Roanoke real estate might be something that you should be interested in as an investor. Roanoke, Virginia, has one of the best competitive housing markets in the United States. More than 40% of listed homes in Roanoke will go under contract in only three days or less.
Based on a report by the Realtors, this county is one of the top 15 markets with the fewest days on the market. On top of that, the sold-to-list price ratio in this county is 105% or higher. However, that is not the only reason Roanoke has such a hot real estate market in 2022.
Roanoke is a large metro area you can find in Southwest Virginia. One of the things that attract investors to this county is because of its impressive economic growth. This county is the navel of commerce and culture in Southwest Virginia. Since its rise in the 1850s, Roanoke quickly became a transportation hub for the manufacturing, mining, and railroad industries.
You will find many unique cultural events in this county. These events include Festival in the Park, Chili Cook-Off, and Big Lick Blues Festival. You will also find the Roanoke River flowing through the city and the Center in the Square, the downtown cultural site in Roanoke. It has art galleries, museums, the Hopkins Planetarium, and many restaurants that the locals truly enjoy.
Before you start looking for homes for sale in Roanoke VA, you need to learn many things about this county. That way, you will be able to decide whether or not Roanoke is the best investment venture for your journey. You should know its population, housing and renting market, cost of living, market history, and market forecast for the next couple of years after 2022.
Roanoke Population and Growth
One of the things that are impressive about Roanoke is its population growth. Over the years, Roanoke has become a place where people want to live, play, and work. Based on data from the Roanoke Regional Partnership, Roanoke’s population has grown by as much as 0.45% from 2019 to 2022. That number is impressive because it is four times the average annual growth between 2010 to 2020.
One of the reasons why the population of Roanoke can grow significantly is because it is a large city. This county ranked 9th among the largest cities in Virginia, with a population of approximately 100,011 in the city. The Roanoke metropolitan area is even home to over 315,000 people.
As the household incomes grew by approximately 9.65%, the population in this county grew by 0.45% every year. Based on the United States Census Bureau, Roanoke has a net population gain of approximately 2,979 people and has grown by as much as 3.1% since 2010. You will find cities and counties in the metro area of Roanoke, including Roanoke City, Salem City, Botetourt County, Craig County, Franklin County, and Roanoke County.
Roanoke Housing Market
Roanoke real estate is very hot in 2022 because of its incredible housing market. The housing inventory in Roanoke continues to decline while house buyers in this county are increasing day by day. The demand for houses in Roanoke is soaring quite high in 2022.
You will find many new homes selling very quickly in Roanoke. After only a few days of being listed, newly-built homes and resale homes quickly go under contract. Based on the data from the Roanoke Valley Association of Realtors, there is a 21.2% increase in the average sale price of a house in this county over 2021.
A couple of years before 2022, news from The Roanoke Star showed that the real estate market in this county will only become stronger over the next several months after the news was released. The newspaper predicts this because of the clear imbalance between the demand and supply of houses in Roanoke at the time. And in 2022, the newspaper’s prediction has come true.
According to the data from ATTOM Data, Roanoke is one of the top 10 United States metropolitans that has increased cash sales. You can see that the demand for houses in the metropolitan area of Roanoke is very strong. More than 36% of sold homes in Roanoke are purely cash transactions, which is impressive when you compare it to only 24% of homes in 2021.
As an investor, you will be glad to know that home values in Roanoke have increased by as much as 14.7% over 2021. The Zillow Home Value Index for this county is around $242,848 as of May 2022. You will also find over 47% increase in home values in Roanoke over the last five years from 2022.
As of April 2022, the median listing price of a house in Roanoke is approximately $250,000 based on data from Realtor.com. The median listing price per square foot of a home in this county is $140. The most expensive neighborhood in Roanoke out of the 47 neighborhoods you can find there is Franklin-Colonial with a median listing price that reaches $445,000. On the other hand, the most affordable neighborhood is Melrose-Rugby with a median listing price of $124,900.
Roanoke Renting Market
When it comes to the Roanoke real estate market, you also need to take a look at the renting market. Investors are competing to buy rental property in Roanoke because of the increasing rent prices in this city. The rent prices have increased by as much as 15% each year, which is higher and faster than the national rent price average.
One of the reasons why people decide to move and rent in Roanoke is because of its low cost of living. By living in this city, people will be able to make more money and spend less money. And the region’s natural beauty also adds to one of the reasons why this city is very attractive.
You will be able to find approximately 110,000 single-family houses in Roanoke. These houses account for 75% of all of the housing in this city. Out of all occupied housing units in Roanoke, one-half of them are occupied by renters. That number should impress you if you are a real estate investor.
