Rising condo inventory offers RVA buyers a shortcut
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Illustration: Annelise Capossela/Axios
Condo and townhouse inventory is surging in metro Richmond, with new builds rising at a rapid clip — all while staying far cheaper than single-family homes.
Why it matters: For priced-out buyers, this could be their ticket to RVA homeownership.
The big picture: The condo boom took off nationwide in 2022, largely because of rising interest rates and construction costs, according to Zillow.
- And while inventory is up this year, prices are down. The average condo price fell nationwide by 1.4% in July, making it "the softest condo market since 2012," the Wall Street Journal reports.
Meanwhile, Richmond's condo and townhome prices rose every month this year aside from July, when the median price dipped 3.7% compared to the same time last year.
- The median sale price for a condo or townhouse in Richmond was $373,000 in July, per Richmond Realtors data, or about 14% less than the median price of a single-family home ($435,000).
- The region had about 2.8 months of condo and townhouse inventory in July, up 28% over the previous year. That's compared to 1.7 months for single-family homes, which was down 5.6% from last year.
Zoom in: The lack of buildable land in many of the Richmond region's most coveted neighborhoods is driving much of the building surge for attached homes, Tom Tyler, vice president of research for the Home Building Association of Richmond, tells Axios.
- Attached homes include townhouses and condos, as opposed to detached homes, better known as single-family homes.
Case in point: The West End, aka Short Pump and nearby, is "the perfect example," Tyler says.
- The area has been built out for years, but it's still in high demand. Cue: denser development — or new homes that take up less physical space.
- In the West End, near well-established single-family neighborhoods like Wyndham, Wellesley and Twin Hickory, new townhome communities like The Pointe at Twin Hickory, Shire Walk and Laurel Oaks are growing or taking shape.
- Of 265 new construction permits issued across 10 subdivisions in Henrico in the first quarter of this year, just 31 were for single-family homes, per data Tyler shared with Axios.
By the numbers: It's not just Henrico. Of the 1,004 permits for new home builds in metro Richmond in the second quarter of this year, 400 were for condos or townhouses.
- Nearly half (48.5%) of new homes sold in Q2 in metro Richmond (that's Richmond, Chesterfield, Hanover and Henrico) were townhouses or condos, per Tyler's data.
- A year earlier, condo and townhouse sales made up 45% of new construction sales in metro Richmond.
In Q2, Richmond and Henrico single-family home sales made up just 36% and 35.5% of all new construction sales, respectively.
- New construction sales of single-family homes were far more prevalent in Chesterfield (64%) and Hanover (61%), but attached homes are still being built there — and selling.
What we're watching: To see how condo prices shake out for August and whether July's dip was an outlier.