The housing market is in the tank, but one segment of the real estate market is on a surprising uptick: condominiums.
High-end condos in the city proper, particularly those $300,000-plus lofts that proliferate downtown, aren't moving as initially expected. But overall, condos have helped pick up the slack in an otherwise slow market.
In 2007, 750 new condos sold in metro Richmond, according to real estate research firm Integra Realty Resources. That's up from 492 new condo sales for all of 2006 - a 52 percent increase.
New condo sales represented 17 percent of all new home sales in metro Richmond in 2007. Just five years earlier, in 2002, condos represented only about 2 percent of new home sales, according to Integra. The city of Richmond accounts for much of the spike. In 2007, 460 of the 750 condos sold in the metro area were in Richmond.
"There's been a very strong increase in the number of condos that have been developed through adaptive reuse, apartment conversions," says Tom Tyler, senior analyst with Integra Realty in Richmond. "Out of the 460, 40 of them were adaptive reuse, 87 were apartment conversions and 180 were renovations" of older buildings.
Through the first quarter of 2008, housing sales were down 31 percent, according to the Richmond Association of Realtors. Condo sales, meanwhile, continue to rise despite the housing crunch and an overall economic slowdown. Through the first quarter, condo sales represented 19 percent of the housing market, according to Integra.
The high end of the market still appears to be struggling. The first major project downtown, the Riverside on the James tower on Brown's Island, still struggles as many original investors turn their condos into rentals. But the mid-tier is stable.
"I just finished a project on Grove Avenue - 32 units," says Jerry Ford, a local real estate investor and broker. "We sold the last two in April, and with my partners we bought another property on Monument [an 18-condo project at 1630 Monument Ave.] and started construction two months ago.
"If you have the right product and you have it in the right location and the right price," Ford says, "we feel like it's still a pretty decent market."