Bryan Cloar and his wife, Debbie, built their dream home in 2005, a three-level, 6,000-square-foot Colonial for $916,000 in the Northern Virginia development of Lans­downe on the Potomac.

Like other planned communities in Loudoun County, it offered picturesque neighborhoods in one of America’s fastest-growing and highest-income counties.

A dot-com boom led by AOL and a surge in government contracting after 9/11 had supercharged this exurb. And onetime dirt roads connecting dairy farms were rebuilt as highways that carried people like Cloar to jobs in sprawling suburban office parks and downtown.

Lansdowne, in Zip code 20176, offered “fantastic neighbors and a great school system,” Cloar said. For the Cloars, the benefits outweighed a major drawback: the commute.

In one decade, the fortunes of Loudoun and its homeowners have shifted as more and more people in the D.C. region have gravitated toward city life. As property values have exploded elsewhere, Lans­downe has been left behind.

Today, the Cloars can’t sell their house — even at a loss. And its value teeters at something close to that of a modest rowhouse in Washington’s Trinidad neighborhood, a once hard-knock neighborhood with high vacancy rates and violent crime in the heart of the 20002 Zip code, where house values rose an astonishing 91 percent in a dozen years.



In the District’s Trinidad neighborhood, once known for high vacancy rates and high crime, house values have risen 91 percent in a dozen years. (Michael Robinson Chavez/The Washington Post)

The Cloars are far from alone. From 2004 through the housing market’s boom and bust and the Great Recession, the values of single-family homes inside the Capital Beltway dramatically outperformed those outside it, cleaving the region into two distinct housing markets, according to a trove of data provided by Black Knight Financial Services to The Washington Post.

Studies show that white-collar workers and empty-nesters are flocking to walkable and transit-accessible neighborhoods, driving up those home values.

Bob Buchanan, founder of Gaithersburg-based builder Buchanan Partners, bet heavily on the outer suburbs before the recession, building properties in Manassas, Chantilly and Herndon.

“I continue to be amazed by what has happened inside the District and especially inside the Beltway,” Buchanan said. “Housing in Maryland and Virginia outside the Beltway, from Route 270 through Potomac through Great Falls and Reston to Route 66, did not do as well. It’s a stunning reversal of our perceptions of our region several decades ago.”

Investing in the outer suburbs — with their abundance of spacious homes, good schools and shopping malls — was a rational bet at a time. By contrast, areas of the District that were ripe for redevelopment were struggling with crime, poverty and racial tensions laid bare during riots 40 years earlier. Hundreds of businesses closed and public schools stalled, ranking among the worst in the nation.

Change in home value since 2004 -10% 0% +9% +18% +28% +40% Up 13.5% U.S. overall Homes in the U.S. are worth $29,698 more than in 2004. This is in the metro area.

The turnaround began in the District after the Metro transit system expanded and Abe Pollin built MCI Center (now Verizon Center) in Penn Quarter downtown. Mixed-use centers boomed at other Metro stations: A Target-anchored mall came to Columbia Heights, and the promise of a streetcar line drew shops and restaurants to H Street NE. Apartment and office buildings followed. Farm-to-table restaurants, coffeehouses and yoga studios added to an urban revitalization. Schools improved and crime dropped.

“The last 15 years, the big metropolitan areas in the United States have become nice places to live, where they weren’t before,” said Mark Fleming, chief economist at First American, a title insurance company.

In the District and its close-in environs, home values soared, with the 20002 Zip code in Northeast Washington rising 91 percent. Right behind it, 20001 was up 79 percent, 20017 was up 78 percent and 20018 was up 76 percent. Near-in Zip codes in Arlington, Montgomery and Prince George’s counties were up 30 percent or more.

The shift toward inner Washington neighborhoods mirrors those in Boston, Seattle, New York and elsewhere, which also have prospered since the recession.

“This is not unique to Washington,” Fleming said. “It’s happened around almost every major metropolitan area in the United States. The exurban fringe was always hit more hard by the housing crisis than the urban core.”

Despite the uneven recovery, no one in Cleveland or Reno is shedding tears for Washington. Only one Zip code within 50 miles of the District experienced a loss in home value of more than 4 percent from 2004 to 2015.

In Zip 20176, where the Cloars’ home is, values are 5 percent higher than they were in 2004 — well below the 13.5 percent national average gain — but the couple haven’t come out ahead. They bought their 6,000-square-foot house with four bedrooms, five bathrooms and a three-car garage for $915,927 in 2005.

In 2014, when Bryan Cloar’s job took them to Texas, they listed the house for $844,900, more than $70,000 less than what they bought it for, but found no buyers after 41 / 2 months. They tried to sell again last spring but decided to rent it out instead. The county assessment on their house has seesawed from $801,100 in 2007 to a low of $565,600 two years later to $709,000 in 2015.

Big houses, long commutes



The Mosaic District in Merrifield, a newly created high-density neighborhood in Fairfax County, is drawing home buyers looking for easier commutes and an urban feel. Two-bedroom townhouses there are selling for more than $900,000. (Michael Robinson Chavez/The Washington Post)

Few places in the region burned hotter during the real estate boom than Loudoun County. As closer-in suburbs grew more built-out and expensive, Loudoun became the next frontier for home builders, a place to parcel farms into subdivisions featuring enormous single-family homes.

