From the Washington Post:
"The average rental vacancy rate in the Washington area in the fourth quarter of 2007 climbed to 3.7 percent from 2.9 percent a year before. Rents increased 1.8 percent in the past year, the smallest rise in five years.
. . .
Management companies said more prospective tenants are shopping around in the growing rental market and asking more about concessions or enticements such as free rent or a flat-screen television".
22 comments:
So much for the notion that price/rent ratios will return to normal through rent increases, rather than price decreases.
Where's that anonymous RE bull troll who used to prowl here and at Bubblemeter, anyway?
From the article: "We're also competing with people who have condos and, instead of selling them, decided to rent them until the market improves."
This is what is funny, these FB's still view this correction as a temporary decline. Not until incomes are in line with the fantasy listing prices out there will the market "improve" as they see it. That will take a long, long time....as in, more years then they can imagine.
Exactly Dominic!
And if you have all your ducks in a row you can be poised to strike at buying a great house.
Its not a game of landlords will always own and renteres will always rent. Or Lords and serfs as some would have us fret about. Its about people who are bad with thier money and people who are not bad with thier money.
Some people thought they are a lord because thier property was valued high for a short time. Yet in fact, they were just a jester in the court that wore a paper crown.
It is going to be very interesting to see what the rental market does over the next couple years. There has been such an oversupply of homes built in this region that I don't see them going anywhere but down, at least in the short term.
Not good news for the various people who think they will just rent their house out for a year or two until things "bounce back."
I wonder about the would-be landlords that talk about trying to buy early in this decline. They might buy a "cash flow positive" property only to find they can't rent it for what they thought they could.
Had to post a couple new listings from today. The first is a house I noticed last spring, because it went on the market at $769,997, in a neighborhood where most of the houses were asking in the $500s, and not selling. It never sold, but it just came back on the market today:
10544 Coral Berry Drive,
Manassas
$544,600
08/31/1999 $286,120
I forget who said it, but that seems to be a good example of time earning the buyer money.
This other one is a more interesting price reduction:
13628 NEWTONMORE PL
BRISTOW, VA 20136
$589,900
Date Price Appreciation
12/28/2007 $514,678 -24.2%/yr
10/28/2005 $938,176 --
We're starting to think about just renting again...
Tabitha,
It's snowy and freezing cold -- the real estate "season" will begin in earnest after the Superbowl, so grab some chips and salsa and hang on. I'm surprised at the number of listings going on the market right now, and I'm sure they'll continue to pile on in earnest starting in February.
T again,
13628 Newtonmore is a phenomenal price drop -45%. It's a "Highgrove" by NV Homes. It's now priced at $82 per finished square foot.
There's an NV development in Warrenton, and the two resales there are still asking from the low to mid-600's, and they've been on the market for two years.
More bad news for the area's economy...
http://tinyurl.com/2gm2w9
Sprint’s Customer Erosion Prompts Cutbacks
Sprint Nextel’s announcement on Friday that it is losing customers more rapidly than expected is making investors nervous about a weak economy’s effect on other wireless companies.
Shares of Sprint fell $2.87, or 25 percent, to $8.70 after it said that it planned to lay off 4,000 workers and close stores to trim costs as its customer base shrinks.
The stock prices of AT&T and Verizon also slipped after the news. AT&T, the largest wireless carrier, was down more than 3 percent, and Verizon, which owns Verizon Wireless along with Vodafone, fell more than 4 percent.
...
To reduce costs, Sprint said it planned to cut its payroll by 4,000 workers. The company, based in Reston, Va., currently has about 60,000 employees.
==============================
It will be interesting to see what form the recession takes in this area. There is a lot more corporate activity here now than there has been in the past.
Also, I can't help but point out that once again... they are based in Reston. Not DC, not even inside the Beltway.
Harriet,
Thank you for posting this. Being able to tell friends that rents won't be seeing significant increases per a Post article will help steady them to wait for a real buying opportunity.
Leroy:
While I do think all of the wireless vendors will be hit, Nextel was very aggressive in building towers in new communities. It became a defacto standard on construction sites and those now unoccupied new communities. So I do expect them to take a harder hit than the other wireless services.
Notice the inventory climbing almost linearly? That isn't the normal pattern for January... The 'spring selling season' will be interesting.
Got popcorn?
Neil
Harriet, the Newtonmore one took my breath away. That house is a real, honest-and-true mansion, on a very choice bit of land, and it's asking less than many of the the endless miles of McMansions out in Bristow. I just went to an open house for 9104 Trusler Court in Manassas, which came back on the market recently. The last asking price before it left the market was $630,000, but then they took it off, redid the kitchen, and put it back on at $700,000. It just droppped to $680,000, and while it is a nice older (30yrs) home on a fine culdesac in my favorite Manassas neighborhood, goodness gracious, in comparison to the Newtonmore house, it is an old-fashioned shack. I am trying to collect my list of "but this other house is priced $200,000 less than yours, and has more of everything, so what gives?" houses.
"Notice the inventory climbing almost linearly? That isn't the normal pattern for January... The 'spring selling season' will be interesting."
