Northern Virginia Real Estate in the 2000-2010 Decade
The first decade of this century has certainly been a roller coaster in terms of world events and real estate value! The Northern Virginia local Sun Gazette newspaper prints a chart each year that shows the average sales price of homes and number of transactions, as well as the percent change over the previous year. The previous decade closed in 1999 with 22,715 total sales and an average sales price of $238,496 for a home in Northern Virginia.
Looking back over the dawn of the new millennium, I recall the concern that the roll over in digits from 1999 to 2000 might bring. All the preparation led to what turned out to be a very smooth transition. Perhaps due to the effort expended for the new technology, there was a corresponding build up in market value for tech stocks, leading to the dotcom bust which began in March of 2000. Northern Virginia does have the Dulles technology corridor which was impacted some by the bust in tech stocks, but the biggest headline at that time had to do with the Presidential election and the “hanging chad”.
Then, who could forget 9-11-2001. For Americans, that date is permanently burned into our psyche. Living close to Washington, DC all of a sudden wasn’t perceived as a benefit once people in a very real way saw a plane intentionally flown into the Pentagon. It was like a bomb dropped! Being inside the beltway took on an entirely new meaning. Now, for safety reasons, many people wanted to be as far away as possible. Commerce effectively stalled, including real estate transactions. Honestly, it was like a ghost town in the halls of our McLean real estate office. But slowly people realized that life had to go on, and a new sense of normal came into existence. The Washington, DC metro area real estate market subsequently benefited because in response to the 9-11 attacks, Homeland Security was created.
Those events began the uphill ride of the roller coaster in real estate values, with 5 straight years of double-digit appreciation in sales price from 2001 to 2005. Then as the saying goes: what goes up must come down. In 2006 the market lived off the fumes of 2005; in 2007, the market lived off the fumes of 2006, and in 2008 there were no more fumes. 2008 brought the entire nation to its knees with a financial crisis brought on predominately by the crash of the housing bubble. This market crash, which went from 2007 to 2009 has been primarily attributed to the credit crisis and housing bubble. Interestingly, the peak average home sales price in Northern Virginia occurred in the year 2008 at $538,463, but the peak number of transactions of 32,735 occurred in 2004.
The Sun Gazette chart stated that the average sales price for a home in Northern Virginia for 2009 was $431,018 and that there were 19,035 sales. What will 2010 say? I believe 2010 has shown a year of recovery and that we are a couple of years away from returning to peak value. From 1999 to 2009, there was an average of 8% appreciation on home values, which is still very respectable. As a Realtor who is active in the marketplace, my perspective on 2010 is that it was a fairly normal market. Good properties priced correctly for the current market conditions sold in a reasonable period of time.
If you are a Purchaser waiting for values to go down, for most of the market area, I believe that you missed the bottom! Now is the best time to buy! If you are a Seller of real property in Northern Virginia, know that being in a normal market is still a very good time to sell. The present conditions will probably continue for several more years at least.
