The housing markets in Washington D.C. and Virginia have both been rising rapidly in recent months. New data from real estate associations in both areas indicates that the housing markets are undergoing a long term recovery, which is expected to continue at least through the spring.
Housing sales in both regions have risen sharply since the beginning of the year. According to the Virginia Association of Realtors, sales in the Richmond area rose 15% between September 2014 and September 2015. The housing market in Chesterfield was even stronger, with housing sales rising 20% in the same time period.
The D.C. housing market has also been performing very well. Real estate professionals have confirmed that housing listings have risen nearly 6% since January. The market has been robust for the past couple of years, but officials are worried about the limited supply. New construction is needed to ensure the sustainability of the recovery and make housing accessible to all citizens.
While housing sales have been rising significantly, price increases have been more tepid. Price increases could follow if construction of new housing doesn’t pick up.
Factors Driving Demand for Regional Housing Market
There appear to be a number of factors that are affecting the housing markets in Virginia and D.C. The economy in parts of Western Virginia has been disappointing. It has the worst unemployment rate in the nation.
The market in the central and eastern part of the state are faring much better, which explains the rising demand for housing in the area. The thriving technology sector is one of the reasons that housing markets in many Virginia cities are booming.
The D.C. tech sector is contributing to its own housing recovery. Some experts have speculated that the district could be a smaller version of Silicon Valley as many startup businesses try to escape California’s costly regulations.
An expansion of the federal workforce could also contribute to the surging housing market. The housing market in D.C. was in trouble when federal austerity measures were imposed several years ago, because many government employees were left out of work. Virginia also suffered from the fiscal cuts, because many Virginian citizens work in D.C. The federal budget has since been restored, which is driving the local economies.
Improving Economies Expected to Spur Housing Recovery
The housing markets in D.C. and Virginia have been outperforming the national average for the past year. Sales are expected to rise even further since new economic data indicates that unemployment will continue to drop and incomes will rise. The only threat to the market is the possibility that housing construction may not be fast enough to keep up with demand, but officials in Virginia and D.C. are taking new steps to mitigate this risk.