Local market expert Shirley Chambers reports the Loudoun County real estate market can rightly be classified as a significant local bubble.
This bubble was fed by investors in 2005 and 2006, says Chambers, who quickly realized the boom was fueled by their own demand.
After those investors withdrew from the region, prices dropped and mortgage holders saw their value plummet.
Now Chambers says the region is faced with a surplus of foreclosures and short sales, and it will take at least 6 months to deplete the current housing inventory.
For the future, Chambers sees prices dropping further through 2009, and a rebound to normal should occur by 2010.
There is hope for the short term, says Chambers, who sees cuts in interest rates and increases in limits on government and conventional loans giving a boost to the Loudoun market.
This comes as good news for this fast growing and wealthy region.
