Quarterly Real Estate Guide:
The Sun Gazette Asks: When Will the Rebound Start, Or Has It Already?
|Where is the local real estate market
headed? The Sun Gazette's Rolly Strauss, Brian Trompeter, Kristen
Armstrong and Dave Facinoli checked in with some top names in the local
real estate world to get their prognostications on when the market will
turn around . . . or whether it already has:
Don Lawrence, Long & Foster McLean: I believe this spring is going to be a fantastic spring. Interest rates are low, there's good inventory and buyers shouldn't be hesitant to move forward. There are all the ingredients for a good spring.
Dean Yeonas, principal, Yeonas and Shafran Real Estate: It is actually a normal functioning marketplace, which means that there's enough inventory and that buyers have time to look at multiple properties and then make a decision. Overall, we're probably 12 to 18 months from getting through a lot of the issues that are affecting the overall economy, but a lot of these submarkets here - like Arlington, McLean, Vienna - are pretty good.
Shirley Buford, Long & Foster McLean Elm Street: I wish I had a crystal ball. I think the next six months will be a difficult six months, but I think that the market in our area is resilient, the most resilient market in the country. It is going to turn around.
Lilian Jorgensen, Long & Foster McLean: The answer is that I don't think we're going to see much change in 2008 until after the election. I think we're going to see an improvement in 2009 and 2010. We have been sliding down here for a couple of years. Listening to the economists, looking at economic indicators and it being an election year, the market should be improving in 2009.
Jinny Wilkes, Re/Max: I don't think we'll know until probably the end of the second quarter. We're hoping tomorrow, but realistically, not until the second quarter. But our market, looking at our statistics, things aren't that bad. This market rewards perfection. Price and condition are paramount.
Pat Evers, Weichert McLean/Dolley Madison: I wish I had a crystal ball, but I think we will see stabilization in the spring market. It really is a great time to buy.
Gail Belt, Coldwell Banker Vienna: If you mean: when will the market return to a wild sellers' market, with multiple contracts, price escalations, buyers giving up home inspections, that type of turnaround is at least five years away. If you mean as a return to stability, with an evening out of prices and reasonable rather than frenzied buyer activity making non-pressured choices, then the market has already turned around. To be honest, this is more a real market and it is a fantastic time to buy.
Nancy Steorts, Weichert McLean: I'm not having any problems. If the property is priced correctly and you have a seller who understands the market and a buyer who understands the property, you have a deal. The property being priced right is the whole key, and I demand the property is priced right. But my market is fine.
Casey Margenau, associate broker, Re/Max Distinctive McLean: It has bottomed out in Fairfax County, Arlington and Alexandria and is already starting to turn around in certain segments. The best deals are past, but there will still be good deals until we absorb some of the excess. Some lower-priced older stuff will stay depressed for a while, because there is a lot of inventory. In the million-dollar range, there are not enough good ones out there.
Barbara Johnson, Long & Foster McLean: I don't think the current market will turn around for a couple of more years. There is too much inventory, but the rates are holding well. So there won't be any dramatic change, but I don't look for it to get any worse than 2007.
Claudette Schwartz, Weichert McLean: I am very optimistic and think it will be a great 2008. I am so busy right now I can hardly keep up with it. If we think positive, it will be positive.
Libby Ross, Long & Foster Arlington: I think it probably has [turned around], if it's not on the verge. I got all of my listings sold by last fall that had been on the market for a while, so that told me I think the market has already turned around.
Susan Shepard-Siple, Weichert Arlington: Here in Arlington, we've already seen the market start to pick up quite a bit in January. We are extremely hopeful for a good spring market. I don't know I would use the word “slump.” It's negative. We had a great, great seven years and the market just did what it does. Markets are a bell curve. They come up the edge and go down. Now, what was a sellers' market is now a buyers' market. I've been at this 18 years. We've seen it before and we'll see it again.
