National, Florida Suburbs Feel Housing Market Pain, Loss
It’s no secret that the U.S. housing downturn has depressed once-thriving real estate markets around the nation. Specifically, however, suburbs of major cities have suffered the most abrupt market correction.
Home construction in these distant towns has slowed, while prices and sales have fallen more than those of close-in suburban neighbors since a five-year U.S. housing boom ended in the summer of 2005.
For example: Average home prices in Loudoun County, Virginia, 35 miles outside of Washington, D.C., fell roughly 11 percent in 2006, according to the Northern Virginia Association of Realtors. By contrast, Virginia’s Arlington County, which hugs the nation’s capital, saw a price decline of only about 2 percent.
“It’s been hard for sellers to comprehend, and I’m usually the bearer of bad news,” said Mike Wagner, a real estate broker who works in Loudoun. “The news is: Your home is worth $100,000 less than it was a year and a half ago.”
And it’s not just prices that have suffered.
The average Loudoun County home sold in December spent 101 days on the market, according to the Realtor group. In Arlington, the average was 72 days. As previously reported, unsold inventory is a problem across the state and country.
Wagner and other local real estate agents say the area’s soft market is a hangover, in part, from a building spree and a buying binge among investors priced out of other areas. The same applies to those within the Florida mortgage market - and elsewhere, evidently.
Take California, where suburban housing markets have softened more than those close to urban centers.
Home prices in Los Angeles rose a relatively modest 5.8 percent in December from a year earlier, while sales were down 14.5 percent, the California Association of Realtors said.
Now, real estate agents in those areas are trying to sell a glut of new homes, along with the inventory of previously owned houses.
“There is intense competition in the inland areas of the state between the existing stock and new homes,” said Appleton. “The absorption of this new product is going to take some time.”
In some of Florida’s distant suburbs, strong price appreciation rates had builders imagining a continued demand for homes, said Brad Hunter, director of South Florida real estate research firm Metrostudy.
“I think it was easy for builders to think that there were real users in these fringe areas far from jobs and entertainment,” he said. “In fact, we found that purchases in those areas over the last three years or so … were speculators and not users.”
