“The house is gone!” my husband exclaimed as we were riding bikes around Salona Village neighborhood in McLean recently. Home builders whose specialty is upper bracket “in-fill” construction have identified Salona Village as one of the top choices for new home buyers that want to live in McLean. The neighborhood is highly desirable as it is a short distance from downtown McLean, which offers numerous shops and restaurants. The public schools are top tier preferred for Fairfax County: Franklin Sherman Elementary, Longfellow Middle and McLean High School. Franklin Sherman Elementary School and Salona are both located adjacent to the boundaries of the neighborhood.
The neighborhood name is derived from Salona, which is a privately owned historically significant 51-acre property. The Fairfax Park Authority acquired an adjacent 41-acre parcel for public park use by means of a perpetual conservation easement. The Salona Park is currently in the master plan phase. Passive and active uses are in consideration, please access this link for more information: http://www.fairfaxcounty.gov/parks/plandev/salona.htm
Builders who concentrate their business on in-fill neighborhoods seek to achieve the ratio of investment as follows: one-third spent on the lot/land, one-third on the construction costs of building the new home and one-third on soft costs such as planning and approval process, overhead, interest carry, commissions and profit.
According to an article in the Wall Street Journal (B6) on December 28, 2016,
“Over the past few years, the land beneath older homes has become more valuable than the houses themselves. Builders said it is easier, and not much more expensive, to build a new house than to renovate and expand and outdated one.
‘Northern Virginia is a pretty hot area for teardowns,’ said Robert Dietz, the chief economist for the National Association of Home Builders, a Washington-based trade group. ‘There are already established, nice neighborhoods with nice schools, so there’s incentive to replace homes.’”
The highest sold price for a new home in Salona Village in 2016 was $2,580,000 built by TriCrest Homes at 1473 Waggaman Circle. In November of 2014, the builder paid $875,000 for the lot that sits on a hill and is about one-third acre in size. This is an example of how the land portion of the formula in the current market may require a higher than one-third portion of the final total house sold price.
The peak sale in Salona Village occurred ten years previous when 6605 Brawner Street sold for $2,665,000 on April 5, 2006. The builder Robert Jacobi paid $640,000 for the almost one-half acre lot in September of 2003. This illustrates how land prices have risen in the last decade. According to the National Association of Home Builders, on a national level, builder confidence is at the highest level since July 2005. https://www.nahb.org/en/news-and-publications/press-releases/2016/12/builder-confidence-closes-year-on-a-high-note.aspx
Land values frequently follow consumer confidence. The reason for this is good lots in preferred neighborhoods are in limited supply and there is great demand. Salona Village is one such neighborhood in McLean, Virginia. There are instances where the existing homes have been improved to such a degree that they are not good candidates to tear down. This provides a wonderful option for those who are not in the multi-million dollar price point.
HBC Group at Keller Williams has one such fabulous home for sale in Salona Village at 6511 Topeka Road. The mid-century modern five bedroom, three bathroom home with two car garage is on one-third of an acre sited on a cul de sac. It is listed for $995,500 and features many upgrades to the kitchen and baths. This is a case where the home value exceeds that of a lot, thus we are marketing it to actual home owners rather than builders.
Click the following link to view the listing: