March 2022 just ended and I think the saying for this real estate market is "Out Like A Lion and In Like A Lion". The real estate market continues to be in a feeding frenzy, even with interest rates rising rapidly, even over 5%. Many buyers who thought it would be a good idea to wait the market out are finding that not only is the cost of buying a home even more, but what they could get when interest rates were in the 2% and 3% range is just not possible!
This is because inventory levels continue to be very very low, with few houses coming on the market. Bidding wars are still the norm. And many sellers who would normally be thinking about putting their houses on the market are not doing so because they can't be sure they will have a place to go to! And new construction continues to be low and getting more and more pricey because of the cost of materials that keep rising.
So let's take a look at the market stats for the month of March 2022, for Richmond City, Chesterfield County and Henrico County, which are areas I do most of my business in!
If you watch through the videos, you will find that at the end of March, listings were very low - for example, in Chesterfield, there were only 391 homes available for buyers (and in 2020 there were 1,277 homes available), which gives you a good idea of just how low inventory levels are! In Henrico it was no better - at the end of March there were only 262 homes available for buyers (vs. 717 homes at the end of March 2020). And it is the same story in City of Richmond - at the end of March there were only 183 homes for buyers (vs. 405 at the end of March 2020)!
The number of homes that were listed at the end of March was also way down - sellers may be holding back putting their homes on the market for fear of not finding another home to buy! Or builders are not building as much as they once did simply because of labor shortages and/or cost of materials to build! For example, in Chesterfield, there were only 637 homes listed for sale in March (vs. 895 homes listed in March 2020). In Henrico only 474 homes were listed for sale (vs. 597 listed in March 2020). And in the City of Richmond only 370 homes were listed for sale (vs. 395 listed in March 2020).
Because of the shortage of homes, and the sheer number of buyers looking for homes, showings on any homes on the market, particularly when a new listing hits the market, the number of showings on a listing has skyrocketed, leading to many listing agents allowing a showing timeframe of only 15 minutes!!! That is a very quick time to try to see a house! And many times you only get to see the house once before you have to make a decision on whether or not to buy it! For instance, in Chesterfield, there are an average of 18.5 showings per listing, while in Henrico, the average number of showings is 20.5 and in the City of Richmond, it is 16 showings per listing on average!
The feeding frenzy that we are seeing in this market and the bidding wars that are happening on homes has led to the average price of the house sold to skyrocket! In Chesterfield County, the average price of a home sold in 2020 was $304,762 - but in 2022 it was $389,006! In Henrico County, the same thing - in 2020 the average price of a home sold was $308,848 but in 2022 it was $391,742! And in the City of Richmond, the average price of a home sold in 2020 was $296,532 but in 2022 it was $381,184!
With so little inventory out there, the time it is taking for a seller to accept an offer is way down! In 2020 it was not unusual for a house to take about a month to sell on average throughout the area! But in 2022, it is taking only a couple of weeks for a house to sell!
Although it may seem for many buyers they won't be able to buy a home in this market, there are closings that are happening! For instance, in Chesterfield there were 549 homes that closed in the month of March 2022; while in Henrico there were 419 closings and in the City of Richmond there were 285 homes that closed in March! Although this was down from 2021 and 2020 levels, it does show that buyers are able to get homes under contract!
But to get a home under contract in this market, it does take some ingenuity, creativeness and compromising! Buyers need to have a good Buyer Agent to help guide them through the crazy real estate market! And, although homes are selling, not all homes end up sold, so a good Listing Agent will help you get your home sold! I work with home buyers and home sellers in this market and am available to answer any questions you may have. Just let me know how I can help!