Prophets See Light Ahead, but Employment Figures May Drive Market

The local real estate market started to stabilize this year, at least by some measures. Compared with 2007, prices are way down, but the number of sales throughout the Washington area is up and the foreclosure rate is steady.

Jane Quill, chairman of the board of the Northern Virginia Association of Realtors, offered a refreshing note of uncertainty: "Truthfully," she said, "we are not absolutely certain we have hit the bottom of this housing market. Anyone's guess."

But she stressed that the Washington area's housing market is different from the rest of the nation. Foreclosed homes are selling in Northern Virginia. Existing home sales in Northern Virginia were up 3.3 percent in November compared with a year before.

The average number of days on the market is down 8 percent, even though it's still a languorous 91 days.

But falling values spurred those improvements. The median sales price in Northern Virginia was down a hefty 21 percent from November 2007.

Quill said she expects much of the excess housing inventory to be absorbed in 2009, and that there will be "dramatic improvement" in the market, especially during the second half of the year.

Joseph Himali, president of the Greater Capital Area Association of Realtors, which covers the District and Montgomery County, laid his hopes for 2008 squarely on employment: "Let's all hope that we keep a strong job market going into 2009."

Sellers finally have yielded on price enough to draw some buyers off the fence, he said.

"First-time buyers have a shot at neighborhoods they have not been able to afford for many, many years," he said.

Linda Simpson, president of the Prince George's County Association of Realtors, said, "Yes, the market has gone south, but it would be worse if we were not in the Washington, D.C., area."

She stressed the county's price edge. "You can still afford to buy two condos in Prince George's County for the price of one in the District of Columbia," she said.

And Prince George's affordability edge is growing. Statistics from Metropolitan Regional Information Systems, the local multiple listing service, show the median price for a home (including both single-family and condos) in Prince George's during October was $260,000, a 14 percent drop over the year.

In Montgomery County, prices fell almost 11 percent over the year to a median of $370,000. In the District, prices rose a scant 0.4 percent to $394,450.

If you want to know what will happen to home sales in 2008, watch what happens to employment. No jobs, no sales. It's that simple.

E-mail Elizabeth Razzi at razzie@washpost.com.