2011 Predictions for the Arlington County and DC Metro Area Real Estate Market
Last January, I did a 2010 predictions post for the year. I was right for 4 out 5 (I didn’t expect interest rates to go as low as they did! That’s a good one to be wrong on!). So i’m going for 5 out of 5 for 2011 and putting my masters in Economics to good use. So here goes…here’s what I see happening in 2011:
1. Interest Rates Will Rise. We’ve been so spoiled this year with rates as low as 4% that we lose sight of the fact that interest rates are still the lowest they’ll probably ever be in our lifetime. I see rates getting back up to 5-6% this year. It’ll be a roller coaster for rates, as they fluctuate daily/weekly, but I think the overall trend will be up.
2. Prices will remain flat, with a slight increase. I think overall, prices will remain flat from 2010, which increased slightly over 2009. Some properties may increase – like townhomes or single family – but overall will remain close to 2010 prices.
3. The number of sales will remain low. While prices increased in 2010, the number of transactions actually decreased from 2009. Partly because some people are deciding to rent instead of buy, some people don’t have the same level of confidence, and partly because we’re still still in a little “hangover” from the tax credit last year since so many people bought in early 2010, it decreased the pool of buyers for the next year or so.
4. Fewer foreclosures, increased short sales. I think Arlington County will see fewer foreclosures than 2010. There will still be a few, but overall, we’ll see a slight increase in short sales as people try to avoid foreclosure. This will contribute to prices remaining flat. Foreclosures often sell for 10% below market value, so this will help everyone.
5. More construction projects will receive financing, break ground. Just like Garfield Park in Clarendon and Gas Light Condo in Rosslyn recently got financing approval, we’ll see an increase in larger developments receiving funding and breaking ground in 2011. Just last week USAA bought 1900 Wilson Blvd from Zom for $18M, the site of the old Hollywood Video will soon be a mixed use project of residential and retail, a common theme we’ll see next year. More construction is good for everyone, except our traffic patterns during peak hours :).
Agree? Disagree? Did I miss a topic you’d like to see more coverage on? Let me know – Laura@TheLJRGroup.com.