Out on a Limb

This time of year is usually fairly easy to forecast but we could be in for some surprises this year. I can say with certainty that the last quarter of any year, 2003 include, is always slower and homes always sell for less than they did in the spring. This is because buyers tend not to compromise at the time because they think more and better inventory will come on in the spring. They will sit on the sidelines in the holiday time and wait until spring UNLESS there is some mitigating factor that creates urgency such as rising interest rates. Sellers who "have to sell" can typically only compete on price so they get out in front of the market, which is why we see the decline in pricing in the last quarter. This year could be different though in that we have stellar interest rates, the lowest I have seen in my career, and despite what you hear on TV and read in the paper our fundamentals are strong here in Northern Virginia. Consumer confidence is the issue but once people realize that what they read about in the paper is happening in Florida, Nevada, Ohio and other states but NOT Northern Virginia they will feel better and realize that this market is slipping away. It might take the stock market bouncing up, administration changes in the mid terms, announcements that the job cuts announced for Virginia are not in our area but down in the tidewater area or some other bit of positive news but at some point the pent up demand will be unleashed. That is where it gets iffy in predicting the next 90 days or so because I feel there is pent up demand to buy and once buyers feel confident or more importantly once they fear the market is slipping away and that the bottom is gone they will all pounce on the market. Rates staying low and there being no indication of change in the near future will probably mean that there will not be a mass rush and in fact we may not see a change until spring but I do believe that those deals that are out there now will disappear and next spring pricing will build off of these numbers. I can't begin to stress enough that real estate is local and that the negative news you are getting pounded with is national, our local market is alive and well, going strong. We are the highest group in the nation as far as job creation and the lowest as far as unemployment numbers. The builders are back to buying land and everyone is gearing up for a steadily improving market. I look to see steady activity at worst and solid improvement at best. We will watch the numbers for you and as usual, keep you informed.