As expected, sales were slower in July than they were in June. This happens every year.
Sales in July also were 24 percent higher than in July 2010 — which something that doesn't happen every year.
"I'm surprised it's not worse, given all the bad economic news lately," said Holly Worthington, manager of Long & Foster's Chevy Chase and Woodley Park offices.
"The market has actually slowed down the past two weeks or so," Ms. Worthington said, "but I think it's just because the market always slows in August. People do have some fear about the economy, but properties that are good deals are still moving."
One of the reasons home sales have been so strong this year is that many buyers have been investors. Ms. Worthington said she estimates an astounding 30 percent of the buyers her office is working with are investors, not folks buying homes to live in themselves.
I find that very interesting and see it as another reason for cautiously rising optimism about the Washington-area real estate market. If investors were that active before the recent turmoil in the stock market, we could see even more of them moving their money into real estate now. Why?
Well, many investors see real property as a hedge against inflation and a safe haven during uncertain times. Even if real estate prices don't shoot up like they did during the 2002-to-2005 boom — and let's hope they don't — Washington-area real estate could be a very smart place to park some investment dollars.
Besides the investors, we must remember that this area also has many wealthy folks who have retained their capacity to buy homes regardless of the economic climate.
"Nothing has really changed for those people. Those who have money will buy, and those who don't have the money don't buy," Ms. Worthington said.
During the remaining months of 2011, watch for sales to drift slowly downward, as they do every year. I'll be watching, however, to see if investor activity increases, and I'll let you know what I find.
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