This impressive graph (click for larger, much more readable version) of housing inventory growth in Northern Virginia is courtesy of the Bubblemeter blog. Let's see, a huge increase in supply; declining demand as short term interest rates get higher (reducing the ability of buyers to qualify under low short-term "teaser" rates) and speculators flee. I think elementary economics tells us what's going to happen next.
UPDATE: I'm not sure how they compile the data, but this site shows that inventory for sale in Northern Virginia has increased around 400% since last March 1. For example, 159 homes in Arlington and 800 homes in Fairfax for sale on March 1, 2005. On February 24, 2006, 673 homes for sale in Arlington, and 4,378 in Fairfax. MORE: But that's nothing compared to Phoenix, where inventory has risen approximately 700% in a year.