For the second quarter in a row, the headline news in the Crozet real estate market is the pace of sales. Or more specifically, the lack of it. In the second quarter of 2018 Crozet (defined by properties in the Brownsville and Crozet school districts) sales dropped almost 27 percent year to year. The third quarter experienced a similar decline, dropping 28 percent from 105 sales in the 3rd quarter of 2017, to just 76 sales in the past quarter. This is in stark contrast to the 6 percent sales increase in Albemarle County as a whole (see chart below provided courtesy of Nest Realty).
Of the 76 total sales during the quarter, 55 were for detached homes and 21 were attached townhouse- and villa-style properties. There was one sale over $1m, 27 acres of growth area on Cathaross Lane sold for $1.7m (this sale will be excluded for statistical purposes). Of the total sales, 29 were for new construction homes, with almost a third being more affordable attached homes. This figure has doubled year-to-year and reflects consumers looking for more affordable options. There were 10 sales of homes on an acre or more, 13 percent of the total, which tend to be in outlying areas. There were six land sales in the quarter, down from eight last year. There were two distressed sales in the quarter, a figure we hope goes to and stays at zero.
The average price for a detached home continues to advance, rising 2 percent to $507,000 during the quarter. This continues to be driven by new home construction prices going up, the price per sqft of newly built homes rising 9 percent over the same period last year to $211/sqft. But this rising cost seems to be having a negative effect on total new builds, as there were 10 fewer homes sold in the quarter compared to the same time last year. Old Trail, Foothills and Westlake continue to be the busiest neighborhoods, but newly opened Sparrow Hill will offer fresh floorplans on ½ acre lots starting in the upper $400K range, with Spring 2019 probably seeing the first deliveries. There were 36 resale transactions in the quarter, down 30 percent from the same time last year. These homes spent an average 41 days on the market, selling in 38 percent less time than in 2017.
There were 21 attached home sales in the quarter, down only slightly from the same time last year. But 10 were new construction, almost double last year’s total, and a probable indication that house buyers are looking for more affordability in new construction. All the new construction sales in the quarter were in Old Trail, but this will change going forward as Glenbrook at Foothill Crossing ramps up their villa style home offerings. The quarter also saw the announcement of Pleasant Green, a large townhome development slated for the area between Cling Lane and McComb Street. No timeline on this project, but several different styles of attached homes will be on offer.
There is much discussion among real estate professionals and home owners/buyers alike regarding the sales slowdown in Crozet. Rising new construction prices certainly has something to do with it, being a function of rising land and material costs. This has helped fuel the rise in resale pricing, which has led in some neighborhoods to a relative glut in resale offerings. The rising interest rate isn’t helping, with the current national average 30 year mortgage rate of 4.9 percent and local rates of 5 percent or higher being almost a full point above where rates were at the same time last year. But while the current rates are still excellent and near historic lows, actual buying power diminishes with rate advances.
So, is the market reversing from a “sellers” market to a “buyers” market? Data would suggest so, as Realtor.com’s Chief Economist Danielle Hale states, “The signs are pointing to a market that’s shifting towards buyers.” Zillow’s CE Dr. Svenja Gudell agrees, stating “buyers certainly are starting to balk at the rapid rise in prices.” What all these factors portend for Crozet’s real estate going forward is anyone’s guess, but hopefully towards a more balanced market with a wide range of prices and an affordable home for everyone.