Buy Alexandria Real Estate: Sliced in Half -- January 2008 Home Sales

Imagine for a moment that you own a pizza shop.  In January 2007, sales were slow, but you still managed to sell a respectable 1,322 pizza pies.  Some were plain cheese, others pepperoni, a few vegetarian's delight, and assorted other pizzas with various toppings.  Expecting that January 2008 would reflect similar results to last year, you stocked up on supplies, continued advertising, and even played around with your prices a bit -- raising the prices on some of the more popular orders and lowering the price on the less frequently ordered pies.

You did everything right.  You advertised in the same places.  You made the same good quality pizza.  You even offered special incentives, like a free 2 liter of Coke with the purchase of a large pie.  However, not only did the customers fail to show up, the pizzas that you did sell took longer to sell and your shop just was not as busy as in the past.  In January 2008, you managed to squeak out just 709 pizza sales -- a mere 53.6% of your sales from the same month one year ago.

If you were that pizza shop owner, you might decide to shake up your sales strategy.  Maybe you would lower your price, offer more incentives, change your advertising campaign.  Perhaps you need to make your pizza store stand out from the rest in your town by cleaning it up and dressing it up.  You can't change the facts that there's just less demand for pizza.

Well, if you look at the Northern Virginia real estate market, this scenario describes exactly what has happened.  Combining the sales figures for Arlington County, the City of Alexandria, and Fairfax County, there were 709 closed home sales in January 2008, compared to 1,322 in January 2007.  While average sales prices were slightly increased in Arlington and Alexandria, Fairfax County experienced a decline of over 11% from the prior year.  Homes stayed on the market for more time and sold for a lower percentage of the asking price in each jurisdiction in January 2008 than they did in January 2007.  Add to that, the current high inventory of homes on the market (sure to increase with the coming Spring season), and there's a situation where sales are literally sliced in half by the real estate market's sharp pizza cutter.

What to do?

SELLERS:

If you plan to sell your home in 2008, you need to be realistic about your pricing.  Please read the following articles:

• Come on Down! You're the Next Contestant on The Price is Right
  
  
• How Many Homes Sold in 2007? How Many Will Sell in 2008? Will Yours Be One of Them?
  

You might consider using the services of a professional stager to make your home stand out from the rest (You've seen those ubiquitous pizza boxes with the slogan "You've tried the rest, now have the best!").  Read:

• HGTV? No, it was me: A Realtor Learns to Stage a Home
  

BUYERS:

Planning to purchase a home in 2008?  This may be a great opportunity to negotiate on price.  In January 2008, homes in Arlington, Alexandria, and Fairfax Counties, sold for 6.4%, 8.29%, and 9.11% below the asking price, respectively.  This represents a significant amount of negotiating room, equivalent to between $38K-$50K below average seller's asking price!

If you are thinking about buying in 2008, why not attend our upcoming free homebuyer's seminar on Saturday, March 8th? 

MORE DETAILS:  You're Invited to a Free Homebuyer Seminar -- Learn & Lunch

Whether you are buying or selling or both, I'd strongly advise you to read the following report:

Buying or Selling in Virginia? Get Educated about the Market

How do you like your pizza?  I'll take mine with extra cheese, mushrooms, olives, and green peppers, please.