“Why is real estate so expensive in Charlottesville?” It’s a question I get asked a lot while showing homes or meeting buyers for the first time. Charlottesville is just as expensive as most large cities in Virginia. And here is why…
According to Zip Recruiter, the average salary in Charlottesville is $56,269 which comes out to be about 27 dollars an hour. This, you might say isn’t indicative of the home values in Charlottesville and you would be right. According to Zillow’s Price Index, Charlottesville’s average home value is $464,773. That means To pay for a home of that value, using the 1/3rd rule, you would need to make around $81,600.
So let’s look at the average salary at the largest employer in Charlottesville; Albemarle County. The average salary for Albemarle County Office employees is around $81,293 per year, or $39 per hour and the average hourly rate for Albemarle County employees ranges from $36 to 46 dollars. So if you look at the value of homes historically and the average salary of the county of Albemarle employees and UVA employees. You will see that they correlate with why most homes in Charlottesville are so expensive.
This is just one reason home prices in Charlottesville are higher than most other cities. The other reason? Supply and demand. People want to live in Charlottesville, they want to have jobs in Charlottesville, and they want to own houses in Charlottesville but right now in 2024, the demand is higher than the supply. So when a house, that is in a great part of town, a good school district, comes on the market… It has 5 people bidding for it, which raises prices. We saw this during Covid and unfortunately, it’s still happening here in Charlottesville.
I hope this helps explain some of the reasons why we have higher prices in Charlottesville. I could talk even more about inflation, CPI, and why the high interest rates are hurting home buying in our city. But that’s another blog post.
