The Richmond real estate market continues to be one of the hottest markets in all of Virginia. The average sale price of homes in Richmond is trending up, and more young professionals continue migrating to the city that’s experiencing steady population growth.
Are you thinking of investing in the Richmond real estate market this year? This article discusses the latest trends in the Richmond market and our predictions for where it’s headed.
Demand for housing
The demand for housing in the Richmond real estate market continues to outpace supply. Data shows that available homes for sale in Richmond have declined over the past two years, despite steady population growth throughout the city.
As the nation starts to recover from the COVID-19 pandemic, more jobs are expected to come to the Richmond area and stir the local economy. These added jobs to the Richmond area will drive up the demand for affordable housing in the city.
Prices and affordability
Affordability is a main concern in the Richmond real estate market. Rising interest rates increase the cost of borrowing and may make homeownership unattainable for many potential buyers. Additionally, lenders are tightening underwriting requirements to account for the added risk of lending in a seller’s market with very low housing inventory.
On the flip side, home values in the Richmond real estate market are still above national averages. Real estate in Richmond’s 118 neighborhoods has a median listing price of $330,000 and sells for $209 per square foot on average. There are currently 1,231 homes for sale in the Richmond real estate market, which is slightly down from last year.
The city of Richmond has several programs that may allow first-time homebuyers to buy a property in the city. The Home Investment Partnership Program (HOME) and the Emergency Solutions Grant program (ESG) aim to provide affordable housing and revitalization to the city of Richmond.
The rental market
The rental market in Richmond thrived during the pandemic and currently shows no signs of slowing down. Investors looking to capitalize on the strong real estate market in Richmond may look to long-term rentals to generate stable rental income.
Average rent prices are up 22 percent in the past two years, and about 56 percent of all occupied housing in Richmond consists of renters.
Even though Richmond is currently in a seller’s market, many homeowners in the metro area are choosing to retain their properties and opting for an owner-occupied living situation which allows them to keep their homes and generate monthly rental income.
The bottom line
The Richmond real estate market may not be the first city that comes to mind when considering the best places to buy real estate in 2023. However, the city has steady population growth, a thriving job market, and an increase in affordable housing that provides investors with a unique opportunity in the rental market.
Visit our website to find out more information about getting the buying or selling process started in the Richmond area this year with Pastore Properties of Richmond.
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