Note: This story has been updated with new comments from Rick Jarvis that more accurately reflect One South Realty Group’s current operations.
While industry observers maintain the Richmond home market remains strong, signs that COVID-19 is having an effect on listings are beginning to emerge.
Data released last week by the Central Virginia Regional Multiple Listing Service shows that while the number of new home listings rose across the region from February to March, there was also a steep number of homes that were taken off the market as the pandemic’s effects began to be felt.
In March, 174 listings were taken off-market – nearly three times the 61 homes that were temporarily withdrawn in February, said Laura Lafayette, CEO of CVRMLS and the Richmond Association of Realtors. The data reflects residential real estate activity in the city of Richmond and in Chesterfield, Hanover and Henrico counties.
“There were definitely sellers who said, ‘Hey, I want to hit the pause button,’ for whatever reason,” Lafayette said. “I’m sure some sellers hit the pause button over concerns about buyer traffic in their house. Some sellers’ economic situation may have changed.”
At the same time, the number of new single-family home listings increased month to month, from 1,152 in February to 1,478 in March. The number of new condo and townhome listings increased from 219 to 242.
March’s new single-family listing number was 2 percent higher than the same time last year, though the condo and townhomes number was 8 percent lower than March 2019.
Lafayette said a closer look at the statistics shows a noticeable shift in activity as impacts of the coronavirus began to be felt locally around the middle of last month.
“It’s almost like the Ides of March is the dividing line,” she said. “The first part of March was strong; the second part of March, maybe not as much.
“What we have found so far, and it’s very early in where we are, is that the market that was really strong going into COVID continues to be really strong,” she said. “If you’re putting something on the market under $300,000, we are continuing to see it sell very quickly, and with multiple offers. That first-time homebuyer market, buyers are there, there are more buyers than inventory, so it’s still an extraordinarily strong market.”
Lafayette said coronavirus-related changes from lenders are having ripple effects.
“We know that lenders have raised the credit score, so there are buyers who were qualified that had an adequate credit score pre-COVID who today do not, so that’s a challenge for some buyers,” she said.
“We also know that lenders are going back through and verifying employment. If they verified it a month ago, they’re going to come back and verify it now, and if you are in a furlough situation, that could affect your qualification to buy.”
Taking tours virtual
Agents are likewise adjusting their behaviors to the times, with many opting for virtual home tours and open houses over traditional showings.
“Obviously, we have instructed our members not to hold public open houses, but they have the ability to show houses virtually,” Lafayette said. “We’ve made it very clear to our members: Yes, you can continue to practice real estate, help buyers and sellers, but you have to conform to the governor’s executive order, and you have to engage in the safest, most sanitary practices you can.”
Rick Jarvis, founder of One South Realty Group, said his agents had been going the virtual route until about a month ago, when the governor’s executive orders prompted the brokerage to institute a policy against holding open houses.
“We are doing everything we can to comply with the governor’s orders and have changed the way we both show and market property,” Jarvis said.
“We are using nearly every virtual tool possible to do as much exploration before ever entering a home. But there are still people who need to transact property, and we are doing all that we can to ensure that it is done in the safest manner possible.”
Brian Haug with Long & Foster, who oversees the company’s operations in the region, said their numbers in terms of contracts written have remained strong so far, up 20 percent over last year going into the pandemic late last month.
“At our Grove office, we had an approximately $1.4 million contract that somebody backed out of because of what’s going on. Thirty minutes later, they had a fully ratified contract on that (property), because it became open,” Haug said.
“What’s fortunate for us in the real estate world, especially in Virginia, is the inventory is just so low that there’s still going to be people trying to, at this point, buy real estate, because the stock market is as volatile as it is,” he said. “Normal times, when the stock market’s volatile, people move their money into real estate, investors will.”
Haug said the lack of inventory and excess demand could end up supporting the industry through the pandemic.
“The thing that’s going to save us is inventory shortage already,” he said. “We don’t foresee prices really dropping at this point; we do see sales potentially slowing down. But what we also think, and what we’re hearing from the National Association of Realtors, is that this market will be pushed into the fall.
“There’ll be a pent-up demand that once this thing actually dissipates, there’s going to be such a demand that instead of a slower fall and a really busy spring, it’s going to transform,” Haug said.
Lafayette said she foresees a similar road ahead.
“It just becomes a question of, is the typical spring market delayed into the summer or fall? Or are there going to be people who were trepidatious today, who are trepidatious for three months, six months? Hard to say.”