How is the Richmond Virginia real estate market doing?  The May 2023 report is out and it still continues to be a very tight seller’s market!  However, there are some signs that we are beginning to soften a little bit – but it is a very very slow softening!

PRICE APPRECIATION

If you look at the real estate market report, you will see that prices are continuing to go up – however, the price growth we are seeing is definitely slowing down.  Although prices overall in all areas went up, from last year, if you look at certain price points, you can see a bit of a slip.  For instance, for single family homes sold in the Metro Richmond area that were priced between $100,000 and $200,000 the prices actually stayed relatively flat, while the condos sold in this price range actually came down slightly from the same time last year!

HOMES AVAILABLE FOR SALE

As you can see from the report all areas showed a decrease in homes available for sale going into June 2023.  Unfortunately, for the price point between $100,000 and $200,000, this is a much much tighter segment – as of May 2022 there were 63 homes available for sale while at the end of May 2023, there were only 14 homes – this included both condos and single family homes!

CONCLUSIONS

Even with the slight softening we are starting to see in some of the metrics, there are still multiple offer challenges out there, but it doesn’t appear to be quite as crazy as it has been!

• Whereas a year ago, we may not have seen any listings expiring, we are now seeing some actually expire and many of those expired listings are not getting relisted!
• Whereas a year ago, we may not have seen any price reductions being taken, we are now seeing more listings with price reductions being taken.
• Whereas a year ago, we may not have seen houses sell at list price but well above the asking price, we are starting to see some houses closing at or even slightly below the asking price.
• Whereas a year ago, we would not have seen sellers paying any of the buyers closing costs, now we are starting to see a few houses close that sellers are agreeing to pay the buyers closing costs.
• Whereas a year ago, you would see multiple offers that could number as high as 50, we are now seeing multiple offers that have as few as 2 or 3, or even no multiple offers.
• Whereas a year ago, you would see offers that had all contingencies waived, now you are seeing offers that include contingencies – however, many times portions of these contingencies will be waived (ex: buyer agrees to pay up to $2,000 of any appraisal gap; or buyer agrees to only have structural and HVAC inspections done).
• Whereas a year ago, interest rates were very low, now they are much higher.  However, many lenders are now coming up with in house programs such as down payment assistance programs and incentives allowing the buyers to refinance with reduced costs when the interest rates go down.
• Whereas a year ago, most buyers were prepared to sit tight and wait for a 2008 crash to happen, they are now finding that this is most likely not going to happen.  They are finding that rents are rising so quickly and so high that they may be better off building equity in their own homes rather than continuing to rent.

For buyers, the market is starting to get a bit friendlier; however, sellers are still in control of the market.  As we move into the summer, interest rates may begin to come down to under 6%, which will be great for buyers and for any sellers ready to give up the low interest rate to move on to the next chapter of their lives.

For more information on what the market is doing in your area, feel free to let me know.  Have questions, don’t hesitate to reach out and we can talk!