A Starker Market In County

9.4% Drop in House Prices Is Among Steepest in Area

It's a good thing the 7,000-square-foot house in Lansdowne isn't typical of properties being sold in Loudoun County this year.

The house has been on the market for more than 450 days. And it still doesn't have a buyer.

But a snapshot of Loudoun's residential real estate market -- taken from May sales data -- shows that existing houses are taking a long time to sell and that the prices being fetched are well below last year's.

The median selling price of a Loudoun house was $435,000 last month, compared with $479,900 in May 2006, according to data from Metropolitan Regional Information Systems, which provides figures to real estate agents. The median is the point at which half the houses sell for more and half for less.

That's a 9.4 percent drop -- one of the steepest in the Washington region.

Just as troubling for sellers, perhaps, is the average number of days it took to sell the 457 houses that went under contract last month in Loudoun: 111. That compares with an average 70-day turnaround for the 484 houses that sold in May 2006.

"This is all a symptom of the overbuilding that has taken place in Loudoun," said Jill M. Landsman, communications manager for the Northern Virginia Association of Realtors, a trade group. "When you have overbuilding and then you have a lot of people trying to sell at the same time, the only way to compete is to slash your price, come to the table with seller concessions or create a clear incentive that shows your property is the one to buy over the 10 others that are similar."

Real estate experts don't expect things to get much better for sellers in the coming months; interest rates jumped last week just as the traditionally slower summer buying season was beginning.

Nationally, the average interest rate on a 30-year fixed-rate mortgage rose to 6.74 percent last week, according to Freddie Mac, the government-sponsored mortgage finance company. The rate was 6.18 percent at the beginning of the year.

"Interest rates are still very good historically, but anyone who has been thinking about getting a 6 percent mortgage -- well, that may be out of the question for the foreseeable future," said Debbie Tencza, a Long & Foster Realtor who specializes in Northern Virginia.

The market slowdown has been felt in counties across Northern Virginia, according to the MRIS data. Price drops also were reported in May in Arlington (down 8.2 percent), Fairfax (down 5.6 percent), Prince William (down 4.3 percent) and Fauquier (down 1.2 percent).

The 9.4 percent drop in Loudoun wasn't surprising to real estate agents who work in the county, where sales prices have been declining since last June.