Washington area home prices fell 5.5 percent to $382,353 in the last quarter of 2011 compared to the same period a year earlier, as the availability of jumbo loans and economic uncertainty caused many buyers and sellers to stay out of the market.
A new report from Delta Associates shows that the area had been building modest momentum in terms of home sales and price increases until the final months of 2011, when the availability of federally backed loans expired and local hiring, particularly in the professional services sector, started to slow.
One of the bright spots was in parts of Northern Virginia, where prices either held steady or saw very modest increases, particularly in Loudoun and Prince William counties.
“The pace of the recovery may remain volatile,” Delta’s report says. “In 2012, we expect that rising demand will yield modest yearly housing price gains.”
Some data points, from the Delta report:
* The number of days a home spends on the market increased by 10 days to 80 days in the fourth quarter of 2011 compared to the same period in 2010.
* The average price of a home in the urban core of the District, Alexandria and Arlington fell 6.2 percent to $508,235.
The District: Prices fell 7.3 percent
Alexandria: Prices fell 1.4 percent
Arlington: Prices fell 5.8 percent
* The average price of homes in the “inner ring” suburbs, including Fairfax, Montgomery and Prince George’s counties, fell 6.9 percent to $367,886.
Fairfax County: Prices were flat, down 0.3 percent
Montgomery County: Prices fell 7.4 percent
Prince George’s County: Prices fell 9.9 percent
* The outer suburbs of Loudoun, Prince William and Frederick counties fared comparatively better, with prices down on average 1.3 percent to $314,232. Most of the decline came from Frederick County.
Prince William County: Prices up 1.3 percent
Loudoun County: Prices up 0.5 percent
Frederick County: Prices down 6.5 percent
Of course, many real estate agents will point out that the reason why 2011 doesn’t look so good is because 2010 was pumped up by the federal tax credit offered as an incentive for homeowners to buy. The tax credit expired at the end of 2010.
Still, inventory remains very low, and as a report out earlier this month by MRIS showed, it’s at a low not seen since 2005 in the area. Delta’s report does not forecast any uptick in housing — particularly prices — during the first half of 2012, but is hopeful about the rest of the year. The region, it implies, remains in a holding pattern until policymakers are more clear about spending cuts to the federal budget and its impact for local contractors and employees.
For the Washington economy, the report says “growth will be limited during the first half of the year, as consumers and businesses remain cautious about the economy. We expect conditions to improve during the second half of 2012, as the economic picture becomes clearer and the outcome of the federal budget is better established.”