I have noticed this myself. It looks like there are a lot of sellers trying to get out ahead of the pack for the spring season. It suggests there is an increasing level of desperation on the part of sellers.
I regularly look listings online for houses in several neighborhoods. Lately I have noticed a lot of "new" listings with pictures that were obviously taken sometime in the spring...
It is possible some of these sellers just happened to have pictures of the exterior of their house, but I suspect a lot of them are relistings.
Here is just one example:
2015 FREEDOM LN, Falls Church, VA 22043
FX6638901
Check out the flowers... doesn't look like January to me.
Just discovered a couple new resources--the MRIS website, and the NVAR website. Both have such excellent graphs and charts! I looked up two local zip codes, and saw some interesting numbers for December 2007 versus December 2006:
20111 (Manassas Park)
ave. sale as % of ave. list
80.25% 12/2007 vs. 93.08% 12/2006
median sold price: down 38.19% YOY
ave. days on market: 191 vs. 144
20110 (Manassas)
ave. sale as % of ave. lst
84.51% 12/2007 vs 93.07% 12/2006
median sold price: down 23.69% YOY
ave. days on market: 154 vs 102
Wonder what spring will look like?
The Washington DC area has a unique phenomenom that could be influencing the real estate market. Current political appointees may be putting their homes on the market now. We will have a new president, and new staff, in just under a year. Maybe sales will pick up when the new presidential staff are hired? I hope so!
"Maybe sales will pick up when the new presidential staff are hired? I hope so!"
Not likely... the new staff will more or less equal the old staff. Besides, the numbers we are talking here just aren't that large in the first place, not when compared to the area's total population.
The best possible thing for the area would be to have the correction continue. Inflated housing prices are a burden on the local economy.
Neil!
Welcome to D.C.
Interesting point about Nextel, they're also among the most aggressive in seeking out new users from the other companies, e.g. their advertising is targeting existing Verizon/T-Mobile/Sprint users. Not a company set up well to deal with a recession, except perhaps that maybe their prices are lower than their competition, but if people just do away with the cell service entirely, that will be ugly for a lot of companies.
I know some of those 60,000 Sprint employees. Hopefully none of them are in the 4000.
"A recession is when your neighbor looses his job. A depression is when you lose your job."
Sprints probably going to move everyone back to Overland Park, Kansas to the gazzillion dollar Sprint Campus they built there in the 90's
It's a whole heck of a lot cheaper to buy RE there & it's pretty spanky living...believe it or not!!
Spunky,
I had a couple of solid job offers from companies in the Overland Park, KS area. I think the area is developing and growing well, looks very clean, etc.
I thought we could save a lot more there as the salaries there are roughly the same as here or even more, but the cost of living is 20%--30 % less.
But my wife didn't like to move there--the surrounding areas like the Missouri part of Kansas City are not that appealing. Also, she was worried about tornadoes, schooling for our kids, lack of highly-ranked state universities, access to good medical care, etc.
But for those who are willing to spend more to attend private universities (or universities in other states), I think it would be a very good option to move there.
Well Ted, I'm from the area so I'm biased.
"OP" as it's known as in the area is very nice. You must not have not taken your wife to the Country Club Plaza for shopping. It's makes Tysons look like a dump (IMO)
Schools there are good, got my baby into an Ivy...
I've seen the same amount of Tornado's here in Nova as I did there...St. Lukes is the Heart Center for the Midwest...
I don't really see the problem, it's not South Dakota!
But it's home to me & laid back & low stress! That appeals to me at this point in my life!
The rental thing is annoying. We had 2 sellers in our townhome community in Fairfax rent b/c they couldn't get their price. This was about a year and a half ago. What a disaster. One unit is rented to 3 different spanish speaking familes, one per floor, with 8 cars. The other is some sort of Turkish student housing with about 10 people and a rotating group that comes and goes. Our HOA has been battling constantly to get proper upkeep of units etc. I hope both units are destroyed by the time the units are actually sold.(at a huge loss I hope)
Leroy said:
I have noticed this myself. It looks like there are a lot of sellers trying to get out ahead of the pack for the spring season. It suggests there is an increasing level of desperation on the part of sellers.
Yep... inventory is going in a very odd pattern. It doesn't matter if its political or financial motivation; we have deseprate sellers. Come on! Not exactly the time of year to stroll open houses...
I've been lurking here a bit... Mostly to grab the "Decade of sales" articles. My company was looking to move a sector to DC... not anymore. Home prices are beyound the incomes. Now its the opposite... Cest la vie.
Got popcorn?
Neil
But rents didnt decrease, they increased 2%.
I remember back in 2001 rents were dropping 5% a year.
Rents did not go up that much doing the boom years, which was a problem as my condo fees and taxes skyrocketed. This year was actually pretty good as I filled 4 places at higher or same rents. I say 99-01 during the dot bust years is when I saw some of the biggest increases in Arlington. I do remember that a lot of units at Clarendon Common sat empty because they tried to charge so much ($4,000+ for 3BR). I have no idea if the failed condos in Arlington are able to attract renters. I am worried about competing with some of the lower priced house rentals I've seen in the paper.
Post a Comment