Roanoke Valley 2022 Real Estate Market Recap

Roanoke Valley 2022 Real Estate Market Recap

After several years of shrinking inventory of homes for sale and rising home prices we finally saw prices start to stagnate at the end of 2022 due to rising home mortgage interest rates. Let’s take a look at the quarterly breakdown for Roanoke Valley.

There were 125 or 11% less homes sold in the first quarter of 2022 compared to 2021. The median home price rose by 8% to $244,483. There were 1375 homes listed in the first quarter of 2021 compared to 1320 in 2022. The 1107 homes sold in the first quarter compared to the 1320 new listings gave us a slight uptick in overall inventory.  

The second quarter of 2022 saw a continued downturn in homes sale with a 9% decrease from 1619 homes sold in 2021 to 1487 sold in 2022. June of 2022 was 15.3% below June of 2021, June was also the month that interest rates crossed over the 5.5% mark for the first time. Median sale price continued its double digit climb with a 15.3% increase with 2022 coming in at $275,733 median sale price versus 2021’s $240,650. Lising inventory continued to outpace sales for 2022 with 1870 homes listed for sale, but trailed 2021’s listings added to the market by 273 homes. The net gain for newly listed homes in the first half was 596 homes.

The third quarter saw mortgage rates initially slide back towards the upper 4%’s but as the third quarter continued rates rose to the low 6%’s. This had a notable impact on the third quarter sales with July down 14.3%, August down 13.4%, and September down 16.1%. We can plainly see the negative effect of interest rates almost doubling in a 6-month period on the Roanoke Valley Real Estate market. New listings in the third quarter also showed a similar negative trend with July down 15.8%, August down 23.1%, and September down 7.2% when compared to the third quarter of 2021. The sole bright spot in the market was the continued increase in median sale price with 2022 coming in at $255,000 a 6% increase over 2021.

Mortgage rates in the 4^th quarter of 2022 continued to wreak havoc on the homes sales in the Roanoke Valley. As mortgage rates soared into the 7% range homes sales dropped significantly over 2021. October down 24.2%, November down 24.4%, and December an amazing 34.6% less (483 2021 vs 316 2022) than 2021. We saw a direct correlation on the listing side of the residential real estate market with over 20% less homes listed in 2022 (1008) as compared to (1247) 2021. Median sale price was up a meager 3% for the fourth quarter of 2022.

The overall market for 2022 ended on a down note with the number of sold listings for 2022 being 5,139 versus the 2021 sales of 6,058 giving us 919 less homes sold and        -15.2% overall. The total dollar volume of sold listings also showed the negative impact of interest rates coming in at $1,641,614,144 a reduction of $173,512,030 in dollar volume and overall, -9.6%. New listings for 2022 were down significantly with -13.0% or 855 less homes than 2021 with 5,740 total listings. There was an increase in median sale price from 2021 (239,900) to 2022 (259,000) with the average home seller seeing $19,100 or 8.0% more for their home.

The National Association of Realtors Chief Economist Lawrence Yun expects home sales to decline by 7%, while the national median home price will increase by 1%, with some markets experiencing price gains and others price declines. Yun added that signs point to mortgage rates topping out, particularly as October's consumer price index showed inflation rising less than expected. He did, however, express concern about the spread between mortgage rates and the federal funds rate.

I am expecting the Roanoke area real estate market to continue to level off and move away from the rapid pace of homes sales and an extremely strong sellers’ market to a weak sellers’ market with more price reductions and days on the market increasing. If the indications are correct, I predict interest rates will drop back into the upper 5%’s and the late spring and summer market becoming quite busy. If my team can ever answer any questions or be of help to please reach out to us at 540-537-9281.