Did Rick Santorum Really Lose 40% on his Great Falls, VA home?

As has been widely reported, Rick Santorum claims he's lost 40% on the value of his Great Falls, VA home located in Fairfax County.  An interesting development in light of consistent reports that the Washington metropolitan area remains one of the healthiest residential real estate markets in the country.  In fact, a recent study using U.S. Census data revealed Fairfax County, VA to be the second richest county in the nation with an median household income of $103,010.  Nearby Loudoun County ranked first with a median household income of $119,540.

Given recent reports on the relative strength of the Washington area housing market, it is confusing that Rick Santorum (or anyone for that matter) could lose 40% on the value of a Great Falls, VA home.  So I researched this claim.

In August 2007 Rick Santorum bought a 4,899 square foot house with 5 bedrooms, 4.5 bathrooms, and a two-car garage.  A search of home sales in Great Falls, VA shows that 3 similar houses closed in the three months prior to the Santorum sale. These homes ranged 4,335-4,548 square feet and, like Santorum's home, each had 5 bedrooms, 4.5 bathrooms, and a two-car garage.  While the average close price for these three homes was $1,675,333, Santorum paid $2,000,000 for his property.

	3 Similar Sales	Santorum Home
Avg Original List Price	$1,743,333	$1,999,000
Avg Close Price	$1,675,333	$2,000,000

Apparently, Santorum overpaid for his home.  In August 2007 $2,000,000 was well over the average close price of similar homes sold in the area.  While this affects Santorum's investment alone, it has little impact on the larger Great Falls, VA housing market.

In answer to Santorum's implication that all home values have fallen 40% in Great Falls, consider the following table comparing all sales in 2007 to those in 2011 in Santorum's zip code of 22066.

	2007	2011
Number of Homes Sold	225	194
Avg Original List Price	$1,478,510	$1,237,031
Avg Close Price	$1,337,149	$1,127,147
Avg List/Close Price Ratio	90.98%	92.35%
Avg Days-on-Market	161	120

These numbers show an average price decline of 15.7%, not 40%.  Santorum is off by 24.3%.  In addition, today's homeowners in Great Falls are selling their properties 41 days faster and walking from the settlement table with a higher percentage of list price.