Ask GGW: Why are Md. house prices down and Va.‘s up?

Housing prices in Virginia increase by 0.8% in 2011, but over in Maryland they dropped 3.6%, Bloomberg reports. Reader Matt asks, why?

Bloomberg quotes consultant Thomas Lawler, who blames differing foreclosure practices, and the article’s lede compares the Maryland and Virginia suburbs directly, claiming they’re “a lot alike.”

Coming just after a post about reporters misusing statistics, this one seems to be quite a stretch. The numbers appear not to compare Virginia and Maryland suburbs directly, but rather the entire states. So is the difference Bethesda versus McLean, or Baltimore versus Richmond, or Salisbury versus Blacksburg?

Matt writes,

This article says that the housing markets in Virginia and Maryland are the same, and that the only difference between then is the strength of foreclosure protection laws. I don’t believe that is true.

It’s my sense that Virginia has more defense contractors and Maryland has more federal government workers. What other characteristics of the housing market are different between the two states?

What do you think might be the reason for the discrepancy?