Wednesday, July 26, 2006

Home Prices Drop in the DC Region

Is this the start of the bubble?

Washingon Post reports:

In what may be the most telling sign yet that the real estate market here has shifted downward, median prices of homes in several parts of the Washington area have declined when compared with the same time last year.

In Loudoun County, for example, the median price of homes sold dropped 1.2 percent last month, compared with June 2005, according to Metropolitan Regional Information Systems Inc., the area's multiple listing service. In Fairfax County, prices fell by half a percent in May and a tenth of a percent in June. And in the District, the decrease was 0.8 percent in March and 1.2 percent in May, compared with the same months last year, even though prices in the District in June were higher than the year before. The median is the point at which half of the houses cost less and the rest more.

The declines are small, and certainly not universal. Prices continue to rise in some areas, most notably Prince George's County, where houses are still relatively inexpensive. But the drops are significant because they mark the first time in half a decade that home prices have fallen in a 12-month span, illustrating just how much the real estate landscape has changed after five years of double-digit growth in home prices.

The areas with declines have some things in common: swelling numbers of houses for sale, slowing sales and lots of new houses on the market. In Loudoun, where developers have put up acres of new subdivisions in recent years, nearly 5,000 properties are for sale via the multiple listing service, which includes mostly resale homes. That compares with 1,800 a year ago. Homes there now take an average of 75 days to sell, compared with 21 days a year ago. In the District and Fairfax County, the number of unsold homes and time on the market has also increased, boosted by a large supply of condominiums.

Read the entire story here.


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