Last year was the strongest ever for real estate sales in Crozet. Ever. There were 313 residential sales in 2017, up 11 percent from the 282 sales in 2016. And while transactions of pre-existing homes were up slightly, it was the 26 percent jump in new construction sales that was eye-popping. Thirty-six percent of all homes sold last year in Crozet were new, up from 32 percent in 2016. The house count in Crozet is growing, and there seems to be no prospect of a slowdown.
In Albemarle County as a whole, total sales were up 7 percent, with the average sales price up 8.2 percent to just over $450,000 (see table provided courtesy of Nest Realty). The average price of all sales in Crozet last year was $461,000, which was up 5 percent from 2016. Prices continue to rise in Crozet, the number of days a new listing is on the market continues to decrease, and inventory is dropping.
As in 2016, economic factors remained very favorable for real estate sales and construction in 2017. While average mortgage rates were a bit higher in 2017, they still hovered just below 4 percent on average, and at times were within .5 percent or so of historic lows. It remains a great time to borrow money for a home purchase.
Construction costs rose, but still averaged around $103/sqft nationally, according the National Association of Home Builders. Costs are currently increasing, though at a somewhat accelerated pace heading into 2018, due to labor shortages (because of all the new construction), material demand and shortages as a result of last year’s historic hurricanes, flooding, and wildfires. If material supplies and labor shortages don’t work themselves out, new construction costs will continue to rise.
Old Trail continues to be the neighborhood leading in new construction, with 55 units built there last year (the same number built there in 2016). Thirty-eight homes were built in Westlake and Foothills in 2017. Hopefully 2018 will see the opening of the Eastern Avenue connector road between these two neighborhoods and Three Notch’d Road. Chesterfield Landing had 10 sales last year, and clearing has started on adjacent land for the neighborhood’s expansion.
The average price for a newly constructed, detached home in Crozet rose 5 percent to $637,000, and the house size increased as well to 3315sqft. Attached/townhome new construction jumped 38 percent to an average price of $442,000. But the size rose 34 percent as well to 2330sqft, which helps explain the large price jump. The lower price/size averages of 2016 included a handful of smaller 1 and 2 bedroom units sold in Old Trail that year.
Somewhat surprisingly, the average price for a re-sale property in Crozet dropped slightly year to year, from $403,000 in 2016, to $402,000 last year. And the days-on-market rose from 57 to 61! While this seems to run counter to other trends, current buyers are certainly lamenting the lack of inventory and the speed with which new listings go under contract.
There were four sales over $1 million in 2017—the same number as in 2016—the most expensive being a $1.8m equestrian property of 54 acres on Dick Woods Road. There were 21 land sales in 2017, again matching the figure from the prior year. Land prices are creeping up, and availability is not surprisingly declining. Rising land prices are also helping to fuel new construction cost. There were only five distressed sales in 2017 (foreclosures, short sale and lender-owned properties), down from seven in 2016.
Heading into 2017, local realtors and their clients were fretting over availability and affordability. Those worries continue as we roll into 2018. According to the National Association of Realtors, the number of existing homes for sale has dropped for 30 straight months, and nationwide inventory is at a dangerously low 3.4 months. New construction permits continue to increase for single-family homes, but the cost for these homes continues to increase, faster than household income is rising. What these conflicting factors will mean for Crozet remains to be seen, but if the national economy continues to advance, the local real estate market will as well.