Housing slump could last for two more years
By: David Sherfinski
Examiner Staff Writer
March 2, 2009
Prince William County officials are predicting that it will take up to two years for housing prices to stabilize, according to county documents.
A prolonged drought in the housing market is one of several forecasts for the next five years to be presented to the county Board of Supervisors by Finance Director Chris Martino on Tuesday.
County financial analyst Dave Sinclair said that in addition to the county’s real property assessment drop, a national depreciation of auto values is also hurting the county. Auto sales declined 18 percent in 2008, and monthly sales declined 30 percent in November and December. Next to real estate taxes, personal property tax revenue — which includes taxes on cars and personal vehicles — is the county’s second-largest source of funds.
In a letter to the county supervisors, Budget Director David Tyeryar wrote that staff is recommending advertising a tax rate of $1.212 per $100 of assessed value — slightly higher than the $1.198 proposed by County Executive Craig Gerhart last month — in order to give the board a bit more flexibility before final budget numbers come out April 14.
Compared with the surrounding areas of Loudoun, Fairfax, Alexandria and Arlington, Prince William’s proposed tax rate for fiscal 2010 is the second-highest. Because of the average 32 percent depreciation in residential property values, however, the average residential tax bill would be $1,494 less — or 33 percent — than the average proposals of the other four jurisdictions.
Sinclair added that 75 percent of all home sales in the county in 2008 were bank sales and 5 percent were short sales, in which the home is sold for less than the mortgage is worth.
While President Barack Obama’s economic stimulus package could infuse capital into local taxpayer’s pockets, its effect was not included in the five-year forecast.
There was a “huge concern” that people more than 5 percent underwater in their mortgages wouldn’t benefit from housing stipulations in the program, Sinclair said.
