $589,000 sold price in June 2023, compared to May 2023, which had a sold price of $650,000.
Meanwhile, 4-bed homes for sale have a $860,000 sold price in June 2023, a 32.2% increase compared to May 2023, which has $649,000.
However, home buyers should still expect some areas or cities in Central Virginia, especially those sought-after areas, to have a median home price that continuously climbs.
Richmond, for example, shows an upward trend in the median sales price and short average days on the market.
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The market for newly constructed homes in Central Virginia also showed some changes. The average price per square foot decreased slightly from $211 in December 2022 to $210 in March 2023.
More new listings have increased from 1,149 in December 2022 to 1,214 in March this year. Newly constructed properties also took longer to sell compared to existing homes.
The average number of days a new construction property stayed on the market increased significantly, from 11 days in December 2022 to 29 days in March 2023.
However, the supply of homes remained relatively stable, with a slight decrease from 4.1 months in December 2022 to 4 months in March 2023.
The number of homes available for sale decreased from 1,055 in December 2022 to 966 in March 2023.
There was a notable increase in pending sales for new construction homes, rising from 610 in December 2022 to 996 in March 2023. Meanwhile, closed sales decreased from 897 to 773 for the same period, indicating a slowdown in completed transactions.
Conclusion
Rentals in Central Virginia have been experiencing significant growth and competitiveness for the past years, leading to rising rents, especially the cities like Charlottesville and Richmond.
However, affordability has become a pressing issue for many residents and potential renters. It is essential to prioritize affordable housing initiatives and ensure a balanced rental market.
With consistent growth and demand, Central Virginia remains an attractive and accessible destination for individuals and families looking for rental options in the state.
Overall, Central Virginia’s rental and housing markets present dynamic trends that require careful consideration for both renters and buyers.
If you want to discuss this further or would like to speak with a professional realtor in the arena, please feel free to contact our team!
We can provide detailed insights about Central Virginia’s local real estate and rental market to help you decide whether moving to the area is ideal for you.
Contact us today at (804) 944-2354 or email us at info@hoperealtypm.com to get started! To be updated with the latest news in Virginia, we invite you to follow our social media pages:
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Frequently Asked Questions
How is the Virginia real estate market?
Virginia’s real estate market remains competitive. As of 2023, Virginia has consistent growth and demand. Typically, new listings increase between March and April, but only some sellers list their homes across Virginia, so finding an available and affordable home to buy or rent can be challenging for many.
Even though there has been a decrease in sales, the limited availability of homes has prevented any significant change in the state’s median sales price. The median sales price has remained steady after a slight decline in the previous month.
What is the housing market prediction for Virginia?
The strong demand in the housing market is expected to continue. Buyers can anticipate facing multiple offers on reasonably priced homes, indicating a competitive market.
However, a limited supply of new listings can challenge buyers looking for available properties. This limited supply may lead to increased competition and the possibility of higher prices in the coming months.
Is Virginia a good place to live?
Definitely! Virginia has a superior education system, diverse culture, and a booming economy. Whatever lifestyle you look for, you can find it among Virginia’s well-established communities. It is also the 10th safest state, with an overall crime rate below the national average, ideal for families!
