Realtors Remain Upbeat Through Transitions

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There is no doubt about it: We live in very interesting times. Between the housing boom going bust a few years ago, the stock market crashing in early October, the November presidential election and the December homeowner relief programs promised by Fannie Mae and Freddie Mac, realtors in particular may find it especially interesting. Soon after Election Day, some were asked to report on their recent experiences and what it leads them to predict for the future:

“I have never seen an election that did not cause an uptick.”

“In October, I saw a lot of foreclosure purchases. They really picked up after the crash, possibly due to investors taking their money out of the stock market and putting it into real estate. We handle most of the foreclosures for Countrywide (home loans) in the Alexandria and Mount Vernon area, I sold a lot of them last month, and a lot of the purchasers were investors.

“It is too soon to predict the effect of the election, but I have been selling real estate here for 20 years and I have never seen a presidential election that did not cause an uptick in the real estate market. I think we will probably see a window of opportunity from December through the first few months of the year when the administrations change. With all the new government programs, I would not be surprised to see even more people coming to our area because someone has to administer them all.”

– Chris White, Long&Foster, Alexandria/Old Town Historic District

“Following the election, my phones have rung more.”

“September and October of 08 were stronger in closings than the same months last year. November is too soon to tell, but following the elections my phones have rung more. It is an exciting time for the country and I think that now things are settled, peoples confidence will come back. It is like what Warren Buffett says: “When everyone else is greedy, be fearful, and when everyone is fearful, be greedythat is the best time to buy.

“I believe there is a lot of pent-up demand among people who have been sitting back and watching. They are coming back into the market because the interest rates are still low and there are certainly beautiful homes for great prices.”

– Karen Leonard, Coldwell Banker Residential Brokerage, Alexandria

“Both sales and rentals have been busier.”

“I think both sales and rentals have been busier. In the last two or three weeks I have gotten more calls for information. You have to show a lot of homes and the buyers are not making up their minds quickly, but activity has picked up.

“The foreclosures and short-sales inventory is shrinking. They have been on the market for a long time. The banks are making up their mind, where they had been taking a lot of time before, so houses that have been on the short sale list are changing to foreclosures. And the foreclosures are selling.

“Also, some of the (foreclosed) owners are rearranging their loans. I am working with someone now to get his loan rearranged, and I helped someone else who did rearrange her payments so she could afford them. That could be happening too (to reduce the foreclosure inventory. Either way, the (foreclosure inventory) list is getting shorter. I think this is very good news for our communities. It should help make the prices more stable.

“The new administration will also affect this area. We should see more upscale sales in January and February. Some (new staff members) are starting to look now because they were in temporary situations during the campaign and are now hoping to find a permanent residence.”

-Norma Heck, Century 21 Accent Homes, Alexandria

“We still have some movement.”

“Things really slumped in October, but I had a listing for a Fairlington condo that sold in two weeks, so there is still some activity going on. I have also had a number of people calling about listings but the banks are much tighter on qualifying people for loans and that makes it hard to buy. The contract contingencies are lasting longer: They are usually removed after two or three weeks, but now it has become two or three months.” (The buyers are asking for the extension, she explains, because they now want the purchase to be contingent on their actually getting the loan, rather than obtaining approval).

“In addition, some buyers have also lost 40 percent on their investments, so they no longer have the money they thought they did.It is very frustrating for the listing agent. My sales have all been completed, but I have seen many that have fallen through instead.

“But we still have some movement and when the administration changes we will continue to see it. This area is blessed because there are so many buyers who come and go: military, government and the private sector. The change in administration will bring in more activity because people will be coming to work for it.”

– Dolly Reichert Woodruff,Prudential Carruthers, Old Town

“The post-election boom is a myth.”

David Howell challenges this common wisdom about an elections effects on home sales. “I have been a broker here through five previous presidential election cycles and never seen or experienced the boom that is so frequently discussed,” he says.

Writing in McEnearney’s August “Market Watch” publication, he explains, in part, that many of the new administrations future staffers are already living and working here, while those coming from out of town may not be able to afford our areas home prices.

As a result, he predicts, “We will see no more than 2,400 homes change hands as a result of the upcoming elections, spread over a year.” That is a small portion of the 50,000 yearly home sales in the Washington area.

“The bottom line is that the post-election boom is a myth,” he says. “One should not base housing decisions on the supposed impact of the election.”

At the same time, he does see brighter days ahead, partially based on more general job growth. As he puts it, “We are passionate believers in the long-term health of the real estate market in the Washington area. We have seen probably the worst down cycle over the last couple of years and it is probably not quite over. I spent some time with the chief economist of the Bank of America (Carter Murdoch) last week and I agree with him that the national market will not bottom out until the second or third quarter next year and that is probably true of the Washington market as well. But what makes our area so different from the rest of the country is our job market.

“We are one of the very few areas that are forecast to have net job growth, and as long as we have that, we will have a continued demand for housing. While no one will anticipate major price appreciation in the next couple of years we do expect to see the market bottoming out by mid-year 2009 and we do expect a slow, steady return to a normal market with normal appreciation.”

David Howell, Alexandria resident and managing broker, McEnearney Associates in McLean

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