Buy or Rent in Charlottesville Right Now? (During COVID-19)

I was wondering what you thought of the Charlottesville city real estate inventory (and prices) this season. And whether it will improve later this summer.

We are first time buyers but I have rented in Charlottesville for a long time, typically near the Downtown Mall. We have lived (in a big city) for the last few years and are now heading back to Charlottesville. Wondering if we should just keep renting given the extremely low stock and very high prices (not commensurate with Charlottesville salaries).

The above is from a reader, but I was recording an interview the other day, and this question came up. My answer to both is questioners is, “maybe,” and/or “it depends.”

First answers

 

The longer answer

No one knows what the Charlottesville (or any) real estate market is going to do, and especially now.

  • Low inventory
  • Buyers still want to buy
  • COVID-19 is still raging
  • Unemployment remains a massive concern
  • But … sellers still want to sell, and buyers want to buy
  • Albemarle and Charlottesville schools still don’t know exactly what the fall school year is going to look like, and I think that is likely to affect sellers’ decisions

What’s the the future of Charlottesville -Albemarle real estate market going to bring?

I’ll tell you in 18 months.

For now, I’d start with questions

  • Do you have job stability?
  • Do you have life/relationship stability?
  • Do you intend/plan to be here for at least five to seven years?
  • Are you familiar with the area in which you want to live?

This stuff seems reasonable to me

 

The honest answer: I don’t know (and no one else does either).

Years ago, I was having lunch with an economist, and we talked about how wrong he’d been with some of his predictions. He acknowledged them, and countered, “if we don’t make predictions, people won’t trust us.” It struck me as an absurd, honest, and true statement.

My best answer is my 18 month answer.

But … what do you think about buying now?

I think that if I were a buyer, and I knew that I was going to be in Charlottesville for at least five to seven years, and I was able to find a house that I liked, that was in a location that worked, and I was able to lock in a crazy low mortgage rate like we’re seeing today, and I was comfortable with the thought my my home’s value going down in the short term, or up, but knowing that the immediate value didn’t matter because I could afford my mortgage, and I liked where I lived, then, yes, I would definitely consider buying.

And if I bought, I’d listen to Jim, and know that if I put a Contract on a house today, one I like as much or more will come on the market tomorrow, but that won’t matter because I like where I live.

  1. Start here if you’re thinking about buying.
  2. I know the above are silly run on sentences; I meant to do that.

But … what about inventory?

I think it’ll come around, but we’ve had an inventory shortage in our market for as long as I’ve been practicing. I suspect that the sweet spot in our market (sub-$500K) is going to remain competitive, and there’s going to continue to be a shortage.

Why so low?

  • We’ve seen an increase in people choosing to renovate their homes rather than trade up.
  • People are simply staying in their homes longer. It used to be that people moved every five to six years; now that’s every eight to ten. That’s pulling and keeping a lot of inventory off the market.

Sometimes, finding a home that’s “good enough” is what you need to do.

Shorter answer to, “will inventory stay low in Charlottesville and Albemarle?” I think so, unless we have a wave of foreclosures.

I’m standing by my “four things that could happen” that I wrote in April.

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