Yes, TONS going on in Oak Grove too. On the grocery store thing, another real estate saying, albeit from the commercial world, is "retail follows roof tops." I have to think with all the new apartment units going in, as well as the single family houses being rehabbed or built, there will be a grocery store in Manchester soon. I mean, how many units have come on line since 2020, and how many more are in the planning and development stage?

Grow the most in terms of added housing units?

North of the River: I think all of "Greater Scotts Addition" which according to the City planners is now everything east of Arthur Ashe Boulevard, north of Broad, all the way to at least Lombardy, maybe even Harrison, including the Diamond District, the Sauers' parcels, and everything going up around Hardywood Brewery on the Hermitage corridor all the way over to Brook Road (Northside).

South of the River: Manchester/Blackwell. Every time I go over there I am amazed, it feels like someone has just plopped down another 10+ story tower. Unfortunately most of what is going up in Manchester/Blackwell seems to be rental, it doesn't seem like there are many for sale units. I'd really like to see more condos/townhouses/houses, not just rental. [NOTE: I could be wrong on that, the amount of "for sale" stuff, I am much more immersed in the north of the river neighborhoods because that's where I grew up and currently live].

But these are not the most undervalued neighborhoods IMO if you are looking to buy, if that's what you are asking. For that I'd pick Randolph and Maymont (North of the River) and Blackwell and Woodstock (South of the River). I also really like Hammond Place and Rosedale in Northside.

I 100% agree with the advice buy what you can afford. Do not stretch for a house. Make sure you figure in all the additional costs (utilities, a "slush fund" for unexpected repairs, and then another cushion just to be safe, like for increases in your real estate taxes or homeowners' insurance premium). The general rule of thumb is you should not be spending more than 30% of your gross income on housing. But if you have huge student loans, or major childcare expenses, or love to take expensive vacations 2x a year, you may need to spend less than that 30% rule of thumb. Whatever you do, just make sure you are not going to be house poor. That's how things go off the rails.

According to an August 2022 article in Bankrate, the winter is the best time to buy a house.

https://www.bankrate.com/real-estate/best-time-of-year-to-buy/

That makes sense to me and tracks my experience, based on more "normal" markets, before we went into the white hot Covid market from June 2020-July 2022. Usually there are fewer people looking to buy in the winter, just because of the distraction of the holidays. There's also usually less inventory in the winter, but the people that are trying to sell are more likely to have to sell for a life reason - job transfer, death in the family, divorce, etc.

That all said, I feel like right now we are at the most volatile place we've been in the financing world in a long time. Are we at the height of the interest rate hikes? I don't know. Some people think there may be another rate hike, and then I've seen predictions that interest rates will come down into the high 5s by the end of 2023.

https://www.morningstar.com/articles/1106505/why-we-expect-the-fed-to-cut-interest-rates-in-2023

So I think it really comes down to what your family's specific needs are. If you don't buy are you going to need to renew your lease soon? If so how much will you be paying in rent? If you start paying a mortgage rather than rent, you are building wealth for yourself and your family. If you pay rent, you're building wealth for your landlord. An adjustable rate mortgage can also adjust down. And mortgages have no pre-payment penalties now, so if interest rates were to plummet, you could always refinance. That old "marry the house, date the rate."

Real estate generates wealth for you in three main ways - you build equity with your down payment + a piece of every monthly mortgage payment, you get appreciation, as the value of your home increases over time, and there is a tax benefit because the mortgage interest is tax deductible. [NOTE: With the increased personal deduction this is not a given anymore].

I think real estate is an amazing investment, and I've had success with real estate from well before I had any involvement in the real estate business, which is my second career. It's highly leveraged, meaning you can control an appreciating asset by only contributing a fraction - 3%-20% - of it's value in the purchase. It's forced savings. And you need somewhere to live. Why not own vs. rent?

But on your timing question, when should you buy, I wish I had a crystal ball. When you feel comfortable and confident doing so is probably the best answer.

Well, the rising interest rates will unfortunately knock some people out of buying a home, that's definitely an effect. I think what's forcing rents higher is (i) not enough rental inventory; and (ii) in-migration into Richmond. I saw something somewhere recently - how's that for a documented source! - that said the vacancy rate in Richmond was something insane like 2%. If that's the case, and there is more demand, because more people are moving to Richmond, rents will inevitably rise.

Another impact on rental price increases - I think it's a fairly small one at this point, although it could become a much bigger issue - is what were yearly rentals turning into Airbnb/VRBO-type rentals.

ETA: OK, property management is not my thing, but I hate saying dumb stuff like "I saw something somewhere" so I figured I'd do a quick Google search. This site - I don't know how reputable it is, but it is *some* data - says the average apartment rent in Richmond as of June 2022 was $1,459/month and INCREASED 14.3% YEAR-OVER-YEAR.

https://www.point2homes.com/US/Average-Rent/VA/Richmond.html

That's crazy. And creating huge problems.

Well there is a saying in the real estate/mortgage world - "Marry the house, date the rate."

I don't necessarily think ARMs are too risky, but like everything else, it depends on your specific circumstances. Right now they are a much better option than the 30-year fixed rate. I had clients close yesterday with 5.75% on jumbo money on a 7/1 ARM, which looked great compared to some of the rates I've seen lately.

TBH, I've been doing only fixed rate 30-year mortgages for so long now, I am going to have to completely reeducate myself on creative financing options. You should be getting guidance from a good mortgage lender who will help you understand all the options and choose the right one based on your circumstance. If the lender won't take the time so you feel fully educated on the process and your choices, you need another lender.

Also, people don't seem to be talking about assumptions right now, and I'm not sure why. An assumption lets you step into the shoes of the current mortgage holder and take over their loan at their rate. I just don't know enough about assumptions right now to give good advice, but you should at least raise it with your lender.

My lawyer answer: It depends.

To some extent I'm kidding, but actually not really. What I am seeing is less competition for houses, less activity through new listings in terms of number of showings and activity at open houses. So there is definitely a drop off - in activity, in sales, in offers. All the national data is tracking this too.

However, on the ground I am still seeing move-in ready homes in desirable neighborhoods that are priced correctly selling fast and sometimes with multiple offers and still over asking. However, that seems to be places like the Fan, the Museum District, Near West End, River Road corridor, etc. where there is a very constrained supply and still exceedingly high demand. Above a certain price point ($700,000ish) I am still seeing cash offers, so these people are not sensitive to the interest rate hikes.

Some of this is also being driven by people moving to RVA from high cost-of-living markets who think our prices are cheap, compared to what they are used to.

ETA: Punctuation

The market definitely ramps down from Labor Day to Thanksgiving, and typically goes pretty quiet from Thanksgiving through New Years Day. Then once you are into the new year the market slowly ramps up again until the "typical" Spring market. This year the market hit a brick wall in late summer, and it seems like there is less coming on the market than we would normally see in that Labor Day-Thanksgiving listing burst. I have to think it's the interest rate rise, combined with the general economic uncertainty.

That's all based on my personal observation, and gut feel. I haven't drilled down into the actual data, I'm going to do some of that over the weekend.