SELLERS ARE STUBBORN AND BUYERS ARE RELUCTANT in NORTHERN VIRGINIA

WHERE DO HOME BUYING FOLKS GET THEIR PRICE RANGES??

When the market was hot, buyers were hot to trot.
Now that the market has cooled, buyers are in the deep freeze. 

Sellers are watching their equity shrink rather than lower the price.
Get a good offer on a property and cringe when the sellers say that they have to counter.

THE FACE OF REAL ESTATE IN MARYLAND AND NORTHERN VIRGINIA HAS CHANGED.
Back in the 1980s and 1990s, Loudoun County was very rural.  Leesburg was a small town with historic charm. 
Then, along came the Internet and the face of Loudoun County changed dramatically.  Some enterprising
entrepreneurs constructed the first privately financed highway in the area and the result was THE DULLES
GREENWAY.  This highway brought Leesburg and western Loudoun County within easy commuting reach
of Tysons Corner in Vienna and McLean where AOL, Alcatel, Coherent, Network Solutions and other Internet
related employers.  The Dulles Greenway meant that drive time from Western Loudoun County to the beltway
was no longer an hour in stop and start traffic up and down Route 7.  It was now 20 minutes from Leesburg
to the Washington Beltway.  Loudoun County was hot.  Leesburg is still full of charm, but today Leesburg is
surrounded by homes in communities with contemporary attractions, and subdivisions with paved roads,
sidewalks, public water and services.  Real estate prices increased approximately 7% a year matching the
growth rate of Loudoun County.

   The changing face of Loudoun County - Homes in the $750K range and in the $1,700,000 range.

WHAT HAPPENED?
From 2002 to 2005, prices of homes in Maryland and Northern Virginia increased about 100%.  The recovery
from the attack of September 11, 2001 was rapid.  Homeland Security brought in jobs and home buyers.  The
FED lowered interest rates to a point where buyers couldn't wait to buy a home.  Then about August of 2005,
the spiraling real estate market came to a screeching halt. 

IT WAS A PERFECT STORM THAT RIPPED THROUGH THE REAL ESTATE MARKET IN NORTHERN
VIRGINIA AND MARYLAND.  100% increase in prices of homes for sale and a 30% increase in interest
rates. 

  RAPID PRICE ESCALATION AND INCREASED INTEREST RATES


We watched the interest rates climb and climb.  I kept asking, and asking, "WILL THEY EVERY STOP?"
Every quarter as the FED kept rising interest rates that slow drip, drip, drip 1/4, 1/4, 1/4 from a wonderful
4.75% to the now 6.25% plus.  Yes, it was like the proverbial show drip water torture. 

TODAY, SELLERS REFUSE TO ACCEPT MARKET TRENDS, SOLD STATISTICS OR APPRAISALS. 
Rather than negotiate prices, sellers are holding out for last year's prices and buyers are looking at what
their money will buy and going home and renewing their lease.  When I qualify a buyer and find that they
are qualified for $350,000, it isn't unusual for the buyer to want to keep their price range to $250,000. 
When they want to know what that will buy in Northern Virginia, I send them listings of Town Homes and
Condominium Homes in that range.  It isn't unusual for the buyer to then come back and ask what they
can get in a "single".  That is buyer-speak for detached.  I spoke with an agent from Atlanta today who
wanted to refer a home buyer to me.  The buyer insisted that he didn't want to be close to strangers and
that if he couldn't get a "single 3/2" in Loudoun County for under $150,000 on a private lot, he would rent. 
I sent the agent the below as an example of what $150,000 would buy in western Loudoun County.  

                                                  
                      

WHAT IS THE MATTER WITH PEOPLE ? ?
Back in 2004, a buyer qualified for $400,000 would want to buyer a $500,000 house.  Now they look at
$500,000 homes and think they can buy it for $400,000.  I can't blame them.  They have heard about the
slow market from the Washington Post, the New York Times and the Wall Street Journal to a point
where it's a wonder anyone wants to buy a home at all.  If it were not for the mortgage interest deduction,
many would not. 

There are about 1673 detached single family homes offered for sale in Loudoun County Virginia.
The low price is $185,000 for a 3/1 "as is" home.  The average price is $790,000.  

                               

WE'RE JUST WAITING FOR THE SPRING MARKET AND "PENT UP DEMAND"
Americans are a home buying culture.  Home ownership is everyone's dream and our job is to help them
find every home buyers the very best home for their money.  I'm out with some new home buyers Sunday.
Their price range is up to $600,000. There are about 1675 homes on the market in Loudoun County. 
The average price is $790,000. 

It's always an adventure.

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