PRICES IN METRO DC DOWN SLIGHTLY

Maybe the sky is not falling. Prices in DC and the suburbs by 2.24% over the fourth quarter 2005 to first quarter 2006 period, reported CNN based on data from the National Assn. of Realtors.

David Lereah, NAR's chief economist, says the market is responding to growing inventory. "With the supply of homes picking up very nicely in many areas of the country, pressure is coming off of home prices," he said. "By the time we report second quarter data, I expect most areas will be returning to normal rates of price growth in the single-digit range."

On the other hand, Lereah is overly optimistic for the DC condo market in particular. There is lots and lots of condos coming on the market and it will take more than a quarter or two for the excess supply to dry up.