If you live in Richmond, VA or elsewhere, you have likely heard how many are flocking to live in the city and seen one ranking anointing our hometown among the top ten for riverfront activities, restaurants and craft beer. We are the 7th best food city according to Southern Living, have the top overall business climate per Business Facilities, #1 for concentration of tech workers per capita (American Community Survey data), and often noted favorably for our art, bike paths, walkability, and on and on!
Interestingly, Richmond ranks #3 for highest median earning for female workers AND the highest percent of women-owned businesses (per WalletHub in 2021).
It is no wonder Richmond feels like a city on the go. According to the Greater Richmond Partnership and UVA’s Weldon Cooper Center, “since 2020, Virginia has gained 84,305 residents and of that gain, 40,200 individuals, or 48 percent, relocated to the Richmond MSA.” People are discovering the many fine aspects of life here and many are leaving bigger metro areas for opportunities here.
How has this impacted residential real estate?
Richmond outshines much of the country for the health of its residential real estate market. We continue to see rising price points, modest increases in the number of single-family homes for sale and a modest uptick in the days needed to get a home under contract. We have had a very strong Sellers’ market for years and are still in a Seller’s market, but it is trending to become more balanced. The inventory of condos and townhomes is a little tighter, prices are still increasing, and it is taking longer to get under contract, per the Central Virginia Regional MLS. In many cases, inspections are making a comeback. Our market is very healthy with beautiful properties in a highly desirable location.
We are seeing new construction of homes, condos, townhomes and apartments, though it will take a while to catch up with demand.
Impact of Interest Rates
Interest rates play a big role here, both for the builder and the consumer.
The Federal Reserve hasn’t raised interest rates recently, with the last rate hike a year ago. But mortgage rates are still high, around 7%. But there may be light at the end of the tunnel, with the Federal Reserve keeping the door open for a possible rate cut this year.
A rate cut would help everyone – the home buyer and the builders financing construction projects. While higher rates have made some in the market take a break from the home search, this void is often filled by cash buyers who are often using proceeds from a more lucrative sale. Just over 25% of Richmond area sales last year were cash according to the National Association of REALTORS®.
Commission Structure Changes
Another notable aspect of the real estate market is commission structures – and the pending changes. It is important to note that in Virginia while real estate broker commissions on sales have always been negotiable, you are more likely to be spending time reviewing your broker compensation arrangement just to be sure anyone buying or selling a property understands their options, especially if you are working with a full-service realtor. Thanks to the recent National Association of Realtors Settlement, broker compensation will no longer be included in the MLS listing. Rather, it is incumbent upon realtors to have written documentation of agreed-upon compensation with all clients. The effective date for this is August 6, 2024, in the Richmond MSA.
Having lived in other areas, I have always viewed Richmond as a very special place to live. As a realtor and Associate Broker, I have relished the opportunity to share this wonderful city with newcomers and to work with Buyers and Sellers to successfully negotiate their next moves!
About the Author
Guest Author: Donna Ransone
Donna is delighted to help clients who wish to buy and sell real estate property. She and her husband, Jim, have been consistent Top Team Producers at Long and Foster Real Estate – Grove Office. Donna is an Associate Broker and Accredited Buyers Representative (ABR®). She is licensed in the Commonwealth of Virginia. Prior to becoming a realtor, Donna had a career in marketing with national and local companies, including her own consulting business, ToMarket, for more than 23 years. Donna is former president of the Richmond Ballet and now serves on their Advisory Council; former chair of the Valentine Richmond History Center, an LMR graduate and has been involved with many not-for-profit organizations.