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Housing sticker shock continues to be rampant in the Fredericksburg area.
By RICHARD AMRHINE
IN MY OTHER job as the real-estate editor for this newspaper, the one issue I get grilled about more than any other is the rising cost of housing around here. The sticker shock is universal, whether I'm talking with government officials, builders, real-estate agents, parents whose children are setting out on their own, or casual observers of the housing marketplace.
No one I've run across claims to have the definitive answer. But almost everyone cites the age-old rule of supply and demand. Demand has been so great over the past few decades that the supply of available land has dwindled. Efforts to curtail growth, such as downzoning, may be well-intentioned but have spiked the cost of the land that's left.
Once land is sold to a developer, the proffers that local governments obtain during rezoning negotiations are adding tens of thousands of dollars to the cost of a house before it is built.
With such a great outlay before the first nail is hammered, the cost of the house is already way higher than it was just a few years ago. And if he chooses to build under a parcel's existing zoning, no builder is going to construct an "affordable" home on an expensive, multi-acre lot.
Just to remove any question about how home prices have soared in the Fredericksburg area, here are some numbers:
The average area sales price in 1996 was $130,139.
The average area sales price in 2001 was $169,480.
The average area sales price in January was $303,877.
Even town houses in the city's new Idlewild Village subdivision are selling for more than $300,000.
Houses may cost more to build from year to year as the cost of materials and labor rises, but the sharp increases we're seeing here reflect much more than the price of lumber and carpenters.
Insurance companies can provide some insight here. These days, agents set the replacement cost of a house in this area at $100 per square foot of finished living space. They are saying that the cost to replace your 2,500-square-foot, two-story colonial with the unfinished basement would be $250,000. If you had that house refinanced recently, you learned that the market-value appraisal is knocking on the $400,000 door.
(Check your policy. You don't need enough coverage to buy your house, but you do need enough to rebuild it.)