Printer-Friendly
Email this Story
Post a Comment (0)
As housing market slows, impact hits local government, businesses
Not too long ago, many long-time Prince William County residents complained that sprawl was out of control.
Though they demanded government action, the housing market itself has regulated local residential growth, at least for a little while, as developers request fewer agriculture-to-residential rezonings.
“I think there's a slowdown in everything,” said Supervisor Wally Covington (R-Brentsville). “There's less construction, there's more hold on projects. So I would say there's a decrease in activity, but the industrial and the retail [construction sectors] seem to be holding on better than the residential.”
According to Kathleen Kennedy, who works for Weichert Realtors in Gainesville and specializes in selling houses in Haymarket and Gainesville, 80 percent of the business coming into the realty office is being done by investors and banks as opposed to traditional home buyers with adequate equity.
What the deflated economy has done reaches beyond developers halting construction on land parcels.
Covington pointed out how developers of an industrial complex near Hornbaker Road installed a sprinkler system in one building so they could pay fewer proffers for fire and rescue.
Proffers are monetary contributions made by developers to the county to offset the cost of government services.
By and large, houses in western Prince William County listed under $500,000 are still being bought and sold, even when they are foreclosed upon.
In and around U.S. 15, Linton Hall and Old Carolina roads, there have been some one-level, single-family “old ramblers” selling for $130,000, according to Kennedy.
But the number of Realtors interested in working in the Prince William market has fallen sharply during the last two years, too, according to Denise Roosendaal, the CEO of the Realtors Association of Prince William County.
“Certainly, our number of new members has gone down,” she said. Her organization had about 3,100 Realtor members in 2006.
Today there are about 2,300.
“Certainly the market has shifted, and Prince William has certainly born the brunt of some of the woes concerning the entire country,” she said, adding, “but I have also heard in the last three to four months, anecdotally, that interest is picking up.”
One of the problems residential developers have had in the last couple of years is they bought swaths of land at peak times in the housing market, expecting to build houses and sell them for even more money.
When the market tanked, demand for newly built houses did, too.
“So they've overpaid for this land,” Kennedy said.
In order to break even or make a profit, “they need to hang on to it for another 10, 20 years or sell it” at a loss, she added.
One such scenario happened along the U.S. 29 corridor near the Fauquier County border, where a developer pulled an offer to build 400 houses on a piece of property after paying a non-refundable deposit.
While neighboring Loudoun County began its residential boom in its western half during the 1990s, a similar scenario did not play out in Prince William until earlier this decade.
“It's cheaper to keep it agricultural and hold it,” Kennedy said. “I think we [in Prince William] were the first to get hit and the hardest to get hit. We were in our development stage.”
Houses in parts of Prince William appreciated at a rate of up to 26 percent during an 18-month period in the middle of the decade, according to Kennedy.
Now, houses in the Braemar subdivision in Bristow that were bought for $500,000 in 2004 are selling for $100,000 less today.
“I think in a lot of these communities, they're just happy to have these homes owned,” Kennedy said.
For instance, she knows Realtors who used to simply wear high heels and suits while looking at properties now having to wear masks and hard hats “because these [abandoned houses] are so horrible.”
Realtors have been trained on how to open front doors so cockroaches crawling above do not land on their heads.
And Kennedy's not referring to some set of shacks.
“I'm talking [about] these $600,000 houses,” she said.
Houses like that were target-sales for predatory lenders who convinced people making $50,000 annually that they could afford them, according to Kennedy.
But those who ultimately could not have either moved or were evicted.
For western Prince William home owners, the worst part of the market collapse may be over, but it could be 2010 before houses begin to appreciate in value again.
“I think locally, right here, we have flat-lined already in a certain prince range,” said the 20-year realty veteran.
You must be logged in to post a comment.