Crozet Market Continues on Pace for Another Strong Sales Year
By David Ferrall
As I say every year at this time, many thanks to the organizers of the Crozet Independence Day parade and ensuing celebration and fireworks at the Crozet Park. What an amazing and festive time for all who attended! A wonderful tradition that just keeps building and getting better each year.
And what is also building is the real estate market in Crozet. For the second quarter in 2016 total sales were up to 95, a 6.7% increase over the second quarter last year. But while total sales for the first half of the year were down slightly year to year, 2016 continues on pace for another strong sales year. This is consistent with the rest of Albemarle County, as shown by the accompanying sales chart provided courtesy of Nest Realty. Of the 95 sales in Crozet, 74 were detached and 21 were attached properties (there were two sales over $1m which will be excluded for statistical purposes). Of the detached sales 15 were for homes on over an acre of land. These properties tend to be outside of downtown Crozet, and consistently represent about 20% of all detached sales. There were nine land sales in the quarter, up from four at the same time last year. Thankfully there was only one distressed sale (short sale/foreclosure/auction) in the quarter, down from 4 last year.
The average price for a detached property rose in the quarter, up 5% to $423,000. The median price stayed fairly constant at $395,000. Of the total sales, 14 were for new construction, this number of new homes being built dropping 36% from the same time last year. Eight of the sales were in Old Trail, with a couple in Haden Place and one each in Cory Farms, Westlake, Foothills and Mountain Harvest. While the average size of a newly constructed home rose 3.5% to 2814sqft, the price per square foot rose 14% to $202, and the average price rose 20% to $608,000. These cost increases are probably attributable to more expensive finishes, but building cost inflation is a consideration as well. In contrast resale detached properties sold at an average price of $438,000, at a cost of $160/sqft.
There were 21 attached sales in the quarter, down 12.5% from last year. Seven of the sales were for new construction, six being in Old Trail and one in Haden Place. As this was the last new Haden Place attached home for sale; new townhome sales will be limited to Old Trail until one of several new neighborhoods opens up, hopefully by next year.
Speaking of new neighborhoods, Chesterfield Landing on Crozet Avenue is in full swing. As of this writing there have been four sales in the development, out of a maximum of 25. There are new home deliveries planned for this year, so development and construction continue to forge forward. The neighborhood is proving quite popular, and disciplined buyers can purchase in the mid to high $400Ks. There are a handful of other neighborhoods in Crozet in varying stages of approval and planning processes. Whether sales in any of them occur this year will remain to be seen. Buyers are asking for new construction homes in the sub-$400k range. Hopefully one of the new neighborhoods will deliver on this.
In the second half of the year sales should remain firm in Crozet, buoyed in large part by persistently low mortgage rates. With the dollar soaring with help from Britain’s recent “Brexit” vote, the Federal Reserve will be hard pressed to raise rates anytime soon. In fact, Kiplinger recently predicted 30 year mortgage rates would stay around 3.5% through 2017. What this means for the economy is anyone’s guess, but it sure is good for home buyers and owners needing to refinance if they haven’t yet. Renters should be paying attention to this as well, as according to the crew at KCM, rental rates are the highest they have been in a decade. As home buying has long been viewed as a way to enhance family stability and to form a foundation for wealth accumulation, renters should be taking a long look at all the benefits of home ownership, especially at the rent vs. own cost comparison.