Manassas Journal Messenger | Housing market slowing, except in Prince William

FAIRFAX – Buyers, sellers and real estate agents in northern Virginia will be watching home sales after Labor Day to determine if the real estate bubble in their own backyard has finally burst.

Home sales in Fairfax County dropped 7.7 percent in July compared to last year. In Arlington, they tumbled nearly 19 percent, due to a sharp decline in condo sales. Loudoun County fell 12.3 percent.

“It’s something we’ve been waiting for. It’s just a natural market balance. We thought it was coming last year,” said Amy Ritsko-Warren, spokeswoman for the Northern Virginia Association of Realtors.

Prince William County sales show the only increase – 3.2 percent this July compared to last.

Real estate agents said they had more homes to show this summer, homes sat on the market longer — and buyers had to grovel less.

Most welcome the changes after years of crazy bidding wars. The unofficial record this spring, according to Ritsko-Warren, was 200 contracts competing for one single-family home in Fairfax.

Weichert broker Michael Turk is glad to bid farewell to a market where buyers often faced 10-15 competing offers and paid $30,000 to $50,000 above list price.

“When you have 15 offers for one property that’s not healthy for buyers. That’s not healthy for sellers,” Turk said.

“As a buyer you didn’t have time to think and you couldn’t negotiate,” said Weichert agent Vivian Lyons. “People were waiving home inspections and appraisals.”

Frank Prindle, of Prindle, Ryan & Associates at Remax Alliance, said selling became a race to get clients to a home the morning it came on the market.

“Within a couple hours, if they hadn’t written a contract, someone else did,” Prindle said.

The rising inventory, along with fewer sales, helped push July’s average price of a single-family home or town home in Fairfax County down $19,000 from June, to $597,255.

NVAR is quick to point out that home prices overall are holding and even rising. Ritsko-Warren said the average sales price in Fairfax for all homes is still nearly $107,000 higher than July 2004. Sales in Alexandria, Arlington, Loudoun and Prince William also rose an average of $100,000.

But she does not expect the 20-25 percent annual increases to continue, instead predicting hikes closer to ten percent.

“We’re not going to see houses valued at $500,000 dropping to $450,000,” Ritsko-Warren said. “Instead of jumping to $600,000 next year, it might be worth $550,000 or $540,000.”

Stephen Fuller, who co-directs George Mason University’s Center for Regional Analysis, said his research shows the real estate market peaked during the last quarter of 2004 and the first quarter of 2005.

But he does not anticipate too many bargains for would-be buyers who have waited out the bubble.

One of them, Bert Laney, rents a house in North Arlington and plans to see what happens this fall. He said part of the reason he waited is standards.

“I either had a choice of stretching myself financially with one of the creative mortgage products or settling for a house that’s worse than my first starter house in 1992,” Laney said.