Hampton Roads rent prices will continue to climb in 2022, real estate experts say
Hampton Roads renters will continue to lose out this year as monthly rates could climb as much as 12% compared with last year, according to local real estate experts.
The prediction, from the Axiometrics research company, follows an 11.2% increase in rent for 2021 in the region, said Christen Faatz, a senior vice president for The Franklin Johnston Group and a presenter at the Hampton Roads Real Estate Market Review & Forecast Tuesday at Old Dominion University.
“It’s usually 3.1% on average but during COVID, most things didn’t go as normal,” Faatz said.
In fact, Hampton Roads rent prices increased a record-setting 12.2% in the third quarter of 2021, according to real estate group CoStar.
Among Hampton Roads cities and neighborhoods, rents grew the most in the Lynnhaven and Oceana areas of Virginia Beach, jumping 18.4% to an average monthly payment of $1,542 per unit, according to commercial real estate company Berkadia. Among the seven cities, rent rates grew the slowest in Norfolk at only 9.8% to an average monthly rate of $1,209.
A limited housing supply, high rental demand and increases in the cost of single-family housing all contributed to rent increases in 2021, Faatz said. A pandemic-influenced nadir of new construction didn’t help either — only 1,348 units were delivered in 2021, 8% less than the historical average, according to CoStar.
Despite those pressures, residents have largely been able to hold onto their housing, Faatz said. For much of the year, tenants were covered under a national eviction moratorium, which expired in September. An eviction crisis, which some experts predicted, did not occur once the ban expired.
Faatz said extended unemployment benefits and ongoing rental assistance efforts likely eased the burden for renters. However, rent collection was still particularly challenging for affordable and workforce housing units.
“But for rent relief programs, they would not be returning to historic norms,” Faatz said.
A $1.02 billion rent relief program through the Virginia Department of Housing and Community Development helped more than 102,000 households by the end of January. The program had about $220 million left as of Jan. 25 and could run out of money by this summer, Faatz said.
Residential: Seller’s market will continue in 2022
Homeowners will continue to benefit and buyers will still struggle to find homes in 2022, J. Van Rose, principal owner of Rose & Womble Realty Co., told the audience.
The inventory, or the number of homes currently on the market, hit another record low in January, with just 2,536 listings, according to the Real Estate Information Network listing service in Hampton Roads. If no new homes went on the market, the housing supply would dry up in less than a month.
Combined with buyers ready to expand due to continuing pandemic restrictions, the median price for the resale market increased 10.4% in 2021, according to the listing service. It will be the same story this year, Rose said.
“However, we believe the rate of price acceleration will decline in 2022 from some of the rapid appreciation seen over the last two years,” he added.
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@pilotonline.com
