Washington’s housing market heads into fall on an upbeat note after plugging along with modest but steady gains over the summer. Even with the volatility in the financial markets, and some uncertainty about the impact of a lower maximum amount for FHA-backed mortgages beginning Oct. 1, there are expectations for a brisk fall selling season.
“All the economic forecasting for July was great,” said Robyn Burdette of Re/Max Allegiance in Northern Virginia. “New pending sales are higher. Closed sales are higher. The housing market is very good and I’m very confident about interest rates.”
Interest rates remain low and homes that are priced well sell, with multiple offers seen in close-in areas such as Arlington. Homes further away from the District, however, still can sit on the market for longer periods.
Metropolitan Regional Information Systems numbers show the median price of homes sold in Northern Virginia rose by 1 percent in July to $450,000, compared with July 2010’s median price of $445,500. The number of new pending home sales in Northern Virginia increased in July by about 14 percent to 1,765, compared with 1,544 new contracts pending in July 2010.
“We are a very diverse economy here in Northern Virginia and much more than just a sleepy suburb of the federal government,” Burdette said. “Hilton is here. Grumman is here. Volvo is here and more companies are coming. It’s not all just federal jobs.”
Overall in July, the District had a 2 percent increase in sales over July of last year and the average sold price rose by 10 percent.
Sales in Alexandria increased by 4 percent and in Arlington by 7 percent over the same period last year. Sales remained flat overall from this year to last in Montgomery County.
Still, there is hesitation on both the buying and selling side of the housing equation.
“Housing inventory is low in some areas as foreclosures have fizzled out and homeowners that would like to sell are waiting for their properties to reach a price-based tipping point before selling,” said Adam Gallegos of Arbour Realty.
Re/Max Allegiance agent Marcia Burgos recently purchased an Arlington home and had to compete with multiple offers. Looking since January, she made full-price offers on two properties in the $750,000 range but never received a response from the sellers.
“It’s odd that it took so long,” she said. “There are a lot of houses on the market. As soon as something popped on the market I received an email — about 125 of them a day.”
Burgos said there should be more buyers based on the current low interest rates but she also sees sellers who are reluctant to stage their homes properly and who price their homes too high.
“You won’t get a serious buyer on an overpriced home,” she said. “If you price it right and present it the way it should be — with new paint and carpet — you will get multiple offers.”
She added that buying a home can be an ego-driven process. “My buyers don’t believe me when I tell them that there are multiple offers,” Burgos said. “They want to negotiate and I tell them that this is not HGTV. They want to go all Donald Trump.”
Burdette is not concerned about the Oct. 1 reduction in the Federal Housing Administration loan limit for the Washington area from $729,750 to $625,500. Many lenders, she said, already have lowered their limits to the same level.
She predicted price points will drive the fall market, making it especially important for buyers to be as informed as possible. “Read globally and focus locally. All that counts is what’s in your backyard. The fall will be strong and 2012 will be a year to watch,” Burdette said.
