2022 was a tumultuous year for the local real estate market with a fiery start to the year that began to moderate about halfway through due to rising interest rates and continued supply challenges. “The housing market always fluctuates. We had an intense seller’s market with lower inventory and record low mortgage rates last year, but that has settled out. Buyers have more ability to negotiate now, and sellers are still enjoying higher prices, so it is still a strong market,” comments FAAR President Carol Sondrini. While price growth remained robust throughout the duration of 2022, units sold decreased significantly which also dragged down total sold volume despite the high prices.
The year closed out with a total sold dollar volume of just over $3.3 billion which represents a more than 12% decrease over the year-end $3.8 billion total for red-hot 2021. The market saw a nearly 12% year-over-year increase in median price, going from $382,000 in 2021 to $425,600 in 2022. Units sold decreased more than 20%, finishing out the year at 7,284 units compared to 9,266 units sold in 2021. Stafford and Spotsylvania counties saw volume reductions that accounted for nearly 1,500 of the 2,000 fewer units sold in 2022 versus 2021, but despite falling sales, prices soared in both places. Spotsylvania County broke $400,000 for its annual median price for the first time ever, clocking in at $410,000 while Stafford County reached $485,000, a $40,000 increase over the previous year.
Days on market, the time it takes from when a listing enters the market until it receives a ratified contract and is removed from active status on the multiple listing service increased more than 33%, going from just 15 days in 2021 up to 20 days in 2022. However, most homes still sold in 20 days or less, making for some strong competition for well-priced homes.
December saw large decreases in total sold dollar volume and units sold, with both metrics declining by over 30%. Despite falling sales volume, median price continued to climb. The month closed out with about $196.6 million in total sold volume, representing a more than 33% decrease from last year. Units sold clocked in at 438 compared to 689 sold in 2021, a more than 36% decline. Median price climbed to $415,000, a nearly 8% increase from the $385,000 price point of December 2021. Every jurisdiction in the FAAR footprint saw units sold decline by more than 30% with Caroline County leading way with a nearly 50% decline from December of 2021. Stafford County saw days on market jump 133% from one year to the next with homes spending an average of just 15 days on the market last December compared to 35 days this December.
While December of 2022 saw more than 200 additional homes on the market than 2021, supply remains an issue. Active listings surpassed 1,000 a few times in 2022 but dipped to 819 in December paired with a more than 35% decrease in new listings from the year before. In December of 2021, 550 new homes came on the market compared to just 355 this December.
While some harbor fears about market dynamics similar to 2008, Sondrini does not see parallels with the housing bust that impacted so many people. Today’s buyers are well-qualified with stable mortgages, sizable down payments, and growing equity. The market is shifting, but supply remains an issue and finding the right home at the right price will continue to be a challenge. “I expect 2023 to be a good market and both buyers and sellers will need a well-informed, trusted Realtor® on their side,” states Sondrini.