Whether you’re REALTOR®, a buyer, or a seller, you’re most likely feeling the impacts of Virginia’s current housing shortage. Many areas of the Commonwealth are lacking in new construction as well as existing inventory. While these circumstances can be advantageous for sellers, many buyers are frustrated by the dwindling numbers of available homes.
According to a 2018 study by the Up for Growth Coalition, this shortfall has been getting worse for years. Between 2000 and 2015, the report found that housing production in the state fell short of demand by 131,000 housing units.
At the same time that new construction is not keeping pace with population growth, the inventory of existing homes for sale remains very low across the state and continues to shrink statewide. At the end of March 2019, there were just under 52,000 active listings statewide. By comparison, five years ago at this time, there were nearly 63,000 homes listed for sale.
Across Virginia, new home construction has faced numerous obstacles. According to Virginia REALTORS® Chief Economist, Dr. Lisa Sturtevant, in some parts of the state, legislation related to the proffer system has impeded construction, while some regions have also faced challenges stemming from local legislation.
Charlottesville and Northern Virginia are two regions where a recent boom in job growth has not been met with an adequate addition of new homes. “While this is a statewide issue—every region across the state needs more housing—there are some areas within the state, where job growth has been really strong, where the issue is really acute,” says Sturtevant.
Options for first-time buyers are especially limited, due to the fact that new construction isn’t producing the type of entry-level homes these types of buyers are seeking. However, new construction is benefiting other segments of the market, such as the Baby Boomers. Age-restricted communities are now being built at higher rates across the state.
Interested in learning more, including suggestions on advising clients during this housing shortage? Check out the most recent episode of the REAL Politics podcast.