- The Washington Times - Wednesday, January 19, 2005

Almost 130,000 existing homes were sold in the Washington region last year. That’s the highest total ever.

In just five years, area home sales have increased 39 percent. Sales have more than doubled since 1997.

The housing market of a region as large as this one is a complicated creature, but here are a few of the reasons sales figures took off in recent years:

• The area economy. Nothing fuels a real estate market like job growth, and this area has been one of the top employment creators in the nation. A growing job force not only demands new housing, but, in this area, many of the new workers are well-paid professionals. They buy houses and contribute to a massive game of “musical homes.”

• Low interest rates. Mortgage interest rates have been very low throughout this sales boom. Low rates allow buyers to purchase more expensive homes, encouraging them to move up and fanning the flames of price escalation.

• Increase in homeownership. The percentage of Washington-area residents who own their homes has risen from 60 percent in 1986 to almost 70 percent in 2003. One reason for the rise has been looser lending guidelines in recent years, which have allowed lower-income residents to buy homes. This expansion of homeownership, combined with the overall population growth in the area, means more people are buying homes every year.

• New-home construction. A shortage of available land in such counties as Fairfax and Montgomery has dampened new construction. Nonetheless, 4,000 to 5,000 new homes per year are built in these two counties. Although some of the new homes replace outdated properties, the total housing stock rises every year. When these new properties are sold as resales, they boost the resale data.

Chris Sicks

Reach Chris Sicks by e-mail (csicks@gmail.com).

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