Excerpt taken from the National Association of Home Builder’s online weekly newspaper
Mirroring what is occurring in many of the nation’s top housing markets, conditions in the Washington, D.C. metropolitan area, which includes Northern Virginia and the Maryland suburbs, show that the market correction is winding down during the first half of this year, according to Stephen Fuller, director of the Center for Regional Analysis at George Mason University.
The first in a seriers of reports commissioned by the Northern Virginia Building Industry Association and the Maryland National Capital Building Association, the study - “Understanding the Local Housing Market” - suggests significant repercussions for prospective buyers who delay their purchases much longer in hopes that they will find even better deals in the local housing market. Excess units on the market are already beginning to dwindle, and prices are expected to stabilize by the middle of the year, the report concludes.
The area’s “housing supply increased rapidly as investors dumped their units onto the market in an effort to capture the value gained in the preceding years,” the study says. Simultaneously, higher energy costs, interest rate fears and media speculation over the housing slowdown exacerbated the temporary softening in demand during the latter part of 2005. The process of “normalization” continued last year, and it accelerate when energy prices rose further during the second quarter.
Looking out to 2010, Fuller expects to see a return to average annual housing price appreciation of 7% and annual supply shortfalls of approximately 15,000 units.
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Senior Vice President, Director of New Homes Division
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