The Norfolk housing market experienced a major setback at the onset of the last recession. However, things have gradually begun to progress, and it would appear as if the recovery has finally taken root in the Virginia city. According to Zillow, home prices have improved dramatically, and the median sales price is currently $180,250. That is a drastic improvement from 2012, when the median sales price bottomed out at around $143,000. Today’s median sales price is even more impressive when you consider where things were just three months ago: $174,000. With the improvements that have been made, however, the Norfolk housing market still has a way to go. This is great news for the Norfolk real estate investing community, as homes are still affordable, and predicted to increase in value.
According to information provided by Trulia, the most popular neighborhoods in Norfolk are Larchmont/Edgewater and Ghent, with respective listing prices of $446,128 and $340,325. Those interested in the Norfolk real estate investing market are advised to keep an eye on these areas, as they seem to be garnering most of the attention.
Much like the rest of the country, the Norfolk housing market has seen inventory levels shrink. Available housing, or lack thereof, is having an impact on sales volume.
According to Register of Deeds William P. O’Donnell, “What we have consistently seen throughout the late winter and spring months is a decrease of real estate inventory in Norfolk County. May 2015 figures continues to reflect that slide with the total number of commercial and residential real estate sales slightly down by 2.6%, 1,451 compared to 1,492 in May 2014.”
Fortunately, there is a silver lining in the Norfolk housing market: while the actual number of completed sales dropped, the average sale price of commercial and residential property continued its upward trend. These numbers increased by as much as 5 percent since last year, settling at $652,981. As a result, total sales volume increased on the year. With a 2 percent jump, commercial and residential sales are now in excess of $604 million.
Of particular importance, however, was the performance of the mortgage industry in Norfolk County. No more than half way through the year, the volume of mortgages topped last year’s numbers by as much as 26 percent. Over the same period, the amount of money owed on said obligations increased 46 percent. It really comes down to one thing: confidence. “Homeowners are showing an increased willingness to take advantage of equity in their homes to finance home improvements and other critical needs,” stated Register O’Donnell. It is this confidence that should fuel the Norfolk housing market for the foreseeable future.
According to RealtyTrac, the Norfolk housing market has approximately 280 homes in some state of foreclosure. These properties are either one of three things: pre-foreclosures, bank-owned foreclosures, or properties that have been repossessed and are scheduled to be place up for auction.
The percentage of delinquent mortgages, or those that have failed to pay their mortgage obligations in a timely fashion, has reached 4.8 percent. Conversely, the national average is just over 6 percent. More than 36 percent of homeowners in the Norfolk housing market are underwater on their mortgage, which is higher than the Virginia Beach Metro.
The overwhelming majority of distressed properties in the Norfolk real estate market are going to be placed up for auction. In fact, auction homes make up 89.7 percent of all of the city’s foreclosures. Surprisingly, that number is actually down 21.3 percent from last year. Banks have repossessed all the rest of the distressed properties. Fortunately for Norfolk real estate investors, said homes are sitting on the books of lending institutions as non-performing loans. They are essentially waiting to be purchased, many at a very discounted rate. Each scenario should be viewed as a unique opportunity to get into the Norfolk real estate investing market.
Of the properties that are in foreclosure, the majority of them are within the $100- to $200,000 price range. They are also heavily in favor of three-bedroom layouts that were built prior to 1950.
Of course, foreclosures are a good indicator as to the current health of the Norfolk real estate market. While Norfolk investors relish the opportunities they provide, homeowners see them quite differently. The truth remains; foreclosures are still holding back the Norfolk real estate market. O’Donnell, “There is no way to sugarcoat these numbers. Clearly, the economic expansion experienced in eastern Massachusetts these past few years has not lifted all boats.”
Wells Fargo, NeighborWorks America and its network member Community Housing Partners recently announced HomeLIFT, a $4.75 million program for homebuyers in Virginia Beach and Norfolk. The plan is for HomeLIFT to strengthen the Norfolk housing market by increasing homeownership. Of the money that has been allocated to the HomeLIFT program, a majority is going to down payment assistance grants. In addition to budding confidence, programs like this should see more homeowners emerge in the Norfolk real estate market.
The recent recession really hurt Norfolk neighborhoods, according to Glen Kelley, Wells Fargo regional president in Virginia. “While the economy has improved, many families have yet to re-enter the housing market because they struggle with making a down payment. HomeLIFT can help by providing mortgage-ready homeowners with $15,000 for down payment assistance to help people buy a home in Virginia Beach or Norfolk.”
While Norfolk has yet to make the strides experts had hoped for, there is no arguing the progression that has been made since the downturn. The Norfolk housing market has come a long way in three short years, and experts believe the positive trend will continue for the foreseeable future.
Norfolk Housing Market Summary:
- Current Median Sale Price: $180,250
- Unemployment Rate: 6.1%
- Population: 242,143
- Median Household Income: $42,677