Loudoun County Real Estate Statistics and News

Loudoun County Real Estate News - May 12th, 2011

There are two stories about Loudoun County that will have an effect on real estate in the future. 

The first story is regarding a longtime business in Loudoun County is expanding their presence here.  JK Moving and Storage is adding another 100,000 square feet of space here in Loudoun.  JK is the premier moving company in Loudoun and will continue to be a great company to have headquartered in Loudoun.  They have recently hired 30 new employees and will be adding another 100 in the near future.  It will host a job fair Saturday, from 8 a.m. to noon, at its headquarters, 44112 Mercure Circle.

On the bad side, there is the possibility that Loudoun County will opt out of funding the Metro Line that is being built right now.  There is a disagreement over whether or not to build the stop at Dulles Airport underground.  This will cost an extra $300 Million and with current cost over runs already at $1 Billion the likely cost to dig the hole will more likely be $500 Million with Loudoun paying 4.6% of this additional cost.

The implications of this are huge.  The Metro Airport Authority could build the stop at Dulles Airport and stop there.  This would eliminate the two additional stops in Loudoun County at Route 606 and Route 772.  And Loudoun would still be responsible for maintaining the Airport stop because it is in Loudoun.  Also, this would almost certainly have a negative effect on property values of those developments being build specifically near the future stops.

And another interesting fact in the story today is the future cost of tolls on the Dulles Toll Road.  Currently it costs 75 cents at the various stops along the toll road and $1.25 at the main booth in Tysons.  Once the metro goes the total costs for a one way trip will be $6.75 if they get federal help or $10.75 if they don't.  This is a huge increase in price and I can see this being a huge problem in the future.  

Loudoun County April Home Sales Down 14% Year over Year, Short Sale Deals Down 41%

There were 380 sales transactions completed in April 2011 compared to 440 in April of 2010.  This is a drop of 13.64%.  The housing market in Loudoun County is heading in the wrong direction as demand dries up in the face of stricter lending by zombie banks.

Foreclosure sales were down 14% as well even though the foreclosure turnstiles were stuck as banks were caught falsifying documents, lying on affadavits and overall being fraudulent in their attempts to steal homes from citizens.  This number should have been down much further if the government would just enforce laws of due process regarding foreclosures.  April 2011 had 50 foreclosure sales versus 58 last year.

Shorts sales continue to be a complete disaster with the government doing almost nothing at all to get the banks to approve short sales.  April 2011 showed 65 shorts sales closes versus 111 last year.  This is a 41% drop off in approved and completed short sales.  More evidence that banks are not fixing the problem and nobody is making them.  This is contrary to any rhetoric coming from the government or from anyone else for that matter.  The short sale problem has been a problem for years and banks have fought each and every attempt to fix this problem.  It will never go away as long as banks buy our congressmen at the state and federal levels.  

Here is a story at MSNBC regarding just how ineffective the government has been in fixing the housing problems.  They are being paid a lot of money to kill any bill that will hold the banks accountable and we as regular citizens are on our own to battle them.

http://www.msnbc.msn.com/id/42881365/ns/business-personal_finance

VIP Cashback Program in Loudoun County

 A new program for buyers and sellers of real estate was recently rolled out and one of the first members of the program lives here in Loudoun County.  The program is called VIP Cashback and it gives consumers an opportunity to receive money back in the form of a rebate check after they buy and/or sell a house.

Stephanie Wight and her husband Brian recently moved into their new Broadlands townhouse.  It was their first purchase and along with the government tax check for $8000, they received two additional checks for $2750 total.

This program is available to anyone in the United States and Canada that buys or sells a house through the VIP Cashback Program.

If you or anyone you know wants to take advantage of the program there are a number of ways to do so.  You can use this VIP Cashback link to sign up immediately.  Or you can send me your contact information and I will walk you through the program and all its benefits.  Or you can visit the VIP Cashback Fan Page on Facebook.  

Here is a video of the interview with Stephanie Wight when she received her rebate checks.

Preview of Loudoun County Year End Real Estate Statistics

 With the new year only a couple of days away, I wanted to take a preliminary look at how the Loudoun County Real Estate market of 2009 compares to the market of 2008.  There have been many developments over the past year that have influenced the real estate market.  Here are a couple that I feel have made a huge difference to our market:

Tax Credit for First Time Home Buyers - This waste of taxpayer money has created a complete imbalance in the low end inventory levels.  The problem with the market in Loudoun is not demand, it is inventory.  Adding more buyers to the market segment that has had multiple offers for over a year is a total failure.  When you see the inventory levels you will see what I mean.

