By Tomoeh Murakami Tse
Washington Post Staff Writer
Saturday, December 30, 2006
Jen Cox, a renter in the District for a decade, has been watching her credit and saving money for a down payment on her first home. With the real estate market cooling, Cox believes her time has come. Next year will be her year -- her year to become a homeowner.
"I'm ready. It's something that I really want," said Cox, 35, who works for a D.C. environmental nonprofit organization. "I'm determined to find a place."
Come Monday, a gust of resolve will be released into the Washington real estate market with the arrival of the new year. It represents the hopes of people who help shape the local housing market -- buyers such as Cox, as well as sellers, investors, renters, real estate agents, mortgage brokers, builders and developers.
Their goals are ambitious, humble, optimistic and realistic all at once -- perhaps a reflection of the less-than-clear housing outlook for 2007. Has the market really "bottomed out"? Or will prices fall further? Should buyers hang tight? Or is it the sellers who should not blink? Is next year the year to rent or to buy? To move up or to renovate? To build condos or rental apartments?
Experts are split about which direction the market is heading. Figures released this week showed both new-home and existing-home sales increased in November from October, but sales of both types of homes remained well below the levels of a year earlier.
David Lereah, chief economist for the National Association of Realtors, earlier this month declared that "most of the correction in home prices is behind us." Meanwhile, Dean Baker, co-director of the Center for Economic and Policy Research and a housing bear, thinks prices will continue to drop throughout next year.
Despite the uncertainty, the resolute are letting go of their doubts and hesitations and are setting goals for 2007, both big and small, new and long-held.
While Cox will be canvassing the District and close-in Virginia suburbs for a two-bedroom condo or townhouse, Samuel Cooper, 40, of Springdale, will be on the lookout for a buyer for his five-bedroom single-family house in Maryland. Cooper, tired of spending days each month cleaning, wants to settle in a townhouse nearby.
David Henderson, 69, would like to be welcoming the new year with a new house. But first he and his wife, Peggy, must sell their house of 33 years. The four-bedroom split-level on a quiet cul-de-sac in Springfield has been on the market for six months now.
Nonetheless, Henderson said he is hopeful that by this time next year, the couple will be in their dream retirement house near a lake in Mississippi.
"It's going to sell one of these days," Henderson said of his Northern Virginia house, noting that two buyers recently came to look at it on the same day despite the slow winter season. "There are serious buyers out there. When someone comes to see your house now, they're looking to buy something."
What Mark Livingstone is looking to buy next year are investment properties.
He bought two this year and wants to get four more next year, so sure is he that the market is ripe for long-term investors such as him.
"Interest rates have gone way down. And inventory has gone way up. It's definitely a buyer's market right now," said Livingstone, owner of Cornerstone First Financial, a mortgage brokerage firm in the District. "Those who have the equity can take the money out and invest."
Livingstone, 39, said he is not worried about real estate values declining significantly in 2007, in part because of what he believes is a kind of built-in safety net in the local market. "Our market is politics, government," he said. "So you're always going to have that. There's no bubble in the D.C. market."
Nelson Mendes, who became a mortgage broker in Arlington this year, thinks buyers will have an edge in 2007, at least for the first six months. His goals for the new year are to set up $30 million in mortgages and to establish "preferred-lender" status with builders.
Sonya Abney, founder of Cosmopolitan Properties in the District, just capped off her company's first full calendar year in business with a staff holiday party. For the past month, she and her staff of 20 real estate agents have been meeting and setting individual goals for 2007.
Abney would like to see the firm double its total sales volume next year to $50 million, hire 15 agents and open a second office, perhaps in Prince George's County. Cosmopolitan opened its doors in May 2005 with three agents.
Abney, 39, also wants the company to expand its community work. This year, she said, the firm bought uniforms for a Little League baseball team in the Shaw neighborhood; next year, it wants to sponsor the team's games and banquets. This year, the company started a welfare-to-work program, hiring two women for part-time positions doing administrative work. Abney wants to hire more next year.
The softening market, she said, does not have to mean less profit.
"It means you work a little bit harder and a little bit smarter," she said. "I don't plan to take a dip in my salary. We don't plan to downsize the community effort."
Many aren't looking to buy or sell, but still have ambitious goals for their homes.
Monique Hanis and her environmentally conscious family this past spring installed solar panels on the roof of their North Arlington home. Next year, they want to put in a rainwater catchment system, which collects rain in a tank for use later in the garden. Additionally, Hanis's husband, Douglas Warnecke, is resolving to finish insulation work in their son's bedroom.
"I did half of it about a year ago," Warnecke said. "I need to do the other half."
Chris Bushara of Arlington is the first to admit his resolutions are more like wish lists. Bushara, 38, hopes to finish the windows on the fixer-upper he bought six years ago. He also wants to redo a bathroom and work on the landscaping, plus other odds and ends. "It's a never-ending home improvement story," he said.
Of course, home builders and developers have set goals, too.
LaZerrick Howard, who owns several rental properties in the District, this year tried his hand at a condo conversion. He renovated four of his units on the eastern edge of Capitol Hill and began selling them as the Courtney Condominiums in the spring. He sold three after several price reductions and is entering the new year with just one unit left to sell.
Erik Bolog, managing partner of Tenacity Group, aims to convert 1,000 condo units in the region in 2007. That's up 25 percent from this year, he said.
Tenacity focuses on condos that sell in the $150,000 to $300,000 price range, and works with tenants so they can buy the units after renovation and become first-time homeowners.
Favorable market conditions, including "stabilized interest rates, available government funding and a large renter population seeking to become homeowners, give us a great deal of optimism entering into 2007," Bolog said in an e-mail. "We are determined to make our resolution a reality."
Cox, the D.C. renter, said that in retrospect, it's a good thing she waited for the new year to come before buying. She looked around last year but was unsure of herself, she said.
"I felt panicked. I wanted to have a place of my own but I wasn't sure I'm able to," she said. "But now I've been saving and trying to live as if I have a mortgage to pay. . . . I just have a lot more confidence. I feel confident that I would find what I want and not what I have to settle for."