June 2023 Richmond VA Housing Market Update

Introduction: Welcome to the June 2023 housing market update for Central Virginia. In this blog post, we will dive into what's happening in the local housing market. Despite some concerns and misconceptions, the Central Virginia housing market remains robust and highly competitive. We will discuss mortgage rates, the current state of the market, and what it means for both buyers and sellers. Let's get started!

Mortgage Rates: One of the burning questions is why mortgage rates seem high. While it's true that interest rates have increased compared to the Unicorn years of the pandemic, they are not historically high. Three percent interest rates are not the norm, and even seven percent falls in the middle range historically. However, there is currently a larger than usual difference between the 10-year treasury yield and mortgage rates. Factors such as inflation, economic uncertainty, and capital market conditions contribute to this discrepancy. Experts believe that mortgage rates may eventually fall later this year, leading to a more active housing market.

Central Virginia Housing Market: Now let's focus on the star of the show, the Richmond housing market. Despite some predictions of home price depreciation, the market continues to appreciate. Contrary to what you may hear or see on the news, social media, or from well-meaning but possibly misinformed individuals, the Richmond housing market is still thriving. Let's take a look at the actual numbers derived from the Central Virginia MLS.

1. Median Sales Price: The median sales price has been steadily climbing from January through June, demonstrating a strong upward trend.

2. Average Days on Market: Currently, homes in Central Virginia are selling within an average of six days, showcasing the high demand and competitive nature of the market. This figure has improved from the eight days recorded in December and January.

3. Selling Price vs. Asking Price: In May, sellers received an average of 102.2 percent of their asking price. This indicates that sellers are often able to sell their homes above the listed price, reflecting the intense competition among buyers.

4. Inventory: Currently, there is a 0.6-month supply of inventory in Metro Richmond, which is similar to the extremely low supply levels observed during the height of the pandemic. This supply-demand ratio contributes to the continued strength of the market.

Implications for Buyers and Sellers: If you are considering selling your home, it's important to note that interest rates have not dampened the housing market. However, overpricing can still hinder your success. It's advisable to set a fair market value price for your home rather than overpricing it. Selling a property "as is" is also an option, but it may result in a lower sale price.

For buyers, the market remains highly competitive, with limited inventory and intense demand. It's crucial to be prepared for the challenges and act promptly when suitable opportunities arise. While interest rates have increased, it's essential to consider the bigger picture. Buying now means potentially benefiting from lower costs compared to the future, as home prices are expected to continue rising.

Conclusion: The Central Virginia housing market, particularly in Richmond, continues to thrive despite the challenges and misconceptions surrounding it. Mortgage rates, while higher than during the pandemic's Unicorn years, are not historically high. The market's strength is reflected in increasing median sales prices, reduced days on the market, and sellers receiving prices above their asking prices. For buyers, the market remains competitive, and taking advantage of current conditions is advisable. By staying informed and understanding the dynamics of the Central Virginia housing market, both buyers and sellers can make informed decisions and navigate this exciting and rapidly evolving real estate landscape.

Thank you for reading our June 2023 housing market update. If you have any questions or comments,