In 2022, you will find a shortage of rental property in Roanoke, which is why the demand for real estate in this city keeps growing each day. After all, it is safer to invest in property rather than investing in the volatile Wall Street that might not have a future.
The median rent prices in Roanoke are around $1,195 per month for a standard 3-bedroom house according to data from Zumper. Renting prices in this city have increased by over 16% during the last three years since 2022.
Out of all of the occupied housing units in the Roanoke metro population, 46% of housing units are occupied by renters. People who are looking for the most affordable neighborhoods for renters can visit areas such as Melrose-Rugby, Morningside, and Washington Heights with renting prices less than $850 per month. People who are looking for the most expensive neighborhoods for renters can visit Old Southwest, Raleigh Court, and Mecca Gardens with renting prices around $1,623 per month on average.
Cost of Living in Roanoke
One of the reasons why Roanoke real estate is thriving is because of its low cost of living. Based on the data from bestplaces.net, you will see that the cost of living in Roanoke is cheaper than the average cost of living in the entire United States.
The cost of living in Roanoke is cheaper in almost every aspect of life, including groceries, transportation, utilities, and especially housing. While the cost of living in Roanoke VA is cheaper in the aspects that we have mentioned above, the health cost in this city is still a little bit higher than the average health cost in the United States.
Roanoke Market History
Now that you know the cost of living in Roanoke, you also need to know the market history of this city. The market history and affordability are two crucial aspects that will help you tremendously before investing in property in Roanoke. By knowing those two things, you will be able to predict how the market is going to be in the future. You will also be able to predict the demand for houses in Roanoke in the future.
Based on the House Price Index by Freddie Mac, you will see that the House Price Index of Roanoke in 2017 is 144.0. The index changed significantly to 218.6 in 2022, which shows a significant increase in housing prices in Roanoke. The average yearly change in home prices in this city is around 16.6%, whereas the monthly change is approximately 1.4%.
Roanoke Market Forecast
Based on its history, you can predict the future of Roanoke real estate. Roanoke experienced the market bottom in 2008 with the reduction of new housing inventory. In that year, the number of single-family homes only reached 140. The inventory then dipped again in 2012, with the number of single-family homes at 43.
However, since the market hit rock bottom, it managed to bounce back after 2012. In 2013, you will see as many as 226 new housing permits. These new housing permits consist of 65 houses for single families and 161 houses for multi-families. That number is very impressive, considering how the market was ten years before 2013.
Because Roanoke has seen many improvements in housing inventory, investors and home buyers have more options to choose from when it comes to housing. Therefore, the inventory cleared quicker while decreasing the days on the market of the available houses in Roanoke. And you can predict Roanoke VA real estate to continue growing for the next couple of years after 2022.
The next thing you should consider is the number of foreclosures in the city. Roanoke only has around 162 houses in a certain stage of foreclosure in 2022. These houses are in different stages of foreclosure, including default, bank-owned, or auction. However, you will be glad to know that the foreclosure ratio of this city is lower than the foreclosure ratio of the national average.
You will see a 30% increase in distressed properties, which is 50% higher than the number of distressed properties in 2021. Investors will be able to benefit from this kind of increase. Why? Well, simply because each distressed property is an opportunity for a great potential deal.
The median sales price of distressed property is significantly lower than the sales price of a non-distressed home. While the median price of a non-distressed home was around $129,500, the median price of a foreclosure house was around $83,572, which is 35% lower. Homes for sale in Roanoke VA become a very great opportunity for investors.
Pros and Cons of Living in Roanoke
Before you start investing in a property in Roanoke, you might want to learn more about the pros and cons of living in this city. While the Roanoke industrial submarket is growing every day, you will also find a couple of disadvantages to living in this city. They might not be major, but you should always know what to expect.
A couple of advantages you will find from living in Roanoke include:
- Wonderful Views. One of the reasons why people are willing to move to Roanoke is because of its incredible views. You will rarely find an urban city that still offers natural views such as Roanoke. That is why a lot of people love this city.
- Convenient Shopping. Although this city is surrounded by beautiful nature, shopping in Roanoke is still very convenient. You will be able to find almost anything you need in the city
A few disadvantages you might find from living in Roanoke include:
- Possible Racism. Although the economy of this city is growing every day, you will still find a group of people who might be more traditional than you would like.
- Several Areas with High Crime Rate. Several areas in Roanoke have quite a high crime rate. However, you can choose the right neighborhoods if you want to avoid this.
Conclusion
Roanoke is a very beautiful city that offers many opportunities for investors. This city has an impressive housing and renting market that might bring you a lot of profit as a property investor. So, are you interested in Roanoke real estate?