That, some financial experts warn, is leading to risky decisions that could become costly disappointments when trends change.
The proliferation of interest-only loans -- in which buyers purchase more home than they could otherwise afford by betting that prices will keep zooming upward, then make interest-only payments until they build equity -- is frequently cited as an example, as is the rush of bidders driving up the price of properties they have not even inspected. Analysts have warned that some properties could be overvalued.
Cathy Laakso of Loudoun paints home murals to earn money to cover her mortgage and taxes. "It means I have to paint a lot of walls," she says.
(Jahi Chikwendiu -- The Washington Post)
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"Trends in the past will repeat themselves," said Long, who presided over a nine-year stretch in the 1990s when home prices were flat or declining. "At some point in time, this is an economic cycle that will turn around."
Some, such as Brian Rhoa, say they have witnessed such a shift before. He said the griping he has heard lately reminds him of the heady California tech boom.
"It goes usually something like this: 'I can't afford to sell my house because I can't afford to move anywhere else in the area,' " Rhoa said. "We're probably maxed out here. . . . How many people can qualify for an $800,000 home?"
In Rhoa's slice of the large Broadlands subdivision, prices have climbed faster than in any other single-family home development in Loudoun. It is near the Dulles Greenway, a key commuter toll road, and he believes its slight elevation puts it a bit above the hubbub of the nation's fastest-growing county -- all of which helps explain its attraction.
"It's a different feel than the cookie-cutter neighborhood," he said.
The rising values come with a tax wallop that varies among Rhoa's neighbors. Cathy Laakso covers her house payments, and rising tax bills, by painting home murals for Loudoun's steady stream of new residents.
"There's a lot of young families here that will spend money to have their child's room like a princess. That's what I do," Laakso said. The prospect of paying thousands more in taxes has caught her attention. "It means I have to paint a lot of walls."
The rise in assessments has also underwritten a massive increase in government spending. The Fairfax County government is taking in nearly half a billion dollars more in residential real estate taxes than it was four years ago. During that time, school funding has jumped by $337 million, or about two-thirds of that amount.
Many local governments have nodded to political pressure and made slight cuts in the rate at which they tax real estate. But no local jurisdiction has come close to cutting the rate enough to offset the overall assessment increases seen by most homeowners.
"Nobody's tax rate got cut in half, so it had to have gone up," said Ben Mays, Loudoun's deputy chief financial officer.
Rising costs associated with being the nation's fastest-growing county consumed many of those additional funds in Loudoun, but Mays said government costs have been increasing across the region.
"Everybody's health insurance costs went up. Everybody's costs to the state retirement system went up. There was pay escalation. You're going to see that, especially on the education side," Mays said.
