Richmond, Virginia: What Housing Bust?

If consumer confidence has the ability to transcend signatures and piles of home mortgage paperwork, then the idea of a Richmond housing market bust may soon be classified as a full-on urban legend.

Sure, the figures are not always encouraging.

According to Virginia Association of Realtors’ numbers, sales of single-family homes fell more than 20 percent in December of ‘06, and 18 percent for the entire year. Many industry pundits called this the dénouement of a five-year housing boom.

But a step back provides some enlightening relativity about the state and future of Virginia mortgage demand: 2006 still marked the fourth highest year on record for home sales in Virginia with 112,699 closed sales (the best year on record was 2005).

And confidence is high.

In fact, according to recent Metro Richmond Survey results, a strong 51 percent of respondents in the Richmond area believe the Richmond housing market is still strong, with 20 percent reporting that its neither strong nor weak and 9 percent unsure. Another 21 percent said the market was weak.

When presented with the latest MRS results, Richmond Association of Realtors‘ Laura Lafayette tempered the optimism with a bit of caution.

“I would say that we are probably even more bullish on the market,” she said.

However Lafayette, RAR’s senior vice president for Public Affairs & MLS, added that the majority of member realty firms have seen a very healthy January, and that the busy spring of home sales is now starting ahead of schedule, at around the second week of January.

“If people price their houses reasonably, they’re going to see them move pretty quickly,” she said.

While Richmonders don’t have the same optimism regarding the housing market six months down the road, the results don’t drop significantly. Forty-four percent of respondents said the housing market would remain strong, while 21 percent said it would be neither weak nor strong and 10 percent unsure.

One advantage those in the Richmond Metro area housing market have is that they don’t need to be too patient with their open houses and listings. According to VAR statistics, homes last year were listed an average of 42 days on market - the quickest market in Virginia.

It’s all the more impressive when this is taken into consideration: according to the Virginia Housing Coalition, median housing prices in the state of Virginia rose 69 percent between 2000 and 2005, while the median household income only increased 16 percent in the same time period.

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