Source: MRIS
Friday, May 9, 2008
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68 comments:
Looks like PWC has tightened up a bit, but it is not quite the 5-6 month market I had been told. Further, there are more listings (almost 7,000) than there have ever been, and sale volume is just about the same as it has been the past 8 years, though better than last year. And the ave. sale price is hovering around 2003 prices. And the ratio is about 1997's, which was not a good year.
All that matches my expectations.
Thanks, Harriet!
April results:
NoVA: -12.0% (YoY median*)
Alexandria: -5.6%
Arlington: -2.1%
Fairfax: -15.7%
Loudoun: -19.0%
Manassas: -33.3%
Montgomery: -6.7%
Prince Georges: -10.8%
Prince William: -29.0%
DC proper: +4.5%
"Why not look elsewhere like the 90% of places where prices have either stagnated or gone up? No ... then you'd have to face the truth ... and that is simply that you are too afraid to make the commitment that one must make when they buy their home."-lance 4/29/08
(I think we can pretty well put this one to rest now can't we?)
April results:
From peak
Alexandria:-5.6% (2007-2008)
Arlington: -9.5% (2006-2008)
Fairfax: -16.6%(2006-2008)
Loudon: -25.5%(2005-2008)
PWC: -33.5%(2006-2008)
Current pricing level:
Alexandria: 2005-2006
Arlington: 2004-2005
Fairfax: 2004-2005
Loudon: 2003-2004
PWC: 2003-2004
Leroy to be fair – I see no reason why Alexandria’s “peak” would be 2007 and Arlington would be 2006. Had I reversed your 2 measurement periods I could have just as easily gotten
Arlington -2.1% (2007-2008)
Alexandria -2.3% (2006-2008)
Last month, when these numbers came out you were strongly implying Alexandria had fallen and Arlington was the lone survivor (on an island with a lot of rain forecast). If we use your new peak numbers is Arlington now fallen and Alexandria the lone survivor?
The reality is, nothing really changed for either one of them.
Looking a little more closely at some PWC numbers:
Manassas (20110)
median sale price: -39.39%
ave. list price for solds: -26.68%
Avg Sale Price as a
percentage of Avg List Price: 86.65%
The number of solds is up 80% from last year, but that is still only 81 out of 801 active listings, and there are two new listings for every sold.
5 of 58 houses over $400K sold, much better than the 1 of 68 over $400K that sold in March, but most of the sale activity is in the $150K-$250K range.
While DOM is down a little, I have seen way too many fraudulent DOM counts to put any stock in that.
Manassas Park (20111)
median sale price: -37.79%
ave. list price for solds: -20.55%
Avg Sale Price as a
percentage of Avg List Price: 84.58%
The number of solds is up 173.91% from last year, but like Manassas, that's only 63 of 611, and there are more than two new listings for every sold.
So sellers are asking less and getting less, and more units are selling because of that. But the supply continues to go up, and what will happen when the hundreds and hundreds of new foreclosures this year come back to be sold?
"Why not look elsewhere like the 90% of places where prices have either stagnated or gone up? No ... then you'd have to face the truth ... and that is simply that you are too afraid to make the commitment that one must make when they buy their home."-lance 4/29/08
(I think we can pretty well put this one to rest now can't we?)"
Actually, if I recall correctly, when pressed on what this meant Lance twisted and torqued his way into a definition that excluded Loudon & PWC (because in sum nobody commuted from there) but did include Montgomery & PG.
Technically, PG is hanging at a thread at -14.7% so Lance gets to twist in the wind on that one for one more month. He has cast his lot with a county that went from 5 to 20+ months of inventory in half a year.
Speaking of which, no one here really pays attention to it, but PG is melting down in a way you would not believe. It could be when this is all said and done, PWC residents will look at the stats and think they got off easy in comparison to PG.
"Speaking of which, no one here really pays attention to it, but PG is melting down in a way you would not believe.It could be when this is all said and done, PWC residents will look at the stats and think they got off easy in comparison to PG."
That's a bit of a hyperbole, no? Sure the inventory is high but April 08' was higher than March '08 in both price and sales. I thought this was a NoVa blog, but as someone who believes in "one-region" and as a PGer myself, I thought I'd give the ol' County a quick rebuttal. The differences between the two aforementioned counties are stark. Due to its large size and lengthy history, PG has vastly more old established single-family neighborhoods (the types of places where many don't even hold a mortgage), has many many more white-collar jobs and has more Metro stations than any jurisdiction outside of DC. If PG were to have a decline anywhere near as bad as PWC, I can assure you that I would pick up every Victorian in Hyattsville (2 metros) that I can get my hands on. Why isn't that happening in Manassas? To be fair, I don't wish PWC any ill will. But the fact remains, PWC has a whole different set of parameters to it that led to such a drastic price decrease. Both counties do have one thing in common, tho: they both have been overbuilt at their outskirts.
