That is definitely the $64,000 question all sellers are asking themselves in today’s real estate market in Richmond, VA and other places! I know everyone keeps saying how hot the market is, and they are right, but market conditions change day to day, week to week, month to month. So when you are thinking of selling your home, the first thing you want to learn about is the market conditions in your area.
When looking at the market conditions for a house, there are really 3 statistics that I like to look at:
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Days on the market – which really lets you know how long a house was on the market before an offer was accepted.
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Are prices going up or down – lets you know if the market is favoring buyers or sellers or if it is neutral.
Months supply of inventory – this just says how long it would take for all of the homes that are currently active on the market will sell.
So what are the market stats for our area? And how does that translate to how hot the market in the Richmond area really is?
Let’s take a look at the statistics here.
DAYS ON THE MARKET
For the Richmond metro areas I normally work in (City of Richmond, Henrico, Hanover and Chesterfield Counties), there were 1281 single family homes sold in the month of April 2021. The average days on market was only 14 days!!! This means that it took only 14 days for a seller to accept a contract from a buyer! In addition, the average sales price of the homes sold was 104% above the list price. This means that sellers were actually accepting offers that were above the list price!!! And sellers only paid, on average, $2,123 towards the buyer’s closing costs! By county/city:
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Chesterfield County – 563 homes sold in April – in an average of 14 days – with the average sales price 4% above the asking price – and sellers paying an average of $2,895 of the buyers closing costs!
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Henrico County – 306 homes sold in April – in an average of 11 days – with an average sales price 4.6% above the asking price – and sellers paying an average of $1,381 of the buyers closing costs!
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Hanover County – 152 homes sold in April – in an average of 14 days – with an average sales price 2% above the asking price – and sellers paying an average of $2,971 of the buyers closing costs!
City of Richmond – 260 homes sold in April – in an average of 16 days – with an average sales price 5% above the asking price – and sellers paying an average of $827 of the buyers closing costs!
ARE PRICES GOING UP OR DOWN?
Here we will want to see what the trend has been over the last few months on the prices of homes. If buyers are willing to pay more for a home in the area, they may also be willing to give up on some of the contingencies in their offers. We have seen this over the past several months as the real estate market continues to be very very tight. In some cases the buyers are not only willing to pay more for the house than the seller is asking, but they may be willing to give up on the appraisal contingency, or may be willing to limit the scope of their inspections, they may be willing to pay the difference between a low appraisal and the purchase price, they may even be willing to pay some or all of the sellers closing costs. This market has led to some very innovative concessions in the offers. However, you should keep in mind that not all buyers are willing to make these concessions, so you should not count on getting offers with these innovative concessions!
What has been the trend of the prices moving up or down? Below are the average sales prices of homes sold by month for 2021 for the area and the individual counties!
|
CITY/COUNTY |
JANUARY 2021 |
FEBRUARY 2021 |
MARCH 2021 |
APRIL 2021 |
|
Metro Area |
$342,792 |
$353,059 |
$368,820 |
$377,717 |
|
Hanover County |
$353,868 |
$389,524 |
$374,946 |
$400,291 |
|
Henrico County |
$336,735 |
$339,320 |
$356,087 |
$385,533 |
|
Chesterfield County |
$339,363 |
$347,361 |
$362,971 |
$375,226 |
|
City of Richmond |
$346,432 |
$359,324 |
$393,426 |
$360,713 |
As you can see from the trends above, even if an area has a decrease in the average sales price from the previous month, the area as a whole has appreciated about 10% over a 4 month period of time! It suggests that sellers have the upper hand in negotiating because buyers are paying more for the limited inventory that we have on the market right now!
MONTHS SUPPLY OF INVENTORY
This metric just tells you how long it will take for all the homes that are currently on the market right now to sell! Of course, it assumes that nothing new will come on the market, which we know is probably not reality! But in order to calculate this figure, I will generally take the number of active listings on the market as of today (5/10/2021) and divide it by the number of homes which sold last month. As a rule of thumb, a market with less than 4 months supply is considered a sellers market, meaning that homes are more likely to sell fast! And if there is more than 6 months supply it is considered a buyer’s market, meaning that the buyers will be in the drivers seat when it comes to negotiating.
Looking at the inventory levels and the number of homes sold last month, it would seem that everything you have been hearing about the real estate market is true. As of 5/10/2021, there are a total of 760 single family homes available for sale in all of Chesterfield, Henrico, Hanover Counties and the City of Richmond. But in the month of April there were 1,281 homes sold. That means that, if nothing else comes on the market, it would only take .6 months to sell what is currently on the market for sale! By county/city, the picture is the same --
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Chesterfield County – there are currently 269 homes on the market for sale – 563 were sold last month – that means that there is .48 months supply of homes!
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Hanover County – there are currently 214 homes on the market for sale – 152 were sold last month – that means that there is 1.4 months supply of homes!
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Henrico County – there are currently 120 homes on the market for sale – 306 were sold last month – that means that there is .39 months supply of homes!
City of Richmond – there are currently 157 homes on the market for sale – 260 were sold last month – that means that there is .6 months supply of homes!
Looking at these statistics, the only word you can say about the real estate market is HOT HOT HOT!!!
Want to know what is happening in your area? Feel free to let me know and I would be happy to keep you updated on the market trends in your area!