Bank Indifference - There is currently a huge shadow inventory level in Loudoun County due to the fact that banks refuse to put foreclosed homes on the market in a timely fashion.  This will keep price levels down as home buyers realize that there is still a bunch of vacant homes that need to be sold over the coming months.  This strategy by banks will increase the length of the recovery by 2 or 3 years.

Interest Rates - Rates have remained at historically low levels as the Federal Reserve has continued to be a huge buyer of mortgage backed securities.  This program is set to expire in March of 2010 and then normal market forces will take over and presumably move rates higher.  In the meantime, the rates have kept demand levels higher as the cost to borrow money remains low.

Here is a good breakdown of the government intervention into the housing market.

Recession - Bad news for the country means good news for Washington.  And Loudoun County is no exception as it has reaped the benefits of the democratic efforts to save the economy by increasing the size of government.  Unemployment levels are half as much as other areas of the country and as the government continues to expand, the jobs will be here.   And people will move here to find employment.   

So these four factors continue to push inventories down.  As of today the number of homes for sale in Loudoun County is only 770.  On Jan 8th of 2009, inventory in Loudoun was at 1471.  This is a decrease of almost 50% on top of the previous year decrease of 38%  

But prices for the full year are almost unchanged.  The average sales price of a home this year was $362,349 vs. $367,557.  This is only a 1.4% change.  And the number of homes sold has gone down 13% from 2008.  This year 4283 homes have been sold with 3 days left in the year.  Last year 4927 homes were sold.  And even more striking is the drop off in home sales over the last 4 months of the year.  Since September 1st, only 802 homes have gone to closing.  Last year 1327 homes went to closing in the final four months.   That is a drop off of 40%.  

In my next post, I will take a closer look behind the numbers and try to explain why the market is acting like it is and give you and idea of what to expect the beginning of next year.  Also, I will have charts and graphs of year end numbers once the year is over.   

Wineries in Loudoun County - A Visit to Fabbioli Cellars

One of the most appealing aspects of living in Loudoun County is the ability to jump in your car, drive 20 minutes and find yourself at one of over 25 wineries in Loudoun County.  Yesterday was one of those days.  

With a couple hours of free time, Heather (my better half) and I drove up Route 15 to Fabbioli Cellars.  We had heard good things about their wines and wanted to sit for a tasting.  For $5 we tried 8 different wines including a couple from the nearby 8 Chains North winery.

If you have never been to a tasting at one of Loudoun's wineries I would suggest going on a less busy day.  We went on a Thursday and we got top notch service and tasted a couple of different wines that we probably wouldn't have had we showed up on a Saturday afternoon. 

There is a great article in the Washington Post about just how friendly and accessible the wineries and the wine makers are.  It also gives some really good tips on how to get the most from the experience.

A great resource for Loudoun County wineries and vineyards is the Loudoun County Visitors Center. 

There are also some great blogs dedicated to wineries and vineyards like Cellar Blog, DC Wine Country Blog, and Virginia Wine Time. 

And if you are on Facebook you can sign up for the Fabbioli Fan page and get updates on events and news. 

Loudoun County Bicycle Advisory Council?

Turns out there is not a Bicycle Advisory Council nor anyone in any position such as bicycle coordinator within the county.  Hat tip to Greener Loudoun for this tip on a meeting to discuss and determine interest in this area for our county.

I will definitely be there and hope avid bikers will come out to support.  I, for one, feel there is a need for more bike lanes, bike paths and a push for bicycle awareness in Loudoun County.  I think it would greatly enhance the appeal of our county.

The meeting is on December 18th at 7pm at the Sterling Library in Cascades.

Loudoun County Budget Outlook Meeting Tonight

  In the coming months there are going to be some very important meetings, discussions and news regarding the Loudoun County Budget for the next fiscal year.  One of those meetings takes place this evening when the Loudoun County School Board and the Loudoun County Board of Supervisers meet to discuss the budget outlook for next year.

Given that the school budget makes up approximately 70% of the county budget in a year, this meeting will hopefully go over the anticipated shortfall in tax revenues of $176 Million that Kirby Bowers has already announced. 

County officials are being a lot more proactive in dealing with the budgetary problems this year compared to last year.   This meeting is evidence of that.

