Brick’s Blog

     As we progress through the year, I find myself pondering more and more on what is different about Richmond’s current real estate market from past years. The biggest difference, of course, is in the number of properties for sale or our standing inventory. Today, we stand with inventory levels over 30 % higher than the highest point in 2006. 2006 marked a year where for the first time in a number of years, the market had an adequate inventory level. Multiple offers for the same property, offers above the list price and days as opposed to hours on market moderated to exhibit a more normal, balanced and realistic market. And while 2006 ended the year with fewer sales (i.e., 386 less units than in 2005), 2006 in retrospect was a stellar year.

     So why is there so much more inventory in 2007? Well, the obvious reasons is there is less absorption or homes sold, which typically occurs when mortgage rates are high, consumer confidence lacking, unemployment is high, and a stock market is in the tank. And although the stock market has been seeing some rough days of late, we currently have good mortgage rates, full employment and high consumer confidence. I do know builder inventories are up, especially in condominium conversions. We have now gone 2 years without what I would call a true Spring Market. But is this enough to explain the high inventory levels? I don’t think so. When I think I have found the answer, I’ll let you know.

Here’s what sales look like though July of this year versus the last 2 years.

      Currently, 2007 sales are trailing 2006 by 4.9 % and 2005 by 5.7 %. The silver lining is that the average sales prices for 2007 is some 5.5 % higher than 2006.