You may not have heard of these places in the "exurbs" in Northern Culpeper County:
Amissville, VA
Jeffersonton, VA
Yet people moved out there to escape high housing prices further in, and gained a heckuva commute to D.C. (Yes, to D.C. proper. They leave around 5:00 am).
And then house prices started escalating there as well, and builders and speculators jumped on board.
In 2005, I visited Enterprise Rent-a-Car for a rental car in Warrenton (that's out past Gainesville). Somehow the conversation turned to the housing market. The rental employee who gave me a courtesy pickup at the dealership lived in a subdivision in Jeffersonton. He said "My house will be worth a million dollars soon!" (It had jumped in value from 250K to 500K in the last three years).
In 2005, Culpeper County tax rates were $.89 per $100 of assessed value. I thought: ok, how much has your raise at Enterprise Rental Car been in the last three years? In 2002, tax rates were at $.92 cents and his property taxes would have been $2,300 a year. In 2005, there hadn't been a reassessment yet (to take into account the '03-'05 runup), but they theoretically would have been $4,450 per year for a 500K house. And if the County hadn't cut rates to $.56 in 2007, at a "cool million" his taxes would have been $8,900 a year.
The following week, my neighbor repeated the same words: "My house will be worth a million dollars soon." (I wondered: what is it with the million thing?)
Check out the dramatic drop in millage rates to make up for the housing bubble:
CULPEPER COUNTY TAX RATES -- REAL ESTATE
YEAR RATE per $100
of ASSESSED VALUE REASSESSMENT YEAR
2007 $ .56 Yes
2006 $ .89
2005 $ .89
2004 $ .89
2003 $ .81 Yes
2002 $ .92
2001 $ .88
2000 $ .82
1999 $ .74
1998 $ .74 Yes
1997 $ .74
And how are these exurban towns faring now?
Here are the May statistics:
Amissville (20106):
Active listings: 62
Sales: 2
Median Sold Price: $335,000
Jeffersonton (22724):
Active listings: 43
Sales: 3
Median Sold Price: $322,500
If a house were priced over $400K in either town, the seller had a zero percent chance of selling in May. Most of the inventory is priced in that range, however. In Amissville, 74% of the inventory is over 400K, and in Jeffersonton, 93% of active listings are over 400K.
Centex is gearing up to build several hundred homes in Jeffersonton, as mentioned a few weeks back on this blog.
(According to MRIS data, in May 2007 Culpeper County had 352 properties on the market priced above 400K. The number sold: 6. That's 59 months of inventory in that price range).
3 comments:
It boggles my mind that people are willing to commute those distances. Of course, some always have. I new one gent who lived near West Va and commuted to Springfield. He arrived at 6:30 and left at 3:30. But when a lot of people are moving that far out, then the roads are fuller and one ends up leaving even earlier in the morning. I'd rather live closer in and in a smaller house or apartment than commute those distances.
I know of many employers in the area that are hurting for people. I think housing costs are one of the main factors. Traffic is another. There aren't enough roads. Also, most of the major highways (and public transportation) are designed to get people into DC. Commuting from one suburb to another can take a while too. Although, the Fairfax Co Parkway did help a lot.
What would be nice is if the public transportation were a better networked, for example, if the Manassas rail stopped at Vienna, then traffic on 66 might lighten up.
59 months of inventory is nothing. they'll be able to work that off in no time*
*no time being defined as 59 months in the best case scenario. actual results may vary depending on new construction adding to the already glutted market and further depressing home prices.
Wonderful presentation.
I enjoyed reading your post always.
I wonder when home owners realize the house is not worth what they are expecting.
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