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Region’s home sales up 6 percent, but challenges remain

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Crowds gathered Thursday at the Home Building Association of Richmond’s annual economic forecast seminar. (Jonathan Spiers)

RICHMOND, Va. — The local homebuilding market saw continued growth last year, with increases in permits and new home sales. But a shortage in labor and existing home inventory remain challenges moving forward.

That was the consensus Thursday at the Home Building Association of Richmond’s annual economic forecast seminar.

Held at the Short Pump Hilton, the event coincided with the release of a new home market report for 2016 compiled by HBAR, Commonwealth Partnerships and Integra Realty Resources-Richmond.

That report, based on data from IRR-Richmond, showed new home sales in Central Virginia increased 6 percent last year, with 2,984 homes sold. The number of permits issued rose 10 percent, with 3,847.

The average new home price in the region for the year was $373,808, about $530 lower than in 2015.

The report emphasized an 11 percent drop in new home closings in Henrico County, where the average new home price also dropped 7 percent. Chesterfield County saw essentially the opposite, with new home closings up 11 percent and the average new home price jumping 5 percent. Hanover County saw sales up 5 percent and average price up 2 percent.

The report concludes that overall regional growth trends will continue in 2017, though it notes concern from builders about challenges such as a deepening labor shortage, lack of developable land, higher material costs and an uncertain regulatory environment.

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