CHARLOTTESVILLE, VA. (CVILLE RIGHT NOW) — Buy or rent? City or county? Roommates or solo? These are just a few of the questions that those looking to move to Charlottesville, Albemarle and the surrounding counties have to ask as they navigate the often-rocky real estate market.

While high prices have defined Charlottesville’s real estate market for years, recent nationwide data indicates that markets across the country are struggling.  An article from LendingTree in January analyzing the U.S. Census Bureau American Community Surveys showed the median monthly gross rent was $1,487 in 2024 while the median monthly housing costs for homes with a mortgage was $2,035. This means renters paid an average of $548 less each month compared to homeowners, $50 more than in 2023.

Figures like these may cause anxiety in those looking for a home, but Ben McCartney, an Assistant Professor of Commerce at the University of Virginia, told Cville Right Now real estate markets are often much more nuanced than they appear. McCartney said the advice he gives students and friends when it comes to real estate is to considers the nuances of where they’re moving and what their own situation is.

“They need to be thinking about the market that they’re moving to,” he said, “but even more important than that is their own life plans.”

Still, McCartney said these nationwide trends are being impacted by a stark uptick in interest rates. He said in 2021, it was possible to get a 30-year fixed rate mortgage at 3-3.5% per year. Now, that same mortgage will cost 6.5-7%.

“So even if it was a $500,000 house before, it’s still a $500,000 house now, your monthly mortgage is roughly doubled,” McCartney said.

What makes Charlottesville stand out?

Those trends are leading to struggles across the country, but what is impacting the market specifically in Charlottesville and the surrounding area? McCartney said the local market is relatively expensive, particularly in comparison to other college towns.

“We’re not comparing ourselves to L.A. or New York,” he said, “but even within our peers, housing here is kind of expensive. And I think that’s due to sort of relatively high demand and relatively low supply compared to those other places.”

McCartney credited the area’s proximity to D.C. and UVA alums buying second homes as two factors he believes could be impacting that demand. Charlottesville’s hilly terrain also makes it harder to build on, and much of the land not developed is already still owned.

“That means in if you’re a builder hoping to build a new development and you’re trying to find a [300] or 400-acre parcel, there’s not a lot of those just sitting around to be scooped up,” McCartney said. “And then the actual construction in Charlottesville requires relatively high sort of hoop-jumping to get through.”

Officials in the City of Charlottesville have been aware of this problem, passing a new zoning code in December 2023. Mayor Juandiego Wade, who wasn’t on the City Council during the original study but did help pass the ordinance, said on Cville Right Now Live in February the Council knew city need more types of housing and more quantity.

“We’ve severely under-built over the last 50 or 60 years,” Wade said. “It’s a supply and demand issue.”

Council responded by looking at a number of initiatives, and on Feb. 17, the council was presented with a proposal for an Affordable Dwelling Unit Tax-Abatement Program. Wade said the next day the staff would evaluate the questions asked by council at the meeting then plan for another work session with Council on the proposal.

“This is not a problem that was created overnight and we’re not going to solve overnight,” Wade said. “I would much rather talk until we get it before we pass or do something that may not be as effective as we want.”

How Albemarle is trying to help its residents

In Albemarle, the Office of Housing is in charge of a number of programs and implements housing policies, working with most of the county’s departments, most closely with community development, as well as a number of community partners, including both residential developers and nonprofits.

Director of Housing Stacy Pethia described the real estate market in the county as “hot” to Cville Right Now, due to the number of people wanting to move into the area.

“We have a lot of natural resources that people can access, so parks and trails,” she said. “We have a lot of amenities within the urban area that people can access. We have good schools. So, it’s a place that people want to move to, and so that keeps our housing market kind of jumping.”

But that leads to the problem McCartney described – not enough available housing for the amount of people looking to move in. So, the county adopted a new housing policy, Housing Albemarle in 2021, which proposed a number of recommendations to help lower housing costs for both homeowners and renters.

She added a lot of the policy is related to county investments in the Affordable Housing Investment Fund. The goal is to invest money into developments that will provide rental housing affordable to households at 60% of Area Median Income (AMI) and homeownership affordable to households at 80% AMI or less.

AMI represents the median family income in any given regions, so investing in 60% and 80% AMI puts the focus on Charlottesville’s workforce, including teachers, firefighters, police, grocery store works and restaurant workers among others. The goal with these investments is to bring the median sale price down so more families in the area can afford to rent or buy.

Currently, the Board of Supervisors is in the midst of work sessions on the proposed budget for the 2027 fiscal year. The budget proposes a $5 million total investment in the fund for the second year in a row. In total, over $22 million has been invested in the program since its creation in the 2019 fiscal year.

The Board of Supervisors also passed an ordinance allowing the county to provide loans to for-profit and nonprofit developers. The same financing can also be provided for rehabilitation for older buildings including apartment buildings and houses. Pethia said the county typically works with nonprofits to facilitate those types of services.

Considering real estate assessments

But what about real estate assessments? For as much work that the county has done to increase affordable housing in the area, Real Estate Assessments increased 6.17% in 2026, the third highest increase in the last 15 years. On the surface, this trend appears like it’s going against Albemarle’s affordability efforts, but those assessments are benefiting plenty of other areas.

Scottsville District Supervisor Mike Pruitt told WINA Morning News last month the problem lies in the fact the county is disproportionally residential, meaning its taxbase is disproportionally residential.

“I think before we talk about lowering residential tax rate, because that’s where we get so much of our funds to operate core government services our constituents ask for and demand, our first strategy needs to be significantly diversifying our tax base, and bringing in more industrial revenue,” he said.

Pruitt added that the upcoming AstraZeneca plant should help alleviate these issues in the next five-to-10 years, especially if more companies move in to be close to AstraZeneca. This would lead the county’s revenues diversifying, opening the door for the conversation of diversifying the county’s tax base.

Until then, officials will continue to work in both Charlottesville and Albemarle to address the problem of affordable housing and curb the impact of national trends in the hopes of ensuring more people can afford to live in the community.

“I struggle to find places that I like and that I can afford and so does my staff,” Pethia said. “So, we are aware of the issues. We are working toward the issues. We are concerned about the housing issue, and there’s no one magic bullet to solve it, and so it’s really doing what we can to move projects forward to help.”