ResalesRichmond, Virginia: Developing Two Markets
Homes in Richmond, Virginia and surrounding towns are dividing into two markets, say local Realtors. Consumer confidence is on the wane, causing Richmond-area buyers to take a wait-and-see attitude, but good buys are available for the taking, especially in the first-time buyer price ranges.
Says Realtor Brick Smith, "My primary area of expertise in the Greater Richmond area is western Henrico County, specifically the River Road corridor, and the West End of the City of Richmond. At present, this area has retreated to a somewhat neutral position from it unprecedented strength seen earlier this year. Although existing inventory remains low, a corresponding decline in active buyers has also been seen.
"Obviously, consumer confidence has waned with the set backs in the equity markets," continues Smith. "Currently, we are seeing very few relocation buyers in the marketplace. In the broader Richmond market, we are seeing a marked increase in the number of properties expiring unsold (i.e., an agent"s real estate listing does not sell within the list period), increased price adjustments, and longer days on market for properties that do sell. For these reasons, I rate our current market conditions as neutral. We have not yet entered a buyer"s market due to continued low interest rates, and I don"t anticipated this occurring as the great American economy recovers."
I looked at sales above and below $180,000, where it is a tale of two markets," says Realtor John McClung. "The results show quite a contrast as below $180,000 there is a five and a half week supply of homes currently on the market, while above there is a five and a half month supply of inventory.
"This should be creating some very solid opportunities for first-time home buyers to move up to a larger home sooner than expected, as the equity in their home is building faster than the value of move up homes," offers McClung. "For July, as has been the case most of the year, the sales curve is virtually identical to the previous two years, the one change from the prior months is an increase in the available inventory, if this trend continues, there will be less pressure on prices. However, the lower price ranges will continue to have significant price pressures for several months to come due to the lack of inventory and the inability of builders to deliver in the lower price ranges."
He suggests, "My belief is that first time home buyers should not be discouraged, as one of the benefits of technology, is that rules are changing to a more just in time model and the key component is the stability of the excess inventory curve. Currently, while excess inventory is low, buyers in all price ranges, whose agents maximize the use of technology to keep them on top of the market stand to be rewarded with excellent investments as some pricing does not fully account for the market trends."
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