Back in 2014, CNN Money ranked Richmond real estate as one of the hottest housing markets in the country. Next, the housing price in Richmond, Virginia, has continued to rise at a steady pace for almost 4 years, increasing approximately 3 percent annually since 2010. The positive trend is probably linked to the thriving job sectors in the region.
According to an agent that NBC 12 interviewed, there are way too many buyers and not sufficient sellers in Richmond Virginia real estate, with homebuyers paying for seller closing costs as well as paying anywhere from $40,000 to $160,000 over the asking price. Richmond keeps being a seller’s market with good properties at a decent price point yielding many offers. Moreover, single-family houses under $400,000 are extremely hard to find.
Perhaps the more important thing is that the real estate market in Richmond is more affordable than most markets in the United States. This makes conditions more conducive to potential transactions. In fact, average homeowners allocate nearly 11 percent of their incomes to their mortgage payment, while the national average is 16.1 percent.
Therefore, it is way more affordable to purchase a home in Richmond than in, for example, San Diego. Along with this, affordability allows more homeowners to move up, creating more activities in the housing market. Here is the Richmond VA real estate market report.
A Glimpse of Richmond
Richmond is nicknamed the River City not without a reason. Located in the impressive James River, Richmond is the capital of Virginia. It is the 3rd most populated metropolitan area in the state and was initially founded as a trading center by English colonists back in 1609. This city is a place of long, deep significance as it played a key role in the American Civil War and also the Revolutionary War. Therefore, it has so many historical sites and attractive museums to commemorate these time periods.
Besides its important role in America’s 2 historical wars, Richmond is now known as one of the interesting tourist destinations in the nation. It offers a lot of appealing tourist attractions, including culinary spots that strongly put the city in the culinary map. Due to its location, Richmond also offers many fun, water activities, such as kayaking and canoeing.
For nature admirers, the River City also has a bunch of amazing, natural beauties, in which you can enjoy outdoor activities like hiking and cycling. Some of the most popular tourist spots in Richmond include the Metro Richmond Zoo, Science Museum of Virginia, Civil War Museum, White House, and Confederation Museum, Belle Isle, Riverfront Canal Walk, and Hardywood Park Brewery.
The diverse, thriving economy in Richmond is driven by the government, law, and financial sectors. This city is home to one of 13 Federal Reserve Banks and a US Court of Appeals. Richmond got a nice reputation as a great place to live, develop a career, and start a business. In fact, it was recently rated as among the best small cities in North America.
Richmond Real Estate Market Overview
Since July 2020, Richmond VA houses for sale averagely have spent 6 days on the market before going under contract. According to an interviewee that The Washington Post interviewed, houses are listed on Thursday, have an open house on Saturday, and under contract on Monday. Similar to many other real estate markets in the state, the reason for increasing home prices in Richmond is simply there is not sufficient supply to meet the growing demands for properties.
Affordability will continue to drive supply and demand in the Richmond VA housing market. However, people who are interested in investing in the city’s housing market will find that the affordability of the distressed market is more appealing. Richmond has approximately 359 homes in some stages of the foreclosure process, based on RealtyTrac.
- Through May 2022, the Zillow Home Value Index for Richmond is $327,746.
- Home values in Richmond have gone up by 15.1 percent over the previous year and by 65 percent over the last 5 years.
- The median list price of a single-family home in the city is $325,000, according to the most recent report from Realtor.com.
- The median sold price of a single-family home is $335,000.
- Homes for sale in Richmond averagely spend 41 days on the market from listing to going under contract.
- The median list price pre square foot for a house in Richmond is $201.
- The sale-to-list price ratio is 105.26 percent, meaning that homes in Richmond are averagely selling for around 5 percent above the asking price on average.
- Of the 120 neighbourhoods in Richmond, the most affordable one to purchase a home is Jeff Davis with a median listing price of $147,500. While the most expensive neighborhood is Ginter Park where the median listing price is $647,000.
Richmond Real Estate Market Trends
The metro Richmond is a hot real estate market in Virginia. The housing market in Richmond stays vibrant, with homebuyers are willing to pay more than sellers are asking. Metro properties Richmond VA are sold quickly and the housing inventory in the metro area has been significantly tight over the past 2 years.
The metro Richmond is facing a dearth of housing supply. Available homes for sale have declined by more than half over the past 2 years. Based on the Richmond Association of Realtors, the months’ supply of inventory for the Richmond metro area has dropped by 33.3 percent for single-family houses. It has decreased to a low of 0.6 months.
New listings dropped 21 percent and the total inventory was down by 36.6 percent, driving the home price up 11.8 percent to a median of $379,950. The difference in median home prices between April 2022 and April 2021 is $40,000. Pending sales were down by 11.1 percent, indicating that homebuyers are holding back because of increasing prices and high mortgage rates.
Looking at these Richmond VA real estate trends, the Richmond metropolitan area is a sizzling hot seller’s market. Robust property demands from buyers are likely to continue into what is typically the slowest time of year. With the inventory remaining tight in most market segments, the tight market conditions will continue to be beneficial for sellers.
