Local luxury real estate and the pandemic: Can a $12M home sell in Hampton Roads?

Virginia Beach

VIRGINIA BEACH, Va. (WAVY) — When an impressive property hit the market in Virginia Beach a few months ago, the asking price caught a lot of attention. At $11.8 million, it’s the most expensive home on the market currently, and the second most expensive listing ever for the region.

Driving through neighborhoods like Virginia Beach’s North End or tucked away streets in Great Neck, you’ll see impressive homes. The price tags are high, but not quite as high as similar properties elsewhere across the country.

Luxury homes in Hampton Roads typically fetch $1 million to $3 million. For example, a current North End Oceanfront listing off 47th street can be yours for $4.6 million. Meanwhile, the asking price for a vacant oceanfront lot in Palm Beach, Florida, is listed for $21.9 million.

10 On Your Side spoke with Cindy Hawks, chair of the Hampton Roads Realtors Association, about the differences.

“We don’t have the industry to support those price ranges,” Hawks said. “We don’t have the buyers in our market pool. Our average median sales price is $275,000.”

Virginia Beach doesn’t have high-paying industries like tech or finance to push up home prices. The typical buyer here is middle class, likely on a government salary or support staff for the resort industry.

The most expensive asking price on record for a home in Hampton Roads was $24 million back in 2006. The home did eventually sell — five years later — for a fraction of that price, at $4.9 million. It’s still the highest price paid for a home in the region.

Currently, however, there are numerous listing well above that mark.

The highest is 1501 Oak Hill Court at $11.8 million. Next, 1060 Bobolink Drive, a newly constructed house near the Cavalier Golf and Yacht Club, is listed for $8.9 million. And if you want to build your waterfront dream home, there’s an eight-acre plot of land on the Lynnhaven River with a $5.9 million asking price. The owner of the land has put in a request for the property to be subdivided. The request is still under review, according to the broker’s website.

But will people pay these prices?

Rolston Audain, the director of marketing and luxury collection Berkshire Hathaway Towne Realty, says yes.

“It’ll sell,” said Audain. “Because the market is that desirable. You can’t recreate the waterfront that we have. You can’t recreate the beachfront and the bayfront. And so it’s becoming more and more desirable.”

Time will tell if the properties sell. The question is, are these listings anomalies or the tip of a trend?

“I think we’re heading in the direction of seeing more properties priced within that range,” said Audain. “Maybe not $12 million, but maybe higher than three [million dollars].”

Recent developments could prove Audain right. The local luxury market did get an unexpected boost this year.

“We have seen over 200 houses sell over the $1 million mark in 2020 alone,” Audain continued. “We have a strong market right now. There’s a lot of activity in the luxury space. Two hundred homes being sold is a huge number. There should be some recognition to that.” 

Audain says the pandemic played a roll in boosting the luxury market in places like Hampton Roads. In a time when people can work from anywhere, some are trading in the big city high-rise for a home office with oceanfront views.

There’s another factor at play here. Audain points out recent economic uncertainty also makes stable investments more desirable.

“There’s a lot of folks who have been uncertain about the stock market,” Audain explained. “Real estate has always been a safe investment, whether it’s luxury or not.”

Cindy Hawks says if the high priced homes on the market now sell for at or close to list price, it’ll be a boost for everyone.

“I like to stay optimistic and say I hope it sells close to list price because that would start a trend for our area. It would put us on the map a little bit more,” said Hawks.

Virginia Beach homes won’t sell at Palm Beach prices anytime soon. But perhaps we’re inching closer, million dollar home by million dollar home.

Berkshire Hathaway Towne Home Realty, who we spoke with for this report, handles half of all sales over the $2 million mark for this region. They have their own luxury home magazine for the area, if you’d like to see more impressive properties, or you can check out their website.

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