The Washington area’s housing market isn’t expected to rebound for at least a year, and 2011 could mark a new low for some areas, according to real estate experts. Home prices are expected to stay flat through at least the first half of the year, according to Rick Sharga, senior vice president of RealtyTrac, a foreclosure-tracking firm in Irvine, Calif. But in areas with higher foreclosure rates — like Prince George’s and Prince William counties — the market could worsen.
“In the more distressed areas the potential depreciation could be closer to national averages,” said Sharga, who predicts that home prices nationwide will fall by 5 to 7 percent next year.
Nationally, the market will continue to suffer for years, said Pete Flint, CEO of Trulia, a real estate tracking firm.
| Long road to recovery | |
| When Americans think the housing market will recover | |
| Already recovered | 4% |
| 2010 | 1% |
| 2011 | 10% |
| 2012 | 27% |
| 2013 | 24% |
| 2014 | 12% |
| 2015 or later | 22% |
| Source: RealtyTrac and Trulia | |
“Going on in our fourth year of the post-bubble market … seems to have checked anyone’s hopes for a speedy recovery,” Flint said. “I’d love to say we’ve taken a few steps forward, but the reality is we’re stuck in the mud.”
Prince George’s County has suffered one of the region’s worst foreclosure rates throughout the crisis. In October, its rate was the highest in Maryland with one of every 360 homes filing for foreclosure — nearly three times the rate of neighbor Montgomery County.
But Joanne Darling, president of the Prince George’s County Association of Realtors, said while her area is “not out of the woods with foreclosures,” housing prices have been improving and the market may be bottoming out.
“I think we will continue to see increases in housing prices over next few years,” she said. “We don’t have 30 percent unemployment like Detroit has — we have a good major employer [in the federal government] continuing to employ people.”
The average foreclosure sale in the county is among the lowest in the region at roughly $184,000, according to RealtyTrac.
Anirban Basu, CEO of Baltimore economic consulting firm Sage Policy Group, said the better deals in Prince George’s could help sales there improve, spelling trouble for Montgomery.
“It’s not the case that Montgomery County is fully insulated from the foreclosure crisis in Prince George’s County,” he said. “Even though a household would prefer to live in Montgomery … the attractiveness of buying a home at a discount could be enough to lure a buyer away.”
In Northern Virginia, Prince William and Fauquier counties had an October foreclosure rate similar to that of Prince George’s. But foreclosure sales there are pricier, averaging between $50,000 and $55,000 more per home.
Virginia’s foreclosure sales fell 31 percent during the quarter ending Sept. 30, while Maryland’s sales dropped by 17 percent.
But Jill Landsman, spokeswoman for the Northern Virginia Association of Realtors, said she believes the market there will stay flat, noting the area’s unemployment rate is several points below the national average of 9.8 percent.
“We do expect foreclosures and short sales to continue, but we don’t exactly expect it will get worse,” she said.
However, the X-factor, experts said, is what effect the national investigation into foreclosure practices will have. Many predict the investigation will stall foreclosure filings, creating an influx of filings next year that will further depress home prices.
In addition, a Trulia and RealtyTrac national survey found more homeowners are willing to default on a loan if they owe more than the house is worth. Flint predicted that would make for another record year of foreclosure filings.
Joe Doman, a Re/Max agent in Northern Virginia, said he is telling his clients to list their houses now before they get lost in next year’s swell.
“One of the asset managers I work for, I haven’t gotten a listing from him in two months,” Doman said. “They are saying there’s a lot of [hidden] inventory out there.”
