According to Money magazine, the outlook for 2008 is looking bleak. Although home prices are down 4.2% from last year, a chief economist predicts that “the worse is yet to come.” Some are saying that home prices could fall another 5-6%. Now I still believe that the strong economy and job opportunities present in the Northern Virginia area will mitigate the local situation. However, local home prices in 2008 are most likely to decrease (even if it’s slightly).
It’s simple economics: too much supply and too little demand. As of today, there are 756 properties listed in the Gainesville/Haymarket areas (320 – Haymarket; 436 – Gainesville). To put this perspective, so far in 2007, 774 properties have sold in the Gainesville/Haymarket areas (305 – Haymarket; 469 – Gainesville). So going into 2008, the market is supplying about what was demanded in 2007. Now add in those homes that will hit the market in the spring to further increase the backlog.
If you are hoping to sell a home anytime soon, it might look pretty grim. If you are waiting for prices to rebound, this will probably not occur until early 2009. And most experts think that it will take several years for homes to get back to the pre 2005 values.
If you are a homeowner who bought before 2005 and you intend to stay put for a few more years, you’ll probably still come out with a healthy profit by the time you are ready to sell. However, if you would like to sell now, I suggest that you stay ahead of the market and LOWER YOUR PRICE NOW. Else, standby for a few anxious months.