Daily Real Estate News  |   February 7, 2007  |   Exurbs Hard Hit by Slowing Market
Suburbs farthest from the urban core, also known as exurbs, are experiencing more dramatic drops in home sales and prices than close-in suburbs.

Ever since the five-year U.S. housing boom ended in the summer of 2005, home construction in these distant exurbs has slowed and prices and sales have fallen more than those of suburban neighbors. Economists and real estate professionals say builders created too much inventory in far-out areas, expecting that buyers would eventually come.

The Northern Virginia Association of REALTORS®, for instance, reports an 11 percent drop in the average home price in Loudoun County last year. On the other hand, the average price in Arlington County — which is closer to Washington, D.C. — registered a more modest decline of 2 percent.

The same trend is seen in California and in Florida.

Brad Hunter, director of Metrostudy's South Florida division, says construction in the far-flung suburbs came in response to robust price appreciation. But speculative investors — rather than buyers who planned to occupy the dwellings — accounted for a majority of exurban sales in recent years.

Source: Reuters, Patrick Rucker (02/06/07)

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