Houses are lingering on the market as the Washington area — as well as the rest of the country — faces a sluggish late summer.
The number of houses for sale
swelled 5.67 percent from June to July and climbed 13 percent over the past three months — both tops in the country, according to a report from Altos Research, a Mountain View, Calif., real estate analytics company.
“I don’t know what to tell you — it’s not a wonderful market,” said Ken Montville, a Re/Max real estate agent based mostly in Montgomery and Prince George’s counties.
Nationally, existing-home sales plummeted in July to their lowest level since 1999, according to data released Tuesday by the National Association of Realtors. Single-family sales, which account for the bulk of transactions, are at the lowest level since May 1995.
Sales have slowed since the
homebuyers’ tax credit ended in June
and as lenders are requiring more money down and better credit scores to secure loans, Montville said.
“Especially in Prince George’s County, there’s a limited amount of that,” he said. “Tighter credit standards have had a major impact.”
Congress extended the tax credit deadline to Sept. 30, but only for homebuyers who had agreements in place before April 30.
The dearth of activity comes even as mortgage rates remain at historically low levels; a 30-year fixed-rate mortgage averaged 4.44 percent the week ending Aug. 19, according to McLean mortgage giant Freddie Mac.
But Montville said that as mortgage rates continue to plummet, many buyers are sitting on the sidelines and waiting for the “lowest rate.”
Homes costing $500,000 and more are sitting on the market for a long time, said David Dowies, principal broker of the Centreville-based Portfolio Realty Solutions, who also noted a generational trend.
“I think the older generation is a bit more cautious now,” he said. “Typically, they’re more conservative and they won’t make a move until they know what’s going to happen with the nest egg.”
Dowies did note, though, that the federal government and military give the Washington area a stronger job market than the rest of the nation. Preliminary unemployment figures for July were 7 percent in Virginia, 7.1 percent in Maryland and 9.8 percent in D.C., which was down from a peak of 12.0 percent in January. The national rate was 9.5 percent.
Lawrence Yun, the NAR’s chief economist, said that if employment improves, so, too, could the real estate market.
“Given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly,” he said, “provided the economy consistently adds jobs.”
