In Housing Market, Signs The Sky Has Stopped Falling

Foreclosure, Price Data Buttress 'Sharp Shift'

Real estate agents and county officials in Northern Virginia say the local housing market is showing signs of stabilizing.

Carolyn Capalbo, a real estate agent in Manassas who works in Prince William, Loudoun, Fairfax and Fauquier counties, said she has noticed a "sharp shift" in the past six months, as a swell of buyers, many looking to purchase their first home, have been jockeying for a smaller pool of houses.

"It's a seller's market," Capalbo said. "We have a lot of relocation people who they feel like can come in and get the deal of the century but find themselves in competition over property, and they're shocked."

The number of foreclosures in each county is down from last year, according to county data. In Prince William County, Manassas and Manassas Park, foreclosures through the first half of this year numbered 2,200, on pace to total far fewer than the 8,300 last year, said Bill Vaughn, county economist and demographer.

"If this pace holds up, we will do about half as many foreclosures as we did last year," Vaughn said. "The really bad years are hopefully behind us."

In Loudoun, foreclosures dropped from 1,288 through July 2008 to 829 through July 2009, according to data provided by the county. In Fairfax, foreclosures totaled 921 at the end of July 2009, compared with 2,039 at the end of July 2008, according to data provided by the county.

The average price of homes sold is also leveling off -- down from last year, but not as steeply as in the previous year. In Prince William, the average price dropped from about $255,000 in July 2008 to about $242,000 in July 2009, according to data from Metropolitan Regional Information Systems, a Web site that tracks real estate data in the mid-Atlantic region. The average price of a home sold in the county in July 2007 was about $407,000, according to MRIS data.

In Fairfax, the average price fell from about $467,000 in July 2008 to about $447,000 this July, according to MRIS data. It was $557,000 in July 2007. In Loudoun, the average price dropped from about $400,000 in July 2008 to $379,000 in July 2009, according to MRIS data. In July 2007, the average price was about $509,000.

Properties are moving faster. In Prince William, units sat on the market an average of 62 days in July, compared with an average of112 days in July 2008, according to MRIS data. In Fairfax, units sat 61 days, compared with 94 the previous July, and in Loudoun, they sat 62 days, down from 108.

Home sales have also generally shown improvement. In Prince William, the number of units sold through July was 4,899, up from 3,460 through July of last year, according to MRIS data. Home sales were also up in Fairfax, and sales were about the same in Loudoun.

Loudoun economist Jack Brown said people should be cautiously optimistic.

"There's no question that things have improved, but there's a lot of improvement we yet need to see," Brown said.

Staff writer Jennifer Buske contributed to this report.