By Victoria Solomon, Current Staff Writer
Wednesday, September 19, 2007; R27

Home sales in the District have fared almost exactly as well this year as they did in 2006, with the exception of August, when sales fell exceptionally low and the D.C. market weathered the national credit crunch. Since Labor Day, Realtors have seen a strong surge of sales, indicating the sharp drop in August may be nothing but a blip, several said.

"We have not seen the decline experienced in many areas of the country and even in certain Maryland and Northern Virginia suburbs," W.C. & A.N. Miller Realtor Susan Jaquet wrote in an e-mail to The Current. "Proximity to downtown Washington and easy commutes continue to be a big draw." "However, the average number of days homes are on the market has increased." she added.

According to the Greater Capital Area Association of Realtors, the number of ratified sales contracts of single-family homes fell from 313 in August to 237 last month. More homes are up for sale this year, with 1,434 listed in the year-to-date inventory compared with 1,330 at the same point in 2006.

Lee Goldstein, who owns Northgate Realty, said the month of August in the real estate business is usually slow, and his summer as a whole was "as slow as it can get". "But it seemed to pick up around Labor Day. "I see lots more buyers out," Goldstein said. Goldstein said he began to market a home in Capitol Hill early this month, and about 100 people showed up for an open house. In his experience, Capitol Hill and other downtown neighborhoods are moving quite well, Goldsteind said. "It has to do with pricing," he said. Things that are priced and staged and marketed well will sell - they will always sell."

Jaquet, who is based in Bethesda but works extensively in Northwest D.C. agreed on the pricing point. "If a house looks good and is "priced right" and marketed well, there is still plenty of demand, and some properties are still flying off the shelf," she wrote. "I have always stressed to clients the importance of preparing and staging a home before it goes on the market. In the current market, this is crucial. If your house does not show perfectly, buyers will just move on because they have lots of other choices.

McEnearney Realtor Anslie Stokes, too, said her summer was dead but Labor Day revived business, with two buyers in one week. The two buyers made bids on homes in Chevy Chase and Capitol Hill and one got the house while the other did not. Stokes said single-family homes in Northwest Washington are always hot, regardless of the glitches in the market. "There's always not enough on the market for buyers who are looking," she said.

Weichert, Realtor Judi Levin, who is a partner in the Ferris Peter Levin Group at the company's Chevy Chase office, said her summer sales have been strong. The Labor Day weekend brought a flurry of activity in her office, as well, especially among Upper Northwest homes priced at over $1 million. "Everything new that came on came under contract, and there were quite a few. That's really the first indication we've had of the fall market. It showed great strength.

According to a report based on Greater Capitol Area Association of Realtors data prepared by Fred Kendrick of Tutt, Taylor & Rankin Sotheby's International Realty and Peter Clute of Coldwell Banker Residential Brokerage, the August market's numbers reflect "a traditional slow part of the season, but even more so the major impact of the mortgage credit issues which roiled the financial markets during the month."

The credit crisis began with sub-prime lending - when lenders issue home loans to those who would not otherwise qualify due to weak credit or no down payment. As more people were unable to pay monthly mortgage payments, interest rates increased on adjustable-rate mortgages, home prices depreciated nationally, and thousands faced foreclosure. This led to higher interest rates for many kinds of loans - particularly for those that covered much of the down payment for the buyers. Kendrick and Clute wrote that many buyers "found it difficult to obtain mortgages that had been readily available in the past."

Michelle Davis of Long & Foster Prosperity Mortgage said the most popular loan for her office is the conforming 30-year-fixed-interest-rate loan. Davis said some lending has disappeared after the sub prime fall-out, making it hard for people with little to no down payment and marginal credit to buy a home in D.C. "It's difficult to find 100 percent financing," she said.Those loans come at a high premium.

But Davis said she has not really seen a complete "fallout" of the mortgage market - buyers have just had to restructure their loans, coming up with a down payment, borrowing against retirement or using a gift. "People who were intent upon buying are still buying," she said. A 30-year-fixed-interest-rate loan is at 7.25% with zero points, she said, still a historically low rate.