Monday, January 14, 2008

The Evers & Co Real Estate Report for December 2007

While December showed a continuing increase in inventory and a decrease of 27% in sales volume over last December, the good news was an increase in average price for the third month in a row, with Washington, D.C. leading with price increases of 8.75% over December 2006. The market continues to show two distinct tiers: the close-in neighborhoods enjoy stronger sales, while the outlying areas have slowed down to a crawl. This is also reflected in the foreclosure rate: Washington, D.C. has an average of 22 foreclosures per 10,000 households, while, for example, Prince William County is running at 262 per 10,000 homes. While Washington, D.C. rose to an 8-month supply of inventory in December, the farther-out neighborhoods in our study have a 10+month supply.

John McClain of the Center for Regional Analysis at George Mason University, predicts that barring a national recession, we should see a recovery in the housing market in 2008. Recognizing the two tiers in the Metro area marketplace, he expects the close-in neighborhoods to recover quickly, while outlying areas will take longer, especially the areas with the highest inventory levels and foreclosure rates. So, while Washington, D.C. could be completely back on track by the end of 2008, the far suburbs may need another year or two to bring inventory levels down from the current 10+ month supply to the 6 1/2-month supply which is the indication of a healthy market.

* Statistics are taken from the Metropolitan Regional Information System for three areas: Washington, D.C.; Montgomery County, Maryland; and Fairfax County, Arlington, Alexandria and Falls Church, Virginia.

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