Improving Housing Market Stirs Hope

Sales Are Up, Prices Steadying in County

Residential sales in Prince William County are up, and home prices are stabilizing -- positive changes, county officials said, for a locality once dubbed the epicenter of the region's foreclosure crisis.

"We're cautiously optimistic," said Christopher E. Martino, county finance director, who spoke to county supervisors Tuesday. "The rate of foreclosure activity has decreased substantially, activity has picked up and our inventory is declining."

Through May, county officials had recorded 1,514 foreclosures, down from 2,319 recorded for the same period last year. Martino said the county had about 6,500 foreclosures last year.

Real estate experts said several factors were to blame for the rise in foreclosures last year, including unscrupulous lending practices and the county's anti-illegal immigration policies, which drove away some Hispanics.

Martino said the county was also growing faster and had more affordable housing, which created momentum before the housing market collapsed nationwide.

The market turnaround "is obviously good news," said Corey A. Stewart (R-At Large), chairman of the Board of County Supervisors. "A couple of us said Prince William would be the first in and the first out. Now there is . . . finite data that we are coming out of the housing recession."

Prince William isn't the only jurisdiction experiencing a market change. Loudoun County Assessor Todd Kaufman said that through last month, the county had recorded 718 foreclosures, down from 989 during the same period last year. In Fairfax County, officials said they recorded 1,300 foreclosures in April alone. That is down from the record 2,257 it recorded in September.

"Houses are selling, prices are reduced and market activity is fairly strong," Kaufman said. "I think the residential market is fairly stable, and the biggest issue now is the general economy and whether that continues to decline."

Sales of more-affordable homes are on the rise in Prince William, Martino said, and houses with $700,000-plus price tags remain untouched.

In May, houses sat on the market an average of 78 days, compared with 128 in May 2008, and the inventory in the county is steadily declining. Martino said the county has four months of inventory compared with about eight in May 2008.

Housing prices are beginning to stabilize. Home values dropped nearly 36 percent in December. The gap between the assessed value and the selling price is closer to 4 percent, Martino said.

Although the residential market looks promising, Martino said, the commercial sector is struggling. Last year, commercial property depreciated nearly 15 percent; Martino said the commercial vacancy rate is about 10 percent and rising.