- The Washington Times - Thursday, September 29, 2005

The Washington-area housing market has suddenly and dramatically slowed down. Although there are too many factors involved to discern exactly why the market is slowing, I believe the region’s high home prices are part of the explanation.

As home prices have shot upward in recent years, buyer interest has increased in counties outside the Beltway, such places as Loudoun, Prince William, Stafford and Spotsylvania counties.

Buyer demand for affordable housing has been so great that buyers have flocked to these counties. As a result, prices there have risen dramatically. Detached homes in Loudoun are now more expensive than those in Fairfax County — although this is due, in part, to the fact that lots are generally larger in Loudoun.

If you head farther south, you may still be able to find a large lot and an affordable price. Virginia Railway Express and Interstate 95 make it possible to live all the way down in Stafford County and still keep your job in the District.

But the sudden popularity of Stafford County has resulted in severe traffic problems in the Fredericksburg area and on northbound Interstate 95.

Prices in Stafford have increased 137 percent in five years, making that county less of a bargain than it had been. Today, buyers looking for a truly affordable home in Virginia have to travel even farther, to Spotsylvania County or beyond.

Looking forward, the metropolitan real estate market should continue to cool in the coming years. When it does, it is possible that outlying counties such as Prince William, Stafford and Spotsylvania won’t cool as quickly as such places as Fairfax, Arlington and Montgomery.

If I’m right that high housing prices are a major factor behind the current slowdown, then the market inside the Beltway is going to continue to slow sharply, while more-affordable markets slow more gradually.

In fact, while sales fell in most area jurisdictions last month, sales were up in such places as Stafford, Frederick and Charles — all counties with more affordable homes than those closer to the District. And Prince George’s County continues to be the region’s most competitive market due to the very reasonable prices found there.

Contact Chris Sicks by e-mail (csicks@gmail.com).

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