T H E E X A M I N ERH2
FIRST-TIME HOMEBUYERS' GUIDE
REAL ESTATE SURVEY
Prices continue to
fall in certain areas
By Sonny Goldreich
Special to The Examiner
T
he recovery in the Wash-
ington area's housing
market continues to
spread, but progress lags
in the Maryland suburbs, where
foreclosures are still dragging
down prices.
With sales surging, the average
selling price for homes across the
area was down only 7 percent this
August when compared to August
2008, according to the "Shape of
the Recovery" report released this
month by George Mason Universi-
ty's Center for Regional Analysis.
That's a big improvement since
March, when the market suffered
its fifth straight month of annual
price declines in excess of 20 per-
cent.
But the Maryland suburbs
improved only slightly over the
same period, showing a 15 percent
drop in average prices in August,
compared to an 18 percent drop in
March.
The situation is worse in Prince
George's County, where average
prices fell by 20.9 percent in Sep-
tember, according to the latest data
released by Metropolitan Regional
Information Systems, which tracks
local housing sales. Prices were
lagging even in wealthier Mont-
gomery County, which traditionally
has been at the leading edge of
regional market trends. Average
prices were down 9.88 percent
in September in Montgomery --
which is still a big improvement
over March, when prices tumbled
19.35 percent.
The problem in the Maryland
suburbs is that they continue to
suffer the effects of rising foreclo-
sures. The number of foreclosures
in Prince George's jumped to 1,919
in September, showing a 29.9 per-
cent increase in the filing rate in
the third quarter over the prior
three months and a 59.1 percent
increase over the same period in
2008, according to RealtyTrac,
which follows foreclosure trends.
In Montgomery County, the num-
ber of foreclosures hit 1,600 in
September, and the rate was nearly
a third higher in the third quarter
over the second quarter and 99.1
percent higher than in 2008.
"The foreclosures are the key
problem affecting prices," said
housing economist Fred Flick,
who reports on local trends for the
Greater Capital Area Association
of Realtors. "They affect every-
body, and that puts a damper on
prices and stops prices from flat-
tening out."
While the region is showing
some recovery from the subprime
mortgage crisis that touched off
the national real estate crash, close
observers warn that the effect of a
new wave of defaults is only begin-
ning to be felt.
"What we're seeing now are
foreclosures from an entirely dif-
ferent area. We are seeing them
in the prime loans, which is point-
ing to unemployment and the
overall economy," said Barbara
Goldberg-Goldman, founder and
co-chairwoman of the Affordable
Housing Conference of Montgom-
ery.
The increase in "foreclosure
events" experts are now observing
signals trouble down the line, she
said. "These include late payment
and notices [to homeowners] from
banks that ultimately will lead to
foreclosures and bank sales in the
future.
The new wave of foreclosures
will not crest until the middle
of next year, and prices will not
begin to recover until 2011, said
Goldberg-Goldman, who is also a
principal for Quorum, a consulting
and development firm specializing
in mixed-use and mixed-income
development. These "stealth"
defaults are not yet showing up
as foreclosures in bank reports
but they already are pushing
down prices as homeowners sell
at reduced rates to get out from
under their debt.
Another factor, at least in Mary-
land, is a homeowner relief law
that Gov. Martin O'Malley signed
in April, lengthening the timeline
before a bank actually seizes prop-
erty for a mortgage default. The
measure lengthens the process
from 15 days to about 150 days by
providing homeowners with more
time and notice before a foreclo-
sure sale.
Lenders must now wait 90
days after default before filing the
foreclosure action. The law also
requires personal service to notify
a homeowner of impending foreclo-
sure action and requires that a sale
not occur for 45 days after service.
Homeowners can stop foreclosure
by paying what is owed up until one
business day before the sale.
This might effectively delay the
next wave of foreclosures, said
Goldberg-Goldman, and could
block some forced sales entirely.
"It might help cut the rate of fore-
closures to give people time to get
back on their feet and work out
solutions with their banks."
Whatever happens with the
new foreclosure wave, the housing
market is showing signs of building
steam through increased sales.
Overall, the area is showing a
strong rebound in terms of home
sales and reduced inventory. The
market has definitely turned, with
the glut in the number of existing
homes for sale down 21.7 in August
from the same month in 2008,
according to the George Mason
study. The number of homes for
sale has fallen to levels not seen
since the peak of the market in
2005.
The trend holds even in Prince
George's, where active listing fell in
September to 6,073 homes, down
from 7,804 in the same month last
year, according to the Maryland
Association of Realtors.
Prices are increasing in North-
ern Virginia, where strong sales
pushed up average prices for
homes sold in September to
$427,881, a 4.94 percent increase
over the same month in 2008 (not
including Prince William and
Loudoun counties), according to
MRIS. Prices were up 8.7 percent
in Prince William and 7 percent in
Loudoun. In Washington, prices
fell by more than 12.2 percent.
"If you look at the trends in
listings and prices, the decrease
is flattening out," Flick said. "So
that's good news. The rate of
decline is declining."
Sales growth continues in housing market
N0 25 Miles
WASHINGTON
PRINCE
WILLIAM
PRINCE
GEORGE'S
MARYLAND
VIRGINIA
22193
Woodbridge
Sept: 169
Aug: 191
22191
Woodbridge
Sept: 130
Aug: 112
22192
Woodbridge
Sept: 120
Aug: 123
MONTGOMERY
20874
Germantown
Sept: 111
May: 75
20744
Fort Washington
Sept: 159
Aug: 139
20774
Upper Marlboro
Sept: 122
Aug: 102
20706
Lanham
Sept: 105
Aug: 82
20784
Hyattsville
Sept: 97
Aug: 84
20772
Upper Marlboro
Sept: 109
Aug: 78
20743
Capitol Heights
Sept: 103
Aug: 81
Source: RealtyTrac
The 10 ZIP codes with the most
foreclosure filings in September
MAP BY ANGELA HAUGHNEY/FOR THE EXAMINER
AP PHOTO/MANUEL BALCE CENETA
A factor in Maryland foreclosures is a homeowner relief law that Gov. Martin O'Malley
signed in April, lengthening the timeline before a bank actually seizes property for a
mortgage default. The measure lengthens the process from 15 days to about 150 days
by providing homeowners with more time and notice before a foreclosure sale.
OCTOBER , 2009
Data suggests
more foreclosures
� About 104,200 mortgages
-- about 8 percent of all loans
in the Washington metro area
-- were delinquent but not yet
in foreclosure in June 2009. Of
these, 51,500 were more than 90
days past due.
� Prime loans made up 11 percent
of the mortgages delinquent
more than 90 days in early 2007,
but the prime share rose to 31
percent by June 2009.
� There were 35,900 homes listed
for sale in June 2009, about five
months of sales. Upcoming fore-
closures could pile an additional
44,000 homes onto the market.
SOURCE: FORECLOSURES IN THE NATION'S
CAPITAL BY THE URBAN INSTITUTE,
RELEASED OCTOBER 28, 2009

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