What's happening in the Richmond Real Estate Market

SUMMARY OF THE CENTRAL VIRGINIA AREA HOUSING MARKET ANALYSIS

3rd Quarter 2011

National and Local Economic Overview

The national economy entered recession in late 2007 and officially came out of recession in

early summer 2009. The recovery since then has been less than robust. As of the third quarter

of 2011, the national economy continues to muddle and drift along with no real inclination for

growth. Each new release of economic forecasts seems to revise earlier forecasts lower. The

lack of stronger economic growth is also being felt in the Central Virginia region as well as

statewide.

The housing market nationally has also not recovered very well, as foreclosures and credit

availability continue to undermine market recovery and sales, which are remaining stubbornly

below normal levels. In all previous recessions of the last 50 years, the housing industry has

either led the recovery or made significant contributions to the recovery. But for the current

recovery, housing’s contribution is close to zero. In the Central Virginia region, the housing

market has fared somewhat better than nationally but recovery is slow. Overall, the national economy is growing very modestly and it does not yet feel like recovery,

which has caused some economists to pose the possibility of sliding back into recession. But a

number of positive measures suggest a second recession is unlikely. And while the equity

markets have been volatile in the third quarter, corporate earnings have been very positive and

many corporations are in an exceedingly high cash position. Resolution of the national debt and

budget political strife as well as European market woes would go a long way to spurring more

robust economic growth in the U.S. economy and real estate markets. Those factors are major

contributors to uncertainty for both businesses and consumers, and easing the uncertainty

would cause a return of some confidence and a return of spending.

Central Virginia’s economy showed signs of recovery in late 2010 and into the spring of 2011 as

the region’s job picture improved. But, the region entered a soft spot in the summer and that

has prevailed through the third quarter. On an annualized basis, the region is down 4,200 jobs

in 2011 (January-August), compared to the same period in 2010. These losses are small

compared to the middle of the recession, and it seems like recovery is just around the corner

but not quite yet happening.

The positive measures in the region’s economy are job growth in its two largest and highest

paying sectors. The Professional and Business Services Sector added 4,000 jobs and the

Health and Education Services sector added 1,200 jobs for the annual period of August 2010 to

August 2011. The other sectors have generally small losses cumulatively, resulting in an overall

net loss as the third quarter comes to a close.

Central Virginia Area Housing Market

The housing market in Central Virginia continues to be stubbornly slow. While sales activity has

picked up somewhat in 2011, prices continue to decline across the region. The major driver of

the price declines is the inventory of foreclosures on the market. Until these homes are sold,

there will be little upward pressure on prices. Underlying fundamentals—including population

growth and historically low interest rates— suggest that the housing market will improve, though

the pace of improvement will likely remain modest and will depend on the drawdown of the

foreclosure inventory.

Home Sales and Prices

In the third quarter of 2011, there was a total of 3,033 home sales in the Central Virginia MLS

reflecting an increase of 23 percent over the third quarter of 2010. Sales were up across the

board in the Richmond Metro Area while sales activity was down slightly in the Tri Cities area.

This uptick in sales is a reversal of the second quarter when sales were down. (However, the

second quarter sales figures for 2011 were being compared to the second quarter of 2010 w

there was substantial sales activity associated with the end of the Federal homebuyers’ tax

credit.) An increase in sales is an important indicator that there is demand for homes and that

some of the more moderately prices and distressed properties are being removed from the

inventory. Continued improvement in the number of sales is critical for eventual price

appreciation in the region.

While the number of sales was up across most of the region, prices continued to fall. The

average price of a home sold in the CVR MLS in the third quarter of 2011 was $223,499, down

seven percent from the 2010 third quarter average. The median sales price in the third quarter

of 2011 was $188,000, down eight percent from the third quarter 2010 median. The trends in

prices were similar in the Richmond Metro and Tri Cities area, though Tri Cities experienced

somewhat steeper price declines. The cities of Richmond and Petersburg were notable for

experiencing moderate increases in median prices in the third quarter of 2011.

