In Cool-Down, Would-Be Owners Reconsider

If there's anything real estate experts agree on these days, it's that you should not buy property unless you are willing to keep it for years.

"I think a person who's buying, they're not going to do quick flips," said Sara Rubida, an agent with Long & Foster in Arlington. She said she advises her clients to be prepared to own their home for at least three years to break even or make a profit on their investment. "But I'd feel more comfortable if they lived there at least five years."

That was the norm before the real estate frenzy began in the late 1990s. Before then, most people lived in their homes for several years before trying to make a profit selling them.

Then the boom hit, and people found they could buy and sell property profitably within months. Investors flooded the market, driving up prices.

No longer, thanks to the bloated inventory of unsold homes and the tightening of lending standards.

"The investors who got into the market recently are really paying the price" for not treating real estate as a long-term investment, said Gregory H. Leisch, chief executive of Delta Associates, a research firm in Alexandria.

That's because selling a home costs money. To walk away with at least as much money as you put into it, your place has to appreciate enough to cover real estate commissions, which are typically 6 percent, and closing costs.

Would-be buyers should consider that before entering the market. And if they're not ready to make a long-term commitment, they should think about renting.

There are other factors that make this an uneasy market for buyers. Because of the growing number of foreclosures among people with weak credit and of people with little money for down payments, lenders are thinking twice before approving mortgage loans. No-money-down loans, which became popular during the real estate boom, are no longer easily attainable. So you had better have a substantial amount of cash on hand if you want to be a homeowner.

"Try to save some money so you can come up with a 20 percent down payment," advised Tom Bryan, a senior vice president of Coldwell Banker Residential Brokerage.

With Washington area prices as high as they are, that's no easy feat.

As of May, the median condominium resale price for the metro area was $303,968, and the median single-family house resale price was $465,726, said Leisch, citing Delta's midyear analysis.