Wow! It is hard to believe that we are already into May, with 4 months of this crazy 2022 real estate market behind us. Today I read something put out by the Richmond Association of Realtors about the state of the real estate market in Central Virginia for the first quarter of 2022!
Some of the takeaways I got from the article was that our economy here continues to improve in 2022, that there is a steady decline in the local unemployment rate, but that consumer confidence is shaky. They also noted that the mortgage rates in the area grew to 5% in the second week of April, which is a level that they had not been at in 11 years! Although sales activity continued to moderate in the area in the first quarter of 2022, the home prices continues to rapidly rise. This is because the inventory levels continue to get smaller. As someone looking at this market day in and day out, I agree with everything that was said in this article.
So I wanted to see if we are continuing to see this trend in the City of Richmond, one of the Richmond areas that I work in every day! The graphic above definitely shows the trend continuing from the first quarter through April.
As you can see, the number of homes that were sold in April this year, vs last year at this time, did drop. However the average list price was higher this year and the average sales price is higher this year! When you look at the average sales price this year vs last year, you also see that these were not only higher, but homes sold over their asking prices, which means that there were multiple offers on most of the houses that sold in April. The time it took for houses to go under contract was well under a month, both last year and this year. However, with continued lower inventory levels, homes are still going under contract much faster this year than they did last year! And, finally, when you look at the supply of homes available for buyers to look at this month, you will see that between the Coming Soon properties (which are listed for sale but not yet available to be shown to buyers and will be available at some point in time this month) and the Active listings, there are far fewer homes available than the ones that are currently under contract but not yet closed. And even fewer than the number of homes which actually did close in the month of April.
All this means that our inventory levels will continue to remain very tight. Even with the increased interest rates pulling some buyers out of the market, there is still such a low shortage of homes for buyers to look at that the prices are still continuing to rise rapidly. Very few of the homes that sold in the month of April 2022 were new construction - of the 284 homes which sold in April, only 17 were new construction! Of the 449 homes which are currently under contract as of May 1, only 45 homes are new construction!
The conclusion from the Richmond Association of Realtors is:
"There has been a lot of economic uncertainty since 2022 began. Inflation continues to rise, and supply chain issues persist. Mortgage interest rates have climbed to their highest level in more than a decade and are expected to keep rising as the Federal Reserve acts more aggressively to control inflation. These factors have shaken consumer confidence on expectations about the economy. The good news is that the job picture continues to be positive, and unemployment is very low. This fuels demand for housing. But it is likely that many households are feeling the pinch in their budgets from lingering inflation and rising mortgage rates, particularly first-time homebuyers. This could dampen buyer activity in the market in the months ahead. It is likely that sales activity will continue to moderate from the busy pace a year ago as we progress through the spring market. Because the supply remains tight, even with slightly fewer buyers in the market, upward pressure on home prices will likely continue to be a major factor, though it is possible the rate of price growth will moderate in the coming months."
I agree with the conclusions! So if you are thinking of buying or selling your home this year, and have questions on the market, or just want to know the value of your home, please don't hesitate to contact me! I am here to help!