Wednesday, Aug. 20, 2008

Developers pin hopes on upcounty home sales

Building permits down by half countywide as projects head to market

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Chris Rossi/The Gazette
Elm Street Development is the builder of the 29-acre Leaman Farm subdivision on Clopper and Schaeffer roads in Germantown. The subdivision will feature 35 single-family homes, 24 townhouses and 10 moderately priced dwelling units. About seven single-family lots and four townhome lots have been sold so far.

As the county's housing slump continues to worsen with a more than 50 percent drop in building permit applications, the developers of three residential communities in the works upcounty say they have high hopes for the projects.

Developers of the Leaman Farm subdivision in Germantown and the Brightwell Crossing and Stoney Springs communities in Poolesville say their locations have somewhat insulated them from the turmoil in the real estate market.

"There are still buyers out there. It's just not as deep of a market as it once was," said John Clarke, regional partner and vice president of Elm Street Development in McLean, Va. The company is the builder of the 29-acre Leaman Farm subdivision on Clopper and Schaeffer roads, which will feature 35 single-family homes, 24 townhouses and 10 moderately priced dwelling units. About seven single-family lots and four townhome lots have been sold so far, Clarke said. Elm Street representatives did not return calls for comment about when sales began and when homes on purchased lots will be completed.

"We've had some relative success with sales compared to other projects because Germantown is not oversupplied," he said.

Overall, new residential development in the county is slowing. Between January and Aug. 14, the county Department of Permitting Services had received applications to build 237 single-family homes compared to 555 during the same time last year, a 57 percent drop, according to Reginald Jetter, chief of the department's casework management division. Townhouse applications fell 54 percent during the same period from 213 to 97, he said.

The county's planning department is seeing similar trends. The Maryland-National Capital Park and Planning Commission received 27 applications for pre-preliminary plans in fiscal year 2008, which ended June 30, according to preliminary data from the department. It received 36 applications in fiscal 2007 and 62 in fiscal 2006. Preliminary plan applications - 44 in the last fiscal year - were down from 76 in fiscal 2007 and 125 in fiscal 2006.

"Projects will sell in Montgomery County if it's right," said Steve Nardella, vice president of land development at Bethesda-based Winchester Homes, developer of the 98-home Stoney Springs subdivision. "We're expecting, since there hasn't been a new, open project in Poolesville for a while, there will be demand," he said.

Winchester is not currently selling lots because the project's state-issued well permit is being appealed by a neighbor, Nardella said. Sales are expected to begin in the spring if the issue is resolved.

"There's not a lot of options for people looking for new homes in this part of Montgomery County, except in Clarksburg," said Tom Kettler, president of Montgomery Village-based Kettler Forlines Homes at Brightwell Crossing, which will add 177 single-family homes to Poolesville and also initially had its well permit contested. The last large residential development in town, the about 70-home Woods at Tama, was built by Kettler Forlines Homes in the late 1990s.

"It's been a long time, so that's why there's some pent-up demand," Kettler said. Construction has begun on a well house, and the company hopes to break ground early next year.

Like Elm Street and Winchester, Kettler said the market will ultimately dictate how quickly the homes get built, adding that Brightwell Crossing has always been expected to take a long time due to its size.

"Being 177 homes, the market conditions at the time will affect how it builds out, but certainly it will happen over several years," he said.