- The Washington Times - Wednesday, October 11, 2006

As the end of 2006 begins to come into view, we can look back and talk about how different the market has been this year.

It has certainly been different from last year, when the Washington metropolitan region’s real estate market first began to slow down. We came into 2006 already aware the market was slowing, but how bad would it get?

Christine Todd, chief executive officer of the Northern Virginia Association of Realtors, thinks the worst is already behind us.

“It was July of 2006,” says Mrs. Todd. “I was really encouraged by August figures because there were more sales and the inventory came down a little bit.”

Prices also came down in Northern Virginia in August, dropping 4 percent in Fairfax County and 9 percent in Arlington compared to last year.

“Home prices have come down, but have values really come down?” asks George W. Lyons, vice president of the Prince William County Association of Realtors. “Or, did we have such a shortage of inventory last year that buyers were paying more than the homes were worth? A $300,000 house is still a $300,000 house, in my opinion, even if someone paid too much for it a year ago. What you are seeing today is homes that are priced where they should have been all along.”

Home prices have fallen because sellers are realizing they need to compete with other sellers if they want to win a buyer.

“So many are stubborn about lowering their prices,” Mrs. Todd says. “There are buyers out there. We are getting good traffic at open houses. But sellers have to be realistic if they want to sell.”

A modest drop in area home prices will be good for buyers, many of whom quit home shopping last year.

“In the summer of 2005, the market finally hit a point where affordability had become a severe problem. Not only had prices risen to extraordinary levels, but interest rates started to bump up and then the price of oil and fuel hit, along with higher tax assessments.

“It was the perfect storm,” Mrs. Todd says.

Despite the slowdown we’ve experienced this year, the Washington region continues to fare better than many other metropolitan areas.

“We’re going to come out of this housing slump ahead of other areas because of the strength of our economy and our expanding population,” Mrs. Todd says.

Contact Chris Sicks by e-mail ([email protected]gmail.com).

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