September 2023 Housing Market Update
Metro Richmond's Housing Market: What You Need to Know for September 2023
Hey there, Richmonders! Are you wondering what's happening in our local housing market and what the remainder of this year holds? Grab your pumpkin spice latte, and let's dive into your comprehensive September 2023 housing market update.
What's Covered in This Article
- Home Sales Trends
- Interest Rate Impact
- Home Values Analysis
Home Sales: A Decrease Across the Board
On a national scale, home sales have declined by 16.6% compared to last year. Unfortunately, Metro Richmond has fared even worse, with a nearly 24% drop in home sales from last year. According to Lawrence Young, the Chief Economist for the National Association of Realtors, there are two primary reasons for this: higher interest rates and low inventory.
The Factors Contributing to Declining Home Sales
Higher Interest Rates: Rising rates have caused potential buyers to hit the pause button, waiting for better opportunities. Even existing homeowners, enjoying low rates like 3%, are hesitant to trade that in for a 7% interest rate.
Low Inventory: Fewer people are putting their homes on the market, and this self-perpetuating problem is leading to fewer transactions.
If you're thinking of buying or selling, and want to understand your home's worth or just chat about the real estate process, don't hesitate to reach out!
The State of Inventory
The lack of available homes isn't solely a result of the pandemic. Data shows that there was a 14-year stretch following 2008 where new home construction was below the 50-year average. This has led to a massive deficit in home supply.
Adding fuel to the fire is the demographic makeup of the United States. Millennials, making up approximately 23% of the population, are entering their peak home-buying years. Following them are the Gen Z population, and some argue that they are even larger than the millennials.
Interest Rates: The Current Scenario
As of September 13th, the current 30-year mortgage rate is approximately 7.25%. However, experts from Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors predict a drop in rates towards the end of the year.
How Inflation Affects Rates
Historically, mortgage rates tend to follow inflation rates. With inflation starting to stabilize, experts are hopeful that interest rates will follow suit.
Home Values: The Appreciation Story
Despite early predictions of home value depreciation in 2023, experts have had to revise their forecasts. Metro Richmond has seen an 8.3% year-over-year growth in median sales prices, outperforming most of the country.
What Does This Mean for You?
- Time is on Your Side: You haven't missed the boat. Plenty of homes sell in the fall and winter. With the strong demand for homes, you can still get an excellent price.
For Prospective Sellers:
- Interest Rates: Should rates go down, demand will likely increase, making it an ideal time to put your home on the market.
Feel free to call, text, or email me for a no-obligation, hassle-free market analysis to find out what your home is worth in today's market. Let's make your real estate dreams come true!