Builders and realtors looking optimistic about spring housing market

By Carol Hazard
Published: March 10, 2010

Richmond-area Realtors and homebuilders are gearing up for the spring market, typically the busiest time of the year for home sales.

“The general feeling is the worst is behind us,“ said Kevin McNulty, president of the Home Building Association of Richmond and president of LifeStyle Builders & Developers Inc.

“There are some indications that this will be a better spring market than last year,“ he said.

More people are out looking at houses, and contracts are being written, he said.

“There is some optimism,“ McNulty said, pointing to the expansion at Fort Lee, the construction of the Rolls-Royce plant in Prince George County, and the recent offer by a Kansas company to buy the Qimonda site in Henrico County.

Hoping to keep recent momentum going, the Home Building Association of Richmond and the Richmond Association of Realtors have started new Web sites. The industry is coming off one of the worst years in recent history for new and previously owned home sales.

The homebuilders’ site, launched Monday, is RightHouseRightNow.com. It will feature about 200 new homes by week’s end, McNulty said.

The Realtors’ site, REsourceHome.com, includes a home-sale search and community information on Richmond and 12 localities. The site is not just for sellers and buyers; it contains household tips and information about services for homeowners.

Both sites prominently feature information about tax credits for first-time and move-up buyers, which are set to expire April 30. Houses must be under contract by that date to qualify, and the deals must be closed by June 30.

An $8,000 tax credit is available for first-time buyers or for someone who has not owned a principal residence in the past three years. A $6,500 credit is on the table for buyers who have owned or lived in their houses for five consecutive years in the past eight years.

Karen Tilson Smith of RE/MAX Commonwealth, president of the Richmond Association of Realtors, said the tax credits will help jump-start the spring home-buying market.

“We have seen an uptick in activity, which has helped relieve some anxiety with sellers,“ Smith said.

The inventory of homes for sale in the Richmond area at the end of February was 9,113, up nearly 200 from the same month a year ago but not as high as the peak of 9,490 in July—a sign of stabilization in the market.

Also, 559 homes sold in the Richmond area in February, up 14.3 percent from the same month a year ago, according to the Richmond Association of Realtors.

“It’s still a tough market, although I am seeing some improvements in key indicators,“ said Tom Tyler, a senior analyst with Integra Realty Resources Richmond, a commercial real estate consulting and research firm.

Closings of previously owned homes in eight localities in the Richmond area rose 40 percent in the fourth quarter from the same period a year ago, he said. The area includes Richmond and the counties of Caroline, Chesterfield, Goochland, Hanover, Henrico, New Kent and Powhatan.

“And it appears [home-building] permits are stabilizing as well,“ Tyler said.

Permits fell 1 percent in the same time periods, a dramatic improvement from the previous year when they dropped 45 percent from October through December in 2008 from the same three-month period in 2007.

“The [home-building] market is not coming back, but it is stabilizing,“ Tyler said. “Stabilization is likely to continue throughout this year with meaningful improvement possible in 2011.“