Light at the end of the tunnel?

A recent article in the Washington Post indicated that the Washington area is one of the few metropolitan areas in the country where home prices have not declined over the past year. According to the Post, Montgomery County saw about a 2% increase in sales prices over the same period last year. Well, it is not bad news but must be taken with a grain of salt. The housing market is still very soft and prices are very low. In Montgomery County there is a wide gulf between the west portion of the county vs the eastern portion. The west which includes Bethesda, Chevy Chase and Potomac currently has a very strong market and I would say it is there where we have seen the price of home increase over the year. The east part of the county continues to suffer from an overabundance of listings with many distressed properties dragging the overall market down. I have not see any price increases in the east county. If anything the average price of a home has dropped over the past year. However, all is not doom and gloom. A recent survey of my neighborhood (Hillandale) shows that there is about 23-25 homes on the market but almost 40% of those are under contract pending sales. Some of these are short sale contracts and I would say about half of those fail to settle but still, that is an overall healthy percentage. An indicator that the market is turning. We shall see....