Terry Shoemaker who started THS Construction here in 2006, is working on a 13,000-square-foot home (above) in Goochland.

INCENTIVES TO BUY "We are seeing incentives for buyers so homebuilders can move existing products, so it is the best time to be buying a house," said Vernon McClure, president of the Home Building Association of Richmond and president of Main Street Homes.

Jackson Commons offers new town homes near the Bojangles statue at Leigh Street and Chamberlayne Parkway. The Jackson Ward development will include 52 town houses and 20 rental units when completed, says developer Ron Stallings with Walker Row Partnership, one of the partners in the project.

McClure says with builders' tight margins, most can afford only to take a small percentage of the price. More are willing to offer other incentives, he said, such as special financing and upgraded amenities.

"From a lender's perspective, the sales market did drop o. during the fall and it became a buyer's market," said Jim Ward, loan officer for Colonial 1st Mortgage. He said fixed-rate mortgages in February were running between 5.875 percent and 6.25 percent for the purchase of a new home with adjustable rate mortgages right behind at about an eighth higher. "There will still be some aggressive concessions made by sellers to get the deals done," he said.

NEW TO THE MARKET The slow-down in the market is one of the reasons that Terry Shoemaker decided to come to Richmond in summer 2006 to start his home building company, THS Construction. "I've learned that a down market is the time to start things because you have more chances for opportunities," said Shoemaker, who was born and raised in Chesterfield, graduated from Virginia Tech in mechanical engineering and worked all over the country in commercial construction for Toyota Corp.

Shoemaker did extensive research on the Richmond market, tracking building trends and property values. He says that in the last several years, many large builders bought large tracts of land to keep ahead of the building boom.

"Now with the downturn a flood of lots have come on the market. So for a small builder right now, it is a great time to be in business because it gives us a chance to buy lots where, a year and a half to two years ago, we couldn't," he said.

TOWN HOUSES, CONDOS Ron Stallings, president of Walker Row Partnership, says that like single family homes, condominiums and town houses are experiencing a reduction in sales prices and more amenities and incentives being offered by builders and developers.

"With condominiums you are seeing an increase in the supply but not as much in demand but we feel that is partly because of the time of year," said Stallings whose latest project, Jack-son Commons, is new town homes in Jackson Ward under the Jackson Commons Partnership. His condominium project, 2c Condos, is a conversion of the old North Carolina Mutual building into 12 European-style condos with two penthouses.

"Without question we are seeing a demand in Jackson Ward for people who want to reconnect with urban living. Our proximity to the downtown area is perfect for people looking for that experience," Stallings said.

CONTRASTING PERSPECTIVES James Richardson, a Realtor with Century 2 U.S. Realty, says after a slight drop o in late fall of 2006, sales of single- family new homes in and around the city have really picked up. "There is plenty of inventory, and right now you have a bunch of people out there looking at homes," he said. "But interest rates still have not gone up to where they were, so I think it makes it a lot better for buyers." On a national perspective, housing starts are off 32 percent from the peak of 2005 but up percent in the last month, according to Chris Chmura of Chmura Economics & Analytics of Richmond. She also reports that new-home sales are off by 26 percent but still higher than 200 and close to 2002 levels.

On a state perspective, Chmura reports that single-family building permits have slowed 36 percent since August 2005. In Richmond, it slowed 30 percent.

SALES TO THE NORTH "The biggest area in the state that got hurt the most was Northern Virginia," said Rich Napier, president of the Homebuilders Association of Virginia and president of Napier Signature Homes. He says that housing starts were down 49 percent in Northern Virginia. "Like other hot areas, they had a brisk market and their correction is more noticeable." After a noticeable slowdown in the fall, most people in the industry reported an upturn in new home sales in Richmond in January and February.

"Inventory has been going down since November and now we see things turning the other way," said McClure. "We have had a great January, and had a couple of customers saying that they see the market is turning and want to lock in now." "There is a lot of activity out there and more things are going under contract. Some of this is seasonally related and some is related to consumer confidence going up," said Durnett. "The hype over the perceived bubble has kind of passed and people are beyond that fear factor." Ward says local Realtors have reported a pick up in sales since the end of January. "And that is kind of early for the year as January and February are typically our slow months," he said.