by James A. Bacon
The Richmond metropolitan economy has been an also-ran since the 2007-2008 recession, so it came as some surprise to see that Zillow, the online real estate marketplace, listed our burg as the expected 4th hottest housing market in 2016.
The bizarre thing about the ranking is that forecast home value appreciation of 2.2% was half that of the other Top 10 metropolitan regions (Denver, Seattle and Dallas-Fort Worth led the way, with anticipated appreciation of 5% of more). But Zillow included unemployment rate and income growth in its metrics of “hotness,” and by those measures Richmond scored pretty well. Anticipated income growth of 1.2% was the highest of the Top 10 metros by a small margin, and unemployment of 4.4% was in the middle range.
Of greater interest was Zillow’s dive into real estate sub-markets. (I couldn’t find these numbers online, so I quote them from the Richmond Times-Dispatch story.) Despite horrendously bad schools and a lingering crime problem, real estate values are booming in the city. Predicted performance for selected neighborhoods:
Church Hill — + 6.7%
Carytown — +5.3%
Fan — +4.8%
Barton Heights — + 4.7%
Forest Hill Terrace — + 4.6%
If neighborhoods in Richmond’s urban core are hot, values in outlying neighborhoods likely are growing slower than the 2.2% average rate. Thus, despite record low gasoline prices (the lowest in decades, on an inflation-adjusted basis) that reduce the cost of commuting, people still want to live in walkable communities in the metropolitan center.
The Great Inversion — the shift in preferences for walkable communities in urban cores — continues apace.
Update: Speaking of the Great Inversion, how about this news — GE is relocating from the leafy Fairfield, Conn., suburbs to downtown Boston. Quoth the Wall Street Journal: The move to Boston’s waterfront is “a bet that the talent it needs is better recruited and groomed in a city than an office park.”
It didn’t hurt that Boston offered $145 million in incentives, including $25 million break in city taxes and $120 million in state infrastructure spending such as roads and parking. But New York, which recruited GE heavily, reportedly offered even more. The incentives influenced which downtown urban setting GE selected, not whether to stay in the ‘burbs or not.There are currently no comments highlighted.