Pending Sales

In the third quarter of 2011, there were 3,093 pending sales, up 11 percent over the third quarter

of 2010. The number of pending sales was especially strong in the Richmond Metro area where

the number of pending sales increased by 14 percent in the third quarter of 2011 compared with

the third quarter of 2010. The Tri Cities area continues to struggle, in sales, in prices and also

in pending sales, which suggests that stabilization and recovery in the Tri Cities area, with the

possible exception of the City of Petersburg, is coming very slowly.

Active Listings

The number of active listings in the Central Virginia region is down 25 percent in the third

quarter of 2011 compared with the third quarter of 2010. While a negative trend in active

listings typically suggests a drawn down in inventory, leading to price increases, it is likely that

this trend is keeping potential sellers off the market. The level of inventory was down 27

percent in the Richmond Metro area and down 22 percent in the Tri Cities area.

Outlook for 2011

The Central Virginia housing market continues to be sluggish. Many of the fundamentals

needed for recovery are present—population growth, economic stability, low household

formation rates, historically low interest rates, and low prices. But, several obstacles remain.

The main roadblocks to recovery are the foreclosure inventory and uncertainty on the part of

buyers and sellers. The positive economic signs, if they continue, should improve consumer

and business confidence. The major banks have resumed processing foreclosures, which will

initially create an uptick in the number of foreclosures. But the resumed process will provide

more certainty about the level of foreclosure activity. Next spring will be critical for assessing

the sales of distressed properties and the recovery of the housing market.

Posted from RAR

2nd Quarter Market Statistics for Greater Richmond

From the Richmond Association of Realtors

National and Local Economic Overview

The national economy hit a soft patch in late spring and early summer, primarily due to high gasoline prices and disruptions in the manufacturing sector related to the disaster in Japan that sapped momentum from several elements of the economy. However, those events are likely temporary and at mid-summer they already appear to be fading. Economic forecasters predict better growth in the second half of the year, as oil prices continue to fall and other temporary blips are put behind us. Job growth has been sluggish in the Central Virginia region and other economic measures have not yet begun accelerating, but it is likely that the area will begin to move out of the soft patch as the economy gains more traction in late summer and fall.

The soft spot in the region’s economy was seen in the cyclical sectors having job losses (Construction, Retail, Financial, Leisure and Hospitality.) Additional job losses were seen this quarter in the government sector, while the Professional and Business Services Sector continues to show signs of solid growth throughout the slow-down. The unemployment rate in the region has remained significantly below the national rate, although the region’s rate has risen above the statewide rate. The good sign is that the unemployment rate in the region in April was the lowest since December 2008, and it is much lower than its peak in January of 2010.

Central Virginia Area Housing Market

While prices are still down from last year, they’ve improved late in the second quarter, particularly in the Richmond Metro area. Pending sales were up for the first time in more than a year, which foreshadows improved sales figures this summer. Finally, inventories are being drawn down as more transactions are completed. There are still some weak parts of the region’s housing market and the region’s current economic uncertainties are a drag on sales activity. However, most of the economic indicators and housing market trends suggest the end of 2011 will be brighter than the first half of the year.

Home Sales and Prices

3,161 homes were sold in the Central Virginia area in the second quarter of 2011, including 2,690 in the Richmond metro area and 214 in the Tri Cities living there. The point of sales activity was lower than the second of 2010 because of the ending of the Federal Tax credit program last June. The average price of a home sold in the second quarter of 2011 was $223,97 (-10% from the second quarter of 2010.) The average price of the 214 homes sold in the Tri-Cities area was $118,603, down 14 percent from the same period provided a year ago. The bright spot is the city of Richmond, with the average sales price up 10 percent over the last year (although the median price is down 2 percent.)

Pending Sales

Pending sales are typically a locator of final sales. In the Central Virginia region, the number of

pending sales was down significantly in 2010 compared to 2009. In the first quarter of 2011, the

number of pending sales was about four percent lower than in the first quarter of 2010. In the

second quarter of 2011, however, there is modest improvement in the number of pending sales.

