The Charlottesville real estate market showed signs of moderating (which is a good thing), driven by a few factors
- Affordability continued to be a challenge for many buyers
- Prices continued to rise.
- While I think we’re going to continue to see appreciation continue (broadly), 2019 may look and feel a bit different with some properties staying on the market longer (weeks and months vs days and weeks)
- The “right” inventory remained a bit of a challenge for many buyers
- Waiting for the right home is important. I represented four or five buyers in 2018 with whom I had been working for between three and five years.
- Finding the right house for the next phase of life is a challenge. Projecting life for the next 7 to 15 years is a monumental challenge.
- Less inventory was on the market
- Clients told me, “I feel like I’m stuck in my house,” many times in 2018. (making these numbers up) … they bought for $300K 10 years ago. House may be worth $400K or so now, but the next step up may be in the $550K – $700K range.
- Charlottesville is expensive
- People are staying put for longer, for life, or financial reasons, or both. Hey, if you’re happy, why move? (“Move” is a four letter word)
- Interest rates were rising a bit
- Yes, they were higher at the end of 2018, but let’s be realistic. 5% – 5.5% isn’t that high. It’s actually quite low.
- There are still sellers who are underwater, or close to it.
- Homeowners who purchased in 2006 (give or take a year or so) may very well be just returning to the break-even point. This is one of the hardest conversations I have, as the market has been so strong for a decade, that telling someone that they are just able to sell, and may make not profit … is hard.
What’s 2019 going to bring?
- People are going to buy houses. People are going to sell houses. People are going to rent.
- Interest rates might increase a bit. But let’s be reasonable. While rates are higher than they have been, they are by no means “high.”
- New construction prices will (hopefully) moderate, but they’ll still be expensive.
- Materials are expensive. Labor shortages continue (not everyone needs to go to college!). Land is expensive (rule of thumb: house will be ~4X price of lot), so if the lot is $100K, you’re looking at a $500K single family home.
- We need a paradigm shift away from single family homes.
- Commutes get worse, natural disasters continue to destroy homes, affordability gets a bit worse.
- Hiring competent real estate representation is even more of a requirement in a changing market.
- Property assessments are going to rise in the City of Charlottesville and Albemarle County
- I’m going to keep writing my monthly note, telling stories, sharing experiences, and hopefully causing readers to laugh, think, and hopefully share the note with their friends.
Questions about the market, or seeking real estate representation? I’m here. Call, email. Invite me to coffee or beer. If nothing else, let’s have a good conversation about the Charlottesville real estate market.
Stories I pulled when researching this post, didn’t get to use, but like and think are useful anyway.
- I might move to Charlottesville. What should I see?
- Describing Life in Charlottesville & Crozet to a Friend – Part 1
- Describing Life in Charlottesville & Crozet to a Friend – Part 2
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