Western Albemarle Fourth Quarter Real Estate Report: COVID-19 Drives Crozet Housing Sales Boom

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Chart courtesy Nest Realty

Gosh. What a year 2020 was. No need to rehash the lows and the lows, we all know what they were. But what most folks, including real estate professionals, did not foresee as the Covid pandemic started to hit was the coming tsunami. The perfect storm of the sudden desire to relocate, low inventory, and dropping interest rates that led to a rush of home buying that according to CoreLogic propelled prices 8.2% nationally in 2020. In Crozet, sales exploded to a total of 407 sales, besting the previous high in 2019 by almost 28%. Demand rose in Crozet, as more folks from outside the area looked to escape Covid. All were faced with limited resale inventory, backlogged builders, and rising prices. These conditions likely will continue into 2021, but will hopefully ease somewhat if Covid vaccinations help unleash a bit more resale inventory and dampen relocation demand.

There were 407 sales in Crozet in 2020, up from 319 sales in 2019 (18 of the 2020 sales were for properties $1m and up, which will be excluded for statistical purposes). 

The average price for a home in Crozet across all categories stayed relatively consistent at $470,000. There were 140 new-construction sales during 2020, up 16% from 2019. The average price for a new construction home across all categories fell a bit to $542,000, reflecting the fact that smaller and less expensive townhomes were increasing in sales. The price of new construction rose 4% to $202 per square foot across all home types. 

There were 249 resale properties sold during the year, which spent a median of 30 days on the market. There was one distressed sale during the year, a number we hope stays close to zero as some home owners face Covid-related financial stress. There were only 11 land sales during the year, a number that has dropped in the past couple of years as land becomes harder to purchase. Interestingly, there were five sales in Old Trail for over $1m in 2020, whereas the prior 5 years averaged less than one sale per year.

The 28% increase in home sales in Crozet year-over-year was in stark contrast to the 1% drop in sales in Albemarle County overall (see attached sales chart provided courtesy of Nest Realty). The fact that 21% of all sales in Albemarle County last year occurred in the Crozet and Brownsville school districts is a telling reminder that the Crozet growth area is exploding. And that infrastructure is really starting to fall behind.

Of the 268 detached home sales in 2020, 85 were for new-construction homes. The average price of these homes dropped slightly to $617,000. But the average size of these homes dropped 11%, reflecting the 10% increase in per sqft building cost which rose to $208/sqft. Westlake was the sales leader with 26 sales, and is now mostly sold out. Old Trail, Sparrow Hill, and Glenbrook were the other larger sales locations. 

There were 183 resales during the year, up a healthy 32% from 2019. These homes spent a median time of 28 days on the market. They sold at an average discount of just 1.5% of listing price, compared to 2.7% in 2019. Fourteen percent of the sales were for homes on an acre or more, properties that tend to be in outlying areas. For years, this sales figure was closer to 20%, highlighting the trend of more sales being in smaller parcel neighborhoods.

Attached home sales were up 30% to 121 sales in 2020. Fifty-five of these were for new construction, which averaged $426,000 in price, a 9% drop from 2019, reflected in the fact that more sales were for smaller townhomes than larger, more expensive villa-style properties. These sales were pretty evenly spread across Old Trail, Glenbrook and Pleasant Green. Average resale price across the 66 sales stayed relatively flat at $321,000. This average number reflects the most affordable category of homes in Crozet.

2019 closed with no visible real estate obstructions looking forward. And even with Covid, or perhaps because of it, 2020 didn’t disappoint. According to Freddie Mac 2019 closed with an average mortgage interest rate at 3.72%. We are now over 1 percentage point lower. Demand is exceeding inventory, and builders are seemingly constructing as quickly as they can procure ever-less affordable materials. But most economists agree, inventory should pick up as the year progresses, and building costs should stabilize. Sam Khater, chief economist at Freddie Mac, actually predicts rates could modestly rise in 2020. Rate-wise it is a great time to buy. And it is certainly a good time to sell. But before you do either, please consult a realtor for experienced, professional advice.  

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