Central Virginia’s real estate market soared in the last three months of 2020 as more homes sold for more money and sold quicker than in the last quarter of 2019, even as fewer homes were up for sale, according the Charlottesville Area Association of Realtor’s market report.
“The housing market had its strongest fourth quarter of sold volume in more than five years as both sales and home prices surged to multiyear highs,” the report states. “There was approximately $565 million [in home sales] throughout the [region] in the fourth quarter, a dramatic 42% jump from last year, which is a gain of about $168 million.”
The market performance came at a time of year when the real estate market is traditionally slow.
“We did nicely despite winter seeing sales usually slow way down,” said CAAR President Quinton Beckham, broker and owner of Keller Williams Alliance. “In the last quarter of the year, people are usually preparing for the winter and the holidays, school is in session, they’re planning trips and not interested in selling or buying. The pandemic, as well as other economic factors, just ended all of that.”
According to the report, 1,278 sales occurred in the last three months, about a 23% increase from the end of 2019.
Across the state, home sales increased in 2020 by 10.8% compared to the previous year, according to Virginia Realtors. It is the largest annual sales growth in the state in five years, the Realtors’ report states.
With more buyers looking and fewer owners selling, the demand pushed local sales to a median price of $348,050 for the fourth quarter, a 13% increase from last year and a gain of nearly $40,000.
Beckham said the performance is likely a combination of a continuing strong regional real estate market and the impacts of the pandemic changing how people work and where they can live.
That’s especially true in counties adjacent to Albemarle, which saw the most sales growth.
“We haven’t studied it, but anecdotally I think a lot has to do with the investment in broadband and the increased ability during the pandemic for people to work remotely,” said Beckham.
Beckham noted that some communities, including Nelson County, have made investments to bring the high-speed internet infrastructure to residents. The number of Nelson County homes sold soared 85% and median sale prices rose 34% in the fourth quarter, compared to 2019.
Nelson County median sales prices in 2019’s fourth quarter were $230,000. For 2020’s fourth quarter, the median price hit $309,000.
Beckham speculated that higher prices and tighter markets in Albemarle County and Charlottesville also may have pushed buyers who can telecommute to outlying communities that have high-speed internet available.
“Broadband and high-speed internet access makes a difference now because it means the ability to work from home while three kids are virtually learning in another room at the same time,” he said.
Albemarle County had the most expensive sale prices, with a median price of $420,000 in 2020’s last three months, about a 14% hike over the $369,250 median price in 2019’s fourth quarter.
Charlottesville was second with a $403,750 median price for the period, about a 10% hike above its $367,898 price in 2019’s last quarter.
Louisa County had median a price in 2019’s fourth quarter of $245,000 and a median price of $315,000 in the last quarter of 2020.
Greene County saw a modest 7% rise in median price from 2019’s $284,660 in the last three months to $304,750 for the same time in 2020.
Fluvanna County was the region’s most affordable median price with $275,000 per sale in 2020, still a 16% hike over 2019’s $236,500.
The sales and the prices reflect the scarcity of homes up for sale, the report notes. There were 671 homes for sale at the end of the quarter in the association’s coverage area, which includes Charlottesville and Albemarle, Greene, Lousia, Fluvanna and Nelson counties. That represents about half of the inventory on the market at the end of 2019.
If there are fewer homes for sale and more buyers wanting them, prices rise, CAAR officials said.
“The inventory in the CAAR regional housing market is plunging. The supply has been trending down for several years; however, the pace has accelerated dramatically in 2020,” the report states. “There was just 1.7 months of supply at the end of the quarter, down from 3.5 months a year ago.”
The supply is determined by the average monthly sales in the 12 months of 2020 divided by the number of homes currently on the market.
“If you look at the number of new inventory on the market, we could sell everything we have in the next six weeks,” Beckham said. “Since the market crash and the recovery 10 years ago, we’ve been behind on the number of new home starts compared to demand. I think this shows us that, at some point, we’re going to have look at adding more new homes and development to create more affordable housing.”