By Nicholas Langhorne, special correspondent

While the nation is in the midst of the worst housing market crisis in decades, Midlothian, along with the rest of the Richmond area, is faring much better than other regions of the state and country, according to local real estate agents and brokers.

“Richmond isn’t that bad of a market,” said John Fiorelli, a realtor at Century21 Signature Realty on Buford Road. “It gets a bad rap because of foreclosures in Northern Virginia, but it’s a pretty solid market.”

Fiorelli’s view is echoed by Laura Lafayette, senior vice president for public affairs for the Richmond Association of Realtors, a trade organization that serves over 5,800 area realtors. The association only keeps countywide statistics, so information specific to Midlothian was not available.

According to statistics from the Richmond Association of Realtors, the number of homes sold in Chesterfield County was down 24.4 percent in 2008 compared to 2007; however the average sale price was only down 3.3 percent to $277,948.

“What matters is that the homes hold their value,” Lafayette said. Chesterfield’s home values outperformed every other jurisdiction in the area except Henrico County.

Lafayette said that area homes saw double-digit appreciation for two or three years earlier in the decade, so the slight declines in value are to be expected. Markets like Northern Virginia are experiencing “drastic depreciation” because of the “irrational exuberance” of the rise of prices in that area earlier in the decade.

While the housing market in the area has not come to a screeching halt, consumers are cautious and looking for deals.

“The overwhelming majority of the homes that sold in Chesterfield were under $400,000,” Lafayette said. Homes priced at $500,000 and above are tending to stay on the market for much longer.

Realtors agree that this is a buyer’s market; there is a large inventory of homes for sale and not many people looking to buy.

“A house needs to be in excellent condition to sell,” said Joan Volante, a real estate broker at First Virginia Realty Company on Hull Street Road. “People are looking for really good deals.”

According to Fiorelli, young first-time buyers are a big reason that the market has stalled. He is not convinced that the incentives for first-time homebuyers in the recently passed federal stimulus package will help.

“20 to 30-year-old people are cultured to buying everything on credit,” Fiorelli said. This is problematic because banks are being very selective and limiting the number of loans they are making.

“You are not going to find banks that will give you a loan with nothing down,” Lafayette said. The average down payment for new homebuyers is between 2 and 5 percent.

“The market rolls uphill,” Fiorelli said. “If first-time buyers don’t buy, then others can’t move up.”

Realtors say that they are finding creative and innovative ways to market homes and get the word out real estate is still a great investment. Agents are turning to less expensive means of advertising, including blogging and social networking sites like Facebook.

Real estate agents and brokers are generally optimistic that the market will bottom out this year, if it has not done so already, and are looking forward to a better 2010 and more responsible homeowners.

“Time will heal these wounds,” Lafayette said. “But we have got to stop thinking about our homes as banks.”

While people are still buying homes and foreclosures haven’t risen dramatically, the Richmond area isn’t completely insulated from the housing crisis. Forbes magazine recently reported that the area’s rental vacancy rate of nearly 24% was the worst in the nation.

However, Volante says that those statistics probably lump commercial and industrial properties with residential.

“We have a rental business,” she said. “The rental business is very active. We are at 97% occupied.”

Fiorelli, who has been selling homes in the area for four and a half years, said that the market has become more challenging, and he has to “put in a little more effort” to move homes.

“People are always going to need somewhere to live,” Fiorelli said. He noted that a large portion of his buyers are transplants from the Northeast moving to this area because of the lower cost of living among other reasons.

Many consumers are worried about potential layoffs and the volatile state of the economy. However, potential buyers with sound credit and stable employment should not shy away from purchasing homes, according to realtors.

“It’s a great time to buy,” Volante said. “It’s the best of both worlds for buyers, low interest rates and prices.”

Statistics from RAA
Number of Homes Sold in Chesterfield County
2007—4,053
2008—3,084
24.4 percent decline

Average Sale Price in
Chesterfield County
2007—$287,509
2008—$277,948
3.3 percent decline