As we can see in the chart from 2000 to 2006 prices had gone up two and a half times in the Washington, DC area (blue line). Now, this was the average increase in this area, some areas saw prices triple during those 6 - 7 year period.The recently released Case Shiller index for the Washington area showed that prices from March 2007 to March 2008 had declined by 14.4% (nominally). Prices declines are indeed accelerating, as prices in the last 6 months have fallen 11.1% which on an annualized basis is much over 20%.
Prices continue to fall. Although prices are falling slowly in the desirable neighborhoods within the Beltway. Far out suburbs and condo units are experiencing larger percentage price declines. In the metropolitan area a declining housing market is a reality.
Inventory continues to remain very elevated. Most areas there is a months supply which is greater then 6 months which usually corresponds with declining prices. In the inner suburbs of Northern Virginia the months supply stood at 7.3 in April.
- Washington, DC proper: 9.8
- Prince George's: 20
- Montgomery County: 9.3
- Loudoun County: 8.4
There are still a boatload of foreclosures on the market. "Although Fairfax has not been hit nearly as hard by foreclosures as neighboring Prince William and Loudoun counties, the number of foreclosures has risen dramatically as a result of the subprime mortgage crisis -- from 198 in 2005 to 4,527 in 2007. Most of the foreclosures are clustered in Springfield, Herndon, Centreville and the Route 1 corridor. The situation has raised concerns about depressed property values, a decline in maintenance and higher rates of crime, including vandalism. Waashington Post May 20th)"
Another wave of foreclosures is coming as the option arms reset. Foreclosures are making a significant contribution in lowering prices in areas hard hit by them.
The Washington - Baltimore area is not recovering from the housing decline. Prices continue to fall and inventory remain very high. Prices are falling slowly in the desirable neighborhoods within the Beltway, howeever far out suburbs and condos are experiencing larger price declines.
In the metropolitan area a declining housing market is reality. For real estate, this spring's real estate season has largely been a bust. Housing busts usually last many, many years. Further price declines will continue this year.