October 2023 Charlottesville Real Estate Reddit AMA – Buyer Letters, Market Updates, and More

Repurposing content is useful. My third Charlottesville Real Estate Reddit Ask Me Anything (AMA) was objectively, informative (I learned some things), timely, and fun. I’m posting the initial post here, as well as a few of the discussion threads — there were a lot of great questions and discussions this time (last two times also!). If you have questions, please ask me anytime! (I’m already looking forward to January’s AMA).

March’s AMA was fun. So was June’s.

What questions do you have?

We’re in a much, much different real estate market in October 2023 than we were in October 2022 or even March 2023.

Level-setting, in Charlottesville + Albemarle (stats will vary if I break down by locality, but for top-level, here we go):

  • 1/1/2022-10/10/2022: 1,905 homes sold. Average price: $590,774. Median price: $468,100. Average DOM: 20. Median DOM: 5.

  • Of the 1,905, 322 were marked as new construction: Average price: $656,270. Median price: $568,571

  • 1/1/2023-10/10/2023: 1,639 homes sold. Average price: $614,329 (up). Median price: $490,000 (up). Average DOM: 28. Median DOM: 6.

  • Of the 1,639, 395 were marked as new construction: Average price: $629,373 (down). Median price: $516,515 (down)

I’m more curious/interested in more of the “right now” numbers.

  • 07/01/2022-10/10/2022: 706 sold. Average price: $572,939. Median price: $459,000

  • 07/01/2023-10/10/2023: 538 sold. Average price: $642,711. Median price: $509,950

Yes – those 3rd quarter numbers are correct; I checked twice.

For legal compliance/disclosure, I am a Partner and realtor with Nest. I’m doing the AMA to help people understand the market, and selfishly, I get better at what I do when y’all ask good questions. 🙂 All data is pulled from Charlottesville MLS.

On Buyer Letters

Q:

A friend just purchased their first house near Crozet. He said the seller had multiple cash offers over asking. But they wrote a letter stating they just wanted a nice spot out in the country and aren’t looking to commercialize or split up the acreage into multiple lots, which is heartwarming.

So it seems there are still plenty of “above asking” offers. But you might get lucky if you aren’t a soulless capitalist.

A:

First – I now guide my buyer clients away from writing letters, and advise my seller clients to advise me to state explicitly to not accept buyer love letters. My thoughts have evolved on this over the years.

Second – yep. Still seeing multiple offers; Crozet remains a fast market, broadly.

Q:

And that financially benefits the seller and realtor. But these sellers care about their neighbors and who they’d be living next to. The sellers weren’t looking for a big payday turnover on their property.

My friends, the buyers, are heavily involved in local industry, as opposed to an out of state WFH job.

I have a few acres within the Crozet Master Plan development area, directly off the proposed multi-use path. The property is paid off and when I sell, I’d like it to go to someone environmentally conscious, as we have 150+ year old forest growth.

I’m just stating the reasoning I’d give to a realtor. If I don’t care to make a profit off my land, is there any other reason to not accept “love letters”?

EDIT: oops, I see you ask sellers if they want to accept love letters or not. I guess that answers my question.

A:

The main reason I don’t do letters anymore is due to fair housing issues. (edit: I’m writing in November’s note about a super-fun letter I got one time)

Example:

I have the seller, and we don’t accept letters. We got a bunch with the slew of offers, and I didn’t read or share them with the sellers until after they had chosen and ratified the best offer.

One of the letter-writers was a single mother with kids; her offer was well below the other offers, but she asked for consideration, and explained that she couldn’t really compete, and wanted some grace from my sellers.

As a human with empathy, it would have been nice for my clients to have chosen that offer, but from my perspective, the offer needs to be about the merits of the offer, and not the humans. Callous? Yes. Necessary? Also yes.

Had the client chosen that one, an argument could be made that they discriminated for that buyer based on familial status.

Same argument can be (and I have made) regarding race. And I’ve seen offers with letters photos of the happy couple, kids, and dogs … Just, no.

That said, I’ve had clients who googled the buyer, discovered that the buyer was going to add the house to his stable of AirBnBs. They chose another (higher) offer instead as they didn’t want to do that to their neighborhood.

Now, as a Crozetian who loves, uses, donates to, talks about often, and thinks the Crozet Trails are one of the best things in Crozet, and setting aside the need for more affordable housing … please either keep your land or sell it to someone who’s going to keep it the way it is. 🙂

Edit: regarding me asking sellers what they want to do? Yep. I don’t make any decisions. I just offer guidance and advice.

 

Q:

Based on my casual browsing on zillow, it seems that in the past couple months there are many more houses that have price reductions during their time on the market than there were in the past few years. However your numbers in your OP don’t suggest a price drop. Are there in fact more reductions occurring these days? If so, I guess it’s not bringing average sales prices down yet.

Also, do you think we’ll see more or less inventory on the market in the next 6 months vs last fall/ winter?

A:

Good post today from Altos. National, but relevant. I won’t copy/paste the whole thing, as it’s all good.

Interesting last point though:

“?The leading indicators for home prices in 2024 are weakening. So, unless you expect mortgage rates to fall in Q1, factor in these slowly deteriorating price trends into your home price appreciation hypothesis for next year.”

It feels like there are more price drops.

  • For the MSA, using Altos data* about 38% of listed homes in Charlottesville MSA have had price drops.

  • I was looking at the numbers locally the other day, and (broad brush) the line of demarcation for a price drop is 30 days — if it’s not under contract by then, price drops are likely.

  • Inventory — I hope so, and honestly have no idea if we’ll get more. The mortgage rate lockdown is real, in my experience, and on the flip side, life happens – marriage, divorce, job, births, deaths – and people have to move. If I was betting, I’d say we’re going to see similar resale inventory numbers in 2024 as we’ve seen in 2023.

  • Inventory this fall/winter — also hard to predict. Charlottesville + Albemarle, listed from 9/1-10/15/2023, resale listings — we’ve had 222 listings. Last year, same timeframe — 235.

  • Last year from 9/1/22 to 12/31/22 — 473 resale listings. We’ll see.

*I have been looking at their stuff for years, have known the founder for > 10 years, and (just published an interview with Mike Simonsen on Nest’s Sweat the Details podcast).

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