NoVA Home Prices Over the Next Few Years? (Arlington, Vienna: real estate, 2013)

[CAVA1990]

Curious if anyone's seen any forecasts of how much home prices will increase in the area. What are your expectations?

[spleuchan]

Realtors will say expect big increases. People expecting hyper inflation will say expect prices to drop. No one has a crystal ball. There are too many factors for anyone to be able to accurately predict.

[CAVA1990]

Originally Posted by spleuchan

Realtors will say expect big increases. People expecting hyper inflation will say expect prices to drop. No one has a crystal ball. There are too many factors for anyone to be able to accurately predict.

Why would hyper-inflation (an unlikely prospect by the way) make home prices drop? It normally causes everything, including the salaries of prospective homebuyers, to hyper-inflate in concert. I think you must have meant hyper-deflation.

[Caladium]

Just a wild guess, but my guess would be prices will stay more or less stagnant. The economy is improving across the country, and local defense contractors are laying off workers and not hiring as many new ones--so fewer people will be moving here for jobs and needing to buy real estate. I doubt prices will fall, but also doubt they'll rise much and turnover might take longer than in the past few years.

[CAVA1990]

Originally Posted by Caladium

Just a wild guess, but my guess would be prices will stay more or less stagnant. The economy is improving across the country, and local defense contractors are laying off workers and not hiring as many new ones--so fewer people will be moving here for jobs and needing to buy real estate. I doubt prices will fall, but also doubt they'll rise much and turnover might take longer than in the past few years.

Which defense contractors have laid off workers here? What percentage of people in the area work in that sector of the economy?

[Carlingtonian]

Originally Posted by CAVA1990

Which defense contractors have laid off workers here? What percentage of people in the area work in that sector of the economy?

I don't think they've laid many off yet, but if Congress doesn't do its job and pass another appropriation, every contractor and every federal employee will be at risk. This article focuses on DoD, but it's gonna hit every department.

As to home prices, I agree with Caladium's prediction of short-term stagnation. On one hand, this is one of the few areas of the country with a strong job market, and inventory is low, as are interest rates. OTOH, if a huge chunk of the local workforce is laid off or put on leave without pay--or worried about that prospect--then they tend to not spend money or upgrade their housing situation.

If it weren't for the appropriations impasse, I'd expect that prices would continue to rise due to demand.

[michgc]

My guess is that spring is going to be a strong market, especially for close-in burbs. Some areas are still very hot - like North Arlington and Bethesda, and the prices are insane. It seems like the demand still outweighs the supply in several desireable areas. Beyond that, I couldn't guess. We are probably selling our house in Vienna. We have tenants in there until mid-summer, so we are deciding whether to sell when they move out or to rent out for another year. We'll most likely sell because who knows how things will be a year and a half from now.

[spleuchan]

Originally Posted by CAVA1990

Why would hyper-inflation (an unlikely prospect by the way) make home prices drop? It normally causes everything, including the salaries of prospective homebuyers, to hyper-inflate in concert. I think you must have meant hyper-deflation.

Long term it would increase housing prices. Short term, it would be very rough on the housing market. NOVA has a high concentration of government workers. Government pay raise rates, for example, usually lag behind what is really happening by a few years. If hyper-inflation starts, wages won't rise fast at first. People can only afford a certain monthly payment. When interest rates rise, the principal would have to decrease for you to have the same monthly payment if you are getting a new mortgage.

I'm not saying hyper-inflation will happen. That was just one example.

Long term, house prices will no doubt rise. Short term is anyone's guess.

[Caladium]

Originally Posted by CAVA1990

Which defense contractors have laid off workers here?

I have no idea what percentage of people work for defense contractors, but I know three different people who were laid off this month. One was from TASC, one was from Northrop Grumman, one was from Harris. All three were surprised, since their companies had had a history of putting employees who complete a contract on proposal work until another opening came up--but this time around when contracts ended their companies chose to lay off employees. Granted, this is just three companies but until this month I hadn't heard of any of the defense contractors doing this. I hope it's just an aberration, but don't really know what to think.

[BMWZ4RUlz]

Layoffs are going to hit this area hard IMO in the short term. I think if you have a 5 year time horizon you will be okay. What I would NOT listen to are realtors on Facebook/Message boards jumping up and down about multiple offers and how the market is red hot. What a joke, inventory has been down as of late, so that causes this. If you want to bid way over list, go for it. Not me.

A realtor could care less if they make 3% on 450K or 430K, remember that.

I recently had to defriend some realtor on Facebook because every post was about how hot the NOVA market was...idiotic. When I asked politely if she was concerned about potential layoffs she said she hasn't heard of any layoffs??? Amazing.