Housing Outlook 2007: Loudoun County

By M.J. McAteer

Sunday, March 25, 2007

Home price increases screeched to a halt in most of Loudoun County last year.

A Washington Post analysis of county sales records showed that the median price of single-family houses and townhouses in 2006 was identical to that in 2005 -- $535,000 -- a sharp contrast with a 26 percent increase the previous year. The volume of sales fell precipitously, dropping 45 percent to 6,015 from 10,875 in 2005. Condominiums were reviewed separately.

And the flat price may mask some of the weakness in the market, because many buyers were getting a lot more for their money. For example, Zip codes 20147 and 20148, which encompass Ashburn, were two of the county's busiest markets last year, with 1,728 sales combined. Last year, each showed a 1 percent increase in the median home sales price.

But Ashburn has lots of new construction, said Dorothy Beach, a real estate agent with Long & Foster in Sterling. After home sales plummeted last year, builders responded by offering extras such as granite countertops and finished basements. These add-ons might be worth as much as $75,000, but builders typically have been absorbing the cost to keep their selling price the same.

Individual homeowners cannot match that approach, Beach said. They have cut their prices instead. This is reflected in more built-out area such as the 20152 area of Chantilly -- 568 homes sold at a median price of $620,000, a 4 percent decline from $649,005 in 2005.

The county-wide median price was also propped up by record prices for some properties in the wealthiest parts of western Loudoun. In Middleburg Zip code 20117, the median price increased 32 percent, to $846,000 from $640,000, mostly because of the "extraordinary" prices at the high end. Of 30 sales, 12 were for more than $1 million.

"We haven't had a ton of sales," said Paul MacMahon of Sheridan MacMahon in Middleburg, "but the ones we've had are eye-popping."

The cost of gasoline probably does not figure into the calculations of the buyers of multimillion-dollar estates, but it may be partly responsible for the drop in prices and sales in other western parts of Loudoun. For example, Zip code 20180, the Lovettsville area, had 111 sales, compared with 205 in 2005, and the median price dropped 8 percent, to $532,860 from $578,214. Mary Sleeter of Re/Max Renaissance in Leesburg said 20180 is perceived as "a more difficult commute."

On the other hand, she said, "Everything up and down [Route] 7 tends to be selling." Zip code 20175, which includes Leesburg, had the second-biggest price jump after Middleburg -- a 20 percent increase in median value on the sale of 526 properties, to $565,865 from $470,000. That probably reflects the influence of new construction.

However, a little farther out Route 7, Zip code 20158, Hamilton, had one of the sharpest price decreases in the Washington region, with 81 houses selling for a median price of $679,465, down 14 percent from a median of $790,379 and 136 sales in 2005.

Loudoun real estate agents say they are guardedly optimistic about 2007 after a decidedly better November and December 2006.

"Prices are still declining," Beach said, but "people are making offers."

Tagged: housing market

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