As we spoke to real estate experts for our annual overview of the Richmond market, we heard consistently that it’s a good time to put a home up for sale. Market observers say that inventory of existing homes is steady but moderate, so listed properties are selling quickly in some neighborhoods with multiple offers coming to the table. With that in mind, we’ve crafted this year’s guide for buyers. We spotlight areas where homes are in high demand and where renewed interest is transforming communities. Market pros also offer advice for first-timers about the mortgage process, common homebuyer mistakes, smartphone apps to help your hunt, and more. We also deliver our updated chart of real estate values in 120 neighborhoods.
Neighborhoods where value and demand are intersecting
- CHURCH HILL- Richmond’s oldest neighborhood has seen multiple cycles of ebb and flow since its establishment in the 1700s, and it’s been on a steady revival for decades now, as more adventurous buyers have been renovating long-neglected homes. The neighborhood’s footprint is growing north and east, thanks to an increase in destination dining, plus a core community of civic-minded homeowners intent on preserving the district’s historic character. Although our review of the area’s 2014 sales shows modest activity (our listing looks only south of Broad Street), local agents say houses this spring are selling within just a few days of listing. And the average selling price has gone up more than 15 percent over the past five years, another indication of the seller’s leverage here.
- SHORT PUMP- The retail and amenities of Short Pump Town Center have exerted more gravitational pull away from Richmond in the last decade-plus, and now neighborhoods in its immediate orbit are the some of the best-selling in the region. New-home sales at West Broad Village hit No. 2 on the top subdivisions list, proving the popularity of the luxury-townhome community within a stone’s throw of food and shopping. North of the mall, both Wyndham and Twin Hickory are meccas for families in search of high-performing schools, well-kept parks and active options for every age level — both neighborhoods had some of the strongest 2014 numbers for pre-owned home sales in Henrico.
- BRANDERMILL- As Chesterfield’s largest subdivision, this sprawling, decades-old development almost always sees real estate activity on a grander scale, and in 2014, it topped the region in existing home sales, with 107 total, while the average sales price reached almost $221,000. There is a price range and layout for most every homebuyer in the master-planned community of nearly 3,800 homes. The local schools and Brandermill’s outdoor amenities — including golf, nature trails and the Swift Creek Reservoir — tend to keep families planted for a good while.
- BELLVUE- Just east of the I-64 / I-95 interchange and bordered by Brook and Hermitage roads, Bellevue offers a menagerie of home styles, from charming bungalows to grander architectural gems with spacious yards and stately curb appeal. Sidewalks, plenty of trees and the expansive Bryan Park nearby are part of the allure that got houses moving faster here in 2014. Two business strips along MacArthur and Bellevue avenues have coffee and dining options, along with grocery and retail — making for a pedestrian-friendly community that harkens back to its “streetcar suburb” origins. Just southeast, Ginter Park is another North Side gem, where demand and sales prices, on average, have outpaced other nearby neighborhoods.
- WOODLAND HEIGHTS - In the past five years, average sales prices in Woodland Heights have climbed by about 31 percent, and residents there know why: It’s woodsy and close to the riverside park system, which has extensive trails and access to the rolling water. It’s just several minutes’ drive from the city center, the popular South of the James Market is within walking distance and its historic homes (and historic designations) convey character and tax benefits. To the west, Forest Hill and Westover Hills offer the same advantages, but with more homes at higher prices, on average.
On The Rise
Areas where construction, investment and demand are building a future
- BATTERY PARK - Just northeast of Virginia Union University and south of the Ginter Park neighborhood, Battery Park is among a handful of districts seeing an infusion of speculative investment and homebuyers drawn by the history and architecture of the city’s “streetcar suburbs” that were established in the 1890s and soon afterward. Real estate agents who deal heavily in the city point to Battery Park and nearby neighborhoods Highland Park and Barton Heights as areas where first-time homebuyers are searching out newly renovated properties or are rehabbing properties and hoping to see them build value in the coming years. “I think buyers need to have a keen eye on how well the renovations have been done,” notes Kelly Trask, a real estate agent with One South Realty.
