The Washington Times reports on the DC housing bubble. "The Washington metropolitan area's housing market cooled off during the latter half of 2005. For the first time since 1999, buyers began to be on equal footing with sellers. How much more will the market cool? Will home prices fall, or just stabilize?"

"Despite a growing job market, the supply of homes for sale has ballooned since August. Excessive supply can lead to a softening, or even decline, in home prices. 'Prices have pretty much been flat for the last four months,' (realtor) Michael Turk says. 'Prices came down between June and November and have been stable since then. Some of the people who pulled out of the market last year have returned. Today they are getting the home they want, while last year they couldn't.'"

"That has a lot to do with the supply of homes for sale. Buyers in February had 28,000 homes to choose from. Last February, there were only 9,800 homes for buyers to see." "'In March of last year, there were only 45 condos available in Alexandria,' says Mr. Turk. 'Now, there are 333 available. So buyers are finally getting what they want. The demand is still there, there's just a lot more supply now.'"

"One tool used by competitive buyers is the escalation clause. When added to a purchase offer, the escalation clause automatically raises the buyer's offer to beat other offers. In some cases last year, the winner of the home was the one with the highest cap in their escalation clause. However, as buyer competitiveness has softened, escalation clauses have become less common."

"'We are still seeing escalation clauses today. I'd say probably 1 in 10 offers contain one right now,' says Dale Mattison, associate broker in the District. 'Last year, we were seeing the clause in 5 out of 10 offers, and in 2004 I would say 9 in 10 buyers used an escalation clause.'"

"Buyers aren't the only ones who change their strategy when a housing market slows. Sellers need to rethink their pricing plan. 'The more sophisticated Realtors are telling sellers not to be aggressive like last year,' Mr. Mattison says."

"Many home buyers use pricing to decide which homes they want to see, but once they're in your home, how it shows is what matters. 'Sellers need to make sure the house shows well,' says Mr. Mattison. 'A year or two ago, you didn't have to do anything to sell a property. You'd just open the door and it would sell regardless of how it looked. But we've spent the last six weeks getting my mother-in-law's home ready so it will shine when it hits the market.'"

"And how do things look for buyers this year? Mr. Turk says, 'Buyers should be able to negotiate most strongly in the condo market. This market will remain very, very flat and soft this year, so certain people should take advantage of the low interest rates and the abundant supply, and buy now.'"