Mitch Berliner put his six-bedroom house in Bethesda on the market for about $1.5 million seven weeks ago, thinking that with its new redwood deck and kitchen it would sell quickly. But only three people have even looked at it.
"People have to come to your house before you can sell it," said Berliner, who wants to scale down to a smaller place in the city. He's baffled by the lack of interest in his house and at first blamed it on the D.C. area sniper, then the cold weather.
"I have every bell and whistle anyone could ever want," he said.
The reason hardly anyone is showing up, real estate agents say, is that there's a glut of mansions -- houses priced at $1 million and above -- for sale in the region. And while the number of expensive houses has grown, the pool of buyers willing to spend that kind of money has shrunk.
Not long ago, buyers flush with cash from the stock market and the technology boom were getting into bidding wars over big houses with granite kitchen counters and huge master baths. But now Wall Street losses and a slumping economy have pushed those buyers to the sidelines.
"The million-dollar buyer is hibernating," said Jane Fairweather, an agent with Coldwell Banker Residential Properties. "There's nobody out there at that price range anymore."
The trend is worrisome to real estate analysts and economists because it could be a harbinger of weakness in the larger housing market, which has been one of the key props holding up the national economy. Many buyers and sellers of high-end properties are acting as if a crash is imminent, agents say. Sellers are rushing to put their houses on the market, anxious to take advantage of high prices. At the same time, buyers have become more cautious.
"It's slowed down so much in the last month that it's made us hesitant," said Ann Williams, who is shopping for a trade-up house priced as high as $1.5 million. "We're leery that the market will correct itself and we'll be stuck in a hole with a property not worth what we paid for it."
The increase in the number of upper-bracket homes for sale in the past two years has been dramatic. In Northern Virginia alone, more than 200 houses selling for $1 million or more have gone on the market in the past three months, and barely 10 percent of them have sold. At the height of the boom two years ago, only 57 such homes were listed and nearly two-thirds of them would have been sold by now.
Of course, a million bucks doesn't buy what it used to, so there are a lot more houses priced at a million or more now than there were a few years ago. A house that cost $600,000 four years ago could now be priced at $1 million in some neighborhoods.
Williams said some sellers seem overly greedy, trying to make a killing on homes that wouldn't be worth the high price in any market. "In my mind, a million-dollar home should be a fantastic house," she said. "But in some neighborhoods it's a fixer-upper."
The changing psychology of the high-end buyer is causing prices to drop and the average number of days houses remain on the market to increase. "It's a stalemate," said Marc Fleisher of Long & Foster Real Estate Inc., who is the firm's top-selling agent in dollar terms for the region. "Sellers haven't accepted any potential change, while buyers are waiting for that change."
According to Bill Moody, an agent with Sotheby's Washington Fine Properties LLC, buyers these days have a lot more choice. "What was 4 million is now three, what was three is now two, and what was two is now 1.5," he said. "There's twice as many houses for sale and half as many people."
Agent Fairweather said of her current pricing strategy: "I'm not looking at the last sale in the neighborhood and then putting on appreciation like I did at the height of the market. I use the last sale as the top number now. It's the beginning of a market adjustment."
Home builders seem to be having a better time of it, largely because inventory has been kept down by the difficulty of finding land in desirable neighborhoods. Most of the million-dollar houses on the market are resale houses -- but given the cash, a buyer in this price range prefers a house that has never been lived in.
"We've seen a change in the last two or three months," said Cory DeSpain, vice president of luxury home builder Toll Brothers Inc. "We don't have that insanity anymore. The buyers who are out there now are very measured, very calculating, very thoughtful about their purchases. But they're still buying."
George Sagatov, a custom builder in Virginia whose houses are priced at $3 million and above, said business is still good, but the mansion slowdown is clearly visible -- even for builders -- at prices between $1.5 million and $2.5 million.
"I wouldn't want to be a builder in that price range," Sagatov said. "Prospects have pretty much dried up there."
In the District and suburban Maryland, the situation is similar to that in Northern Virginia, although the change is not as severe. Sixty-seven houses priced at $1 million or more went on the market in the past three months in the District and 18 have sold, a 27 percent sales rate. Two years ago in those same three months, 50 houses were listed and 29 were sold, a 58 percent sales rate.
In Montgomery and Prince George's counties, 103 houses selling at $1 million or more were listed and 19 sold during the past three months, an 18 percent sales rate. Two years ago, the rate was more than double that -- 45 percent, with 97 listings and 44 sales.
Overall, in the region's market for homes under $750,000, good houses priced fairly are still selling, agents say, although there may be just a single offer rather than the frenzied bidding wars of recent years. And condominiums are still sought after, especially those priced below $250,000. So far there's no slowdown in sales of high-end condominiums in the District, those priced at $650,000 and above. Helping the overall market are relatively low mortgage rates.
It may be impossible to know what course the overall housing market will take until spring, the most active buying and selling season. The sniper attacks almost certainly caused autumn business to slow. And soon the Thanksgiving, Hanukkah and Christmas holidays will also put a damper on activity.
All of this has contributed to the lack of urgency felt by the high-end home shopper. "I don't feel in a panic to buy at all," said Jackie Winston, who has been looking for a "big, gorgeous, spacious home to entertain in" priced between $2.5 million and $3 million. "Almost everything I've seen has been overpriced. I'm assuming prices will go down."
If she sees a house she loves, she'll buy it, as would most shoppers at her price range -- but not at the price the sellers are asking.
"I'm not going to pay full price," Winston said. "Definitely no, no, no."