Matt Snyder, 29, and his fiancée, Emily Meade, 27, have been looking at houses for months.
“We put offers on two other houses and lost them pretty quickly,” Meade said, relaying an experience that has become common around the region. “It was bad.”
The Richmond region’s housing market remains hot, spurred by high demand and low inventory. That’s good news for sellers, but it’s often frustrating for buyers.
When single-family homes in highly desirable neighborhoods go on the market, they’re getting multiple offers in a matter of days, many in cash.
When Eric and Meredith Mayton put their 1,300-square-foot Westover Hills home on the market this spring with a listing price of $309,500, they had 30 showings in the first three days. By the weekend, they had 10 offers and three of them were cash.
Their house was under contract by the end of the weekend.
“We were able to get a contract $20,000 over asking price,” Meredith Mayton, 35, said. “There was a bidding war between cash offers.”
The winning offer on their Westover Hills home was all cash and offered the most favorable rent-back terms.
“That gave us time to move into our forever home. We agreed on one of the offers on Sunday. Within a week, we found our new house in Wyndham,” Meredith said. Their new $600,000 home is larger for starting a family and housing guests. They said they also wanted to move to Henrico for the school system.
They closed on their Westover Hills home last week, but they’re renting it back until the end of June when they’ll move into their Wyndham house.
And the nine others who tried to buy their old home would have to keep looking.
The winning bid
A newly engaged couple, Snyder and Meade didn’t give up on their home search, even though they lost out on the first two houses they wanted.
When a picture-perfect 1,868-square-foot brick cape on Leonard Parkway came on the market at a listing price of $459,000, they were among the first people to see it and immediately fell in love.
“It has great curb appeal. We loved the neighborhood. We loved the sidewalks. The owners did a really good job of making it more of an open floor plan. It has a fenced-in backyard for our new puppy,” Meade said.
“It has a lot of classic charm of the older Richmond houses,” Snyder added.
But they weren’t the only ones interested. The house received three other offers, several over asking price and some in cash.
The owners, Millie and Ty Denoncourt, accepted the couple’s offer even though it wasn’t the highest.
“I wrote the sellers a letter, thanking them for considering us because we know the market is crazy right now. We wanted to put our best foot forward,” Meade said.
“We felt a real connection with the buyers because of the note,” Millie Denoncourt said. “They also offered the best terms.” She wouldn’t divulge exactly what those terms were, and the sale isn’t yet recorded in online records, which show the property was last assessed at $437,000.
The Denoncourts are bucking the trend in a way.
Many homebuyers who are looking to buy a bigger home in the county are waiting to sell their home first, then buy their second home. But most agents suggest doing what the Denoncourts did, because of low inventory, especially in the city.
In the past year, houses in the city cost on average 7 percent more than Henrico and Hanover counties and 20 percent more than Chesterfield County for the same amount of space. Last month, the gap was even wider.
The Denoncourts found a larger house for their growing family in Mooreland Farms in Henrico, just 10 minutes away and a few miles west.
“We knew that if the right house came along, we were ready. And this house felt right,” Denoncourt said.
During the three years the Denoncourts lived at Leonard Parkway, they completed many renovations and upgrades. They removed a load-bearing wall to open up the space and installed French doors to the backyard. They also renovated the kitchen and the bathrooms.
“It was three years of on-and-off renovations,” Millie said. “We did get to enjoy some of the upgrades.”
Having their house ready to sell helped them move quickly. The day after their contract on the Mooreland Farms house was accepted, they put their Leonard Parkway house on the market. It was under contract by the end of the week.
In Richmond, homes spend about four weeks on the market on average, selling two weeks faster than four years ago. And prices are up across the board.
The average sale price of a home in Richmond near the West End was $585,577 in March versus $538,226 a year ago.
“It’s a really hot market,” Snyder said of putting in the winning bid. “We just got really lucky here.”
Hot in the city
Anything in the city of Richmond is selling very quickly, according to agents.
“If it’s in the city, it doesn’t matter what the price is, it’s just going to go,” real estate agent Jennie Barrett Shaw said. She helped the Maytons sell their home in Westover Hills.
“The city is a desirable area where a lot of people want to be. I don’t see it slowing down,” Jane Vick, an agent with Long & Foster, said. “In general it’s a great time to sell in the city. There are a lot of buyers looking, inventory is low, and they’re willing to pay a premium for houses that are buttoned up.”
Vick listed the Denoncourts’ home on Leonard Parkway and said that the house being finished and well-decorated helped establish the listing price and made it move quickly.
Low inventory is indicative of demand outstripping supply. Economists believe six months of inventory is a healthy level, according to Richmond area realtors.
Richmond has 1.8 months of inventory, according to the Richmond Association of Realtors.
For the first three months of the year, single family home sales were down 1.36 percent compared with last year, which realtors describe as essentially flat.
Houses for first-time home buyers, anything at $250,000 and under, are going especially quickly.
“Houses under $250,000 aren’t spending any time on the market. There is so little first-time homebuyer inventory. That’s where we’re seeing many examples of multiple offers,” said Laura Lafayette, CEO of RAR.
The counties are seeing similar trends with low inventory and high demand for first-time home prices at $250,000 and under.