"Leroy to be fair – I see no reason why Alexandria’s “peak” would be 2007 and Arlington would be 2006."
I picked the highest median recorded for each area in April, those high points didn't all happen in the same year.
"Actually, if I recall correctly, when pressed on what this meant Lance twisted and torqued his way into a definition that excluded Loudon & PWC (because in sum nobody commuted from there) but did include Montgomery & PG.
Technically, PG is hanging at a thread at -14.7% so Lance gets to twist in the wind on that one for one more month. "
Again... only if you are willing to accept his goofball definition that any area not down at least 15% isn't down...
Getting back to the numbers in general for a minute... these are pretty clear about the direction the region is heading. Time has run out for the real estate pumpers. It will be interesting to see which of them hang around and which of them just sort of disappear.
Leroy said:
"It will be interesting to see which of them hang around and which of them just sort of disappear."
LOL ... David's already disappeared ... and half the BHs are talking about the purchases they're in the process of making. And despite this, you have a few die-hard BHs STILL sitting around on their duffs waiting for prices to fall. LOL
Lance, prices are falling, or did you miss the April numbers? It is funny to see you act like there is still some debate about that fact.
There was a bubble.
It is bursting.
Prices are falling dramatically.
The buyers who ignored your advice to hurry up and buy back in 2006 have saved themselves tens if not hundreds of thousands of dollars.
That is a pretty good reward for a little bit of patience I think.
Don't try to twist the issue to make it sound like we are somehow against real estate, because that is obviously not the case. We are just opposed to overpaying for something that will be far cheaper in the foreseeable future.
Meanwhile... long after your various theories have been overcome by events and shown to be nothing more than wishful thinking... you still try to deny the facts.
90% stagnating or rising huh?
Why don't you surprise all of us and show some maturity by admitting you were wrong about that?
Or for that matter about the bubble...
Just as another data point, average sold price in Arlington was up around 5% in April over 07 and DOM was down.
Also, median sales price in 22201 was up double digits and DOM was down double digits.
Now Leroy will tell you how this is evidence of a crashing Arlington Orange Line SFH market.
Now now Narl, if you are going to resort to strawman arguments you should at least try to be a little bit more subtle about it.
"Just as another data point, average sold price in Arlington was up around 5% in April over 07 and DOM was down."
And sales are at 10 year lows(by a wide margin)...
In 2006 Lance told us about the "new paradigm" which meant DC wasn't experiencing a bubble. (In fact he said a bubble in real estate was literally not possible and that we needed to buy before we were priced out forever...)
As recently as a few months ago "inside the beltway" was safe and the "theory" that the inner areas would eventually fall was a ridiculous fantasy...
Then it was "Alexandria and Arlington" are safe because they are obviously populated by a completely different type of person and like everyone within sight of KH's front porch, all are loving life and will never sell...
Then it was "Northern Arlington is safe"...
Now you are chopping that down to just 22201? (Because 22207 isn't looking so hot...)
Watching the various real estate pumpers scramble to invent new theories to justify bubble level pricing has gotten to the point that it reminds of the Monty Python skit with the Black Knight...
Let me guess, just a flesh wound right? No cause for concern...
yes, 20009:
Average Sold Price:
$ 705,207 Apr 2008
$ 547,656 Apr 2007
up 28.77 %
Median Sold Price:
$ 579,000 Apr 2008
$ 489,000 Apr 2007
up 18.40 %
But Leroy will continue to tell people "wait it can only get cheaper ... and point to zips that people are fleeing from as examples".
I'm sure glad I didn't listen to him and believe for one instant that the kind of places I (and most people) want to buy in would really be cheaper if I waited. They're not. If you're looking to buy in a desireable area don't count on a "bubble" making the prices cheaper. If you've been waiting now for 3 years for that to happen, you have just lost tens or hundreds of thousands of dollars by counting on Leroy's bad advice.
Yes, 20009 in March...
Average sold price: $405k
Down: 25%
Median sold price: $399k
Down: 21%
20009 in Feb
Average down: 16%
Median down : 16%
Where were you with the data THOSE months?
20009 is highly volatile as you should well know. This month it might look like it is up big, next month it might look like it is down big.
But hey, I am glad we have officially gone from talking about the region to your specific block.
It is obviously what you have wanted to talk about the whole time...
As for...
"But Leroy will continue to tell people "wait it can only get cheaper ... and point to zips that people are fleeing from as examples".
