Northern Virginia’s housing market is improving, but rising unemployment will accompany the turnaround, local and national experts told local real estate agents at a housing conference Wednesday.
Local economic and housing indicators are on the upswing, but unemployment will lag, said Stephen Fuller, director of George Mason University’s Center for Regional Analysis. The Northern Virginia Association of Realtors summit was held at GMU’s Johnson Center in Fairfax County.
“The turnaround has occurred” for new-home sales in the Washington area, excluding condominiums and multifamily homes, he said.
Still, he said unemployment would remain high — which would hurt the housing market.
“Unemployed people don’t buy houses … at least no longer,” said Frank Nothaft, chief economist for McLean mortgage buyer Freddie Mac.
That warning prompted calls for an extension of the $8,000 first-time homebuyers’ credit, which is supposed to expire Dec. 1. The White House and Congress are looking into extending the program.
“I’m fairly confident that we will do it,” said Rep. Gerald E. Connolly, D-Va., though he did estimate that it could cost between $15 billion and $17 billion.
“We aren’t out of the woods” in terms of unemployment, and aren’t going to be anytime soon, he added.
Lawrence Yun, chief economist and senior vice president of research for the National Association of Realtors, agreed that the credit should be extended.
“Fifteen billion dollars in any other time would be a huge sum,” he said, but he pointed out that the Wall Street bailout totaled $700 billion last year, and the stimulus bill in February was nearly $800 billion.
“I have no compunction about pushing the homebuyer tax credit forward,” he said, eliciting comments of “makes sense” and “hooray for our side” from the audience, largely composed of local real estate agents.
