You can feel the change in the air in many neighborhoods this fall. It's not a seismic shift, but it's undeniable: more houses on the market, houses staying for sale a bit longer, and prices no longer galloping up like they were.

The insane days of spring, when people were in a frenzy to buy and multiple bidding pushed home prices up by the week, seem gone.

Is that it, then? Was spring the peak of our incredible real estate market?

Perhaps not, many experts say, citing a powerful mix of healthy job growth, low unemployment, continuing in-migration and limited availability of housing. But some economists warn that the market's fate hinges largely on mortgage rates because low interest rates are the reason buyers have been able to continue to afford ever-increasing home prices here. A spike in rates could put a freeze on the market, they warn.

For now, there's only a slight nip in the air -- caused by what, nobody is really sure. Mortgage rates are still hovering below 6 percent, although they did drift above that mark in the summer. The Federal Reserve may have spooked some buyers by raising short-term interest rates two times recently. Pre-election jitters or a seasonal hiccup are the other two common explanations for the fall chill.

"The insanity is over," said P. Wesley Foster Jr., chairman and chief executive of Long & Foster Cos. "The market is slowing a bit. The multiple contracts are going away and we've seen houses staying on the market longer. But it's still a good market. That crazy market, with 20 to 25 percent appreciation and 50 contracts on one house, wasn't healthy."

Foster said the slowdown started in the summer and has been most pronounced in higher price ranges, that is, properties priced at $700,000 or more in some neighborhoods, or at $1 million or more in pricier areas. He attributed a lot of the change to the coming presidential election.

"I don't see anything else out there that would be causing it," Foster said.

Real estate agents say buyers are shunning inflated list prices, prompting owners to reduce prices if they are intent on selling. Homes and neighborhoods that are well-priced -- and appear to offer value for money -- are still selling briskly, agents and buyers report.

"It's been really strange," said John Welch, an agent with Re/Max Allegiance in Alexandria. "We've been in multiple contract situations with buyers, but then at the same time, we've seen properties sit on the market for what seems like a long time."

Consider two recent transactions that went in opposite directions.

Mark Davenport and Jennifer Vanmeter, who were shopping for a house in the District for less than $500,000, found a two-bedroom, two-bath rowhouse on Capitol Hill recently that was listed at $499,000. Their agent had told them the market was slowing on the Hill because of the political uncertainty caused by the impending election. So they thought they might be the only offer. Wrong. There were three others. They bid up to $527, 000 and waived the home inspection to become the winning contract.

Davenport said they wanted the house because they thought they were getting value for their money. "We felt like we were getting something, to find an 85-year-old home in good condition in a nice urban neighborhood for $500,000," he said.

"We didn't get the feeling the market was slow," Davenport said. "It still seemed quite the seller's market to us."

In contrast, Jim and Dori Rutherford think they may have over-priced their house when they put it on the market, because in order to sell, they reduced the asking price three times. It still took seven weeks.

The Rutherfords started out listing their three-bedroom, one-bath house on the fringes of Alexandria's Del Ray neighborhood this summer for $525,000. They received no offers, so they lowered the price to $515,000. Still no offers, so they went down to $505,000. No offers again, so another price reduction to $499,000; they ended up getting a bid for $485,000.

"In retrospect, our pricing was too aggressive," Jim Rutherford said. "We heard comments at our open house about how it was a lot of money for one bathroom. But it was priced completely right for the spring market."

Agents and buyers say buyers are looking for value -- and when they find it, they will still jump.

"It is slowing down, but you still need to be prepared," said Ramee Gentry, who recently bought a townhouse in Alexandria. "If you see a place you like, you still need to be aggressive. People are still putting down strong offers."

Gentry estimated that about a third of the single-family houses she looked at before finding her townhouse were over-priced. "Some sellers were just completely unrealistic," she said. "We saw some really crummy houses that had had nothing done to them listed at top dollar for their neighborhood."

Boyd Campbell, managing broker at Century 21 Home Center's office in Lanham, said the agents in his office have seen no slowdown in most of Prince George's County, which has the lowest median sales price of any close-in county in the area.

"There's been a modest slowdown in a couple of Zip codes in the county that are priced in the $600,000 range and above," Campbell said. "Between the $200,000 and $400,000 price range, it's as vibrant as it's always been, evidenced by multiple offers, escalation clauses and well-qualified buyers."

Campbell said: "It has everything to do with price."

One of the biggest factors contributing to the slowdown is an increase in the number of properties for sale, called the inventory.

Analysis from the Greater Capital Area Association of Realtors show that the number of properties for sale increased in all the large local jurisdictions this fall. The number of homes available for sale in the area at the beginning of October was at the highest level of the year for all those areas, the figures showed.

"There's a lot more inventory than there has been," said agent Jay Moody of the McEnearney Associates office in Arlington.

"There's more on the market now than we've had all year," echoed Candy Clanton of Re/Max Allegiance in Fairfax.

Condos and new construction, especially in close-in locations, are the exception. Condos are still moving quickly because more buyers have been pushed out of the single-family and townhouse market and into condos by ever-spiraling prices. Empty-nesters have also embraced the urban condo lifestyle.

