Virginia’s state capital of Richmond has a rich and diverse history, having played an important part in the Revolutionary and Civil War. Today the River City is a peaceful location offering the urban amenities you’d find in a major metro without the price tag. For a city old with history, modern Richmond is a young and dynamic city that also is an excellent market for real estate investors. Let’s dive a little deeper:
Richmond Population Growth
Richmond is the fourth largest city by population in Virginia, with more than 230,000 residents inside city limits. However, the Richmond metropolitan area includes around 1.3 million people, making it the third-largest metro area in the state.
One of the best signs pointing toward the market’s future is the city’s recent growth. Over the last decade, Richmond’s population grew by 12% or about twice the growth rate of Virginia as a whole.
The Richmond metropolitan area growth shows little signs of slowing. The MSA is projected to grow by 10.4% over the next ten years and reach 1.44 million residents by 2030.
Population-wise, the demographics skew younger. Approximately 54% of the population is between 25-64, so there are plenty of working professionals in the Richmond area.
Richmond Job Market
Situated along Interstate-95, Richmond is a two-hour drive from Washington D.C. or Virginia Beach and less than three hours from Baltimore. You can reach 55% of the U.S. population within a one-day drive. With several major railroads passing through Richmond, accessibility is not an issue.
The job market here is healthy and thriving. Some of Richmond’s largest industries include manufacturing, health sciences, transportation and logistics, finance, real estate, and creative businesses. More than 220 international companies from 26 countries, plus four Fortune-500 Companies, call the Richmond area home.
The result of this diverse and thriving job market led Richmond MSA’s estimated GDP to grow by 24% over the last ten years to more than $78.7 billion.
The strong diversity in the job market helped Richmond’s economy in its recovery from the COVID-19 pandemic. With an unemployment rate of 5.7%, the city saw job growth of 1.2% last year. It is one of the five best places in Virginia to find a job.
Richmond is home to Virginia Commonwealth University, University of Richmond, Virginia Union University, and J. Sargeant Reynolds Community College, so there is no shortage of graduates entering the workforce each year.
Richmond Housing Market
The housing market in Richmond is active, with many properties being sold above the asking price since the demand is greater than the supply of homes in the metro area. Forbes listed Richmond at no. 8 on their list of hottest housing markets right now.
The area’s market has seen a 7.9% year-over-year increase in home values and is expected to add another 10.2% in the next year. Over the last five years, Richmond’s home values have seen a rise of more than 45%.
While market inventory is constricted and median prices are on the rise, Richmond real estate is still a good deal for real estate investors. The median sold price for a single-family home was $300,000, but listing prices rose by 12.5% year-over-year.
In Chesterfield County in December 2020, the median sale price for single-family homes was $310,000, which is up 12.7% year-over-year. The average number of days spent on the market was 17, which is down 58.5% from the prior year. Competition is tough, but there are still opportunities to find good deals and hold for appreciation gains.
Richmond has 116 neighborhoods to explore, ranging from the median price of $750,000 in Westhampton to the $174,800 median-priced Swansboro.
Richmond Rental Market
Working in the rental market here means cultivating a targeted investment strategy. Richmond has a strong rental market, with 55% of homes being renter-occupied. About 59% of apartments are renting for $1000-1500. The median rent for a three-bedroom house in December 2020 was $1,654 per month.
The average rents in Richmond have increased 14% year-over-year and more than 26% over the last five years, showing a strong future forecast for investors and landlords.
Neighborhoods such as Chippenham Forest, Deerbourne, and Brookland Park are some of the more affordable areas, with rents averaging around $795. For the higher-end market, Shockoe Bottom, The Fan, and Swansboro rent for an average of about $2,070 per month.
Invest in Richmond Real Estate
With more projected growth in the future, now is a great time to invest in the Richmond market. Richmond offers a strong economy, a booming housing market, and a renter-heavy millennial population. A wide range of neighborhoods and prices on the market give real estate investors options.