In 2020, the pandemic immobilized huge sections of the economy. The shutdown of non-essential businesses left 9.6 million people unemployed or laid off with no set date to return to work. This led to increased financial hardship, manufacturing and shipping delays, and an overall unstable economy.
The stock market plunged dramatically, falling by a record-breaking 7.79% in just one day in March. This led some investors to panic and begin frantically selling off stock and leaving the market. While the economy suffered these devastating blows, something strange was happening in Virginia.
Home prices averaged $280,000 in Virginia in 2020, up by 2% from the previous year. These prices have been increasing yearly since 2012, and even the pandemic couldn’t slow down the speed. Some fear that this growth indicates a looming housing bubble burst, which is when the prices for homes drop dramatically and suddenly.
As of yet, there’s no proof of that, but many investors still question whether or not investing in Virginia real estate is good in the long term. To find the answer to that question, let’s dive into why the market is exploding, and what investors need to know about the situation.
Why Is Virginia’s Real Estate Market So Popular?
Virginia’s success can be attributed to a few different factors. Firstly, the state boasts a strong workforce. Nearly 38% of adults have a bachelor’s degree or higher, placing it in the top ten states for educational attainment. This explains why the state has the nation’s fourth-largest concentration of crucial science, mathematical, and engineering jobs.
Secondly, the state has a variety of options when it comes to living environments. You can get an art gallery in the city, or drive out of the city limits to see the Appalachian mountains. No matter what your vibe, the state has something to offer.
Thirdly, Virginia is known for excellent healthcare access. There are 89 hospitals located around the state and 129 primary care physicians per every 10,000 citizens. This means that when you live in Virginia, help is never far away.
What Does The Future Hold?
The steady rise in prices of Virginia real estate has been going on for nearly a decade, and there’s no reason to believe that growth will fall off anytime soon. In fact, the state is expected to grow thanks to Amazon, Gerber, and March of Dimes all choosing the state as the new home for their various headquarters.
With deals like this underway, workers are sure to be coming into the area, and that means more houses being sold. As of 2020, there were less than 30,000 homes for sale on the market. So, as more people move in, home owner’s will be able to make quite a profit by selling.
What Do You Need To Know As An Investor?
Real estate is so popular because it has a high tangible asset value. When you buy a property you know you’ll always be able to get some money back for it, even if it’s not what you paid. That’s not always the case with other forms of investing.
Because the Virginia market is currently so small, chances are that if you choose to invest there you stand to make more than what you paid. While there are no guarantees, that’s certainly a possibility you should consider when choosing an investment. Even outside of Virginia, single-family homes yield a yearly return of about 9%.
Real estate also happens to be a great way to diversify your portfolio. If you already have money tied up in stock or other riskier forms of investing, adding a few pieces of property can help you create a nest egg to fall back on if times get tough.
If you’d like to invest in a property in Virginia, you can find an investment property loan to cover the initial cost of your buy. This will allow you to snatch up one of those rare houses on the market, and hold on to it until you’re able to make your desired profit. You can get 30-year financing for rent-ready properties, which means you’ll have plenty of time to make your sale.
Making good investments can be tough, but when you see a market explosion like the one happening in Virginia, the decision becomes a little easier. Now that you have all the information, you can start your investment journey on the right foot.