Western Albemarle First Quarter Real Estate Report: Crozet Real Estate Sales Slump Over Winter
By David Ferrall
It is here! The much ballyhooed Crozet Avenue streetscape project is underway. Work on Tabor Street is mostly complete and the widening of Crozet Avenue has begun. Once done, the project should be a boon to local residents, making the street better and safer for pedestrians, runners, cyclists, and motorists alike.
So, while much needed infrastructure work is going on, what is happening with the real estate market in Crozet?
Not much, sales-wise. First quarter sales in Crozet experienced a disappointing 46 percent drop compared to the same period last year. Only 25 properties sold in Crozet in the first quarter, a quarterly total not seen since before the inception of this report in 2011. And, this was the first quarter in 10 that did not see a year-to-year increase. New listings were down over the same period, as were properties being put under contract (see chart provided by RealCentralVA.com).
Several drags could explain the low sales numbers. The first would certainly be the weather. The extreme cold and snow amounts were in fact polar opposites of the weather experienced during the same time last year. Kids were home from school, driving was difficult at times, and it was just downright cold. Not conducive conditions to house hunting.
The area is also suffering a slight shortage of inventory. By February 2013 there were 202 properties for sale in Crozet. This year at the same time there were only 174.
Couple these factors with rising prices and inflating seller expectations and the result seems to be slower sales. This is true across the entire Charlottesville metro area market, which experienced a 5.6 percent slowdown in sales in the first quarter.
Of the 25 sales, 18 were for detached and 7 were for attached properties. This ratio is slightly higher than in previous quarters, and reflects the declining inventory of entry-level townhouses. Of the detached properties, 11 were on lots less than an acre in size. Seven of these were new construction, three in Old Trail. There was one sale for over $1 million; the 266-acre Shelton Mill Farm sold for $2.75M (and is excluded from the statistical averages in this article). Of the 7 attached property sales, only one was new construction, and 6 of the 7 sales were for properties priced at $205K or less. There was only one short/distressed sale in the quarter, compared with 7 a year ago. That’s a trend we all hope continues!
For the most part, prices are continuing to rise in Crozet, which mirrors the trend in the Charlottesville metro area. Nationally, according to the KCM Blog, prices are up about 10 percent in the past 12 months, a trend analysts see as continuing. This outlook is shared with the folks at CalculatedRiskBlog.com, who see declining distressed sales, delinquencies, and negative equity paired with rising inventories (nationwide) as being positive factors propelling the market.
This inventory outlook is not shared by all, and certainly isn’t what the Crozet market is experiencing.
The average price for all properties in Crozet jumped 15 percent compared to the first quarter of 2013 to reach $383,000. The average price per finished square foot was up almost 25 percent to $170.
The average price for a detached property rose 23 percent to $435,000, and the price per finished square foot rocketed 42 percent to $180/sqft. The average price of an attached property dropped 7 percent to $256,000, though the price per finished square foot rose almost 6 percent to $148/sqft. If you remove the attached property at Baywick Circle in Old Trail that sold for $644,000, the average price for an attached property was actually $191,000! This reflects what buyers are looking for, and highlights the lack of affordable inventory in the segment that boasts just a smattering of re-sales and higher priced new inventory in Old Trail and Haden Place.
How far prices can or will rise is the question of the hour. Tight inventory nationally (according to Fannie Mae) and rising prices have prompted Fannie Mae’s chief economist Doug Duncan to revise their annual sales projections downward. We certainly saw higher prices and lower sales in Crozet in the first quarter, and a slower sales pace so far in the second quarter as well.
Mortgage rates remain near historic lows, and surveys show rental rates continuing to advance, so purchases could pick up as renters are motivated by lower costs of owning versus renting. That is, if selection allows.
Local realtors are scratching their heads wondering where the “fresh” inventory is. There are buyers for well-priced properties, especially re-sales. If inventory picks up and prices stabilize, sales will follow.