Loudoun’s population soared — from 86,129 in the 1990 census to 312,316 in 2010. By 2004, Loudoun was the nation’s fastest-growing county, and home sales had almost doubled in four years.

It had less than half the population of the District at the time, yet Loudoun recorded 9,344 home sales in 2004, almost 400 more than the District.

Housing follows jobs, and in those days, Northern Virginia’s job market was fueled by tech companies and government contractors kept busy by two wars in the Middle East.

About the series A bubble sent home values soaring in many U.S. cities. Their crash pulled the country into recession. After an uneven recovery, what kinds of neighborhoods are better off, or worse? These stories map the winners and losers of this tumultuous era. Overview

Stockton, Calif.

Atlanta

Charlotte, N.C.

Washington

“The overwhelming majority of jobs that were created in the region were created in Northern Virginia. The Maryland suburbs were next, and D.C. was the lowest,” said David Howell, chief information officer of McEnearney Associates. “The economic impact was in the suburbs more than the District.”

Developers and home builders pounced, building sprawling developments with the anticipation that demand for housing would grow and grow. Buyers wanted big houses on big lots, and builders delivered. And because lenders were loose with their loan qualifications, some buyers bought more house than they could afford.

When the downturn came, the new homes were derided as McMansions — temples to American excess. Homeowners found that not only could they not pay the mortgage but they also couldn’t afford to heat or cool their manses.

“At the time, most people were buying everything they could buy,” said Gordon Wood, a real estate agent with McEnearney Associates. “Now people are more realistic. They don’t look at their house as how they’re going to make a ton of money. They are starting to think about, ‘What are my true needs?’ ”

Of all the positives home buyers cite for wanting to live in the suburbs — affordability, schools, newer homes, leafy neighborhoods where children can roam freely — one negative has gained more traction: traffic. Washington has some of the worst gridlock in the country, with Interstate 66, which connects the District to Fairfax, Loudoun and Prince William counties, earning the ignominious distinction of “worst damn freeway in America.”

Capital Beltway is a dividing line in housing values In a corridor up the Potomac River, from D.C.’s hottest Zip code out to Loudoun County, neighborhoods in the farther suburbs have seen weaker home value growth since 2004. Zips in Loudoun Zips in D.C. Zips in Montgomery and Fairfax counties MARYLAND W. VA. 10 MILES MONTGOMERY CO. D.C. FAIRFAX CO. LOUDOUN CO. Capital Beltway VIRGINIA MD. CHANGE IN HOME VALUES SINCE 2004 Increase in home values D.C. metro average 2004 2015 Decrease in home values Sources: Black Knight Financial Services, Census Bureau, ESRI Capital Beltway is a dividing line in housing values In a corridor up the Potomac River, from D.C.’s hottest Zip code out to Loudoun County, neighborhoods in the farther suburbs have seen weaker home value growth since 2004. CHANGE IN HOME VALUES SINCE 2004 20002 Ivy City, Trinidad, Capitol Hill +91% Zip codes in: D.C. Montgomery and Fairfax counties Loudoun County MARYLAND W. VA. 10 MILES MONTGOMERY CO. D.C. FAIRFAX CO. LOUDOUN CO. Capital Beltway D.C. metro avg. +12% VIRGINIA MD. Increase in home values 20180 Lovettsville, Va. -2% 2004 2015 Decrease in home values Sources: Black Knight Financial Services, Census Bureau, ESRI Capital Beltway is a dividing line in housing values In a corridor up the Potomac River, from D.C.’s hottest Zip code out to Loudoun County, neighborhoods in the farther suburbs have seen weaker home value growth since 2004. Zips in Loudoun Zips in D.C. Zips in Montgomery and Fairfax counties CHANGE IN HOME VALUES SINCE 2004 20002 Ivy City, Trinidad, Capitol Hill +91% MARYLAND W. VA. 10 MILES MONTGOMERY CO. D.C. FAIRFAX CO. LOUDOUN CO. Capital Beltway Increase in home values VIRGINIA MD. D.C. metro avg. +12% 20180 Lovettsville, Va. -2% 2004 2015 Decrease in home values Sources: Black Knight Financial Services, Census Bureau, ESRI

For Lansdowne commuters, all roads lead to congestion. On each path — Route 7, Route 28 or the Dulles Toll Road — stop-and-go traffic is a way of life. Even early birds are hammered by stoplights on Route 7, and for those heading east toward Tysons Corner, the District and Arlington, those bottlenecks are just the beginning of the misery.

Next up is the ordeal of crawling through Tysons and limping onto the Beltway through notorious chokepoints. Meanwhile, transit options are limited. An enormous, 2,300-spot parking garage at the nearest Metro station is so popular that it creates another logjam.