Laura Fall, principal, Fall Properties, Arlington: The closer-in suburbs have already started to level out. The inventory there is starting to shrink. I think we're going to have lot of fallout still from short sales and foreclosures. It can alter the common value of a community. In outlying areas, they're having problems with a big inventory, high energy prices and lots of short sales and foreclosures, which have a dampening effect on [housing] values. With lower interest rates, there will be a return to the market, but it won't be in droves.
B.J. Djordjevic, branch vice president, Coldwell Banker Arlington: There's a slump in different locations. In Arlington, there's not a slump. We're seeing a lot of activity in 2008. Interest rates are down. It's a great time to buy. I see the media pointing the finger, not at real estate any longer, but at the economy in general. Automobile sales, retail and the election are more topics of conversation than the real estate market. In Arlington, the market is fine. Prices have gone up. It's business as usual.
Bret Brock, managing broker, Brock Realty Arlington: I don't think we'll see the price appreciation we saw from 2000 to 2005 within the next 10 years. We'll reach those price levels probably within the next 24 months, but the level of yearly appreciation won't be as great. I think the market will be stimulated after the election more than it is now, coupled with the interest rates predicted over the next two to four months. I think people are ready for a change, whether it's Republicans or Democrats. Also, there will be an influx of new, transient, political jobs, which will stimulate the economy. It's the changing of the guard, if you will.
Dave Eaton, Prudential Carruthers Fairfax Oakton Vienna: Definitely, we're going to have a turnaround in 2008. The pundits are talking about mid-year, when the weather is getting good, and I would endorse that. We're looking at probably March when it will pick up.
John Edelmann, Coldwell Banker Arlington: There's already been some change, just since the holiday season. The open house numbers are up to full levels. We may see an early spring, even if the weather's not that way. There's pent-up buyer demand despite the media reports, and, actually, in Arlington, sales prices have held pretty steady. I think if the inventory dries up a little bit, we're going to see a better spring than last year.
Vivian Lyons, Weichert Great Falls: I'm hoping that the market will stabilize in 2008 and that we'll start to see improvement by the end of this year, and by that I mean a better balance between supply and demand. Once the buyers feel comfortable that the prices have bottomed out, then they'll come back into the market, and the inventory will start to get eaten up.
Freddy Barney, Coldwell Banker McLean: Unless there's a huge change, I don't think things are going to improve until the fall. A lot of people are thinking of putting their home on the market, thinking they're better off listing in the spring, and then we'll have another blip in inventory and it'll get worse before it gets get better. But that said, everything in real estate is local. It's been much more stable, especially for homes over $1.5 million. It's the little guys who've been hurt the most, the ones under a half-million-dollars. But McLean and Arlington are very solid.
Karen Close, associate broker, Long & Foster McLean Dolley Madison: Our problem is changing the mindset from the national doom-and-gloom, because real estate is local. The stats are good here. We have 40,000 government jobs coming here, and another 20,000 coming from the private sector over the whole area - Maryland, D.C. and Virginia, out to Stafford. People are going to have to buy something if they're going to work here.
Delk Hamaker, principal broker, KDH Real Estate Arlington: I don't want to predict whether [the turnaround will be] this spring or next fall, but from our standpoint, I've seen showings go up for our properties since the first of the year, certainly from last November and December. Whether this translates to sales or just looking, some positive news, somewhere, will help. People are sitting on the fence.
Nancy Marsh, Long & Foster McLean: [The turnaround will happen] when people stop trying to have a follow-the-herd mentality, because, really, this is the best time for buyers in the last seven or eight years. People will gain confidence when they realize that real estate in the national capital area is the one investment that has held the best - in trust and in value - over the long term. People should go with their gut instinct and with the long-term value.
Donna Uscinski, Long & Foster Great Falls: Things are busier, and I think it's going to be a great year. If interest rates come down again, and I think they will when the Fed meets again, it'll really help. This happens all the time - every few years we have a slowdown, so things are going to get better. And it's an election year; that's always great for real estate.
