Last Sunday's WaPo published a series of articles on DC's real estate market entitled "Property Values 2007." In "Housing Experts See Further Price Declines in 2008," home and condo prices were discussed. Generally speaking, the consensus appeared to be:
In an industry with more question marks than answers, housing experts are predicting a continuing drop in single-family-house prices in the Washington area through this year and well into 2008, a bigger drop in condominium prices, and slight rises in prices of homes in certain neighborhoods.
"In general, for the metro area, there will be modest declines," said David F. Seiders, an economist with the National Association of Home Builders. "But it depends on the exact locality."
What about the DC condo market?
During the real estate boom earlier this decade, developers put up an unprecedented number of new condominiums.
"There's clearly a glut of condos, particularly in D.C.," said Dean Baker, co-director for the Center for Economic and Policy Research, who is predicting that housing troubles nationally are likely to drag the economy into recession.
Condo prices locally will decline sharply, he said. "I wouldn't be at all surprised to say 20 percent. The time period is very hard to say. You can get meltdowns very quickly."
Will houses fare better?
[Guy] Cecala of Inside Mortgage Finance, who lives in Bethesda, said that even in popular neighborhoods such as his, he expects a decline in single-family-home prices of at least 10 percent over the next year.
Right now, he said, "$45,000 is not a big drop in price" for homes selling at $800,000 or more, and "$100,000 is not a big drop for a million-dollar home."
"I think we're subject to significant price devaluations," he said. "I think anybody who doesn't think we're going to see a drop in housing prices is kidding themselves."
Peter Morici, an economist at the University of Maryland, said that with that [price declines] in mind, "buyers should not feel any sense of urgency to buy a home."
"Sellers would do well to sit tight if they don't have to sell," he said. "Postponing to next spring or summer might pay. Between now and then, it's going to be hard to unload houses."