Foreclosed homes have failed to drag down DC housing market
In the wake of the housing bust of the late 2000s, the national market can be tough to read. Foreclosed-homes, which often sell at a significant discount, can bring down surrounding home values. With this in mind, it can be difficult to properly gauge a metro's market, as increasing sales suggest one thing and declining prices suggest another.
However, with good analytic measures, it is possible to tease out the relative strength of a region with relative accuracy. Some markets, according to The Associated Press, have seen both relative gains in sales price and total sales. People considering buying real estate in Washington, DC, will be happy to learn that the District is on this short list.
According to the source, the nation's capital has maintained strong demand throughout the wake of the economic downturn, and it's foreclosure rate has slowed considerably in the last few years. Because of this, home prices in the District have risen 3.9 percent over the past year, even when factoring in foreclosed-home sales.
This news shows that, even as most metros in the country struggle with devalued homes, DC has managed to not only stay even, but improve. Compared with other markets around the country, DC's upwardly trending statistics are even more impressive.
Cities with high unemployment such as Atlanta and Las Vegas are finding it harder to attract new residents to offset the adverse price effects of foreclosed homes. Home prices in these two metros are down 12.1 and 1.8 percent, respectively.
However, as the source notes, the district's strong economy and attractiveness to new residents has helped it weather the housing downturn and buoy prices that might have otherwise been dragged down by foreclosures.
Another factor that is keeping DC's housing stock relatively valuable is the diminishing stock of foreclosed homes. In other regions, most notably in the southeast and southwest, the housing bust left many residents with homes priced below what they are actually worth. These markets, thanks to a large stock of foreclosed homes, have found it hard to return to a healthy balance of bank- and resident-owned homes. The District, on the other hand, shed most of its foreclosed stock in the first half of 2012, according to the news outlet, which has helped selling prices rise more quickly in the second half of the year.
With rising home values and a dwindling supply of foreclosed homes on the market, now might be a great time to buy real estate in Washington, DC.