COVID 19 SQUEEZES THE MARKET
e pandemic spurred demand for country homes while also reducing supply as sellers took their homes o the market. And that supplydemand gap helped drive up prices.
What impact has COVID-19 had on the local housing market?
The pandemic spurred demand for country homes while also reducing inventory as sellers took their homes o the market. And that supply-demand gap helped drive up prices.
The average home sales price in Rappahannock for the rst half of 2020 increased 19 percent, to $435,191 from $367,036 during the same period in 2019, according to a second quarter market trend report produced by Adam Beroza at Cheri Woodard Realty.
“With low interest rates and a desire to shelter in place in a more secure environment, we saw a strong increase in buyers looking for country properties in May and June,” Beroza wrote in his report.
That same trend is being re ected nationally, with the median sale price for homes in rural areas up 11.3 percent year over year in July, according to an analysis from Red n.
Sales have remained largely at for now. Twenty-seven properties sold in the second quarter of 2020 compared to 24 properties in the second quarter of 2019, Beroza found. But of the 50 properties for sale as of Sept. 15, 24 were under contract, suggesting that the third quarter was shaping up to be strong.
“We’re getting many more calls, and listings are selling faster and in some cases are having multiple bidders,” said Rick Kohler, from Real Estate III. “In many instances, these are people from the D.C. area looking for some place to get away.”
Je Tucker, an economist at Zillow, said second-home buyers are one major driver of rural demand. And Jason Brady at Oakview National Bank in Washington said he’s seen an increase in people taking out mortgages on second homes.
“That demand to get a second home, sort of a country retreat, is de nitely contributing to these rising prices,” Tucker said.
How could that impact people’s ability to find housing?
Before the COVID-19 pandemic, most buyers from outside Rappahannock were not competing with local buyers at the lower end of the market. But Realtor Alan Zuschlag said he’s starting to see younger professionals who can work remotely competing more directly for starter homes and more modest acreage.
“These newcomers will help fuel the local restaurant, landscaping and farming economy, but they will also cause price appreciation in smaller properties,” he said.
Potential buyers with higher incomes may also have better credit ratings or a longer rental history, making them more attractive to landlords or lenders than those with lower incomes. And that could mean wealthier city dwellers will make it harder for local middle-income residents and their families to nd housing.
“When someone’s income is not really tied to the local labor market but is scaled to a superstar city like D.C., their purchasing power is going to be so much higher than locals in a place like Rappahannock, especially with limited inventory right now,” Tucker said.
Kohler said Rappahannock has traditionally been more of a luxury market for second homes for people from D.C. and northern Virginia. But demand from those would-be buyers has increased a er a brief pause at the start of the pandemic while housing remains in short supply.
“This is a small county, and there’s not that many people that want to sell at any one time,” Kohler said. “In certain price ranges, you might have four or ve houses available so that makes it more competitive.”
What role do mortgages play?
Mortgage rates are at record lows, which reduces monthly payments for homeowners.
But the requirements for getting a mortgage – good credit scores, enough money for a down payment – can be barriers for those with lower incomes. And rising prices may o set the bene ts of lower interest rates.
Real estate agent Aron Weisgerber said some of the younger couples he’s worked with have had di culty securing nancing for a home, with college loan debt sometimes adding to the challenge.
Only 26 percent of working-age adults had the security of a fulltime job with a salary, according to a United Way study of Virginia that predates the pandemic. But hourly jobs can have irregular schedules that provide less stable income and that can work against people when applying for a mortgage.
What’s the situation facing renters?
BruceGeisert, who manages the RappRentersNet group on Facebook, said he’s seen the number of requests for affordable housing explode since the pandemic. Yet many people with rooms to rent have been reluctant to do so for safety reasons. He’s also seen a significant increase in people needing internet access as a requirement for renting in the county, and that can make finding a place even more difficult because much of Rappahannock has spotty broadband service.
As of Sept. 14, there was only one rental property listed on Zillow — a five-bedroom house in Amissville for $2,700 a month.
The reduction in unemployment assistance for those who’ve lost jobs due to the pandemic has also raised fears of a rise in evictions. (Read our Aug. 23 story: Housing struggles in Rappahannock)
What about seniors?
Elderly residents o en look to downsize, but in Rappahannock their options for alternative housing are limited. Or they may want to repair or refurbish their homes to suit their diminished mobility, but they lack the money or ability to perform those upgrades.
A challenge for those looking to move with limited incomes and savings is that they o en end up competing for housing with lowincome earners, such as young families. In markets with limited supplies, that competition can in ate rents and sales prices.
“The options for a ordable housing for seniors are very limited and there’s very few places that come with seniors in mind as far as accessibility goes,” said Joe Kimp en, the adult protective services caseworker at the Rappahannock County Department of Social Services.
If a senior resident has a housing issue that can’t be solved by repairs or refurbishment, he said, the only place to nd housing is outside of the county – and that can be devastating to someone who’s spent their whole life in Rappahannock.
For some seniors, maintenance or the ability to downsize is more a concern than cost, said Joyce Wenger, president of Rapp At Home, a nonpro t with roughly 200 members that provides senior-centered services.
It partnered with another group, Aging Together, to conduct a needs assessment in March 2019 that found housing was a top concern among seniors in Rappahannock. Ellen Phipps, executive director of Aging Together, said one form of support would just be home repair maintenance or yard work.
“A lot of times the things that drive people from their homes is not because they’re necessarily sick or need nursing care, but just because they just need some supports in the community to enable them to stay in their own homes for longer,” she said.