CHANGE IN HOME VALUE SINCE 2004 BY ZIP CODE Increase Decrease W. VA. 10 MILES MD. 7 Lansdowne 270 LOUDOUN COUNTY 95 267 7 15 D.C. VA. 66 28 CHANGE IN HOME VALUE SINCE 2004 BY ZIP CODE W.VA. MARYLAND Decrease Increase MONTGOMERY COUNTY 7 Lansdowne 270 LOUDOUN COUNTY 95 267 7 15 D.C. VIRGINIA FAIRFAX COUNTY ARL. CO. 28 66 495 95 495 10 MILES 95 CHANGE IN HOME VALUE SINCE 2004 BY ZIP CODE W. VA. Decrease Increase MONTGOMERY COUNTY 7 Lansdowne 95 MD. 270 LOUDOUN COUNTY 267 7 15 D.C. VIRGINIA FAIRFAX COUNTY 28 66 495 95 495 10 MILES 95

A 2011 study by the Chicago-based Center for Neighborhood Technology found that most of Loudoun County’s commuters traveled 26,000 to 35,000 miles a year to work. Less than 10 percent used public transit. They spent $1,280 to $1,770 a month on transportation, and that didn’t even account for the time sopped up sitting in traffic.

“What is the time value of the hour and a half you spend commuting each way?” Fleming said. “If you really calculated, would you have bought that home out there? That’s why all these exurban areas are struggling to recover. Because there is not the demand.”

A net of about 1,000 people a month are still moving to Loudoun, lifting values in the eastern end of the county. If history is any indicator, a major bump could come again in 2020, when the county is scheduled to open its first three Metro stations.

But many of these neighborhoods were designed for a car culture. The worse the traffic is, the more people are attuned to walkability or access to public transportation.

“There is a part of me that wonders, if walkability is what everybody is looking for, what does that do for the neighborhoods that don’t have it?” said Christine Richardson of Weichert Realtors, who is the Cloars’ listing agent.

Reimagining inner suburbs

Outer Loudoun County and inner D.C. neighborhoods are outliers for local housing values over the past decade. In between are more-established suburbs along the Capital Beltway, such as Arlington, Fairfax, Montgomery and Prince George’s counties, which are undergoing their own reckoning with home buyers’ growing interest in more accessible locations and drawing inspiration from more dense urban neighborhoods.

For decades, home builders in Fairfax County, a step closer to downtown D.C. from Loudoun, relied on subdivision development.

Fairfax has some of the best public schools in the country, including the fifth-ranked high school nationwide and seven of the top 10 high schools in the state. Crime and unemployment are low, while white-collar salaries make it one of the highest-income counties in the country.

But the traffic is a drag on home values. “People pay a lot of attention these days to what their commute is going to be, where their job is located and how they are going to get to work,” said Sharon Bulova, Fairfax County Board chair since 2009.

With space running low and traffic running high, elected leaders have focused on turning dated commercial and industrial districts into more-dense neighborhoods with a mix of housing, shopping and entertainment.

Metro and other public transit routes have played a big role, with Fairfax creating dense neighborhoods near Orange Line Metro stations where home buyers are paying a premium.



Construction signs and scaffolding surround the Navy Yard Metro station in Southeast Washington, where a building boom has followed construction of Nationals Park. (Michael Robinson Chavez/The Washington Post)

That refocusing continues to pay off for the county, with millions of square feet of development around new Silver Line Metro stations in Tysons as well as at Reston Town Center and the Mosaic District in Merrifield, where two-bedroom townhouses sell for more than $900,000.

In the past, retirees stayed in their homes, particularly once their mortgage was paid off, or moved to warmer climes. Now they are jettisoning their large homes and spacious yards for turnkey condos downtown with little or no upkeep required.

But even people who prefer single-family homes are choosing ones near new apartments and the restaurants and shops that often come with them.

“The time and history in which baby boomers came of age was a wonderful economic time in the United States,” Fleming said. “So they’ve amassed relatively humongous amounts of wealth. That wealth creates the possibility to do things.”

Prince George’s has had a similar phenomenon. Some of the highest gains in home values in the region since 2004 were in the close-in, Metro-accessible areas of Hyattsville, College Park and Cheverly, besting anything in all of Loudoun County.

The Prince George’s neighborhoods with the top growth are almost exclusively inside the Beltway. The boost in values has helped the county bounce back from the highest foreclosure rate in the region.

“Overall, our market is coming back pretty strong, especially since when we hit rock bottom in 2011,” said Thomas Himler, the county’s deputy chief administrative officer. “We’ve come pretty much full steam back.”

Some economists and housing analysts suggest that the rush to inner neighborhoods was a passing symptom of the recession, and that the country will return to a generations-old cycle in which professionals with families choose the house with the yard and the picket fence, no matter how far they have to go to get it.

Technology could trigger another generational shift: With the emergence of self-driving cars, the expansion of high-speed rail or the boom in teleworking, that commute could prove less imposing.

For now, accessible homes near urban centers remain much in demand for those who can afford them.

“Maybe it’s more of a mental thing,” said Chris Brockett, executive vice president at Eagle Bank of Bethesda. “You hear people saying, ‘Is that inside or outside the Beltway?’ And maybe there is some bias, the thinking that you’re more urban being inside the Beltway where you’re not commuting on these feeder roads.”