When The Observer looked at Jefferson County home construction trends in May of 2021, the County’s Office of Impact Fees reported that 149 residential building permits had been issued countywide (all jurisdictions) during the first three months of 2021. The numbers for the full year were even more impressive, with 427 permits issued. Looking at the chart above, the 2021 numbers for single family and townhouse construction (above, in blue and red) are almost double the annual rate seen in the past decade. Looking further back, the level of new home construction in 2021 was significantly higher than any of the “boom” years prior to 2008.
The demand for new home construction is not unique to Jefferson County. As The Observer reported in May, “new housing supply is not keeping up with rising demand. We estimate that the housing market is undersupplied by 3.3 million units and the shortage is rising by about 300,000 units a year,” according to a report by Sam Khter, Chief Economist at Freddie Mac.
Thousands Of New Homes Ahead
The local slowdown in supply over the past decade is reflected in numbers provided by Jefferson County’s Office of Planning and Zoning, which reports that there are more than 6,500 approved, but vacant, building lots in the unincorporated areas of the county. Many of these lots are in subdivisions that were approved over a decade ago (before the 2008 financial crisis). This number does not include several major subdivisions within the city boundaries of Charles Town or Ranson, such as Huntfield, Norborne Glebe, or Fairfax Crossing. Together, these lots represent by-right development that stopped (or never started) after the 2008 crisis. Add the several major subdivisions proposed in the past year and there are over 10,000 new home parcels approved or proposed across Jefferson County. The map at right shows many of the larger developments where construction is just now being started (or restarted) along with several recently proposed developments.
Regional Trends Come To Jefferson County
National and regional trends are definitely driving the local real estate market. Adam Shively, of Four State Real Estate in Charles Town, summarized the market as “local sellers want to move up, new buyers are looking to move in [to the county].” Shively remarked that the imbalance of supply relative to demand is particularly acute in the resale market. He shared numbers that showed a few dozen homes for resale across the entire county — compared to 300 to 400 for a comparable period two years ago. “We can’t catch up. In West Virginia, we kept selling throughout the pandemic, but sellers stopped putting homes on the market. Now sellers look around and ask ‘where do we go’ so they can’t put their homes on the market. A slowdown in the demand would help, but that won’t reset the prices. Compared to two years ago, prices for comparable houses are up $100,000 or $150,000.” Jackie Lewis of Greentree Realty of Shepherdstown also remarked on the rising prices of resale homes, attributing it in part to buyers who are selling houses closer to Washington D.C. and have cash to purchase: “the last three houses that were sold in Cress Creek [a golf club community outside of Shepherdstown] were cash-only deals, between $650,000 and $740,000.” Lewis also noted that she’s seen many renters who now want to buy, a trend she attributes both to a desire to put down roots and the leverage available from low interest rates.
Can It Go On?
Lewis expressed skepticism about how long the demand-driven market would last, especially if interest rates rise. Shively is more bullish, seeing the current demand and pricing levels as a floor. Driving around the new housing developments in the county, the growth scenario seems to be more evident, with many “sold out” and “new phase coming” signs prominently displayed. National builders have moved into Jefferson County as well, a sign that they see consistent demand in this market. Lennar, the largest new home builder in the United States, began work on the Harvest Hills subdivision near Shenandoah Junction in early 2021. While the company has begun (or completed) construction on roughly half of the houses, all of the lots have been sold. Dan Ryan Builders, a name familiar to many local home buyers, has purchased the unbuilt lots of the Huntfield subdivision south of Charles Town. The previously-approved plans allow for development of approximately 2,800 additional residential units in this community.
Adding it all up, there certainly seems to be momentum for a population expansion over the next several years.
This article has been updated from the print edition.By Steve Pearson