It's May 2nd here in Richmond, Virginia as I write this blog post. I had the opportunity to show more than ten homes this weekend, and it was a wild ride to say the least.
With three sets of clients and their various home searches ongoing, I was able to get a lot of exposure to the different mini-markets of Richmond if you will.
Here are my insights:
In the City of Richmond: (The Fan, Museum District, Church Hill, Northside)
We are still finding ourselves in multiple offer scenarios if we are priced well. What is priced well? I'm glad you asked. If a home is priced slightly under the market value we are finding that it draws in more potential buyers, willing to offer a little over the list price driving up a bidding war. In the City of Richmond, we are seeing this happen but not to the magnitude we are seeing in Single Family homes in the suburbs. We are mostly seeing a few offers on homes, with great terms (waiving contingencies for the most part), however the prices are not way above the list price, just slightly above it. If you are looking to purchase in The Fan, Museum District, Church Hill or Northside, right now might be one of the best opportunities for you to jump into the market!
West End: Three Chopt to Gaskins in Western Henrico:
Although it is a seller's market here, I am mostly seeing 4-5 really good offers coming in a little over the list price, compared to the 15-20 we were getting when rates were in the 3's and 4's (although there is a one off 15-20 offer situation every now and then). Anyone looking to sell in the next few months is still looking in great shape as far as listing their home goes in in this area, with buyers still looking to live in one of the most competitive real estate areas in town.
West End: Short Pump, Rain Tree
It is very competitive here, and why wouldn't it be? The mature neighborhoods in Western Henrico are extremely inviting and absolutely beautiful. Any home that shows well and is priced right is booked with showings and is getting great offers submitted with deadlines on Sunday and Monday. We ran into situations where the estimated contract price were 100k over the list price with 19 offers and no contingencies. If you are looking to be in this part of town, it is extremely important to come up with a game plan with your agent to make sure you are presenting the best offer possible. Pick an agent that will build a rapport with the agent on the listing side, and talk about the strategy that will be necessary to get the house that you are looking for.
While it may seem like doom and gloom in some parts of town as far as the competitive offers go, I can definitely say right now seems like an amazing time to buy or sell. If rates dip back down into the 5's we could really see some trouble as far as multiple offer situations go. If we are dealing with 19 offers in a 6.5-6.75 % rate environment, that number could easily get to 30 offers with rates in the 5's.
It seems like sellers might still be holding out on listing their homes with 3% interest rates tied to them. I mean, it definitely makes financial sense, but there are a lot of families outgrowing their current homes, or looking to make a geographic move, which is definitely ramping up the current market.
I am personally looking for homes for myself still, and feel better about the competition I will face with rates where they are now, compared to where they could be on the lower side. And guess what? If I buy a house at a 6.5 to 7 percent interest rate, and rates ever go back to 5 percent, then I can refinance and it's almost exactly like I got that house in the first place, and probably at a lower price!
If you ever have any questions about the current market please feel free to reach out. I saw something on instagram from Josh Altman (Million Dollar Listing LA) that inspired me to write this, as he said now is a great time to get a discount on a home. Unfortunately Josh Altman is in California where the market is doing completely different things than it is in Richmond, Virginia. Real estate is and always has been local, so make sure you are getting your information here, not on the mainstream news.
Hope everyone is having a great week!
Gary
