ResalesRichmond Market Runs Hot/Cold According To Sales Price
Richmond, Virginia starter home equity is building faster than in move-up homes, according to the law of supply and demand and low interest rates, say local Realtors.
"Over the past few weeks the market in the city has changed slightly," says Realtor Stanton L. Thalhimer.
Say Realtor John McClung, "August sales indicate a trend toward a stabilizing market. For last month"s analysis, I looked at sales above and below $180,000. The results show quite a contrast, as below $180,000 there is a five and a half-week supply of homes currently on the market, while above there is a five and a half-month supply of inventory.
"Reviewing those same criteria for August, revealed an 11-week supply of inventory in the $180,000 and below range and approximately a five-month supply above the range," he says. "This still creates some very solid opportunities for first-time homeowners to move up to a larger home sooner than expected, as the equity in their home is building faster than the value of move up homes, and interest rates are still excellent. The 11-weeks supply is still well below the 22 to 30-week supply one would look for in a stable market."
He adds, "For August, as has been the case most of the year, the sales curve is virtually identical to the previous two years, the one change from the prior months is an increase in the available inventory, if this trend continues, there will be less pressure on prices. However, the lower price ranges will continue to have some price pressures due to the lack of inventory and the inability of builders to deliver in the lower price ranges."
McClung advises, "My belief is that first-time home buyers should not be discouraged, as one of the benefits of technology, is that rules are changing to a more just-in-time model and the key component is the stability of the excess inventory curve. Currently, while excess inventory is low, buyers in all price ranges, whose agents maximize the use of technology to keep them on top of the market stand to be rewarded with excellent investments as some pricing does not fully account for the market trends."
Agrees Realtor Brick Smith, "My primary area of expertise in the Greater Richmond area is western Henrico County, specifically the River Road corridor, and the West End of the City of Richmond. At present, these areas are experiencing a neutral position with extremely strong demand for properties under $300,000 and more selective demand at prices above this level."
Continues Smith, "Existing inventory levels continue to rise, but much of that can be attributed to improper pricing by owners, who have unrealistic expectations grounded in the unparalleled demand seen earlier in the year. There is little indication that the number of buyers have subsided - only that the buyer are more selective in making their purchase decisions. This selectivity is best manifested at the upper price levels above $500,000. While these properties are seeing sufficient buyers, these properties are very hit or miss in generating offers. Some sell immediately, while other see good activity but no offers. While this would indicate we are slipping towards a buyer market, the strength of the properties at the lower prices keep us in a neutral position. This demand at the lower price ranges is strictly driven by the continued low mortgage rates available for first time buyers and move up buyers. These numerous move up buyers are being created from homeowners who are considering refinancing their existing property, only to find their purchasing power is so increased that a move up is the wisest financial decision."
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