- The Washington Times - Wednesday, April 11, 2007

If you look back two years to the spring of 2005, one of the hottest places to sell a home was outside the Beltway in Virginia.

Because homes were so expensive inside the Beltway, more-affordable counties such as Prince William and Stafford and Spotsylvania rewarded sellers with quick sales and rising home values.

In March 2005, homes in Prince William sold in an average of 21 days, and sales chances were an incredible 125 percent.

It’s easy to mix up those two data points when looking at last month’s data because the figures have basically flipped. Homes sold in Prince William last month had spent an average of 135 days on the market, and sales chances were only 11 percent.

Sales chances are my way of measuring the level of competition in the real estate market. Dividing sales figures for the month by the inventory on the last day of the month results in a percentage — a figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a balanced market or a seller’s market.

Loudoun County is also included in today’s charts, but it is a rather different place from nearby Prince William County. Because of Dulles International Airport and the associated technology corridor, Loudoun developed into a very expensive housing market in recent years.

Well-paid corporate executives and professionals can afford the larger lots and big homes of Loudoun, but this type of housing was a liability when the market began to slow in late 2005.

That’s why prices fell so much in Loudoun County, dropping $56,000 in the past year, while the median price in Prince William only fell $15,000.

The drop in prices in Loudoun County seems to be drawing buyers back, however. Notice how much higher March sales chances were in Loudoun than in Prince William.

Prices have fallen in other Virginia markets, but nowhere as much as in Loudoun. Of course, other counties hadn’t risen as high as Loudoun, either.

The median sales price in Stafford County, for instance, shot up $120,000 from 2004 to 2005. In the next 12 months, however, prices there rose only $20,000, and in the past year they fell $6,000.

Contact Chris Sicks by e-mail ([email protected]gmail.com).

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