- JACKSON WARD - The handful of homes on the market in Jackson Ward last year moved faster than any other city neighborhood — just an average of 10 days from listing to sale. Also, with renovations constantly afoot, property values are rising: The average sale price has shifted up more than 40 percent since a decade ago. It’s a place hanging on proudly to its sense of community and history with new and improved gems such as Mama J’s Kitchen and the revamped Hippodrome Theater, which once helped earn the district its nickname, “Harlem of the South.” Says Carrie Parker, a real estate agent with RVA Property Group: “There are some really awesome condo renovations in Jackson Ward — historic buildings with modern, updated interiors. As the arts district continues to see development in the restaurant and retail sector, I believe residences will follow.”
- FULTON HILL- You are a young, first-time homebuyer hunting for an area with smaller, less-expensive homes that have character and could use a little TLC. Your frontier may be the East End neighborhoods of Montrose Heights and Fulton Hill, where you’ll find bungalows mixed with newer, affordable single-family homes. Here, you have elbowroom and a bit of insulation from the urban rumble, while staying close to the city center. Within a year or so, you’ll be a short bike ride or manageable walk from the Stone Brewing Co.’s first East Coast location on the riverfront, also not far from Rocketts Landing. “I talk to a lot of people and say, ‘If you can’t afford Church Hill, you should probably consider Fulton Hill,” says Matt Smith of MSE Properties. Kelly Trask of One South Realty adds that Montrose and Fulton offer “a lot of house for not too much money.”
- MAGNOLIA GREEN- This subdivision, several miles west of Pocahontas State Park in Chesterfield County, was just ramping up in 2007 when the economic recession took its toll on real estate development. After a new developer, iStar, took over in 2009, sales and construction rapidly picked up steam. Magnolia Green has led the region in new-home sales since 2012. It’s zoned for approximately 3,500 homes that include townhouses, first-floor homes, upscale single-family residences and activity-packed amenities. The 18-hole championship golf course that was planned and only half-finished when Magnolia stalled was set to open by early June, as of press time.
- UNION HILL- As older city districts draw more demand from first-timers and move-up buyers, nearby neighborhoods are getting the spillover of demand. Anchored by Jefferson Park, which overlooks the northeast face of the city skyline, Union Hill is an urban pocket that’s stirring with diversity from new renters, existing residents and those willing to invest in architectural rehab. Walkable dining and food options — Alamo BBQ, The Roosevelt, Metzger Bar & Butchery, Sub Rosa Bakery and the new Union Market — are evidence of a neighborhood where transformation is well underway.
Booms Around Town
As these major projects rise, expect nearby real estate to take on more value and demand
Courtesy Libbie Mill
- LIBBIE MILL- Gumenick Properties held its cards patiently for years through the economic trough, before foundations finally started hitting the ground in 2013 at this 80-acre expanse on Staples Mill Road in Henrico. Now, the developer is moving on its seven- to 10-year timeline to phase in a pedestrian-friendly community with a “town center;” a 2-acre lake; a county library; almost 1,000 single-family homes and 1,100 apartments; and 160,000 square feet of offices, shops and restaurants. The popular Southern Season gourmet food retailer opened there last year, and Gumenick announced that it will start taking orders for homes this year.
Courtesy Stone Brewing
- STONE BREWING- It was big news for local beer lovers in October 2014 when San Diego-based Stone Brewing Co. announced intentions to build its first East Coast brewery, along with a nearby bistro, on the James River east of downtown, near Rocketts Landing. Construction crews have already jumped into action. By early 2016, Stone’s presence will add lifestyle amenities to the eastern edge of the city — very likely intensifying interest and investment along the Route 5 corridor into Henrico County.
Commonwealth Commercial Partners
- SAUER CENTER- The story broke on Richmond magazine’s blog in May 2014 that the national grocery retailer Whole Foods plans to open its second regional location as the anchor of a newly proposed mixed-use development on West Broad Street, the Sauer Center. The 76,000-square-foot project is slated for the site currently occupied by Pleasants Hardware northwest of North Meadow and West Broad streets. The property is owned by a division of the C.F. Sauer Co., which also produces spices and baking products in the adjacent iconic red-brick plant on the corner. Although a definite project timeline is still undisclosed, in April, Pleasants took over a property just 1.5 miles west where it plans to open a new store, replacing its flagship location, by year’s end.
Handheld House Hunting
Technology is changing the way people shop for homes. But not all real-estate apps are created equal. Here’s a quick rundown of some smartphone standouts to help in your quest for a new address.
