That Thing On My Desk Is Only A Paperweight - Not A Crystal Ball!
Pat Kennedy makes some very good points in her post. These points are not only good int the Washington, DC area but can be applied to just about every market. Thank you Pat for sharing your wisdom.
Everyone I’m working with is looking to me for insight on what’s going to happen to the Washington area real estate market. And darned if I know! But there are some observations worth noting.
Prices in many District neighborhoods have held up, at least so far, especially areas that are close-in and near Metro, like Cleveland and Woodley Park. But some very desirable neighborhoods along the 16th Street corridor, like Crestwood and Colonial Village, have some major bargains.
There is no question that our market has slowed down with the big economic meltdown, and we seem to be at some sort of a crossroad. So here’s what I think.
- We are seeing a sort of “buy and hold” market here. So if you are looking for someplace to buy long term as a home or rental, buying is probably your best bet. Even if prices go down, they are not likely to stay there forever.
- If you’re planning a move to the Washington area and think you will only live here for a short time - a year or so - renting could be a better option, unless you would be willing to buy something and hang onto it as a rental property when you move on.
- The smart people, like Warren Buffet, advise you to buy when nobody else is, and, um, that would be now!
- What goes up must come down, but in real estate, what goes down also comes up again sooner or later. And while there are down cycles, the next up has always been higher that the high from the previous up market.
- This isn’t a market for sissies. Economic uncertainty increases the risk for buyers and tends to drive down prices.
- The other smart guy wisdom is to sell when everyone else is buying: du-uh!. And there are many sellers who are deciding they don’t really have to sell and are turning down low offers. They are in many cases buying low and renting out their old home. Or they are simply sitting out the downturn altogether.
- If you have to move now, you have to move. If you’re selling and buying in this same nutty down market, it could all be a wash. You’ll sell your old place for a lot less than it was worth a couple of years ago, but your new place will cost you less than it would have in 2005.
We can look to the past for some insight, but the past is not always the best predictor of what’s to come.
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