Crozet Real Estate Has Banner Year in 2015
By David Ferrall
Real estate in 2015 could have gone either way, as 2014 was sort of a “cooling off” year in Crozet. 2013 was a banner year, with the highest number of sales since before the start of the Great Recession. 2014 just couldn’t match that. So 2015 started with low interest rates, plenty of inventory, and homebuilders ready to build. And build they did. The number of new construction properties sold in Crozet in 2015 exploded by 56 percent to 105, while total sales for the year rose 12 percent to 285. And homes sold an astonishingly 46 percent faster in 2015 than in 2014. It’s hard to predict if this pace will continue into and through 2016, but the underpinnings of strength mostly remain.
Real estate in Albemarle County also fared well in 2015. According to the Nest Realty Annual Report, sales rose 8.5 percent in the county in 2015, though the average price fell almost 8 percent (see chart provided courtesy of Nest Realty). About 18 percent of all county sales occurred in Crozet. For the fourth quarter of 2015, total sales were mostly unchanged in Crozet, rising a couple of sales to 67 from 65 in 2014. There was one sale over $1m in the quarter (5820 Plank Road sold for $1.1m), which will be excluded for statistical purposes.
Of the total quarterly sales, 51 were for detached properties and 16 for townhome properties. Of the detached homes, 25 were for new construction, 11 being in Old Trail, five in Wickham Pond, four in Foothills, the balance being in Westhall, Haden Place and Grayrock.
Average price rose almost 11 percent to $472,000, while the median price of $494,000 exceeded the average price, an inversion we don’t normally see in quarterly figures. Average price per square foot across all detached sales was $164. Breaking this down, new construction averaged $185sqft, while resale price was 22 percent less at $144sqft. The average price of new construction vs. resale was $544,000 vs. $401,000. Some new upcoming communities will hopefully bring sub $400K new construction options to buyers of detached homes in 2016, a segment that purchasers are asking for. There remain only two such properties available now in Crozet, both in Wickham Pond.
There were 16 attached sales in the quarter, mostly unchanged from the 15 seen in the same quarter last year. Of these, five were new, a couple of sales each in Haden Place and Old Trail, and a resale in Wickham Pond. Average prices for these were down 10 percent to $268,000, with the price per sqft mostly unchanged at $144. With townhome properties in Haden Place now sold out, new construction attached-properties in the coming months can be found only in Old Trail. Look there for new rooftop deck homes that promise excellent views!
There were five land sales in the quarter, up from three during the same time last year. Land sales were up 24 percent to 21 for the year. There are currently new lots for sale to the public in Westlake at Foothill Crossing, the first time in a while that a larger development has offered lots to non-builders.
In 2015 there were 21 distressed (auction, short sale, foreclosure and lender-owned) sales, up from 12 in 2014. Of the 2015 total, seven occurred in the fourth quarter, compared to only three at the same time in 2014. It is disturbing that these sales increased in 2015, a trend we hope to see reversed this year.
2015’s strong performance sets a high bar. We start the year with persistently low interest rates and prices that remain relatively flat. According to our friends at The KCM Crew, delaying home buying until 2017 could cost an average buyer an additional $2200 per year and $67,000 over 30 years. And with the Wall Street Journal pointing out that rents have risen faster than in any time since 2007 and are continuing to accelerate, buying now seems prudent.
But not all is rosy. By all accounts the Federal Reserve will continue to raise interest rates this year, though the quarter-point move last month did little to long-term mortgage rates. Further rate moves could possibly be more effective. There is also potential for growing unease from roiling volatility and downward trends in the national and international equity and commodity markets. While not the final word, the National Association of Realtors just predicted modest growth in 2016, as buyers face decreasing affordability and “meager economic growth.”
What this means for real estate in Crozet is anyone’s guess. But what is almost certain is that sellers who price their properties appropriately should have a good chance of selling, and pre-qualified purchasers who are given a good choice of inventory should be buying.