“Some neighborhoods in the counties are selling super fast,” real estate agent Daphne MacDougall said.
The West End is a highly desirable market, “as it always is,” she said, as well as the Short Pump area. She also mentioned Bon Air in Chesterfield and Lakeside in Henrico as sought-after neighborhoods, with both being just outside the city.
Homebuyers upgrading from their first home in the $300,000 range to the $600,000 to $800,000 range are also having a hard time.
“ The ones in good condition and updated are selling fast,” MacDougall said.
Low inventory and homebuyer fatigue
“I have folks that have been looking since last year,” said Wes Atiyeh, an associate broker for Joyner Fine Properties. “When one buyer gets accepted, all the other people who put an offer on that house are back to the drawing board again.”
“What we lack is inventory. We’re still at an inventory deficit of almost 4 percent,” Atiyeh said.
With the low inventory, many potential buyers have been house hunting for a long time. Some buyers have lost out on multiple houses, which tends to make them more aggressive on future bids.
“A lot of people who have been looking and not getting houses are desperate for one,” Vick said.
She also said some buyers who haven’t found what they’re looking for have decided to stay in their existing homes and add on.
Atiyeh said the “hottest” neighborhoods are the Fan, the West End, the Grove/Libbie area, parts of Henrico closest to the city, and Westham, as well as parts of Church Hill and North Side.
George Cumming with Cumming Home RVA said that with the Fan and Museum District getting tapped out pricewise, interest is bleeding over into neighborhoods like the Carillon, Byrd Park, Carver and Scott’s Addition.
“Those are hot markets because the Fan is not in most people’s means,” Cumming said.
“It all depends on the client and where they want to be. If they’re single, they want to be in the city where the action is. If they have kids, they may be looking more at the counties for schools,” Atiyeh said.
Millennials are entering the housing market and getting crunched. Many are getting outbid by empty nesters who are selling their big houses in the suburbs and moving back into the city with plenty of cash to outbid loan offers.
Whitney Gooch, 31, found a way to buy a house within her means by looking outside of her initial target neighborhoods.
At the beginning of her search, she was looking at Fulton and North Side. But with a budget of $200,000 and low inventory in the city, she wasn’t finding much. And the houses she was finding were “really tiny,” she said.
Her agent, Jaima McReynolds with Cumming Home RVA, helped her find a house in the Manchester area off of Jefferson Davis Highway.
“I wasn’t necessarily looking for a house in that area. But I ended up looking in more up-and-coming neighborhoods to find the kind of house that I wanted — older with character and more square footage,” Gooch said.
“I like the Manchester area. Things are really popping around here.” She mentioned The Butterbean Market & Cafe with its live music and a brewery that’s coming to the area with a rooftop bar.
“I’ve lived in Richmond since 2006. I know the area. But this feels really new,” she said.
The house she bought was listed at $189,000. She offered $194,000 and was accepted. She offered over the asking price because she’d been outbid on another house in Fulton.
“I was devastated,” Gooch said of when she didn’t get the house in Fulton. “I had no idea it was going to be such an emotional process. I started picturing my whole life in that house. I saw myself moving in the summertime. I really started seeing my life in that house. When I found out I didn’t get it, I felt like I was going through a breakup, mourning the loss of that house.”
Gooch said she took a small break from house hunting. “Eventually, I got over it and found this house.”
As a single woman in her early 30s, buying a house wasn’t immediately on her radar. She kept waiting to get married and have a dual income to purchase a house, but when that didn’t happen and her friends started buying houses, she started thinking about buying her own house.
“A lot of people don’t understand they can afford a house and pay the same amount for a mortgage that they’re paying in rent,” her agent, McReynolds said. “I’m in the millennial age group too. I’ve been telling my friends they can do this.”
“I’ve been renting for so long, I wanted to have an investment in something,” Gooch said. “Buying a house in an up-and-coming neighborhood, the hope is that it will appreciate.”
Gooch is a therapist with a significant amount of student loan debt. She was able to put down 3.5 percent by taking out a loan against her 401(k) to help with the closing costs. Originally she wanted the seller to cover the closing costs, but instead, she was able to split the closing costs and work them into the price of the home with her agent.
The end result: her new mortgage costs $70 more a month than her current Willow Lawn rental.
“I thought [homeownership] was something that wasn’t attainable for me. I didn’t think I could do it with only my income,” she said.
What buyers are doing to stand out to sellers
In a competitive market where houses are receiving multiple offers, buyers are making concessions .
Some buyers are waiving inspections altogether or waiving inspections up to $5,000.
“Giving the sellers exactly what they want in terms of the closing date and renting back is what is putting some offers over the top,” Vick said.
But you do have to be careful, agent Cumming advises. “We as agents need to protect our clients in the long run. We don’t want them to be underwater in the market.”
Buyers need to be preapproved and ready to move on a house immediately. Most potential buyers are seeing a house and writing the offer the same day.
“Find out what the motivation of the seller is to win a bidding war,” Cumming said. “Real estate is always personal. The net gain is not always the deciding factor.”
Realtors say there’s no telling when the market may cool down: Home sales in April are expected to skyrocket as the spring and summer buying season begins.