Luxury sales are springing back, Casey Margenau says
By Jackie Friedlander
Our guest today is Casey Margenau, who has been in the top 1 percent of all real-estate agents in the country for the past 10 years. The Northern Virginia Association of Realtors also ranked him first in sales for small teams in 2006. Although he works with sellers in all price ranges, his luxury listings make him an authority on the upscale market.
Q: As a Realtor with many luxury listings, can you tell us what is happening in the upscale market now, and what you expect in its future?
A: The $1 million-plus range is following a different scenario from the rest of the market. In the lower end, under $500,000, you are usually dealing with an older home, townhouse or condo in this area. As you go below that $500,000 mark, there are huge swings in inventory where there are a tremendous number of homes on the market. The lower the price range, the larger the supply because of the larger number of subprime mortgage loans that were used to purchase these homes now being foreclosed on.
By contrast, the inventory in the higher end has been staying at about the same level as it has in previous years.
Slowly this spring, buyers have been coming back into the market and buying the good values. As a result, we are seeing an abundance of buyers starting to shop this spring market for the higher-end properties, now that prices have adjusted and values are better and more choices are available.
Q: Did the same trend occur throughout all of Northern Virginia?
A: It has started in the closer-in areas, Arlington, Alexandria and McLean. I wrote a contract this weekend for a home in North Arlington that had received four offers. It was for an older house that had been updated and located in a charming, good, solid neighborhood. And it had been on the market for only three days! This is indicative of how turns in the market usually occur; they pick up first in closer-in areas and then move further out to the suburbs.
Q: Will the market be affected by the coming election?
A: I believe that later this year we will have a slowdown because of the election, with some people waiting to find out if they will have jobs here. After that, there will be a boom because we are changing administrations no matter which party wins. We will then have an influx of people who will jump-start the market after '09, as always happens after an election year. We always have a very good spring at those times.
Q. What kind of home buyers will the new administration bring?
A: It usually runs the gamut of price ranges. The former administration’s employees don't necessarily leave Washington; they have put down roots here, especially the ones who have been here for the last eight years. Homes will also be bought by the newcomers: the government appointees, and people who move here to do business with them. Even some of the workers who are younger who will mostly rent, that is OK, too. This will also help the market, as many long-term investors have been buying a lot of good values and need renters.
Q: When do you think the market will recover fully again?
A: We can't tell the future, but we can predict a lot from the past. The difference between now and the early '90s is that there is more money out there, in pension funds and all kinds of money markets. Although some banks may be tightening standards because of past lending practices, others will step up to the plate.