The following was written by Nest Realty’s David Ferrall for the Crozet Gazette:
We survived the Cliff, and there are now vague rumblings about the Ceiling. But the bumbling partisan missteps in Washington currently hold no sway over the Crozet real estate market. 2012 was a banner year for local home sales, the 244 total Crozet sales being the largest number since 2006. And while the 4th quarter of any year is usually the time the market takes a breather, and folks take time to enjoy the holidays, over a fifth of the total yearly sales happened between October and December. This even annual distribution coupled with factors like high attendance open houses, multiple offers on listings, and continued low mortgage rates paints a pretty peachy picture for local buyers and sellers. All this leads to a forecast of a busy spring, with the chance for good fresh inventory available to buyers with continued strong interest rate driven buying power.
The good news isn’t limited to Crozet alone. According to the 2012 Nest Report, there was a 15% sales increase in the local MSA (Metropolitan Statistical Area including all local counties), and median prices edged up 2%. In Albemarle County sales were up 14% to 1280 on the year, Crozet being the leading sales area with about 1 in 5 sales happening locally. And while these numbers compare well to low figures of past years, they represent a flat to upward trend that the local and national economies have been looking for. Only in hindsight can we really determine if the bottom has occurred in the real estate market, but from where we are sitting right now the future certainly looks brighter.
And boy did we shine in the 4th quarter here in Crozet! Of the 53 total residential sales, 39 were detached and 14 attached. These attached homes were mostly new construction (10), spread between Liberty Hall and Old Trail. Of the 39 detached home sales, 22 of them were new construction, with a national builder enjoying success in Westhall (5 sales) and Wickham Pond (5 sales), and local builders selling 10 homes in Old Trail. The 62 total sales in Old Trail this year have helped attract several new builders to the development, which will enhance variety and give buyers greater selection. The biggest sale of the quarter was Ramsay Farm in Greenwood, which sold at absolute auction for $3.3m (for statistical purposes this sale is being left out of square foot and average price figures).
Not only were sales up in the area, but prices were up as well. Price for a property’s finished square foot rose 3.8% overall from the same time last year, the bulk of this gain being in attached properties. Average prices skyrocketed, moving from $310,000 last year to $411,000 this year for a detached house, and from $238,000 to $290,000 for an attached house. This was an overall average increase of 31.5%! The median sales price rose about this amount as well. These jumps are in large part attributable to re-emerging confidence in the real estate, and in larger homes being bought. In 2012 30 year rates dropped another 12.5%, from an average of 3.89% to 3.38%, roughly were they are today. Buyers can afford to buy more expensive properties today than they could a year ago. And numbers show that they are! Buyers are also feeling more confident about the real estate market than they have in years. And nationally statistics show the “move-up” buyer is again looking to upgrade. This segment of purchasers has been absent in past years, and can add real oomph to the market.
But 2012 did see a decrease, and an important one it was. Short sales (where a property sells for less than the amount owed on it by the owner) and lender/bank owned properties (that have been foreclosed on) declined over the year. There were 4 short sales in the 4th quarter of this year, and a total of 20 short and lender/bank owned sales over the year. In the 4th quarter of 2011 there were 4 short and 2 lender/bank owned sales, and 23 over the year. As a percentage of total sales the 2012 figure came in at 8.2%, vs. 12.1% in 2011. This 32% drop is great news, as distressed sales can be harmful to local markets by dragging down comparable sales prices. But more importantly they can cause great stress to the home owner. This is an important drop, and one we all hope continues.
At year’s end there were 79 transactions waiting to close in the new year. This is a 34% increase over the same period last year, and a great way to kick off 2013. Total inventory in Crozet has dropped from over 12 months to just over 9 months year over year, an important trend that signals demand is rising while supply falls. This movement is mirroring what is happening nationwide. Prices do not seem poised to jump, but they are holding steady and some areas are seeing small increases. This could bring some fresh inventory to our market as sellers who have may have been waiting for a good time to sell have the best opportunity in years right in front of them. In 2013 buyers should have plenty of properties to chose from, with historically low interest rates to fund their purchase. Seller’s who price their properties properly have the best chance to sell than they have in years.
Something for everyone helps make for a balanced market that helps keeps people happy and the economy stable!