Buyers, It's Your Move

Confusing times? Most definitely. Feeling uncertain? You're not alone.

But one thing is clear: Buyers are overwhelmingly in control now.

"It's as strong a buyers' market as I've seen in many years," said Zandi, who thinks prices won't hit bottom for nine months to a year. "Buyers have the upper hand in all their negotiations with sellers at this point and that bargaining power will, I think, only increase in coming months."

Carol and Demetrios Dekazos, renters in Alexandria, hope to use that negotiating power. Sensing opportunity in the current market, the couple recently resumed their house search, a year and a half after bidding wars and escalating bids forced them to retreat. "We were getting killed out there with contracts," said Demetrios Dekazos, 43, who works in financial management in the District.

Purchase prices could get lower, but the rental market is getting tighter -- rents have risen about 8 percent in the past year, according to Alexandria-based research firm Delta Associates -- and the Dekazos are now looking forward to becoming homeowners, on their terms. "We feel like we now have a chance," he said.

Buyers such as the Dekazos, analysts and real estate agents said, will do well to look for motivated sellers in neighborhoods with a lot of houses vying for attention.

According to the local multiple listing service, the drops in prices in the region are generally occurring in areas that saw rapid growth during the boom, both in construction and price appreciation. For the most part, though, the declines have not yet been significant enough to lure buyers off the sidelines.

Year-over-year median prices were down 4 percent in August in Prince William and Loudoun counties, whose share of unsold homes account for roughly a quarter of the homes on the market in the region. Prices were also down in Arlington (14 percent), the District (9 percent), Fairfax County (6 percent) and Alexandria (2 percent). Condo sales have been hit particularly hard. In Arlington, the District and Alexandria, condos account for more than half of the homes on the market. In Fairfax County, they account for a quarter.

Many of the outlying areas are still seeing gains: Calvert County homes, for example, posted a 10 percent August-to-August increase, while Charles and Anne Arundel counties saw 5 percent appreciation. Prince George's County had a 9 percent increase -- a healthy gain, but hardly the 20 to 30 percent jumps seen in the boom days.

"It's a good time to take stock of the market and really watch what's going on," Zandi said. "Are the sellers really interested in selling now or are they waiting to get a better price?"

David Hawkins, managing broker at McEnearney Associates in Alexandria, said desperate sellers constitute only a "moderate" portion of the market. "There are still some sellers who have an unrealistic view of where the market is today, who are not in a position of having to sell," he said. "They will sell if they can get their price."

Those who really do want to sell "need to recognize that they need to be the best house at the best price this week," Hawkins added. "What the neighbor got a year or two ago has no bearing on the market now."

Where buyers see value, quick sales are still taking place.

Kristina Hayden and her husband, Joseph Fagg, both 26 years old with jobs in information technology, recently sold their condo in the crowded Woodbridge market. They got their asking price after receiving three offers in one week, they said.

"People in our neighborhood were a little greedy," she said.

"We were happy just to have fair market value," he added.

The couple had originally planned to move into a condo in Alexandria but had to scramble when developers of the project decided in May that they could not go forward with their plans because of slow sales. But not to worry, the couple found a two-bedroom in another condo conversion project in Arlington.

The incentives, Hayden said, were "amazing."