There has been a simple, easy to follow “rule” for my entire Real Estate career, Location Location Location! It is an easy way to emphasize that the single most important consideration is location. This has been true and will be more so in the future, however things are no longer as they were in the past. We have benefited from a massive movement of “Baby Boomers” for the last 60 years. They have affected everything in this country as they have advanced through the years but nothing more than our housing trends beginning in the mid 1960s as they became adults. Initially came the starter homes in places like Levittown, Bowie, Silver Spring, Arlington, Alexandria, Annandale and 1000s more across the US. Then along came the move ups, vacation homes and finally the “McMansions”, they were on a role!
I can only hope that January is not an indication of what's to come for the rest of 2010. It was the weakest month in my survey since January 2008! Let's take a look at the numbers (remember that my survery consists of the offices and Realtors located in Leesburg, Ashburn, Sterling and Dulles). We had 290 sales with an average sales price of $323,000 this year. This compares to 320 sales and an average sales price of $454,000 (this was early in the price decline) in 2008! Although I expected the the drop in sales price, we are painfully aware of that, the declining transaction numbers are a shock. If these numbers do not improve we will continue to see seriously eroding market values of our homes.
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It looks like we are going to have another difficult year in Real Estate. There are so many variables that could go wrong and any one of them will cause major problems for us. If we have more problems with the banks we will see a greater tightening of credit, making it harder to sell properties. The FED is backing away from purchasing mortgage backed securities and the housing credits will expire. As we begin to see the end of the “subprime” crises we are entering into the “prime” crisis, this consists of the ALT-A loans and smilar weird products that were used to purchase homes a couple of years ago. Over the next 18-24 months we can expect to see the “short sales” and “forclosures” move from the lower end of the market into the upper price ranges. If we can find a way to avoid all of these problems we may have a good year and I hope we can!
