Charlottesville Virginia Real Estate

The Staunton News Leader had a Neat Article About Augusta County Property Values, detailing how the housing market in Staunton, Waynesboro and Augusta County has risen drastically due to pressure from the east.  The big selling point here seems to be price pressure from Charlottesville and Winchester, which makes Augusta County and its cities seem like an inexpensive alternative.

“Augusta has a significant amount of spillover growth, just on your side of Afton Mountain, from Charlottesville,” said Theodore Koebel, director of the Center for Housing Research at Virginia Tech. “You have people commuting over the mountain and buying homes because, compared to the Charlottesville area, they may be seen as a bargain.”

Buyers priced out of Harrisonburg might be looking south for housing options, said Darryl Crawford, a planner who analyzed six years of sales data to compile the newest report. Sales in greater Harrisonburg dropped in 2005, but remained steady in greater Augusta.

“For somebody who works in Harrisonburg, they could easily live in north Staunton or Augusta County,” said real estate agent Diane Woodson, who markets her Staunton and Waynesboro houses to buyers in Harrisonburg and Charlottesville.

But the report also shows housing cost increases outpacing wage increases locally. When adjusted for inflation, home prices rose 50 percent, but wages actually dropped by $161 a year in Staunton and $1,998 a year in Waynesboro. 

… 

“I don’t think the city, or anybody else, is putting enough emphasis on affordable housing,” said Staunton City Councilwoman Rita Wilson. “The average person is being pushed out.”  Koebel said it is important not to read too much into the rising home prices for now. The Augusta market is still small enough that one new subdivision or a few expensive purchases could swing the statistics.

Per the DailyProgress Charlottesville assessments are up big this year, hitting poor neighborhoods particularly hard.  Here’s a chart of the percent increases:

Charlottesville tax districts with the highest and lowest percentage increases in existing housing assessments:
Top 5
1. Fifeville - 32 percent
2. Venable - 27 percent
3. Willoughby - 24 percent
4. Forest Hills - 22 percent
5. (tie) 10th & Page - 20 percent
5. (tie) Ridge Street - 20 percent
Bottom 5
1. University-Maury Hills - 0 percent
2. (tie) Towles-Merryden-Ivy Terrace - 3 percent
2. (tie) Azalea Gardens-Green Valley - 3 percent
4. 28 Holmes & North Avenue Area - 6 percent
5. Little High St./E. Jefferson St. - 7 percent

From the article:

The assessments of houses in Fifeville jumped 32 percent this year, the highest rate of any tax district in the city, following a 24 percent jump the prior year. Values of homes in the Ridge Street area spiked by 20 percent, compared with 8 percent the year before.

The average increase of existing residential home assessments in the city was 16.2 percent, with the typical Charlottesville house now worth approximately $280,000, said Roosevelt Barbour Jr., the city’s assessor.

Driving the demand for houses in these communities is the old real estate mantra of location, location, location. Situated halfway between UVa and the Downtown Mall, Fifeville and 10th and Page now draw young couples like the Pearsons who are attracted by easy access to the city’s main commercial center without the necessity of owning a car. 

I’ve been involved in Central Virginia real estate for more than a decade and the best time to buy has always been “a couple years ago”.  In hindsight that means NOW.  I’ve been more bearish lately on Charlottesville, feeling like things are as high as they can sustainably be right now.  The Staunton and Waynesboro markets seem to have more runway, in my opinion.  I’m not ready to say that a single family home in Charlottesville is a bad investment, but for investment property, I think greener fields lie elsewhere.

There does seem to be an oversupply of townhomes in Charlottesville, but those prices aren’t coming down like they are in other parts of the country.  I think the developers of the condos and the apartments-converted-into-condos in Cville are sufficiently diversified in the cash-cow that has been the Charlottesville real estate economy, that they’re neither willing nor needing to sell at bargain prices to cut their losses.  They’d just as soon double down.  The real opportunity in Charlottesville seems to be for people wanting to rent those condos.  When there’s oversupply in housing, even if the owners won’t sell at a loss, they still would rather lose money with low rent than eat the entire mortgage.  Empty apartments are expensive.