- - Thursday, August 11, 2011

Much of the nation is still suffering with a terrible real estate market. As you may know, however, the Washington-area real estate market has seen significant improvement in sales activity, buyer competition and even home prices.

Whenever there is sufficient competition among buyers, home prices are pushed up. The drop in inventory and rise in sales we’ve seen in the past few years have forced buyers to compete in ways we haven’t seen since 2005. As a result, prices have begun to climb back in some area jurisdictions - sometimes even higher than they were before the real estate slump began.

Today’s charts show 2005 median sales prices to provide our benchmark. That was the last year of the real estate boom that pushed prices so high.

I’ve also given you 2008 data. That was the year prices in much of Virginia hit bottom. Maryland prices took longer to fall.

You can see that every Maryland county had lower sales prices in 2010 than in 2008. Meanwhile, prices already were climbing back up in parts of Virginia. That’s not surprising, because buyer competition has been much stronger in Virginia in recent years.

Now it’s picking up in Maryland, too. This year we have seen prices climbing in some Maryland counties, such as Montgomery and Howard.

One word of warning: June’s data is not as reliable as the annual data represented by the other three bars. Home-price data for a single month is susceptible to fluctuations caused by the sale of a few very expensive or very inexpensive homes.

Also, home prices usually rise the most during the more active spring market. So we might see monthly price statistics drop a bit as the year goes on.

All of these fluctuations even out in annual data, making 12-month data preferable for serious analysis.

Send email to csicks@gmail.com.

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