Low unemployment pumps up Alexandria, Va., home market

— -- Alexandria, Va., a historic city close to the nation's capital, always has been a desirable place to live. It may be even more attractive now.

Concerns about gas prices and frustration with gridlock traffic have sparked more interest in the city, says Susan Mekenney, chairman of the Northern Virginia Association of Realtors.

Workers can rely on four Metro stations within Alexandria's city limits to ride trains to work, instead having to drive. And many Washington, D.C., employers subsidize Metro passes, says Gayl Warman, a Coldwell Banker real estate agent.

Throw in that the metro area has the lowest unemployment rate among the country's top 15 metropolitan areas, and it's no wonder prices (down 5.0%) have not dipped as much as elsewhere, says John McClain, senior fellow at the Center for Regional Analysis, George Mason University.

"We used to call ourself 'recession-proof,' " Mekenney says. "That's not true anymore, but we are not feeling what the rest of the country is feeling."

Job growth is focused on highly paid professional employees, McClain says. That is good news for Alexandria's housing market, because single-family homes are not cheap: The median price is $680,000.

With such high prices, it's no wonder that condominiums have held up better than single-family homes, McClain says. And because they are generally more affordable than homes and townhouses, they give first-time home buyers an option in Alexandria. In December, condominium sales were up 4% from a year ago.

Mortgage rates are low and sellers are willing to negotiate, Mekenney says. Traffic through homes on the market has been good, she says, but that doesn't mean potential buyers are rushing to make offers.

"People are very sensitive and well-informed here," Warman says. "They are also fairly optimistic."