New home construction in Jefferson County continued at a rapid pace for the second year in a row in 2022 and shows no signs of slowing down in 2023. County-wide, 452 new homes were permitted in 2022, up from 427 in 2021 according to data provided by the county’s Office of Impact Fees, which tracks the permit applications made to start construction on individual housing units across the county. Compared to the decade following the 2008 recession, twice as many houses are now being built each year in Jefferson County (see chart).
A Growing Inventory Of Buildable Lots
The number of approved building lots also continues to grow. The county’s Office of Planning and Zoning processes applications to approve preliminary plats, concept plans, and new subdivision applications for land in the unincorporated areas of Jefferson County (outside of the municipal boundaries of Charles Town, Ranson, Bolivar, Harpers Ferry and Shepherdstown). In 2022, this office processed requests to allow 1,296 new housing units to be built.
In Ranson, construction applications are processed by the Community & Economic Development Department and in Charles Town, the applications go through the Department of Community Development. Both departments experienced significant staff retirements in 2022, and the newly-hired staff were unable to provide specific details to The Observer on new projects approved in the past year, other than to note a general increase in permit requests. The three smaller municipalities in the county (Bolivar, Harpers Ferry, and Shepherdstown) do not have any new major residential construction projects underway within their boundaries.
A year ago, The Observer estimated there were over 10,000 parcels in subdivisions approved for new home construction in Jefferson County. Even without specific numbers from Charles Town and Ranson, it’s clear that in the past year this number has increased to over 11,000. While many of the lots approved years ago may not be under active construction anytime soon, the more recent approvals suggest the robust pace of new home construction will continue for the next several years.
What’s The Attraction?
The Presidents Pointe development in Ranson (image below) will have 1,100 townhomes and 200 single family detached homes when it is completed, according to Brett Keefer, the local manager with Stanley Martin Homes, the developer of the project. With prices starting at $260,000, the townhomes are designed to serve first-time home buyers. Keefer says he is seeing a mix of buyers who are already living in the area as well as buyers who are moving into the county in search of housing. Keefer said that construction began in 2019 and the company projects full completion in approximately 15 years. Keefer reports that 70 units are currently occupied and 60 percent of those units had one resident who is working remotely at least three days a week, with a fifth of the residents working remotely full-time.
The Beallair development, being built by The Wormald Companies between Charles Town and Harpers Ferry, aims to attract move-up buyers with base prices from $460,000 to $600,000 for single-family detached homes. Courtney Poland, the sales manager for the project, reports that the project has 132 homes currently occupied, out of a total of 428 planned for the entire project. Poland reports a similar experience in attracting remote workers relocating from Northern Virginia and Maryland — many with families who are looking for what she described as a tranquil lifestyle in a friendly community.
Incentives Influence Demand
Patricia Sherwood, Associate Broker with Long & Foster Real Estate, provided her insights on the state of the local resale market and what makes a new home attractive — particularly for first-time buyers. “Jefferson is still a rural area with many modest homes on large lots. The pre-existing housing stock doesn’t offer as many choices that fit the budgets of first time buyers, particularly as interest rates have increased over the past year.”
Both Sherwood and Keefer noted that USDA and other government-sponsored loan programs are very attractive to buyers who don’t have a lot of cash for a down payment, but these programs are restrictive about the condition of the property. A newly-constructed house is almost guaranteed to meet the criteria, but an older house may require significant repairs to qualify for these programs. Poland observed that many buyers are looking for a low-hassle, low-maintenance residence — a “lock & go lifestyle” that allows them to travel and enjoy other activities, which makes new construction and low-maintenance options attractive to younger generations of buyers.
Demand Dips And Rebounds
Keefer says the typical sales pace in Presidents Pointe for 2022 was 4 to 6 homes a month. In October, coinciding with the spike in mortgage interest rates, he saw that number drop to zero, but it’s since rebounded to the earlier pace. Poland reported approximately 30 sales at Beallair in 2022, with a significant drop at the end of the year. She too has seen a substantial increase in potential buyer traffic since December.
Sherwood looked at the local real estate market over the past two years and suggested that it’s not clear what a return to “normal” will look like. Prices for existing homes have definitely plateaued but are drifting down only slowly which she attributes to the disincentives for sellers to put houses on the market. As she described it, “if you have a low interest rate on your house, you don’t want to give that up. Plus, unless you are moving away, you have the same problem of finding another house to buy.”
Tax Revenue Impacts
The Assessor’s office tracks the value of real estate in the county, with assessments calculated at 60 percent of the fair market value as of July of each year. For Jefferson County’s next budget year (running from July 2023 through June 2024), the tax base is calculated from the values assessed in July of 2022. According to the Assessor’s office, those numbers show an increase in assessments of roughly $600 million for existing owner-occupied residential property and an additional $88 million in new residential property value. State law requires that the county adjust its levy rate downward as property values increase to mostly offset the increase that would otherwise occur above a certain limit. The same levy rate applies to all residential real estate, but the county is allowed to treat property taxes from new construction as additional revenue without regard to the state limits, which would generate an additional $250,000 in tax revenue for the general fund.
The July 2022 assessments include many of the new construction projects with permits issued in 2021, but only a few of the projects permitted in 2022, so the assessments for next year (which fund the budget for the fiscal year running from July 2024 through June 2025) could see a similar increase.
By Steve Pearson