The region’s housing market is showing signs of recovery, with median home prices in some areas nearing pre-recession highs. But experts warn that the market will hit some bumps before it returns to full strength. The strongest signs of growth are in the region’s inner core of the District, Arlington County and Alexandria. In particular, the District’s median price in August was nearly 90 percent of its November 2005 high, and in Arlington County it reached 95 percent of the peak in June 2006, according to data from Metropolitan Regional Information Systems Inc., which tracks the local housing market.
The Washington area is performing at the top of the curve nationally as well, with the highest average home price of any metropolitan area in the country, according to July data released Tuesday by Standard & Poor’s/Case-Shiller.
| Median sales price | ||||
| August 2011 | Peak | |||
| Arlington | $499,500 | $525,000 | ||
| District | $399,900 | $450,000 | ||
| Alexandria | $392,500 | $475,000 | ||
| Fairfax | $420,000 | $515,000 | ||
| Montgomery | $379,900 | $490,000 | ||
| Loudoun | $385,305 | $525,000 | ||
| Prince William | $277,500 | $425,000 | ||
| Prince George’s | $160,000 | $340,000 | ||
| Source: RealEstate Business Intelligence LLC | ||||
However, price data may be skewed, warned Anirban Basu, chairman and chief executive officer of Baltimore economic consulting firm Sage Policy Group. Lenders are more cautious than ever, requiring higher credit scores and lending only to buyers in more stable communities. As a result, it is easier for more affluent buyers — who are more likely to spend more — to get mortgages.
Fairfax, Arlington and Montgomery counties are among those starting to recover, Basu said. In each of these areas, as well as in the District, the number of houses for sale at the end of August was significantly lower than at the end of August 2010, and that shrinking supply can drive up prices.
Even though Montgomery and Fairfax are at about 80 percent of their peak prices, they are at “the head of the class in terms of the pace of recovery,” Basu said.
Montgomery and Fairfax both have good employment, public transportation and public school systems working in their favor, said MRIS Chief Marketing Officer John Heithaus.
In Fairfax particularly, houses are selling after an average 58 days on the market, lower than the 70-day local average and 90-day national average, data shows.
Fairfax real estate agents say high demand is creating a shortage of houses, particularly those under $450,000, said Jill Landsman, spokeswoman for the Northern Virginia Association of Realtors.
By contrast, Prince George’s County will continue to have a slow recovery, Basu said. Home prices there are still at 47 percent of their peak.
The county is still dealing with a large number of foreclosures, which puts it behind in the recovery process, said John McClain, deputy director at George Mason University’s Center for Regional Analysis.
And Heithaus warned that a new wave of foreclosures is likely next year and will hit Prince George’s particularly hard.
“There’s a lot of things that have to take place before Prince George’s County is poised for genuine housing market recovery,” Basu said.
