By David Ferrall
A year ago a national debt ceiling debate loomed, and 30-year mortgage rates were about 4.375. The Crozet Streetscape construction was still being planned, and Crozet area properties were selling briskly at increasing prices.
And today? For now there are no national borrowing issues, though our national debt continues to grow seemingly unchecked to alarming new proportions. Mortgage interest rates are at their lowest point of the year, near 2011 levels and far off the predicted 5 percent level many analysts thought we would see by year’s end (In fact, current stock market gyrations and slowing growth worldwide seem to indicate that interest rates will stay low for the foreseeable future). Street construction in downtown Crozet is thankfully over, and properties continue to sell well in Crozet, though at leveling volumes and prices.
A total of 77 residential properties sold in the third quarter in Crozet, up three transactions from the same period last year. Three were for over $1 million (and those are excluded from the statistics reported here). There were two land sales in the quarter, both down Craigs Store Road below Batesville.
According to the recent Nest Realty third-quarter market report, in the Charlottesville market overall there were 7 percent fewer transactions in the quarter (see attached five-year-sales chart provided courtesy of Nest Realty), though 7 percent more contracts written, which bodes well for the coming quarter(s). The median sales price was up 8 percent to $290,000, but inventory was up 11 percent. In Crozet we had 4 percent more sales in the quarter, and the median price rose 3.5 percent to $381,000. The number of inventory units is down, but compared to the number of sales, the actual months of annual inventory ticked up to 9.57 months at quarter’s end. There were only two short/foreclosure sales in the quarter, compared to four at the same time last year, a downward trend that hopefully will continue. So while Crozet continues to buck the trend on number of sales in the area, we see inventory building, which is consistent across the Charlottesville market.
Digging into the numbers in Crozet, we find that 60 detached properties sold during the quarter. A quarter of these were for properties of an acre or more, a slightly higher amount than the 20 percent pretty consistently experienced in previous quarters for these properties, which are typically in outlying areas. Thirteen sales were for new construction, with six sold in Old Trail, four in Wickham Pond, and three in Foothills. With the addition of Grayrock North and Haden Place, these are the current new construction neighborhoods for detached housing. The average price per square foot for detached houses was up 5 percent to $158; the average price was up 8 percent to $436,000. Properties sold at an average of 98.25 percent of list price. This figure varies in accuracy because many new houses sell for more than the initial asking price due to buyer upgrades, which skews the average upwards. At quarter’s end, there were 9.7 months of inventory of single family houses, down slightly from the last quarter and the same time as last year, but still far off the industry average of 5-6 months for a balanced market.
The third quarter saw a large, 41 percent drop-off in sales of townhouses. This is due in part to lack of selection (only Old Trail and Haden Place offer new townhouses), but also to shifting demand. Of the 13 total sales, five of them were for new homes, four in Old Trail and one in Haden Place. The re-sales were mainly in Old Trail, but a few sales occurred in the Highlands, Parkside Village, and Clover Lawn. The average price per square foot for these units remained mostly unchanged at $148 per sq/ft. The average price remained essentially unchanged at around $279,000.
Last year at this time, Crozet house sales totaled 207 for the year. Through the first three quarters this year, there have been a total of 178 sales, a 14 percent decline. As the fourth quarter is not typically a busy sales period, it seems likely that total sales for the year will be under last year’s 256 total. If that is what happens, we’ll see the first year-to-year decline since 2008.
But at the end of September, 85 properties were under contingent and pending contract; if most of these close, and some additional sales come in, we still could top 2013’s figure.
Where we go from here remains to be seen. If inventory continues to build and sellers are trying to achieve unreasonable (compared to similar sold properties) pricing, sales may continue to slow down. But with mortgage rates sticking closer to 4 than 5 percent, more buyers may decide now is the time to buy.