Compared with the second quarter of 2010, the number of pending sales is up two percent

across the Central Virginia market, excluding the Tri Cities area, where the number of pending

sales was down ten percent compared with the second quarter of 2010. These trends offer

support for improvement in the Richmond Metro market and continued uncertainty in the Tri

Cities market.

Active Listings

Inventories in the Central Virginia market are being drawn down. The number of active listings

at the end of the second quarter of 2011 was down 12 percent compared to a year ago. At the

end of the second quarter, there were 8,431 active listings (including single-family and

condominiums), down from 9,599 active listings at this time last year. This includes 6,405 in the

Richmond Metro Area (down 11 percent from a year ago) and 925 in the Tri Cities area (down

14 percent from second quarter 2010.)

Outlook for 2011

The drawdown of inventories, coupled with the uptick in pending sales, means activity is picking

up in the Central Virginia region. Foreclosures are likely still a damper in some neighborhoods,

particularly in the Tri Cities area. In addition, it is still difficult for some buyers to get financing,

which continues to keep demand relatively low.

However, there are some potentially bright signs on the horizon. It is likely that the nation’s

economy will improve in the second half of the year, as job growth restarts. There is significant

pent-up demand for housing and prices may be on the rise in some parts of the region.

Therefore, an improving regional economy, continued with low interest rates, simple population

and household growth, and increasing consumer confidence should make for a more normal resale market at the end of 2011 and into 2012.

5 Tips to prepare your home for sale

5 Tips to Prepare Your Home for Sale

By: G. M. Filisko

Published: February 10, 2010

Working to get your home ship-shape for showings will increase its value and shorten your sales time.

1. Have a home inspection

Be proactive by arranging for a pre-sale home inspection. For $250 to $400, an inspector will warn you about troubles that could make potential buyers balk. Make repairs before putting your home on the market. In some states, you may have to disclose what the inspection turns up.

2. Get replacement estimates

If your home inspection uncovers necessary repairs you can’t fund, get estimates for the work. The figures will help buyers determine if they can afford the home and the repairs. Also hunt down warranties, guarantees, and user manuals for your furnace, washer and dryer, dishwasher, and any other items you expect to remain with the house.

3. Make minor repairs

Not every repair costs a bundle. Fix as many small problems—sticky doors, torn screens, cracked caulking, dripping faucets—as you can. These may seem trivial, but they’ll give buyers the impression your house isn’t well maintained.

4. Clear the clutter

Clear your kitchen counters of just about everything. Clean your closets by packing up little-used items like out-of-season clothes and old toys. Install closet organizers to maximize space. Put at least one-third of your furniture in storage, especially large pieces, such as entertainment centers and big televisions. Pack up family photos, knickknacks, and wall hangings to depersonalize your home. Store the items you’ve packed offsite or in boxes neatly arranged in your garage or basement.

5. Do a thorough cleaning

A clean house makes a strong first impression that your home has been well cared for. If you can afford it, consider hiring a cleaning service.

If not, wash windows and leave them open to air out your rooms. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Wash light fixtures and baseboards, mop and wax floors, and give your stove and refrigerator a thorough once-over.

Pay attention to details, too. Wash fingerprints from light switch plates, clean inside the cabinets, and polish doorknobs. Don’t forget to clean your garage, too.

This is what the New Monroe Park will look like

Repost from RVA news .com

The future of Monroe Park

by Brad Kutner

February 21, 2011

Spanning 130 pages, the Monroe Park Master Plan (PDF, 70MB) is an exhaustive look at Monroe Park’s history and faults — usually one causing the other. Painting a picture of a park once the center of a bustling southern town, it details many possible ways to return Monroe to its turn-of-the-century glory.

The document carries with it some harsh descriptions of current facilities as well, and points out specific (from the Monroe Park Planning Board’s point of view) hindrances to future success.

The first 50+ pages deal mainly with the park’s history, presenting it as a historical site that could support a community that demands the public space.

