First, my standard disclaimer/disclosure: your micro market will be different. Recently, I’ve written offers on houses in the > $1M range and in the ~$400K range. Each of these markets is very, very different. The market analyses I do for sellers in Spring Creek in Louisa will be very different than a house in the City of Charlottesville. If you have questions about buyer representation or seller representation, please ask. For this post, I got caught up on Nelson County, but finish with a quick look at Charlottesville and Albemarle. My tl;dr advice is similar for each of those markets.
tl;dr: homes prices are up, demand is solid, interest rates are nudging up, inventory is low, and great representation is crucial.
First, the PDFs
- Albemarle County December 2021
- City of Charlottesville December 2021
- Charlottesville MSA December 2021
- Nelson County December 2021
These PDFs are not as accurate as when I do fresh, manual data pulls from the Charlottesville MLS, but they’re good enough for our conversation. Keep in mind also that with such small numbers, a few transactions can have significant impact on the numbers.
(Click to embiggen)
Why show that? Two reasons: 1) the new builds on C&O Row had a bit impact on average new construction pricing in 2018 and 2019 and 2) I knew something was amiss when I saw the huge delta between 2021 and 2019 (I worked backwards). There is value in knowing the market well enough to know when to look a bit deeper at the top-line data rather than just accepting what the “average” shows.
Running numbers manually usually leads to a different, deeper dive than where I started. The other day, I was curious about Nelson County, and that led to a slightly broader look at Charlottesville & Albemarle
Just talked to a new client about Nelson County’s market, so I ran numbers; they matched my gut.
– December 2021 – 30 sales, Med $: $423K.
– December 2020 – 60 sales, Med $: $295K
– Dec 2019 – 32 & $251K
Led by: pandemic + work from home + Firefly laying fiber everywhere.
Nelson’s market has skyrocketed. When I was looking for news about their increasing real estate assessments (Nelson folks are probably upset about this; they reassess every 4 years), I found this story, How Nelson County became No. 1 for remote workers,which is as surprising as it is not.
“One of the words we throw around a lot in today’s vernacular is ‘game changer,’’’ says Gary Wood, president and CEO of the Central Virginia Electric Cooperative and its wholly owned subsidiary, Firefly Fiber Broadband, which is partnering with Dominion and Appalachian Power to install fiber in 14 counties.
Internet connectivity is the fourth utility, says Wood, like electricity, water and phone service.
The U.S. Census conducts surveys every year, and its most recent numbers for 2019 show Nelson County leading the state with 11.8% of its residents working from home. In sharp contrast, the same survey shows Bland County with less than 1% of its population working remotely.
Wood thinks Nelson’s 2020 remote worker numbers “could easily double,” and he estimates 35% to 40% of Nelsonites worked at home during at the peak of COVID.
“Having true high-speed, reliable, cost-effective internet allows people to work from home,” he says. Companies found they could let employees work remotely, and workers like it, he says.
That’s Nelson; what about Charlottesville & Albemarle?
The short story, and this is what I tell my clients:
We have not had enough inventory in our market for many years. People choose to relocate to the Charlottesville area because it’s still a great place to live, close to Washington DC, Richmond, Blue Ridge Mountains, skyline Drive, and the environment is nice and reasonably protected from climate change.
I expect the 2022 real estate market to be competitive. Hopefully not as competitive as 2021, but interest rates are still low, people want to buy houses, economy is good for at least the upper half of the economy, and new construction is prohibitively expensive for a large part of the market. That’s going to lead to continued competition in the sub $500K that’s our price point.
Questions? Ask, please.
One City & One County Neighborhood
It’s easy to say, “prices are up!” but it’s a different conversation when looking at specific neighborhoods. So I did.
I looked at two neighborhoods, one in Albemarle that is fairly homogenous and one in the City of Charlottesville that is as well. Both are high-volume and desirable. We’ve seen significant increases in values over the past few years. As I said in my December monthly note, it’s going to be interesting to see the impact of increasing interest rates.