Is the value of homes in DC still going down like the rest of the country or has it stabilized?

Asked by Kb, Washington, DC Mon Jun 9, 2008

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Don Tepper, Agent, Burke, VA
Mon Jun 9, 2008
It really depends on the area, and whether you mean strictly District of Columbia, or the surrounding areas.

I'm most familiar with Virginia. However, from what I understand the values in most areas of DC have held up pretty well.

Moving out to the suburbs, the close-in suburbs have also done pretty well. There are even a few areas where prices are slowly climbing--some areas of Arlington, for example.

It starts getting more difficult as you get closer to the Beltway. Some areas have fallen sharply; others haven't. For instance, there's an area near Springfield Mall where prices have gone down 40% or so, or probably will stay that way for awhile. It's an area that had been cheap, single-story homes that rose from the $200,000s to the $500,000s in just a couple of years. A lot of new buyers, many from foreign countries (and thus possibly not understanding the loans, certainly not understanding the pricing patterns), bought there. So now there are a huge number of foreclosures and boarded-up homes. The same situation occurred in some areas around Annandale. On the other hand, there are some areas of Falls Church, Vienna, and most of (upscale) McLean that are in pretty good shape.

Outside the Beltway, you have the same sort of pattern. However, the farther out you go, generally, the bigger the hit in home prices: Manassas, Woodbridge, parts of Reston, for instance. Same scenario as Springfield: Lower priced homes experienced a huge and unsustainable price runup. Prices collapsed, and the market's littered with foreclosures. Those areas probably will take another year or two (or longer) to stabilize.

I'm less familiar with Maryland, but I understand that the same sorts of patterns are present there.

Hope that helps.
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