Hampton Roads Real Estate Returns to Pre-COVID Normalcy as Military Market Drives Steady Demand

Written by:

Steve Marcinuk

Date:

25 Feb 2026

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

The Hampton Roads real estate market is settling into what agent Dan Patton of Prodigy Realty describes as a return to “normal” after years of pandemic-driven volatility. With 12 years of experience serving the Virginia region’s sizable military population, Patton has seen the market move from pre-pandemic stability through the rush of ultra-low interest rates and now back toward more balanced conditions.

“We have shifted more to a pre-COVID market, which, in my vocabulary, is called a normal market,” says Patton, a Coast Guard veteran who began his real estate career in 2014. He notes that homes in good locations now typically sell in three to seven days during the spring and summer, while winter listings may remain on the market for one to three weeks. This seasonal pattern contrasts with recent years, when homes sold within days regardless of the month.

The re-emergence of traditional cycles signals a meaningful change for buyers and sellers. Both groups are now adapting to new expectations on pricing, financing, and inventory, reflecting broader national trends while also responding to the unique circumstances of Hampton Roads.

Market Fundamentals

Hampton Roads mirrors many national housing trends but has distinct characteristics due to its large military presence. Home prices have climbed sharply over the past decade, with average sale prices rising from $225,000 in 2014 to about $350,000 today. While the region’s buyers remain largely military families, Patton notes that the financial landscape has changed considerably.

Interest rates are now the dominant factor shaping buyer decisions. After a surge in demand fueled by 2% rates during the pandemic, rates have climbed to as high as 8%, before settling in the 6.2%-6.5% range. Patton observes that buyers are far more attentive to rate changes than they were in his early years as an agent, when 3%-4% rates were the norm and rarely a major discussion point.

“Everybody has been really rate-conscious, trying to find different ways to buy down and make the home more affordable because rates are so high,” Patton says. The heightened focus on financing has changed how buyers approach their search, often prompting them to explore creative solutions to offset higher monthly payments.

Beyond Interest Rates

While rate hikes have grabbed headlines, Patton points to two additional factors squeezing buyers: rising insurance costs and higher property taxes. Insurance premiums have increased sharply, with some providers exiting the market entirely, particularly in flood-prone areas. At the same time, property tax bills have grown as home values appreciated during the pandemic boom.

“Insurance has gone up drastically in our market, but nationwide, there’s been a lot of insurance companies that have closed up shop and pulled out of our area,” Patton explains. “Taxes have gone up because homes are now worth more post-COVID. Everything has hit the buyer’s pocket.”

This combination has made it increasingly difficult for buyers to find affordable options. As a result, many are turning to grant programs and other forms of assistance. Patton points to a recent $10,000 “heroes grant” intended to last through the summer but fully allocated by mid-February, underscoring strong demand for financial support.

Seller Market Dynamics

On the seller side, many homeowners are reluctant to list their properties because they hold mortgages at rates of 2% to 4%, a phenomenon widely known as the “rate lock-in effect.” This reluctance has kept inventory relatively tight, even as supply is gradually increasing.

“Sellers are sitting in a really good spot because they’re sitting on two to four percent interest rates,” Patton says. “A bunch of our sellers are sitting on twos and threes, and they’re not looking forward to selling their house.”

As a result, sellers now face different expectations. Whereas homes once sold almost immediately, it’s now common for properties to remain on the market for one to three weeks, especially outside of peak seasons. Patton says that educating sellers about this new reality is a key part of his job.

“Sellers are a little bit more nervous because they aren’t expecting to be on the market that long,” he explains. During slower months, sellers are offering more concessions, such as closing cost assistance. However, as the market heats up in the spring, Patton predicts buyers will once again need to cover their own closing costs to compete in multiple-offer situations.

Investor Opportunities

For investors, Hampton Roads offers strong potential given the steady demand for rental housing among military families. Service members frequently rent during their assignments, creating a reliable tenant base and minimizing vacancy risk. Patton, who owns seven investment properties, notes that the market also attracts corporate renters from companies such as Dollar Tree and traveling medical professionals seeking medium-term accommodations.

“We have a bunch of military coming in. I myself am military, I rented in our current market for four years because I was going to head home, wasn’t going to stay,” Patton says, highlighting the consistency of rental demand.

Investment opportunities span a range of property types, from single-family homes and duplexes to apartment buildings and short-term rentals. The region also draws fix-and-flip investors, though Patton cautions that successful flipping requires careful planning and realistic expectations, rather than simply following television trends.

Market Correction Concerns

Questions about a possible market correction remain common, but Patton believes Hampton Roads is insulated from dramatic price swings by its steady flow of military personnel. Each year, about 5,000 service members rotate in and out of the area, ensuring a constant cycle of buyers and sellers.

“We have a relatively healthy supply of buyers and sellers as they transfer out,” Patton explains. This ongoing turnover provides stability and limits the likelihood of sudden corrections. Patton expects concerns about a crash to persist for several years, but he views them as misplaced given the region’s fundamentals.

His long-term view is shaped by experience with previous interest rate cycles. “When I started 12 years ago, rates had just crept into the 4% range, and my boss told me we’ll never see threes again. Ten years later, we saw threes again, but it was only for a minute,” Patton recalls.

Growth and Market Stability

Looking ahead, Patton’s forecast for next year centers on lower interest rates, which he sees as the primary lever to increase transaction volume. He anticipates rates could settle in the 5% range over the next three to five years, making homeownership more affordable and encouraging more activity on both sides of the market.

“Hopeful that rates are going to come down makes things more affordable and helps buying power with our buyers,” he says. “If we keep on this trajectory, it can be a really solid year for both buyers as they have lower payments and sellers as we bring more buyers that have been sitting on the sidelines.”

Rather than a return to the frenzied conditions of the pandemic, Patton favors a continued move toward stability and predictability. “We don’t want a feeding frenzy as it has been in the past, necessarily. A good, healthy market for both buyers and sellers where everything grows as it should in a normal trajectory.”

This outlook aligns with a broader industry preference for gradual, sustainable growth over rapid swings in either direction. For Hampton Roads — with its stable, military-driven demand and diverse economic base — slow and steady progress appears to be the most likely path forward.

As the region adjusts to pre-pandemic norms, Patton’s experience suggests that patience and realistic expectations will serve buyers and sellers better than attempts to time dramatic market shifts. In a market anchored by consistent demand and steady turnover, those who focus on long-term fundamentals are likely to fare best.