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Bill Freehling is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Bill Freehling.
Caroline’s housing market taking longer to recover
Caroline’s housing market has been the slowest to recover in the Fredericksburg area, a trend that has led to a foreclosure auction being scheduled on one of the county’s largest developments.
Year-to-date, the median sales price of homes sold through the Multiple Listing Service in Caroline is down 42.1 percent from 2005, according to an analysis of Metropolitan Regional Information Systems data. That’s nearly twice the percentage declines in Fredericksburg and King George County, and more than the drops in Stafford and Spotsylvania counties.
In addition, foreclosures have made up about 30 percent of this year’s sales in Caroline, almost triple the percentage from Fredericksburg and well above the figures in the region’s other three localities.
Falling prices, competition from foreclosures, tighter credit and the trend toward people seeking to live closer to their jobs have led to a tough business climate for new home developers in Caroline.
That is evident in building permit data provided by Caroline’s Department of Planning & Community Development. In 2005, when the market was still booming, there were 641 building permits issued for new homes in Caroline. Last year the total was 72.
The Belmont subdivision, which took shape amid the housing boom and still includes many areas that haven’t yet been developed, is among the Caroline developments that has been hardest hit. More than 200 acres of that development, a project of Frank and Linda Sealy, is scheduled to be auctioned Dec. 11 in front of Caroline Circuit Court.
Near the Carmel Church exit off Interstate 95, Belmont is farther south and lacks the amenities of two other newer residential developments in Caroline — Ladysmith Village, where there is a library and an under-construction YMCA, and Pendleton, where there is a golf course.
Union First Market Bankshares Corp. is the lender on the Belmont properties scheduled to be auctioned Dec. 11, as well as three Spotsylvania properties owned by the Sealys.
Union CEO Billy Beale said in an email that the bank has foreseen the troubles at Belmont for many years and has set aside reserves. He said the burden of proffers and length of the housing decline led to the current situation.
“Had it only lasted a couple of years we and Frank would not find ourselves in this position,” Beale wrote.
Caroline’s housing struggles are consistent with what is playing out across the Washington area and nation. Communities that are farther from major population centers and that boomed amid the housing bubble have taken longer to bounce back than the inner suburbs.
For example, Stafford’s median prices so far this year are down 32.2 percent from 2005, Spotsylvania’s 38.9 percent and Caroline’s the aforementioned 42.1 percent. The year 2005 was chosen for the analysis because that is when sales peaked in the Fredericksburg area and prices were near their highs.
There are some silver linings in the data for Caroline. Housing sales have picked up this year relative to other area localities, though the figure is still well down from 2005. That could be fueled in part by investors snapping up foreclosure properties, which builders hope will set the stage for an improved market for new construction in the years to come. There have been 73 permits for new homes issued this year in Caroline, more than in all of 2011.
Caroline Economic Development Director Gary Wilson also pointed out that the price declines have created opportunities for prospective home buyers and new businesses in Caroline, whose jobless rate has been declining faster than other area localities.
Here is the MRIS data used for this article: