By Carol Hazard, Richmond Times-Dispatch, Va.

Feb. 28--Key is consumer confidence about job market The housing market in the Richmond area is a long way from its peak in 2005.

But it seems to be improving, with the area posting double-digit increases in sales of homes, much like the rest of the state, in the final quarter of 2009 from the same period a year ago.

Any recovery is likely to be tepid, until the job market improves and people feel confident about their jobs -- and buying a house, agents say.

The Richmond area was hit hard by the demise last year of such large employers as Circuit City Stores Inc. and LandAmerica Financial Group, real estate experts say.

While the number of home sales rose in the fourth quarter, prices are still slipping, agents say.

The median price, with half the houses selling for more and half for less, was $197,715 in the fourth quarter, down 6.8 percent from the same period a year ago, according to the Virginia Association of Realtors.

Here are what real estate experts and agents in the area, some in the business for decades, had to say about the market as it comes off one of its worst years in recent history.

-- Lacy Williams, Realtor with Joyner Fine Properties: "It's all about jobs. When people see their neighbors lose jobs, they are afraid they will lose their jobs."

When companies start hiring, the housing market will improve, she said.

"The good thing is there is lots of activity and the number of sales is up. And first-time buyers are out there buying."

About half of all home sales in the Richmond market last year were for homes that sold for $200,000 or less.

Yet, prices could keep falling because of high inventory levels and increases in foreclosures, Williams said.

The Richmond area had an 8.6-month supply of houses for sale at the end of December, meaning it would take that long to sell all the houses on the market at the current rate of sales.

A fourto five-month supply is considered healthy.

Some areas, such as Richmond's West End and western Henrico County, have a 4.2-month supply of homes for sales, Williams said. Goochland County has a 15.6-month supply.

"The further out you go, the greater the inventory. That seems to be a nationwide trend. People are moving back in to the city."

-- Scott Shaheen, regional vice president of Long & Foster Realtors: "The feeling is that 2010 will be better than 2009. Tax credits not only for first-time buyers but also for repeat buyers will help jump-start the spring market."

A tax credit of $8,000 was extended for first-time homebuyers and a credit of $6,500 credit was expanded to include current homeowners. The contracts must be signed by April 30 and closings completed by June 30.

Shaheen said he expects a 3 percent increase in sale prices in the Richmond area this year, which would point to a definitive upward turn in the market.

He noted that 2009 was the hardest year for Realtors. Although 2007 and 2008 weren't the greatest years, they weren't bad in retrospect, Shaheen said. "Most Realtors would be happy to see [the same sales volumes] as 2007."

-- Laura Lafayette, chief executive officer of the Richmond Association of Realtors: "2009 was a challenging year for residential real estate sales, and some of those challenges may well continue in 2010."

Inventory levels and prices could continue to be hurt by foreclosures. Also, consumer confidence will play a key role.

"If it becomes clear during the year that sale prices have turned upward, that should spur folks to get off the fence and in the market," Lafayette said.

"We ended 2009 in fairly strong fashion, so that and news of increased activity in recent weeks bode well for the first quarter of 2010," she said.

-- Jim Napier, president and principal broker at Napier Realtor ERA: "In my 34-year career, 2009 was the most challenging and toughest year to help my organization navigate through," Napier said.

"Foreclosures will continue to play a prominent role in the market; to what extent, I don't know."

Higher unemployment levels and the struggling economy will hamper the housing recovery. "We seem to have hit bottom, but prices may continue to soften."

Still, Realtors are optimistic by nature, he said. "We are seeing an uptick in activity. As we head out of winter, we all anticipate a spring market," one of the busiest times for home sales.

Home prices accelerated here as they did elsewhere from 2004 to 2006, and the market is still catching up. Prices are where they would be if prices had risen at a normal 3.5 percent to 4 percent a year, he said.

"Our job as real estate professionals is to share all market information, so people can price and position their properties if they want to sell."

-- Richard Bower, senior vice president at Joyner Fine Properties: The housing market stalled in October 2008 and continued into 2009. "For the first half of 2009, no one knew what to expect," Bower said.

The first-time homebuyer credit stimulated the entry-level market last year. But it didn't push through to the top or drive sales of higher-priced homes.

While the upper market slowed significantly, it did not come to a standstill. Sales of homes for $1 million or more were spread out throughout the year, Bower said.

"We had some very respectable sales, including a $4 million sale in Windsor Farms."

Bower said he is optimistic. "The industry is getting more healthy as time goes on."

Bower has been in the real estate business since 1973 and has seen four or five cycles. Each one is different, he said. The downturn in the early 1980s was defined by astronomical interest rates.

This downturn has more to do with lost jobs. "There's a lot of caution in the air," he said.

"The recovery will be slow. We will continue to grow, just at a slower pace than we are accustomed to." ------

Contact Carol Hazard at (804) 775-8023 or chazard@timesdispatch.com.

-----

To see more of the Richmond Times-Dispatch, or to subscribe to the newspaper, go to http://www.timesdispatch.com.

Copyright (c) 2010, Richmond Times-Dispatch, Va.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:CC, NYSE:LFG,

A service of YellowBrix, Inc.