Western Albemarle First Quarter Real Estate Report
2019 was the strongest year for real estate sales in Crozet ever. 2020 started with the expectations where 2019 left off: low interest rates, continued demand, and more affordable housing options were going to lead to another big year. The real estate fundamentals were strong, but there was noise around the presidential impeachment trial, and background chatter about a virus in China. Three months later the former seems forgotten. The latter has changed life as we know it.
At quarter’s end there were a total of 48 sales in Crozet, down 14% from the same period the year before. The effect of the COVID-19 virus on the first quarter sales is hard to pinpoint. Sales from mid-March (when the virus’s effect really kicked in) through month’s end only dropped by one sale in 2020 compared to 2019. But at present, area-wide listings and contracts written are down over 40%. Second quarter figures will give a more accurate year-to-date effect of the virus.
Of the 48 sales, one was for over $1m (6527 Dick Woods Road sold for $1.13m) which for statistical purposes will be excluded of this report. The 14% sales drop actually bucked the Albemarle County trend as a whole, which saw transactions rise 17% (see chart provided courtesy of Nest Realty). But what also dropped were prices, with the average sales price for all homes in the quarter dropping 6.5% to $419,000. Average days on market for resale properties rose to 78, an increase of 30% over last year. This could be from initial listing prices being too high, which can stifle demand. There were six sales of homes on an acre or more, doubling the three at the same time last year. These tend to be on properties outside of development neighborhoods. There were four land sales in the quarter, up from three last year. Land remains in demand; well-located and priced parcels typically sell quickly.
There were 28 detached sales in the quarter, down five from the same time last year. Twelve of these were for new construction, which is more than last year, but the average price of these houses dropped 19% to $548K. This is due in part to six of the 12 sales being in Sparrow Hill, where the house size is smaller and the price point more affordable. There was only one new sale in Old Trail, continuing a declining sales trend in the neighborhood. There were 16 resales in the quarter, down a third from 2019. Average price dropped slightly to $407K, while the average days on market rose 21% to 63.
Attached home sales dropped by three to 19 total sales in the quarter. Of these sales, six were new construction, four being in Glenbrook, the remaining two in Old Trail. The six new sales reflect a 50% drop from 2019. Average price dropped as well to $430K, as did home size from 2,474 square feet to 2,031 sqft. This reflects the shift away from sales in Old Trail to Glenbrook, where homes are smaller and more modestly priced. There are currently four properties under contract in Pleasant Green. Moving forward, this 268-unit neighborhood should over-represent total attached home sales. There were 13 re-sales in the quarter, rising in price 5% to $309K. These sales were fairly evenly spread across seven different neighborhoods, and probably represent the most affordable housing option at present in Crozet.
The COVID-19 virus has led to major interruption in most every facet of business. Real estate is no exception. As of this writing, new listings and contracts written were down over 50% each in the Charlottesville market in the most recent week. But the important fact to note is that this is a health crisis, not a real estate crisis. We are facing recession, which is succinctly summed up by Ali Wolf, the chief economist with Meyer’s Research: “Last time housing led the recession…This time it’s poised to bring us out. This is the Great Recession for leisure, hospitality, trade and transportation in that this recession will feel as bad as the Great Recession did to housing.” In 2008 there was an over-supply of homes, and the loans to buy those homes were easy to get, and given in many cases to unqualified purchasers. In 2020 there is an undersupply of homes, and better lending guidelines in place for purchasers. So, while real estate nationally, and in Crozet specifically, may suffer a slower sales pace and perhaps some minimal price degradation, once virus-related restrictions are raised and a semblance of normalcy returns, so will the real estate market. Stay safe.