Change You Won't See

"Not much," said John McClain, a senior fellow at the Center for Regional Analysis at George Mason University, which dissects local economic statistics.

"We've never been able to pick up a change in administration at the metropolitan scale."

It's a matter of numbers. The population of the Washington area is about 5 million, with about 3 million jobs.

For perspective: The government-published "plum book," a listing of legislative and executive branch positions outside the civil service, contained about 7,000 jobs in both its 2000 and 2004 editions. Those include an estimated 3,300 presidential appointees.

Not all those people will work in the Washington area. And of those who do, not all will be newcomers -- for instance, John D. Podesta, one of the team that will oversee the transition, is a former Clinton White House staffer who has held jobs here for three decades, most recently at a D.C. think tank.

They're not even a large slice of the federal labor force -- there are 345,000 federal workers in the region, McClain pointed out.

But what about closer in? In what most people would consider the inside-the-Beltway areas -- the District; Montgomery and Prince George's counties in Maryland; Arlington and Fairfax counties, plus the cities of Alexandria, Fairfax and Falls Church in Virginia -- the population last year was 3.74 million.

The last administration changeover followed the election of George W. Bush in 2000. Home sales in the close-in area rose 7 percent in 2001, to 62,266, from 58,106 in 2000, according to Metropolitan Regional Information Systems, the region's multiple listing service. (That number isn't comprehensive -- it doesn't count sales outside the system -- but it shows the trend.)

However, sales also rose 6 percent the following year, and 7 percent the year after that as the housing boom picked up speed.

In the 2006 election, control of Congress passed from the Republicans to the Democrats. Again, broader trends muffled any effect on the local market. Home sales in 2007 fell 21 percent from 2006 as the boom busted.

It may be possible to see effects in some neighborhoods, said Dan Fulton, president of Fulton Research and Consulting in Fairfax. That might, he speculated, include parts of Alexandria or the District, "especially the rental market," and such emerging neighborhoods as the area around Nationals Park and the cluster of new high-rise buildings in the NoMa neighborhood on the edge of downtown.

On balance, though, he said, "I think you'll probably see a minimal effect."

But in soft and declining markets, lenders are making comps a big deal. Some sellers are forced to renegotiate lower prices with buyers, even after they have a signed contract.

Rather than accepting sales of similar properties that closed as much as six to 12 months ago, lenders and mortgage investors are demanding that appraisers include only the freshest comps, ideally those closed within the previous 90 days, to support their valuations.

They're also pushing for more extensive data on local listings, pending sales and listing-price-to-selling-price ratios before they agree to fund a mortgage.

As a result, growing numbers of sales transactions are being complicated, even knocked off track, as buyers demand that sellers lower agreed-upon contract prices to reflect the lower loan amounts lenders are offering.

"Appraisals have become a real hassle," said Steve Stamets, a loan officer with 20 years of experience at Nationwide Home Mortgage in Rockville. "Some sellers are taking a beating," he said, citing a recent transaction where the appraisal came in thousands of dollars below the signed contract price. Had the seller not agreed to eat the difference -- take a lower price than the buyer had agreed to in the contract -- "the whole deal could have fallen through," Stamets said.

Major lenders and investors such as Fannie Mae and Freddie Mac are "beating down on the appraisal" by demanding 90-day comps or fresher, he said.

In Richmond, appraiser Perry Turner of P.E. Turner & Co. said his firm has seen numerous cases where using newly mandated 90-day or more recent comps, as opposed to those six months or older, has contributed to valuations lower than the price on the sales contract.

"In 95 percent of those cases," he said, "the [listing and selling] agents have gotten together and renegotiated the contract" rather than lose the deal.

In Woodland Hills, Calif., appraiser Kerry Leiman, owner of Leiman Appraisal, defends the tougher standards as producing valuations that are much more finely tuned to short-term changes in local prices.

"Shorter is far better," Leiman said, even if sometimes there are not enough comparable closed sales that fit the lender's tighter time requirements. In those instances, he said, appraisers can look to current listings and use time adjustments based on local market pricing trend data to come up with appropriate estimates.

Turner said that when there are not enough 90-day comparables, he can sometimes persuade real estate agents to disclose in confidence the prices on pending sales, which otherwise are not reported or listed until closing. Pushed by lenders for the freshest possible data on properties, Turner also can tap into the local multiple listing service and statistically derive adjustment indexes for small geographic areas based on the percentage difference between original asking prices and selling prices.

That, in turn, allows him to adjust estimated prices for current listings that are comparable to the property he's appraising. If the listing is for $400,000 and the index suggests that houses in the area are selling for an average of 4 percent below the original list or asking price, the appraiser can estimate the probable value of the unsold comparable house at $16,000 less, or $384,000.

Tim McCarthy, an appraiser in Tinley Park, Ill., agrees that requirements for fresher comps generally improve valuation accuracy for lenders' purposes, but pointed out that they are not foolproof. To the extent that appraisers have to focus on listing-price-to-selling-price and time-on-market indexes, they may miss some of the games that sellers and agents can play, he said.

For example, McCarthy said, a seller with a current listing at an unreasonable price that hasn't sold for months might pull the house off the market, then come back with it as a "new" listing with the same excessive price. As long as the listing date is at least three months from the date the house was pulled off the market, the listing will be counted as new under some multiple listing service rules, and the high asking price may get factored into new appraisals.

In that case, the whole push for fresh data "just totally misses the mark," McCarthy said.

Kenneth R. Harney's e-mail address isKenHarney@earthlink.net.