Crozet-area Sales Decline Slightly in 2014 as Prices Rise
By David Ferrall
2013 was a great year for real estate in Crozet, the best for sales since before the “Great Recession” of 2009-2010. So 2014 had a tough act to follow. And while fourth quarter sales in 2014 bested the mark in 2013, total sales for the year in 2014 fell slightly year-on-year for the first time since 2007. This 5 percent drop is not terribly significant, and probably just represents a leveling off of sales that is somewhat expected after years of post-recession increases. Suffice it to say that sales in the Crozet area (as defined by those properties that feed Brownsville and Crozet Elementary Schools) were robust in 2014, and most signs point to the same in 2015.
Real estate in the Charlottesville area as a whole also fared well in 2014. According to the Nest Realty Annual Report, 2014 saw a 4 percent increase in total sales in the Charlottesville metropolitan statistical area (see data table provided courtesy of Nest Realty). Average prices rose 5 percent, as did the average price per sqft by a similar amount. Properties did sell much closer to their listing price then in recent years (98.8 percent), though in contrast the average number of days-on-the-market somewhat surprisingly rose slightly. This last trend coupled with months of inventory being up 6 percent at year’s end really provide the only slight pushback to our relatively healthy market.
On the plus side, conventional 30-year mortgages are again under 4 percent and trending downwards. This helps make properties more affordable on the lower end of the price scale, and lets buyers in the middle and upper end of the price scale get more property for their money. For renters, increasing financing affordability certainly makes rising rents less attractive and might convert a few to buyers.
Total fourth quarter sales in Crozet were up 24 percent over the same period last year. Two were for properties over $1m (which will be excluded for statistical purposes), one of which was the historic 100-acre Seven Oaks Farm, which closed in October for $5.5m. Quite a discount on the $12.5m original list price!
Of the total sales, 48 were for detached properties, of which nine were on an acre or more. Nineteen properties were new construction, with nine of these being in Old Trail, four in Wickham Pond, and a couple each in Foothill Crossings, Grayrock West, and Haden Place. There were 13 sales of attached properties, up from only three at the same time last year. Three of these sales were for new construction in Old Trail. Of the remaining resales, seven were in the Highlands and one each in Wayland’s Grant, Wickham Pond, and Old Trail. In the quarter there were three land sales, up from two in 2013. Over the year there were 17 land sales, roughly in line with the 16 sales in 2013. There were three distressed sales (foreclosure, short sale, bank owned) in the fourth quarter, compared with four at the same time last year. The more encouraging figure is that in 2014 there were only 12 such sales in Crozet, as compared to 32 for 2013. It is great to see this distressed inventory depleting, as clearly fewer homeowners are experiencing whatever stress forces such sales.
While sales were up for the fourth quarter, so were prices for detached homes. Price per finished square foot for a detached home rose slightly in the quarter from last year to $153. The average price for the same home rose 5.5 percent to $434,000, in line with slightly larger average home size quarter to quarter. This was an anomaly for the year, though, as 2014 saw a reduction in average house size for the first time since 2009. For the year, there were two more detached homes sold in 2014 than in 2013 (184 vs. 182), and the average price for these homes rose about 3.3 percent to $419,000. Average price for new construction for the year rose almost 10 percent to $515,000.
The opposite was true for attached homes. Prices for attached homes dropped to $137sqft and an average of $278,000 for the quarter. Attached home sales cooled in 2014; there were 19 fewer sales in 2014 than in 2013 (45 vs 66), and the average price dropped over 10 percent to $272,000. There are current new construction attached homes for sale in Old Trail and Haden Place, and in Wickham Pond there are some designated affordable housing units waiting to be built.
What 2015 brings to the Crozet real estate market is anyone’s guess. If interest rates stay at current low levels, job growth continues, and rents continue to rise, sales should remain strong. If interest rates turn and start increasing, perhaps due to inflation from wage growth (which is currently stagnant) or a turnaround in gas prices, sales could slow. And of course geopolitical risk and current high stock market levels are constant wildcards. But two things are certain: sellers who price their properties appropriately should be able to sell, and buyers will have nice inventory to choose from in the coming months.