I'm sure glad I didn't listen to him and believe for one instant that the kind of places I (and most people) want to buy in would really be cheaper if I waited. They're not. If you're looking to buy in a desireable area don't count on a "bubble" making the prices cheaper. If you've been waiting now for 3 years for that to happen, you have just lost tens or hundreds of thousands of dollars by counting on Leroy's bad advice."
You honestly think people are "fleeing" from virtually all of northern VA? You think people are "fleeing" 22207?
You think "most people" in this metro area want to buy rowhouses in the District?
lol
You have gone from a little bit delusional to just plain nuts.
Lance/Leroy:
You should look deeper into the April 2007/April 2008 numbers. The change in median price is driven by the fact that in April 2007 82 of the 99 sales in 20009 were condo/co-op. In April 2008, there were a scant 43 sales, and 29 of those were condo/co-op. Therefore, the percentage of condo/co-op sales in 20009 went from 83 percent to 67 percent, which explains the "price change."
That said, it is much more informative to look at the fact that there were 302 active listings in April 2008 versus 246 in 2007. That, coupled with the 50 percent decline in sales frequency, spells greater inventory, which is followed by price declines.
Leroy said...
There was a bubble.
It is bursting.
Prices are falling dramatically."
1st statement is correct
2nd statement is correct
With respect to Arlington & Alexandria, the 3rd statement is about as correct as Lance saying that anything less than a 15% fall is just "noise".
As to Arlington & Alexandria being "safe" all I know is I passed on a place back in 03 going for 380K because (thanks to the doom & gloomers) "all areas are in a bubble" and "no where is different". Thanks to the "dramatic" fall close in, those places have declined from a peak of 620K down to 550K.
In the mean time, I have friends who were looking to buy in clarke county where I see stats like this (median prices):
April 2006 475,460
April 2007 299,900 -36.92%
April 2008 207,500 -30.81%
Now I think its fair to call these declines "dramatic" and to say Clarke county truly was not "safe" However, until I see 3/2 bungalows in Arlington going for 380K, seems to me I made one of the biggest mistakes in my life.
Incidentally, Joiner I should say that I was a bit preemptive with PG. The fact that that area had 5 months of inventory as late as Mid 2007 and now has 20 months is a dramatic rise. (its stuff like this that gives me hope for Arlington) This has yet to translate into severe price drops for that area.
Wow, the numbers just keep getting worse. PWC and Manassass city are getting decimated!
I'm sick of it, but these numbers reinforce my reason for waiting.
Lance, why aren't you jumping for joy? DC is up 4.5%! Ignore every where else...you don't live there. :)
"As to Arlington & Alexandria being "safe" all I know is I passed on a place back in 03 going for 380K because (thanks to the doom & gloomers) "all areas are in a bubble" and "no where is different". Thanks to the "dramatic" fall close in, those places have declined from a peak of 620K down to 550K."
I don't know who you were talking to in 2003, but getting back to 2003 pricing in nominal dollars is going to be iffy.
We will have to see how things play out the rest of this year and next spring. Arlington and Alexandria were hit by the bust later obviously and aren't as far along in their correction.
Thanks for pointing out the shift in property types in 20009. That zip seems to be particularly prone to those sorts of swings that make median values pretty questionable.
Obviously the average home in that zip didn't swing in value from $405K to $705k (+75%) in a single month.
From the available data it looks like homes there have been edging down slowly.
See here:
http://www.dcbrownstone.com/comps.htm
http://tinyurl.com/6yeazn
The house in question finally sold at $945K in Feb.
The Annonymous: "As to Arlington & Alexandria being 'safe' all I know is I passed on a place back in 03 going for 380K because (thanks to the doom & gloomers) 'all areas are in a bubble' and 'no where is different'. Thanks to the 'dramatic' fall close in, those places have declined from a peak of 620K down to 550K.
I recall your saying that at $380K, it was only $20K overvalued. If that was really the case, and if you were confident about your job security and sure that you would live in this area for more than 6 years, there was no need to listen to the 'doom and gloomers'. I certainly wouldn't have told anyone not to buy under those circumstances.
On the other hand, by late 2004, when I moved to Fairfax, I was certain about the bubble and I told many coworkers much senior to me, even a Vice-President of my company, that it was a clear bubble and people should wait.
But no one listened, saying they had been in the area much longer and they simply 'knew' that prices in NoVA would never come down. A couple of them made drastic life changes, buying a home 2 hours from work in Harisonburg, VA to work from home, with occasional visits to Fairfax.
I can tell you that all of them now accept there was in fact a big bubble and some are downright depressed about buying so far away from work. So the bubble has affected many, many people differently.
tedk said:
"So the bubble has affected many, many people differently."
