Washington-area home prices rose in April and May, but experts caution that values still have a long way to go.
The District, Arlington and Alexandria area’s price index level of 169.49 placed second in the country to New York, according to the Standard & Poor’s/Case-Shiller Home Price Index. The index is based on home appreciation values since January 2000, with a base value of 100.
Area home prices increased 0.8 percent from March to April and 1.3 percent from April to May, but the area’s year-over-year May home prices dropped by about 15 percent compared with last year.
“The pace of descent in home price values appears to be slowing,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s.
Blitzer, though, stressed that the market has a way to go.
“While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17 percent on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation,” he said.
Areas with high volumes of inventory, overbuying and foreclosed properties — like the Sun Belt and California — generally scored lower, said Maureen Maitland, vice president of index services at S&P.
“A lot of it seems to be regional,” she said, adding that a major factor in the indices was whether home prices “overshot” during the housing boom several years ago.
Local real estate agent Donna Evers said sales in the District, Fairfax County and Montgomery County were a mixed bag last month.
One positive indicator is the current 3.8-month housing supply in the Washington area, compared with a six-month supply last June, she said. Home prices are down 16 percent this year, compared with 1.8 percent last year.
“In order for the stuff to start selling again, you’ve got to have price reductions,” she said.
Still, while houses between $500,000 and $800,000 are receiving multiple bids, more high-end houses are struggling, because lenders are not offering enough readily availablefinancing, even for buyers with good credit scores, she said.
“One month by itself is too little to go on in terms” of trends, she added.
Existing-home sales nationwide have risen three consecutive months, according to the National Association of Realtors. Further, new-home sales jumped 11 percent in June — the third consecutive monthly increase — according to the U.S. Commerce Department.
