1. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
Total population (2009): 5,476,241
Washington, D.C., was one of only two markets to see year-over-year gains in the most recent Standard & Poor’s/Case-Shiller home-price index report, which tracks 20 U.S. metro areas nationally. While 11 of the 20 markets tracked posted new index lows in December, home prices in Washington, D.C., rose 4.1 percent year-over-year.
The area’s median home price rose 8.1 percent from fourth-quarter 2009 to fourth-quarter 2010, according to the National Association of Realtors. Though the area’s median home price is almost twice that of the nation’s median, affordability is still fairly high — 78.8 percent of homes in the area were affordable to families making the area’s median income in fourth-quarter 2010, according to an index from the National Association of Home Builders and Wells Fargo.
Washington, D.C., is also a place where it is much less expensive to buy than rent, according to Trulia (see rent vs. buy chart).
Employment is the biggest factor in the strength of the housing market in the Washington, D.C., area, according to Rina Battiata Kunk, associate broker at McEnearney Associates, Realtors.
The area’s 5.7 percent unemployment was one of the lowest rates in the nation in December 2010, according to the U.S. Bureau of Labor Statistics, and income fell only slightly from 2008 to 2009.
Not surprisingly, the federal government is the area’s biggest employer, and the capital also attracts legal and lobbying firms, and foreign companies that choose to base their U.S. offices in the capital.
"Federal government (jobs) make this area less prone to the ups and downs of other areas of the country," Kunk said.
Washington, D.C., also has a rising population and a higher-than-average rate of in-migration from other states. According to a migration patterns study by Atlas Van Lines, Washington, D.C., and North Dakota — along with Texas, North Carolina, New Hampshire, Maryland, New Mexico, Alaska, Kentucky and Tennessee — saw more inbound cross-state household relocations than outbound ones in all of 2010.
"Houses in my market … are continuing to sell quickly and very close to list price. We have a shortage of houses and lots and lots of buyers who are waiting to find something to buy," Kunk said.
The market’s delinquency rate fell to 6.8 percent November 2010 compared to the same month in 2009, when the rate stood at 7.6 percent. At the same time, distressed sales have remained fairly steady at about 30 percent of overall sales, according to CoreLogic. Foreclosure activity fell 22 percent in the area in 2010, according to RealtyTrac.
|Unemployment rate (Dec. 2010)||5.7%||9.1%|
|1-yr. forecasted job growth (Q3 ’10-Q3 ’11)||2%||1.9%|
|% ch. median household income (2008-09)||-0.8%||-2.9%|
|Median sales price (Q4 ’10)||$331,100||$170,600|
|% ch. median sales price (Q4 ’10 vs. Q4 ’09)||8.1%||0.2%|
|% homes affordable at median income (Q4 ’10)||78.8%||73.9%|
|% ch. single-family bldg. permits issued (2009-10)||4%||3%|
|% ch. population (2008-09)||2.2%||1%|
|% population lived in other state 1 yr. ago (2009)||4.4%||2.3%|
|% ch. occupied units (2008-09)||0.3%||0.6%|
|Foreclosure activity rate (2010)||1 in 49 units||1 in 45 units|
|% ch. foreclosure activity (2009-10)||-22%||1.7%|
|Avg. days on market (as of Feb. 13, 2011)||131||135|