Which market are you watching and what news are your reading or watching?
To hear it from the national media, you're bombarded with stories about foreclosures, massive price drops, a downward spiraling economy, recession, Armageddon, doomday, death and destruction.
The local news is not much better. When the Washington Post reports on real estate, they are often examining the entire region, Suburban Maryland, D.C., Northern Virginia, as well as the far reaches of the outer suburbs. Parts of Loudoun County may be more a suburb for Reston or Tysons Corner than they are for D.C.
Sure, real estate is a roller coaster ride and it's not for the weary who are in it for the short time and must clench the safety bar and scream the whole way down. Anybody whose ridden on one of the cars at an amusement park knows that you've got to weather the ups and downs, but in the end you'll likely escape unscathed.
Such is true of the Northern Virginia real estate market. Cycles come and go, but one fact remains -- over the past 40 years, the average home appreciation in the region has been 7% per year. 2000 through 2005 saw unprecedented double digit appreciation. Calls were issued that a bubble was about to burst.
Bubble bursting? Not quite so dramatic. However, neither was it nor will it necessarily be a soft landing, as other experts suspected. Home prices momentarily met their peak on the rollercoaster of real estate and have been heading down, but how quickly and how dramatically depends on where you look. It is important to examine the numbers carefully if you are considering a purchase or a sale in the near future, or even if you are just cautiously watching the market for a future move. Reading this blog can be your seatbelt during the bumpy real estate ride.
Real estate prices have been going down, though not across the board.
Always remember the mantra: REAL ESTATE IS LOCAL. Say it again. Memorize it and don't forget.
Here are some cold hard facts and numbers:
| Location |
| February 2008 | February 2007 | % Change | |
|
|
|
|
|
| |
| CITY OF ALEXANDRIA | Average Price | $477,997 | $468,556 | +2.01% | |
| Median Price | $414,000 | $429,950 | -3.71% | ||
| Sales Price/List Price | 92.95% | 93.31% |
| ||
|
|
|
|
|
| |
| ARLINGTON COUNTY | Average Price | $508,232 | $524,538 | -3.11% | |
| Median Price | $425,000 | $470,000 | -9.57% | ||
| Sales Price/List Price | 93.73% | 94.82% |
| ||
|
|
|
|
|
| |
| DISTRICT OF COLUMBIA | Average Price | $507,978 | $490,276 | +3.61% | |
| Median Price | $414,000 | $388,990 | +6.43% | ||
| Sales Price/List Price | 92.72% | 93.92% |
| ||
|
|
|
|
|
| |
| FAIRFAX COUNTY | Average Price | $467,979 | $508,545 | -7.98% | |
| Median Price | $405,000 | $448,900 | -9.78% | ||
| Sales Price/List Price | 91.17% | 93.42% |
| ||
|
|
|
|
|
| |
| LOUDOUN COUNTY | Average Price | $426,442 | $486,292 | -12.31% | |
| Median Price | $374,950 | $419,900 | -10.70% | ||
| Sales Price/List Price | 90.14% | 91.38% |
| ||
|
|
|
|
|
| |
| PRINCE WILLIAM COUNTY | Average Price | $307,392 | $408,874 | -24.82% | |
| Median Price | $275,000 | $370,000 | -25.68% | ||
| Sales Price/List Price | 87.64% | 93.85% |
| ||
|
|
|
|
|
| |
Distilled to a graphical format, we see that price changes are not that dramatic in most areas, with the exception of Prince William County. The steep decline in Prince William County values is strongly correlated with the high prevalence of foreclosures in that area. You'll notice that Alexandria and D.C. actually saw month over year price increases.
As a buyer, this market presents some opportunities to get in and purchase a home before the rollercoaster starts climbing the next hill, whenever that may be (we don't have a crystal ball). If you are planning on living in the area and owning the home long-term, a wise investment may pay off with dividends in the future.
As a seller, you may expect buyers to make some severely low-ball offers based on their misunderstanding of the realities of the marketplace and the widely overhyped freefall that the media is predicting.
They hyped the market on the way up and they're hyping it on the way down. Drama makes news. When you are buying or selling real estate, however, you need the balanced guidance of a real estate professional.
Just to hammer home the reality of how hyper-local real estate markets can be, take a look at the following chart of price changes in Arlington Virginia. While the previous chart shows a slight loss in value over the last year in Arlington, take a look when it's broken down by zip code:
5 zip codes experienced an average loss in value while 4 zip codes in Arlington experienced gains over the past year. In 3 of the zip codes where there were average losses, the home price change was barely perceptible.
Hardly a freefall!
The national news? No. Local media? Probably not. A REALTOR who is on the street and in the trenches of the daily real estate market? There's your best bet for safety on the roller coaster of real estate.
Give me a call to discuss your real estate needs 703-626-0715
Comments(15)