Kate Ryan, associate broker, Long & Foster McLean Dolley Madison: We've turned a corner, of sorts. We're seeing an increase of activity of buyers to get back in the market. Prices may still decline a bit, but I don't think we're headed for any terrible decline. Sellers have come to terms with the reduced prices houses are bringing. And buyers are cautiously willing to get in, knowing in their gut that investing in real estate in the Washington metro area really is a good financial decision. It bodes well.
Kristin Kelly, Re/Max Allegiance: We will see some help with the interest rates dropping some, which will stir up activity. I don't think prices will be much different from 2007, and sellers have adjusted psychologically. They're more open-minded and open to activity. As far as buying, it's already started to pick up.
Jim McGarity, associate broker, Long & Foster Arlington: I believe we've turned around already. People are really getting out there and taking advantage of the low interest rates. They've been through this bad time with bad publicity for the last six to eight months of [last] year, and I think they're about ready to do something. I'm hoping I'm right.
Matt Shepard, Keller Williams Arlington: If you listen to the economists, they're talking about 2008 being a slow market. I've seen more activity in the last couple of weeks than in the six weeks before that. Buyers are coming out of hiding. I think we're in a period of adjustment that's been a long time coming. Here, we are insulated some by our area, that we're the nation's capital. It's a great time for people to buy a house, and for a savvy investor to buy in a down market. Sellers still have to be prepared to negotiate.
Andree Andriuk, Weichert McLean Dolley Madison:We are hoping this spring it will start reactivating, but knowing exactly when, nobody really knows. I don't remember the market being as saturated as it is today, but as the interest rates are at a good level, we can't complain! I have a lot of clients waiting until the spring to put their homes on the market. That's when the market comes alive again. Buyers should see it not just as an investment, but as a place to live - and they'll still make money on it when they sell.
Pat Bray, Long & Foster Vienna Oakton: Everybody has a different opinion. For me, it's started. My phone is going to ring heavily again. We're seeing a lot of relocation buyers are in the market that we normally see with the private sector this time of year. By no means are we exploding, but if the press would say something positive, we'd be in better shape. The buyers are tired of sitting and waiting. We may not be totally there, but we're almost there.
Jean Gorman, Century 21 New Millennium McLean: The lenders need to do more than they're doing and they need to work harder, and then we can flush out the problem. Lenders need to renegotiate the [existing] loans that are out there, before people default. Then inventory will go down, and that's when we'll see a turnaround. When people move into the area, when we see a new president, we'll see a mass influx and a mass exodus. I'll tell you, I'm busy!
Sharon Hayman, Long & Foster: It's difficult to say, but [the turnaround should come in] 2009, and the reason I'm saying that is because I look at the market every day. I think 2008 is going to be difficult for the outer-lying areas and suburbs, and will remain status quo inside the Beltway. I also think it will change in 2009 because of the political climate and leadership. Consumers aren't believing in President Bush. Once we vote for someone else, it will boost the confidence in the market. We'll start seeing the outer-lying areas pick up.
Janet Gresh, Long & Foster: The end of the slump will be driven by buyers realizing that this is the best time in 15 years to buy in quality locations that previously were inaccessible. It's that surge of buyers and very low interest rates that will end the slump. Buyers are already active in the market, but waiting for the right time to buy. With a forecast of another potential interest cut by the Fed, buyers are standing by. There are tremendous buying opportunities out there in the market.
Kay Abell, Long & Foster McLean and Georgetown: It is a more a buyers' market in every way, every day - far different from years past. If qualified buyers are sitting on the fence postponing the time to buy, they are missing a great window of opportunity to at least explore the huge inventory of listings in all of the metro areas and elsewhere. One phrase I have been hearing since November is: “Let's wait until March and see what's happening.” March seems to be the benchmark time frame everyone is pointing to.
Barbara Bubel, broker, Weichert McLean: Basically, I am confused, and I always thought I had a good handle on the market. Yet I am seeing a lot of buyers out there resurfacing. It's possible these could be honest buyers. The market is sending mixed messages. At some point, I predict a leveling out.