After years without a lot to cheer about, the Richmond housing market appears to be finally finding its long-lost mojo.
"We're in recovery, and it's a sustainable recovery," says Laura Lafayette, chief executive officer of the Richmond Association of Realtors. "It's not a V-shaped recovery — a dramatic increase in prices — but what we need to see is the gradual increases, and that's what we're getting."
That gradual increase, Lafayette says, has been seen in "all of the big four" localities in the region, as well as beyond, though the pace has varied by locality. "If you look at the metro area, Henrico is the performer of the year," Lafayette says. "Henrico has done really well in terms of pending sales and solds." In numbers, Henrico has seen a 17 percent increase in completed sales of single-family detached homes.
And if there's a runner-up, Lafayette says, it's the city itself: "The number of transactions are up dramatically [metro-wide] over last year, but it's only in Henrico and Richmond that we've seen positive price appreciation, and it's the first time we've seen that in five years."
Even if real estate agents are seeing the bright side, county officials still are dealing with mixed emotions.
In Henrico, Virgil Hazelett, who stepped down in January after two decades as county manager, sees an outlook still fraught with too many variables to be absolutely certain the housing market recovery will
New construction, Hazelett says, has slowed to about half of the new-construction housing permits that it'd been receiving during the construction boom. That amounts to a change from about 800 such permits per year to not much more than 400 in 2012; still, it's an improvement over 2011, when the number of permits fell below 400.
That's one of a couple of hopeful indicators for Hazelett, who says the county's roughly 10 percent to 12 percent population growth rate every 10 years seems likely to be met, having slowed only slightly during the downturn.
"We're hoping the housing market is going to swallow up the houses that are out there, and growth will improve," he says, looking to the East End — the Varina district — as the likely place where growth will come into its own in the coming years.
Craig Toalson, executive vice president of the Home Building Association of Richmond, predicts the next issue could be a shortage of new homes. "I don't think we have a lot of stock out there, actually. Lot prices are up, and I think we have a shortage of lots that are ready and buildable," says Toalson, also lamenting the exit of many builders and developers whose task would typically be replenishing that stock.
In Chesterfield County, County Administrator Jay Stegmaier says officials have noted a sharp increase in the number of condos, apartments and town homes being planned and approved — somewhere in the range of a 60 percent increase over past years.
"I think what you're seeing in those numbers is that the mortgage banking reforms that were put in place have made it more difficult for people to go out and get these easy mortgages," Stegmaier says. "And of course incomes are kind of stagnant, and that seems to be driving a lot of buyers into the lower end of the market."
What that's meant is a steady, healthy market revival, but one that seems likely to change future development trends perhaps for many years.
"Multifamily has taken off," confirms Toalson, agreeing that a variety of economic forces have combined to make living in New Urbanism communities like Henrico's West Broad Village much more attractive.
But while multifamily is buoying the market for now, Toalson says, 2013 and beyond may not necessarily be the year of the condo association. "I think the single-family is coming."
Again, market indicators like increases in average apartment rent along with stabilization in the mortgage lending industry may well give home buyers renewed confidence, Toalson predicts: "When rents go up, people see the incentive to buy, and they'll likely build or buy a single-family home."
Lafayette is similarly bullish, pleased to see banks returning to healthy lending levels and prospective home buyers returning to healthy limits on what they attempt to borrow.
"I think people have learned some lessons over the last four or five years."
Couple it all with an ever-improving job market in the Richmond region, and this cautious optimism may well prove to be infectious.
"Richmond is still an attractive place to live and work," Stegmaier says. "[It's] an attractive place to grow your business. Those things are going to lead to improvements in housing."