City housing market expected to cool in next decade

Published 9:33 pm Tuesday, June 21, 2022

Getting your Trinity Audio player ready...

By Greg Goldfarb

Suffolk’s multifamily housing market was hot a few years ago, then it cooled off, and now it’s heated up again. But, a local broker believes it may not stay strong forever.

“I think our current seller’s market will cool down and most likely swing back to a buyer’s market at some point over the next 10 years,” said Lee Cross, managing broker for Suffolk-based Cross Realty. “I don’t see our local market hitting the lows of 2011, when a third of every home that sold was a bank foreclosure or short sale.”

Email newsletter signup

Despite consumer inflation, high fuel prices, and rising rents and mortgage rates across the nation, Suffolk’s residential home market is stable and competitive, Cross said.

As of this past May, active home listings in the city numbered 291, a 9% decrease from a year ago, according to the Virginia Beach-based Real Estate Information Network (REIN). Pending home sales are also down 1.6%, at 255. 

Home closings, however, are up at 257, a 24.7% increase from a year ago, and the median sales price for a house sold in May in Suffolk was $375,500, a 14.39% increase over this time last year. 

May’s new construction sales were at 67, according just to REIN’s multiple listing service. There currently is 1.6 months’ supply of inventory, according to REIN, which reflects how long it would take for all residential properties to be sold, if no new properties were added. By contrast, with a “healthy” or “balanced” market, there would be up to six months of inventory, according to Rami Yoakum, a REIN communications specialist.

Created in 1969 as a multiple listing service for Hampton Roads, REIN tracks real estate data from across the region, including Suffolk. Over the last half-century, Suffolk’s housing market has seen its share of ups and downs.

“Suffolk has experienced all types of different markets,” said Cross, a Suffolk native and Pitchkettle/Kings Fork resident. “In my 20-year career, I have seen Suffolk experience two very strong seller’s markets: from 2005 to 2007, and, our current market; and, one very strong buyer’s market, from 2010 to 2014.”

The national and local economies, interest rates, and different property zoning laws across Hampton Roads, all affect Suffolk’s housing market’s attraction and strength, Cross said. When useable property is scarce in neighboring cities, buyers often look to Suffolk.

“Most of the developable land in Virginia Beach, Norfolk, Chesapeake and Portsmouth has already been developed, which is driving more people and developers towards Suffolk,” said Cross, who serves on REIN’s Sales Manager’s Advisory Council and on the Hampton Roads Realtor Association’s board of directors.

Suffolk’s housing market works like most across the state, reacting to the public’s need for accommodations.

“It is all about the supply, the listings, sellers wanting to sell, versus, the demand, the number of buyers,” Cross said.

He predicts that Suffolk’s residential housing market is likely to continue growing.

“(That is,) unless a highly unlikely event, like the Navy leaving Norfolk or a major economic depression, were to occur,” he said. “Suffolk is a very unique market because of its size and location, the exponential growth we have experienced in the past decade, and its variety of real estate offerings.”