WHO REALLY KNOWS WHERE THE REAL ESTATE MARKET IS HEADED?

Ok...I read the newspaper articles every week and I am amazed at the amount of attention that is given to where the real estate market is heading. Many writers are focusing on the future or lack there of for the real estate market now. Many folks are freaking at what they are reading and unless you are in the market day in and day out, be cautious what you read and hear. Would you rather speak to a forecaster of the stock market or someone who is in the trenches every day as a broker dealing with the clients and their money? I know my answer! I am here to tell you that the real estate market in the Washington Metropolitan area is always going to be a structurally strong market. Why would I think this you might ask? Great question! Well let me tell you it is simple in my opinion, jobs, jobs and I don't know if I mentioned jobs. Between the Gaithersburg, Maryland Corridor High Tech Industry, the Dulles Corridor High Tech Industry, the Government jobs in DC, MD, and VA, just to mention a few major components to real estate ownership. People are always going to buy and people are always going to sell, primarily due to the transient nature of the area and did I mention the political flavor on our real estate market.

If you look at a home value statistical scale or layout over the past ten to fifteen years, the curve always flattens out rather than dropping down a deep valley.  You get an increase or decrease over a five to seven year period and then a market adjustment for the same period of time, give or take.  When an increase does take place like the one between 1999 and 2006 rarely do we see an adjustment that hits at or below where it was five to seven years ago.What does that tell us?  Simplify you may say, OK! Between 1999 and 2006 we had one of the largest increases in history over home values, as well as some of the lowest interest rates in history. If I may speak in generalities for a moment, as a market today in the metropolitan area of Washington, DC, MD and VA we have decreased in values to about where we were in the early 2003 pricing. So whatever your home was worth in the beginning of 2003 is probably where you are today as far as home value!!!! Yes there are some exceptions to this, but very few! No Pulp, Just the Juice!  

The "Real Juice" on the Montgomery County Real Estate Market

So what is the Washington metropolitan area real estate market really doing? Well all of the news channels and the local news papers seem to have it right on the money! or do they? I rememeber a few years ago reading about the bursting of the real estate bubble in the Washington DC area. Well it never really came did it? I actually read this article a few times from 2002 to 2006. Did the market slow? Yes. Is it continuing to slow? Yes. Has it started to rise from the peak that ended in August of 2006? No and it probably won't in my opinion until around 2013 to 2014 or later. What I have learned from expert statistitions is that these market shifts come in 7 to 8 year periods or spurts. If we see August 2006 as the start of the descend that means we have about 5 to 6 more years. That means all indicators are that we are in a downward mode from the peak of August 2006. As we watch all of the major news stations and papers tell us of this recession we are about to embark on, fear tends to hit most peoples minds! So how is fear affecting people and their real estate decisions? From my perspective and in my real estate world, there are a few fundamental knowns right now:

1. prices have come down significantly in the past year. Some areas more than others so be aware that it is very specific to the area you live in.

2. Interest rates are still extremely low!

3. Home prices are very affordable now as apposed to pre 2006!

4. Buyers have more negotiating room.

5. Loans are now restricted to specific guidelines as they should be!

6. Homes priced well and in the best condition are still selling and usually first!

7. If you baught a home in the last 5 years it is probable that you won't sell your home for the price you paid for your home. Yes "Less" than what you paid!

8. Foreclosures and Short Sales are at an all time high!

9. Homes are sitting on the market alot longer on average! But priced well that number will come down!

10. It is a great time to buy!

The "Juice", without the pulp is that the real estate market is slower but still active and people will always buy and sell homes. Interest rates are low and I believe will stay low for a good while. Traditionally the real estate market in an election year and in the Washington DC area has been fairly strong! Don't believe everything you hear! As my kids say " I want the juice without the junk in it" and that's what you will hear from me! Until Next Time...Stay Positive and Go Make Someones Day! Scot

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