William Byrd I purchased the 7.36 acres of land late in the 17th century. Covering a large portion of present day western Richmond, the rural land was bought and sold to different parties over the years. Around 1840, with rapid expansion taking its toll on the populace of Richmond, the City caught public park fever and began investing in land conservation and public space.

Hollywood Cemetery was one of the first of the public space projects, and a “capital square” was next on the list. Originally planned as a four acre purchase, City Council cut it back to three, and, in 1851, the then titled “Western Square” became the first Richmond-owned public park.

Though outside the city limits at the time, The Virginia State Agricultural Society used the land for an annual agricultural fair. Hailed for its success, the fair moved to a larger lot by 1865. This made room for the park space as a Civil War Confederate camp. Sixteen barracks were constructed on the quite urban landscape. The barracks were torn down some time near the end of the war, and the flattened acreage was prime for reinvention.

In 1869, City Council annexed the Fan and Oregon Hill neighborhoods from neighboring Henrico county, and a civil engineer was brought in to construct a public square. The park was then named Monroe Square, after Virginia-born President James Monroe. Lt. Col. Albert Ordway, the post-war occupying federal officer stationed in the park’s neighborhood, advocated strongly for improving the square as a public space.

In 1875, Wilfred Emory Cutshaw, a Virginia Military Institute graduate, took the role of City Engineer. Most of the improvements he made in his 30 years as Civil Engineer remain intact today. The original path plan, fountain placement, and a majority of the trees match the plan written over 130 years ago.

A lack of funds for the next 100 years limited improvements to the park. The central Checkers Building itself is constructed on the remains of the former center square building.

The next bulk of the Park Plan details several possible ways to improve each affected detail. From inadequate path lighting, to non-ADA compliant restrooms, to possible trip hazards, every nook and cranny is called on for improvement.

Not all options are superficial: raising paths to grass level and developing better irrigation systems will help with storm water issues and area flooding, returning most water to the soil as opposed to the City’s sewer system.

Better angled light fixtures will direct the luminescence down and inward toward the park, reducing light pollution. Even the color and warmth of the beam is bisected and presented in different lights for the city to consider for the final project.

The plan culminates with a recommendation strategy in three phases and an explanation of a post-renovation non-profit organization overseeing the park.

Phase One calls for the most physically demanding renovations: laying a brick perimeter path, replacing out-of-date storm drains, demolish existing paths, and installing stone dust paving along existing curb lines, and many more. Everything must go.

A new circulating water pump system will replace the old; “engineered soil” will be be installed in specific areas. One of the many proposed food kiosks will be built along with a set of movable chairs and tables. Trees that do not fit in to the original turn of the century plan, or “Period of Significance,” will be removed, including some “ornamental” trees and evergreens; 62 trees in all are on the chopping block.

Phase Two will consist of more hard construction on the center of the park. The Checkers Building will receive the brunt of the work. A brick plaza will be placed on the north side of the Checkers Building, and the bathrooms will be enlarged and made ADA compliant. The facade of the Checkers Building will be renovated, and the second floor will be hollowed out to make a kind of open gazebo.

A fenced playground will be built, including a giant Virginia map in the paving pattern. This will replace the grassy area to the south of the building.

Phase Three will consist of minor and less critical elements to the park. Information kiosks, a water spray park, and a petanque/quoits court are on the list but not described as not “crucial to the overall success” of the park.

The last part of the plan deals with developing a non-profit body to manage the park. In City Council meetings, Fan District Councilman Charles Samuels said the oversight committee would be similar to the one managing Maymont Park, just south of Carytown.

The plan details the committee’s role as fund raisers that would see to the financial security of the park. It would consist of 12 to 15 members, meeting quarterly with representatives of the local community including property owners, retailers, near by neighborhoods, VCU, and the City of Richmond. A “strong director” with experience in real estate management, design, business, and public space would lead the organization.

The City of Richmond would then “transfer operating authority and responsibility to this new entity from the city.” The non-profit organization would also have the right to collect all revenue generated from the park.

