Today’s charts look at the Washington region’s resale prices in a different way. By spreading out the past 21 months on one chart, you can see prices have remained relatively stable in some jurisdictions, but have fallen significantly in others.
Let’s discuss the most dramatic case first. Median sales prices in Prince William County have plummeted due to a large number of foreclosures that swamped the county with excess inventory. However, the steep drop in prices has generated unexpected sales activity there.
Prices have dropped in many other jurisdictions, but it hasn’t been the smooth slide downward seen in Prince William.
For one thing, prices bob up and down each month because different homes are sold each month. I know that sounds obvious, but you have to remember that a few very expensive or inexpensive homes can skew a month’s data.
A good example is Montgomery County in July 2008. It looks like home values shot up $35,000 in one month and fell by $37,000 the next month. There’s no way home values actually were on that kind of roller-coaster ride. It was simply a handful of very expensive home sales that pushed the data up for one month.
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Despite these kinds of monthly fluctuations, you can see some trends as you study the fever charts. Look, for instance, at the shaded area from February 2007 to July 2007. This indicates the most active sales season of each year. This is when home prices tend to rise the most due to competition among home buyers.
During this spring market of 2007, home prices rose in Arlington, Alexandria, Howard and the District. Back in the spring of 2004 and 2005, when sales were still very active, I found that every jurisdiction experienced this kind of price increase.
Now, however, prices are trending downward instead of upward. The Virginia charts, in particular, reveal a rather clear decline in home prices between July 2007 and February 2008.
This spring, we didn’t even see the handful of price increases that we had seen in 2007. Most jurisdictions did well to simply retain value during the spring market of 2008.
Someday, home sales will pick up enough that we’ll see home values rise again. I know that’s hard to imagine, but it will happen someday. However, I would rather not speculate about when that will be.
Contact Chris Sicks by e-mail (email@example.com).