Million-dollar home sales heat up in Richmond
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Competition and out-of-town buyers with bigger budgets are pushing more parts of the Richmond metro into the millionaire home club, agents tell Axios.
Why it matters: The majority of Richmonders don't make million-dollar house money, at least if U.S. Census Bureau data is any indication.
The big picture: Before the pandemic, million-dollar home deals were a rarity in Richmond, Dawson Boyer with Providence Hill Real Estate tells Axios.
- And the region's occasional million-dollar home sales were concentrated in a few parts of town, like the Fan and Windsor Farms, or on specific streets, like Hanover, Grove and Monument avenues.
- That changed with Covid and the influx into metro Richmond of more than 50,000 newcomers in four years.
Between the lines: Many of those transplants came here from bigger cities — often armed with equity from home sales in pricier markets or remote jobs paying bigger-city salaries. At the same time, locals were looking to level up their homes in search of more space for their remote jobs.
- Plus, the Richmond region, like most of the country, hasn't been building quickly enough to meet demand.
- All of this helped drive up Richmond's home prices and created the "kind of crazy" home sale market we see today, Boyer says.
Case in point: $1 million-plus listings are cropping up everywhere, in Westover Hills, Forest Hill, parts of Stratford Hills, Northside, and the Near West End.
- They're also in James River and Midlothian high school districts in Chesterfield County, as well as in Freeman and Godwin high school districts in Henrico County.
By the numbers: 114 homes in metro Richmond sold for $1 million or more in 2019, according to an Axios review of data from the Richmond Association of Realtors.
- Last year, 496 homes in metro Richmond sold for $1 million or more.
- As of Tuesday, 170 homes had sold for at least $1 million this year, putting RVA on track to surpass all of 2020's million-dollar-plus home sales by the end of this month.
Reality check: The median home sale price in metro Richmond is $410,000, per Richmond real estate data from April. That's up nearly 4% year over year.
The intrigue: Bidding wars are driving up prices, creating a $1 million home where one wasn't before.
- Of the 170 homes that have sold for $1 million or more this year, just 148 had been listed for seven figures.
- Boyer said that over the weekend, his $950,000 listing sold for $1.1 million, and a couple of weeks ago, his colleague had a $1.6 million listing go for $2.3 million.
What's surprising in the market now, though, Boyer says, is the number of cash offers coming in, especially in the Near West End, Fan and Museum District.
- "I bet if you pulled 20 houses" from those neighborhoods, "14 of them were cash deals," he says.
In some cases, Boyer has seen transplants flush with recent home-sale money driving the cash sales, but increasingly, "it's early transfer of wealth" — that is, parents gifting their children their inheritance early so their kids can finally get into the housing market.
Zoom out: Richmond isn't the only city seeing a million-dollar home boom. There are now 233 U.S. cities where a typical starter home costs at least $1 million — up from 85 cities in March 2020, according to a Zillow report.
The bottom line: Richmond seems to be well on its way to being a town where $1 million is the median home sale price.