Revenue would come in the form of food kiosks and events, in addition to the work done by the overseeing board.

A security force would be developed and present in the park from 7am to 11 pm, with one to two unarmed officers patrolling at any one time, funded by the park’s revenue.

Brad Kutner is a freelance journalist living in the Bellevue neighborhood of Richmond's Northside. He is a regular contributor to Pacifica's Free Speech Radio News, and is a volunteer manager with WRIR 97.3 LP-FM. He specializes in reporting on local politics and the environment, but spends most of his time looking at food blogs with his tiny dog in his lap.

Great proposed legislation by Jen McClellan

this is a repost of an article by richmondbizsense

February 22, 2011 by Catherine Leth

The city of Richmond is one step closer to offering new financial assistance to private firms doing work in blighted neighborhoods.

Two proposals headed toward approval in the General Assembly – House Bill 1668 and Senate Bill 799 – would create a “community revitalization fund” that would allow renovators to apply for loans or grants when working in deteriorated residential areas.

Del. Jennifer McClellan, D-Richmond, is sponsoring HB 1668. She said that most of the funding would go to nonprofit groups but that for-profit companies could apply as well.

“The city is trying to find new ways to combat blight and fix up derelict properties,” McClellan said. “We’ve got buildings up in Northside that have been boarded up for 40 years. So if somebody wants to come and buy it and fix it up, they can apply to the city for a grant or loan to do that.”

Under current state law, localities cannot give money to private entities without express permission from Virginia lawmakers. This is one of many statewide policies that make it harder for Richmond to fix up its neighborhoods, says Chris Hilbert, a member of the Richmond City Council.

“I hope that people can see that and give localities, particularly some of our older cities, these powers to effect change in our jurisdictions,” Hilbert said.

Hilbert, who helped create the legislation, said blighted areas are a haven for prostitution and drug dealing and tend to drag down neighborhoods. He showed little concern for property rights supporters who oppose government action targeting owners of blighted houses.

“I was taught early on that my right to swing my fist ended at my neighbor’s nose,” Hilbert said. “I feel like those owners of blighted properties are swinging indiscriminately at property owners around them.”

The proposed revitalization fund could be used in four ways:

• Loans or grants to organizations for the construction, renovation and demolition of residential structures
• Infrastructure improvements
• Acquisition of blighted properties
• Sustainability projects for residential structures

The legislation has met little opposition in the General Assembly.

HB 1668 passed the House, 99-0, on Feb. 8. On Friday, the Senate approved the bill, 36-3. (Three Republican senators voted against it: Stephen Martin of Chesterfield, Mark Obenshain of Harrisonburg and Ralph Smith of Roanoke.)

The companion measure, SB 799, was introduced by Sen. A. Donald McEachin, D-Richmond. In January, it cleared the Senate, 35-3 (with Martin, Obenshain and Smith dissenting). On Friday, the House Committee on Counties, Cities and Towns unanimously endorsed SB 799.

Supporters hope the proposed revitalization fund will build on the success of programs such as Neighborhoods in Bloom.

The City of Richmond created Neighborhoods in Bloom in 1999 to work with nonprofit groups to repair and sell vacant historic homes. The project involves meeting with community leaders and analyzing crime and poverty statistics to find areas most suitable for renovation.

On the Web:

To track or comment on House Bill 1668, go to www.richmondsunlight.com/bill/2011/hb1668.

To track or comment on Senate Bill 799, go to www.richmondsunlight.com/bill/2011/sb799.

Find more information about Neighborhoods in Bloom at www.richmondgov.com/neighborhoods .

The Real Deal - 4th Qtr Housing Report

http://www.rarealtors.com/assets/uploads/4Q%20Stats%20Report%20Summary.pdf

Richmond VA Ranks 7th Nationally for Marketwatch "Best Cities for Business 2010"

By Russ Britt, MarketWatch
LOS ANGELES (MarketWatch) — It takes a resilient economy to ride through the Great Recession — and it doesn’t hurt to have the world’s most powerful government in your backyard.
Both of those could apply only to Washington, D.C., as the nation’s capital rose to the very top of MarketWatch’s 2010 annual ranking of the Best Cities for Business, beating out such cities as Omaha, Neb., Boston and Des Moines, Iowa.

