Richmond’s new residential construction industry is in a position of moderate, healthy growth.
There is demand for $1 million-plus custom homes in the city of Richmond, Chesterfield and Henrico counties, while townhome popularity continues to increase throughout the region, and investment in rural on-your-lot construction remains steady.
Halfway through 2019, total new home closings data from Integra Realty Resources points to a regional pace that mirrors the first half of 2018, while single family permits issued dipped slightly, by 1.6 percent. This leveling of activity is not due to a lack of demand; it is due to private and public barriers to delivering supply. Since the Great Recession, builders continue to be limited by labor constraints and most of our local building and planning departments are accepting more permit applications without adding resources to handle their work load. Unnecessary permit delays along with other regulatory burdens on construction continue to delay housing starts.
Chesterfield County leads our region in new home closings year over year with a 23 percent increase, the largest volume produced in Harpers Mill. Average new construction home prices around the region in 2019 are 33 percent higher than their 2010 lows. With several recent high-profile economic development announcements in our region, the need to increase the supply of housing at a variety of price points is accelerating.
A market correction and hit-or-miss consumer confidence globally is not a present concern. Our local market is hot. The outlook is optimistic. The challenge to our continued growth in production lies in the capacity to build the homes being demanded within the land, labor and regulatory limitations.
Homebuyer traffic has remained strong from spring 2019 through the summer, drumming up confidence for builders as they move into fall production with expectations of healthy, sustainable growth.
The Home Building Association of Richmond (HBAR) represents builders and developers that are building rental and for-sale housing for individuals and families at income levels of 50 percent of the area median income to the higher end of the income spectrum.
For more information visit hbar.org.