A popular RVAblog post yesterday was It’s a Buyer’s Market Baby !!!, by Narced. This post was certainly topical, since the RTD also reported on the National Association of Realtors (NAR) second quarter comparison of 2006 versus 2005. (Why is it that I can find and link any article on the NYT, WSJ or WaPo, but not the RTD. It was above the fold on the Business Section.) Basically, the article reported that 2nd Quarter Virginia Sales for 2006 were down 23.9 % (4th worst in the Country) from a year ago with the greatest declines in Northern Virginia and Norfolk.
Now before the Chicken Little panic sets in, let me give you the perspective of a 20 plus year Richmond Realtor. We are definitely in a softer market than a year ago, two years ago, three years ago, etc. The softness began in late August of 2005, when in the wake of Hurricane Katrina and subsequent Hurricane Rita, the national media was abuzz with fear stories of unaffordable fuel oils for winter heat and gasoline to get to work. Locally, it was like someone turned off the tap.
By Christmas, there was a significant pick up in the number of buyers out looking from the preceding months. My impression was the buyers went to any area mall, saw they couldn’t find a parking spot and concluded how bad can it be. It felt like we had returned to pre-August market, but as we moved into Spring the historical summer market (those moving before school starts) never materialized.
As of this morning, there are approximately 8,800 active listings in the Central Virginia Multiple Listing Service (CVMLS). This number is approximately 25 % higher than it has been in recent years. Now, let’s get some perspective on this number. 9,000 active listings was a fairly normal level of inventory prior to the recent boom years, when CVMLS covered the Richmond area only and our area population was less.
So, is it a buyer’s or a seller’s market? Well, that depends on many factors - your area, your price range, etc. but I feel like we’re in market equilibrium. There’s plenty of inventory and a very relaxed environment in which to make an informed and unrushed decision. These are 2 elements absent from the marketplace for several years now. For sellers, they are discovering buyers want "perfection." Homes in prime condition are the ones selling at the higher price ranges. The Richmond Real Estate market still remains softest in the middle. Under $300,000 continues to sell well, while $1,000,000 dollar plus sales have already equaled last year’s record.