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Charting the market: Lean year for builders
Question of the Day
So far, this has been the worst year for Washington’s home builders in at least 20 years. Despite a surge in overall buyer activity brought on by the home-buyer tax credits, buyers didn’t seem very interested in new construction.
While sales of existing - resale - homes were up 5 percent during the first five months of the year, new-home sales were down 17 percent compared with last year.
Price is likely one reason for the difference. New homes usually cost more than existing homes.
Settlement dates could have been another factor. Those who bought homes in the spring to get the home-buyer tax credit faced a June 30 deadline to go to settlement or they would lose the credit. Because new-home buyers often have to wait for their home to be built, homes purchased in the spring might have been completed after June 30.
(The settlement deadline has been extended to Sept. 30, but home shoppers didn’t know that would happen in the spring, when the deadline could have affected the kind of home they purchased.)
Despite the overall drop in new-home sales, we did see an increase in sales in one Virginia county and one Maryland county.
Although both Loudoun and Charles have seen an uptick in sales activity, they are very different markets. The median price per square foot for a new home in Charles was $128 during the first five months of the year - an increase of 4 percent over last year. Charles is the least-expensive new-homes market in the immediate Washington area.
Homes are more expensive in Loudoun, where a square foot of new house costs $168 this year - up 1 percent compared with January through May of last year.
Actually, the price differential between Charles and Loudoun is even larger than what is evident from those figures. That’s because two-thirds of the homes sold in Charles were single-family homes (which cost more than condos and town homes) while 44 percent of Loudoun sales were single-family properties.
The larger proportion of town homes and condos in Loudoun County keeps the square-foot statistics down.
If you want to know how expensive a foot of new house can get, look inside the Beltway. Alexandria is more than $400 per foot, and the District is approaching $500.
No wonder sales are up in Charles and Loudoun. And it’s no surprise that some people are willing to commute all the way from Stafford County, where homes are less than one-third the price of those in the District.
The metro area includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria; and the District.
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