Jun 29, 2022 - Real Estate

Richmond homebuyers are paying even more over asking than last year

Homes that sold for 50% or more over asking price in Richmond
Data: Richmond MLS; Map: Baidi Wang/Axios

Homebuyers of single-family homes in metro Richmond paid an average of 8% more than the original list price in April and May, up from an average of 5.5% over asking the same time last year.

  • That's the highest ratio of list-to-sale price in recent history, according to an Axios analysis of data from the Richmond Association of Realtors.

Why it matters: Over-asking home sales prices are a sign of a tight and competitive market, and while the number of home sales in Richmond and the state shows signs that demand is cooling, that hasn't translated into lower home prices.

  • "In fact, [home prices] continue to climb rapidly. The statewide median sales price in May 2022 was $401,082, which jumped up 8.7% from last May, a gain of more than $32,000," the Virginia Association of Realtors wrote in its most recent report.
  • In metro Richmond, the median sale price for a single-family home hit $390,000 in May, an 18% year-over-year increase.

What's happening: In the last 120 days, 4,337 single-family homes closed in Richmond, Chesterfield, and Henrico — 3,380 of them, or more than three-quarters, for over asking, Adam McEwen, with the Central Virginia MLS, tells Axios.

The intrigue: While 8% is the average over asking, some people are paying even more. Since last January, 157 homes in metro Richmond sold for 40% or more over the original list price, meaning buyers are sometimes offering $60,000 — or even $500,000 — above asking in their desperation to secure a home.

Zoom in: Homes sold at auction — often marked as "investor specials" — are the biggest driver of the trend, Axios' analysis shows.

  • The opening auction bid for this house in the Manchester High School district in Chesterfield was set for $99,000. It sold in September for $165,000 and then hit the market again two months later, freshly renovated, for $285,000 (it sold for the second time in fall 2021 for $287,000).
  • This midcentury-influenced, good-bones Battery Hill Drive house in Henrico, happens to sit on a 5-acre lot on the James River, just a stone's throw from the Lily Pad. It listed in December for $250,000 and sold at auction a month later for $522,500.

Then there are the million-dollar homes:

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