Out on a Limb

Our team’s activity level from the last half of 2011 carried over into the first part of 2012. We have already received multiple offers on two of our listings. We are busy! I look for at least the first half of 2012 to do very well as buyers take advantage of low rates and low prices. The word is finally getting out that our market has seen the bottom so some pent-up demand is being released. As of this writing unemployment for Fairfax County is 4.2% compared to 4.5% for the entire Northern Virginia area and 8.6% for the nation as a whole. A total of 18,600 jobs were added in the metropolitan area and over half of them were in Northern Virginia in 2011. The BRAC results also bought a net new job gain of 14,000 to the area. This bodes well for 2012 to be a great year. Election years however, are always difficult to predict. I have been in the real estate business for seven presidential elections and our area is different than the rest of the nation. We enjoy a stronger real estate market and lower unemployment than the rest of the nation because our largest employer is the federal government. Most folks around here are tied directly or indirectly to government contracting. Elections years bring stress and uncertainty to our area that the rest of the country does not feel. That hurts our local consumer confidence and will put some folks on the fence that otherwise would be moving.
I expect that to affect our market somewhat especially as the election nears. So, to truly go out on a limb with my predictions for the 2012 real estate market I would say that rates should stay stable for the year although an increase is likely as we get nearer to the election. It will still be a cumbersome and frustrating process to obtain a loan and I look for that to get worse before it gets better although I do look for some more flexible loan programs to start popping up. Consumer confidence should stay strong as will our market for the first couple of quarters anyhow and then we will see things slow down noticeably. Short sales will still be a part of our market but foreclosures will continue to slow. Pricing will trend upward in the first half of the year but level out for the last half. I look for the number of sales to increase slightly over all as well. This is just my opinion of what the future holds and as the 2012 market unfolds I will as usual keep you informed.