Ongoing economic turmoil has made luxury homes less attractive to many consumers in the United States. The low inventory of homes on the market continues to drive home prices up due to strong demand.
In Virginia, the luxury market is relatively small, and year-over-year sales for homes that sold over $2 million (January – May) declined by 29% between 2022 and 2023. From January through May, 338 homes sold for around $2 million or more throughout Virginia. The median sold-to-ask ratio for Virginia’s luxury market in the first five months was 101.5%, reflecting the strong buyer competitiveness for luxury homes in the Old Dominion.
Emerging luxury markets in Virginia
The median sold price for luxury homes increased by 2% compared to this time last year throughout Virginia. Northern Virginia continues to be the dominant area for high-value home transactions in the commonwealth.
Fairfax County accounts for nearly 47% of the luxury home transactions so far in 2023, and the median sales price of luxury properties in the area was $2.4 million, which is 2% higher than last year. Zip Code 22101, which is a large portion of the McLean market in Fairfax County, had 57 closed sales of around $2 million and above from January through May. This zip code had the highest transaction in the first five months of the year at $10.8 million. In Arlington County, zip code 22207 accounted for 32 transactions, around $2 million and above.
The sale of luxury homes in Loudon County fell slightly compared to this time a year ago but remains relatively strong. Between January and May 2023, there were nine home sales close to $2 million and higher, three more than this time last year in the area.
Around the capital of Virginia (Richmond MSA), the median price of luxury homes sold so far in 2023 was $2.3 million. In zip code 23226, the city of Richmond, six closed sales were above $2 million earlier this year. In Virginia Beach City, zip code 23451 had 14 transactions from January to May that sold above $2 million. One of the highest closed transactions in Virginia so far this year sold for $7.2 million in this area.
Despite the uncertainty looming around, purchasing a luxury home can still be a safe investment if it fits the buyer’s budget. Many wealthy households are leveraging their cash in real estate transactions to diversify their portfolio, especially because luxury real estate can have a significant rate of return in the long run.
Stay updated with Virginia’s housing and economic data on the Virginia REALTORS® website, or email us at [email protected] with any questions.