Richmond Real Estate Market Report-Affordable Houses?

Blog by Arnold Shuchat | March 1st, 2014

Oscar Ameringer's famous quote, "Politics is the gentle art of getting votes from the poor and campaign funds from the rich by promising to protect each from the other" came to mind when I was reviewing affordability of single family homes in the Richmond market.  Specifically, everything west of No. 3 Rd. that is detached.

In my mind the most important numbers which affect the politics of the real estate market are those revolving around the most affordable properties.  So, what do those numbers look like quarter to quarter from the 2011 heyday?  Are they telling?

Here are the total numbers of sold properties in each quarter in the lowest 3 price slots: $0-700k, $701-750k and $751k-800. It is shocking to say the least the we even have to use the number "$700k" in our lowest price catergory! Last I looked we don't even have a ski hill in the centre of town! 

What I wanted to get a feel for was the ebb and flow of the total number of units and the changes to the categories at these "introductory" price levels.  You just have to compare the 1st quarter of 2011 to that of 2013 to get a feeling as to the market direction and pressures.  1st quarter 2011 was a hot one.  The distribution of sales was skewed to the upper bracket of these "affordable" house categories.  On the other hand, 1st quarter of 2013 showed a completely opposite trend.

To add a little more market context to the situation, as of now, there are only 21 homes listed for sale under $800k.  With 16 sales in the total in the "affordable" sector to date, the absorption rate in this sector is quite high and the average number of days on the market is about 69 removing the statistical outlier properties.

Although we are only 2/3 through the first quarter of 2014, there are fewer properties listed in this "affordable" category and the pricing seems to be becoming skewed once again to the higher end of the 3 price ranges.  In summary, I do not see a trend to greater affordability in this market segment. I cannot opine on the lowest price segments in the rest of the country, but it looks like it will take another jolt to the mortgage rules to squeeze this segment away from the historical highs it is approaching. I wonder what our PC MP Alice Wong thinks of all this.  Do her constituents want to see their properties devalued due to government intervention in the mortgage market?

# of Sales of Single Family Homes in Richmond's West Side
$ Values 2011 2012 2013 2014 Partial
<$700k 8 7 18 4
1st quarter $701-750k 11 5 15 5
$751-800k 18 7 9 7
Totals 37 19 42 16
<$700k 9 8 10
2nd quarter $701-750k 7 9 9
$751-800k 14 8 21
Totals 30 25 40
<$700k 6 6 11
3rd quarter $701-750k 9 5 16
$751-800k 9 13 24
Totals 24 24 51
<$700k 8 12 5
4rth quarter $701-750k 6 9 10
$751-800k 14 8 11
Totals 28 29 26