Roanoke is one of the most competitive housing markets in Virginia, with over 40% of the homes for sale in the county going under contract in 3 days or less after being listed. According to a report from Virginia Realtors, Roanoke also ranks among the top 15 markets for fewest days on market and a sold-to-list price ratio of 105% or higher.
Roanoke is the largest metro area in Southwest Virginia and is the commercial and cultural center of the southwest part of the state and of Southern West Virginia. Roanoke was founded in the 1850s and quickly became an important transportation hub for the railroad, mining, and manufacturing industries thanks to the city's central location in the Roanoke Valley between Maryland and Tennessee.
Nicknamed the “Capital of the Blue Ridge,” Roanoke’s cultural events include the Chili Cook-Off, Big Lick Blues Festival, and Festival in the Park. The Roanoke River flows through the city, and the downtown cultural site Center in the Square is home to art galleries, restaurants, museums, and the Hopkins Planetarium.
Keep reading to learn why investors are considering investing in the Roanoke real estate market in 2022.
Population growth
Judging by the region’s population growth, Roanoke is a place where people want to live, work, and play more than ever before. According to the Roanoke Regional Partnership, the population of Roanoke grew by 0.45% between 2019 and 2020, nearly 4X the average annual growth from 2010 to 2020.
Key Population Stats:
- Roanoke is the 9th largest city in Virginia with a population of 100,011 in the city and more than 315,000 in the Roanoke metropolitan area.
- Population of Roanoke grew by 0.45% year-over-year while household incomes grew by 9.65%.
- City of Roanoke has grown by 3.1% since 2010, and had a net population gain of 2,979 people, according to the U.S. Census Bureau.
- Metro area of Roanoke consists of the cities of Roanoke and Salem, and the counties of Botetourt, Craig, Franklin, and Roanoke.
Job market
With a current unemployment rate of just 3.2% (as of Oct. 2021), the economy in Roanoke is still showing strong signs of recovering. Job sectors in Roanoke showing the fastest growth include manufacturing, information, financial activities, and leisure and hospitality, according to the BLS.
In 2021 alone, business expansions and relocations to the Roanoke Region created 290 new jobs with $55 million in new investment, according to the Roanoke Regional Partnership. Prior to the pandemic, job growth in the Roanoke Region had been outpacing the entire State of Virginia average.
Key Employment Stats:
- GDP of the Roanoke MSA is more than $16.6 billion, according to the Federal Reserve Bank of St. Louis.
- Unemployment in Roanoke is down to 3.0% through May 2022 while job growth increased by 1.8% year over year.
- Median household income in Roanoke is $57,642 while per capita income is nearly $33,722.
- Median household income growth was 9.65% last year with 53% of the households in the Roanoke metro area earning between $50,000 and $200,000 per year.
- High-tech employment in Roanoke has grown by 1.9%, according to Forbes.
- Key industries in the Roanoke Region include transportation and manufacturing, life science, and food and beverage.
- Carilion Clinic health care, Kroger, Wells Fargo Bank, HCA Health System, Walmart, and Advance Auto are among the largest employers in the Roanoke metropolitan area.
- More than 100,000 undergraduate and graduate students in 25 colleges and universities are within a 60-mile radius of Roanoke.
- The Roanoke Region has a higher concentration of undergraduates per capita than Boston-Cambridge, San Francisco-Oakland, Raleigh-Durham-Chapel Hill, and Austin, Texas.
- Largest public and private four-year colleges in metropolitan Roanoke include Virginia Tech, Radford University, Liberty University, and American National University.
- Over 90% of the residents in Roanoke are high school graduates or higher, while nearly 29% hold a bachelor’s degree or postgraduate degree.
- Roanoke is equidistant from New York City and Atlanta and within a one-day drive of two-thirds of the U.S. population.
- Interstates 581 and 81 pass through the Roanoke city limits.
- Amtrak provides passenger service from Roanoke to major metro areas including Chicago, Washington D.C., Philadelphia, and Boston.
- Roanoke-Blacksburg Regional Airport (ROA) provides non-stop flight service to major Midwest and East Coast cities including Atlanta, Chicago, Charlotte, Orlando, St. Petersburg, New York City, and Washington, D.C.
Real estate market
There doesn't seem to be enough houses in Roanoke for people to buy, with new homes selling faster than they are built and resale homes going under contract within a few days of being listed. According to the most recent statistics from the Roanoke Valley Association of Realtors (RVAR), the average sale price of a home in Roanoke increased by 21.2% over the past year.
A couple of years ago, The Roanoke Star newspaper suggested the real estate market in Roanoke would only get stronger over the next several months, due to the continuing imbalance between supply and demand. Fast forward to today, and that prediction has absolutely come true.