You may not realize it, but your last sentence supports my assertion that there isn't a "bubble" out there ... just a re-adjustment of "what is valuable" and "what isn't". When all is said and done, relative values between urban and suburban and between global city and non-global city will be very different than it was back in 2001. What we've witnessed isn't a general non-warrented inflation of ALL house prices, but rather a re-alignment reflecting the new realities of a new century where the world has become a smaller place ... and the institutions of national governments can no longer enforce greater equality in wages/benefits and the like between those who own the resources and those who support them. Whether or not we like it we're heading back to the times of the early 20th century when the halves and have-nots were separated by wide gulfs of wealth and life-style ... 'cept this time it is on a global scale in a global economy. And until we develop means of reducing such disparaties on a global scale (as national governments did on a national scale when economies weren't global), this readjustment will stand.
Now, let's see if you can figure that out Leroy ... You seem intelligent and I bet you can ... IF you allow yourself to really consider what I've said and to ponder it fully.
Since prices 20009 were brought up, I think this deserves some consideration:
DC6724436, listed at $245k. It is a foreclosure in 20009.
It was purchased in 9/2007 for $313k.
Those are not the numbers for 22201. I just checked. Anyone else, feel free to check as well. The numbers for 22201 are median price up 12%, DOM down 20%. I have no idea what you are looking at.
But nice try.
The comment deleted above mine was by Ace, lying about (or, to be more charitable, mis-stating) 22201's sales stats.
Figure it out?
I can do much better than that... I can see right through it.
It is nothing more than your lame "new paradigm" explanation all over again. Same nasty candy, new wrapper.
You somehow think using a bunch of buzz words will distract people from the fact that you have nothing to say. You WISH prices would keep going up but without any good argument to support that conclusion you instead turn to this sort of vague hand waving.
There has been no massive fundamental shift globally that has resulted in a massive and permanent increase in real estate prices.
Leroy, would you care to explain the activity in Manhattan apartment prices over the past 2 years? Not being sarcastic, I am truly curious how your creative mind can explain it away. And don't tell me about the market having been run up by junk loans; I assume you've heard of co-op boards...
narl: your prices in 22201 are driven by condo sales. Condos are notorious for having large average and median price fluctuations if you don't control for number of BR/BA, which is impossible given MRIS's crappy public data. For example, in 22201 the average condo sales price went from about $470k to $350k between Sept. and Oct. of 2007.
Ok Bubbleboy, sure, and if there were price decreases I'm sure you'd be saying the same thing, i.e. that the decreases were not evidence of price drops.
To any unbiased observer, this must be pretty funny.
Narl, please refrain from personal attacks and nastiness. There is absolutely no basis for your negative attributions. Further, my post was not nasty at all; it simply presented data, some of which appeared to contradict what you posted. I realized within a minute after posting that I had typed in the wrong 22201 in the MRIS data set. However, I posted the correct data for 22207, which I note you say nothing about. As you well know, this site does not permit editing, so I deleted my post before any other comments were posted.
By the way, I currently own a home nearly free and clear in one of the "nice" Arlington zip codes, so any self-interest I would have in anything other than the truth, would be to distort upward.
to clarify my immediately prior post, I should have said "the wrong zipcode instead of 22201."
Narl, please refrain personal attacks and nastiness; there is absolutely no basis for your negative attributions, and my post was not nasty at all; it simply presented data, some of which appeared to contradict what you posted. I realized within a minute after posting that I had typed in the wrong 22201 in the MRIS data set. However, I had the correct data for 22207, which I note you say nothing about. As you well know, this site does not permit editing, so I deleted my post before any other comments were posted.
You ought to tone it down Narl, you aren't doing anything to help yourself acting like this.
I argue for high stakes for a living; can't help it; apologize if it offends (not intended); but it has done fine for me in life so far.
"I argue for high stakes for a living; can't help it; apologize if it offends (not intended); but it has done fine for me in life so far."
Huh?
There is a huge difference between arguing for "high stakes" and just generally being rude.
Hey Lance, Check this out and let me know how you interpret it.
It suggests that gasoline price inflation is lot bigger deal that certain BH's think.
"It suggests that gasoline price inflation is lot bigger deal that certain BH's think."
Out of curiosity KH, what is it that you think "bubbleheads" think about gasoline prices?
Leroy, for you to call another poster "rude" is funny.
Leroy said:
"There has been no massive fundamental shift globally that has resulted in a massive and permanent increase in real estate prices."
As usual ... you are so full of your own position, that you don't bother to read what I said ... or try to understand it. I did't say that the "fundamental shift globally" (as you call it) had resulted in "a massive and permanent increase in real estate prices."
What I said was "When all is said and done, relative values between urban and suburban and between global city and non-global city will be very different than it was back in 2001."
