Karen Briscoe

What I believe is holding the housing market back in the Northern Virginia area is the lack of consumer confidence. This crises of confidence reminds me of Humpty Dumpty. If you recall the nursery rhyme:

Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall.
All the king's horses and all the king's men
Couldn't put Humpty together again.

The Northern Virginia real estate market from 2006 to present “had a great fall”. It was logical and necessary that a correction was in store. The market area had experienced 5 years of double digit appreciation in housing prices from 2001 to 2005, and any person that was thinking clearly knew that those levels of appreciation was unsustainable. In 2006 and 2007, appreciation was flat at .1% and in 2008 and 2009 there was a correction with depreciation of 14.4% and 6.5%, respectively. In 2010 there was a solid year of recovery with 8.9% appreciation over 2009, which brought the price levels back to the 2004 levels.

The Case-Shiller S&P Index for June 2011 was released recently and the Washington DC metro area fared the best out of 20 metro areas followed by the index. All of the 20 markets experienced a decline in prices from June 2010 to 2011. The Washington DC metro area declined by only 1.2% in June 2011 over the previous year. But remember that the Washington DC metro area had experienced February to May 2011 each month year over year price increases. So we had 4 months of price increases and 1 month of price decrease.

What is occurring now in the marketplace is a “bumping along”. In times like this the market ticks up and the market bumps down. So having one month of a bump down is not catastrophic! We can put Humpty Dumpty together again if consumers believe that the market is recovering. I honestly doubt that the government (all the king’s men) can put the real estate market together, but I do believe that home buyers and sellers can!

Clearly home prices in most of the Northern Virginia area have returned to prices that are indicative of a normal market and thus sustainable. The metro area is strong on job growth and has low unemployment. Interest rates are historically low and inventory in many sub-markets is in line with demand. All we need is Buyer confidence in the value of real estate and Seller willingness to price their home based on the current market.

The best source for understanding the local real estate market is by working with experienced and knowledgeable Realtors®. Karen Briscoe and Lizzy Conroy with the Huckaby Briscoe Conroy Realty Group would be delighted to be of assistance. Please contact via the means most convenient for you: www.HBCRealtyGroup.com,

703-734-0192, Homes@HBCRealtyGroup.com.

The headline that caught my eye was in the July 28, 2010 issue of USA Today which stated: “Home Prices Rose 1.3% in May”. To me that statement is misleading because the 1.3% increase for the Composite-20 Index is actually recovery, not new appreciation in home values. Not surprising, the national index peaked in the second quarter 2006 at 189.93 and bottomed in the second quarter 2009 at 111.11. The composite and city indexes were normalized in the first quarter of 2000 to a value of 100, and are based on three month moving averages. The U.S. National Home Price Index is calculated monthly with a two month lag and is a house price index using a modified version of the weighted-repeat sales methodology.

The quoted data is provided by the Standard & Poor’s/Case-Shiller index. The index was developed by Karl Case, Robert Shiller and Alan Weiss beginning in the 1980’s but it wasn’t until 1991 when the index became a respected indicator. The S&P/Case-Shiller Composite 10 and 20 Index are two of those frequently quoted in the Washington Post and USA Today papers when comparing the top Metropolitan Statistical Areas (MSA) in the United States and the Washington Metro area is one of the 10.

The Washington Metropolitan Area (WDXR index) is formally known as the Washington–Arlington–Alexandria, DC–VA–MD–WV MSA by the U.S. Census Bureau, and informally known as the National Capital Region. The United States Office of Management and Budget defines the Metropolitan Statistical Area (MSA) to include the larger Baltimore-Washington Metropolitan area and is the fourth largest combined statistical. So it is certainly news when home prices increase in the National Capital Region!

The Washington metro area index increase was 1.5% in May over April 2010 and the one-year change was 7.4%. The seasonally-adjusted data for the Washington, DC metro area states that price index peaked around 250 range (not surprisingly) in the middle of 2006 and currently the Washington metro area is one of the best recovering market areas, now hovering around a price index of 180. So as you can see we are clearly still deep in recovery mode, not true appreciation. My husband is a former newspaper publisher and often cautions people to understand what they are reading!

