By now, everyone is well aware of how rough the real estate market was in 2009!  This was true throughout the nation, as well as the Richmond metro area.  Below is the trend analysis & 2009 market conditions for real estate in the City of Richmond.  This does not include Henrico, Hanover and Chesterfield Counties, which I will talk about over the next few days.

Key Points

• In 2009, there were 1840 single family homes sold in the City of Richmond.  This area includes Area 10 (Fan, Church Hill, Oregon Hill, etc), Area 20 (Near West End), Area 30 (Northside), Area 50 (southside) and Area 60 (southside including Westover Hills, Woodland Heights, Stratford Hills, etc).  This was only a slight decrease from the sales in 2008 (which was 1886 single family homes)
• Although the city as a whole saw the number of single family homes sold decline in 2008, Area 30 and Area 50 both had increases in the number of homes sold in 2009.  Part of this could be due to the fact that both of these areas had the highest number of foreclosure homes sold of all the areas in the city.  They also had the percentage of homes sold under $200,000.
• The average days on the market continued to climb.  This has been an ongoing trend since 2006 and should not be a surprise since 2006 is when the market began to turn.
• Prices of homes have decreased.  Again, this should not be a big surprise to anyone, as everyone has been made aware of the sluggishness of the real estate market.  In 2009, prices declined significantly, by 19% from the 2008 prices.  Much of this could be due to the high number of foreclosure homes which sold in 2009 (23% of the homes sold in the city of Richmond in 2009 were foreclosure sales) as well as the high percentage of homes sold that were priced under $200,000 (77% of the homes sold in the city of Richmond in 2009 were priced under $200,000).
• Going forward into 2010 how is the city of Richmond poised?  A look at the active listings on January 1, 2010 shows that there are 1314 single family homes on the market for sale.  In 2009, the city of Richmond sales averaged 153/month, which means that in the city of Richmond alone there is almost 9 months of inventory.  This means that if no other homes come on the market for sale, it would take almost 9 months for the existing inventory to be sold.  This means that going into 2010 the city of Richmond will still be a strong buyer’s market, which will continue to add pressure onto the prices in the city.
• Breaking down the active listings, it should be noted that 898 (of the 1314 active listings) are priced under $200,000.  Again, we will continue to see more and more homes at the lower price points throughout 2010, I believe. 
• Again looking at the active listings, only 86 of the 1314 active listings are actually foreclosures.  This is a very small percentage of homes; however, it is felt that in 2010 we will continue to see more and more foreclosures come on the market as we see banks putting more of the foreclosures that are currently held in inventory onto the market; additionally, we may see some new ARM mortgages adjusting and that may lead to foreclosures.  This will continue to put pressure on pricing on the homes that come on the market in the city of Richmond.

Area 10

• In this area, the average sales price of the single family homes sold decreased by almost 14% in 2009, after a slight increase in 2008 (over the 2007 average sales price).  In 2009, the average sales price of homes in this area was $214,408.  It should be noted that although the prices have dropped significantly from 2008, the home prices are still well above the average sales price of homes sold in 2002 (which was $165,888-29% higher today than in 2002!)
• In this area, the number of homes which sold dropped significantly:  from 549 homes sold in 2008, to 472 homes sold in 2009.
• As in all areas, the average days on the market increased in 2009-from 60 days in 2008, to 66 days in 2009.
• In 2009, almost 57% of the homes sold in this area were priced under $200,000, while only 16% of the homes sold in this area were foreclosures.
• Going into 2010, this area has 336 active listings.  This equates to almost 9 months of inventory on the market.  However, only 18 of these listings are foreclosures, while 187 (about half) of the active listings are priced under $200,000.

Area 20

• In this area, the average sales price of the single family homes sold decreased by 19% in 2009, following a slight decrease in 2008 (over the 2007 average sales price).  In 2009, the average sales price of homes in this area was $365,483.  It should be noted that although the prices have dropped significantly from 2008, the home prices are still well above the average sales price of homes sold in 2002 (which was $291,803-25% higher today than in 2002!)
• In this area, the number of homes sold dropped slightly:  from 291 homes sold in 2008, to 276 homes sold in 2009.
• As in all areas, the average days on the market increased in 2009-from 49 days in 2008, to 64 days in 2009.
• In 2009, only 11% of the homes sold in this area were priced under $200,000, while only 2% of the homes sold in this area were foreclosures.
• Going into 2010, this area only has 81 active listings.  This equates to only 3.5 months of inventory on the market.  A real estate market that is in balance is one that has around 6 months of inventory on the market.  A real estate market with more than 6 months inventory is typically considered a buyer’s market.  Therefore, this particular area of the city of Richmond appears to be more of a seller’s market, although I would doubt that it would ever have the feel of the previous seller’s market we were in.  What I do think this means is that prices will continue to be higher than in other areas and that sellers will not be as willing to take price reductions or take relatively low offers on their homes and in many neighborhoods here, buyers may have to pay top dollar for homes in this area.
• Of the 81 active listings in this area, there is only 1 home that is a foreclosure and only 13 homes are priced under $200,000.

