If you’ve been looking at the Mid-Year Market report from the Charlottesville Area Association of Realtors (CAAR)—and let’s face it, who hasn’t?—then you might have noticed something curious in the rollercoaster that local real estate’s been riding the past six years. While Charlottesville and Albemarle County saw significant spikes and dips in mid-year sales, outlying counties like Fluvanna, Greene and Nelson remained a little more stable.
So with stability in a volatile market increasing as you move away from the market’s center, i.e., the city and its urban ring, is buying a house in an outlying county a better long-term investment than property in Albemarle or Charlottesville? The answer might lie in a quiet area just east of the city as the rates of real estate appreciation change.
It’s pretty out there, and maybe—away from the urban core and its fluctuating market—you could make a good investment with minimal worry.
"Historically, the appreciation has been a little bit higher in Charlottesville and Albemarle," says Realtor Daniel Rothamel. "But I don’t think that’s going to be the case this year."
While the price per square foot has increased since 2002 for the city and all its surrounding counties, Charlottesville’s 76 percent jump in price is a bit of a mirage. City condos pump a lot of hot air into the price per square foot, even while the market for them is sagging. Likewise, Nelson’s 85 percent increase was skewed in large part by high-priced resort property inhabited only months out of the year by people whom we’d rather not talk about or, for that matter, to.
The real numbers to look at come out of Greene and Fluvanna. Especially Fluvanna. Greene saw a 65 percent increase in price per square foot since 2002, while Fluvanna posted a 66 percent spike. Both counties saw steady growth in value even as the area market convulse.
"I think you’d find your swings are really less," says Rothamel about buying in the outlying counties. "Just like stocks, you have high-risk and low-risk. Some of the outlying areas may be lower risk, but you’re probably not going to see as great a return. But you may not see as great a loss."
And if you have a couple hundred thousand dollars to park in a piece of real estate, Fluvanna is a place to consider. While Fluvanna’s price per square foot is on the rise with surrounding counties, there’s also a glut of housing on the market, as reflected by its 24 percent drop in sales over the last six years. Rising value coupled with sellers willing to drop asking prices is a good recipe for a nice little return in the next 10 to 15 years.
And that’s not to mention how different Fluvanna, and specifically Zion Crossroads, might look in the coming years. The now-sleepy bucolic area just east of Charlottesville stands to get a big-time makeover. With a new Super Wal-Mart in Louisa and higher-end retail reportedly eyeing Zion Crossroads, the area stands to become less dependent on Charlottesville for its cosmopolitan fix. This means city folks might start flocking out to its rolling hills, driving up real estate values with their lattés, crêpes and whatnots.
Even with all its swings, buying in the city is still a good bet. But as Rothman says, "the price of buying into the game is pretty high." If $250,000 to $450,000 is more your price range, then buying out in the counties is a safe bet, though one that might not yield giddiness-inducing returns. Except perhaps for Fluvanna, which despite its drop in mid-year sales, looks poised to grow soon. Look for those sales numbers, not to mention prices, to rise.