Closer to D.C., 'Faster the Recovery'

CEO of Dulles Realtor Group Says 'Now Is the Time to Buy'

Jeanette G. Newton, chief executive officer of the Dulles Area Association of Realtors, answered questions last week from loudounextra.com readers about the local housing market. Here are excerpts from the online discussion.

Q A real estate agent told me that she would be less surprised if home prices in the inner suburbs near Metro went up 10 percent in the next year than if they dropped 5 percent. We want to sell our home in the next year to move into a less expensive place and are trying to decide if it's better to do it now or ride it out for a year when hopefully the market will be a little better for sellers. This real estate agent thought we should wait a year. What do you think?

A Most of the statisticians who have been measuring real estate stats in the metro D.C. area have indicated that we have already hit bottom and that home prices will rise. However, that rise will be extremely slow and may not even be noticeable for a year. I certainly don't think you will see any 10 percent appreciations in the next year or two, but I also don't see values going down any further. You need to review your financial needs, and if it is feasible for you to wait a year, that might be good advice.

I know that the status of the real estate market in the D.C. metro area varies greatly by location. Which locations do you see as stronger and weaker markets?

It has become apparent that the faster the values rose, the more they slowed. Loudoun homes, for instance, appreciated faster than most of the metro D.C. area, and as a result, they have been the slowest to recover. In reviewing the numbers, it does appear that the closer you are to the center, D.C., the faster the recovery. Look at it as a wave moving out from D.C.

Do you have any prediction for the market west of Dulles and Loudoun, i.e., Winchester/Frederick County, Va.? Winchester is somewhat of a D.C. bedroom commuter community. What would you say will happen out here in the coming months?

As I indicated in another answer, there is a wave that seems to be moving out from the center of our metro area. There are two other factors which seem to be prevalent right now, price and gasoline/commuting costs. The Winchester area has been more affordable than much of Loudoun, so its ability to recover more quickly is an important consideration. However, with gas at $3 per gallon, many people are now taking that into consideration when they decide where to live. Those are the things that seem to be driving the current market for the outskirts of the metro area.

The Virginia [House of Delegates] just killed abusive-driver fees but has not acted to repeal the 400 percent increase in the grantor tax which was implemented during the worst real estate market downturn during at least 20 years. What tax revenue policy changes do you support to help fund more road construction in Northern Virginia?

As an association, we support very broad-based tax increases that legislators must be accountable for. We fought very hard against that grantor's tax increase, which we renamed a "farewell tax" because the only people paying it were those who were leaving the area. We support user fees and, therefore, would have been happier with a gasoline tax increase or, since everyone benefits from good roads, perhaps even a slight increase in the sales tax. We feel strongly that the current homeowner is already paying their fair share and should not carry the full burden.

I am a single, working mother of two in my early 30s who is currently renting a townhouse in the Leesburg area. I would like to know if I should continue renting with the market the way it is or if I should take advantage of the current "buyer's market." Do you anticipate housing prices will rise in the next couple of years? What home-buying programs are available for one-income households?

Now is an incredible time to buy. Prices are at their lowest, there is a great deal of inventory, and with the prime rate just being lowered, mortgage rates should be even better. You absolutely should be out there looking. Don't forget to take that tax deduction into consideration on your mortgage interest when you figure what you can afford. County assistance may be available for certain income levels, and you might always want to consider contacting Habitat for Humanity if you feel your income might be low enough to qualify. I would definitely contact a lender now to discuss your options. Now is the time to buy!

We are listing our Cascades townhouse next month and were wondering about pricing. We have lived there nine years and paid under $200K in 1999. This information is available to anyone accessing the Loudoun County Appraisal District Web site. Should we expect buyers to know this information and, if they do, should we also expect to get "low-balled" more than someone who doesn't have as much equity? Will we have to adjust our price/expectations accordingly?

I don't believe you need to be concerned with the public records and how much you purchased your home for nine years ago. The biggest issue is how big your mortgage is, and no one knows that but you and your bank. Contact a Realtor and have them do a comparative market analysis and take their advice on pricing your home to match your home type and area.

I live in an area [of Sterling Park] that has about 10 foreclosure homes in a three-block radius, and I've seen prices drop roughly 30 percent since 2006. Considering the high number of foreclosures in the Sterling Park area, how long do you see the price/value declines continuing?

Foreclosures can certainly have an effect on a market area. I continue to believe that the market is flattening out on the whole. Of course, individual neighborhoods could experience very different results. We should also see foreclosures flattening out over the next year since many of the problems were due to ballooning loans. Give it another year, and you should see some improvement.