According to recent statistics, real estate prices in D.C. are back on the road to recovery. As more buyers return to the market, the recovery in prices is continuing to pick up pace, while foreclosure rates are showing signs of returning closer to average levels.
Even commercial investment is returning to local markets. Real estate investment businesses, like the arm of Fortress Credit Corporation (presentations by Pete Briger), are returning their focus to real estate and property investments. This trend is being replicated across both residential and commercial sectors, helping to fuel regeneration and growth in the real estate market.
As the housing market continues to recover from the crash of 2007 and the lows of 2010, investors and homeowners alike are now regaining their footing in local markets. Washington has enjoyed among the strongest of recoveries, with foreclosure rates down, house prices up and inventory pressures becoming an increasing fact of life for those in the business.
But with the housing market now seemingly back on track to return to previous levels, some are still understandably anxious about the way the market will develop going forward. Many of the same signs that presented in pre-crash conditions are presenting now – swelling prices, stiff competition for homes and a worrying lack of contingent offers (on both mortgages and surveys). However, there are measures in place that are designed to protect against a repeat of the housing crash.
Greater regulation has been introduced into real estate markets, to protect against the type of conditions that led to the previous bubble. This is helping to ensure that the return to growth in the market is sustainable, rather than the beginnings of the next housing market crash.
A lack of appropriate regulation was widely attributed with sparking the housing bubble which saw foreclosure rates hit an all-time high while market prices plummeted. Self-certified mortgages and relaxed lending practices led to too many unaffordable homes in a self-fueling marketplace.
Some analysts have expressed concern over the impact these regulations may have on potential buyers. Rob Chrane, president and founder of Down Payment Resource, said that although the data looks increasingly promising, some buyers may still be dissuaded from making an offer as a result of the regulations in place.
“If you’re a renter household and keep reading that credit guidelines have tightened up and credit is harder to get, a lot of people will take themselves out of the market. We refer to them as shadow buyers. These are people who are potentially eligible but don’t know there are resources out there for them.”
The Washington real estate market hit its lows in 2010. While the crash unfolded over the early part of 2007, it was 2010 that noted the highest rates of foreclosure, and the lows in recent market prices. Experts are now hoping that the signs of growth will continue, for the benefit of the local market and investors.