Up in the Air - Home Values Up, But How Much Owners Can Recoup in Recovery?

Luxury Living Special Section
by Rima Assaker

Saab’s company has been providing real estate and mortgage services since 1987, so he has seen the dips and peaks this industry can weather. “With banks and financial institutes sinking, the condition of the housing market has become volatile,” said Saab. “However, the principle stays the same, and people will continue to invest in real estate.”

Saab, who has personally invested in multiple foreclosure and other properties, pointed out that “real estate investment has always been one of the key profit areas for banks and other financial institutions.”

“Investing in a house has always been considered one of the safest ways to safeguard our money. Owing to this investment fundamental, people continued investing in real estate during the period between the late 1990s and 2005, even though the prices were reaching their all-time highs,” he explained.

“Housing prices will increase with time, and will surpass the heights we saw during the late 1990s through 2005,” Saab predicts. “I don’t foresee that to happen in a blink of an eye, but we will see those prices again in between seven to 10 years.”
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Saab points out that investment opportunities abound due to foreclosure properties that have flooded the market. “Foreclosures and short-sales will make up as much as 40 percent of total sales for the next 30 to 36 months,” he said. “The percentage could possibly be greater, depending upon how eager banks will be to put their inventory on the market. Their preferences will be to pace their releases to keep prices from plummeting, but the sheer numbers may make that impossible for some banks.”Saab advises that “even after the supply begins to dwindle, the effect upon home prices will continue for at least another year.”
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Capital CushionAs negatively as homebuyers and real estate investors may view the market, the Washington region is still considerably better off than most markets across the country.“We live in the metropolitan area of the nation’s capital,” said Saab. “This is a government, defense, high-tech and business center. Everyone wants to be here because this is where the jobs are.”Evers, who has more than 35 years of real estate experience, agrees. “Companies [and their employees] want to be here, but in addition, it’s a beautiful location and a beautiful city. It’s a plum place to live for so many reasons … it’s like the courtiers wanting to be closer to court — anything to do with the government, the people want to be close.”And government often equals job stability, Saab notes. “There is a ton of money running around Washington, D.C.,” he said. “It’s clearly shown by the fact that people can handle a $3,500 to $4,500 per month mortgage or rent payment. Income is not going to change anytime soon in D.C. or its suburbs.”“The D.C. metro area is also very transient, meaning people come in and out of it frequently, which also raises the demand for buying and selling homes,” adds Long & Foster’s Bacchus. “People come to Washington to get things done, and they will always need to come to and be in Washington to do business and make things happen in the country.”He concludes: “The D.C. area has no idea what it is like to be in a Midwestern or Southern state, or some places in Florida, where there is no semblance of industry and no economic engine to support the economy. We are very lucky.”
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