Ending 2018’s Charlottesville Real Estate Market, Looking at 2019

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.
  • But it’s Family! (or Why to Think Twice About Hiring your Family Realtor)
  • Real Estate Licensing in Virginia does not Equate Competence
• 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.
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  • Monthly note archives are here.

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