As has been the case for a number of years, the shortage of homes for sale continues to restrict the local, regional and national real estate markets. While interest rates remain below 4% and home appreciation continues to be solid, the number of homes for sale and months supply of inventory continue to shrink. This is especially evident in the first-time buyer market. As people stay in their homes longer the move-up buyers have no place to go and therefore stay in their homes, which limits the first-time buyer market. The average stay in a home is now over 10 years.
Fortunately, the Museum District is pretty resilient and continues to have fairly steady year-over-year activity. There were 17 homes sold in the 4th quarter compared with 13 in the 4th quarter of 2018 with the price per square foot increasing by a whopping 19% (many factors play into this number). Condo sales are also steady with 5 being sold in the 4th quarter of both 2018 and 2019 and the price per square foot increasing about 8%.
There are only 5 condos and 3 single-family homes for sale as of this writing.
From a national perspective new home construction is at the highest level since 2007, so the industry is attempting to correct the inventory imbalance but will take some time.
The Richmond Metropolitan Area has been experiencing some volatility regarding home appreciation levels. You will note on the graph below that 3rd quarter appreciation actually turned slightly negative after a very strong 2nd quarter. Through the 3rd quarter of 2019, appreciation stands at 3.4%, so a reasonable 4th quarter will put 2019 in the +/-5% that we have seen over the past few years.