With the cow pastures of Loudoun County, Va., giving way to four- bedroom brick colonials, Norwest Mortgage has opened a branch in the county seat.
In securing a foothold in Leesburg, in a mostly rural area outside Washington, the nation's leading retail mortgage lender is part of a national trend targeting exurbs-emerging communities beyond the suburbs-as the latest frontier for loan growth.
Brett Griffin, a loan officer at the three-person branch, called the area "a strong market" and added that Norwest "needed a strong force from within."
As jobs have migrated from city centers to suburbs, residential development has spread in concentric circles.
For builders, lenders, and real estate agents, figuring out where the next hot exurbs will crop up is smart strategy, says Stuart A. Feldstein, president of SMR Research Corp., Hackettstown, N.J.
"If you look for areas where the central urban area has been packed for a long time, suburban growth has been good also for a long time, that tells us that the place is filling up," Mr. Feldstein said. "Draw lines around that, and you can pretty well predict where people will go, especially based on the road system."
As Fairfax County-the current hub of metropolitan Washington's high-tech economy-fills up and land there becomes pricier, companies such as America Online and WorldCom have launched "campuses" in Loudoun, which is about 25 miles from Washington. Residential developers are not far behind.
All along Route 7, the old east-west highway that connects Loudoun to Fairfax County, are mounds of red-brown dirt that mark the sites of developments such as Broadlands, Cascades, and Countryside, where homes sell for $200,000 to $1 million.
"Fifteen years ago, people used to work for the government and commute into D.C. Now we're finding a lot of people from America Online buy in Reston or in Ashburne," says Barbara Aaron, a real estate agent at Coldwell Banker Stevens in Reston. "This is really the place to be."
Reston was once a largely undeveloped area in Fairfax County; Ashburne is in Loudoun County.
Dorothy Friedlander, president of Relocation Source in McLean, Va., said she often places relocating executives in Loudoun's new developments. By crossing the county line they get the same new house they would in Fairfax for $15,000 less, Ms. Friedlander said.
Mr. Griffin of Norwest said that before the Leesburg office opened, loan officers from Norwest's Reston and Winchester, Va., offices handled the Loudoun business. But "this is a relationship-type business," Mr. Griffin said.
Now it is easier for loan officers to meet with real estate agents, and a Loudoun homebuyer seeking mortgage information need only make a local call, he said.
"One officer here works almost primarily with builders, another hits the 'for sale by owner' market, and another loan officer will be working more and more with Realtors and referrals," Mr. Griffin said.
Exurban growth has accelerated as more Americans work out of their homes at least some of the time, and as long commutes to city centers become less of a liability, Mr. Feldstein said.
Forsyth County outside Atlanta, which had little growth a decade ago, has become one of the region's fastest-growing areas, he said.
Cutting down commuting time remains important, and toll roads have become a popular tool. Loudoun County, for example, is accessible to Dulles International Airport and Fairfax County by a high-speed toll road.
Mr. Feldstein has some practical advice for lenders seeking to maximize business in the exurban market:
Because exurbs typically are in counties different from the older suburbs and the city center, it is smart to get county-based information on population and mortgage volumes.
Exurbs often grow through new home building, so focus on getting loans through builders.
To the extent that retail originations are important to your strategy, make sure you have retail offices in these locations.
Look for partners in these markets-mortgage brokers as well as small banks, thrifts, and credit unions that originate loans but don't fund them.