Closely following the market conditions is extremely important, especially in the current environment. With inventory levels extremely low and other market conditions trading in extreme ranges, using data to help guide your decision making is essential.
The following charts are designed to give you a sense of market conditions using local (CVRMLS) statistics, information from the most recent census, as well as national Federal Reserve data.
One of the best metrics to follow to gain a sense of market velocity is the PENDING sales in the region. Pending sales keeps track of how many homes are showing as ‘under contract’ but yet to close. Closed sales tend to lag the market by 45-60 days.
The Richmond region is growing and growing quickly. For many decades, the City of Richmond’s population growth was either negative or flat while the surrounding counties were growing. In the latter 1990’s, the City began to reverse the trend and grow at rates equal to, if not greater than, the surrounding counties.
US Economic Data (Federal Reserve Data)
The following is pulled directly from the Federal Reserve Economic Data and is a mix of both national and regional data related to housing and economic conditions.
The following chart shows aggregate home prices for both the Richmond region, as well as nationally.
The homeownership level nationally is still well below the highs seen during the bubble.
For those who feel that the housing market is artificially heating up, the reasons are more related to inventory (or lack thereof) or from lower interest rates than mortgage products targeting marginally qualified borrowers.
National Supply of Housing
As with local inventory conditions, the national scene for housing is also tight. Inventory can measured in raw numbers or stated in terms of a ‘monthly supply’ of housing. Monthly Supply combines available homes with the absorption rate.
Since housing starts effectively ceased in the post-bubble years, the inventory conditions have become increasingly tighter. The only pressure release valve is an increase in housing starts.
Richmond VA tends to be both more stable and less seasonal than many other regions in the country. With a great deal of our employment coming from government (State + local) as well as being home to both a Federal Reserve and a Federal Court of Appeals, we have a bigger built in hedge against recession than many other cities.
Per Capita Income
Our per capital income is relatively strong relative to many other regions of the country. When you combine our higher than average income and a lower than average cost of living, affordability in Richmond is considered to be strong.