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D.C. Area Housing Market Recovers By Brady Dennis, Published: July 27

Washington real estate has fared better in recent years than the national housing market, which has beenswamped with foreclosures, falling prices and homes that are worth less than than their owners owe on them.

Now, a new report set for release this week by Delta Associates, an Alexandria-based research company,suggests that the Washington market may be back to full health.

The news is pretty remarkable. The market is in full recovery, with prices up like they were in the early2000s, said Greg Leisch, the firms chief executive. It makes us very different from the rest of the country.

Delta based its findings on a broad range of data about the local housing market, including an analysis of allhome sales in the Washington region through the end of June.

The numbers tell a story of revival, of normalcy returning at an impressive pace.

Sales volume through the second quarter of 2012 rose almost 10 percent over the past year, and pricesclimbed 5.2 percent during the same period. Inventory is the lowest its been since about 2005, whichsuggests an abundance of willing buyers. The average number of days it takes to sell a home in theWashington area has fallen to 59, well below the long-term average of 78.

Leisch also said that the structural shift that unfolded in the area during the downturn fewer people owningand more people renting has begun to reverse during the past year, as rising rents and historically low

interest rates have created a new wave of aspiring buyers.

Were back to bidding wars, multiple contracts, sellers cherry-picking what kind of financing they want towork with, said Morgan Knull, an agent with Re/Max who deals with properties in the District and its suburbs.I cant think of anywhere Id rather be selling real estate right now than in the Washington, D.C., area. Itskind of a golden place to work right now.

Thats not to say that every area homeowner has felt the warm glow of recovery.

About one-third of local borrowers remain underwater on their homes, meaning they owe more than thehouse is worth. But Leisch said that one-third of those homeowners many of whom live in the outermostsuburbs in Virginia and Maryland are underwater by 20 percent or less, meaning that they could find

themselves in the black again if the market continues to improve.

Despite the remaining hurdles, such as the sluggish condo market, the Washington area has plenty of goodfortune on its side to help bolster the housing market. The region largely avoided the crippling unemploymentand plummeting home prices that have plagued much of the country. The area has continued to produce jobs about 47,000 last year alone and the unemployment rate remains one of the lowest in the country. Inaddition, some jobs common to the Washington region, including government work and contracting,traditionally have proven more secure than job bases in other areas.

And this much seems certain, at least for now: There is no shortage of eager buyers in many parts of theregion.

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Ive been saying all year that something has changed, said Joan Caton Cromwell, an agent withMcEnearney Associates who handles properties in the District, Maryland and Northern Virginia. She said shehas seen countless houses in recent months sell for above asking price after receiving numerous offers.

Still, she maintains a certain level of caution, having seen plenty of ups and downs in the past. Its a fragilepeace, she said. A good seven months does not a market make.

And yet, its hard to hide her optimism that the worst has past and that a sustained good streak lies ahead.

I believe that this is the beginning of the beginning, she said. I feel very positive about where this isheaded.

Still, the resurgence of Washingtons housing market remains tenuous. With widespread talk on Capitol Hillabout reducing government spending and hundreds of billions of dollars in automatic cuts scheduled to kickin at the beginning of next year unless Republicans and Democrats finalize a budget deal, many localemployees could lose their jobs. Debt troubles in Europe continue to carry the threat of adverse affects in theUnited States.

Meanwhile, actions taken by the D.C. council to aid struggling homeowners have all but ground foreclosuresto a halt in the District, and it remains unclear how many of those seizures eventually will go forward andwhat effect that might have on the housing market. In addition, uncertainty about the outcome over a

presidential election always causes a measure of consternation among local buyers and sellers, local realestate agents said.