HARDING REPORT – MAY 2005
*** News from Jefferson County WV Property Market ***
Each month the Harding Report includes the latest news and information from the Jefferson County, West Virginia property market. This is a free service compiled by Thomas Harding, a licensed real estate agent with Greg Didden Associates in Shepherdstown, West Virginia.
For additional local information or any other property enquiry contact:
Thomas Harding
www.tharding.com
304 671 7292 (cell-phone)
304 876 6400 (office)
CONTENTS
- The Here and Now
- Jefferson and Berkley County Market News
- Traffic Study
- Area growth
- Long Distance Investing
- Upcoming Events
HARDING REPORT – MAY 2005
1. The Here and Now
I am still working with a local elementary school teacher, trying to help her find a house she can afford. While her salary has risen with inflation (2%) the price of houses in the area have raced ahead at a mighty 25% (40% in some areas – see stats below). Basically it is an impossible task. My friend can afford a house in the $150,000-$160,000 range. There is almost nothing available in that range in the area that is a decent place to live. And when a property does come on the market, either it needs considerable work to make it livable, or within two days there are five contracts on the property, pushing the price still higher. To make matters worse, these competitive situations are pushing people to remove contingences built in to protect buyers, such as home inspection and appraisal contingencies.
Perhaps one answer is to provide subsidized housing for our government and state employees. To do this will require great foresight and some risk on the part of those in government. I do know that if we don’t find a solution to the affordable housing crisis, it is going to become increasingly hard to recruit good teachers for our schools and colleges.
2. Jefferson County Market News
Each month before I look at the Jefferson County property stats I take a deep gulp. This month I gulped afterwards. There was a MASSIVE 32% increase in sales volume last month. To put that in perspective, if you were going to buy the AVERAGE house in the area this year, it would be $75,000 more than last year. The situation seems to be accelerating, not slacking as so many predicted. More houses are being sold at higher prices in quicker time. Hold onto your seats ladies and gentlemen, the “Spring Market” has only just begun.
2005
2004
% Change
Total Sold Dollar Volume:
$ 28,114,411
$ 15,677,664
79.33 %
Average Sold Price:
$ 305,591
$ 230,554
32.55 %
Median Sold Price:
$ 287,450
$ 220,800
30.19 %
Total Units Sold:
92
68
35.29 %
Average Days on Market:
47
56
-16.07 %
Average List Price for Solds:
$ 309,697
$ 237,053
30.64 %
Avg Sale Price as a percentage of Avg List Price:
98.67 %
97.26 %
And here for good measure are the Berkley County stats… again a massive increase, even higher than Jefferson County, 42% over the year comparing April sales 2005 to April sales 2004.
2005
2004
% Change
Total Sold Dollar Volume:
$ 31,170,133
$ 17,765,425
75.45 %
Average Sold Price:
$ 210,609
$ 148,045
42.26 %
Median Sold Price:
$ 192,456
$ 141,450
36.06 %
Total Units Sold:
148
120
23.33 %
Average Days on Market:
54
61
-11.48 %
Average List Price for Solds:
$ 217,066
$ 150,938
43.81 %
Avg Sale Price as a percentage of Avg List Price:
97.03 %
98.08 %
(mris.com)
3. Traffic Survey Thunders in
A new study by commissioned by West Virginia, Maryland and Virginia governments predicts that the numbers of drivers on area roads could go up as much as 80% by year 2030. The $850,000 study found that 1,750 people left Jefferson County to work in Berkley County each day and thousands more left the county for the east such as Montgomery County, Fairfax and Loudan County VA.
Cambridge Systematics was asked to project levels of locally and externally generated traffic. A 66% percent increase in population in Jefferson County was presumed for the study, rising from 42,190 to 69,940 people.
“We hear a lot of people saying that we think estimates are going to be even higher than that” said author of the study Lewis Grimm.
Because there will likely be more jobs, Grimm said, the increased local traffic could be somewhat balanced by the fact that few people will need to leave the county for work. “As you have a better balance between the number of jobs and the number of people, you tend to get better traffic” Grimm said.
In 2000, according to the study, only 17 % of the traffic could be described as ‘congested’. By 2030 that is likely to change. “The system is likely to look a lot worse. It’s going to get more congested” said Grimm.
Traffic is expected to increase by 47% on Interestate 70 West in Washington County by 2030 and up to 80% on Interstate I81 North. Traffic on 340 East in Jefferson County will likely increase by 87% the study found.
