Washington region posts gains as home prices still falling in most U.S. cities
Wednesday, December 29, 2010; 12:56 AM
The Washington region posted the highest year-over-year home price gains in the nation this fall, as real estate values slumped in nearly every other metropolitan area, a key housing report said Tuesday.
A healthy job market, particularly for high-salaried workers, buoyed demand and prices for housing in the D.C. area, local economists said. Home values climbed 3.7 percent in Washington in October from a year earlier, making it one of only four regions nationally to avoid a dip in prices, the Standard & Poor's Case-Shiller home-price index said.
It is unclear how long the region will be able to buck the national trend. One of the anchors of the local job market - private government contractors - may face significant cutbacks over the next several years as the Obama administration has vowed to rein in defense spending. But many economists expect that the local housing market is strong enough to weather layoffs now that prices appear to have stabilized.
Still, pockets of the region continue to lag behind. In some Maryland counties, values are falling due to aggressively-priced foreclosures, according to new data from George Mason University's Center for Regional Analysis.
The steepest plunge took place in Prince George's County, where the median home value fell by nearly 16 percent from January through November compared with a year earlier. Prices also fell, but less sharply, in Maryland's Charles and Frederick counties, which dropped 4 percent and more than 2 percent, respectively. In contrast, prices in Montgomery County rose almost 2 percent, while those in the District enjoyed a nearly 3 percent gain.
The Northern Virginia suburbs, where job growth has been stronger, did well across the board this year, the George Mason analysis showed.
Prince William County prices jumped nearly 20 percent this year after being hit hard by the housing crisis. The county cleared out a sizeable portion of foreclosures quickly, experts at George Mason said. Meanwhile, in Fairfax and Loudoun, two of the wealthiest counties in the nation, prices rose by more than 8 percent.
"We think prices have made the adjustment and we can move on," said Jim Diffley, chief regional economist at IHS Global Insight. "Given the area's employment picture, we feel there is less risk of a fall in the Washington region than in other parts of the country."
The Washington market's strength contrasts sharply with sagging real estate trends elsewhere in the country.
Of the 20 major metropolitan areas tracked by the Case-Shiller index, only three regions aside from Washington posted year-over-year gains: Los Angeles, San Diego and San Franciso.
The results are more dismal when looking at the results from September to October. Over that span, prices of single-family homes fell 1.3 percent and in every region, including Washington. It was the third-straight month of declines.
What's more, in six regions - Atlanta; Charlotte; Miami; Portland, Ore.; Seattle and Tampa - prices fell in October to their lowest levels since their housing markets began deteriorating in 2006. This "double dip" in real estate represents one of the worst fears of housing analysts and is developing just as it appeared that the overall economy was recovering.