High Number of Repo Houses for Sale in D.C. Area

Washington D.C. is seeing positive economic activities, with rising gross metropolitan product and wages and low unemployment rate. All economic indicators are pointing towards the area’s economic recovery except the performance of its housing market.

A study released by the Brookings Institution showed that D.C. economic recovery would be hampered by the drastic decline in housing values and the growing number of repo houses for sale.

In its MetroMonitor report, Brookings Institution ranked the D.C. area among the top 100 metropolitan regions in terms of the performance of economic indicators in the first three months of this year. D.C. ranked 10th among regions with low employment rate decline and 11th in low unemployment rate criteria. Additionally, the region ranked in smallest decline in gross metropolitan product.

Brookings Institute’s Metropolitan Policy Program research director Alan Berube said that it is still too early to tell whether the positive economic trends can boost job creation or whether the problem with the growing number of repo houses for sale will dampen the growth trend and hold back the area in some way.

According to the report, housing prices in Washington area declined by 8.8 percent compared with the first quarter 2008 total. The price drop in the area was worse compared to the 6.3 percent national average decline. This placed the D.C. area at number 77 compared with home values in other regions.

Furthermore, D.C. also ranked number 98 among regions with high number of repo houses for sale, with 6.49 out of 1,000 houses in foreclosures, compared with the 3.06 national average foreclosure rate.

The report noted that many homeowners in Washington took out the same high-interest subprime mortgage that caused the deluge of foreclosure properties across the country. Of note is the high foreclosure rate in Prince George’s and Prince William counties.

According to Berube, Washington is the only top 20 metropolitan area in terms of economic performance that is affected by the housing crisis in such huge proportions.

He pointed out that the top 3 metropolitan areas in the Brookings Institute’s rankings, San Antonio and Austin in Texas and Oklahoma City, have not experienced the high home prices and growing number of repo houses for sale happening in Washington.

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