The housing market crash many feared would wreak havoc on the Washington area economy never materialized and the worst of the market “correction” appears to be over, said real estate industry experts Thursday.

The last 12 months have been tumultuous, said representatives of the three local real estate associations, with prices during 2006 falling for the first time in years.

Housing values experienced double-digit growth between 2000 and 2005, but a spike in inventory and rising mortgage rates kicked the once white-hot housing market into a slump in 2006, they told reporters in Washington Thursday.

In November, for example, prices for single-family homes were down 1.4 percent over the previous year. By contrast, housing prices increased 19.6 percent from November 2004 to November 2005. Condo prices, which shot up 24 percent from November 2004 to November 2005, were down 5.3 percent in November of this year.

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Northern Virginia was hardest-hit in 2006 with prices dipping as much as 5.7 percent year-over-year in September — a figure that outpaced national numbers. Montgomery County, Prince George's County and the District fared somewhat better. While condo prices dipped, single-family homes in those three jurisdictions saw slight appreciation in 2006.

But despite decreasing prices, economists and industry officials continued to stress that market conditions were a “correction” — not a “crash” ­— that had to happen because prices were appreciating at an unsustainable level. Housing prices should bottom out soon and begin to appreciate again — in the single, not double, digits — in the spring of 2007.

“I think the adjustment is almost over and prices will rise in 2007,” said John McClain, senior fellow at George Mason University’s Center for Regional Analysis. “We need a more sustainable growth so that our housing prices don’t go up so much that we can’t recruit workers to the area.”

kwilmeth@dcexaminer.com