Local real estate experts say 2012 was a 'rebound' year

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Real Estate,Dean Bartoli Smith

Washington-area real estate and market experts called 2012 a "rebound" year of price increases and sales growth across a region that will face challenges of low inventory and a lagging economy into 2013.

Lisa Sturtevant, deputy director of the Center for Regional Analysis at George Mason University, said the region that once led the nation out of the recession will look more like the rest of the country in 2013.

"Other parts of the country are coming back, and we're not the leaders anymore," she said. "It's been a slow recovery due to slow job growth and residential construction, home remodeling and building -- nonstarters until very recently.

"There was a sense that we're different here, more insulated," she added. "We're looking less and less different."

Positive signs include an increase in home sales across the region over 2011, and price increases for 33 out of the 37 months since the bottom of the market in 2009. But Sturtevant noted consumer confidence dipped this month in response to concern over "fiscal cliff" issues including federal spending cuts and job losses, as well as possible changes to the tax code and unemployment benefits.

"We've lost federal jobs since mid-2011 and no backfilling as people retire," she said. "We will see more of this, regardless of the fiscal cliff.

"I'm going with my gut here. I'm not seeing a lot of optimism for the first six months of 2013," Sturtevant said.

In Northern Virginia, the 2012 story has been a good one. The average sales price increased by 3.6 percent over last year, said Pat Kline, immediate past chairwoman of the Northern Virginia Association of Realtors. The number of units sold increased 12 percent, and the area had a low unemployment rate of about 4 percent.

"Overall, housing is on the mend," she said. "If we go over the 'fiscal cliff,' people will be hesitant."

Bonnie Casper, president of the Greater Capital Area Association of Realtors, said 2012 saw increasing median sold prices in the District and Montgomery County as a result of low inventory.

"It's not the frenzy we've seen previously," she said. "There's so much competition for so little inventory."

This competition pits empty nesters, young families and single professionals against each other. They are vying for what Casper refers to as the "walkability index" of homes that are in walking distance of work, restaurants and Metro stops.

"Sellers are more realistic and have more money for the next transaction, and buyers can't lowball," Casper said, but it is still difficult to predict what will happen next year.

"Real estate is 20 percent of the gross national product," Casper said. "Until we see a full real estate recovery, we won't see a recovery in the economy."

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