2010 has started off more like a lamb than a lion!  Hopefully, that is only due to the bad weather and more than normal snow that we have had here in the Richmond area that has prevented more homes from selling.  We have gone through 2 months of the new year, almost through the third month, and I thought it would be nice to look at the trends we have seen here.  For buyers and sellers, it is always good to know how your neighborhood and area is doing, as that will impact how much you can buy or how much you can sell your home for and how to time your sale and purchase.  Feel free to let me know your thoughts.

2009 Summary

In 2009, for the 12 months, there were a total of 2,655 homes sold in all of Henrico County.  The far west end (Area 22) had 869 homes sold in 2009; the Glen Allen/Nuckols Rd. corridor had 759 homes sold in 2009; and the Lakeside/Chamberlayne Farms area had 321 home sold in 2009.  These 3 areas accounted for almost 75% of the homes sold in Henrico County. 

Of the 2,655 homes sold in Henrico County last year, only 249 were foreclosure sales.  This is a little more than 9% of the total sales in 2009.  Foreclosures by area in Henrico were:

• Area 22:  34 foreclosures out of 869 homes sold (4% foreclosure rate)
• Area 32:  37 foreclosures out of 321 homes sold (almost 12% foreclosure rate)
• Area 34:  44 foreclosures out of 759 homes sold (less than 6% foreclosure rate)
• Area 40:  55 foreclosures out of 346 homes sold (almost 16% foreclosure rate)
• Area 42:  79 foreclosures out of 360 homes sold (almost 22% foreclosure rate)
• Short Pump:  14 foreclosures out of 366 homes sold (less than 4% foreclosure rate)

Although the foreclosure rate in Henrico County was well below the foreclosure rate that we continue to hear about on the national media.  Although the foreclosure rate tends to be low overall in Henrico County, this figure does not include short sales.  Homes in the east end & northern part of Henrico seem to be taking the biggest hit with foreclosures.  This could be a double edged sword.  On one hand, these areas may present some great opportunities for buyers to pick up some good deals, since these homes may be priced exceedingly well and for the buyer who is looking for something that they can put their own personal touch on, it is possible to find a very good deal in these areas.  However, for sellers, these foreclosures may be impacting the pricing in their areas & until the foreclosures & short sales reduce, this may continue to put some downward pressure on pricing in these areas.

For the 2,655 homes sold in Henrico County last year, the average sales price for these homes was $248,437.  By area, prices were:

• Area 22:  Average price was $302,899
• Area 32:  Average price was $173,875
• Area 34:  Average price was $305,228
• Area 40:  Average price was $174,170
• Area 42:  Average price was $135,101
• Short Pump:  Average price was $329,707

For the 2,655 homes sold in Henrico, there were 1,210 (or almost 46%) homes sold that were priced under $200,000.  This is usually a price point that appeals to many first time homebuyers.  For many buyers out there, they need to be aware of the price differences between the different areas, as this will impact the areas they may be looking for a home in.  By area,

• Area 22:  Of the 869 homes sold in 2009, 207 were priced under $200,000
• Area 32:  Of the 321 homes sold in 2009, 247 were priced under $200,000
• Area 34:  Of the 759 homes sold in 2009, 173 were priced under $200,000
• Area 40:  Of the 346 homes sold in 2009, 254 were priced under $200,000
• Area 42:  Of the 360 homes sold in 2009, 329 were priced under $200,000
• Short Pump:  Of the 366 homes sold in 2009, 23 were priced under $200,000

2010 Henrico County VA Real Estate

So as we begin 2010, how are things going?  Well, sales have been very slow the first 2 months.  Part of this may be due to the weather we have had, which included more snow than we are used to.  And, of course, sales in January and February do tend to be slower than during other times of the year. 

For the first 2 months of this year, there have been a total of 243 homes sold.  This is around 9% of the total homes sold last year.  Hopefully, as we come into the spring weather and first time buyers continue to come into the market, the sales will pick up.

