By Alejandro Lazo
Washington Post Staff Writer
Saturday, March 28, 2009
By any measure, 2008 was a brutal year for the local real estate market, as gains made during the housing boom continued to unravel.
Home sales fell throughout the region as credit dried up and buyers fearful of an increasingly uncertain job market sat on the sidelines. No local jurisdiction except the District was spared from falling home prices, and some of the hardest hit Zip codes in the suburbs had declines of more than $100,000.
Region-wide, the median sales price for single-family houses and townhouses fell 8 percent, to $382,500 from $417,000, in 2007, according to a Washington Post analysis of government sales records. The median price for condominiums also fell 8 percent, to $268,000 from $289,900. The median is the point at which half the homes cost more and half cost less.
The economic events of the year played out in every segment of the market. The wave of distressed sales ¿ those homes sold by banks or by homeowners facing foreclosure ¿ dragged down prices at the lower end. Meanwhile, the stock market's dive in 2008, 38 percent as measured by the Standard & Poor's 500-stock index, kept wealthier home shoppers from committing to purchases at the higher end, real estate agents said.
"It was depressing," said Mark Smith, a real estate agent with Coldwell Banker Residential Brokerage in Gaithersburg. "We saw an increase of properties coming on the market, a decrease of credit flowing to what banks consider 'marginally qualified people' and an increase in short sales and foreclosures."
Not all the news was bleak. Midway through the year, the glut of foreclosure properties spurred a buying spree in some jurisdictions, particularly Prince William County, as many first-time buyers found prices within their reach and investors snapped up homes.
"There was a significant shift in the market toward the lower end .?.?. that we look at as a very encouraging sign," said David Howell, a managing broker in the McLean office of McEnearney Associates. "You start to see the rebound when first-time home buyers and investors come back."
-- The District fared the best out of all the jurisdictions in the region, according to The Post's analysis. While sales volume slid 30 percent, to 2,239 homes from 3,212 in 2007, the median home price rose 8 percent, to $520,000, from $480,000.
The biggest price increase occurred in Georgetown's 20007 Zip code, one of the District's most expensive neighborhoods. There, the median home price shot up 18 percent, to $1,075,000 from $909,150, even as the number of sales decreased to 199 from 237.
"The people buying there are going to be more economically insulated, just by the mere fact that you have to be wealthy in order to buy there," said Joseph Himali, owner of Best Address Real Estate in Georgetown.
Meanwhile, the Zip code with the biggest drop in median home price was 20011, which includes parts of Petworth and Columbia Heights. There home prices fell 10 percent, to $375,000 from $415,000, and homes sales dropped to 290 from 433. Data for the District and the other jurisdictions in this story exclude condos.
"The move-up market has continued to stay strong in D.C.," said Holly Worthington of Long & Foster Real Estate. "It is the first-time-buyer market that got hit with a whammy when the subprime market fell."
-- Prince William County, plagued by foreclosures stemming from the subprime meltdown, had the region's steepest price decline. The county's median home price fell 23 percent, to $300,000, in 2008, down from $390,000 in 2007. Volume also plummeted, with 4,961 homes sold compared with 6,755.
However, sales volume shot up in some neighborhoods with the steepest declines in prices. Many of those homes were those that had been foreclosed on by lenders and then sold at steep discounts.
"What we really had happen in 2008 is we had a convergence of the price of homes with the median income of the county," said Lingiam Odems Jr., a real estate agent with Buyer's Advantage Real Estate in Woodbridge. "People are now able to go into and get homes with documented loans ¿ no need for creative financing."
In Manassas Zip code 20110, the median price of a home fell 48 percent, to $175,000 from $335,000, but the number of homes sold surged to 1,007 from 405. A similar story played out in neighboring Manassas Park, Zip code 20111, where the median price of a home sold fell 51 percent, to $180,000 from $364,950, and sales leapt to 549 from 278.
In the eastern parts of the county, around Woodbridge, where home prices also declined, though not as sharply, sales volume also fell.
-- In Loudoun County, demand picked up as prices fell. The median home price dropped 17 percent, to $410,000 from $492,000, and the number of homes sold jumped to 4,885 from 4,034. The falling prices are a legacy of Loudoun's ambitious growth during the boom years.
"It's really hard to stop that kind of growth when the marketplace changes so quickly," said Debbie Wicker, a real estate agent with Re/Max Allegiance.
The eastern part of the county, around Sterling and Ashburn, where many builders had put up high-density developments during the boom, posted some of the biggest price drops. In Zip code 20164, just north of Sterling, sales increased while home prices declined 30 percent, to $260,908 from $375,000.
