Crozet Real Estate Market – Nearing End of 2018

Sales are slowing, inventory is creeping up, new construction is moving along, and we’re seeing price moderations. Watch the whole video, skim the transcript; ask us questions.


Jim: Hey there, I’m Jim Duncan with Nest Realty here in Crozet.

Greg: And I’m Greg Slater with Nest Realty. We define the Crozet market as the school districts of Brownsville Elementary and Crozet Elementary. We gave you some stats in our last video. We were talking about the fact that sales in Crozet were down about 10% at that point. Moving ahead, we’re looking a little bit past the third quarter to the end of October, year to date. We’re still going in the wrong direction. Now we’re about 16% off.

Greg: If we look at that a little closer, though, because we also like to break out new construction from resales because we have so much new construction in the area, the resales are actually going in the right direction. While they were 11% off midway point, they’re only 8% off now. The new home contracts were 6% off at the midway point, and they’ve moved to 10% off now.

Jim: You look at the number of homes that were under contract in … I think July 18 we did the last one. At that time, there were 90 homes under contract in Crozet, Crozet and Brownsville. 69 of them, so 77%, were new construction. Now, mid-November, 77 are under contract. 51 of those are new, about 66%, 67%. So the percentage of new coming down, I think, overall, it’s a healthy thing?

Greg: Sure.

Jim: Because more resales are kicking in, and that’s reflective of the fact that resale prices are up year over year from January 1 to mid … 10/31 are up 8%. Resales are coming more in line, or being improved by the new construction, as the new construction moderates.

Greg: If you think about what we were talking about, looking back at the beginning of the year, the buyers were there early and the inventory wasn’t. The builders picked up those sales. Our inventory showed up a little later, and we had a little bit slower summertime because some of those listings showed up a little late this year.

Jim: We’re also seeing the inventory’s really rising. From 1 January to end of September, actually, inventory has kicked up about 28% and closed sales to that point were down 23%. So, as we’re seeing more inventory come on the market, you also have buyers who have sort of stepped out of the market, I think in large part because the prices and interest rates.

Greg: What’s really interesting, though, is if we take a look at the fact that sales year over year are declining in Crozet and we compare it to Charlottesville and Albemarle, both of those areas are trending ahead of last year’s pace still, and we’re off. What we tried to do is figure out what’s going on in that regard. When we looked back over these numbers, over the last five years we’ve seen steady increases in sales each year and we’ve seen steady increases in pricing each year. Honestly, if you line up the number for 2018 right now, they’d line up with 2016. We had a really strong 2017. We couldn’t maintain that pace.

Jim: Housing’s not a commodity. You see, it’s hard to look at it from a year to year basis as well, because it’s not something that most people buy in 2016 and sell in 2017 or ’18. I think each of us are talking to sellers now who are looking at 2019 to put it in the market, and I’m telling my guys to be ready late January, mid-February to take advantage of the school market, because most people in Crozet are looking at the school market, and they need to be ready, willing, and able to go by mid-January, February, to pull the trigger on that new listing.

Greg: It’ll be interesting to see if the winter impacts that. I think they’re calling for a little more snow. Sometimes that can trip people up.

Jim: Which is fantastic.

Greg: The buyers that are in the market and find what they want are going to pull the trigger.

Jim: Well, the buyers who are looking at the spring market are looking now, so that when that house comes on the market in Westhall or Wickham or Old Trail, and they know it fits what they’re looking for, they usually jump. So, it’s going to be interesting to see how that plays out, and with more inventory in 2019, as I think we’re going to have, the buyers may be more selective than they’ve been.

Greg: Yes. All signs point to more inventory. We continue to see an upward pressure on the cost of construction that hasn’t let up yet, so as that premium for new construction continues to grow, it’s just going to be very important to price your home correctly and get it in the right conditions and make sure you present it well, particularly if it has energy efficiency features and things like that, because you’re competing with new construction.

Jim: Buyers are looking at the total cost of ownership, energy bills as well as transportation costs to get to Charlottesville or working at home or what have you. They’re looking at that total nut every month. What do you think for 2019?

Greg: I think it’s going to be fine and it’s going to feel more stable. I think a little softening of values and a slowing pace this year is just going to bring a little more reality to the market. You just kind of get in the habit of expecting a certain amount of drop or a certain amount of increase, and I think we’ve just seen that be interrupted. We’re just going to have to price our inventory right, and I think we’ll see those homes sell.

Jim: I don’t find that the, we’ll price it high and wait for them to make an offer, you don’t get that offer.

Greg: You can get a little more specific in your community and see what the average days on market is, and make a plan to stay within that, because when you get too far outside the expectations of the market for a home to sell in a community, it becomes a strike against you.

Jim: Year to date, 2017 versus 2018, Old Trail actually has the same number of sales, 74 year over year. Highlands is about the same, 14 versus 12 in 2018. Greyrock was significant. Last year they had four home sales, this year they have eight. Western Ridge had 15 in 2017 and six this year. The neighborhoods we see it coming are Sparrow Hill.

Greg: They’re doing the waiting list plan, right? If you want information on that community, they’re trying to line everybody up and make a big splash.

Jim: All right, the View and the Summit at Old Trail, the two apartment complexes. Old Trail has some commercial spaces coming.

Greg: If you’re not familiar with the Foothill Crossing side of town, the infrastructure to start to make all of that side of Crozet more pedestrian friendly to downtown is starting to get in place. It’s interesting to go back there and see how much it’s changed.

Jim: The Crozet Trails are phenomenal. I think that 2019’s going to be interesting. If you’re looking at buying or selling, I would certainly say, start having a conversation now. About Thanksgiving time is really the time to get it sorted out. I’m Jim Duncan with Nest Realty.

Greg: And I’m Greg Slater with Nest Realty. We’ll see you next time.

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