Western Albemarle Second Quarter Real Estate Report: Local Home Sales Dip in Spring Quarter
By David Ferrall
What a party! Kudos to the organizers of the July 5th Independence Day parade and celebration at Crozet Park. The partially finished streetscape project was lined with folks who enjoyed perfect weather and an entertaining parade. The huge turnout for the celebration at the Crozet Park was a testament to the sense of community Crozet enjoys. And speaking of enjoyment, how about those fireworks!
But fireworks are not exactly the story being told in the current local real estate market. For the third quarter in a row, Crozet has experienced a year-to-year drop in total property sales. And sales in Crozet through the first half of the year are down 23 percent from 2013. If there is good news in this it is tipped towards the buyer, as average prices are down a touch and inventory is up slightly, which has for now put a cap on prices. But the inventory feels like a misnomer to buyers and agents alike, many of who are frustrated with Crozet’s seeming lack of fresh offerings. The quarter started strong with new listings (see chart provided courtesy of RealCrozetVA.com), but the strength faded as inventory slowly started creeping up.
Crozet’s performance was roughly mirrored in the total Charlottesville market statistical area. Median prices overall in the area were up 1 percent and total sales were up 1 percent as well, according to the quarterly market report by Nest Realty. Days on the market were down to 85, but inventory rose 15 percent. The relatively flat performance perhaps signals a stronger third quarter, or the start of a flattening out after the post-Great Recession increases.
There were 77 total sales in Crozet in the second quarter, down 11.5 percent from the same time last year. There were 3 sales over $1 million (which are excluded for statistical purposes). Of the 77 sales only 11 were for townhouses. This represents a 56 percent drop from last year, and reflects limited new inventory and a possible shifting of buyer interest. Of the 66 detached properties sold in the quarter, 19 were for new construction with the majority being in Old Trail and Wickham Pond. There were 14 properties sold that were over an acre, a pretty consistent 20 percent of homes that typically sell each quarter out in the surrounding county. There were only two foreclosures/short sales, a number that continues to be inconsistent quarter to quarter, but that is seemingly in a downtrend. At quarter’s end there were 81 properties under contingent or pending contract, many of which will presumably close in the upcoming quarter.
Prices in the quarter were down in just about every category. Total price per finished square foot dropped 7 percent to $144, and the average price of a house dropped 5.5 percent to $377,000. Average price for a detached property dropped 4 percent to $393,000, the average price per sqft of these houses being $145. Of these detached homes 29 percent were new construction, with Old Trail (9) and Wickham Pond (5) having the highest number of sales.
Townhomes represented the largest quarterly drops, as new townhome choice continues to diminish. There were only two new townhomes sold in the quarter, out of a total of 11 sold. A year ago in the second quarter 25 townhomes sold, of which 12 were new. Sales in the latest quarter were split evenly between Old Trail and Highlands, with one new sale in Haden Place. The average price for an attached property dropped 16 percent to $283,000, which is most likely explained by the fact that the majority of sales were resales. Price per square foot dropped 13 percent.
So where are the next fireworks in the local real estate market? It is hard to say, but this past quarter could be an indication of stabilizing prices and number of properties sold quarter to quarter. Interest rates remain stable. Both Freddie Mac and the Home Mortgage Bankers Association expect 30-year rates to be in the 4.3 to 4.7 percent range at year’s end, and maybe up to 5 percent by this time next year. For the sake of affordability, prices will need to remain steady if rates start to creep up. Inventory should remain static or grow slightly, hopefully with a smattering of new listings to entice buyers waiting on the sidelines. A slow and steady pace should be a welcome forecast for upcoming quarters.