The metro Richmond area real estate market in 2023 demonstrated both resilience and competitiveness, making it one of the most active markets in the state. As we step into 2024, most trends and predictions suggest a dynamic year ahead.
Market Overview and Trends in 2023:
Throughout 2023, our market was a ALL about the sellers. With high demand and competitive bidding holding steady all year, it was a tough one for buyers, particularly as interest rates ticked up to nearly 8%. A significant portion of sales, (about 55.4%) closed at prices above the listing price, indicating a highly competitive environment. The average sale price of homes in Richmond maintained an upward trend as well, fueled by the influx of young professionals and steady population growth in the area. One of the more difficult hurdles buyers faced was the inventory shortage- while already tight, it was made worse by sellers not moving because going from a 3% (or sub 3%, in many cases) rate to one that’s 7 or 8 was just too unappealing.
Housing Affordability and Demand:
The concern for affordability continued to grow in 2023 due to rising interest rates and low housing inventory. This situation made homeownership more challenging for many potential buyers. Despite these challenges, Richmond’s real estate market continued to thrive, with the rental market showing particularly strong growth. Rent prices increased by 22% over the past two years, in fact. The Richmond area is one where generally, it is still less expensive to buy than rent, though, which makes it good for both buyers of primary residences and those buying investment property.
2024 Predictions:
Looking forward to 2024, the Richmond Metropolitan Statistical Area (MSA) forecasts a stable outlook, While some predictions show a slight dip in housing market performance by the end of the year, headed into a major election that seems nearly impossible to predict. The Virginia housing market as a whole is expected to see an 11.4% increase in home sales compared to the past year, suggesting a rebound from 2023’s relative decline. Home prices are also projected to rise modestly, by about 1.2%.
Real Estate Investment in Richmond:
Richmond continues to be an attractive option for real estate investors, particularly those interested in the rental market, due to the large student population. The city’s status as the state capital and a hub for commerce and education enhances its appeal for investment. The market is expected to yield good returns in the long term, with home prices showing a year-over-year upward trend.
The Richmond real estate market in 2024 is poised for a year of adaptation and change. While challenges like low inventory and affordability constraints still exist, the market is expected to remain competitive and moving throughout the year. As we head into a spring market with lower mortgage rates, more buyers will surely be out home shopping. It is a great time to think about selling if you’ve been on the fence (and easier, as a result, to find something to purchase after your sale).
If you’re thinking of purchasing in 2024, this is the time to start building a game plan and getting your pre approval. As rates dip lower, competition for the homes available will absolutely increase. Make sure you’re ready when you find “the one.” For investors and homebuyers alike, understanding these dynamics and staying informed will be crucial for navigating this evolving market.
Richmond’s steady population growth, thriving job market, and diverse real estate options make it a unique opportunity in the rental and overall housing market, through 2024.
Curious about the value of your home, or what you can purchase? Reach out to me today and let’s discuss!