[Martinsburg Journal 5/5/5]
4. Population Growth in area
Berkley County is ranked among nation’s fastest growing counties according to US Census Bureau. Berkley County, with an estimated population of 89,362 replaced Wood County as the state’s largest county. In addition, to being in the top 100 list for growth between 2003 and 2004 in the nation, Berkley County also made the Census Bureau’s list of top 100 growing counties since April 1 2000 census. Since 2000 the population has increased 17.7%, or by 13,457 residents.
Berkley County’s growth has benefited Martinsburg, said Mayor George Karos “We’ve had a plan a plan (to deal with growth) and it’s under way as we speak. I think you have to keep up with it and anticipate future growth.”
He added that growth does bring negative aspects such as traffic congestion and crime, but overall growth has been good for the County.
Jefferson County joined Berkley in leading the 27 West Virginia counties that posted population gains for the period. Twenty Eight counties posted population declines according to census figures.
Jane Peters with Jefferson County’s Economic Development Authority said that migration from other states is apparent since 55% of the county’s workforce commutes. Jefferson County’s population grew 2003-2004 by 1,249 residents to 47,663.
Sewer needs in Jefferson County haven’t kept pace with the county’s growth. The Legislature sought to address that this past session by approve a bill that transfers decision-making authority on the construction of waste-water plants from the state Public Services Commission to the Department of the Environmental Protection. The county’s business park can’t expand until sewer needs are addressed. The industrial park is served by the city of Charles Town’s treatment plant which is being upgraded. “It’s a horrible problem right now” Peters said “We have 15 companies on a waiting list to go into that section, assuming they are still around when they have sewer.”
[Martinsburg Journal 5/15/5]
5. Long-distance investing
Where can you get a good deal these days when you can't afford the market where you live? Think long-distance investing. Real estate has demonstrated its resiliency throughout the years and investors are banking on finding land, and homes, away from their home-base to continue building their real estate portfolios.
Keep in mind, an investor can make money off real estate in several ways:
- Purchase fixer uppers, invest in fix up and flip
- Purchase new and flip once construction is completed
- Purchase, move in and hold
- Purchase, rent and hold
Most people will gain equity through option number 3. But in an overly heated market, even those who can find the fixer uppers will almost pay market rate for their diamonds in the rough. And there are others who just don't have the cash to do any of the above.
Look elsewhere when this occurs. There are plenty of undervalued/fixer upper/foreclosure/vacation properties available in this great land, you just have to be willing to look more than across town to purchase them.
It's always seemed curious that while people are willing to purchase stock in companies hundreds or thousands of miles away, they find it hard to consider the same approach to real estate investing. Just as you can hire someone to manage your stocks in other companies, you can do the same thing with a real estate portfolio.
Property management is one of the largest segments of the real estate industry. Thousands of Realtors earn their living doing what investors have no time, expertise, or contacts to do: collect rent, pay all the monthly bills, receive calls from aggravated tenants, keep the land and property maintained, etc. Many property managers work with investors who live across state, country, and around the world.
Long-distance investing requires a bit more risk tolerance since now your investment has people living in it -- walking, eating, playing, fussing, raising a family, partying, and just enjoying life in your investment. That means some wear and tear on your commodity and someone has to watch out for the home maintenance and make sure it is taken care of, that renters pay on time, that your other bills are paid (association dues, taxes, memberships, etc.) and then sends you the remaining cash flow each month.
Nevertheless, it's an investment that has proven over time to be good to its beneficiary.
[Realty Times: May 13, 2005]
6 Upcoming Events
- May 14, Expo 2005 Livestock & Horse Show, Jefferson County Fairgrounds. For more information call (304) 724-1411.
- May 14, 9th Annual Spring Car Show. For information call Country Roads Car Club at (304) 728-2770.
- May 12, 13, 14, 15, 19, 20, 21 & 22 “Baby” Old Opera House, Charles Town. For information or tickets call (304) 725-4420 or (888) 900-SHOW.
- May 20-22, Annual Jefferson 500, Summit Point Raceway. For more information call (304) 725-6512.
- May 21, 4th Annual Ranson Spring Fling, For information call (304) 725-1010.
- May 27, J.B. Smith Memorial Golf Tournament, Sponsored by Charles Town Rotary Club, Locust Hill Golf Course & Sleepy Hollow Golf & Country Club, Charles Town.
- June 3-4, SCCA 12-Hour Endurance Race, Summit Point Raceway. For information call (304) 725-6512.
- June 4, 6th Annual Summer Gospel Fest & Hog Roast, Sponsored by the Jefferson County Parks & Recreation Commission. Morgans Grove Park, Shepherdstown. For more information call (304) 728-3207.
- June 10-12, 34th Annual Spring Mountain Heritage Arts & Crafts Festival, Sponsored by Jefferson County Chamber of Commerce. For more information call (304) 725-2055 or (800) 624-0577.
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