If you’ve been paying even the slightest bit of attention to Richmond’s real estate market over the last year, then you know: It is a red-hot seller’s market. One of the hottest in the country, in fact. The number of houses available is historically low, meaning sellers are cashing in big-time with multiple offers — often far above their initial asking prices.
So why is real estate inventory so low in Richmond? Ruckart Real Estate founder Brad Ruckart weighs in: “Richmond is in the path of progress, which makes it in high demand because folks are moving from all over to take advantage of our affordability factor.”
And it’s the same story across the United States, where housing inventory declined a record-breaking 48.6% over last year, according to Realtor.com. Let’s take a closer look at our inventory shortage and what that means for anyone considering selling.
COVID, of Course
The most obvious culprit behind the current inventory shortage is this pandemic we’ve been living with for the past year. Sellers are naturally hesitant to list their homes in this period of extreme economic uncertainty, and they’re also nervous to open their homes to strangers. That means many people have been waiting to list their homes until the pandemic is over — or at least until they feel more secure in their economic future. But that also means that, with vaccines rolling out across the country at a fast pace, we’re likely to see inventory start to open up again. Which means increased competition for sellers in the coming months.
Most sellers know they’ll have no problem selling their homes for top dollar in the current market. The question is, what will they do after they sell? With so many people competing for such a low supply of homes, will they be able to find another house they can afford? Although interest rates are historically low, this uncertainty regarding supply is causing many sellers to wait until inventory increases.
Blame the Millennials
We have a thriving population of Millennials (adults aged 24-39) in Richmond — just look at the Ruckart Real Estate office as an example. And though this generation has been putting off homebuying longer than their predecessors, many Millennials are finally settling down and buying their first or even second homes. This group makes up nearly 40% of the homebuyers’ share, according to Forbes. Which means increased competition for the listings that are out there.
The New Construction Factor
Low real estate inventory nationwide has led to an increase in new construction — but it’s still not nearly enough to meet demand. Buyers are craving more space and are looking to the suburbs, meaning demand for new construction is at an all-time high. But builders are facing a number of roadblocks including increased lumber prices, supply chain challenges, restrictive zoning laws, limited lot supplies, and a lack of skilled laborers. These issues will make it difficult for builders to make a profit on entry-level homes, despite the high demand, according to Forbes.
What to Expect of Richmond’s Real Estate Market in 2021
As life begins to return to normal post-pandemic, you can expect Richmond’s real estate market to do the same — but not immediately. As sellers feel more confident, more inventory will come on the market, and the correction process will eventually begin.
This is good news for buyers, but sellers should take note: Your days of dominating the market are numbered. If you’ve been waiting to sell your home, you may soon have a lot more competition. And with interest rates projected to rise, you’ll likely be paying more for your next home as well.
The bottom line: If you’ve been thinking about selling your home, we’re in a sweet spot right now. And with a strong team behind you, you can sell your house for top dollar and find a new one that you’ll love. “Fortune favors the bold,” Brad says. “If you’re willing to take the risk and follow our advice and go to the market, our proven process will net you the best results on price, sales contingencies, and sometimes even a rent-back until you can find the next property to live in.”
When you’re ready, contact us at Ruckart Real Estate to get started.