Manassas real estate regains a pulse

Sales, prices have city financial officials 'optimistic the worst is over,' though cuts might not be

Residential sales in Manassas are up, and home prices are beginning to rebound -- two heartening changes, city officials said, for a city that has been plagued by foreclosures.

"There have been some very positive signs in the third quarter of this year," Manassas Commissioner of the Revenue John P. Grzejka told the City Council on Monday. "I'm optimistic the worst is over, but no one has a crystal ball."

Through September this year, city officials recorded 256 foreclosures in Manassas, down from 592 in the same period last year. By the end of last year, Manassas had recorded 900 foreclosures, far more than the handful it has typically had, Grzejka said.

Some sales are coming in above list price, Grzejka said. The average sales price of a home is about $179,000, up from about $160,000 last year.

In addition, the city's assessments for single-family houses are leveling out. But condo values are still down about 20 percent, and commercial property has dropped more than 10 percent.

Grzejka said home prices are steadying because the inventory in Manassas is declining. In September, there were 50 houses on the market. Last year, that number stood at 327. Houses are also selling more quickly -- in roughly 30 days -- compared with last year, when houses sat on the market an average of 119 days.

"It's all about supply and demand," he said. "The stabilization of prices occurred because the market is more in balance than it was in prior years."

Grzejka said property values will continue to fluctuate as Manassas officials draft the fiscal 2011 budget and its accompanying five-year forecast. There are also concerns nationwide that a high number of delinquent mortgages could trigger another round of foreclosures, he said.

During next week's City Council meeting, council members are scheduled to address and possibly vote on a five-year budget plan for the city. If the council wants to keep the average single-family residential tax bill flat, it will have to cut $2.8 million from the city's budget and $2.4 million from the school system's budget, based on current real estate numbers, Manassas Finance Director Pat A. Weiler said.

City Manager Lawrence D. Hughes said city departments are drafting budgets that reflect cuts of 10 percent. Last fall, Manassas cut its budget by combining 12 of its main divisions into seven and eliminating the equivalent of 20 full-time positions. Those changes were expected to save Manassas about $2.5 million over a year and a half, Hughes said.