- - Thursday, September 15, 2011

August sales of existing homes in the Washington area were up 20 percent over August 2010. Maryland led the way once again, with an increase of 29 percent compared to Virginia’s 14 percent.

The biggest gains were made in Prince George’s County, where sales were up 64 percent over last August. That has a lot to do with the affordability of homes in Prince George’s.

Homes sold in August had a median sales price of $160,000 in Prince George’s County, compared to $186,000 in August 2010, and $320,000 back in 2007.

That’s right - homes in Prince George’s sold for half as much as they did four years ago. And it wasn’t just in August. The same drop can be found when you look at June and July numbers.

This is, of course, terrible news for anyone who bought in 2007 and is selling now. But it is great news for buyers, and the sales figures reflect their enthusiasm. Total sales for the first eight months of 2011 are up nearly 50 percent compared to the same period in 2010.

We would not see that kind of demand unless prices had fallen so much. The same thing happened in Virginia’s Prince William County in 2008.

When the real estate market began its collapse in late 2005, home prices began to fall sharply in Prince William, where many borrowers had taken out subprime loans and overpaid for their properties.

By the time prices bottomed out in Prince William, they had fallen 46 percent. But that caused home buyers and investors to come running. In 2008, sales shot up by more than 70 percent. A couple of years after that, we saw sales prices rebounding in Prince William County.

The same should happen in Prince George’s County before long. Sales were up significantly in 2009 and 2010. With three years of increasing sales and an inventory of unsold homes that is down by 10 percent, it won’t be very long before competition among home buyers begins to push home values back up in Prince George’s County.

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