Washington Region’s Home Prices Heat Up as U.S. Cools Down
Tips & Trends
From Rory S. Coakley on some of the latest real estate news and happenings.
The Washington area’s home prices in May outperformed the rest of the nation by leaps and bounds – again – while other markets continue to double dip, a new report says.
Prices in May rose 4.9 percent in the Washington region from a year earlier, according to a report issued Thursday by the real estate tracking firm Clear Capital. The nation’s capital is just one of three markets that posted annual gains in May, with the other two gaining less than 2 percent.
Nationally, the home prices fell by 7.6 percent from last year.
“D.C. has been definitely been the darling, the one that’s been able to hold on,” said Clear Capital spokesman Alex Villacorta.
After more than an entire year of recovery, Washington-area homes are averaging values similar to early 2004 levels, Villacorta said. That’s a roughly 13 percent recovery from the bottom in early 2009.
According to Metropolitan Regional Information Systems Inc., a separate real estate tracking firm, the median sale price in April (the most recent data available) was $334,000 for the Washington area. The average sale price was more than $411,000.
In addition to a stable economy, area sales are benefiting from the fact that there are fewer quality homes on the market than in past years so competition is stiff.
“At the same time, there’s an increase in cost of quality rentals,” said John Heithaus, MRIS’ chief marketing officer. “It’s placing the well-qualified homebuyer in a much more precarious position – that’s something that’s unique to us.”
Prices also are helped by the declining portion of bank-owned houses on the market. While bank –owned homes – which can bring down sale values – make up a greater percentage of listings in the Washington market than in other well-performing markets, the rate has declined by more than half from its peak of about 39 percent.
That’s giving the market a return to normalcy.
“I think 2011 is the first time in about three years we’re seeing seasonal patterns more consistent with [usual] levels,” said the president of consulting firm Miller Samuel Inc.
But other markets will have to wait longer. Bank-owned homes as a percentage of homes on the market climbed to more than 50 percent in Fresno, Calif., Minneapolis and Detroit last month.
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Rory S. Coakley
Coakley Realty, Inc.
20 Courthouse Square, Suite 107
Rockville, MD 20850