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Posted by: Prashant Gopal on March 10, 2008
Average home prices in Washington D.C. and nearby suburbs are on the rise, according to data from the Center for Regional Analysis at the George Mason University School of Public Policy.
In the city, average home prices for February increased 3.6% compared to February 2007. In January, average prices jumped 11.5% and have been increasing since October, according to the university group’s analysis of data from MRIS, the D.C. area multiple listing service.
Home prices in Arlington, a Virginia suburb very close to D.C., dropped 3.1% in February after climbing 13% in January. Prices in Alexandria, Va. rose 2% in February.
But more distant suburbs have suffered from an oversupply of new construction. Subdivisions proliferated during the boom where land was more affordable. In Prince William County, home prices dropped 25% in February compared to a year earlier. And prices fell 12.3% during the same period in Loudoun County.
I should note, home prices in D.C. fell 9.4% in December according to the Standard & Poor’s S&P/Case Shiller Home Price Indices report, which tracks sales of the same homes over time and is generally considered to be the best measure.
But John McClain, senior fellow and deputy director for the Center for Regional Analysis, said the multiple listing service data is sometimes more accurate in a down market.
“With the big drop in transactions, their [Case Shiller] data base is more limited,” McClain said in an e-mail. “And they only do single family detached which in down transaction times give them fewer data points. It’s somewhat oranges and apples right now. In normal times, their data [and our data] pretty much track the same curve.”
I would love to hear from folks living in or around D.C. What’s your impression of the market?
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.