After waiting until interest rates dropped below 10 percent, Dennis Harlowe told his financee Colleen Bernier last weekend that they were going to buy a home.
She hestitated, but the couple quickly signed a contract to buy a two-bedroom, two-bath condominium with a balcony in the Ramblewood section of the Daventry development in Springfield. Harlowe said they waited to buy because a lower interest rate meant that they would be able to afford a nicer residence than they could rent.
Harlowe and Bernier are but one example of the flocks of Washington-area residents rushing to buy houses, town houses and condominiums as interest rates have plummeted to their lowest point in seven years. Interest rates for loans insured by the Veterans Administration and Federal Housing Administration are now at 9.5 percent and many conventional 30-year fixed rate mortgages are also available below 10 percent.
Real estate brokers and lenders say the Washington-area real estate market is more frenetic than at any time in nearly a decade.
"It's just crazy out there," said agent Julie Cronan of Nyman Realty, which operates in Prince George's and Charles counties. "People who bought within the last year are moving again because they can qualify for so much more house today at the lower interest rate than they were able to buy last year."
Many houses are selling as soon as they are placed on the market. Others sell before they even go into the multiple listing service because there are waiting lists for houses in certain neighborhoods.
Shannon & Luchs agent Berdie Giattina reported selling a home on Fessenden Street NW, off Wisconsin Avenue, in less than seven hours. The house was listed at $139,000, but the purchaser, David Madden, paid $143,000 to make sure he got the house.
Agents in suburban Virginia say they have waiting lists for houses and buyers may find stiff competition to buy a house once they have found what they want.
"These are the days of multiple contracts," said a Mount Vernon Realty agent who added it was not unusual for a house to have as many as nine contracts on it at one time. That means it's a sellers' market and few sellers have to take less than the asking price for the property if it is clean, in a good location and reasonably priced.
Sally Swanson, of Laughlin Realty, primarily sells in the McLean-Great Falls area. She said she recently showed a house "to a young couple when it was really snowing hard. They wanted it. I told them to make an offer that was above the listing price, that that was the only way they were going to get the house." Her assessment proved to be accurate as the couple offered "several thousand dollars" above the $130,000 asking price and got the house.
Bill Mason of Showcase Realty last weekend decided to hold a house open that he had not advertised. He posted signs off main streets near the Annandale house and reported that 29 people eventually showed up to look at the home and it sold quickly.
In the Pimmit Hills area near Tysons Corner, a small house on the market for $97,000 drew more than 50 agents the first day it was listed in the Northern Virginia Board of Realtors computerized multiple listing service.
Most builders and real estate brokers in this area are still riding the waves of 1985, which was the best year in their recent sales history.
According to recent figures released by Rufus S. Lusk & Son Inc., sales of single-family homes in the District alone totaled 5,144 in 1985, a 9.4 percent jump over 1984. Builders and brokers are predicting that this year will be better.
William Laughlin, president of the Northern Virginia Board of Realtors, which covers Fairfax, Fauquier, Loudoun, Prince William and Arlington counties, Alexandria and several small towns, said, "The single most important factor . . . is interest rates."
Christine and Michael Bates are fairly typical of many buyers moving up to larger homes because of the current interest rates.
"I knew exactly what I wanted," said Christine Bates, who works for an architecture firm. "So when the interest rates started going down, we only looked for a few days. I knew that I wanted something new, not a resale. You can build up equity quickly by being one of the first to buy in a new area." The Bateses bought a center-hall colonial town house.
Real estate agents in the District and in the suburbs complained about a low inventory of existing houses for sale.
"The inventory is depleting quickly," said Elaine White of the Potomac Village office of Long & Foster.
"People don't have a chance to look as closely as they should before making such a big decision," White said. Any delay in making an offer on a house can mean the prospective buyer won't get it, a Loudoun agent warned.
Swanson said, "We need listings badly between the $150,000 and $300,000 range" in the McLean, Great Falls, Tysons Corner and Vienna areas. "I have customers on waiting lists but very little to show."
February sales figures reported for local jurisdictions show sales to be far ahead of sales in January and ahead of sales at this time last year.
The Northern Virginia Board of Realtors reported 2,202 February sales, compared with 1,768 for the same month last year. For the first two months, sales totaled 3,922 compared with the 2,667 figure a year ago, a 47 percent increase.
In Montgomery County, sales totaled 932 last month, a 70 percent jump over February 1985, according to Edith Donohue of the Montgomery County Board of Realtors.
In Prince George's, Rusty Lobban of the Board of Realtors reported February sales of detached homes and condominiums totaled 568, compared with 514 for the same month last year. Current sales in the District also are apparently outpacing last year's, but statistics are not yet available.
Gary Garczynski, chairman of the Metropolitan Washington Builders Council, called today's market "the best and the worst of situations."
He lauded the low interest rates that are attracting buyers to new communities, but warned that the influx of buyers puts pressures on builders who "must make sure we know how far we are willing to go out in front to commit to delivering finished units."
Garczynski said his own company -- Signature Communities -- pours foundations in the spring, but many Washington-area builders, such as NVHomes and Ryan Homes, operate differently. They don't start building until a contract is written on a particular unit.
Wayne VanNostrand, regional marketing services manager for Ryan Homes in eastern Montgomery and Prince George's counties, said that while Ryan anticipated a strong first half of 1986, the company did not start building house units.
"As people come in and sign contracts, we build the houses," VanNostrand said. "We are not going to go beyond our capacity to deliver. We have to keep our credibility with the public."