The recent announcement that one of Amazon’s two new headquarters will be in Arlington, Virginia, just over an hour’s drive from historic Richmond, may begin to have ripple effects through eastern Virginia as early as next year.
We can only guess what impact Amazon’s estimated 25,000 new hires for this future complex will do to communities even 150 miles away. Like a bowling ball dropped onto a bed, however, it will definitely be felt throughout the region.
In the light of these historic tech-era population changes in the wind, and with Thanksgiving and its focus on the Pilgrims of Plymouth, it’s worth remembering that Richmond sits just up the James River from the first European settlement. It was here, in 1607 that Jamestown was founded, and only a generation later that its residents headed up the James to establish a second town, Richmond, named in honor of a town just outside London.
Today, Richmond is at the heart of the second largest Metropolitan Statistical Area that lies entirely within the commonwealth of Virginia. There are some larger MSAs, but they each crossover into neighboring states. Thanks to its central city and namesake, the Richmond MSA not only has a rich past, according to the latest VeroFORECAST from Veros Real Estate Solutions, it also has a healthy economic future. The third quarter 2018 VeroFORECAST predicts its single-family residences will rise on average 6.7% in value over the next year, and condos and townhouses will appreciate just slightly less at 6.6%.
Demand for housing has reduced the MSA’s supply of listed homes to just 1.9 months, and that is boosting the market’s property-appreciation prospects. The estimated population of more than 227,000 is up about 10% over the last six years, and the unemployment rate here is only 3%, about 20% less than the national rate of 3.7% announced earlier this month.
This solid real estate market ranks 76th out of the 358 MSAs that were analyzed for this VeroFORECAST. Among the many data categories factored into the ranking, those that were most significant in Richmond’s projections were housing supply, unemployment rate, inflation, interest rates and population trends.
THE RICHMOND MSA MAKEUP
Four independent cities and 13 counties form the Richmond MSA, also known as the Greater Richmond Region. Richmond is the largest of the four cities that are not part of any county. The other three – Petersburg, Hopewell and Colonial Heights – are close together and called the Tri-Cities.
An economic promotion organization called Greater Richmond Virginia includes only the city of Richmond and the MSAs three largest counties: Chesterfield, Hanover and Henrico. Those counties have a combined population of 789,000, and along with the 227,000 who live in the City of Richmond, account for about 1 million of the MSA’s 1.26 million residents.
Clearly, a healthy economy is helping Richmond maintain its economic engine. Some 472,000 workers employed within the MSA’s major industries are keeping its unemployment rate under the national average. Topping these categories are services, retail trade, manufacturing, state government and a combination of finance, insurance and real estate. Leading the manufacturing sector, which employs more than 63,000, the largest segment is the tobacco industry, followed by chemicals, printing and publishing, paper, and wood manufacturers.
Back in September, the ManpowerGroup released an Employment Outlook Survey of Richmond MSA employers and found that on average they anticipate a net employment growth for fourth quarter 2018. According to the report, “job prospects appear best in construction, durable goods, manufacturing, wholesale and retail trade, information and financial activities.”
Among employers surveyed, 25% plan to hire more employees this quarter, with just 5% planning to reduce payrolls, 69% expecting to maintain current staff levels, and a single percent unsure of what they’ll do.