Strong market, robust evictions defined housing in Henrico last year

Last summer, Realtor Shakeema Daniels of ICON Realty, helped a client through the difficult housing market. Only after six offers on various homes – and missing out on the chance to make offers on five others – was the buyer able to make a successful offer.

“[The home] wasn't even move-in ready,” said Daniels. “That buyer did a lot of work before even moving in. But it just goes to show what kind of market we're in for buyers.”

Last year was a seller’s market in Henrico County and throughout the area. So far, this year is more of the same.

Daniels advises buyers to ignore the HGTV image of an ideal house and be prepared for the cost and effort to secure a home in the competitive climate. Her client went to work to spruce up his new home in Eastern Henrico – slapping on a new coat of paint, replacing carpet, changing out the fixtures and the appliances after the purchase because he really just wanted to get the house under $225,000.

“In the past we'd had clients who, when houses come on the market, maybe you have one or two other offers, but now we're looking at upwards of 20 to 30 other offers on a house,” said Daniels. “So not only is it more competitive, and interest rates are a lot lower than they were in 2015, but also you have way less inventory.”

As part of the Key Team at ICON Realty in Rocketts Landing, Daniels and her colleague Dakia Knight hone in on data to understand the market and to create a comparative market analysis every time a client is interested in making an offer, to ensure the listing price is in-line with the data in the area.

“Cash is king when it comes to winning those bids as we see the supply decrease,” said Knight. “In 2020, there was an average of 397 active listings on MLS [Multiple Listing Service] versus 600 in 2019. That’s how little inventory we have.”

Data shows that median sale prices in Henrico increased almost 13 percent to $298,959 and average sale prices increased 8 percent to $352,950.

“When you think about a pandemic, when you think about. . . civic unrest or a reckoning, and then when you throw in a bitterly divisive presidential election – all of that, and you still have a very healthy real estate market overall,” reflected Laura Lafayette, the CEO of the Richmond Association of Realtors. “And in metro Richmond, we will have experienced the best housing market since 2005.”

In a time when staying home and staying put because of the dangers of COVID-19 many of Daniels’ clients have been motivated by the pandemic’s stresses and changes to their lifestyle, like the couple that must separate because they cannot bear to be confined together any more and the family bursting out of a small apartment in need of a house with an office and separate quiet spaces for children to do their schoolwork at home.

She also worked with Washington D.C. residents who ditched small apartments for more room in Henrico when remote work became the norm for the long term allowing flexibility with their location.

Henrico offers many positive attributes

“The county government is well-managed,” said Lafayette, who is a Henrico resident. “I feel like I have access to excellent schools for my children. There are excellent amenities in Henrico, you have easy ingress and egress to get to other jurisdictions, to get onto the interstate, to get to anything you might want or need. And so I think that [our] high quality of life [is a draw].”

Data from the Richmond Association of Realtors Central Virginia Regional Multiple Listing Service from 2020 shows there were 4,751 single family and condominiums/town homes sold in the county last year through November – a 27% increase from 2019 (19% among single-family homes and 32% among condos and townhomes).

The most dramatic statistical change showed what a sellers’ market the region is. The number of days that homes stayed on the market dropped from an average of 31 in 2019 to 17 in 2020.

“Everything is snatched up,” summarized Knight.

The low inventory in 2020 clearly did not mean slower sales.

“Surprisingly, 2020 was our strongest year in sales since 2016,” said Daniels. “Resale is so competitive and low in inventory that new construction was more attractive.”

But Lafayette said construction slowed in 2020 as the result of COVID-19.

Lafayette, Daniels and Knight are well aware of the parallel story alongside the healthy real estate market of high unemployment leading to people losing their housing.

Not always ‘safer at home’

During a year in which “Safer at home” was a mantra as a measure to encourage people to distance themselves from others as protection from COVID-19, record numbers of Henrico residents who lacked funds have lost their housing.

By the numbers, Virginia Court Data showed a total of 133,682 unlawful detainer hearings at the Henrico Court in 2020. That was a drop from the previous year, which totaled 187,999 eviction proceedings, and even fewer than in 2018 (199,388). The problem was linked to people losing their jobs and livelihoods due to the COVID-19 virus, with Henrico County’s unemployment rate spiking in April 2020 at 10 percent.

The Alliance for Housing Solutions described the patchwork of remedies as evolving and ever-changing.

Throughout the year, eviction moratoriums issued by Virginia Governor Ralph Northam and the Center for Disease Control slowed and saved some renters low on funds due to job loss. In some cases, the CARES Act gave business owners, including building complexes, relief that extended to their tenants. But in many cases this assistance was not understood and implemented by owners, renters, lawyers and judges.

“Incredibly confusing” is how Palmer Heenan, attorney and Equal Justice Works Fellow with the Central Virginia Legal Aid Society called the mixture of solutions.

Henrico has an eviction problem

In the middle of June 2020, Area Congregations Together in Service was designated as the regional response eviction prevention organization by the Partnership for Housing Affordability. And with that came state funding. In 2019 ACTS served just more than 300 households and expended around $240,000 in financial assistance.

