The short answer is ‘pretty well.’
Beginning sometime in 2007 and lasting into early 2011, market values fell, often dramatically, across the board with no one asset or area being immune. By the time the dust settled, property values had fallen anywhere from 20% to 50% depending on wide and diverse set of factors. All neighborhoods felt the effect and The Fan was not immune.
In 2011, those that study housing began to change their tone and use words that indicated the market was shifting yet again (and this time, to the positive.) Markets that had been in freefall were flattening and those that had flattened were showing small levels of appreciation. The “Sand States” (Florida, California, Nevada and Arizona) were still years away from recovery but the denser, older and economically healthy areas were far better off.
The hardest hit areas during the crash shared a common characteristic: excess. These excesses in the market took the form of excess size, features, purpose or inventory (and sometimes all of the above.) The truly large homes that were built on expensive lots throughout the suburbs lost great value. Likewise, the excess inventory of second homes and resort condos also took a huge beating. Those homes built with every imaginable bell and whistle became another harshly punished sector of the market.
What forms of excesses are prevalent in The Fan? Few, frankly.
The Fan is a mature urban neighborhood of large but reasonably sized homes whose scope, while upscale, largely eschews excess. With parking at a premium, the homes in The Fan do not have 3 and 4 car garages to house multiple cars. With 2500-4000 SF footprints, the ability to dedicate 1000 SF to a master closet or bath is hard justify. Likewise, game rooms or other singular purpose entertainment rooms, so common in the McMansions of the suburbs, were not introduced to the homes in the Fan. Lastly, and perhaps most importantly, with no real land available for expansion, Fan inventory is effectively fixed.
These factors, combined with the fact that The Fan is the most walkable and culturally engaging neighborhood in Richmond, meant that when values fell, Fan District homes held their values at rates far better than the rest of the market. As we navigate the recovery, those who chose to call the Fan their home will be well rewarded.
Rick Jarvis is one of the Founders of the One South Realty Group in Richmond, Virginia. He can be found at Google+ and Twitter