If you want to follow a good blog that deals with the school board from the perspective of a school board member, I suggest reading John Stevens blog.  He is a vice chairman of the school board and resident of Sterling.

And on a side note, I believe the projected budget shortfall will probably be more than the $176 Million but I will write about that a little later in the year as the 4th quarter prices for real estate in the county become more clear.

A Perfect Opportunity for Home Buyers in Loudoun County?

Given the current state of affairs in the national economy and the current conditions in the local real estate market , could this be a perfect opportunity to buy a house or move up to a larger house in Loudoun County?

If you are a contrarian, then the answer is almost certainly YES.  If you look at market factors that were in force at the top of the market place in the summer of 2005 and flip them upside down, you get the same answer, YES.  And if you look at business cycles and the typical length of a bear market, once again you get the same answer, YES.

Analysis #1 - The Contrarian

In this marketplace with every story coming out being doom and gloom regarding home sales, home prices, unemployment, banks getting seized, investment companies going bankrupt, foreclosures hitting all time highs, recessions, bailouts, budget shortfalls, emergency sessions of Congress, Presidential speeches, etc. etc., it is almost impossible to go against all other indicators and predict a bottom to a market.  But if you are a contrarian, these are the perfect indicators that you look for to predict a bottom to a market.  Or at least they give you reason to look for a turning point to the current downward trend. 

Looking back at the state of the economy and what was in the news regarding the economy during the summer of 2005 shows almost nothing negative in the archives except the war in Iraq.  The main concern of the President was Social Security.  Here is what the President was doing those months.  The very last entry for the month of August was, in all likelihood, the catalyst for the downfall of the economy.  It was the outline for the relief efforts in the aftermath of Hurricane Katrina.

Analysis #2 - Local Real Estate Market Factors

The net increase to inventory levels during the summer months (Jun-Aug) of 2005 was 760 homes.  This was on top of an increase of 494 the previous three months.  At the time, that increase to inventory had not been seen since the 1990's.  Compare those numbers to the net decrease in inventory numbers of 633 for the summer months after a decrease of 20 the previous three months. 

The average price of a home sold in the summer of 2005 in Loudoun County was $544,425.  Compare that to the current price of $380,863 and you have a prices that are 30% better than during the height of the market when everyone was fighting to buy a house.

And interest rates during the summer of 2005 were at 5.8% on a 30 year fixed rate mortgage.  Compare that to today's interest rate on a 30 year fixed mortgage rate of 5.875 - 6% and there is very little difference to a mortgage payment.  Payment of the average home today at 6% is $900 a month less than the average payment of home purchased at 5.75% in 2005.  You would need an interest rate of 3% to get to the same monthly payment.

Analysis #3 - Market Cycle

How long will the market go down?  There are many schools of thought regarding the length of a market cycle and none are the same but if we look at the most recent real estate market cycle in this country we can get some idea.  From peak to peak, the national real estate market cycle lasted about 16-17 years (1989-2006).  Given the same length of contraction, consolidation and expansion of the previous cycle, we should see a contraction of 3 years that offsets the boom of 4  years that occured between 2002 and 2005.  That should be followed by a consolidation period of normal or little growth during a 8-10 year consolidation period. 

Here in Loudoun County we are usually about 6 months to a year ahead of the national averages therefore you see the peak as 2006 on a national level while we were peaking in 2005.  And because of that fact Loudoun County will come out of this down cycle before other markets in America. 

2 Loudoun County News Stories that Affect Real Estate

Here are some stories of interest that might affect the Loudoun County real estate landscape in the coming months/years:

George Mason University Campus in Brambleton

DC United to become LC United?

Loudoun County Inventory Levels Creep Lower

Inventory levels in Loudoun County continue to move lower during the summer months and continue a trend that began in the spring.  Since 2005, the spring and summer months were typically a time that inventory levels built up as more and more homeowners flooded the market with their listings.  Coupled with new home construction that added even more homes to the inventories, Loudoun County had a tremendous imbalance of supply vs. demand. 

But the trend has finally reversed after 3 years and now we see demand outpacing supply by a little each month.   Today, the number of homes currently for sale in Loudoun County stands at 2061.  In July, there was a net reduction of 261 homes from the inventory levels. 

Since the end of the second quarter which was just 6 weeks ago, almost 200 homes have been shaved off the inventory levels.  Demand is outpacing supply at the lower price ranges with homes in Sterling Park regularly receiving multiple offers and days on market levels dropping to an average of 56.