So far this fiscal year, ACTS has served well over 3,000 households and, extended over $9.2 million to Richmond area residents in need of funds to stay housed.

In Henrico ACTS distributed $1,292,462.37 in rent and mortgage relief, helping a total of 327 households financially. That assisted 852 individuals, 396 of whom were under 18.

“We probably estimate at somewhere around 15 to 20,000 calls, but we have no idea of how many of those were unique callers because some people in their desperation were calling 10 to 20 times a day every day,” said William Poarch, CEO of ACTS.

One recipient, a single Glen Allen mother of five, received $13,000 from an ACTS grant to keep her family in their home after losing her job due to COVID.

“She went from being able to sustain this all on her own, to receiving about $700 a month in unemployment, said Hanna Yoon, COO of ACTS. ”Clients like this particular a woman who is a single mother of so many young people [arise] all the time. And I think that they're a really good example of how COVID has touched people you would not have expected. I don't think this woman, if the pandemic weren't to have laid her off of her well-paying job, that she would have ever found herself in a position of asking for any kind of assistance.”

Poarch says Henrico obviously has an eviction problem.

“Beyond Richmond, Henrico was the highest amount of the other locales that we expended money to,” said Poarch. “So it definitely tells us that Henrico does have an eviction issue, which we've kind of always known. And it's not just the eastern zip codes.”

Poarch says there are instances in Henrico of housing developments where the majority of residents cannot pay rent resulting in landlords not having enough funds to do upkeep or repairs.

Poarch says it would be better if people in crisis could come to one agency and get the assistance they need, instead of having to desperately phone three or four different organizations.

Henrico County itself also implemented a rent relief program last year to assist those in need.

Fighting eviction is time consuming and expensive

At the beginning of January, Heenan returned to Henrico District Court to file a motion to dismiss the case to preserve the housing for a resident of the Treehouse Apartments north of the Richmond Raceway facing eviction due to loss of income, based on the Center for Disease Control’s eviction moratorium and the deathly dangers of COVID. It was a case he had been litigating for five months.

“For those who are struggling with maintaining their housing, even a $50 or $200 shortcoming can snowball into much more,” said Keenan, “Two hundred dollars can turn into $700. If you’re already behind on rent, that can hurt, $60 court fees plus $150 attorney’s fees can cascade until you can’t get out of debt. This affects a huge swath of America. There is $70 billion in unpaid rent, and Congress has allocated only $25 billion in aid.”

Heenan handles up to six cases every Friday and four on Mondays in multiple area courts, but not everyone at court has representation.

“COVID has swept up the middle class in the eviction crisis,” said Heenan. “We’re looking at folks who have never faced eviction. So many people are paying more than 50 percent of their income on housing and rents are increasing. [For everyone’s health,] It would be best if people could shelter in place.”

He said the official numbers of evictions from the courts do not accurately record the true number of evictions. Many happen when landlords informally intimidate their tenants, who often have little protection without leases. Threats are issued, utilities cut and locks changed. That translates to a panicked phone call to the CVLAS office.

CVLAS is also engaging in tenant rights education, especially on how to deal with “out-of-state” landlords where it is unclear who owns the property. Henrico County lacks tenant advocacy groups like the ones are commonly found in Richmond.

2021 brings more economic challenges

“What happens when the money runs out? What happens when there is no more [federal] CARES dollars for either the tenant or the landlord and the moratoria are lifted?” asked Lafayette. “That's where we're going to see pain and suffering because landlords have mortgages to pay. They have employees to keep, maintenance workers, etc. So they need that rent. On the other hand, tenants, who've seen their jobs go away that aren't coming back, they've got an income challenge. There's just no question about that.”

Lafayette says the economic challenges have a strong effect on small landlords and she predicts those challenges will lead those landlords to offload those rentals to the housing sales market.

“[W]hen the moratorium on evictions are lifted, from the federal and state government, and when landlords can pursue the actions, it'll be interesting to see if some landlords who own single family rental properties and said that they don't want to retain rental properties anymore, they don't want that stress or that challenge, and they decide to take their rental properties and move them into the for sale market,” said Lafayette. “[That may] help the for sale market tremendously.”

President Biden has said he will extend the national-eviction moratorium through September. It can’t come soon enough for some. This month, the Henrico Court has 7,265 unlawful detainers, the beginning of eviction proceedings, on the docket.

Those interviewed for this article offered solutions to these problems and disparities.

“We need to create equitable and affordable housing,” said Knight. “That difficult conversation needs to be addressed a lot more.”

Lafayette also thinks more attractive, affordable housing options including seniors are needed for that large demographic in the region.

“If we had thousands of more affordable rental units, then people would have less fiscal stress when it comes to meeting their housing needs,” said Lafayette. “What we know in this region is that to afford the average two bedroom apartment, if you're making minimum wage, you have to work 90 hours a week. You can't do that.

“Another big picture is that at the federal level, there has to be greater investment in housing choice vouchers to give people an opportunity to have choice about where they live and the communities in which they live and the opportunity to be able to afford to live in those communities.”