Anothering Blistering Sales Pace for Crozet Housing
For the second quarter in a row, the headline news in the Crozet real estate market (defined by housing in the Brownsville and Crozet elementary school districts) is the pace of sales. The third quarter of 2017 eclipsed past quarter increases, as sales rose almost 40 percent year-to-year! There were 106 total sales in Crozet in the just past quarter, up from 76 total sales at the same time last year. This increase greatly exceeds the 5 percent increase seen in Albemarle County as a whole (see attached five-year sales trend chart provided courtesy of Nest Realty), exemplifying the draw the Crozet community has become.
Of the 106 sales, 83 were for detached homes, the remaining 23 being for attached properties. There was one sale over a $1 million, a 54-acre equestrian property on Dick Woods Road that has been excluded for statistical purposes. Thirty-five of the total sales were for new construction properties. Fourteen percent of the total sales were for homes on an acre or more, a figure that is lower than usual and is influenced by increasing neighborhood sales on smaller parcels. There were seven land sales in the quarter, and only one distressed sale (qualified as a short sale, foreclosure or auction). This latter figure is one that we hope goes to zero in the fourth quarter.
The average price for a detached home in Crozet rose 5 percent to $462,000. This was in large part influenced by the sales price of new construction homes rising 6 percent to $636,000. These 29 newly built homes averaged 3,326sqft in size. Nine of them were built in in Old Trail, nine in Foothill Crossing, seven in Westlake, with the balance in Chesterfield Landing and surrounding areas. The average price of these newly constructed properties was up 4 percent to $194/sqft, a figure likely set to jump as building supply costs, especially wood and wood products, are rising at an alarming pace. The price of a resale detached home rose a bit over 6 percent to an average price of $432,000. These homes are going under contract in an average of 35 days.
There were 23 attached home sales in the quarter, almost double the 13 sold at the same time last year. Six of these were for new townhomes, with the average sales price of these rising to $448,000 and the cost of construction rising 6 percent to $197/sqft. New townhouse neighborhood choice continues to be limited to Old Trail. Hopefully, new neighborhood choices will surface that offer lower prices to enable more families to afford a newly constructed home. Resale neighborhoods were dominated by Old Trail with six sales, and The Highlands and Wickham Pond having three sales each.
Looking forward, the underlying constant will remain affordability. Construction prices continue to rise and are passed along to the consumer. There is no end in sight for this trend, especially with increased material demand from recently hard hit areas such as Texas, Puerto Rico and California helping to push prices higher. Land prices in neighborhoods in and surrounding Crozet areas are rising as well, which only adds to the problem.
Heading into the fourth quarter, it is a pretty safe bet that total 2017 homes sales in Crozet will top any year since the start of the Great Recession. With new homes sales soaring, and more affordable resale properties lasting fewer days on the market, there really are few headwinds. The Federal Reserve may raise rates before year’s end, which could be easily justified as an inflation tamer resulting from the strong national economy as a whole. And even though Freddie Mac predicts a 30-year mortgage rate high of 4.4 percent in 2018, the folks at CoreLogic still expect prices nationwide to rise by 5 percent. We will see the same increases in Crozet almost assuredly.