| Nation’s best and worst home price declines | ||
| Percent change in home prices since 2006 peak | ||
| Rank | Region | Decline |
| 1 | Buffalo-Niagara Falls, N.Y. | -4.1% |
| 2 | Tulsa, Okla. | -4.8% |
| 3 | Houston | -4.9% |
| 77 | Washington | -26.7% |
| 98 | Cape Coral-Fort Myers, Fla. | -56.1% |
| 99 | Stockton, Calif. | -58.6% |
| 100 | Modesto, Calif. | -59.6% |
| Source: The Brookings Institution | ||
The region’s home values are among the slowest in the nation to recover from their 2006 pricing peak, according to a new report. The Washington area, which includes Northern Virginia, the Maryland suburbs and parts of West Virginia, ranks 77th in the country’s top 100 metropolitan areas, according to the Brookings Institution’s MetroMonitor report released Wednesday.
However, despite the mighty fall — home prices here have dropped by 26.7 percent since the fall of 2006 — the report says housing was still 8.6 percent overpriced as of this spring.
That means that despite the leveling off local home prices have experienced in recent months, the region’s median home value may still be in for a dip, said the report’s co-author.
“I would expect housing prices to decline overall unless there is a big ramp up in federal spending,” said Howard Wial, a Brookings fellow. “And we’re not expecting to see that.”
By comparison, housing was more than 2 percent overpriced in 23 metropolitan areas, the report said. In 41 areas, housing prices in the second quarter were more than 2 percent below where they would have been had they followed trends in employment, wages, and interest rates since 1999 — in other words, if there hadn’t been a housing boom.
The top 100 markets saw housing prices fall 23 percent from 2006 on average. Among the weakest areas are Stockton, Calif., Cape Coral, Fla., and Las Vegas, where home prices are still less than half their peak value.
The report is on prices for single-family homes whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac.
Wial noted, however, that his prediction doesn’t mean that every home in the region will decline in value as housing here is diverse. In the District alone, the median home value across the Anacostia River in Southeast is $240,000. In Northwest, the median value is $783,000, according to the U.S. Census Bureau’s American Community Survey.
But Wial said he couldn’t say whether only the more expensive homes were likely to fall in value over the next year.
And good jobs aren’t necessarily a cure-all — Wial differs from some economists who say D.C.’s employment opportunities will keep the housing market from falling further.
“We consider a metro area’s job and wage growth as among the economic fundamentals that will affect where housing prices will go,” he said. “So the fact that D.C. has a relatively low unemployment rate is already factored in.”
The metropolitan area’s unemployment rate was 5.9 percent during the second quarter; the nation averaged 9.2 percent.
