Another month in the books – the end of 2022 and the end of a very topsy turvy year! The year started off with bidding wars on properties that sometimes saw as many as 50 or 60 offers on a house, with buyers bidding up houses as much as $100,000 plus over asking prices, with buyers giving up on things like appraisals and inspections! And it saw homeowners getting appreciation rates of like 15% to 20% year over year! Interest rates were also at historically low levels – with some buyers having a 30 year fixed rate mortgage of around 3%! But then along came June and July 2022 and we started seeing interest rates climbing drastically up to almost 7% or above, with interest rates beginning to come down slightly in December! We saw houses sitting on the market a little bit longer (although in some cases, a little bit longer might have only been 3 days on the market at the beginning of the year to 13 days on the market at the end of the year). We also saw more listings expiring without being re-listed! And we started seeing more houses closing where the seller paid closing costs.
But while the market started cooling as the interest rates started to climb, unfortunately, the prices also continued to climb. So here is a snapshot of how the overall Richmond metro real estate market did in December 2022 vs December 2021.
TIME ON THE MARKET
In 2021, homes that sold in the Richmond Virginia area went under contract in 18 days, on average. In 2022, this time went up slightly – to 23 days! This is still not a very long time, but it is 5 days on average longer than at the end of 2021, which is an indication of the real estate market here is starting to shift a bit. Looking at this by area:
Richmond City – for the 12 months ending 12/31/2022, homes went under contract, on average, in 15 days; for the 12 months ending 12/31/2021, homes went under contract, on average, in 16 days. Slightly better in 2022, but not enough to make a difference!
Chesterfield County – for the 12 months ending 12/31/2022, homes went under contract, on average, in 13 days; for the 12 months ending 12/31/2022, homes went under contract, on average, in 14 days. Again, slightly better in 2022, but not enough to make a difference!
Henrico County – for the 12 months ending 12/31/2022, homes went under contract, on average, in 12 days; it took the same time in 2021 for a home to go under contract on average.
AVERAGE SALES PRICE
In 2022, homes that sold in the Richmond Virginia area sold, on average, for $407,908 – this was an increase from the average sales price of a home sold in 2021, which was $370,920. Even with higher interest rates, homes are still showing increases in prices in December. Looking at this by area:
Richmond City – the average sales price of a home sold in 2022 was $430,913, while in 2021 the average price of a home sold was $381,568! Average seller concessions in 2022 was $1,698 while in 2021 it was $1,509.
Chesterfield County – the average sales price of a home sold in 2022 was $422,167, while in 2021 the average price of a home sold was $376,503! Average seller concessions in 2022 was $2,809 while in 2021 it was $2,002.
Henrico County – the average sales price of a home sold in 2022 was $420,330, while in 2021 the average price of a home sold was $376,268! Average seller concessions in 2022 was $2,368 while in 2021 it was $1,494.
In all areas, the sales price was still well above the asking price, but the average concessions that the sellers provided to the buyers increased from 2021 to 2022. This is another indication of a cooling of the hot real estate market of the first 6 months of 2022!
In December 2022 there were fewer new listings coming on the market than at the same time last year. This trend has continued each month since the market began to cool in June to July time period. Historically, this is a slower selling time period so, hopefully, as we start to move into the spring market we will see the number of new listings increase each month. In December 2022, there were 686 homes which came on the market in the metro area. But in December 2021, there were 893 homes which came on the market in the metro area. This is one reason why inventory levels throughout the area remain very very tight!
However, there is some light at the end of this tunnel – at the end of December 2022, there were 1,271 homes available for sale – at the end of December 2021, there were only 975 homes available for sale! Although 1,271 homes available for sale is not a lot of homes, it is an increase from where we were at the end of December 2021. Hopefully, if we continue to see homes come on the market in the coming months, it can help to bring us back to a more normal market than we have seen in past years!
I think that this is where you see the biggest impact of the cooling market! In December 2022, there were 1,005 homes that closed in the metro Richmond VA area. In December, 2021, however, there were 1,565 homes that closed in the metro area. Coupled with the fact that the number of homes that went under contract in December 2022 was 779 (vs the number of homes that went under contract in December 2021 of 966 homes), this shows that the rise in interest rates have caused some buyers to pull out of the market and is leading to inventory levels getting higher, which should help the buyers out there.
Often when I am talking to people I meet, invariably the question comes around to “How is the real estate market doing?” Hopefully, this post will give a little bit of insight as to what is happening in the metro Richmond Virginia area! Remember, all real estate is local – so if you are thinking of buying a home in 2023 or selling your home or just want to know what is happening in your area, feel free to contact me and I would be happy to help! Remember, Zillow and some of the other sites that give automatic valuations may not be the most accurate place to find out what a house is worth! Let me do a complete real estate review for your home!