December 30, 2007

You Might Actually Afford a Home in 2008

Opportunities abound for Northern Virginia buyers in the new year

You've been wary about jumping into the real estate market. Perhaps rightly so. You hear daily reports on television, on the radio, and read about it in the newspaper, magazines, and online. Real estate is going to hell in a handbasket. Mortgage lenders are going out of business and those that stay in business have tightened their purse-strings.

Maybe you are comfortable renting and waiting for the real estate market to settle down. Or you need more space than your current home provides but you are willing to tough it out and see what the prices do before making a move. You want to move to a new neighborhood but you are willing to wait.

Keeping a pulse on real estate in Northern Virginia, you know there are increasing foreclosures, bank owned properties, increased inventory, and some desperate sellers.

You can afford a house in 2008

Where's the good news for 2008?

Right here: YOU MIGHT ACTUALLY BE ABLE TO AFFORD A HOME IN 2008!

If you're like many people who live in the metropolitan D.C. area, you watched with amazement from 2001 through 2005 as home prices skyrocketed at increasing double digit appreciation rates. If you bought before 2001 or any time in that time period, you have likely benefited from the property's amazing appreciation. You refinanced, renovated, consolidated your other debts, and otherwise enjoyed the equity in your home.

Maybe you missed out on the home equity largesse fest, and scowled whenever your friends and colleagues bragged about how much money they made on their homes. You sat on the sidelines and regret that you didn't buy that $450,000 Ballston condo when you had the chance to buy it in 2001 for only $175,000!

Do you believe in second chances? Then 2008 may be your year.

Here's a graph that shows the average sales price of homes in Northern Virginia from 1996 through November 2007:

Northern Virginia average home sales prices

Appreciation reached its peak in 2004 and 2005 when values skyrocketed a whopping 20.6% and 22.2% above the values from the previous years. Prices in 2006 were flat and in the last few months of this year have been trending down slightly.

You may never be able to buy a luxury condo above the Orange Line metro for under $200,000 again, but prices have stabilized and this next year might present a good buying opportunity.

Have you made your New Year's Resolutions yet?

If one of your resolutions is to buy a new home, 2008 could be among the best times to buy real estate in recent history in Northern Virginia or D.C.