Real estate sales in Crozet started with a whimper in 2023. First quarter sales were lethargic and ended as the slowest quarterly sales since when this column started in 2011. Looking forward, the landscape for the second quarter appeared fairly rocky. Interest rates continue to rise, current home owners aren’t selling, and home builders are struggling to keep up with demand. But surprisingly, sales increased 12% in the second quarter over the same time last year. There were 96 sales in the quarter, with four of them being more than $1.25M (these will be excluded for statistical purposes). This increase bucked the trend in the Albemarle overall, with the county experiencing a slight 4% decline in sales. New construction stayed flat at 27 total sales, though sales of pre-existing houses rose 23%. Of these re-sales, 71% were for the listing price or higher, highlighting the continued existence of an imbalance of buyers vs. sellers for these pre-existing homes. There were four land sales in the quarter, down from eight last year. Land buyers and builders are starting to complain about the dearth of quality buildable lots in the county (except in developments like Stockton Creek). There was one distress sale in the quarter. Hopefully this figure continues to hover around zero.
The average price for a detached home continued to rise, up 5% to $698,000. The size of these homes rose slightly to 2,918 sqft. Only eight new construction detached homes sold in the quarter, half the number sold in the previous year’s second quarter. Five of these were in Old Trail, and two in Glenbrook. One sale was in Pleasant Green, which will have more closings in coming quarters. The average new construction price was relatively unchanged at $763,000. Cost to build was relatively flat as well, coming in at $269 per sqft. This cost flattening is hopefully a trend that continues as nationwide inflation seems to be slowing. In the quarter there were 46 sales of pre-existing homes, up 18% from last year. The average price of these homes dropped slightly to $617,000, but they stayed on the market for a median of only five days. Seventy-eight percent of the sales were for the asking price or higher.
There were 38 attached-home sales in the quarter, up 52% from the same time last year. Nineteen were for new construction, with the majority of these sales split between Pleasant Green (8) and Glenbrook (6). The average price of these homes rose 8% to $518,000. The average house size rose 16% to 2,169 sqft, and surprisingly, the cost to build dropped slightly to $237 per sqft. Pleasant Green remains the sales leader in this category, reflecting the lowest new construction sales prices in Crozet. There were 19 resales in the quarter, these homes selling in a median of four days for an average price of $410,000. More than half of these sold for the list price or higher.
At this time last year, many real estate professionals and punters were looking for prices to fall. Heck, even Realtor.com’s Senior Economist George Ratiu opined, “It’s increasingly clear that the real estate markets are headed for a correction.” In fact, last July Case-Shiller, FHFA, and CoreLogic all showed prices starting to decline slightly. But those hoping for a deal had their prospects dimmed by year’s end, and in 2023 prices have been only on the upswing. The reason? There just aren’t enough homes available for the number of people who want to buy. Fannie Mae’s Chief Economist Doug Duncan said, “…housing prices continue to show stronger growth than what was previously expected…” and “…consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future.” So, while higher mortgage rates will probably be the norm for a while, even this relatively expensive fact hasn’t totally tanked demand as buyers adjust to this new norm. As First American’s Chief Economist Mark Fleming explained, “History has shown that higher rates may take the steam out of rising prices, but it doesn’t cause them to collapse entirely. This is especially true in today’s housing market, where the demand for homes continues to outpace supply, keeping the pressure on house prices.” We continue to experience this in Crozet, so whether buying or selling, please make sure you consult a realtor for experienced guidance before stepping into this roiling market.
