Real Estate Report: COVID Drags Down Crozet Real Estate Sales

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Q2 sales, 2020. Chart courtesy Nest Realty

Usually this second quarter real estate report opens with a resounding “thank you” for those involved with the annual 4th of July Crozet parade, picnic and fireworks display. This year our profound thanks goes out to those on the front line of COVID-19 who on a daily basis put themselves at potential risk for the benefit of our community. Thank you.

The effects the COVID virus has had on all of us need no explaining here. The same effects have been felt in the local real estate market, where quarterly sales fell 7% compared to the same time last year. This decline actually fares well against Albemarle County as a whole, which saw sales drop almost 23% from the same time last year, as shown in the Total Sales chart provided courtesy of Nest Realty.

For the 2nd quarter Crozet sales totaled 94, with six of these sales being for over $1m (these will be excluded for statistical purposes). New construction sales rose 52% during the quarter to 38 total sales. This is a lagging indicator though, as these homes were started before COVID became an issue. We could expect to see lower new home sales figures in coming quarters. The big drop came in re-sale properties, where sales fell 31%. Fewer listings came on the market, as fewer sellers wanted their homes open and shown to the general public. There were four land sales in the quarter, unchanged from last year. There was 1 distressed sale in the quarter, the first such sale since the last quarter of 2018. We hope this is just a blip, and that the COVID pandemic doesn’t lead to stress in the real estate market. It shouldn’t.

The average price for a detached home in the quarter rose 9% to $528,000. This was due in most part to the new construction sale price increasing 9%, and per-square-foot construction cost increasing a stiff 20%. Of the 25 new homes sold in the quarter, 10 were in Westlake and five in Old Trail. More affordable properties in Sparrow Hill led sales at the same time last year, which helped to keep costs down. The average price for re-sale properties remained largely unchanged at $444,000. These homes were on the market for longer, though, as the median days on market quadrupled from 8 to 34. Inventory was a problem in the quarter, as potential sellers held off listing their homes due to COVID uncertainties and concerns.

There were 28 attached home sales in the quarter, up a few over the same time last year. Thirteen of these were for new construction, with Old Trail leading the way over Glenbrook and Pleasant Green. Expect in coming quarters for Pleasant Green to be the sales leader. The average price for these new construction units rose a staggering 18%, due in large part to several Old Trail villa sales over $700,000. The average price for a re-sale attached property was $341,000, an 11% increase over the same quarter last year. These properties sold 23% quicker than they did last year, averaging only 23 days on market.

COVID at present remains a health problem. It has led to unprecedented disruptions in our economy and in daily life. But other than a few months of slowdown in the real estate markets, it doesn’t at present appear to be having much effect on housing demand. The National Association of Realtors reports a massive 20.7% jump in home sales in June from May. And NAR Chief Economist Lawrence Yun suggests, “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.” Interest rates continue hitting historic lows, with the 30-year mortgage average going below 3% for the first time in 50 years. This should continue through the year, and perhaps for years to come.  

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