Great piece by Michael Laris in The Washington Post about ambitious real estate development gone bad in Loudon County, on the fringes of the DC metropolitan area:
They said it would be a new Reston or Columbia, 35 miles west of Washington — the biggest development in Loudoun County’s history, with more than 15,000 homes filling communities with such names as Greenfields and Broad Run Village.
Now a real estate shopping spree that made the company Loudoun’s largest landowner at the height of the nation’s housing bubble has been jerked into reverse, with a key lender moving to foreclose on more than 4,100 acres Greenvest companies pieced together for the project. The land is scheduled to be auctioned off Tuesday morning outside the historic red-brick courthouse in Leesburg, provided there is no bankruptcy filing or last-minute deal.
Part of the tragedy of our recent boom/bust cycle is that we really don’t seem to have amassed a huge amount of worthwhile stuff during the overinvestment phase. The dot-com boom at least led to the creation of a lot of bandwidth and web-related human capital that folks continued to use even once the madness of Pets.com wore off. Some of what happened in the housing bubble is at least somewhat like that—immense condo oversupply developed in DC proper but the trends indicate that it’ll be filled sooner or later and the country really does have relatively few housing units existing in walkable urban areas.
By contrast, it’s not as if when you turn the clock back to 1999 that there was some objective shortfall of largish homes in sprawling suburbs in the United States. And nobody really wants extra ones. Even in Spain where they disastrously overbuilt beachfront property you can imagine the prices resetting and people using the homes. But there are only so many households in the United States, and both the demographic (fewer families with kids) and energy (more expensive) trends point toward somewhat less demand for this sort of thing in the future.