Cities in Montgomery and Loudoun counties suffered the biggest housing development busts in the region, with the pace of new development in some areas slowing to a tiny fraction of what it was during the boom years. Gaithersburg and Rockville in Montgomery and Purcellville and Leesburg in Loudoun saw the most dramatic drop-offs in the rate of home construction after 2004 when compared with the first half of that decade, according to data compiled from the Census Bureau’s American Community Survey.
“Clearly, the recession is the main driver here,” said John McClain, deputy director of George Mason University’s Center for Regional Analysis.
He added that the rapidly increasing populations in both counties — Loudoun is the fastest-growing in the region — positioned them to catch the brunt of the bust. Builders were meeting the growing demand during the first half of the decade, then couldn’t keep the same pace during the recession, he said.
| Biggest housing busts | |||||
| Total units | Total units | Growth | Total units | Growth | |
| in 1999 | in 2004 | from ’99 | in 2009 | from ’04 | |
| Purcellville | 804 | 1,528 | 90% | 1,631 | 7% |
| Leesburg | 10,878 | 14,119 | 30% | 14,684 | 4% |
| Rockville | 19,245 | 23,661 | 23% | 24,328 | 3% |
| Gaithersburg | 19,720 | 23,029 | 17% | 23,293 | 1% |
| (chart excludes sample sizes smaller than 500 units) | |||||
| Source: American Community Survey 2005-2009 | |||||
In Purcellville, the number of housing units almost doubled between 2000 and 2004 to more than 1,500. But in the last five years, the growth has slowed to a mere 7 percent, or 103 homes.
Leesburg’s growth rate slowed to one-eighth of the pace set during the first half of the decade. Just 565 homes were built after 2004 compared with more than 3,200 in the prior five years.
In terms of sheer numbers, Rockville had the most dramatic drop-off in development. During the first half of the decade, more than 4,400 homes were built. But in the second half of the decade, only 667 homes were built, through the end of 2009.
Gaithersburg suffered a smaller scale housing bust, but still saw growth of just 1 percent in the last five years.
Hilary Goldfarb, a developer with Gaithersburg-based Promark Real Estate Services, said the difficulty of obtaining financing during the recession hindered projects. But developers are also moving away from sprawling developments and toward developments compactly built around transit.
Clarksburg, for example, saw its development pace cut in half, but housing still increased there by 62 percent in the last five years due to the county’s focus on planned development there, which includes adding mass transit options.
“Transit-oriented development, especially in Montgomery County, is going to continue to be the next generation of development here,” Goldfarb said. “I think the hot spots you’ll see in the next decade are White Flint, Silver Spring and Wheaton, because of the planned development there and because in those areas the market is not saturated.”