With the inflationary period we are just now entering, what was once "astronomical" nominally, becomes "average" or even "cheap" as the currency denominating values loses value. One can't look at prices in isolation. One must look at them in relation to other prices AND in relation to income. 30 years ago a millionare's home might have cost $500,000 and a teacher's home $50,000. If today that same millionare's home costs $10,000,000 and the teacher's home "only" $500,000, then the value of places where millionares live has risen twice as fast as the value of places where teachers live. Who really cares that there has been "a massive and permanent increase in real estate prices" over the past 30 years. Higher prices get sorted out by higher salaries. What anyone should care about is that the place that the millionare values has risen twice as fast in price as has the place that the teacher values. And why has that happened? Is it because the house where the millionare lives has intrinsically gone up in value to now be twice as nice as the house the teacher lives in? No ... Remember, I said it is the same house. What has happened is that the millionare (or rather the replacement millionare who would buy that house) now has more income available to him/her with which to bid up the price of that home. He is relatively richer in the grand scheme of things than he was 30 years ago.
The fundamental global shift (as you called it) is that the haves have a lot more money available to them now then they did even a decade ago ... And as the world shifts toward larger pools of cheaper labor (and no global laws/rules to make that labor more expensive via mandated health care, pensions, etc.) the rich will get richer and the poor poorer. So, the millionare's house price will over the next 30 years rise maybe 4 times as fast as the teacher's house who will be earning relative less in 30 years than he/she does now. So, where would you rather buy? ... in the urban area/global city where the millionare must live to ply his trade? or in the "affordable" rural area/non-globally important areas? The fact that they are both going up in price isn't what matters in the end, it's increasing differential that does.
March - April Change (Monthly Median)
Alexandria: +2.1%
Arlington: -3.5%
Fairfax County: +1.2%
Loudoun: -2.2%
Prince William: -3.6%
Non Weighted Average: -1.2%
Case-Shiller has been showing over 2% monthly declines for Dec,Jan,and Feb. Perhaps the rate of decline is slowing?
So, according to Fannie Mae, Virginia is a RED state.
http://tinyurl.com/66cqrr
"Case-Shiller has been showing over 2% monthly declines for Dec,Jan,and Feb. Perhaps the rate of decline is slowing?"
That is pretty unlikely I think. (though we will eventually find out obviously)
The thing to remember about Case Shiller is that it measures same house sales. It is perfectly possible for medians to rise even as Case Shiller falls.
Basically, if someone spends the same amount of money today as someone a year ago the person buying today likely gets far more for their money. As far as the median stats are concerned they both spent the same amount, but Case Shiller would reflect the fact that housing prices were falling.
"As usual ... you are so full of your own position, that you don't bother to read what I said ... or try to understand it. "
Lance, I understand what you said plenty well, but what you don't seem to get is that the most interesting part of your post is the psychology that produced it. The post itself was completely devoid of anything meaningful.
It is interesting to see you try to invent elaborate theories about massive global trends that inevitably explain why your house will prove to be a good investment.
Your self worth seems very much tied to the idea that you will become rich because of your house. You regularly bring up the "haves" and the "have nots" with the obvious implication that you must be one of the "haves."
Meanwhile lance, pretty much everyone else in the world has recognized what is really going on. The housing bust has been front page news for roughly a year now and everywhere from London, to Madrid, to LA to DC is feeling the crunch.
Leroy said:
"The housing bust has been front page news for roughly a year now and everywhere from London, to Madrid, to LA to DC is feeling the crunch."
I guess I gave you too much credit. You really don't realize that "the crunch" isn't being felt everywhere. It's certainly not being felt in DC proper, Arlington, and other similar areas around the globe.
And you also don't understand that what I wrote had nothing to do with me personally. It's simply a valid explanation of why we are seeing the "tale of two cities" in regards to the real estate market which KH has tried to explain to you multiple times. Perhaps it's not that you don't want to understand it ... just that you can't.
"It's certainly not being felt in DC proper, Arlington, and other similar areas around the globe."
heh...
When all else fails there is always denial I guess.
lance:
I would be the first to agree with you that, at least so far, DC, Arlington, etc. have fared better than the outlying areas. But, to say “the crunch” is “not being felt in DC proper” just isn’t credible.
If we compare DC’s numbers for April 2008 to April 2007 we see that:
*Total Sold Dollar Volume is down: 39.18%
*Total Units Sold is down: 43.03%
*Total inventory is up: 24.11%
*Total inventory excluding condos is up: 34.80%
I was pretty sure that the upper end of the market held up . . . but . . .
*Sales of units over $500,000 fell from 251 to 150, or 40.24%
*Sales of units between $400,000 and $499,999 fell from 90 to 51, or 43.33%
Even if we exclude condo sales, sales of units over $500,000 fell 20.00%, and sales of units between $400,000 and $499,999 fell 37.50%.