Washington has made the most out of having the U.S. government, a very large customer for any company, to keep it chugging during the tough times. But the region also has seen massive expansion in suburban towns in Virginia and Maryland over the years that has boosted its economy.

MARKETWATCH SPECIAL REPORT:BEST U.S. CITIES FOR BUSINESS THE TOP 10Washington, DC An ability to be resilient in tough times, aided by its proximity to the world’s most powerful government helped vault Washington D.C. to the top of MarketWatch’s 2010 list of U.S. “Best Cities for Business.”

“Washington’s been adding a tremendous number of jobs for a number of years,” said Kevin Klowden, a managing economist at the Milken Institute in Santa Monica, Calif. Klowden and other institute researchers recently performed their own study on the best cities for business and ranked Washington high on their list as well, sixth overall and tops among major metropolitan regions.

In the fourth year of doing the study, MarketWatch found cities that might have ranked higher in years past, but fell down the list as they continued to suffer the ill effects from the 2008 economic plunge. The strong truly survived, as those that performed well in the 2010 study proved their mettle under a rigorous test in a number of new categories.
The nation’s capital wasn’t at the very top of the class in MarketWatch’s study on how cities fared this past year, but Washington was solid in virtually all metrics checked and benefited from the addition of some new categories.

MarketWatch took a hard look at how cities have tried to contain their jobless rates in the past year and how they have done from the time the economic boom reached its apex in 2006 to today.
The statistics proved revealing and surprising, as a number of metro areas that normally would rank high in boom times such as Bridgeport, Conn., and San Jose, Calif., were well down the list because of low economic stability rankings. In fact, California did poorly in general, with six of its cities in the bottom 10.

How they scored Scores of all 102 cities in MarketWatch annual survey. Company score measures the concentration of businesses within a metro area according to several gauges. Economic score looks at a number of metrics, including unemployment, job growth, population growth, personal income and local GDP.

Here are the Top Ten:

Rank City TotalScore
1 Washington 1100
2 Omaha 1072
3 Boston 1071
4 Des Moines 1057
5 Minneapolis 997
6 Denver 980
7 Richmond 957
8 New York 950
9 Harrisburg 939
10 Seattle 932


Plus, the MarketWatch survey added four new metrics, bringing the total to 14. Part of that included an extra data point on unemployment and one on personal income growth, each of which are designed to give a better picture on how various regions have performed during the recession. There also were new metrics pertaining to regional GDPs, with a focus on tourism and military contributions to local economies.

Washington beat out 101 other cities for the honor, as MarketWatch looked at all metro areas with a population of 500,000 or more, ranging from New York to the smallest city included in the ranking, Durham-Chapel Hill, N.C. Durham is a new addition, having crossed the 500,000 threshold last year.
Here’s what they said about Richmond:

7. Richmond, Va. — 957 points: Richmond continues to reap the rewards of being in fairly close proximity to this year’s top finisher, Washington, D.C. After a one-year hiatus from the top 10 last year, Richmond came back to claim a spot once again.
Richmond boasts the best of both worlds; it’s about an hour and a half to metro Washington by car, yet it’s a lower-cost, relatively smaller city. When times are hard, it doesn’t necessarily feel the pain as much.
Richmond scored well, particularly in its concentration of S&P 500 companies. But it ranks low in tourism and personal income. While it has a large number of companies for its size, it didn’t have a particularly strong showing in creating jobs over the last year, or the last four years. Still, it’s unemployment rate over the last four years remained relatively low.
“We didn’t have as much of a recovery, but we didn’t have as much of a loss,” said Kim Scheeler, chief executive of the Richmond Chamber of Commerce

Kerry Riley
Kerry@kerryriley.com
One South Realty Group, Richmond VA
Richmond Real Estate