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Posted at 10:00 AM ET, 02/10/2012

Washington home prices fall one percent in January

The median price of Washington area home sales fell 1 percent to $310,000 in January 2012, compared with the same period a year ago, but segments of the market showed signs of strength, even though overall inventory levels remain limited.

The average home in Washington is on the market for 86 days and is selling for 93 percent of the asking price — figures that have remained about flat for the past year, according to data released Friday by RealEstate Business Intelligence, a division of the region’s multiple listings service. Some parts of the region, however, showed price gains and corners of the market, such detached homes, are in high demand, as evidence that buyers are jumping on the best properties to hit the market.

The median price for detached homes in the region increased 2.9 percent in January to $385,898; median prices for townhouses fell 3.2 percent to $300,000; and condo prices fell 3.9 percent to $230,000.

Also, sales of foreclosed homes continued to decline, as the region pulls further away from the worst of the housing crash. The region’s inventory of foreclosed homes for sale fell 67 percent in January, compared to the same period a year ago.

According to data, half of the jurisdictions in the region — mostly in Northern Virginia — saw a year-over-year increase in median sales price: Arlington (17.2 percent), Falls Church (16.6 percent), Alexandria (2.1 percent) and Fairfax County (2.1 percent).

The number of homes for sale has fallen to a level not seen since 2005, and RBI predicts the low inventory will start to result in modestly rising home prices this year. The number of listings has fallen 25 percent compared to January 2011.

But, similar to the home price trend, the region is divided with Northern Virginia communities showing gains, while suburban Maryland and parts of the District continue to struggle.

The number of homes for sale in January grew more than 100 percent in Falls Church, 32 percent in Arlington and one percent in the District. Prince George’s County saw the largest decline, with 24 percent fewer sellers compared to a year ago.

In separate report released Thursday, real estate Web site Zillow forecast that the Washington area would lead the nation’s metro areas in home values, with a 1.3 percent gain. That figure, however does not factor in the impact of possible federal government spending cuts.

The Washington area benefits from having a strong employment base in four areas: government, health care, universities and military, according to Zillow chief economist Stan Humphries. “Any city or metro area that has one or two of the four is doing better than the rest,” he said. “D.C. has all four.”

Humphries estimates the national housing picture will continue to slowly slog through the large amount of negative equity, which will take years. He expects the market to become healthy again in 2016, with Washington’s housing sector showing signs of stronger health a year or two before then.

By  |  10:00 AM ET, 02/10/2012

 
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