Anytime a market loses over 39% of its sales volume, rest assured, some people are feeling it.
zerodown said:
"Anytime a market loses over 39% of its sales volume, rest assured, some people are feeling it."
Real estate is cyclical. Any one who thought the sales levels of 2005 (or 2006 or 2007) would last forever would have been off his rocker. We had people putting houses on the market that they in more normal times (such as now) wouldn't have. (The last time my house had sold prior to my buying it was 40 years prior!) We had builders building an unprecendented amount of new housing and infill and bulldoze/rebuild.
To say that we are now "hurting" or in a "crunch" because sales levels have trended back toward normal is disengenuous. Since where in the cycle one falls determines what is "normal" in terms of sales volume (and what is available for sale to begin with), a better indicator of "crunch" would be prices. In the District and Arlington and many other places, prices continue to climb ... indicating that there is still more demand than available supply. This is definitely not indicative of "a crunch".
Total Units Sold: Washington DC
April 2008 368
April 2007 646
April 2006 652
April 2005 790
April 2004 824
April 2003 662
April 2002 624
April 2001 569
April 2000 635
April 1999 626
April 1998 586
Source: MRIS
As far as prices go, you really can't accurately compare median/average prices for April 2008 with April 2007, since the mix of properties sold in those two months was so different.
Prices probably declined across the board in DC; but, since sales of condos/coops decreased by 56.08% and residential properties decreased by "only" 24.63%, average/median prices showed an increase.
In other words the increase in median and average prices in DC was probably due to the change in the mix of properties sold, rather than a general increase in property values.
DC Condo/Coop Sales
April 2008: 166
April 2007: 378
DC residential property sales:
April 2008: 202
April 2007: 268
Source: MRIS
"To say that we are now "hurting" or in a "crunch" because sales levels have trended back toward normal is disengenuous. "
Lol, ok and how about if sales have "trended" to levels far below decade lows?
The current sales level, 368, is down 55% from peak levels, and is down 35% from the next lowest year in the last decade...
To say that sales levels of "trended back toward normal" is beyond "disengenuous" it is ridiculous.
"As far as prices go, you really can't accurately compare median/average prices for April 2008 with April 2007, since the mix of properties sold in those two months was so different.
Prices probably declined across the board in DC; but, since sales of condos/coops decreased by 56.08% and residential properties decreased by "only" 24.63%, average/median prices showed an increase."
Yep...
It is very difficult to rely on medians in a rapidly shifting market. No doubt about it, the innermost areas of the city are getting hit the latest, but to try to claim they "aren't feeling" the bust is just denial and wishful thinking.
The bust has a long way to go before it is done.
Money Magazine forecast through May, 2009
Washington, DC: -13.2%
hog
zerodown said...
"Total Units Sold: Washington DC
April 2008 368
April 2007 646
April 2006 652
April 2005 790
April 2004 824
April 2003 662
April 2002 624
April 2001 569
April 2000 635
April 1999 626
April 1998 586
Source: MRIS"
Thanks for doing the research to support my point. DC started its climb up the cycle in 1997 with the establishment of the $5,000 federal credit for first time buyers in DC. By 1998 DC was well into the up cycle. I just checked the MRIS site to find the April 1997 figures and found that your numbers aren't in there ... In any case, I found that in April 1998, 635 units priced between $30K and $500K had sold (the only category available) vs. only 412 units sold in April 1997.
Like I was saying, you need look no further than the fact that prices are rising in the District to understand that there is more demand than supply even in the slow market we are in.
novahog said...
"Money Magazine forecast through May, 2009
Washington, DC: -13.2%
hog"
Thanks for giving us the source of your crystal ball. Can we use it to know who the next president will be too? LOL
This is why nobody likes explaining things to you lance... someone goes to the effort to provide you with real data and you just make up another excuse, backed up by nothing, and dismiss it.
DC's sales numbers are 35% lower than at any point in the last decade. That to you is "trending back towards normal."
Naturally there is a 0% chance that you will ever admit you were wrong.
Are you even willing to admit your claim from a couple weeks ago that in 90% of the area prices have either stagnated or gone up is wrong yet?
We all know it is wrong. We even know that YOU know it is wrong.
It says a lot about you that despite that you still won't admit it.
Until you decide to play in the real world nobody is going to take you seriously.
Let's assume that the DC homebuyer credit is responsible for sales increases starting in 1997. What accounts for the recent decrease in sales? Perhaps the credit has been repealed, so the current sales decline reflects a return to pre-1997 normalcy. [Nope, Congress has routinely renewed the credit.] Or perhaps sales have decreased because current asking prices in DC are insufficient to attract the amount of buyers they used to. How many times has it been explained here that real estate prices are sticky and are led by sustained decreases in sales and demand before stubborn sellers capitulate?
terminator said:
"Or perhaps sales have decreased because current asking prices in DC are insufficient to attract the amount of buyers they used to."
