Loudoun Home Price Declines Steepest in Region

By M.J. McAteer

Sunday, March 30, 2008

Loudoun County had the Washington region’s sharpest drop in home prices last year.

The median price of single-family houses and townhouses sold in the county last year was $492,000, down 8 percent from $535,000 in 2006, according to a Washington Post analysis of government sales records. The next worst performing county in Northern Virginia was Prince William, where the median price fell 5 percent. No area in Maryland’s Washington suburbs or the District came close to experiencing such a precipitous decline.

Blame it on Newton’s third law of motion: “For every action, there is an equal and opposite reaction.”

Loudoun home sales and values.

From 2000 to 2006, Loudoun was one of the nation’s fastest-growing counties, and developers responded with a building boom, creating thousands of mainly less-expensive homes. Last year, as the highflying mortgage market had its wings clipped, new-home starts plummeted by 50 percent, county assessor Todd Kaufman said. Overall sales in Loudoun, not including condos, went from 6,015 units in 2006 to 4,034 last year.

The closer-in areas of the county took the biggest hit. In 2007, Zip code 20105, which extends east from Aldie along Route 50, recorded 258 sales, up from 234 in 2006, but the median value of the units dropped 18 percent, to $494,680 from $600,000. The median value of the 82 units sold in Sterling Zip code 20166 — down from 197 units sold in 2006 — dropped 17 percent, from $495,000 to $409,000.

Kaufman said the plummeting numbers are partly the result of high-density developments in eastern Loudoun, including Sterling, Ashburn and Broadlands, not being “stratified enough.” Developers flooded the market with lower-priced condos and townhouses, and buyers of those properties have been the most vulnerable to the subprime mortgage crisis.

Sue Smith, an agent in Re/Max Premier’s Dulles office, estimated that nine out of 10 properties for sale last year in Sterling Zip code 20164 were foreclosures. The median price of the 328 units sold there was $375,000, down 11 percent .

Pat Paulas of Long & Foster said lower-priced properties along Loudoun’s border with Fairfax County began to move in 2007, but only because of bargain-hunting investors. “The breakdown comes at about $350,000,” she said. “Anything above that is selling slower.”

Unless the price is way, way above that. Mary Gibson of Walsh & Associates, said, “The over-$1-million market is as strong as ever.”

Photo: Steven E. Schwartz

Llangollen Farm, an estate west of Middleburg, sold for $22 million in 2007.

Kaufman agreed. He said estates have accelerated in value despite the generally dismal market. He also noted how deceptive median price can be for an area like Middleburg. The median is the point where half the sales are above and half are below. It mathematically mutes the effect of high-end sales.

Thirty-three properties sold in Middleburg’s 20117 Zip code last year, a tiny uptick from the 30 in 2006, but the median dropped 4 percent, to $814,500. That doesn’t reflect a stunning sale such as Llangollen Farm, a 1,100-acre estate west of Middleburg that went for $22 million last year.

Tagged: home, home sales, real estate

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