Henrico home sales robust despite COVID-19

Despite the COVID-19 pandemic, home sales in the Richmond region have been steady throughout the first half of the year – even as inventory decreased dramatically after pandemic began.

And according to a number of housing industry experts, it's a sellers’ market in Henrico County and the rest of the region.

According to Richmond Association of Realtors, June 2020 outperformed pending sales in both the single-family homes and condo markets when compared with the same month last year.

“We are definitely in a seller's market. The inventory is very low,” explained Mike Kelly, an associate broker for Long & Foster. “This could be caused by some sellers waiting out the COVID before listing their home because they don't want people touring their home and not knowing if they are positive for the virus or not.

“For buyers, the interest rates are the lowest I have seen them in my entire 25-year real estate career. I just sold a couple of homes where the buyers have interest rates in the mid 2% range.”

Brian Haug, a senior vice president with Long & Foster echoed Kelly’s sentiments.

“It’s both a good time to buy and to sell,” said Haug. “Inventory remains low, creating opportunities for sellers to maximize the return on their investments. There’s also pent-up demand that we’re seeing amongst buyers, who may have delayed their search when the coronavirus pandemic first began. In addition to ongoing buyer demand, mortgage rates have dropped to all-time lows, enabling buyers to get more for their money.”

Laura Lafayette​, CEO of the Richmond Association of Realtors, said the market has been hot longer than people realize.

“When the months’ supply of inventory is less than six months, it’s considered to be a seller’s market.  We have been in a seller’s market for five to seven years,” she said. “And in June of this year, sellers received (on average) 100% of their asking price.  It’s not unusual for our realtors to report that homes are selling in a matter of days not weeks and that they’re receiving multiple offers with some of those offers over the list price.

“The first-time homebuyer market, anything under $250k, remains incredibly tight due to lack of inventory.  This market was strong before COVID and has remained strong.”

According to a report from Long & Foster, the median selling price of luxury real estate in Henrico County rose by 2.3%, while the number of transactions dropped by 22.5%. Monthly average inventory declined by 1.7% relative to the same quarter of 2019, while the total time spent on the market rose by 54.3% to 54 days in the second quarter.

According to Kelly, selling and buying in Henrico County “has been on fire.” In many cases, Kelly says homes in Henrico’s West End are selling quickly (under 30 days) and sometimes above the asking price as buyers try to outbid each other. In addition, Kelly said that county’s East End also is benefiting from the robust market.

“The eastern part of Henrico has seen an increase in prices and some are getting multiple offers,” Kelly said. “The eastern part of the county affords you more spacious lots and even acreage and unlike the West End the population is a lot less dense. The Varina District has nearly half the land mass of Henrico County. There are still parcels well over 100 acres in Varina that most residents don't even know about.”

How the real estate industry adapted
Like most industries, home sellers had to embrace new methods in order to comply with the challenges that COVID-19 presented. Haug said Long & Foster adapted by staying connected digitally.

“Real estate is a people business, and we’ve kept our personal relationships intact leveraging a variety of tools,” Haug explained. “We provide our team with some of the best technology in the business, enabling them to maintain their business operations and serve their clients from virtually anywhere.”

Kelly pointed out other changes that have been made when it came to client contact. Sellers are asked to wear masks and gloves when looking at their homes. Some homes have lights switched on and doors already opened so that there is less touching of surfaces that have high bacteria levels.

“When showing houses, we need to take care,” he stated. “We as agents also now have a "COVID Addendum" that all parties sign with contracts now that deal with any unanticipated delays or lack of availability of businesses that might be operating on a skeleton crew or some that are operating on altered hours.”

In addition, Kelly said that most real estate offices operate on changed hours and the agents have to communicate using video chat services like Zoom.

Lafayette added that the industry was “quickly able to transition to a virtual environment.”

"[W]e’ve had a virtual/digital transaction desk for years, meaning all of the forms can be completed, executed, and transmitted in a digital environment,” she said. “They also have the ability to provide virtual tours, hold virtual open houses, and use a product called Showing Time to schedule showing appointments in such a as to ensure only one group of potential buyers are in the property at any one time, i.e., schedule a showing for 2:00 and block out any other showing availability until 3:30.”

Lafayette also said that in Henrico County, credit was due to local leaders for having the foresight to keep their industry moving.

“We’re deeply grateful, and I cannot stress this enough, for Henrico County government’s hard work to stay open for business.  If the courts had shut down and local government had shut down, all of our digital technology would have been for naught.

“I tip my hat to John Vithoulkas and his amazing team.”

Kelly offered some advice for sellers and buyers.

If you are a Seller and want to sell, now is the time to do it,” he explained, and if you are a buyer, with the interest rates as low as they are, now is the time to do it.

“Buyers just need to be aware, if you are competing with another offer, you will need a pretty clean contract. Price is not always what sellers are looking for, they are also looking at contingencies such as financing, home inspections and home sales, most sellers would rather not have any contingencies but that doesn't always happen. For us agents it is really frustrating when we cannot get the deal worked out due to multiple offers. I hate making that call to my fellow agents telling them my sellers chose another offer.”