- The Washington Times - Thursday, December 9, 2004

If you have read this column at all during the past few years, you may have grown tired of hyperbolic language about the area’s real estate market. Words like “biggest,” “hottest” and “unbelievable” may have been repeated month after month, but they have been entirely appropriate when describing the 2000-04 markets.

During each of those years, more homes were sold in the Washington area than in any previous year.

Each year was the most competitive market on record for buyers and the most profitable year for sellers.

With every year setting new records, it has become difficult to predict what the coming year will hold. The temptation is to assume that the market simply must cool down, or at least level off.

Year after year, however, it hasn’t. To be honest, there are few indications that 2005 will be the year the market finally cools down.

Area unemployment figures continue to be extremely low, and many of the new jobs being created are for highly paid professionals who can afford area home prices.

The area’s traffic troubles might even contribute to the high demand among home buyers. Road-weary commuters who can afford homes inside the Beltway battle over them. That keeps competition high in counties such as Arlington and Prince George’s.

Commuters who cannot afford homes inside the Beltway are flocking to places such as Stafford, Prince William, Frederick and Charles counties.

That demand is fueling those markets and making things buzz.

The only factor in the market that has the potential to cool things down is prices. If wages don’t keep up with the rapidly rising price of local housing, the market could begin to cool off.

But I am not comfortable saying that 2005 will be the year things finally calm down. At most, I imagine the market could level off because of high prices, but even that doesn’t seem likely.

Chris Sicks

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