Western Albemarle Third Quarter Real Estate Report
When the pandemic hit earlier in the year it was anyone’s guess how the local real estate market would be affected. Early indications weren’t good. Given the dire warnings and initial financial hits on Wall Street, most would not have foreseen an explosion in local property activity. But that is exactly what has occurred in the third quarter of this year. Total sales were up over 30% in the quarter, and at the time of this writing the total year-to-date sales are only 17 behind the total number of sales for all of 2019. And there are still two months remaining!
There were 134 total third-quarter sales in Crozet in 2020, up 33% from the same period last year. In comparison, quarterly sales in Albemarle County as a whole rose just 2% (see quarterly sales chart provided courtesy of Nest Realty). Without the increase in Crozet sales, County sales would have actually declined 3.5%. Of the total sales, 93 were for detached homes, and 41 were for attached townhomes/villas. Four of the sales were for properties of $1m or over, and those are excluded for statistical purposes in following figures. Forty-three of the sales were for new construction homes. Fourteen of these houses were sold in Old Trail, with Pleasant Green totaling 10 sales. There were 18 sales for properties over an acre, which represents 13% of total sales. Historically, this figure has hovered closer to 15-20%; the declining figure reflects more in-town and neighborhood sales. There were four land sales in the quarter, down from five last year. There were no distressed sales in the quarter, a trend that, hopefully, will persist as we continue to face uncertain health and economic issues.
The average price for a detached home fell in the quarter, dropping 5% to $509,000. This drop is due in part to a higher percentage of these sales being lower cost re-sales. Of the 89 total sales, only 22 were for new construction, down from 30 sales in the same period last year. The average new construction price dropped 11%, due mostly to the actual home size averaging 2,843 sqft, compared with 3,508 sqft in 2019. The cost of construction rose, though, to $210 sqft. Rapidly escalating material costs due to COVID shutdowns and increased demand will continue to underpin new home prices.
Glenbrook was the new home sales leader, with Old Trail and Westlake a sale or two behind. There were a relatively massive 67 re-sale transactions in the quarter, up 68% from third quarter of 2019. The average price of resales rose 10% to $483,000. The median days-on-market was mostly unchanged at 27 days. Homes were selling quickly, and there were instances where multiple offers were received, which pushed prices higher.
There were 41 attached sales in the quarter, up a third from the 31 sales in 2019. Twenty-one of these were for new construction, with Pleasant Green accounting for 10 of these sales, and 9 being in Old Trail. The average price for these new builds dropped slightly to $419,000, reflecting a 7% decrease in size. There were 20 resale properties sold in the quarter, at an average price of $312,000. The resale market will continue to face competition from new construction, especially now with Pleasant Green in full swing.
Not in recent memory has market forecasting occurred against a backdrop of such uncertainty. The outlook is dominated by the presidential election and increasing case numbers—and uncertainty—around COVID heading into the winter. But in real estate, low inventory and historic low interest rates are keeping demand up and prices strong. Yahoo Finance even suggests that a surge in COVID-related divorce rates is adding to demand, as is the exodus from large cities as people seek the “safety” of house living over apartment renting. The National Association of Realtors, Zillow, and CoreLogic all suggest strong demand and low inventory will continue to propel prices, though not all are in agreement about how long the current situation will last. The same scenarios hold true in our local Crozet market. Hang on for the ride.