Loudoun Lags Others in Housing Market

By Bill Brubaker (Contact)

Wednesday, September 12, 2007

The median sales price of an existing Loudoun home dropped 8.6 percent in August compared with the same month a year ago, making the county’s housing market one of the worst-performing in the Washington region, according to data released this week.

Sales prices dropped 1.3 percent in Prince William County and 4.5 percent in Prince George’s County, according to the Metropolitan Regional Information Systems (MRIS), which provides figures to real estate agents. And they rose 0.6 percent in the District, 2.1 percent in Fairfax County and 25.7 percent in Arlington County, where condominium sales were strong.

In Fauquier County, the median sales price dropped 11 percent.

The fresh sales numbers offer some good and bad news for Loudoun home sellers.

The bad news is that the median selling price of an existing house was $444,500 last month, compared with $486,500 in August 2006, according to the MRIS. The median is the point at which half the houses sell for more and half for less.

The good news is that prices have been rising in Loudoun since January, when the median was $419,500.

Home prices have been dropping across the Washington region the past two years after double-digit run-ups from 2002 to 2005. And the buyer’s market in Loudoun is especially evident in communities such as Lansdowne, Brambleton and South Riding, where new houses are being offered alongside existing properties.

“If you bought your house in those communities three years ago, when the market was higher, you may have spent $40,000 or $50,000 on different options, such as granite [countertops] or a finished basement,” said Dale Polen Myers, a longtime agent at Carter Braxton Real Estate in Leesburg. “And now if you are selling that house, you have to compete against new homes from the same builder who is offering to do things for the buyer as an incentive for them to buy.”

Newspaper advertisements for new homes in the Washington area scream with incentives.

“The Choice Is Yours! 50% Off Options (No Limit) Or We’ll Pay All Closing Costs!” promises Ryan Homes.

“Deal of the Century. You Name Your Deal!” says K. Hovnanian Homes.

“Below-Market Financing Starting at 3.999%,” trumpets Del Webb.

Home builders also are cutting prices. Pulte Homes, for example, advertises that it has dropped the price of a four-bedroom, 3 1/2-bath home at the Hamlets at Red Cedar in Leesburg from $906,125 to $806,000. “But hurry,” a Pulte ad says, “it all ends September 15!”

These deals — spurred by a glut of unsold properties — have forced owners of existing home to cut their selling prices, said Myers, who is chairwoman of the Dulles Area Association of Realtors.

“In Loudoun County, unlike in places like Fairfax County, we have a new homes market that is very competitive,” she said. “And that means people with existing homes are having to reduce their prices to compete with the incentives these new builders are offering.”

Myers said she wasn’t surprised that some closer-in suburbs fared better than Loudoun in the August sales statistics.

“That’s been true always,” she said. “I mean, people picked Loudoun because of a certain quality of life. They would come out and say: ‘You know, I could be in Fairfax or Arlington or Alexandria in a condo or I could be in a single-family home in Loudoun County and have a yard.’ So they would choose to come out here simply because of the benefits of the quality of life.”

But with higher gas prices and congestion increasing on Northern Virginia roads, the closer-in suburbs seem more attractive to some home buyers, Myers said.

The 25.7 percent run-up in Arlington home prices was striking, especially in today’s market. The median price of an Arlington house rose to $528,000 last month, compared with $420,000 in August 2006.

“That is an example of supply and demand,” said Jill M. Landsman, communications manager for the Northern Virginia Association of Realtors. “There is good job growth, and there are a lot of two-income, educated families who want Arlington because it offers excellent proximity to Washington, D.C., to McLean, to Alexandria and to other suburbs for jobs.”

In Loudoun, meanwhile, there is one more hopeful sign for sellers: Homes that went under contract last month took an average of 93 days to move. That compares with an average 138-day turnaround for houses sold in August 2006.

“So that’s not so bad,” Myers said. “I can remember back in the ’80s where six months was your average time to sell a house in Loudoun. But many people don’t remember that.”

Tagged: home sales

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