Illustration by Justin Vaughan
Your sanity wasn't the only thing affected by the winter that wouldn't end. The Richmond-area housing market was also in somewhat of a hibernation mode.
"In January, February and even into March, we had a bunch of weekends where it would be a washout or snow," notes Laura Lafayette, CEO of the Richmond Association of Realtors. That meant fewer homes ready for showing, fewer shoppers making the rounds and a first quarter of home listings and sales that lagged slightly behind last year's numbers, even though the U.S. real estate market is generally regarded as being in a state of recovery.
Overall, the number of newly listed single family homes and pending sales through April was down about 2 to 5 percent respectively over the same period last year, according to figures recently released by the association.
"The good news is, if you look at the sold [homes] activity from March to April, sold [homes] picked up significantly in April," Lafayette says.
This winter's effect on the local real estate market, she adds, somewhat obscures the general upward trend since housing bottomed out in 2010.
Earlier this year, business website CNN Money tapped Richmond as one of the "10 Hottest Housing Markets of 2014," citing a 3 percent annual increase in home prices since 2010 and projections that the region would see another 8.5 percent growth in that number through September.
"We've been seeing progress in 2011, 2012, 2013," Lafayette says, referring to a broad housing market that includes the Richmond region and jurisdictions on the perimeter. "The question becomes: When are we at our ‘new normal?' At the high in 2005, we sold over 20,000 [homes]. At the bottom in 2010, we sold 10,000. That high is not natural, and that bottom is not natural, so what would be the typical activity?"
Especially given the anemic start to 2014, Lafayette is reluctant to predict a bold surge in the market over 2013, but she expects that the warmer months will help the market catch up.
So, too, does Mark Joyner, vice president of Napier Realtors ERA and president of the Richmond Association of Realtors. "We anticipate a very strong second quarter, with activity that might have occurred in the first quarter delayed until the spring," he says.
Like a jigsaw puzzle that got scrambled, the region's real estate picture is coming back together in segments. Analysts and real estate agents say fewer homes have hit the market this year, but the ones that are ready to sell are moving fast.
"We're still transitioning," says Tom Tyler, senior analyst for Integra Realty Resources in Glen Allen. "But it's turning into a seller's market, I think. … Some of the inventory is shrinking. Obviously, that's better for the sellers. On the pre-owned homes side, prices have been ticking up on average."
Heading into the summer, select neighborhoods are drawing more attention, Lafayette notes. "We've seen in certain areas, not only do houses not stay on the market, there are multiple offers for a house. Then there are other areas which are still trying to pull out of the recession, where you see houses still staying on the market. But it's very specific to certain areas."
Neighborhoods that feed into certain schools or districts tend to be popular, she says. Lafayette points to Henrico County's Deep Run High School as a major draw for buyers in the market for single-family homes.
Joyner notes that the bricks and mortar of a home have to balance with what's around it. "People do not buy a house until they've first bought into a community's quality of life," he says. "And here in the Richmond region, we have an excellent quality of life."
Maybe not surprisingly, suburban neighborhoods in the counties of Henrico, Chesterfield, Hanover and Goochland are showing more demand for single-family homes, particularly above the $250,000 level, Tyler says.
Demand appears to be up for condos and townhouses, too; Tyler thinks the supply of attached housing may even be running short in some parts of the region.
According to the RAR's mid-May report, condos and townhouses are selling well in the city of Richmond and Hanover County. In the city, listings and sales showed more than a 20 percent improvement over the same period last year. In Hanover, attached-housing sales have shot up nearly 90 percent.
As the Great Recession shrinks into the rearview, Tyler and Lafayette both foresee a resurgence of new real estate development. "Just in the last couple of years," Tyler says, "the developers and builder-developers have really been stepping up the efforts to get new product in place. And I've seen the development of new sections of existing subdivisions as well as brand-new subdivisions."
Lafayette adds that developers will start to pick up where they left off several years back. "The first thing you start with is what's the available lot inventory, what did the builders hold on to in the recession? And that's where they'll start," she says. "You'll see some neighborhoods that have been dormant that are now getting underway."