The supply of new homes is also tight, especially close in -- for builders these days, "close in" means anything east of Leesburg in Virginia, anyplace in Montgomery County, and practically to the Chesapeake Bay. Builders try to manage their supply according to their ability to deliver and sell the homes.

"It's as good as it's ever been here," said Dave Graham, president of the Washington division of Pulte Homes Inc., the country's largest builder. "Two years ago, we didn't have waiting lists like we have now." Graham said the company has about five people on a waiting list for every home.

But supply has gone up in the single-family resale market. And coupled with that, there seems to be a drop in demand, although that's not as easily measured.

"There are fewer buyers out there," said Welch of Re/Max Allegiance. "You can feel it. I think people are uneasy about what's going to happen with the election, uneasy about gas prices, uneasy about the war, about what's coming around the corner. They're taking a break."

Some attribute the slowdown to a normal autumn lull. Spring is the hottest time of the year for real estate. September tends to be a lost month, agents say, especially the early part of the month, when people are concentrating on getting back into work after the summer, and settling the kids into school rather than on real estate. In terms of sales, though, September usually comes in fourth place after March, April and October.

"Usually in the fall you see a bit of an increase in inventory," said Thomas R. Kunz, president and chief executive of Century 21 Real Estate, discussing the Washington area market. "And there's been no dramatic increase in days on market."

In higher price ranges, though, agents report an uptick in the number of days properties are staying on the market. "I'm looking at the listings for Bethesda now," Jane Fairweather, an agent with Coldwell Banker Residential Brokerage in Bethesda, said last week. "Here's what I see priced between $800,000 and $900,000: 279 days on market, 83 days, 16 days, 118 days, 56 days, 17 days, 2 days, 55 days, 30, 45, 27, 67, 120."

Although many agents report anecdotally that homes are remaining on the market longer, statistics from the area's multiple listing service show days on market for all properties relatively flat for most local jurisdictions in September.

When conditions come together the way they have now, home prices tend not to go up.

"Prices have flattened out," Fairweather said. "I'm doing more price reductions now than I've done in the last two years."

Agents say, though, that even with price reductions, it's hard to gauge whether house values are actually going down because some homes were over-priced to start. Some sellers have been jacking up their prices over the last comparable sale, a strategy that may have worked in the spring but won't work now, agents say.

Stephen S. Fuller, local economy expert and professor of public policy at George Mason University, attributes the slowdown to recent Fed hikes of short-term rates and mortgage rates edging up over 6 percent in the summer before heading back down.

"It's just a momentary blip," he said, saying people's expectations have been skewed by the insanity of the spring.

Fuller predicts the local housing market will continue to sizzle over the next few years. He discounts the idea that the market is past its peak.

"It's going to take us three years to get to a more normal pattern," he said.

He primarily credits the area's job growth -- 80,500 new jobs were created in this area in the 12 months ended in July, according to the Bureau of Labor Statistics. More new jobs were created in the Washington metropolitan region than any other metro region in the country. Many of those jobs were related to increased government spending.

To accommodate that job growth, the area needs at least 40,000 new units of housing a year, Fuller said, a demand that isn't being met. He predicts a deficit of 218,000 housing units for the area by 2025.

"We're pumping people into this region to fill these jobs," Fuller said. "I can't see any reason why the market would slow down."

Mark Zandi, chief economist at, disagrees, arguing instead that the market has been fueled primarily by low interest rates.

"There's been very little relationship between jobs and housing over the past five years," Zandi said. "The key here is not jobs; it's interest rates."

Zandi predicted home prices in this area could fall because of weakening demand when interest rates go up. "When rates rise, buyers will no longer be able to afford the prices," he said.

Zandi predicts that if mortgage rates rise to 7 percent, prices will go flat to down a couple percentage points here; if they rise to 8 percent, the area could see a correction of 5 percent to 10 percent from peak to trough, he said.

"Ironically, it may be just those jobs that cause interest rates to rise," he said. "The economy gets better, the job market gets stronger, interest rates rise. To count on more jobs to bail out a juiced-up housing market is wrong."

Dean Baker, co-director at the Center for Economic and Policy Research in Washington, says this slowdown is the beginning of a downturn in the market.

"I wouldn't call it the collapse yet," Baker said. "But there's definitely a softening. You're starting to see the first step now. I'm very confident that there will be a big downturn when there's a turn in interest rates. My expectation is that when we get higher mortgage rates, which will be in the not-too-distant future, there will be a sharp fall in prices."

All this talk of past peaks in the market weighs heavily on Douglas Vibert's mind. On the one hand, he's happy he and his wife managed to beat seven other contracts for a three-bedroom townhouse in Springfield recently. But still, he is worried.

"For nice properties, the market is still hot," Vibert said. "At the open houses for the cruddy ones that were priced the same, people would see the price and just say, 'forget it' and walk out. But ours was nice, so a lot of people wanted it."

The townhouse was on the market for $319,000. Because of the multiple bids, the Viberts paid $326,000.

"It was the highest price that any townhouse had ever sold for in that development," Vibert said.

And how does that make him feel?

"Really not good at all," he said.