The Northern Virginia Building Industry Association (NVBIA) held its annual Market Wrap-Up in December. Here are some highlights from the presentation and discussion:
- Home prices are up somewhat, number of sales are down. Current homeowners may not like their house, but if they want to keep their mortgage interest rate, they choose not to move.
- Population growth in the next five years will be high for 25-44 and 65+ age groups, but negligible for the 45-64 age group.
- Same-house mortgage payments are up 19% since 2016, caused by a combination of rising prices and interest rates.
- Building costs are rising faster than prices. Regionally, over the past 12 months, costs are up 7.5% and prices have risen only 3.6%. As a result, builder profit margins are squeezed.
- Mortgage lending is down, as higher interest rates discourage refinancing.
- Virginia’s new proffer law is inhibiting the building of new homes. Home supply in Maryland is taking up the slack.
- The Richmond Highway Corridor is well-positioned for new residential development. Both for-sale and for-rent homes are anticipated. (Note from SFDC: Much of the Richmond Highway Corridor is exempt from Virginia’s new proffer law.)
The moderator was Dan Fulton of John Burns Real Estate Consulting. Panelists were Steve Gray of Wells Fargo Bank, Tom Pyne of Intercoastal Mortgage Company, Rob Fisher of Fisher Custom Homes, and Brian Davidson of Van Metre Homes.