The summer of 2010 finds the District's overall housing market a little unpredictable, with houses, town houses and condos priced from $500,000 to $900,000 selling quickly but those tagged higher moving "sluggishly," real estate agents said. Interest rates are low and prices have dropped because of competition from distressed properties -- but a market that should be running over with buyers is not.
"There really is no rule of thumb," said Suzanne Goldstein, a Long & Foster agent. "Anything with six figures" sells relatively quickly, she said, but higher-priced homes are slower to go.
May was the housing market's first month following the expiration of federal tax credits in April. Still, Metropolitan Regional Information Systems data for May show 351 houses sold, compared with 269 for May 2009. The average price dipped just slightly to $487,245 from $489,047 in May 2009.
Since then, the Washington market has slowed. Its strength depends on homebuyers in the lower price brackets buying properties so the sellers can move up to more expensive homes, Goldstein said.
"It doesn't trickle down from the upper [price] brackets, it trickles up from the first-time buyers."
For the market to grow, there needs to be a way to get the first-time buyers back in the fold. Low interest rates are not doing it, Goldstein said.
Jon Eric Ritland, a real estate agent with American Realty Group, said homebuyers who did not get in on the federal tax credits "are better off having waited" because in most housing market price brackets they will save more on the drop in mortgage interest rates than they would have saved on the credit.
The bottom line is that single-family homes in the $500,000-to-$900,000 price range are "the strongest portion" of the Washington market, said Thomas Anderson, president of Washington Fine Properties.
The strongest markets are in particular, popular neighborhoods. Town houses and row houses in that price range located on or near the U Street corridor, for example, or around the West End, move very quickly.
There is the same number of homebuyers as when the real estate market was strong, Goldstein said, but they have become more conservative and are taking their time. They are "sitting and waiting for the best deal."
Economic factors, such as an unstable job market, may also be keeping potential buyers from signing contracts, she said.
It is the unpredictable nature of the market that is keeping buyers away, Ritland said. "There are people with money, and they want to buy a house, but they are reluctant to get into the market right now because some are waiting to see if another tax rebate comes through or if there is some new program," he said.
What the market really needs, Ritland told The Washington Examiner, is consistency "and no more special programs."