Real estate sales in Crozet started the year with a 37% increase in sales during the first quarter compared with 2023. This sales bump continues, as the second quarter of this year saw a 6% rise in sales versus the same time last year. The 102 total sales during the quarter were a healthy total, considering that mortgage rates continue to stay relatively high, which continues to negatively impact resale inventory. Of the 102 total sales during the quarter, five sold for more than $1.25m (these will be excluded for statistical purposes).
The quarterly sales increase bucked the overall county trend, which experienced a 14% sales decline overall. There were 37 new construction sales, up 37% from the same time last year. Resale home sales dropped 8%. Of these pre-existing house sales, 75% sold for the list price or higher, which continues to highlight the imbalance of buyers vs. sellers. There were eight land sales during the quarter, doubling last year’s four during the same period. There were zero distressed sales during the quarter, a figure we always hope stays at or near zero.
The price for a detached home dropped 10% during the quarter, to $629,000, but the average size also dropped 15% to 2,493sqft. The price drop therefore is to be expected. There were only five new construction detached sales during the quarter, with three being in Old Trail and two in Glenbrook. The five sales over $1.25m were spread across Stockton Creek, Foothills, Foxchase, and the county.
The average price for new construction homes continues to rise, up 10% to $837,000. The cost of new construction rose 17% to $314 per square foot, the first time to break $300sqft locally. Prior to Covid, this cost was hovering around $200sqft, so the market has experienced a 50% cost increase in about four years. There were 41 resale transactions during the quarter, down from 46 sales at the same time last year. The average price of these sales dropped slightly to $603,000, and stayed on the market for a median of six days. Of these sales, 76% were for the asking price or higher, indicating that competition remains for well-located and well-priced homes.
There were 51 attached sales during the quarter, the first time attached sales have out-paced detached homes during a quarter. This is due in large part to their affordability, and to availability of new construction townhomes in Pleasant Green (12 quarterly sales), Glenbrook (12 sales) and Old Trail (8 sales). The average price of these new construction attached homes was relatively flat at $522,000. But the size of these homes dropped slightly to 2,168sqft, while their cost to build rose slightly to $239sqft. There were 19 resales during the quarter, with prices up an average of 5% to $470,000. These homes sold in a median of seven days, 68% of them selling for the list price or higher.
Looking forward to the second half of 2024, it appears that not much is going to change in the local real estate market. Prices are going to continue to rise, though at a more moderate pace than we’ve experienced over the past few years. New construction will probably continue to account for a third of all sales, which is in line with national trends. The big question remains mortgage rates, and if/when they may start to decline meaningfully. Recent inflation data suggests the Federal Reserve could start cutting rates in the late third or fourth quarters. Richmond Fed president Thomas Barkin is “very encouraged” that signs of slowing inflation are broadening. Fed Governor Christopher Waller recently opined, “I believe the time to lower the policy rate is drawing closer.” A gradual start to mortgage rate reductions would be welcome to many home buyers who have been on the sidelines due to high prices and rates. But when rates start to fall it could invite increased buyer competition and a rebound in prices. In spite of this, Danielle Hale, chief economist at Realtor.com, optimistically posits that persistent homebuyers “could see better conditions in the second half of the year, which tends to be somewhat less competitive seasonally, and might be even more so since inventory is likely to reach five-year highs.” Only time will tell how these factors coupled with a chaotic (to say the least) presidential election could affect real estate sales in Crozet. But as always, please consult a seasoned realtor for experienced guidance before making any real estate decisions.
