It's a buyer's market
By Greg Pearson STAFF WRITER

Business has been good for principal broker Gayle Walters despite the recent national housing slump.

The mood among real estate agents and home builders at last Thursday's Home Building Association of Richmond local forecast seminar could be summed up this way: with interest rates low, plenty of homes for sale and the Richmond area growing, the only reason the housing market isn't good here is the bad news media. They mostly blamed national media attention on the housing slump, but also mentioned the local daily newspaper.

"The media should be reporting how low rates are, the supply of homes on the market and the special incentives that are being offered," grumbled one seasoned agent.

It was left to Dr. Chris Chmura of Chmura Economics and Analytics to put the numbers to slumping real estate sales: at the current rate of sales, Chesterfield has almost a 16-month supply of new single-family homes on the market, slightly more than Henrico County but slightly less than Richmond or Hanover County. A very healthy market is a four-month supply of homes.

"The nation's been in a residential recession for the past year or so," she said. "2008 will be slower than 2007…homes sales are at the 2001 sales level." But she predicted a recovery late this year or early next year.

One of her many charts predicted there would be 454 new single-family home sales this month in metro Richmond compared to 690 last February. (To see Chmura's entire presentation, go to www.chesterfieldobserver.com and click on "special.")

For builders, she recommended diversifying this year into the remodeling business, which continues to grow nationally. For existing lots, Chmura urged building less expensive homes and suggested builders "weigh price cuts against opportunity costs" for those homes already waiting for buyers.

"Earlier, we had something new," said real estate consultant Cecil Sears, "speculators who bought without the intention of living in the houses they bought, which created artificial demand." He said new home demand peaked in Oct. 2005. "It's time for builders to get their stock in order," he added.

To put the professionals in a better mood before they left the seminar, Lloyd Mason Poe of Lifestyle Builders and Developers and StyleCraft Homes entertained with his humorous look at trends in the marketplace - interspersed with advice. (To see his presentation, go to www.chesterfieldobserver.com and click on "special.") Women represent 91 percent of home-buying decisions, he told them. They want homes that help reduce the stress of juggling work and home. Single women are twice as likely as single men to buy a home on their own.

In 1997, 50 percent of homebuyers received their real estate information from real estate agents, but last year that declined to 34 percent. During that same period, the Internet's share grew from 2 percent to 29 percent.

The buzz in the industry is about "green building practices" even though many consumers still just equate that to being energy efficient. That trend is being driven by commercial builders - perhaps because it adds 6-10 percent to the average home price.

Citing data from Integra Realty Services, there's also a shift going on in the Richmond market toward more multifamily housing. Single-family residences have declined from 94 percent of the purchases to 67 percent, said Poe, while townhouses and duplexes now represent 16 percent (up from 4 percent). Condominiums have grown from 2 percent of sales to 11 percent.