Housing starts down; new lots up
by Tom Chillemi
With the economy in a steep dive, the number of single-family homes started in Middlesex County in 2008 was the lowest in at least 8 years, according to the Middlesex Planning Department.
In 2008, construction was started on just 61 homes, the fewest since 2001 when 97 homes were started (see chart).
Likewise, just 13 manufactured homes were permitted in 2008—half of the 26 that were permitted in 2007.
What a difference a year makes. In 2008 the county approved 382 subdivision lots—that’s just 36 less lots than were approved in 2007, 2006 and 2005 combined.
However, three large subdivisions approved in 2008 have not broken ground. They include Rosegill’s Phase I with 95 lots (123 dwellings); Water View Landing’s 88 lots; and “Stonebrook at the Courthouse” in Saluda with 85 lots.
Other subdivision lots approved in 2008 include 40 lots on 27 acres at Fairfield Trace at the Piankatank River Golf Course; 21 lots on 27 acres at Glennfield on Crittenden Road in Deltaville; and 53 lots created in miscellaneous subdivisions.
Waiting in limbo is the proposed 379-lot development for Hartfield that local developer Gene Ruark has been trying to get approved for about four years. Denied by the Middlesex Board of Supervisors in 2008, the rezoning request is mired in court with a $14 million lawsuit filed by Ruark. A hearing on the suit is set for April 9.
Two of the above subdivisions, Water View Landing and Stonebrook, did not require rezoning. They were, and still are, zoned Village Community. In May 2008, the Middlesex Planning Commission approved site plans for both subdivisions, which total 173 dwellings.
The Village Community zoning would have allowed “by right,” without rezoning, nearly twice the number of lots approved—up to 156 lots at Stonebrook and 166 lots at Water View Landing.
“It appears that the Village Community (VC) zone was used [in the past] extensively as a high-density residential zone for major subdivision development,” said Middlesex Planning and Zoning Director Matt Walker. “This was not the sole intent of the district. The purpose of the Village Community district was to provide areas of the county where a mixture of commercial, recreational and residential uses could develop.”
In October 2008, the Middlesex Board of Supervisors approved an amendment to the Village Community (VC) zone in the county zoning ordinance that requires major subdivisions to receive a special exception and meet additional development criteria, Walker said.
“Due to the economy we do not anticipate the level of subdivision activity in 2009 that was experienced last year,” he added.
In 2009, Walker foresees an increased demand for affordable housing options. He said there is a trend of families consolidating and trying to provide housing for extended family members returning home, either because of financial difficulties or aging-related health and mobility concerns.
According to statistics from the Multiple Listing Service (MLS) used by most Realtors, 104 Middlesex County dwellings were sold in 2008, a decrease of 41 units or 28 percent, said Middlesex resident Frank Johnson, an associate broker with Frank Hardy Inc. and principal broker of E.L. Hamm Real Estate in Virginia Beach.
In 2008, home sales in Middlesex totaled $37.1 million—that’s $21.4 million less than 2007 when residential sales topped $58.5 million, according to MLS statistics.
Land sales in 2008 tallied $4.03 million in Middlesex, a drop of $37,700 from 2007.
Overall combined sales of homes and land declined in Middlesex from $63.7 million in 2007, to $42.8 million in 2008. That’s a decrease of 28 percent and about $20.8 million, according to MLS.
Among those who started building last year is Harlan Mason of Hanover. He started his family’s country home in Deltaville in August, 2008. Mason is doing much of the construction himself, working on weekends with his son Blake, and subcontracting out the rest.
Mason, a financial process manager, seems to have timed his construction right. “Lumber is a little cheaper and there are plenty of people looking for work. I’ve gotten some good bids,” he said.
Not much real estate is moving in the “second homes” and “vacation homes” market, said Johnson. “Sellers are remaining pretty stubborn and they don’t have to sell. There is no real urgency.”
Vacation and second homes are often bought with discretionary funds, explained Johnson. “Some homes are an investment and those owners are looking for a return and can wait a couple of years if necessary,” he said.
Johnson added there seems to be some home sales in Gloucester in prices ranging up to about $300,000. And there is “a little movement” over $1.5 million, but that middle ground is somewhat stagnant, he said.
While there is a buyers market for some primary residences, “it’s not a buyers market in the Middlesex area,” said Johnson. “The primary residences around here don’t turn over very much.”
Nationwide, the gloomy real estate picture is paramount in California, Florida, and Michigan, which lead the nation in foreclosures, he said. “It’s not as bad here. We don’t see as many foreclosures around here as in some parts of the country.”
Home sales in Richmond have remained strong in some pockets, including the west end, he noted.
Johnson echoed a sentiment from the movie “Gone With the Wind” that land endures. “Real estate won’t go zero,” he said. “You can still plant a garden on it. That’s the beauty of real estate, it will be back and gives you a place to go. You can touch it and feel it.”
What effect declining home starts and values will have on Middlesex County real estate tax revenues is uncertain, said county administrator Charles Culley. Real estate and personal property taxes generate 70 percent of county tax revenues, he noted.
Personal property tax revenues also could be down, said Culley. The value of motor vehicles will decrease because they are a year older, said Culley, and not many new vehicles were bought in 2008.