Ashburn's 20147 Zip code had the most sales in the county, 777, up from 674. The median price declined 18 percent, to $400,000 from $488,500.
-- In Fairfax County, the median home price fell 14 percent, to $445,000 from $520,000, and volume declined to 9,852 homes sold from 10,851. Several Zip codes had six-figure drops.
The median home price for a house in Herndon, Zip code 20170, for example, fell 34 percent, to $309,000 from $469,900, but home sales jumped to 499 from 317.
A similar pattern emerged around Springfield, with Zip code 22150 posting a 25 percent decline, to $350,000 from $465,000, and home sales increasing to 259 from 184. The median home price for Zip code 22151, just north of Springfield, fell 18 percent, to $375,000 from $460,000, while home sales increased to 208 from 148.
-- In Alexandria, the median home price fell 5 percent, to $550,000 from $580,000, while the number of homes sold fell to 832 from 1,315. It remained the region's priciest jurisdiction.
The Lincolnia area, Zip code 22312, took the steepest hit, with the median home price falling 10?percent, to $434,000 from $482,500, and volume remaining relatively flat, with 21 homes sold, vs. 24.
-- In Arlington, the median home price fell 7 percent, to $543,000 from $581,000, while the number of homes sold fell to 1,375 from 1,713.
In South Arlington's Zip code 22204, the county's least expensive area, prices fell 11 percent, to $385,150 from $435,000, while home sales also decreased to 288 from 310.
Zip code 22209, which includes Rosslyn, posted a 57 percent increase, to $602,000, on 66 sales, from $383,500 on 62 sales in 2007. That neighborhood includes a mix of small and large homes, and the median price has swung widely in recent years.
-- Montgomery County experienced the steepest drop in home prices among the suburban Maryland jurisdictions, a sharp reversal for a county that had otherwise withstood some of the worst of the housing bust.
The median home price fell 11 percent, to $440,000 from $495,000, and sales volume plummeted to 7,195 from 8,598.
While prices declined in the majority of Zip codes, some of the steepest drops were in the northernmost areas.
Germantown, Zip code 20874, posted an 11 percent decline, falling to $314,990 from $353,750. Nearby Gaithersburg, Zip code 20877, posted a 20 percent decline, to $350,000 from $438,060. Just east of Gaithersburg, in Zip code 20855, the median sales price fell 20 percent, to $425,000 from $529,000.
Smith, of Coldwell Banker, said the market has been complicated by waves of short sales, transactions in which lenders agree to let owners sell for less than they owe ¿ a time-consuming deal that many banks are not good at executing, he said.
-- The housing market in Prince George's County continued to erode. The median home price fell 7?percent in the county, to $314,910 from $340,000, while sales volume fell to 3,831 from 7,993 in 2007.
The northwestern part of the county experienced particularly broad declines. "A lot of people are more concerned about their commute," said Boyd J. Campbell, managing partner and associate broker at Century 21 Home Center in Lanham. "A lot of those communities have fallen out of favor, and consequently the demand for those properties has fallen."
Hyattsville's Zip code 20783 posted one of the largest declines in the county, a 26 percent drop, to $300,000 from $405,000, while home sales fell to 76 from 211. Nearby Zip code 20781, also Hyattsville, experienced one of the few sales-price increases in the county, as the median price for the 83 homes sold rose to $395,000 from $355,000.
The median home price in Beltsville, Zip code 20705, fell 17 percent, to $330,000, from $396,000, while sales dropped by nearly half, to 90 from 176. Zip code 20785, which encompasses part of Landover, meanwhile, had an 18 percent increase, to $310,000 from $263,000, while volume fell to 243 from 459.
Other Maryland jurisdictions also took a hit.
-- In Anne Arundel County, the median price fell 5 percent, to $322,500 from $339,000. Home sales fell to 4,928 from 6,479.
-- In Charles County, the median price fell 5 percent, to $309,990 from $325,000. There were 1,170 sales, down from 1,918.
-- In Calvert County, the median price fell 5 percent, to $315,000 from $332,800. Sales fell to 500 from 782.
-- In Frederick County, the median price fell 8 percent, to $300,000 from $324,900. Sales fell to 1,490 from 2,473.
-- In Howard County, the median price fell 3 percent, to $391,903 from $402,500. Sales fell to 2,369 from 2,972.
-- In St. Mary's County, the median price fell 7 percent, to $285,000 from $305,000. Sales fell to 899 from 1,080.