- Nestiny- Locally developed “real-estate school” website and app that take homebuyers step by step through the purchasing process. Best Feature: The True Affordability Tool and one-page Ready Report give buyers an easy-to- read financial reality check. Biggest Weakness: May be a bit remedial for those who already have experience in the real-estate rodeo. What the Pros Say: “A really cool first-time homebuyers’ tool,” says Carrie Parker with RVA Property Group. “It’s quite comprehensive.”
- Redfin- An online alternative to traditional home selling and buying by using remote e-agents who are paid a salary instead of commission. Best Feature: Charges only a 1.5 percent listing fee (about half of the industry standard). Biggest Weakness: Puts more responsibility on the buyer/seller, eliminates interaction with live, local human beings. What the Pros Say: “ “At the end of the day, Redfin is just a discount brokerage with a fancy website,” says Melissa Savenko, a Richmond RE/MAX agent.
- Zillow- Started in 2005, the biggest name in real-estate apps provides a comprehensive listing of homes and neighborhood stats. Also of note: Zillow recently acquired its largest competitor, Trulia. Best Feature: Customizable search tools let you organize by price, area or home features. Biggest Weakness: Their “Zestimates” of a home’s value have been criticized as inaccurate. What the Pros Say: “While it may be a good tool for the most basic valuations of residential real estate, it should be taken with a grain of salt,” says Ty Dwyer with RVA Property Group. “Realtors have access to much more relevant local data often contradicting Zillow’s valuations.”
- Realtor.com- A comprehensive listing and search site backed by the National Association of Realtors. Best Feature: “Accuracy” and “freshness” are important keywords for the app, which claims “90 percent of listings are updated every 15 minutes.”Biggest Weakness: Brand-new listings don’t always include photos.
- Homesnap- Take a picture of any house in the United States, and the app will pull up data from MLS listings, census data and property tax records. Best Feature: Easy to use, works like facial recognition for houses. Biggest Weakness: Taking pictures in front of strangers’ homes might feel creepy.
- Doorsteps Swipe- Combines the fun of mindless smartphone picture browsing with the usefulness of home shopping. Best Feature: A simple finger swipe lets you “like” or “unlike” listings based on photos to build lists of your favorite properties. Biggest Weakness: Easy to get carried away in a “thumbs up/thumbs down” frenzy and overwhelm yourself with too many options.
- Estately- Yet another player inthe cleverly named real estate app arena.Best Feature: The Flip feature lets you “trash” ugly and unlikable homes so that they don’t keep popping up in searches. Biggest Weakness: Has been called “a Tinder for real estate” (after the infamous singles hook-up app), which doesn’t really mesh with the long-term commitment of buying and owning a home.
- Sitegeist- Delivers an instant info-graphic snap-shot of any neighborhood, culling publicly available data from sources including the U.S. Census Bureau and Yelp. Best Feature: Spans categories from median age and average temperature to political affiliations and pizza places. Biggest Weakness: Lacks the old-fashioned charm of simply chatting up the neighbors.
Pre-owned home sales remain stable as new construction brightens the outlook
In Richmond magazine’s year-over-year analysis of the region’s real estate data from 2013 to 2014, existing home sales and average sales prices stayed relatively neutral — only mini-booms of demand occurred in select areas, as well as isolated upticks in average sales prices. Meanwhile, it is the market for new homes where supply and demand appear to be growing strongest in the city and its immediate neighboring counties of Chesterfield, Hanover and Henrico.
Developments that were hampered through the post-recession years are adding units. Magnolia Green in Chesterfield — among several vast projects in the region that came to a halt during the downturn — led 2014 in new-home closings, according to Tom Tyler of Integra Realty Resources in Glen Allen. In Henrico, demand for new townhomes put West Broad Village in the same echelon, while Hanover’s Rutland development was in the region’s five top-selling subdivisions of new homes.
One significant trend, Tyler notes, was “an increasing market share of new home sales at the higher price points.”
The average sales price for single-family homes in 2014 increased by $10,000, says John Finn Jr., president of the Richmond Association of Realtors. He adds that homes are selling at better than 97 percent of list price, meaning that buyers need to be prepared to make close to a full-price offer — because it likely will not be the only bid on the table.
