Why are we diving into the topic of home prices? Well, the affordability of things has a direct impact on Richmond’s culture. As rent and housing costs rise, it becomes harder for artists and the arts scene to afford to live here, potentially pushing them out of the city. So it’s all connected. Circle of life.
Today a new study has reddit/rva on fire with a debate that reinforces what we already know – rents continue to rise, and buying a home in the city feels impossible. And that isn’t just in our heads, Richmond has earned a spot on a New York Times’ list of the top 10 most challenging cities to buy a home for Gen Z, according to research from an organization called Point2.
While this study primarily focuses on Gen Z, a generation that covers 12 – 27 year olds, it’s a problem that affects everyone. If you weren’t fortunate enough to purchase a home during the pandemic when inventory was high and interest rates were at historic lows, you might be feeling like an outsider looking in.
But is the situation as dire as it seems? We spoke to local realtor and Gen Z-er Cole Adkins of Rock Realty (804) 822-7376 and he had this to say:
“Everyone is going ape over this report this morning. I have had 11 houses sold since the beginning of the year. Is it tough? Sure it is, but it is about who you have as your representative. A lot of these folks are just paper chasers. And it’s obvious, but it’s hard for the consumer to identify that because they think this person has their back, and they’re going through the process for the first time, so they’re not able to kind of call out what kind of bullshit plays are being made.
But it really comes down to who you’re working with. Let me give you an example – there’s a lady I’ve been working with who spent two years improving her credit. I know her from when we worked together at a restaurant, and her credit was in pretty bad shape, probably one of the few with a sub-400 score. We managed to boost her credit to 600, and she’s now eligible for a mortgage. She is buying a home this year.
Or another example, if I have a client with a budget of only $150,000, finding anything in that price range is a real challenge. However, I can leverage my knowledge and connections to identify a few neighborhoods with affordable bungalows in that range. I can reach out to homeowners and explore the possibility of a sale without any pressure. This approach often works wonders. There are various ways to make the process smoother for your clients, but it ultimately depends on how dedicated your agent is to your cause. There are deals to be made in Richmond, VA, and interest rates are coming down this year.”
That said, Point 2 Homes did some math to size up Richmond’s housing game and we are one of the few cities outside California to make the top 10.
Home Price to Income Ratio: How many Gen Z paychecks it takes to afford a typical Richmond home.
Home Price Change: Whether home prices in 2023 are more wallet-friendly than in 2022.
Inventory: If there are enough houses to go around.
Homes Sold Over Price: How many bidding wars are happening.
Days on Market: How quickly homes get snatched up.
Gen Z Homeownership Rate: The odds of young adults actually becoming homeowners.
Gen Z Unemployment Rate: Where it’s tough to find work for the moolah you need to buy a crib.
Point2 Methology for clarity and transparency:
In conducting this study, Point2, a division of Yardi Systems Inc., draws from a comprehensive array of data sources, including internal data, public records, governmental sources, online research, and reputable third-party agencies.
Our research focuses on the 100 largest U.S. markets by population, as determined by the 2021 Census Estimates. New York City is segmented into its five boroughs for analysis purposes. The study primarily operates at the city level and draws data from respected sources such as Redfin, Zillow, Realtor, PropertyShark, and Local MLSs.
To identify “The Gen Z Homebuying Havens,” this report employs a combination of ranking scores and weighted averages derived from the following key metrics:
- Home Price-to-Income Ratio
- Year-over-Year Median Sale Price Change (percentage difference between Nov 2023 and Nov 2022)
- Gen Z Homeownership Rate (owner-occupied units with householders under 25 years old among total housing units occupied by individuals under 25 years old)
- Unemployment Rate for individuals under 25 years old
- Inventory per 10,000 Residents
- Share of Homes Sold Above Listing Price
- Days on Market (DoM)
Demographic data, including Median Income, Unemployment Rate, and Homeownership Rate, is sourced from the Census and American Community Survey for the year 2022. The Home Price-to-Income Ratio is calculated based on the median home price and household income for householders under 25 years old.
To ensure relevance, the Unemployment Rate is specifically considered for the 20-24-year-old Census group, as the majority of the younger age group (16–19-year-olds) is typically still in school.
Since 2005, the dedicated team at RVA Magazine, known as RVA Staff, has been delivering the cultural news that matters in Richmond, VA. This talented group of professionals is committed to keeping you informed about the events and happenings in the city.