Housing prices in Prince George's County have continued to creep up as demand for new homes outside the Capital Beltway rises. Last year, the median sales price of a home here rose 7.1 percent to $165,000, according to county sales records. The numbers do not include condo sales.
The sales were driven by low interest rates and rising home values, said Holly Sun, an economic analyst for the county government.
"The housing values are appreciating so fast, and people really do think it is a good investment compared to investments in the stock market. I think the [housing] market will continue to be relatively strong, but I think it will moderate to some extent," she said. "The price increases will slow down because of supply constraints. There is only so much room for new homes."
The most popular areas of the county are those that are unincorporated, such as Upper Marlboro, or cities such as Bowie, real estate agents said. The most expensive part of the county last year shifted from Upper Marlboro to Zip code 20720, an unincorporated area near Bowie that is minutes from the county's newest shopping mall, Bowie Town Center. The median home price there rose 10.7 percent, to $238,000.
Terri and Nathaniel Smith and their new baby recently moved into a new 2,800-square-foot home built in that area. The Smiths, both 32, purchased their home in Fairwood, a planned community developed by Rouse Co., which built Columbia, in Howard County. The opening of Fairwood, on the outskirts of Bowie, is one of the reasons home prices outside the Beltway rose last year.
The Smiths, who moved to Fairwood from Gaithersburg to be closer to their families, paid more than $300,000 for their four-bathroom, four-bedroom home.
"Buying a home is the best thing we could do," Terri said. "We expect [home values] to continue to rise. It was all about the community, coming back home and the growth potential."
Buyers like the Smiths are popping up throughout the county, said Sharon D. W. Boddie, who owns Prestige Real Estate & Investment Co. in Largo.
"In general, Largo, Mitchellville, Kettering and Bowie are hot spots," Boddie said. "Anytime that I get anything in those areas, immediately I'm going to have -- before the end of the day -- anywhere from 10 to 20 phone calls from other Realtors. Sellers, if they put their house on the market, they need to be prepared to sell. Be ready to go."
Patrick Morrissette, an agent with Century 21 New Millennium in Dunkirk, Md., said he has seen plenty of bidding wars in Prince George's, where he has been selling homes for more than a decade, but that last year's price hikes beat even the increases he saw in the late 1980s and early 1990s when the county was full of new construction.
Then, he said, "prices skyrocketed, but not to the extent we've seen" recently.
Nonetheless, the county's median home price remained lower than Howard, Fairfax and Montgomery counties, according to a Washington Post analysis based on county sales records. In Fairfax, the median sales price was $305,000, up 16.2 percent from $262,500 in 2001. The median sales price in Howard rose 9 percent in 2002, to $225,000 from $206,000 in 2001. The median price in Montgomery climbed 14.2 percent, to $265,000, in 2002, from $232,000 the previous year.
Areas such as Mitchellville, home to Prince George's County's gated communities, nearly kept pace with increases in neighboring counties. Home prices in Mitchellville rose 9 percent to $235,000, up from $215,000. Prices also rose in older communities inside the Capital Beltway. In parts of Capitol Heights, the median home price rose 8.6 percent to $124,945. In College Park, the median home price rose 12.9 percent to $175,000.
The rising home prices are good for the county, which collects more property tax dollars when home values rise. It is not so good for residents, who have to pay more. Cedar Heights resident Charles Gallion's voice still rises when he talks about the property tax assessment he received in January.
His tax assessment, which is conducted by the state of Maryland every three years, rose 19 percent, to $1,500 for his 65-year-old home. When Gallion, 82, bought his home in the 1930s, his property taxes were only $108, and the house cost less to build than the $1,500 he's now paying in annual taxes.
"We don't mind paying our fair share, . . . but we only want to pay our fair share" said Gallion, president of the Cedar Heights Civic Association, whose membership is appealing the neighborhood's tax increases.
Because of a tax cap imposed by the county on owner-occupied homes, Gallion will have to pay only a 1 percent tax increase on his home, said James P. Soreci, supervisor of tax assessments for Prince George's. However, Gallion will have to pay the full 24 percent tax increases on the two other homes he owns in Cedar Heights because he does not live in them himself.
"New homes being built in these older communities make the area more desirable to live in and has pushed up demand for older homes," Soreci said.