A Quick Mid-2023 Look at Charlottesville’s Real Estate Market

Looking at the state of the Charlottesville real estate market, little has changed since this time last year. There are certain houses that I am watching that sold within the past 3 years that are back on the market – some go under contract quickly; some sit. Each is an interesting story and micro-analysis of the Charlottesville- Albemarle real estate market.

  • Sales are down, year over year. Prices marginally so. Days on Market are up a bit.

    • In Charlottesville + Albemarle, from 1 January to 30 June 2022, 1,199 homes sold. Average days on market: 22. Median DOM: 5. Average sold price: $601,276
    • From 1 January to 30 June 2022, 1,098 homes sold. Average days on market: 29. Median DOM: 5. Average sold price: $600,906

For this look, I’m not going to do a breakdown of new construction versus resale, or specific price points, unless you ask. I’m happy to provide specific answers, but I find these broad looks are good enough for most to understand that the market is what the market is. And there are so many known unknowns.

Some of the known unknowns

  • What will be the effect of the City of Charlottesville rezoning? Will it push prices up? Down? Lead to more construction of higher density homes?
  • Will Albemarle’s Comprehensive Plan have a marked effect on how we live? In the short term? Long term?
  • Will prices come down?
    • Maybe. But if you are able to buy now, and you have life/job security, what might be the opportunity cost of waiting? As I tell my clients, I can’t answer that. I know that houses have appreciated, even as mortgage rates have increased substantially.
  • Will interest rates come down or go up?
    • Yes.

Specific questions that only buyers/sellers can ask and answer (with professional guidance?)

There’s really only one question, usually.

Should I wait to buy or sell?

    • This is when we should have a conversation over coffee or beer or water. A lot goes into this – kids? Parents? Job? What do you like to do? How well do you understand the market and the area?

Doing Reddit AMAs (Ask Me Anything) twice this year has been one of the best things I’ve done in a while. I’ve learned a lot through the questions, and I’d like to think others have as well. Here’s a link to the June Charlottesville Reddit Real Estate AMA.

I liked this question, as it dovetailed with my intention to write a mid-year market analysis for Charlottesville and Albemarle.

(We) are looking to buy in Charlottesville this year with a 700,000 or under budget, looking in the city, at least 3 bedroom/2 bath, can’t pay cash, willing to make other concessions. Do we stand a snow ball’s chance in hell of buying a house?

My answer:

Define “Charlottesville.” 🙂

– Charlottesville City, Charlottesville + Albemarle, Charlottesville MSA?

– In the City & County right now, there are 55 resale (not new) single family active on the market, with at least 3BR and at least 2BA, under $700K.

— 95 are pending, and 355 have sold this year.

Short answer: probably.

Of the 150 active and pending, there are 127 with at least 1300 above grade square feet. 111 with at least 1800 total finished square feet.

Between $500K and $700K, all criteria as above, there are 91 homes. 61 of those have basements. 41 have a garage, too.

A lot of my clients want a manageable yard; there are 29 with less than one acre.

If you’re interested, here are the 29 mapped out.

The follow-up was particularly interesting, asking how viable a non-cash offer would be.

Probably.

That said, I was looking at some of the recent solds in the City, and some of the ratios of asking to selling prices for desirable homes are bonkers.

166 single family homes have sold in the City this year. Average price is $577K; median is $504K.

66 – 40% of the 166 sold with cash.

Some background and context on cash offers in the Charlottesville area.

Cash matters, but it’s often more of a salve for the seller to know that appraisals aren’t going to be challenges that need to be overcome. There are ways to strengthen offers to compete with cash — certainly not as strong as a cash offer, but occasionally strong enough.

I can write a winning offer – cash, no inspection, quick close, rent back for as long as the seller wants, but that’s usually not an offer a buyer can or wants to have accepted by the seller.

Asking Price and Days on Market

This is just a snapshot, part of an answer to a buyer’s question. I think it’s interesting and instructive, but also meaningful in that it shows that micro-market analysis matters, and my advice to some buyers this year has been sound — if you don’t want to a) compete b) be disappointed, maybe don’t look at homes the first weekend they’re on the market.

Looking at single family homes, not new construction  in Charlottesville + Albemarle between $300K and $700K, sold from 1 May to 10 July 2023:

  • Days on market 7 days or less: 104.67% of asking price
  • Days on market 8 to 31 days: 95.51% of asking price
  • DOM of 32+: 91.02% of asking price.

Conclusion: under a week – you’re likely making an emotional offer and we’re having more of a conversation about “writing a winning offer,” with less of a discussion about resale value.

If the house has been on the market for  than a week – the offer the sellers receive is likely to be based more on data.

For buyer or seller clients, I’d also be inclined to look at what percentage of these were cash, talk to agents and see what additional information I can find out that will help my clients. For a blog post, I think this is good enough. 🙂 

Images above courtesy of the New York Fed. Micro-market analysis matters

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