You may not have heard of these places in the "exurbs" in Northern Culpeper County:
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:
Active listings: 62
Median Sold Price: $335,000
Active listings: 43
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).