I love the responses to my monthly note (subscribe if you’re interested in the note); they make the writing worthwhile. I posted one response to November’s note yesterday; today brings the second response.
Empathy for homebuyers in Charlottesville + Perspective
I don’t have much to add to this response, other than to say thank you to the author, and nod my head vigorously in agreement. And a bolding here or there. (I do have some final comments at the end)
I really appreciate the time you take writing as much as you do. What a service you provide!
As a comment to this last note, I’m trying to wrap my arms around the median price of new construction in Albemarle topping a half-million dollars.
Developers/builders certainly appear bullish with the influx of professionals into our area. I’m not quite sure I share their belief, as at some point the new home market has to provide options for all the citizenry.
Certainly demographically our percentage of college graduates is high, but there are only so many salaries over six figures, and at some point there will be saturation.
Fortunately, we have momentum in profitable startups, but a successful homeowner base depends on those businesses staying here for the life of their endeavor, and that certainly isn’t always the case.
The next four years will be interesting for sure.
I can’t imagine the frustration of a first time homebuyer in this area. Interest rates are at an all-time low, but the price of the homes are in the stratosphere.
Something has to give, and I’m afraid we’re going to find a glut of high-end homes that cannot be moved, which in my opinion will eventually pull down the existing home values at our price point and higher.
You know, one should study what happened in Silicon Valley before the dot com bubble burst to understand what is happening to the real estate market here.
The Valley had extremely high projections of salary levels and business successes, and the price of newly constructed homes, many built solely on speculation, rose accordingly. Large gated communities with severe restrictions and very inflated property values popped up overnight.
Expectations of the affluence of home buyers was exceeded only by the median price of new construction. The caliber of buyers the market was prepared for never materialized fully, inventory was sold at a loss, and much of the area is still recovering.
The City of Charlottesville, and especially the County of Albemarle, need to figure out what they want the community to be. Building hotels and single family houses is one thing, but as my client above said – as at some point the new home market has to provide options for all the citizenry.
How do we provide these options? I don’t know, but I know that when Albemarle County makes the process to rezone a property an overly onerous and timely process that a developer defaults to by-right, the community loses.