Crozet real estate market update with Greg Slater and Jim Duncan with Nest Realty.
The first half of 2018 is behind us, and we talked about resales vs new construction, home prices, where in Crozet homes are selling, what happened with home inventory over the past few years.
Note that this is a longer video than typical; we covered a lot.
Thanks to the Rooftop for letting us use their … Rooftop.
(Greg and I are getting accustomed to doing these videos together … we will get better)
Jim: 00:08 Hey, I’m Jim Duncan with Nest Realty.
Greg: 00:10 I’m Greg Slater with Nest Realty. We wanted to take this opportunity to talk a little bit more about the Crozet market, specifically. When we define the Crozet market, we’re talking about the Brownsville and Crozet Elementary School districts.
Greg: 00:24 The reason we do that is, is because we see a lot of reports out there that talk about Albemarle County as a whole, city of Charlottesville, as a whole. As Crozet residents and agents that do a lot of business out here, we like to look at the community of Crozet itself.
Jim: 00:38 In the last six months, it’s interesting when you look at it. In the first half of 2018, from January 1st to the end of June, in 2018, 143 homes sold throughout Crozet and Brownsville Elementary districts. In 2017, it was 159; and 2016, it was 140. We’re down a little bit versus what we’ve seen in the last few years.
Jim: 01:01 Median sales price actually, you start digging into those numbers. In 2018, so far this year, the average sale price has been $474,000. Of those sold, 37 are new, and the average sale price of new construction was $584,000. For 2017, that number was … The average sales price was 456,000, and the number of new was 56.
Jim: 01:27 So far this year, we’re seeing a little bit fewer new construction sales, and the average sale price of a new last year was 593. So, on par, if you will, for year over year.
Jim: 01:38 The neighbors have been selling them with the most volume in Crozet are going to be Old Trail, the large neighbor we have, but then the W’s, Waylands Grant, Western Ridge, Westlake, Wickham, and Highlands, which kills the W.
Greg: 01:52 Looking at the sold data is looking at transactions that happened several months ago and that have already closed. One of the things I like to do is look at the contract. It’s a little more current and can help us understand what’s going on between resale and new, because new construction contacts stay off the market longer. They take longer to close, because the home needs to be built.
Greg: 02:15 If we’re looking at the contracts year over year for the first half of the year, Crozet saw a slight decrease of about four percent. If we break that out to new and resale, what we’ll see is the resales were off about 11% while the new construction was only off about 6%.
Greg: 02:34 If we look at those sales as a percentage of new versus resale, those new contracts accounted for 39% of the activity of Crozet.
Jim: 02:44 On that real quick, you’re looking at the number of contracts, or homes under contract right now in Crozet. July 18th, there are 90 homes under contract right now in Crozet. 69 of those are new construction, which I thought was a fairly staggering number when you look at the number of contacts going forward.
Greg: 03:01 If you unpack that a little bit, it’s because those homes have to be built, right? A lot of the people that bought in the spring resale are closing now; a lot of those people are waiting for their homes to be finished and be closing in another month or two.
Greg: 03:12 We saw the contracts have been going down a little bit, but at the same time, what we’ve seen is there’s been an increase in resale listings this year, year over year, of about nine percent. When you put those two things together, I think you’ll find the agent that’s familiar with Crozet feeling like there’s a little more inventory this time of year than we’re used to having. Whether or not that’s the right inventory, or it’s priced right, or those homes are in good condition is a different conversation, but there are a few more homes on the market not quite selling at the pace some of us have expected because of that.
Jim: 03:46 I think that some of that is driven in part because the last few years we have not had significant inventory. So as things came on the market the early part of the year, buyers jumped on it. We started to see a lot of sellers, we’ve seen the buyers jumped, and they’re choosing to put their homes on the market in the vacuum of having a significant life event.
Greg: 04:05 If you remember, we had a conversation at Nest Realty among ourselves in January or February, where one of our colleagues actually asked is this the spring market now? Things were going well, or better than we thought they should feel like for that time of year, and it’s exactly what Jim said. We came into the year with buyers concerned the home they wanted wasn’t going to come on the market, or that interest rates were going to increase. The numbers we heard were five percent. We haven’t got there yet. We’ve hovering around four and five-eighths, but there’s been some upward pressure on interest rates.
Jim: 04:37 I mean, just anecdotally, I’ve probably had four or five transactions this year that have closed for buyers with whom I’ve been working for four or five years. Every year would come on, they’d look, and they wouldn’t find the right inventory. So this was the year for a lot of people, that they finally found that house.
Greg: 04:53 This time of year, I would say seasonally, we talk about pricing and pressure year over year, but there’s some seasonality to pricing. When the urgency is in the market and the buyers that show up early really need to buy a home that year, right now, a lot of the activity that we’re getting back to is what I call elective, you call discretionary, it’s if I find the right home that would make me move, I would consider selling my house.
Greg: 05:18 I have conversations every day with people considering a lifestyle move but aren’t necessarily have some real life event that’s causing it. Right now, we’re seeing a premium for new construction that’s stretched a little further than it normally has been in comparison to resales. Most buyers aren’t running straight to new construction unless there’s a new community or a new opportunity that just didn’t exist in the market.
Jim: 05:45 I think it’s interesting, a lot of the homes that are in the established neighborhoods in Crozet, some of those need some updating, and you’re looking at 10 to $30,000 of updates that are required, and some buyers are choosing to spend that 70,000, $80,000 premium and they’ll go to new construction instead.
Greg: 06:02 That’s right.
Jim: 06:03 So looking forward to the last part of 2018, what are you looking at?
Greg: 06:08 I’m watching new construction in some new communities that are going to hit in this market. I don’t think you can drive through Crozet and not notice the dirt being moved. There’s a new community coming with single family detached homes on larger lots. That’s in demand, and it should come in at price points that should cause some activity. When we talk about the percentage of sales going to new as a home seller, it’s easy to compare to the other resales that sold, but sometimes it’s hard to understand what the builders are doing and how they’re taking buyers off the street before they even get a chance to consider your home.
Jim: 06:47 I think from a resale perspective, you need to be cognizant of the fact that new construction is your competition.
Greg: 06:51 There’s no question.
Jim: 06:53 Being aware of the pricing and how you’re situated is critical. My answer with almost everyone of my clients, buyer or seller, is it depends. Every situation is very, very dependent on what your life choices are and what the neighborhood is, etc.
Jim: 07:08 Some of these new communities that we’re looking at, the apartments that are coming, it’s right back there, The View, 125, 126 apartments there. The Summit in Old Trail, going to bring other 150 apartments, something like that. So it’s going to be interesting to see what impact that has on the market, as well. We got Rocket Coffee out on 240. They’ve got Marie Bette pastries, which is kinda nice. They have a discount for cyclists, also. University Tire is coming to the corner of 240 and Jarmans, and you have the Brewing Tree. It’s a little bit further out, but they still have good beer.
Jim: 07:38 This is the time of year where I start to have a lot of conversations with sellers for next year, and they’re starting to get ready for 2019.
Greg: 07:45 Absolutely. We’re always looking ahead and have to think a little long term, because honestly, if you’re competing with new construction, you really have to think about the maintenance of your home and the condition of it, or whether or not there are improvements that will better position you for sale when the time comes.
Jim: 08:00 Right. So if you have any questions about anything we’ve said or about the Crozet market, I’m Jim Duncan with Nest Realty.
Greg: 08:06 I’m Greg Slater with Nest Realty. We’d be happy to have a conversation with you.