Western Albemarle Real Estate 4th Quarter Report: Strong Demand Keeps Raising Crozet Housing Prices

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The real estate market in 2020 was rocked by Covid. It came to a standstill in the second quarter of that year, before exploding to the upside, largely driven by increased demand, falling mortgage rates, and building supply and labor shortfalls. At the end of 2020, CoreLogic reported that real estate prices nationwide were up 8.2% from the year earlier. While at the time of this writing CoreLogic hasn’t yet reported the final sales price increase for 2021, through November of the year the increase was 18.1%.

Certainly, prices and demand rose in Crozet (defined by the area served by Brownsville and Crozet Elementary schools) in 2021. The 429 total sales set another yearly record, besting 2020 sales by 5.4%. Every category (total sales, prices, costs, etc.) this column follows rose, except for the number of days newly listed properties stayed on the market! The industry’s hope this time last year was that coming Covid vaccines may help staunch the strong demand and rising prices. But that didn’t happen. Demand today remains strong, inventory is low, and new construction prices are at or near all-time highs. The only headwinds the market seems to be facing are pervasive inflation and the near certainty of mortgage interest rates rising through the year, both of which constrain affordability.

There were a total of 429 sales in Crozet in 2021, up from 407 sales in 2020 (10 of the sales were for $1m and higher, which are be excluded here for statistical purposes). This 5.4% increase in homes sales year-over-year out-performed the county as a whole, which saw sales drop 9.3%. The average price for a home across all categories rose 6.6% to $501,000. There were 169 new construction sales during 2021, up 21% from 2020. The average price for all new construction was up 2% to $552,000. The price to build new construction rose 4% to $210 per sqft across all home types. There were 249 resale properties sold during the year, the exact same number as in 2020. These homes spent a median of 6 days on the market, compared with 30 days in 2020. There were no distressed sales during the year. We certainly hope this continues. There were 39 land sales in 2021, up from 22 the year prior. And prices rose as average parcel size declined. Considering the year-long upward trend in most price categories, it is odd that there were only 10 total sales for properties valued over $1m in 2021, down from 18 in 2020. 

Of the 273 detached sales during the year, 90 were for new construction homes. The average price of these homes rose 6.6% to $658,000 as the average cost to build these homes increased 7% to $223 per sqft. Old Trail and Westlake were the sales leaders with 29 and 28 sales respectively. Park Lane had 14 sales, and is now sold out. There were 183 resales during the year, the exact same number as in 2020! The average sales price rose 7.5% to $504,000. These homes sold quickly, spending only a median of 6 days on the market. And 61% of the homes sold for the asking price or higher. Both these statistics reflected the strong demand which continues unabated into 2022. Sixteen percent of the sales were for homes on an acre or more, properties that tend to be in outlying areas. This percentage continues to fall slowly as more sales occur in neighborhoods, and larger county building lots become scarcer.

There were 145 attached home sales in 2021, up 20% from the prior year. Of these, 79 were for new construction, with an average price of $431,000. Pleasant Green dominated total sales with 33, Old Trail and Glenbrook followed with 25 and 21 sales respectively. The number of resales was unchanged from 2020 at 66, but the average price rose 12.4% to $361,000. These resales didn’t last long on the market, selling in a median of six days. Sixty-five percent of these sales were for the list price or higher, reflecting the simple fact that there were more buyers than sellers.

Looking ahead to 2022, local real estate issues abound. There is unrelenting buyer demand, which swamps the limited listings that do come available and the ability for new construction to keep up. Unrelenting nationwide inflation affects not only real estate pricing, but also buyer ability to pay ever higher prices as inflation in other areas negatively affects buyer budgets. And interest rates almost certainly will end the year higher. In fact, they jumped almost .25% in the second week of January alone, prompting Senior National Association of Realtors Economist Nadia Evangelou to comment, “If inflation continues to grow at the current pace, rates will move up even faster in the following months.” Perhaps rising rates will dampen demand somewhat, leading prices to plateau and resulting in a bit more available inventory. 

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