2021 was an historic year for real estate in Crozet. Never before had there been so many sales during a year, nor more new construction. Heading into 2022, the big question was, can this pace possibly continue? If the first quarter of the new year is anything to go by, the answer is quite possibly “no.
At quarter’s end there were 65 total sales in Crozet, a drop of 20% from the same period last year. Housing inventory remains tight, and builders are building as quickly as they can while fighting rising prices and supply chain interruptions. Meanwhile, market headwinds are strengthening. Mortgage rates are rising (up 48% since January to more than 5% for a 30-year mortgage, according to Freddie Mac), economy-wide inflation is the highest it’s been in 40 years, and there’s a war in Europe. But in spite of growing hindrances, the preponderance of property buyers over sellers remains, as evidenced by the fact that 66% of the quarter’s resale properties sold at or above the original asking price. So, while this imbalance still shows itself, there are indications that the market could be cooling ever so slightly.
Of the 65 sales in the quarter, seven were priced at over a million dollars (for statistical purposes these are excluded from this report, but this may change in upcoming reports if the number of $1m+ sales increases). The 20% drop in total sales was in line with the countywide drop of 18%. Overall, average prices were up, driven in large part by the imbalance of buyers vs. sellers. Median days on the market dropped by half, from eight last year to just four days in the past quarter. There were 10 sales for properties on an acre or more. There were four land sales during the quarter, down from 13 from the same time last year. This slower trend will probably continue as available land to purchase becomes somewhat scarcer. At present there are 12 pending land sales, and while not all these will be built on, most will because when purchasers can’t find a home to buy, then they chose to build. There were no distressed sales during the quarter, though area-wide foreclosures are up, most likely due to Covid-related forbearance programs ending.
There were 45 detached homes sales in the quarter, down 12% from the same time last year. Twenty-one were for new construction, with the average price rising 4% to $683,000. The average size of these new homes dropped substantially from 3,483 sqft to 2,791sqft, which partially accounts for the price per-square-foot rising 28% to $253/sqft. This increase was also due to current inflationary pressures. Thirteen of the sales were in Old Trail and seven in Glenbrook. There were 24 resales during the period, with the average price rising by 13% to $539,000. These resales sold in a median of five days, with 63% of them selling at or above their original list price.
There were 13 attached home sales in the quarter, down from 30 sales at the same time last year. Of these, five were new construction and all of them were in Old Trail. The average new construction cost rose almost 20% to $228/sqft, while the average price also rose 20% to $486,000. There were only five resale transactions in the quarter, but the average price across these shot up almost 30% to $432,000. These homes sold in a median time of four days.
Moving into the second quarter of 2022, it’s increasingly obvious that the world is facing grave uncertainty. Inflation rates that were already at 40-year highs in the U.S. are now also being pushed by war-related shortages in food, commodities and energy. Shortages and inflation in the building trades and uncertainty with supply chain issues are keeping the cost of new-construction homes elevated. This in turn pulls up resale prices. And mortgage rates have exploded to over 5%, exceeding even the most aggressive predictions of real estate economists. But in spite of this cascade of negative influences, demand remains strong, as Ali Wolf at Zonda states “…rates jumped much quicker and much higher than even the most aggressive forecasts called for at the end of last year, and yet housing demand appears to be holding steady.” In Crozet, the question moving forward into 2022 is will demand across most housing types and pricing remain? It has been a great time recently to be a seller. Are more buying opportunities finally around the corner? Time will tell.