“It’s been a roller coaster.”
That’s how Renee Boetticher, a soon-to-be resident of Round Hill, describes the last two years of her family life. It’s a statement that could easily translate to the overall state of Loudoun’s current housing market.
Boetticher and her family have been through a long two years of looking for their next home. They wanted a little bit more space, not to mention more land, than what their current home in Leesburg affords them. Their budget was between $550,000 and $730,000, and she admits they were a little picky—they wanted land and a solid internet connection. But they’ve been on the losing end of negotiations for five homes they put offers on. One of those homes in particular underscores the current buying season in Loudoun, and it was right around the corner from Boetticher’s current home in Leesburg. Within three days of the home being listed, there were 70 showings and eight offers. It was a bigger home than Boetticher’s, but one in need of updates. The winning bidder offered $20,000 over asking price with no contingencies.
“People just lost their minds over it,” she remarked.
Boetticher ended up buying a home at the top end of her budget and further west than she anticipated. Thankfully, selling her home was far easier—it was under contract four days after being listed and netted a $100,000 profit from what she bought the house for in 2015.
Her experience is not unlike what many others in the county are seeing. The historically low housing inventory was often cited by real estate professionals as problematic. A recent analysis by George Mason University’s Center for Regional Analysis showed that the number of active listings in Loudoun County in February—the most recent month for which statistics are available—was the lowest in more than a decade.
The low inventory is causing some potential buyers to rent or stay in their current homes, thus taking another potential home off the market, said Heather Wilhelm Gosman, a Realtor with RE/MAX Gateway.
“There’s these frenzies we’re seeing in resales and rentals,” she said.
Gosman noted that some landlords are moving to multi-year leases with the current competition, which is creating its own set of challenges for a portion of the population.
“We are getting very well qualified people, who have no pets, excellent credit, getting turned down for housing. You have landlords who are going for multiple year leases. If you’re looking for something for a year, they come back and say we want someone for two or three years. For whatever reason, they don’t want to buy, and they don’t understand why they can’t find a place to live,” she said.
Jen Miller is preparing for that potential scenario. The Sterling resident is readying to sell her condo, with closing anticipated later this month, but now is worried about whether there will be a place to buy in her price range.
She and her family of three are hoping to move to Leesburg, but are not finding much within their price range. They are trying to buy with a Federal Housing Administration loan, which places limits on the ratio of homebuyers to renters within a given community. That has all but ruled out a large neighborhood in Leesburg they were considering. They did find one place in their $220,000 price range, but the seller wanted them to cover closing costs, a financially difficult proposition for the family. Miller is mentally preparing for a summer spent crashing with family until they can find a purchase they can afford, or a place to rent. But that comes with its own challenges.
“So now we’re battling the dilemma that the market is cut in half [because of our FHA loan] and the market we can buy in, there’s such high demand that there’s no give or take in negotiations,” Miller said. “We even walked down the rental option, but we have two dogs and nobody will rent to anyone with animals. We close on April 26 and we’re not going to have a place to live. We have a cousin that lives in Leesburg that said we can stay with her for a few months. But if we don’t find something, we’ll be homeless—middle class, $120,000 a year [household income] homeless.”
Miller said she is frustrated by the number of investors who are purchasing the housing units on the lower end of the market, and then renting them out for high monthly rates.
“My frustration isn’t all on the demand side. The market will even itself out I feel. But when you have wealthy investors coming and buying condos built for middle-income people, and then put such high criteria [on who you rent to], you’re phasing out an entire group of people that need housing,” she said.
Miller has a last resort option—move back to Michigan where she owns a home. The tradeoff, however, is she’d be leaving a job-heavy region to a part of the country that struggles with unemployment.
Amy Sutphin was recently faced with a similar choice and opted to head south—to South Carolina. She had owned a condo in South Riding for 17 years and couldn’t afford the single-family home she desired on a teacher’s salary. The single mom decided to head to where she could better afford to provide for her family without the high housing costs. She was able to afford her home for less than her condo’s sale price.
“It’s so sad, we miss Loudoun so much,” she said.
Sutphin said she hopes to find her way back to Loudoun eventually, but doubts she’d be able to buy a home without changing careers.
Allison Metzger of Green Lawn Realty, who also serves as president of the Board of Directors of Loudoun Habitat for Humanity, said the county struggles with a housing ladder problem that is compounding things for many potential buyers nowadays.
“There’s really no lower end homes—the $300,000 price range doesn’t exist,” she said. “So people in the $300,000 to $400,000 range are not finding anything they like or that’s on the market, so they’re staying [where they live]. There’s a pent-up aggravation for buyers,” she said.
To that end, Metzger said she is daily fielding calls on rentals, some of which are going for more than $3,000 a month.
Lisa Sturtevant, chief economist for Virginia REALTORS, noted in her presentation at the Dulles Area Association of Realtors’ recent Housing Summit that homeownership among those aged 25 to 34 is down significantly in the Washington, DC area compared to other parts of the country.
“If we don’t have rental housing that is affordable, it’s really hard to move up into homeownership. Having that stepping stone is important,” she said.
Sturtevant is the principal author of a 2017 study on housing needs in Loudoun created by the George Mason University Center for Regional Analysis and Sturtevant’s consulting firm, Lisa Sturtevant and Associates. That study, which has driven much debate around the county’s new comprehensive plan, found that compared to market demand, the county could be short nearly 18,000 housing units by 2040.
One section of the real estate community that is doing quite well is homebuilders. The low inventory on the market is also causing many buyers to flock to new construction, Metzger said.
“I think it’s forcing people to purchase new construction whether they want to or not. The prices of new construction in some cases are astronomical to me, but people are willing to make it work because there’s nothing else out there they like. So they’re stretching themselves,” Metzger said.
Gosman admits that she is seeing some sale prices on homes now that don’t make much sense to her. Even some renters are offering landlords above their listed rental price, she said. But Gosman doesn’t believe the housing market is headed for another crash like 2008. Lending practices have significantly improved since then, she noted.
“I think we have fail-safes in place that will prevent [a crash] from happening,” she said.
Both Gosman and Metzger predict that the market will settle down a bit in the summer, traditionally the busiest time of year for real estate, as they see inventory slowly starting to go higher.
Still, there are those benefiting from the hot market, like Amy Alexander. Alexander has rented one of her properties, a townhouse in Leesburg’s Tavistock Farms neighborhood, for the last decade. With her tenant moving out, she asked her Realtor Eve Weber to let her know if there was ever a time when she could sell the townhouse to get her desired sale price. That time is now, Weber told her.
“The way the market is, it seems crazy not to try to take advantage of it,” Alexander said.