by Karen Briscoe
June 2, 2011
That headline is certain to grab your attention if you live in the DC metro area! It just so happens though that it was the last line of an article with the headline: Home Prices Hit 2002 Levels by Julie Schmit which appeared in the USA Today on June 1, 2011. Similar articles appeared on the front page of the Wall Street Journal and the Washington Post. All of this news was in response to the release of the S&P 20-city composite index comparing home sales in March 2011 with March 2010. The DC metro area is the only major market area of the 20 that did not go down year over year.
The month over month increase (March 2011 over February 2011) for the Washington DC metro area was 1.1%. Only one other market area experienced a rise in prices and that was Seattle which had only 0.1%.
The headlines of all of these publications indicated that prices are at 2002 levels. The local Sun Gazette newspaper has tracked the last 36 years of home sales in the Northern Virginia marketplace of Fairfax, Arlington, Alexandria and Falls Church. According to that report in 2002 the average sales price of a home was $319,292 and there were 27,936 total sales. There was double digit appreciation year over year from 2001 through 2005. Then in 2006 and 2007 the appreciation was flat at 0.1% per year. The peak year in average sales price was 2007 at $538,463. The peak year in terms of number of sales was 2004 at 32,735. In 2010, the average sales price was $469,018 and there were 17,858 sales. According to these statistics, the average sales price for this Northern Virginia marketplace is currently between 2004 and 2005 levels.
With an increase year over year of 4.3%, that statistic tells me that the Washington, DC metro area including Northern Virginia has hit the bottom and is slowly but surely making its way back up to peak levels. Typically these market cycles take 7 years from peak to peak, so we should see peak prices sometime between 2012 to 2015.
The bottom line is it is important to read entirely through an article to get to the last line, because if I had skipped the end of this article, then I would have missed the critical message to the Washington DC metro area in terms of real estate values. That is that DC is still recovering but clearly the best place to be in the United States in terms of owning and investing in real estate. The link to the June 1, 2011 article in USA Today: http://www.usatoday.com/money/economy/housing/2011-05-31-home-prices-case-shiller_n.htm#
The best source for understanding the local real estate market is an experienced and knowledgeable Realtor. Karen Briscoe with the Huckaby Briscoe Conroy Realty Group would be delighted to be of assistance. Please contact via the means most convenient for you: www.HBCRealtyGroup.com, 703-734-0192, Homes@HBCRealtyGroup.com.