Home Prices Receding, Sales Rising In Pr. William

By Jennifer Buske
Washington Post Staff Writer
Sunday, May 4, 2008

Painting, cleaning and remodeling the kitchen are some of the projects self-proclaimed handyman Kevin Garvey is ready to delve into now that he has a home of his own.

After he had browsed more than 30 houses in Northern Virginia, the price and location of the single-family house off Liberia Lane made the first-time home buyer move to Manassas.

"There were a lot more options in Manassas than in other areas," said the 24-year-old, who looked in Leesburg, Centreville, Ashburn and Alexandria before buying the $305,000 house. "This was a bank-owned property at a good price. It was an offer I couldn't pass up."

Garvey is one of many first-time home buyers making their way to the area, real estate agents said. After a plague of foreclosures, Prince William County, Manassas and Manasss Park finally have some positive activity in the housing industry.

"I'm happy to say we are seeing a lot of first-time home buyers," said Carolyn Capalbo, a real estate agent with Keller Williams in Manassas. "People are seeing the prices come down to a point where it makes sense to purchase. What they would be paying in rent versus a mortgage is about equal, so there is a strong argument to buy."

Because of the number of foreclosures in Prince William, Manassas and Manassas Park -- 659 in March -- a lot more affordable houses are on the market, real estate agents said.

Garvey, who moved from Tallahassee, said he was attracted to Manassas because real estate taxes are lower, the neighborhood is nice and it's close to his government job. Although Garvey said he didn't expect to buy a house at age 24, the prices here vs. in Florida made it a better option.

"What I found interesting here with the foreclosures was I could get a better deal than what I could have gotten in Florida" for the same size home, Garvey said.

Metropolitan Regional Information Systems data show that the number of housing sales for Manassas is up 33 percent in March 2008 from March 2007. Although 673 active listings remained on the market at the end of March, 52 units sold, compared with 39 that sold in March 2007. Eighty-six sales are pending.

Housing sales in Prince William are also rising. At the end of March, active listings numbered 5,757. During that month, 502 units sold, vs. 418 sold in March 2007 (a 20 percent jump). Manassas Park had 294 active listings on March 31. Twenty-five units sold that month, compared with 14 in March 2007, MRIS data state.

"We've seen a clear increase in activity over the past 30 to 45 days," said agent John Thompson of Northern Virginia Samson Realty, adding that agents are noticing multiple offers on some Manassas and Prince William properties. "It's a supply-and-demand-driven market. There are lots of good deals out there, and anytime you have a commodity where there are good deals, there will be buyers lining up."

While some jurisdictions are starting to see a positive trend in housing sales, MRIS data show that many surrounding localities are still on the decline. Housing sales in the counties of Fairfax and Loudoun and in the city of Alexandria, for example, are down 26, 20 and 40 percent, respectively, from a year earlier, data show.

Real estate agents said the Prince William market is heating up more quickly than others because it took a bigger hit.

"The housing market is looking much more affordable in Prince William than in other places," said Stephen Fuller, an economist at George Mason University Center for Regional Analysis. "Prices got way too far away from reality across the region. Prince William is adjusting more substantially and will be a much better housing market in the long run because there is a better balance between value and price."

The cost is what brought Joe Munsell from Springfield to Bristow. A renter for the past four years, Munsell said he was attracted to the value, the family-friendly neighborhood and Prince William's crackdown on illegal immigration, which he said is making the area safer.

"Two years ago, I could have never afforded what we bought," said Munsell, who is moving into a four-bedroom $400,000 house with his wife and two children. "But prices came down quickly. The timing was perfect. We found an excellent home and decided to strike when the iron was hot."

The MRIS data show the average recent sale price of a Manassas house is $195,500, 40 percent lower than last year. In Prince William, it's $299,600 -- a 26 percent drop. The average cost of a house in Fairfax and Loudoun is still more than $400,000.

"There was a significant price change, much more than in other jurisdictions," Fuller said of the Prince William area. "And, I'd like to think that economics work. As prices go down, sales go up."

Investors are also finding deals, real estate professionals said. Although most clients are new homeowners, a few consider this a good time to buy investment property.

"As a small-time investor, you can't go wrong, especially now," said Lou Coletta, who just invested in his second Prince William property. "I like Prince William, Fairfax and Loudoun, but the property in Loudoun has not gone down as much as here. Prince William was hit the hardest, and prices have taken a tremendous drop."

Keith M. Elliott Jr., with Re/Max Olympic Realty in Haymarket, said that though houses are cheap, buyers need to be cautious because foreclosed properties come as-is.

"The state of some of these homes was disgusting," said first-time home buyer Sue Lozano, who looked in the Prince William area before settling on a house in Chantilly. "People just didn't care what state they left them in."

Garvey, on the other hand, said he was happy to get a house that needed a little fixing up. It gave him a chance, he said, to make it his own.

"With foreclosures, you have to be willing to work and make it what you want it to be," he said. "I wanted my house to have a little bit of that fix-up flair. I wanted it to have enough projects that I could do myself, but nothing too overwhelming."

© 2008 The Washington Post Company