Below are the real estate market conditions for the 9 months ending September for the City of Richmond VA.  If you would like to find out what has been happening in your neighborhood or your market area, let me know and I will be happy to send you the information.  I hope you find this information helpful.

What does the above show?

For the first 9 months of 2009 there was not only a drop in the number of homes sold, but also an 18% decrease in the average price of the home sold.  Does this mean that all homes in the City of Richmond dropped in value this much?  No.  What this does tell me is that several things are happening ---

In the first 9 months of the year there was a marked increase in the number of foreclosures sold.  As you can see, in the first 9 months of 2008, only 140 of the 1512 homes sold were foreclosures – this was about 9% of the total sales.  However, in 2009, you will see that the figure increased and coupled with the decrease in the number of homes sold, this increased the percentage way up – to 17% of the total sales.  Generally, when there is a foreclosure, the bank is usually negotiable on the pricing, and so many of these will be sold for well below the market value of the neighborhood, therefore affecting the overall average sales price for the entire area.

• Additionally, you will also see that there is a pretty significant increase in the number of homes sold that were priced under $200,000.  This lower price point includes many people who are buying their first homes or are downsizing their payment because of the economy.  Again, the increase in the number of homes sold at this lower price point has affected the overall average sales price for the entire city of Richmond.

•  Another item which is impacting sales prices in the City of Richmond is the number of short sales we continue to see.  Although there is no firm number of homes which are being sold as potential short sales, since this is a pre-foreclosure sale, and foreclosures have risen in the City of Richmond, this trend should also continue to see an increase over the number from last year.  Again, with short sales, prices will generally be below market value for the neighborhood so that a quick sale can be generated.  This will also impact the average sales price for the entire area.

• Finally, a look at the months of inventory shows that this continues to be quite high – as of today (10/13/09) there are 1,304 single family homes active on the market.  If no other homes are listed for sale, it would take almost 9 months for these homes to be sold, based on the average number of sales per month we have seen for 2009.  A normal market is considered one in which there is about 6 months of inventory.  This is slightly better than the previous month’s figure, but it still shows that we have a long way to go to bring down the amount of inventory still available to the buyers out there.

Remember the old saying that all real estate is local?  Well, the same can be said for the real estate in the city of Richmond.  Looking at the various areas of the City of Richmond, you can see big differences in some of these figures.

• Area 10 (includes the Fan and Church Hill):  For the first 9 months of 2009 there were 366 homes sold (vs. 437 in 2008).  The price also showed a decrease – from $260,072 in 2008 to $222,548 in 2009.  This area of the city continues to have one of the highest number of foreclosures & short sales which will continue to have a big impact on the price in this area.  The area also has almost 10 months of inventory available for buyers.
• Area 20 (near West End):  For the first 9 months of 2009 there were 206 homes sold (vs. 252 homes sold in 9 months of 2008).  The price also showed a pretty significant decrease – from an average price of $460,424 in 2008 to $362,667 in 2009.  This area has very few foreclosures and very few of the sales in this area were priced under $200,000.  Given this, I would say that much of the price decrease is due to the market in this area continuing to stabilize.  It should be noted that as of today, this area has 112 active listings, meaning that there is only 5 months of inventory available.  This may lead to prices in this area stabilizing and the market being a more normal market.  It is the only area in the city of Richmond where inventory are below 6 months, which is the benchmark used to determine if the market is a buyer or seller market.
• Area 30 (northside, including Ginter Park, Bellevue, Highland Park):  For the first 9 months of 2009, there were 269 homes sold (vs. 226 homes sold in the 9 months of 2008).  It was one of the only areas in the City of Richmond where more homes were sold in 2009 than in 2008.  However, prices here also saw a very sharp decrease (from $173,624 average price in 2008 to $119,332 in 2009).  However, two things seemed to have had a very significant impact on this decline in the average price point:  the foreclosure rate in this area jumped up by about 10% and the number of homes that were sold priced under $200,000 were almost 75% of the total sales for the first 9 months of 2009!  The area has around 8 months of inventory still available, and this should continue to put some downward pressure on pricing here.
• Area 50 (southside City of Richmond):  For the first 9 months of 2009, there were 212 homes sold (vs. 225 sold in the first 9 months of 2008).  Again, prices here also showed a decline of around 24%.  Here it seems that the rising foreclosures and short sales as well as the fact that almost all the sales in this area were priced under $200,000 seems to continue to impact pricing in this area.  This area also has the highest months of inventory supply, at almost 12 months.
• Area 60 (southside City of Richmond, includes Stratford Hills & Woodland Heights):  For the first 9 months of 2009, there were 309 homes sold (vs. 372 homes sold in the first 9 months of 2008).  Prices here had a 18% decrease over the previous year’s prices.  Again, the foreclosure rate (and consequently the short sale rate) rose significantly from 2008 and the number of homes sold priced under $200,000 also rose significantly from 2008.  These two items seem to have the biggest impact on the price decrease that we see here.  For this area, there is almost 9 months of inventory available.

As you can see, we continue to have a ways to go before the real estate market in the city of Richmond will return to a more normal state.  The continued pessimism and the continued fear of unemployment, as well as the rising foreclosure and short sale rate will impact prices in most of the areas of the city of Richmond.  We have seen a very high increase in the number of homes sold that have been priced under $200,000 – much of this can be attributed to the $8,000 tax credit, which will expire on November 30.  It is unknown whether Congress will extend that.  If they do not extend it, then it is unclear what impact that will have on the housing market in 2010 and on the prices in not only the City, but in all other areas around Richmond. 

I welcome any comments and thoughts.  If you would like this information for your home, please don’t hesitate to contact me.