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Chesterfield's housing market is expected to turn the corner
"We're hitting the soft landing, and the economy is ready to take off," Dr. Christine Chmura of Chmura Economics and Analytics told the Richmond real estate market last week during a breakfast s p o n s o r e d by the Home Building Association of R i c h m o n d . The national forecast is for three percent growth in real estate during the third quarter with additional increases later in the year. The real estate market for new homes and resales declined in 2006, but much of that was due to the comparison to an outstanding 2005. Despite the decline, prices were up again even though homes stayed on the market for longer. Chmura stressed that the two major factors for real estate sales - growth in employment and low interest rates - are in good shape. She didn't discuss the mindset of potential buyers and the role the media plays in helping or hindering sales. Chmura thought there was little chance of a recession here or that a housing bubble might appear. Risks to the economy outside of housing included the price of oil and the value of the dollar. "My early indication is that the market may have bottomed out in December, based on the traffic and interest in our homes," said Vernon McClure, president of Main Street Homes in Chesterfield and president of the Home Building Association of Richmond. Main Street is the seventh largest home builder in metro Richmond and sells about 40 percent of its homes in Chesterfield. "Our inventory of [new] homes has come down, so we're gearing up for the peak demand, looking six months ahead," he added. Chmura pointed out one problem in housing - affordability. The percent of the market that can now afford a home in metro Richmond is down to 44 percent, a drop of 12 percent over the past three years. Nationally, the affordability factor has also declined 12 percent in the same period, but is only 32 percent. Her data showed that during the third quarter last year the average home in metro Richmond sold 22 percent above market value. "Housing affordability is a problem," agreed McClure. "It takes 3-4 years to get a house to the public. Lots are now $100,000 instead of $50,000, which is why homes cost $400,000." Part of that lot cost in Chesterfield is the county proffer, which can cost as much as $15,600, to offset the cost of providing services to new residents. "The challenge in '07 is finding buyers, not materials," said Lloyd Mason Poe, president of Lifestyle Builders and Developers. He was also part of last week's program, and his company is based in Chesterfield. Poe quoted national figures that showed 37 percent of the homebuyers in 2005 were single, and both the Hispanic and Asian market shares grew by 14 percent. Top 10 home builders in metro Richmond for 2006
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