Richmond Townhouse Turned to a Seller Market

May 31, 2009

From buyer’s market to  seller’s market

Richmond townhouse market made a dramatic turn from a buyer’s market to a seller’s market. This is a big surprise to home buyers who briefly enjoyed a few months of abundant supply, to scarcity of suitable townhomes.

The big increase in sales for townhouses in Richmond in March and April accounted for 221 townhomes sold during the past 2 months. This effectively depleted the inventory to a level where strong demand from home buyers were creating multiple offers on some townhomes. Some homes were reported to be selling above their listing prices.

The following table summarized the monthly townhouse sale and month of inventory (MOI) since January, 2009:

Month Listings No. Sale Av. 3 mth MOI
Jan/09 375 13 21 18.86
Feb/09 380 47 29 13.10
Mar/09 360 89 50 7.20
Apr/09 323 132 89 3.63

Strong rental demand

The lack of affordable housing in Richmond in the $400,000 to $500,000 range for a growing family has resulted in townhomes in great demand. Rental rates for such homes were also reported to have increased from the $1,500 range to over $2,000 a month. The strong buyer interest can also be attributed to more home buyers able to get the financing the need due to lower mortgage rates.

What to expect?

The buyer market situation with supply of townhomes around 3.63 months will result in sellers expecting higher prices for their townhomes. The strong demand is likely to result in townhouse prices being push higher, until a more balance market return.

You can watch and monitor the supply/demand ratio for townhomes in Richmond. A balance market can be expected when the inventory reverse and increase the the 6 months supply level.

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