Home prices up, sales off slightly
By Greg Pearson STAFF WRITER

While national headlines may say home sales are down, the market is holding steady in Chesterfield County.

Despite national headlines that say fewer homes are being sold, real estate sales are holding fairly steady in Chesterfield County.

The figures may be confusing, but you have to know what's being measured.

The first thing to remember is, according to many real estate sources, current real estate sales are being measured against 2005 - the best year ever in Chesterfield County. Real estate sales were so good last year, resales generated bidding wars. Some buyers were tendering offers above the asking price because they had previously been outbid on other homes. 2006 would be perceived as a good year if it weren't being compared against 2005.

Second, just because real estate sales and prices are down in Northern Virginia or Southern California doesn't mean that holds true in Chesterfield. While new and resale single-family homes are off 12 percent for January-October of this year compared to the corresponding period in 2005, the average price is up almost $33,000 (13 percent). And the average time on the market is only six more days.

Page Dowdy/Chesterfield Observer According to Integra Realty Resources, there's been a 27 percent decline in new home sales for the third quarter of 2006.

"Nationally, the media has portrayed sales as gloom and doom, but locally, sales remain strong," says Dawn Bradley, assistant manager for the Midlothian sales office of Long & Foster Realtors.

"We have to remember that we're judging sales against recording-setting, recent years," cautions Vernon McClure, president of Main Street Homes in Chesterfield. "Sales are off a bit, but we believe the market has stabilized now and expect to see it growing again in the number of homes sold by the middle of next year."

Third, pricy homes are selling. In October, five of the 10 most expensive homes sold in the Richmond metro were located in Chesterfield County - all of them in the Tarrington community off Robious Road. They ranged from $922,000 to $1.2 million.

Fourth (and perhaps most important), the traditional reasons for a decline in home sales - high interest rates or a decline in jobs - don't apply. As of October, Chesterfield's unemployment rate was just 2.3 percent, lower than many observers can remember. The Richmond metro's unemployment rate was just 2.8 percent, the lowest in five years.

"The local economy is still very good, employment is increasing, and mortgage rates are still attractive on an historical perspective," said Tom Tyler, residential analyst for Integra Realty Resources in Richmond. "2005 was such a phenomenal year, and now we're returning to a normal year."

So, why are homes sales declining in the county? One reason, according to Tyler, is fewer investors, specifically for townhouses and condominiums. "It was so hot last year that investors were buying at preconstruction prices, then reselling at a profit," he observes.

Some buyers purchased with a commitment to occupy the townhouse or condo and are now renting them because the market has cooled somewhat.

But, new home sales in the county are declining. Integra reports sales were down almost 200 homes (27 percent) in the third quarter of this year compared to the third quarter 2005. And, building permits are starting to decline, which will probably reduce new homes sales more. Builders, after all, know that the market usually follows the headlines.