Somehow, it looks like the year has managed to get to the halfway mark, so it’s an even better time than normal to check in and see what the real estate market in Richmond is doing.
After the past few very unprecedented years, I know everyone was hoping that this would be a more normal year. Alas, circumstances had a different idea, and it’s still a very unprecedented market.
Last year, we heard lots of folks predicting a crash. Values would drop, and we’d maybe even have another situation on our hands that looked like ’07 and ’08. Yikes. That sure didn’t happen.
So where are we now, as we begin the second half of 2023, and more importantly, what does this mean for you?
Some general statistics:
- The average sales price of homes in the Metro Richmond area was $470,585 in June.
- Average sales price in June of 2022 was $434,35, and in 2021, $376,599.
Yes, contrary to a lot of the news predictions, prices are continuing to go up. But wait a minute! Why? - There are a few reasons. We’ve been struggling with a nationwide housing shortage for a few years now. After the mortgage crisis of ’07-’08, lots of builders stopped building, and between that lag in production and a whole new generation of homebuyers dropping into the market, the supply has just not come close to catching up to demand.
- To compound that already low inventory, rates have made the inventory issue much worse. According to Redfin, 60% of homeowners have been in their homes for less than 4 years, and nearly 92% of homeowners have mortgage rates below 6%. That means many of them are not ready to move at all, and even those who are are surely struggling with the idea of trading a 4.5% mortgage rate for one that’s been hovering around 7% for a while now.
- Average sales price in June of 2022 was $434,35, and in 2021, $376,599.
Courtesy Redfin
None of that is particularly great news, if you’re buying, I know. Inventory is tight, and rates are not particularly good. However, my thought is always that if it’s otherwise the right time for you to make a move, some of those market conditions just have to be part of the equation, rather than the whole determining issue.
Remember, rates will likely go down (depending on who you ask, probably sooner rather than later) and when they do, you can certainly refinance. Unfortunately, they’re unlikely to go as low as pandemic levels, as that was likely (we hope!) a once in a lifetime anomaly in a number of ways. What we do know is that when rates go down, more buyers will enter the market, and that will make the competition tighter.
All that to say, if you’re buying, or wanting to buy, don’t wait for some magical date where rates will go lower and prices will be better, because those things are very, very unlikely to ever happen at the same time. More likely- the longer you wait, they more likely prices are to continue to rise. Don’t get in over your head- make sure you can afford the house that works for you at the rates as they are, and remember, whether you’re a first time buyer or moving to a home that works better for you for whatever reason- it doesn’t have to be the “forever home” that leaves you financially strapped every month.
But what if you’re selling? It should be a snap, right? Just throw a sign in the yard! With 10 buyers for every home, that’s a no brainer. Right?
Yes. Well, kind of, and also no. In June, we dropped back down to 1 month of supply (a balanced market is 6 months), so it is undoubtedly a great time to sell. The demand is there, for sure.
If it’s been a while since you’ve sold a home, the market is different. Buyers are different. And, the amount of information buyers have access to is different. That means, yes, you can probably sell pretty much anything in this market, but for how much, and how long will it take (and at what cost?)
Getting your home ready to sell matters in this market, if you want to get “top dollar.” That means making necessary repairs, cleaning and decluttering, and in many cases, staging as well. Pricing the home well, and marketing it professionally also play a huge role in being able to get the most out of your equity.
If you’re thinking of selling, don’t just “throw it on the market.” Even in this market, you’ll definitely find yourself in a much better position if you work with a professional who can help you maximize the value of your home.
Regardless of whether you’re thinking of buying or selling, homes are indeed back to selling over the asking price in many cases (our average list to sale price percentage right now is 103.5%), and that means tougher competition for buyers, and better money and terms for the sellers. (And if you’re both buyer and seller? Plan accordingly.)
Looking for more detailed info about your neighborhood, house, or an area you want to move? Give me a call! I’d love to help!