For the first 2 months of this year, foreclosures have risen to almost 16% of the homes sold.  I think we will continue to see the number of foreclosures rise this year, as well as the number of short sales in the area.  By real estate area,

• Area 22:  Of the 62 homes sold in the first 2 months, 8 are foreclosures (36%)
• Area 32:  Of the 34 homes sold in the first 2 months, 9 are foreclosures (26%)
• Area 34:  Of the 73 homes sold in the first 2 months, 6 are foreclosures (8%)
• Area 40:  Of the 41 homes sold in the first 2 months, 8 are foreclosures (20%)
• Area 42:  Of the 33 homes sold in the first 2 months, 7 are foreclosures (21%)
• Short Pump:  Of the 25 homes sold in the first 2 months, 1 is foreclosure (4%)

So as you can see the foreclosures in most areas appear to be rising; however, I don’t think 2 months of information should send anyone into a panic.  However, we should continue to monitor this trend as this will have impact on pricing strategies, both for the sellers and the buyers.

For the first 2 months of the year, of the 243 homes sold, 128 of these were priced under $200,000, which is what I would consider a price point for many first time homebuyers.  This is slightly higher than it was for last year, showing that the strongest part of the real estate market in Henrico County continues to be the first time homebuyer.  There are many reasons for this:  the high number of foreclosures & short sales that are priced down & attracting buyers who may not have been able to afford a home in the past, the continued low interest rates, the continued availability of special financing programs such as the grant money and VHDA/FHA loans, the first time homebuyer/move up buyer tax credit and the large amount of inventory on the market.  Looking at this by area:

• Area 22:  Of the 62 homes sold in the first 2 months, 18 were priced under $200,000
• Area 32:  Of the 34 homes sold in the first 2 months, 27 were priced under $200,000
• Area 34:  Of the 73 homes sold in the first 2 months, 23 were priced under $200,000
• Area 40:  Of the 41 homes sold in the first 2 months, 31 were priced under $200,000
• Area 42:  Of the 33 homes sold in the first 2 months, 29 were priced under $200,000
• Short Pump:  Of the 25 homes sold in the first 2 months, 3 were priced under $200,000

So how are the prices holding up in 2010?  As of February the average sales price is:

• Area 22:  Average price $293,100 (last year it was $302,899)
• Area 32:  Average price $158,212 (last year it was $173,875)
• Area 34:  Average price $264,372 (last year it was $305,228)
• Area 40:  Average price $145,221 (last year it was $174,170)
• Area 42:  Average price $128,636 (last year it was $135,101)
• Short Pump:  Average price $264,670 (last year it was $329,707)

I don’t know that, with only 2 months of information, that I would be reading too much into this difference.  Part of this may be due to the higher number of foreclosure and under $200,000 homes that have closed this year which is driving down this price.

Finally, I think it may be an interesting thing to see just how many months of inventory there is in Henrico County.  As of March 12, there are a total of 1,286 active listings in the Multiple Listing Service.  In 2009, there were 2,655 homes sold, which means that for all of Henrico County, there were an average of 221 homes sold/month.  This means that as of March 12, Henrico County has an average months of inventory of 5.8 months.  The words of wisdom say that a real estate market that has 6 months of inventory is one that is in balance – neither a buyer’s market or a seller’s market.  Although Henrico County as a whole has 5.8 months of inventory, is this true for each area?

• Area 22:  As of March 12, there is 6.2 months of inventory
• Area 32:  As of March 12, there is 8.2 months of inventory
• Area 34:  As of March 12, there is 7.2 months of inventory
• Area 40:  As of March 12, there is 11.4 months of inventory
• Area 42:  As of March 12, there is 9.2 months of inventory
• Short Pump:  As of March 12, there is 6.5 months of inventory

So as you can see, there is very high levels of inventory in most of Henrico County, and this will continue to put some pressure on housing prices, especially in the east end of Henrico.