Richmond Home Shopper

2010 Richmond Real Estate Outlook

Great summary and outlook for the 2010 local real estate market by Lisa A. Sturtevant, PhD and John McClain, AICP from the George Mason University Center for Regional Analysis. For more detailed information and data on the Richmond real estate market contact Skye Bruce Properties.

While there are some positive signs for the Central Virginia Area housing market going into 2010, there are other factors that recommend caution. Sales and pending sales are both higher at the end of 2009 compared with the end of 2008. In the first half of 2010, it is expected that sales activity will continue to increase. The Federal home buyer tax credit program has been expanded to include both first time and move up homebuyers. The program requires buyers to sign a contract by the end of April, with closing by the end of June. Many potential homebuyers who want to buy in 2010 may accelerate their decision to the early part of the year. As a result,sales might slow down in the second half of 2010. While the number of potential buyers will increase in early 2010, so, too, will the confidence of potential sellers. As a result, it is expected that the number of listings will increase, giving buyers more options. While sales activity will likely increase, it is not certain that prices will rise in the first half of 2010. There are two major factors that may contribute to the slow price growth. First, foreclosures remain a potential problem as the economic recovery unfolds. As prices continue to be lower than a year ago, homebuyers face the risk of getting in a situation where they are underwater. If a household member loses a job, foreclosure or short sale are possibilities. The stock of foreclosures and short sales will likely not diminish until later in 2010. These homes will generally be lower priced and will continue to dampen prices in the overall market. Second, potential sellers have been holding off from listing their homes. Evidence of improved sales activity will encourage more sellers to list in the first half of 2010. While demand is also expected to be up, it is possible that the new supply of homes will be as great or greater than demand, keeping prices from rising appreciably. Heading into 2010, then, it is expected that the number of sales will continue to increase in the first half of the year, with a small pull-back in the second half of the year, with price appreciation expected later in 2010.

Contact Skye Bruce Properties.

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