Do you know the meaning of the word "insufficient"? Are you really saying that prices in DC are too low to attract the amount of buyers they used to?
Incidentally, prices are UP in the District.
Why is it KH and all others who aren't "counting on plumeting prices" to be able to buy understand that there's no mass plumeting of prices occuring anywhere other than a few far off areas where we could have told you that would happen if the boom ended. Where this not true, why wouldn't you yet have bought? Why are you still waiting for plumeting prices of the type of place you want if it has already occured?
Lance,
Actually, I went back to 1999 and pulled the 1998 data from that year; I was trying to go back 10 years. Unfortunately, there are some discrepancies in the data. In 1999, the 1998 sales are listed as 586, and in 1998, the 1998 sales are listed as 635. 1999 sales are listed as 626 in 1999 and 642 in 2000. 2001 sales are listed as 569 in 2001 and 583 in 2002. So who knows?
One only needs to look at Loudoun and Prince William counties on Harriet’s entry for April sales statistics to see that 1997 was a very bad year in this area -- very low sales, high inventories and bad ratios. Yet, you acknowledge that April 1997 sales were greater that April 2008 sales in DC. So, I fail to see how these numbers support your assertion that April 2008 was a return to normal sales levels.
As I previously pointed out, I don’t believe the April 2008 statistics for DC support your assertion that prices are rising.
With 3619 active listings and 368 sales, DC’s inventory/sales ratio was almost 10 for April 2008. Further, I doubt developers list every new condo unit available; therefore, the condo supply is likely understated.
Most people would consider an inventory/sales ratio of 10 as a sign of distress and not an indication that “there is more demand than supply.” But hey, it’s a free country and you're free to interpret the data any way you please. Let's just say that you're not very convincing.
Lance: "Why is it KH and all others who aren't "counting on plumeting prices" to be able to buy understand that there's no mass plumeting of prices occuring anywhere other than a few far off areas"
I wouldn't quite put it that way.
In terms of landmass, the boondocks are much larger than the area inside the beltway and overshadow the 100 square miles of the original district.
I know people who live, "out there", on 3, 10, 100+ acre lots. Some have only 1 acre but that's in a city like Leesburg or on a river or lake.
In contrast the land for a TH or an apartment ranges from 2,500 square feet down.
The majority of my friends, associates, and relatives live in the city on relatively small parcels. I'm guessing but the average size is probably less than an eighth of an acre.
A smaller number have large landholdings outside the beltway.
- The two markets -
There is outside the beltway and that probably should not include Rockville or Vienna, or any place that's been Metro'ed.
Then there is inside the beltway. Places that are a short drive to a high density of jobs and services.
I don't dispute that there are jobs out there; AOL, MCI-Worldcom, Base Re-Alignment, the Dulles industrial parks are examples.
There are more opportunities, higher quality, more varied, closer in.
A home-base in DC, Alexandria, or Arlington, gives a person more options when changing jobs. (There was a nice piece about that a few days ago.)
These two markets have a very different profile over the last 5 years, 2004, 2005, 2006, 2007, and 2008.
Between 2004 and 2005, there was a price peak and a final price blow-out, out there.
2005 to 2008, prices slid. No one disputes that happened outside the belway.
Inside the beltway, it's less clear. While I can find flat to falling prices in Alexandria, this is happening differently from, say, PWC.
2005-2008, the actual prices for a specific group of older, smaller units fell about 10%, perhaps as much as 15%. That total drop is over a few years and from whenever the peak occurred.
Other classes of units have increased in price.
If prices fell to 1999 levels, it would look like....
401 Tennessee Ave would drop from over $600K to about $230K. This place is 3 miles to the Pentagon. You can bike there in 15 minutes, walk it in about an hour.
($30K down, about $2K/month PITI?)
The substitution effect would devastate places outside the beltway.
"As I previously pointed out, I don’t believe the April 2008 statistics for DC support your assertion that prices are rising.
With 3619 active listings and 368 sales, DC’s inventory/sales ratio was almost 10 for April 2008. Further, I doubt developers list every new condo unit available; therefore, the condo supply is likely understated.
Most people would consider an inventory/sales ratio of 10 as a sign of distress and not an indication that “there is more demand than supply.” But hey, it’s a free country and you're free to interpret the data any way you please. Let's just say that you're not very convincing."
Don't worry, so long as medians aren't up at least 15% Lance will argue that they aren't really up and what we are seeing is just statistical noise...
Right lance?
Remember that attempt to weasel out of your 90% claim?
Well is the District's median up 15%?
If not, by your own ridiculous standards you have to admit it isn't actually rising.
