FDA Growth Benefits Surrounding Communities.

It has been a couple of years since I last posted about the Food and Drug Administration White Oak Campus. When I last reported the total work force at the FDA was just pushing past the 5,000 workers mark. Actually, in the past two years this number has not changed much. However, there is still major construction going on and the scheduled completion of a few new buildings should give the facility a boost in it's worker population. By 2017 the projection number of workers should exceed 8,000 employees. After that there is no real projected growth for beyond 2017 as the campus will be pretty much built out. However I would not be surprised to see more buildings and space open up with the passage of time as that seems to be the norm for all government facilities.

Originally there was a lot of griping and resistance to the FDA coming to White Oak but it seems that most objections have faded away and the local communities have not only accepted the new facility but embrace it as well. Hillandale, my own community, which abuts the campus is a good example. I really think the stabilizing real estate market in Hillandale owes a lot to the growth of the campus.  To be sure, our road traffic is a little worse but the FDA has brought a lot of good paying jobs to the area and we have seen a number of FDA employees purchase homes in Hillandale, not to mention some of the other surrounding neighborhoods such as Burnt Mills Hills, and Burnt Mills. We have also seen our local Key Middle School and Cresthaven Elementary School reconstructed as modern, state of the art facilities. We waited a long time in Hillandale for this to happen but the FDA campus seems to have helped move this process along. When my wife and I first moved to this area, I jokingly referred to the New Hampshire Ave. corridor between the White Oak  and Hillandale Shopping Center's as  "dining's death valley." There were just so few options for decent dining out. Nowadays it is different with both shopping centers offering a broad choice excellent places to eat.

With the arrival of the FDA my community is really shaping up to be a great place to live and work. And as any Realtor will tell you. The neighborhoods around the FDA campus offers up some of the best home values in close-in Montgomery County. Click on this Hillandale link if you want to see what is on the market in Hillandale and the rest of the 20903 zip code. And if you are curious about the value of your own home you can go here to get an estimate of your home's worth in today's market.

Light at the end of the tunnel?

A recent article in the Washington Post indicated that the Washington area is one of the few metropolitan areas in the country where home prices have not declined over the past year. According to the Post, Montgomery County saw about a 2% increase in sales prices over the same period last year. Well, it is not bad news but must be taken with a grain of salt. The housing market is still very soft and prices are very low. In Montgomery County there is a wide gulf between the west portion of the county vs the eastern portion. The west which includes Bethesda, Chevy Chase and Potomac currently has a very strong market and I would say it is there where we have seen the price of home increase over the year. The east part of the county continues to suffer from an overabundance of listings with many distressed properties dragging the overall market down. I have not see any price increases in the east county. If anything the average price of a home has dropped over the past year. However, all is not doom and gloom. A recent survey of my neighborhood (Hillandale) shows that there is about 23-25 homes on the market but almost 40% of those are under contract pending sales. Some of these are short sale contracts and I would say about half of those fail to settle but still, that is an overall healthy percentage. An indicator that the market is turning. We shall see....

Where are we going?

Well, there is not much I can say about the housing doldrums that we are going through right now. However, I caution all against using this recession as a gauge for analysing the housing market in Montgomery County and the metropolitan area. Housing prices go up and down with the economy-there is no secret about that and with the large recession of the past few years prices are down. I have seen it before and know that you cannot allow a few years of recession to bias your thoughts about property ownership. I tell all my clients that real estate should always be looked upon as a long term investment. If you happen to buy at the right time and reap the benefit of a rising market, so be it. However, you can also get caught with your fingers singed if you purchase at the wrong time and are looking for a quick gain.

Now, just look at Montgomery County and the long term projections for population growth. With just over a million residents now, it is projected that the population of the county may double within the next 25 years. With this influx of people comes job growth and most importantly demand for housing. People have to have homes and the fact is that much of the county has already been built out. There are two predictions that are of interest. One, is that due to the lack of suitable housing more people will be forced to live further out from their jobs (Frederick, Howard, Anne Arundel Counties) and commute longer distances. And as a result, the demand for homes that are in Montgomery County will be very high. So high in fact that the long term concern is that there will be a critical shortage of housing in the county far into the future and that home values "will go up" to the point where new residents will be priced out of the market.

In short, more people and not enough homes. What does this tell you about the overall value of homes in Montgomery County? This is not rocket science. If you can look beyond the current recession then you will see that over the long term this is a great place to buy property. It has been for the last half century. Recessions come and go but for the long term, owning a home in Montgomery County is a good thing. I would think that this data applies to the Washington Metro Area in general and expect the housing market for the overall area to be strong once the economy gets back on track. In short, buy property and plan on holding it. Property in the area is cheap now. It won't be for long