A critical driver of the region’s rebounding market, of course, is how “credit-conscious” buyers have become after the nationwide mortgage crisis, says Nicci Diamond, a real estate agent for Virginia Capital Realty.
“Buyers are way more educated. ...
They don’t have the pie-in-the-sky attitude that people had six or seven years ago,” Diamond says.
Many prospective buyers are still worried about qualifying for loans in the post-recession world, however. “An unfortunate myth out in the marketplace is that banks are requiring 20 percent down,” says Finn, who’s also regional sales manager and managing broker for United Real Estate Richmond. “In most cases, that’s just not accurate. There are a number of loan products [that allow] for far less of a down payment.”
Finn adds: “The first-time homebuyer market has been strong thus far this year. That’s good because it allows move-up buyers to sell their starter homes and gain square footage or desired amenities.”
Scott Garnett, an associate broker with OneSouth Realty, says younger first-timers finally jumping into the housing market. “My take is that the millennials have sat on their hands for six years — socking away cash, building good credit — and now they’re coming out into the market in force,” he says. “They were smart and rode this thing out.”
Think you know it all? Think again. Real estate pros caution against rookie mistakes in
the buying process
Know Your Limit
The mistake: Overall, the No. 1 mistake I see is prospective buyers who are not getting started soon enough with the preapproval process. Some, and this is especially true for first-time buyers, are reluctant to let someone look at their credit rating and their other finances, but if you don’t do that, they won’t know what price point we should realistically be looking at. It’s super competitive out there for buyers, because of a lack of inventory. Sometimes homebuyers don’t realize what they need to know, until it’s too late. By then, the home they want might be gone.
The lesson: Work with a real-estate agent on the preapproval process. Sometimes people think all they need to know is on the Internet. An agent can tell you where homes are selling, how competitive the market is and help you decide how much you can afford. — Shannon Murray, real-estate agent at the Keller-Williams Realty
Prepare to Spend
The mistake: The first thing I see with first-time home buyers is that they don’t have as much money saved for the down payment as they need. Because they haven’t owned a home before, they really don’t understand the qualifications and the guidelines, and they need to. The responsibilities and repairs of homeownership also are going to be new to them. They need to be prepared when the furnace goes bad — or the air conditioner.
The lesson: There are several programs for first-time homeowners with low and moderate incomes. If income and job stability and credit requirements are met, down payment assistance is available. We have quite a few loan officers who specialize in first-time homebuyers. They’re educated to do more listening, and they can bring people up to speed on homeowner counseling programs and down payment help programs. —J. H. “Sandy” Peele Jr., certified mortgage broker, Union Bank & Trust
Learn How to Budget
The mistake: One common mistake is that people start looking for houses before they know what they qualify for. We want people to know that they are financially ready for home ownership. You want to know what is affordable for you and what fits into your budget.
The lesson: Get educated. We offer free homebuyer education. We educate over 12,000 people a year. In one day of training, you’ll learn the entire homebuying process from start to finish. —Kelly Gill-Gordon, homeownership program education manager, Virginia Housing and Development Authority
An Accurate Appraisal
The mistake: One of the biggest mistakes I find is people who go with online lenders who use the least experienced and cheapest appraiser they can find. If you don’t get an accurate valuation, you can overpay for a property. First-time buyers can end up paying $175,000 for a property that was only worth $150,000 on the day they bought it.
The lesson: You want an appraiser who has a professional designation. You want a local appraiser. You want to ask how long they’ve been an appraiser, whether they have ever been disciplined, whether they are a full-time or part-time appraiser, whether they work out of their house or if they have an office. — Pat Turner, founder and appraiser, P.E. Turner & Co.
The mistake: One of the biggest mistakes I’ve seen is people who are price shopping for their home inspection. I totally get that people want to save money, but a home inspection is probably not where you want to try to save money. It’s too important. We find everything from leaky roofs to improper wiring and leaking plumbing, termites, loose toilets. The No. 1 problem I find is improperly built decks.
