By Maryann Haggerty
Washington Post Staff Writer
Sunday, March 30, 2008

The slowest real estate market in years appears to be translating to nicer houses for Washington area buyers.

Throughout the region, the number of single-family houses and townhouses sold fell sharply last year, dropping by almost a third from 2006, according to a Washington Post analysis of government data on sales prices.

The faltering real estate market that's dragging down the national economy is weighing on home prices here, especially in Northern Virginia.

However, the median house price region-wide in 2007, $420,000, was actually up 0.5 percent from 2006. The median is the point at which half the homes sold for more and half sold for less.

That is a marked contrast with some other closely watched statistics. For instance, this week the Standard & Poor's/Case-Shiller index showed that Washington area home prices in January were down almost 11 percent from a year earlier.

The difference is because of what the numbers measure. Case-Shiller and similar indexes use statistical models to determine how the prices of physically similar houses change over time.

In contrast, median price data aggregate actual sales prices with no attempt to account for physical characteristics. The disparity between the two types of price measurements indicates that buyers were likely to be spending about the same amount as they would have in the recent past but were getting more house for the money.

The number of house sales in the area fell 31 percent, to 58,509 from 84,660.

Condominiums, which were analyzed separately, showed a 1 percent increase in median price, to $289,900. Sales volume was down 25 percent.

The biggest price drops came in two Northern Virginia counties, Loudoun and Prince William, places that are struggling with soaring foreclosure rates. A bank repossession of a house doesn't show up in these price statistics because it's not considered an arm's-length transaction, but foreclosures and other distress sales tend to drag down values around them.

The median price was actually up in the District, rising almost 7 percent, to $480,000. It also rose in the largest suburban Maryland county, Montgomery, going up 4 percent, to $495,000.

The region remains one of the most expensive in the country, even with slow home sales. The priciest jurisdiction last year was Arlington, where the median price of a single-family house or townhouse was $580,000, up 3 percent. Medians in neighboring Alexandria and Fairfax County also remained above $500,000, though they were down from 2006.

The least expensive jurisdictions were Charles and Frederick counties in Maryland, which attract home buyers willing to trade longer commutes for lower costs. The median price in both counties was $325,000.