Housing Slump Drags Down Virginia ‘Active Adult’ Sector
The general slump in the housing market has chilled the once hot active adult communities sector in Virginia. Both new home sales and existing home sales declined precipitously in 2006 versus 2005. Early 2007 is showing a glimmer of improvement as declining prices start to bring buyers out.
Gainesville, VA (PRWeb) March 6, 2007 — The 2006 slowdown in the Virginia housing market had a dramatic and negative impact on the “active adult” housing sector. To entice buyers back into the market, builders are now offering huge incentive packages including substantial price discounts and attractive no-cost upgrade packages.
A few years ago, Virginia active adult community sales were riding high on the aging “boomer” wave. It was common for new communities to have thousands sign up for tours within days of an announcement. The age 55+, amenity-packed gated communities were popular with the leading edge of the “boomer” generation.
Peggy Lasater, a Realtor and active adult community specialist, tracks the sector closely. “Builders are really aggressive. Three of the new homes I’ve sold in the past few months were discounted over $100,000 from list price. It’s the most aggressive pricing ever for this market segment and a clear sign of the impact of the housing market slowdown.”
Sales of existing homes in active adult communities have also declined significantly. Lasater says, “Some communities, such as Heritage Hunt, Leisure World and Dunbarton, all in Northern Virginia, had unit sales of existing homes drop by around fifty percent in 2006 compared to 2005.”
She attributes the sharp decline to two major factors: difficulty selling currently owned homes and resale home prices that have been too high. “The prospective buyers almost always have a home to sell first and they are having difficulty getting the price they want in the current market. Unfortunately, the market doesn’t care what price they want. On the seller side, too many homeowners still haven’t come to terms with what the market is telling them. If your home has been on the market for several months without an offer, it is over-priced. It is taking price reductions of ten percent or more to move this inventory. We are beginning to see those reductions now.”
Early 2007 is showing signs of an improving market. “I’m seeing more activity.,” she said. “It actually showed up on New Year’s Day when traffic to my Website jumped sharply and it has stayed higher. And all through January, I’ve been seeing more contracts on the MLS. I think people are realizing that if you wait for a better market to sell your current home, you end up buying in a better market and paying more. So, why wait? There are now some great buys in the active adult communities of Virginia.” More info: [email protected]