Developer Says Many Intending to Buy Here
The City of Falls Church and its inside-the-beltway neighbors will not suffer the continued slide in real estate values that some officials suggest could leave Fairfax County with a stunning, overall 10 percent decline in taxable assessments next year.
Such is the view of one of the area’s most prominent locally-based developers, Robert Young of the Young Group and Jefferson One LLC, as expressed in an exclusive interview with the News-Press this week.
In fact, Young identified what he called a “surprising trend” in Falls Church this summer that he’s observed, and that may be a harbinger of an early warming up of the housing market here.
“The usual pattern is for interest in home buying to drop off during the summer months from a spring peak,” he noted. “But that has not happened this year. There is a surprising amount of activity, of persons who are serious and intending to buy a home, looking around for something.”
He said the only thing holding them back is an uncertainty about whether the prices are going down further, or not. “Once they become convinced that prices are not going to be dropping much more around here at all, they’ll start buying,” he said. “There appears to be plenty of prospective new home buyers out there. There is a lot of pent up demand.”
One of the reasons for this is the ideal proximity of Falls Church to multiple transportation options, including Metro in both its rail and bus incarnations. It is at a location that is a perfect equidistance between two international airports, the District of Columbia and Tysons Corner.
A second reason is that the recent steep drop in residential real estate prices has created a renewed interest in “picking up a bargain,” and finding a stable alternative for parking financial resources in turbulent economic times.
A third reason, Young noted, is the “definite, perceptible trend” of populations from more economically-troubled outlying areas, such as Loudoun and Fauquier counties, seeking homes closer to where they work.
“I think the $4 mark for a gallon of gas has been a kind of tipping point for this,” Young said. “With no one predicting that price will come down anytime soon, if ever, there is a growing urgency to lose the long commute, and come to where both road trips will be shorter and more public transit is available.”
Many parts of Fairfax County do not have easy access to public transit, Young noted, which contributes to why property values will continue to decline there as homeowners migrate to where they can access it. That migration will only magnify the impact of the foreclosure crisis that began last year when the sub-prime mortgage mess began to unravel.
This is why predictions of an overall 10 percent decline in housing assessments in Fairfax County are not outlandish, and why county officials are planning extraordinary meetings beginning next month on how to cope with the implications of this for next year’s budget, as well as with revenue shortfalls in the current one.
“Whether or not there will be a rise in home values in and around Falls Church is too soon to tell, but relative to other areas, there will at least be stability, and I predict no significant further home value reductions,” Young said. “We are very stable compared to outlying areas such as Loudoun.”
But at the same time, the region is not immune from the same factors that are contributing to distress in the national economy, including the severe tightening of the credit markets in New York, Young noted.
“We remain largely dependent on forces outside our control when it comes to finding funding for new development,” Young said. This could stall growth here for the coming period, and the length of the slowdown is simply impossible to predict. “Will it be this year, or next?” Young asked rhetorically.
Whether some of the large-scale mixed-use projects already approved by the City Council can secure funding at this point has to remain problematical, Young said, although he said he knows of no specifics.
“To the credit markets in New York now, residential projects cannot be financed, and commercial projects are becoming increasingly difficult.
This is making it hard for Falls Church to achieve the elusive “critical mass” that will cause its local restaurants, entertainment venues and retailers to prosper, Young noted. “Retail and restaurant business has also slowed down a lot, and its going to take patience, combined with some creative marketing initiatives to weather the current economic environment,” he said, adding that the City government could play an important role to help boost local businesses through effective marketing.
He said that City Hall should also focus on updating its zoning code, including revising parking and buffering regulations, and develop the City’s reputation as a “green city” by requiring green roof, LEED certified and other environmentally-friendly components of new construction going forward.
Young, a resident of McLean, has launched extensive new developments in Falls Church, including the Read Building, the acquisition and renovation of the so-called “Panera” and 105 N. Virginia Avenue buildings, the office building now under construction in the 800 block of W. Broad that will house both the Falls Church School Board administrative offices and the U.S. Post Office, and a Hilton Garden Inn, approved last month for the 700 block of W. Broad and not yet under construction.
He serves on the board of directors of the Falls Church Chamber of Commerce and was a founding first chairman of the Falls Church Education Foundation. He has contributed extensively to such Falls Church civic functions as the New Year’s Eve “Watch Night” and Tinner Hill Blues festivals.