The Bubble Watch

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THE BUBBLE WATCH

All over the Washington area earlier this week, real estate agents were talking about “The Bubble” at their weekly office meetings. Our managers all had copies of a front page New York Times article talking about more signs that the real estate market may be cooling off. Ah, another bubble meeting.

So, where is this bubble so maybe I can stick a pin in it? I can promise you that it is not floating over the 1600 block of Hobart Street in our nation’s capitol.

Monday night, I presented an offer for some clients on a most appealing Wardman style home in Mount Pleasant. OK, so it had a 50-amp breaker box and almost no electrical outlets. The kitchen looked like something out of “That 70′s Show”. There was a lot of galvanized plumbing. Termites had been nibbling at the back wall. But it had gorgeous floors and woodwork. The light fixtures were lovely. The rooms were wide and sunny, and freshly painted in warm soft colors that worked. And the gargoyle in the rear garden actually conveyed.

This house had something else going for it. The owner got good advice from a good agent who helped her to price it right, considering the house’s condition.

And my offer was one of SEVEN! It had no contingencies! It was well above the asking price! And we came in second.

Over the last few weeks, I’ve noticed houses staying on the market for longer than a month. But most had scary deferred maintenance issues, or they smelled of cats and smoke. Your basic Feng Shui disaster area. More important, however, their prices are far higher than their market value will be after another year of double-digit appreciation.

So what about this bubble? I think it’s a metaphor that doesn’t quite fit. This market reminds me more of a basketball that might develop a slow leak. If it does, its bounce might not be quite as lively until the market plugs the leak.

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