Archive September 2009
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Without rehashing the point any further, this has been a very difficult
couple of years for the Real Estate market. Our market in Loudoun
County has experienced its fair share of problems. The million dollar
question is what's ahead for us. Loudoun County is composed of three
distinctly different markets. The first and most active is the heavily
developed Rt. 7 corridor from Leesburg east. We also have the partially
developed Rt. 50 corridor east of Rt. 15 and finally the rural market
west of Rt. 15.
It is all too obvious that Loudoun County, as well as the rest of
Northern Virginia, has a rapidly deteriorating commercial Real Estate
Market. As you drive around there are an astonishing number of “see
through-ems”, buildings you can look in one window and out the other
side! We also have a growing number of vacancies in our retail centers.
Many of the loans on these under and non producing buildings are set to
refinance in the near future and they no longer have enough equity to
acquire the financing. Loudoun County has one of the highest commercial
vacancy rates in the Washington area, however as new construction slows
there is good reason to believe that our future growth will absorb most
of the vacancy in the next few years.
Without rehashing the point any further, this has been a very
difficult couple of years for the Real Estate market. Our market in
Loudoun County has experienced its fair share of problems. The million
dollar question is what's ahead for us. Loudoun County is composed of
three distinctly different markets. The first and most active is the
heavily developed Rt. 7 corridor from Leesburg east. We also have the
partially developed Rt. 50 corridor east of Rt. 15 and finally the
rural market west of Rt. 15.
This is what I expect to happen in the next twelve months. First we
have to look at the factors that influence Loudoun County. We are very
lucky to be so close to Wash. D.C! We can expect solid growth in the
future as a result of government spending which is currently adding
jobs to the local market as well as bringing more private sector jobs
our way. We are already experiencing an increase in financial sector
jobs arriving as a result of the increased regulation and need of
financial institutions to be near the Washington regulators, the
Washington Post reported on this in Sept. 13th , and this is
just the beginning. We are also very lucky to have Dulles International
Airport and the subway connection to Washington in the near future. We
are the most attractive and promising market, in the most stable city
in the country. Although we have had so many problems, as has the rest
of the country, we are very lucky to be in Loudoun!
In the two eastern areas we have a housing shortage! We have a
market which at any other time in history would be experiencing
explosive price increases. This is especially true in the Leesburg,
Ashburn, Sterling/Potomac Falls and South Riding areas. We have
multiple contracts on many of the most attractive properties and
rapidly decreasing inventories. What we actually have is a market being
artificially restrained by mortgage regulations which will not allow
prices to increase. Until these prices are allowed to rise many people
will simply refuse to sell and we will continue to have multiple
purchasers who are frustrated in their attempts to buy. Builders are
also having problems with prices, there is simply not enough profit in
the residential market for them to risk building to meet the current
demand. This market will be stable with lower sales volume and very
frustrating for all!
The rural market will experience more substantial problems. It is
always true that the further west you go the longer it will take to
recover. If you add to that the changing demographics, younger families
are more likely to be looking for smaller properties which require less
maintenance and a lower mortgage. They also want more amenities in
close proximity to their homes. This trend is expected to continue and
will seriously erode the chances for recovery in rural markets. The
next year will continue to be very difficult in these areas. There will
probably be a greater chance for recovery in the urban centers such as
Hamilton, Purcellville and Round Hill.
In summary next year will probably look much like this year with
prices continuing to increase slowly in the east with reduced sales and
we will probably see prices begin to stabilize in the west and sales
continue to slide.
