The worst of the housing downswing is overin the D.C. area, and prices, buoyed by job growth, should start rising moderately in about 18 months, regional housing expert Stephen Fuller predicted Thursday.
“Housing prices are still soft,” Fuller told The Examiner, “but the market is beginning to correct this year in Arlington, Alexandria and Fairfax.”
Prices in those areas have stopped falling and are actually up marginally, said Fuller, head of the George Mason University Center for Regional Analysis.
Housing prices never dropped in suburban Maryland, nor did the price of single-family detached units in the District, though the D.C. condo market has been uneven.
Outer suburbs in Prince William, Loudoun and Stafford counties are still suffering and will probably be slower to recover, Fuller said.
While the average time it takes a Fairfax house to sell is down to 68 days, houses in the outer suburbs are languishing on the market for four to five months. Three months is historically the norm, Fuller said.
“The outer suburbs have a bigger inventory of unsold new homes,” Fuller said. “That’s where the big subdivision construction projects have been.”
“Our market in the D.C. metro area is different,” Fuller told a room full of Realtors at the National Virginia Association of Realtors’ annual economic summit Thursday.
A strong economy fueled by steady federal spending insulates the D.C. area from volatile shifts in the housing market, he and other experts said.
Metro area jobs are on track to grow by more than 40,000 this year and by even more than that in both 2008 and 2009 — bringing workers to the area who will need a place to live.
“Household formations have stopped, but jobs have increased,” said Lawrence Yun, senior economist for the National Association of Realtors.
“Housing prices will begin stabilizing, but it depends on when pent-up housing demand releases,” Yun said. “It could begin early next year.”
Reducing the inventory of unsold homes in the region will be critical to the growth of the housing market, and Fuller said he’s seeing early signs of that.
“We’re selling more houses than we’re listing in Fairfax and Arlington and Alexandria,” he said. “Sales have to continue exceeding listings for another year in order for housing prices to start moving up.”
