Region’s home sales up 6 percent, but challenges remain

Crowds gathered Thursday at the Home Building Association of Richmond’s annual economic forecast seminar. (Jonathan Spiers)

Crowds gathered Thursday at the Home Building Association of Richmond’s annual economic forecast seminar. (Jonathan Spiers)

The local homebuilding market saw continued growth last year, with increases in permits and new home sales. But a shortage in labor and existing home inventory remain challenges moving forward.

That was the consensus Thursday at the Home Building Association of Richmond’s annual economic forecast seminar.

Held at the Short Pump Hilton, the event coincided with the release of a new home market report for 2016 compiled by HBAR, Commonwealth Partnerships and Integra Realty Resources-Richmond.

That report, based on data from IRR-Richmond, showed new home sales in Central Virginia increased 6 percent last year, with 2,984 homes sold. The number of permits issued rose 10 percent, with 3,847.

The average new home price in the region for the year was $373,808, about $530 lower than in 2015.

The report emphasized an 11 percent drop in new home closings in Henrico County, where the average new home price also dropped 7 percent. Chesterfield County saw essentially the opposite, with new home closings up 11 percent and the average new home price jumping 5 percent. Hanover County saw sales up 5 percent and average price up 2 percent.

Economist Elliot Eisenberg presenting at Thursday's economic forecast at the Short Pump Hilton. (Jonathan Spiers)

Economist Elliot Eisenberg presenting at Thursday’s economic forecast at the Short Pump Hilton. (Jonathan Spiers)

The report concludes that overall regional growth trends will continue in 2017, though it notes concern from builders about challenges such as a deepening labor shortage, lack of developable land, higher material costs and an uncertain regulatory environment.

That regulatory uncertainty was emphasized at Thursday’s forecast, which featured presentations by design and home improvement website Houzz and economist Elliot Eisenberg.

Eisenberg, a former senior economist with the National Association of Home Builders, noted the uncertainty that comes with a new administration in the White House and a less traditional – and therefore less predictable – president.

While home prices nationally are going up 5 percent, Eisenberg said national income, up 3 to 4 percent, is not keeping pace. He said more entry-level, smaller homes are needed in the market and emphasized the shortage in existing home inventory is the biggest challenge facing the industry.

Thursday’s event was sponsored by Union Bank, Fulton Mortgage, HHHunt, BB&T Home Mortgage, Hallsley, TowneBank and TerraForge.

To read the full 2016 new home market report, click here.

Crowds gathered Thursday at the Home Building Association of Richmond’s annual economic forecast seminar. (Jonathan Spiers)

Crowds gathered Thursday at the Home Building Association of Richmond’s annual economic forecast seminar. (Jonathan Spiers)

The local homebuilding market saw continued growth last year, with increases in permits and new home sales. But a shortage in labor and existing home inventory remain challenges moving forward.

That was the consensus Thursday at the Home Building Association of Richmond’s annual economic forecast seminar.

Held at the Short Pump Hilton, the event coincided with the release of a new home market report for 2016 compiled by HBAR, Commonwealth Partnerships and Integra Realty Resources-Richmond.

That report, based on data from IRR-Richmond, showed new home sales in Central Virginia increased 6 percent last year, with 2,984 homes sold. The number of permits issued rose 10 percent, with 3,847.

The average new home price in the region for the year was $373,808, about $530 lower than in 2015.

The report emphasized an 11 percent drop in new home closings in Henrico County, where the average new home price also dropped 7 percent. Chesterfield County saw essentially the opposite, with new home closings up 11 percent and the average new home price jumping 5 percent. Hanover County saw sales up 5 percent and average price up 2 percent.

Economist Elliot Eisenberg presenting at Thursday's economic forecast at the Short Pump Hilton. (Jonathan Spiers)

Economist Elliot Eisenberg presenting at Thursday’s economic forecast at the Short Pump Hilton. (Jonathan Spiers)

The report concludes that overall regional growth trends will continue in 2017, though it notes concern from builders about challenges such as a deepening labor shortage, lack of developable land, higher material costs and an uncertain regulatory environment.

That regulatory uncertainty was emphasized at Thursday’s forecast, which featured presentations by design and home improvement website Houzz and economist Elliot Eisenberg.

Eisenberg, a former senior economist with the National Association of Home Builders, noted the uncertainty that comes with a new administration in the White House and a less traditional – and therefore less predictable – president.

While home prices nationally are going up 5 percent, Eisenberg said national income, up 3 to 4 percent, is not keeping pace. He said more entry-level, smaller homes are needed in the market and emphasized the shortage in existing home inventory is the biggest challenge facing the industry.

Thursday’s event was sponsored by Union Bank, Fulton Mortgage, HHHunt, BB&T Home Mortgage, Hallsley, TowneBank and TerraForge.

To read the full 2016 new home market report, click here.

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