More seriously for a moment...
The District is obviously anything but a healthy market. Sales are way way down and prices have been trending down for quite a while now.
Lance is going to go ahead and say whatever he wishes was true. It is beyond obvious that he isn't here for anything like an honest discussion and isn't particularly concerned with what is actually happening.
He will automatically dismiss any information that he doesn't like.
His own goofy theories require no support at all.
He will refuse to admit his mistakes no matter how obvious or ridiculous they are...
"The substitution effect would devastate places outside the beltway."
KH, you really need to think things through more carefully...
The last couple "inside the beltway" areas that haven't been hit hard are tiny. There simply aren't nearly enough houses in those areas to come close to "devastating" the vast majority of the city.
Seriously, at this point you are talking about small parts of Alexandria and Arlington, not even the whole of those areas. Everywhere else is already clearly down from the peak and falling.
... why did you lie about your motivations when you first started posting on this blog? You used to claim that you were just an interested homeowner with no particular concern about your house's value except for the possibility of higher taxes... more recently you have admitted that you have been speculating on housing as well.
Why didn't you just come out and state your real reason for being here?
If I can get back to the actual numbers here for a minute, a couple things I found interesting:
ARLINGTON & ALEXANDRIA. Back in January these areas for the first time posted double digit months of inventory. That was THE most serious risk they have ever faced for major price declines like the outer county areas, and I for one was ready to leave the close in areas for dead.
Now, 3 months later, they have remarkably cut those months of inventory in half. Sales are still to low to consider them "safe", but given the 5-6 moths of inventory they are now posting, it looks like another season of mild price declines is in store.
PRINCE WILLIAM COUNTY. PWC is the big winner again (winner being a relatve term given the huge price drops to date). This is the 2nd straignt month that sales are above their YOY average, and of the top 5 counties we look at here, they are the only one to improve on their YOY months of inventory.
Despite this improving picture, months of inventory is still to high so I think the upward pricing pressure in PWC is ZERO, and will stay that way for a long time. However, given there are some signs of life out in PWC, they may soon pull out of their death spiral in prices and start posting more moderate declines.
FAIRFAX & LOUDON. I think these are the 2 most interesting counties. We were all caught off guard a little when PWC started posting YOY sales increases. However, notice how Loudon & Fairfax are both within striking distance of their previous year's monthly sales.
Back in January, they were both at about 50-60% of prior YOY sales numbers. In Feb the improved to about 67-71% of prior YOY sales. In March, the improved again to 73-79% of prior YOY sales. Now they are at 90-94% of prior YOY sales numbers. If this continues, they should start seeing YOY improvement, perhaps as early as next month.
I find this interesting because PWC's improving picture is easy to explain in the sense of it has been hit so hard, the banks are clearing out inventory, etc, etc. However, LOU & especially FFX have not had to suffer nearly as bad as PWC did, and any improvement they showed would be more difficult to explain (in this context). Thus, it is these county numbers that I will watch closely for the next few months.
Lance @ 12:06 AM:
"Incidentally, prices are UP in the District."
Your response is evasive. Sales are far below where they were in prior years, but you point solely to the reported prices of consummated sales, thereby disregarding the diminished number of sales. The market is sending a clear signal that buyers are not as willing to pay asking prices in comparison to prior years, which eventually puts downward pressure on prices.
And you don't even mention my disagreement with your point about the DC tax credit. Have you abandoned that argument?
With regard to my use of the word "insufficient," I meant that prices had not decreased sufficiently to meet the lower level of demand. Somehow I think you knew this, but I guess you're here to score "points" by any means necessary. Regardless, my usage was indeed awkward, so my bad for posting past my bedtime.
Those who nitpick at usage or grammar, much like those who use an ad hominem attack, are signaling that they're losing the argument. Your adoption of this tactic in order to "win" an argument reminds me of Ben Franklin's advice in "Rules for Making Oneself a Disagreeable Companion" (1750):
"If . . . one of the Company should seize the Opportunity of saying something; watch his Words, and, if possible, find somewhat either in his Sentiment or Expression, immediately to contradict and raise a Dispute upon. Rather than fail, criticise even his Grammar."
The rest of Ben's helpful advice can be found here:
http://tinyurl.com/8y5kp
terminator,
I didn't address your "argument regarding the tax credit" because it was obvious that you had read into my mention of the tax credit an argument that I wasn't making. The only reason I even mentioned the tax credit was to give you the timeline of when DC started its climb up the rising part of the real estate cycle. PERIOD. I wasn't arguing that it caused prices to rise (though I'm sure it acted as a catalyst in the same way Bush is hoping the rebates will do this year.)
By the way, I think good ole Ben had some advice for you ...
"Go fly a kite!"
;)
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