This is a doozy! I get asked this question all the time. Let’s look at where we’ve been the last year. In 2006, real estate activity here in Northern Virginia was down significantly over the year before – buyers were panicked that we were headed for a fast demise – sellers were still trying to hold onto higher values and we had a HUGE disconnect. Actually, it was sort of strange – on paper, economically, although we needed a correction in our prices, we should have been poised to still be in an active market. Interest rates were still holding, inventory levels were building, job growth was steady with record low unemployment and commercial vacancies were down – all factors generally pointing to a healthy residential market. But still the market came to a grinding halt.
So, here we sat (the real estate community at large) with buyers that were afraid to buy, sellers that had lofty expectations and the media crying that the sky was falling in… OF COURSE our market was down. I can look back now and see that it was consumer panic – the same sort of behavior that causes stock market crashes… fortunately, it wasn’t quite that extreme. As time passed, we saw that in fact, prices didn’t dive to the darkest depths (at least for most areas), interest rates still continued to hold (which is amazing), we continued to add jobs, and thus buyers, to our area and sellers began to get the message to price realistically. Those buyers that had been holding off seemed to jump off the fence and stick their toes in the water and now we’re seeing activity begin to pick up – so… what does all this mean? Right now here’s where things are… the Northern Virginia market continues to track at slightly less than last year.
What’s interesting about this is that we had a healthier 1st half and a weaker 2nd half for 2006… so the fact that we’re tracking just under is an indication that we’re not in bad shape at all. Some markets are actually tracking ahead – like Arlington (and that’s for both the single family market as well as condos). And economic indicators point to 2007 to be the year of recovery.
The sub prime lending problems plaguing other parts of the country do impact us slightly here in that lending restrictions have tightened and there will be some buyers who will not approve for a loan this year that might have been able to obtain financing in recent years… so with those people out of the market, there is a negative affect on total sales. What does all this mean? It’s a great time to be a buyer. Make sure you’re:
well educated about the process, terms, etc…
purchasing within your comfort zone (price, location, features)
well represented by a realtor (ME) who’s going to give you the time/attention you deserve getting the best deal from a lender (I can help direct you to some great local resources)
I’d be happy to further discuss market conditions, options, lenders and the purchase process anytime. Just pick up the phone and call or email me anytime! Or check out my website by clicking here. Happy Thursday Jennifer
