NAAAM Real Estate

Housing appreciation in the D.C. Metropolitan area has slowed its breakneck speed, and the fear is that the “bubble has popped.” As recently as a year ago, property was scarce and demand high, creating a volatile market with emotionally-driven price escalation. These conditions were unstable and dangerous for the average homebuyer.

In the past year interest rates have risen and supply is up, but it does not mean we are headed for a recession or slowdown in the housing economy. It simply means that the market, as markets do, has corrected itself and leveled off to a more stable and safe environment.

Now homes are taking longer to sell. Gone are the days of two-hour listings. Buyers are no longer waiving home inspection contingencies, and escalation clauses are not showing up on contracts to fight higher bids. We are not experiencing double-digit appreciation, but the market is now more reasonable, predictable and affordable.

The federal government will always provide D.C. with a strong economic base. And the number of jobs is expected to increase in coming years due to continued expansion in the homeland security industry. This will keep demand for housing up and property appreciation rising.

Now that sellers have to negotiate it is a good time to look for those less-than-perfect houses which can be bought for less. Improvements can be done over time and your home’s value will increase. Equity can then be used as a down payment for a second home, or investment property. Now you have two properties which are appreciating, and the cycle continues.