Is It Time Yet?

Buyers Can't Predict Market's Future, but Neighborhoods Hold Clues

Your neighbor, your sister-in-law, the person in line at the grocery store: Everybody is happy to share an opinion about what's going on with the housing market.

If you wait a year, that house you're eyeing will be $100,000 less.

There has never been a better time to move from renting to owning.

Every house and condominium in that neighborhood is due to take a big drop; buy in that other one, and you'll be golden.

Unfortunately, there's no magical formula to determine the future of a real estate market.

When Keith Gibbons was looking for a house about 10 years ago, he was frustrated by how little information was available and how much he had to rely on his real estate agent. There wasn't an easy way to analyze data such as price per square foot. So in 2005, when Google opened up its mapping technology, he saw an opportunity. He started collecting D.C. home-sales information and posting it online. His Web sites DCHomePrices.com and DCCondoPrices.com map the data. He also has a blog at DCHousingPrices.com, where he analyzes the numbers and other news on real estate indicators. He has 67,000 records in his database and looks at sales volume, dollar amounts and average prices since 2005.

"Personally, I find it pretty empowering," Gibbons said of the data. He pointed to a Dupont Circle condo he recently wrote about on his blog. In October, it was listed for sale at $1.6 million, but Gibbons crunched his numbers and decided it should have been priced $150,000 to $240,000 less. Then in January, it sold for $1.43 million, within his valuation range.

Aggregating and analyzing data, Gibbons said, has given him knowledge about the D.C. market and a better idea about what's overpriced. For now, he continues to rent in Tenleytown.

If you don't want to set up your own 67,000-record database, how do you figure out when and where to buy? Economists and others who study the real estate market say you can look at the neighborhood and the economy for clues.

· A major indicator: the number of houses for sale in a neighborhood and the number of days they have been on the market.

If lots of houses in a neighborhood have been for sale for more than a few months, then prices are probably going to come down. If they don't, the houses won't sell.

For instance, Michael Simonsen, founder of the real estate research firm Altos Research, said that in a hot market, houses will be listed for an average of a month. If they start hanging around for 100 days or more, Simonsen said, the market is leaning in buyers' favor. It opens up the opportunity for them to negotiate.