Richmond Real Estate Market Forecast
What about the forecast for the Richmond VA real estate? Virginia Beach is the largest city in the state, followed by Norfolk on the shores of the Chesapeake. These dense, large housing markets drag attention. But you should put Richmond into your consideration. This city is home to nearly a quarter million residents.
The real estate market in Richmond, the capital of Virginia, is actually multiple times bigger than this. If you also include suburbs around the city, the Richmond real estate market contains roughly one and a half million residents. The housing market in this city is a mixture of renter occupied and owner-occupied units.
Single-family detached houses are the most common housing type in the River City with a percentage of 48.72 percent of the housing units in Richmond. Other common housing types in the city include duplexes, large apartment complexes, and a few row houses. Referring to Zillow, the typical home value in the metro Richmond is $320,654. It was just $189,000 as of May 2012.
Since then, the city’s home value has appreciated by almost 70 percent. Home values in the Richmond metro have grown 13.2 percent over the past twelve months. According to the data from NeighborhoodScout, home appreciation rates in Richmond have been above the average for the past decade. The cumulative appreciation rate for the last decade has been 88.39 percent, which equates to an annual average appreciation rate of 6.54 percent.
During the past 12 months, the appreciation rate in Richmond has been 18.12 percent and 6.70 percent in the latest quarter. Therefore, it is predicted that home prices in the city will increase by double-digits over the next 12 months. Looking at these stats, it is no doubt that home prices in Richmond will continue to be up in 2022, with the inventory remaining tight and low, just like across the country.
Population Growth in Richmond
Over the last decade, 32 people on average have moved to Greater Richmond every day. This increases the Richmond metro population from 1.2 million residents in 2010 to more than 1.3 million this year. The City of Richmond alone added more than 22,000 new residents over the past 10 years, with a population growth rate of roughly 11 percent.
- With a population of more than 1.3 million residents in the Richmond metropolitan area and more than 226,000 people in the city, Richmond is the 3rd most populous city in Virginia as well as 4th largest city in the state.
- According to the most recent census, the population of the City of Richmond has grown by 11 percent while Greater Richmond has grown by over 8 percent over the last decade.
- The median property values rose by more than 2.0 percent.
- Richmond’s median household incomes were up 0.9 percent year-over-year.
- The Richmond metropolitan area includes the cities of Richmond, Petersburg, Hopewell, and Colonial Heights, along with the counties of Prince George, Powhatan, New Kent, Henrico, Hanover, Goochland, Dinwiddie, Chesterfield, and Charles City.
Job Market in Richmond
More than half of the jobs in the city are located in Downtown Richmond. It also has pushed job growth over the last 20 years. Though the downtown has significantly affected the economy of the region, job growth in the suburbs is impressive as well. According to a report from Richmond,com, the job market in the suburbs like Lakeside and Midlothian is growing as well as more people and businesses move to the city.
Based on one local news station, the River City has been described as a great place for job opportunities. Recently, Richmond ranked the 69th best place to find a job in the country. It is also among the 5 best cities in the state for employment. Here are some stats regarding the job market in Richmond.
- According to the Federal Reserve Bank of St. Louis, the GPD of the Richmond MSA is more than $76.2 billion. It also has grown by over 16 percent over the last decade.
- Based on the Federal Reserve Bank of Richmond, the city’s job growth rate is 2.0 percent year-over-year, while salaries and wages went up by 2.6 percent as of June 2022.
- The median household income in Metro Richmond is $71,223 while the per capita income is $39,237.
- Richmond is ranked by Forbes as the 55th best place for careers and business in the country.
- Major industries in Richmond include logistics, transportation, health and life sciences, green technology, real estate, finance, advanced manufacturing, as well as creative and knowledge-based businesses.
- Some big companies are headquartered in Richmond, such as Universal Corporation and Dominion Energy.
- As of April 2022, the unemployment rate is 2.8 percent while job growth is almost 1.8 percent in 2021.
- Major colleges and universities in Richmond include University of Richmond, Virginia Commonwealth University, and Virginia Union University.
Life Quality in Richmond
US News & World Report ranks Richmond as one of the best places to live and retire in the United States. The Metro Richmond is highly ranked for job market, desirability, value, and overall life quality.
- The living cost in Richmond is 3.5 percent below the national average, based on the Greater Richmond Partnership.
- Climate in the city is humid subtropical with humid, hot summers and moderately cold winters.
- Richmond has a broad variety of housing and lifestyle options, including waterfront communities, historic townhomes, renovated warehouse apartments, and suburban living.
- Richmond is home to countless cultural attractions, including the American Civil War Museum, Richmond Symphony, and Virginia Museum of Fine Arts.
- It takes only a short drive from Richmond to Washington D.C-Baltimore, University of Virginia, and Hampton Roads.
FAQs About Richmond Real Estate Market
- Is Richmond a Good Place for Real Estate Investment?
Richmond is a hot seller’s market as the home price and home value in the city continue to rise, with a low, tight inventory of homes for sale.
