The D.C. region has been called the leader of the nation’s housing market. Indeed, even as other markets across the country begin to recover, prices in the Washington area continue to rise and have been up for 26 out of the last 30 months, according to data from RBIntel.
But, as everyone knows, all real estate is local, and the recovery has been markedly different around the region. In the Washington metropolitan statistical area, or Washington MSA (which is defined as the District and 21 counties and cities in Maryland, Virginia and West Virginia), the median sales price is at 80 percent of the peak. However, there is wide variation across the region. In general, price recovery is more likely to be in closer in locations. The Virginia suburbs generally have fared better than the Maryland side of the river.
The uneven recovery across the region suggests that affordability is a minor issue in some places but an increasingly pressing issue in others. For example, in Prince George’s County, where the median sales price in April is still just half of the county’s peak, housing remains relatively affordable. In the District, and in Arlington County and the City of Alexandria, on the other hand, affordability is a pressing issue again. The median home price in Arlington County was nearly $550,000 in April. The median price of a single-family home (excluding condos, but including townhouses) in the county was $680,000.
These are the same prices we saw five or six years ago when affordability was a front and center issue. Interest rates are somewhat lower now than they were at the market peak — which makes the overall cost of housing lower — but incomes and families’ purchasing power have been flat. In jurisdictions where prices have returned close to peak, it is very difficult for anyone but the highest income families and individuals to buy a house.
Amid the news of the continued recovery of our housing market, it is important to acknowledge that affordability is still an issue for many people. In some jurisdictions, affordability is just as big a problem now as it was at the peak of the housing market.
Lisa A. Sturtevant is an assistant research professor at George Mason University’s Center for Regional Analysis.