 Area 30

• In this area, the average sales price of the single family homes sold decreased by almost 28%, the area in the city of Richmond with the highest price decrease from 2008.  Here we have seen price decreases each year since 2006.  In 2009, the average sales price of homes in this area was $117,100.  In this area, prices are still above the price of a home in this area in 2002 (which was $114,882), but not much. 
• In this area, the number of homes sold actually increased over the number of homes sold in 2008.  In 2008 there were 292 homes sold; in 2009, there were 353 homes sold in this area.
• As in all other areas, the average days on the market increased in 2009-from 56 days in 2008 to 60 days in 2009. 
• In 2009 in this area, over 77% of the homes sold were priced under $200,000, while almost 29% of the homes sold were foreclosures.  This area had the highest number of foreclosures sold in the entire city of Richmond.
• Going into 2010, there are 219 active listings as of 1/1/10, which equates to almost 7.5 months of inventory, showing that this area is still in a pretty strong buyer’s market.  This will continue to add downward pressure on the pricing of homes in many neighborhoods in this area.
• Of the 219 homes on the market, only 16 of them are foreclosures.  This number may rise as we go into 2010.  However, the bigger item that may continue to impact prices in this area is that there are 168 homes (of the 219 total active listings) in this area that are priced under $200,000.  This is almost 77% of the homes available for sale that are priced at the lower price points.

Area 50

• In this area, the average sales price of a single family home here decreased by a little over 18% over 2008.  This followed a 9% decrease in price in 2008 over the 2007 average sales price.  In 2009, the average price of a home was $83,820.  Although the average sales price of a home here had a significant decrease, it was still well above the average price of a home in 2002 (which was $60,259).
• In this area the number of homes sold in this area was slightly higher than the number of homes sold in 2008.  In 2008, there were 292 homes sold; in 2009 there were 311 homes sold.
• As in all areas, the average days on the market increased in 2009-from 61 days in 2008 to 73 days in 2009.
• In 2009 in this area, almost all the homes sold were priced under $200,000, while only 28% of the homes sold were foreclosures.
• Going into 2010, there are 235 active listings as of 1/1/10, which equates to 9 months of inventory, showing that this area is in a very strong buyer’s market.  This will continue to add downward pressure on the pricing of homes in many neighborhoods in this area.  This area has the highest number of months inventory of all the areas of the city of Richmond.
• Of the 235 homes on the market, only 24 of them are foreclosures.  This number may rise as we go into 2010.  However, the bigger item that may continue to impact prices in this area is that almost all of the homes on the market in this area are priced under $200,000. 

Area 60

• In this area, the average sales price of a single family home decreased by almost 16% over 2008.  This followed a 5% decrease in prices in 2008 over the 2007 average sales price.  In 2009, the average price of a home was $186,259.  Although the average sales price of a home here had a significant decrease, it was still well above the average sales price of a home in 2002 (which was $141,639 – almost 32% higher than in 2002!)
• In this area the number of homes sold in this area decreased slightly – from 462 homes in 2008 to 428 homes in 2009!
• As in all areas, the average days on the market increased in 2009-from 56 days in 2008 to 66 days in 2009.
• In 2009 in this area, almost 62% of the homes that were sold in 2009 were priced under $200,000 and only 12% of the homes sold were foreclosures.
• Going into 2010, there are 224 active listings as of 1/1/10, which equates to a little over 6 months inventory.  This means that this particular area of the city of Richmond appears to be a more stabilized real estate market. 
• Of the 224 active listings on the market, only 11 are foreclosures, while 138 of these listings are priced under $200,000.  Although this will continue to impact the average sales price in this area, the fact that the months of inventory is at a more balanced level may help to negate some of the impact the high % of homes priced under $200,000 will have in 2010.

Based on the above, I still see the city of Richmond having a ways to go before the real estate market begins to settle down.  In 2010, I still see foreclosures rising and short sales rising, which is going to continue to impact the prices in this area.  We still have the $8,000 tax credit until April 30 and this will continue to bring first time homebuyers off the fence and will continue to see homes being sold at the lower price points, which will impact the average price of homes in the area.  Finally, although I think we will still continue to see a sluggish market in 2010, there are some glimmers of hope that the real estate market is turning – areas 20 & 60 appear to have moved away from being strong buyer’s markets and appear to be in a more balanced real estate market.

My final piece of advice is – buy a home as an investment for the long haul!  If you had purchased a home in 2002 in the city of Richmond (anywhere in the city), although you would have seen your value depreciate over the past couple of years, you home would still have appreciated well above what you had paid for it.  In 2002 the average sales price of a home in the City of Richmond was $154,910; in 2009, the average sales price of a home in the City of Richmond was $189,781 – this is an appreciation of almost 23%!