When Celeste and I sold our last house in Northern Virginia (that’s it on the left) in July, 2004 and relocated to North Carolina a big part of our thinking was that the real estate in NoVA had to be peaking and we knew that the market in Winston-Salem was hitting a near low. While this wasn’t the only factor we considered in the move it definitely prodded us to move quickly.
Well, the NoVA market continued to skyrocket after we left but I think we got out close enough to the peak and close enough to Winston-Salem’s bottoming out that we can have no complaints. Now I’m starting to see items like this about the DC market and I worry for anyone who bought at the peak, made themselves "house poor" and used adjustable rate financing.
I don’t think we have any friends or family who are in that boat, but if they are I hope they’re able to get out of it relatively unscathed. And for anyone who’s looking for real estate as an investment I’d say they should hold on another year or two and then start buying up all the foreclosed or panic sale properties in Fairfax, Prince William, Loudon and Stafford counties. Forget Arlington and Alexandria; due to their location and infrastructure they typically don’t get hurt as much in downturns as do the outer counties.
BTW, my personal barometer of how out of whack the NoVA market became is this: we bought our first single family home in ’96 for about $137,990 and sold it in ’01 for $185,000. The people that bought it from us in ’01 sold it this year for $405,000. That’s $405,000 for three bedrooms, two baths, 1,750 square feet of finished living space if you include the finished part of the basement, and a location 30 miles from DC along the I-95 corridor which happens to have some of the worst traffic you’ll ever find. That’s just nuts.
Of course my hat’s off to the folks that bought the house from us. Nothing like a 120% gain in a little under five years.