The lesson: Find a home inspector who is qualified. Our inspections follow the strictest standards of practice in the industry, written by the International Association for Certified Home Inspectors, the largest home inspector certifying organization in the world. One of the most important questions I would ask is, “Are you going to get on the roof?” A lot of home inspectors won’t get on the roof. Be sure you get your home tested for radon. In Richmond, Virginia, one in four homes have levels of radon that the EPA (Environmental Protection Agency) recommends for mitigation. — Juan Jimenez, founder of “A House on a Rock” home inspections
Home Loans 101
You waited and you saved. But before you can buy that first home, you’ll inevitably need someone like Lori Skeeter, a loan originator and mortgage planner with Alcova Mortgage in Richmond’s Fan District. Skeeter routinely works with first-time homebuyers to navigate the home-loan process. This is a sampling of her sit-down session on the basics of financing.
First Things First- Skeeter asks clients to fill out an online application so that she can review their credit reports and their assets. “My next step usually is I want them to come in and sit down. We’re going to go over the credit report line by line. Is anything inaccurate? Is there anything we need to change?”
The Worksheet- Doing is learning, so Skeeter walks loan applicants through a “fee worksheet” that itemizes all of the closing costs on a house. “If you bought a house that cost X [many dollars], then how much would you need to bring to closing and how much will your payment be? ... This is just our planning guideline,” she says. Skeeter doesn’t believe in glossing over terms on the sheet, so she quizzes clients to see how much they already understand. “I say, ‘Don’t be embarrassed about not knowing an answer.’ ”
Origination Fee- “One of the key things is to push back on origination fees, because … you’re basically paying the lender for the privilege of [processing] the loan for you,” she says. “That’s kind of my job, so I don’t feel that I should charge you additional money for the fact that I’m doing my job.” An origination fee is calculated as a percentage of the mortgage loan, typically a half to 1 percent.
Appraisal vs. Assessment- “I explain that the appraisal value is different from the assessed value. ... The assessed value is based on what the city or the county says [the property value is] and how that’s going to affect their tax base. But the appraisal value is traditionally the fair market value and that is what the lender is prepared to lend on,” Skeeter says.
Escrow Account- “I always ask people, ‘What’s your escrow account for?’ And a lot of times they’re not sure. ... The escrows are the lender’s very nice way of saying, ‘Yeah, we don’t trust you to pay your own taxes and your own insurance yourself, so you’re going to go ahead and you’re going to give us that money and we’re going to take care of it for you. They’re trying to control risk in every possible aspect,” Skeeter explains. She adds, “They’re part of your closing costs — you’re paying for stuff that you’d have to pay for separately anyway, but it’s just wrapped up in your mortgage.”
Title Insurance - “People are always surprised by the title insurance,” Skeeter notes. “They always want to know what that’s for. The short version of that is that the [lender wants] to make sure that there’s absolutely nothing out there [like a mechanic’s lien] that’s affecting your ability to have a clear title to the property.”
Good Faith Estimate- The numbers on the fee worksheet eventually help Skeeter and a client complete the good-faith estimate. “Once you officially issue a good-faith estimate, there are certain numbers on those forms that cannot change. Period. End of story. So, I don’t issue a good faith estimate, typically until you are under contract on a home.”
Highs and Lows of 2014
Since 2000, we’ve tracked real-estate statistics for more than 100 neighborhoods in the city of Richmond and the counties of Chesterfield, Hanover and Henrico. Here are superlative numbers from neighborhoods around the region. (Neighborhoods with only one sale in 2014 are excluded.) Our chart begins on Page 92.
Biggest 5-year price increase: Carver, Richmond, 62.72 percent
Highest average sales price: Monument Avenue, Richmond, $1.17 million
Most homes sold: Brandermill, Chesterfield, 107 homes
Fewest days on market: Jackson Ward, Richmond, 10 days (avg.)
Most days on market: The Bluffs at Bell Creek, 120 days (avg.)
Highest average square- footage cost: Hampton Gardens, Richmond, $217.33
Lowest average square-footage cost: Highland Park, Richmond, $33.59
Source: Central Virginia Regional Multiple Listing Service (MLS), 2014 resale data
Top 10 Subdivisions
Ranked by new-home closings in 2014
• Magnolia Green, Chesterfield
•West Broad Village (townhomes), Henrico
• Brookcreek Crossing, Chesterfield
• Rutland, Hanover
• Rocketts Landing, Henrico
• Sadler Walk , Henrico
• Hunton Park, Henrico
• Foxcreek, Chesterfield
• The Bluffs at Bell Creek, Hanover
• Hallsley, Chesterfield
Source: Integra Realty Resources-Richmond