Based on their experience during the first six months of 2008, Alexandria Realtors were asked to predict the area housing market for the rest of the year. Without donning rose-colored glasses, most took a realistically optimistic view. Heres what they had to say:
We are going to have three slow years
Weichert, Realtors, Alexandria/Belle View
Based on more than 35 years of experience, he says, I predict a very slow year. We are going to have three slow years before we get back to normal. In four years it will take three or four months to sell a house, which is a normal market.
Now there is too much inventory and there will be a lot more. Our area will not be as hard-hit as Florida, Nevada, Arizona and California, but we are not going to be in any booming market, either. We still have years before we wring out that extra excess and we have so many foreclosures to go through, too. But I am sure it will be worse for people who are living in outlying counties like Loudoun and Prince William.
Everything goes in cycles, just like your body rhythm. The stock market and real estate market both go up and down. This one is just like the boom-and-bust cycle of 1989 and 1990. It had been booming in the late 80s and 90s but then it went bust and was very slow for about four years. I think we are doing the same thing. The housing market and general economy are having a bad effect on each other. Freddie Mae and Freddie Mac have raised the conforming loan limit (to $729,000 for our area) but they have made it more difficult to qualify. (Other Realtors have also expressed their frustration at getting contracts for their listings, only to learn that the buyers could not obtain the needed financing in the notorious credit crunch.)
We are getting back to a normal market.
Sue Goodhart, McEnearney Associates,
Old Town Alexandria
In real estate since 1992, she says, We had a good first half of the year and we are getting back to a normal market. It has overall been a good first half inside the Beltway, where we are getting back to a more normal market, like 2000 and 2001. As you get further away, though, you get more problems with short sales and foreclosures. Alexandria has a good location with Metro access. Between the fuel costs and traffic congestion, it takes a lot of time AND money to drive in.
We had a wild market and then a depressing one, but now we are getting back to a normal situation. Buyers are making wise decisions, getting home inspections and finding lots of good deals. The sellers are not getting the prices they might have hoped for, but they are not taking big losses, either.
I had a very slow start this year when the stock marked dropped, but we have shaken it off. There are always people who have to move, and fewer are just doing it on the spur of the moment. Nor are we having investors who are just trying to cash in. Instead, we have the people who normally need to buy.
My team has sold 55 houses this year, which puts us on track with last year, even if we are a little behind. There are good buyers out there and if you price your home properly and show it well, it will sell. This is certainly true of Alexandria, Arlington and Washingtonalthough, once again, when you move away from the Beltway you have a slower market.
a fair market for both sides.
Ann Dozier Michael, McEneanerney Associates
A veteran Realtor of 25 years standing, Ann says, The first half of the year was different from 2005 and 2006, but it has not been bad. It has been better for the buyers who have a chance to think about the property, get a home inspection and make a sound decision. It is a fairer market for the buyers, even if the sellers feel they are losing money on it. They have to be responsible for getting their property into excellent condition.
It is becoming a fair market for both sides, and I think the rest of the year will be the same. Most of the houses are selling in a fair waynot in hours but weeks. That makes it better for the buyer and also a more normal situation. I would compare it to a tug-of-war, with an even number of players on both sidesno one is out-pulling the other.
2009 will be better.
Norma Heck, Century 21 Accent Homes, Alexandria
Based on her 35 years of experience, she says, We have been through cycles like this before, in the 70s. 80s and 90s. But we have been going through a much harder cycle this time, because of all the short sales and foreclosures, competing with other properties.
The first half of the year went pretty much as I expected. It did not go well. Sales were especially slow because people buying the foreclosures and short sales did not understand how to go about them. They are much slower than ordinary sales because you have to work with so many people, including both owners and banks. So they slowed everything down. We just had to try to educate people about that.
But I think the banks are beginning to work more with the buyers and sellers. Everybody is becoming more realistic now, about where prices are. It is getting harder for the first-time buyers because it is harder to find 100 percent loans, with no down payments. I am doing a lot of rentals now, because people rent if they cannot sell.
But things are leveling off more. Prices are becoming more even. We are starting to see the light at the end of the tunnel, and I think 2009 will be better.
more contracts being written.
Lynne Humphries, Prudential Carruthers, Old Town
I think it is picking up. I see more buyers in the office and more people coming to open houses and more contracts being written. I dont know whether this is just the spring market and will fall back later in the year, but it is nice to think it is a continuing trend.
But we hope it is going to continue when we look at the statistics from the Northern Virginia Association of Realtors. The number of houses on the market had been high in January and February, but now it is coming down, which is a good thing. The market is definitely better than in other parts of the country, like Florida, that are really bad. Even here, it is certainly better than the predictions had been.
Join in the fun!
Janet Price, McEnearney Associates, Old Town
Having entered the profession 12 years ago, Janet says that the local residential market reached the so-called bottom of the trough in March 2008. Since then, she claims, the buyers have returned and sellers have come full circle by realizing how to realistically price their homes.
With interest rates remaining low and values beginning to creep back up, now is the time to buy, she says. I am busier now than I was in 2006, with its $25 million in sales. Deals take longer to put together, but when they happen, the deals are solid. They dont go away.
I believe lenders are shedding the effects of the sub-prime drag on the market of 2007. They are looking for good borrowers with good credit, and when they find them, they have plenty of money to lend at good rates. With the lenders back, the buyers eager and the sellers realistic, thats a perfect storm in a positive sense for a steady, sustained recovery. Its already happening. So join in the fun!