As ATTOM Data reports, Roanoke is among the top 10 U.S. metros where cash sales on the rise. The demand for homes in the metropolitan area is so strong that over 36% of the houses sold are all-cash transactions compared to about 24% one year ago.
Key Market Stats:
- Zillow Home Value Index (ZHVI) for Roanoke is $242,848 through May 2022.
- Home values in Roanoke increased by 14.7% over the last year.
- Over the past five years home values in Roanoke have increased by more than 47%.
- Median list price of a home in Roanoke is $250,000 based on the most recent report from Realtor.com (April 2022).
- Median listing price per square foot for a home in Roanoke is $140.
- Of the 47 neighborhoods in Roanoke, Franklin-Colonial is the most expensive with a median listing price of $444,500.
- Most affordable neighborhood in Roanoke to buy a home is Melrose-Rugby where the median listing price is $124,900.
Attractive renters’ market
Rent prices in the City of Roanoke have increased by 15% year-over-year, rising faster than the national average. As WDBJ 7 in Roanoke recently reported, the popularity of remote work is attracting people to Roanoke where renters can get “more bang for their buck.”
A growing number of people are renting in Roanoke, attracted by the lower cost of living and the region’s natural beauty. There are about 110,000 single-family homes in Roanoke, accounting for 75% of the total housing inventory, and renter-occupied households account for nearly one-half of the occupied housing units.
The shortage of rental property helps to explain why the demand for real estate in Roanoke keeps growing. Virginia Business recently observed that “People are parking money in real estate because they’re worried about the volatility on Wall Street and they know that their returns on bond yields are not very good right now.”
Key Market Stats:
- Median rent in Roanoke for a 3-bedroom home is $1,195 per month, according to Zumper (as of June 2022).
- Rents in Roanoke increased by about 16% over the past 3 years.
- Renter-occupied households in Roanoke account for 46% of the total occupied housing units in the metropolitan area.
- Most affordable neighborhoods in Roanoke for renters include Melrose-Rugby, Washington Heights, and Morningside where rents are less than $850 per month.
- Neighborhoods in Roanoke with the highest rents include Old Southwest, Mecca Gardens, and Raleigh Court where rents are as high as $1,623 per month.
Historic price changes & housing affordability
The rise or fall in home prices and the affordability of housing are two data sets real estate investors use to help forecast the demand for rental property.
Historical price changes may be an indicator of future property values. As home prices continue to rise, they become less affordable for people to buy, which in turn can create a stronger demand for rental housing.
Freddie Mac publishes a monthly House Price Index (FMHPI) that tracks the price inflation for houses in all major real estate markets in the country. The Index uses December 2020 as a benchmark of 100, then measures the change in housing prices in each market to 100.
The most recent FMHPI for Roanoke, VA shows that:
- April 2017 HPI: 144.0
- April 2022 HPI: 218.6
- 5-year change in home prices: 51.8%
- One-year change in home prices: 16.6%
- Monthly change in home prices: 1.4%
The Roanoke Regional Partnership recently compared housing prices in Roanoke to other cities in the U.S.
The report found that Roanoke, VA has a housing cost index (HCI) of 81.6 compared to the national average of 100. Housing costs in Roanoke are more affordable than nearby Charlottesville with an HCI of 103.8, and coastal cities such as Washington, DC and San Diego, both with housing costs indexes above 220.
Quality of life
Roanoke is rated by Forbes as one of the most affordable places for doing business in the U.S. Nicknamed the Capital of the Blue Ridge, Roanoke also receives high rankings for job growth, education, and is among the best places for business and careers.
Key Quality of Life Stats:
- Cost of living in Roanoke is 7% below the national average, according to Forbes.
- Livability recently named Roanoke as the best affordable place to live and one of the best places on the East Coast for outdoor recreation.
- Roanoke lies between the Allegheny and Blue Ridge Mountains, with the Appalachian Trail running just seven miles north of the city.
- Mill Mountain, located within Roanoke’s city limits, is home to the Roanoke Star, Mill Mountain Zoo, and the Discovery Center interpretive building.
- Roanoke receives above-average ratings from Niche.com in all key quality of life measures including housing, public schools, and nightlife.
- The city has a dense suburban feel with a lot of parks and restaurants.
- Climate in Roanoke is humid subtropical with generally mild seasons all year round.
- Downtown Roanoke is home to dozens of museums and theatres, including the Taubman Museum of Art, Opera Roanoke, and the History Museum of Western Virginia.
- Carilion Roanoke Memorial Hospital is ranked as one of the best hospitals in Virginia by U.S. News & World Report.
Get out the map
Where to begin your search? Roofstock created a heat map of Roanoke based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels, and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2-star neighborhood
RED: 1-star neighborhood
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