Despite economic troubles across the nation, Loudoun still continues to grow
By Sandhya Somashekhar (Contact)
Wednesday, August 6, 2008
If there were any doubt that Loudoun County’s long-standing reputation for rapid growth and affluence is changing, consider this: During the first six months of the year, the number of foreclosures in Loudoun almost matched the number of new homes permitted.
From January through June, there were 956 foreclosures in Loudoun. During the same period, the county authorized the construction of 1,172 new homes, a 20 percent reduction from last year and about two-thirds less than at the height of the building frenzy four years ago.
Although the numbers hardly paint a complete picture, they illustrate a dramatic turnaround in a community that grabbed national headlines because of its wealthy, fast-growing population.
Just a few years ago, government hearings were packed with residents dismayed by the transformation of their rural county into a buzzing suburban hub. Now, county officials are more likely to field complaints of next-door neighbors disappearing overnight, leaving behind overgrown lawns and the threat of sinking home values.
“There’s a lot to worry about,” Supervisor James G. Burton (I-Blue Ridge) said. “I’m somewhat pleased that the number of building permits is down. But we’ve got a real problem in certain pockets of the community where the empty houses are leaving a bad impression of the neighborhood.”
It is a pattern repeated in other parts of suburban Virginia that experienced a growth boom in recent years. Prince William County, which was among the 50 fastest-growing counties in the nation four years ago according to the Census Bureau, registered about 3,600 foreclosures from January through June of this year. A similar turnaround has occurred in Stafford County, which also was on the top 50 list that year.
“Those areas were hot and had the most transactions. There were lots and lots of mortgages taken out,” said John McClain, deputy director at George Mason University’s Center for Regional Analysis. “Unfortunately, many of those mortgages were subprime.”
At the peak of the building boom in 2003, Loudoun issued more than 6,600 residential building permits, the final authorization needed for a builder to construct a house, townhouse or condominium. A year later, the Census Bureau rated Loudoun the nation’s fastest-growing large county. Today, at 280,000, the county’s population is more than triple what it was in 1990.
Many residents and officials say that the 2004 growth rate was not sustainable and that it has led to crowded roads and schools and rising tax bills. They say the recent drop in building has been a good thing for Loudoun, giving the county time to catch up by constructing schools, fire stations and other needed facilities.
But the corresponding plunge in home values and the spate of foreclosures has caused some worries because of their impact on real estate tax revenue.
“We continue to need the respite” from new home construction, said Ben Mays, Loudoun’s deputy chief financial officer. “You don’t want such a slowdown that you have a tax problem, but a slowdown isn’t in and of itself a bad thing for us right now.”
Few think the issue of growth has vanished from Loudoun for good. Indeed, the most recent figures show home values in Prince William and Loudoun creeping higher, suggesting that the housing market might have hit bottom there. In Loudoun, tens of thousands of homes have been approved but have yet to be built. Many predict that builders will take advantage of that backlog when the economy improves.
Mays and others say Dulles International Airport, Loudoun’s proximity to Washington job centers, Metrorail’s proposed extension into Ashburn and Tysons Corner’s planned redevelopment will help the county’s economy — and the housing market — bounce back.
But for the moment, many Loudoun residents aren’t seeing cranes and bulldozers out their windows. Rather, they are seeing “For Sale” signs on their neighbors’ yards with the word “FORECLOSURE” dangling on a plaque below.
In the past few months, there have been two foreclosures on Mike Keeney’s Sterling street, one next door and one across the street. In one case, the residents moved out in the middle of the night, he said. Although lawn crews occasionally come to trim the grass, “the one next door is getting a little ratty,” he said.
But Keeney, who sits on the county’s Planning Commission, says he is not eager to return to the days when it seemed like subdivisions were cropping up overnight.
“We have a couple of applications [for new developments] in the works or coming down the mill this fall,” he said. As far as the county’s growth goes, he said, “I know it’s going to rear its head again.”
Article taken from http://loudounextra.washingtonpost.com/news/2008/aug/06/loudoun-building-boom-buckle-under-economic-strai/