To truly understand the real estate market, the best guidance will probably come from aprofessional Realtor. Please call the Huckaby Briscoe Group if you are looking to buy or sell in the Northern Virginia areas of McLean, Great Falls, Vienna, Arlington, Falls Church, as we would be delighted to be of assistance. Visit our website for more information at: www.HuckabyBriscoe.com or contact Karen Briscoe at 703-734-0192 or Homes@HBGroup.us.

Recently the statistic came out that for the first time in 2008 the average new home being built in the United States is smaller by 200 square feet than two years previous. This trend shows a decline in desire for McMansions and square feet at any cost. Homebuyers are now considering whether they really need that extra 1,000 square feet. Further, smaller homes by virtue of size alone are more energy-efficient and are less expensive to maintain. There is no way of truly determining which trend came first, building green or smaller, but they work in tandem in my view as both offer similar benefits of energy-efficiency and decreased maintenance costs.

This week I had the opportunity to attend the McLean Chamber of Commerce private tour of the Charity Works Green House in Salona Village. The Green House was designed by Cunningham/Quill Architects PLLC who illustrated beautifully that great design can come in small packages. It was designed to exceed the highest Leadership in Energy and Environmental Design (LEED) standards for houses. This carbon-neutral house was built in partnership by GreenSpur Inc. and West Group. It is expected to use 80 percent less energy per square foot than a comparable new house. The craftsman-style home boasts only 4,000 square feet of living space on almost ½ acre of land, which is small by new homes in McLean standards. Of greatest impact to me was the fact that the room sizes were intimate. This signifies a turning point in design, where bigger is no longer the default choice of architects and builders.

I was curious to know if this trend in smaller home design has come to McLean, so I did a market analysis of new detached homes built and sold the year they were constructed for both 2008 and 2009. The square footage numbers used came from the Fairfax County tax record for the property. In 2008, the average above-grade square footage for new homes was 5,268. In 2009, the average above-grade square footage for new homes was 4,861. In just one year that is a reduction in home square footage by 7.7 percent. It also signifies that the Charity Works Green House design is blazing a trail in more ways than one. In my view, both green and smaller are trends that architects and home builders should pay close attention to.

DEAR EDITOR: I am a seller of an upper end priced home in Northern Virginia. Some of my friends say that this is a terrible market to sell real estate. Others say, "If you see it in the Active Rain, you can believe it." Please tell me the truth; is this a good time to be in the market?

Yes, Virginia, this is a great time to be in the market in Northern Virginia. Virginia, your friends are wrong. They have been affected by the skepticism of a skeptical age. With the change in administration, there will be many new political appointments. The "Plum Book", an inventory of 8,000 new jobs (which is 1,000 jobs greater than it was 4 years ago), is a testament to that fact. Overall the metro DC area has already added 282,000 jobs through third quarter 2008, whereas in all of 2007 there was a positive job growth of only 275,000. Stephen Fuller, director of the Center for Regional Analysis at George Mason University said: "We don't have a Wall Street. When there's a crisis like this, the Fed goes out and hires a bunch of people to help out. I suspect they'll bring Wall Street guys to Washington and . . . put them to work." Statistics show that the federal government expands, not contracts. Yes the Northern Virginia real estate market is a great market to be in because the Federal government exists and all the related industries that support it.

One can interpret the numbers anyway you want, but it's how they affect you personally that matters. And I'm here to tell you that close in Northern Virginia, good houses in the upper brackets priced right are selling. In fact, looking at those numbers, more houses sold in first quarter 2008 than in fourth quarter 2007 in McLean, North Arlington, Great Falls and Vienna. It is anticipated that first quarter 2009 will be even better.

Ah, Virginia, in all this world there is nothing else more real and more abiding than "real estate" in this area.

Please contact Karen Briscoe at the Huckaby Briscoe Group, Weichert Realtors, 703-734-0192, http://www.HuckabyBriscoe.com, HuckabyBriscoe@aol.com if you would like a free comparative market analysis or you have a referral for the close-in Northern Virginia market. Huckaby Briscoe Group is the #1 Real Estate Agent in the McLean-Center Weichert office.