Source: MRIS
Tuesday, June 10, 2008
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49 comments:
Initial thoughts - the inner counties werent as rosy (or relatively less gloomy) as I originally thought. Months of inventory is still good - it is now half of what it was just 5 months ago when it looked like they were going to join their outer conty conterparts with double digit months of inventory. At the same time however, inner county prices are weak - it is amazing the inner areas are seeing such healty price declines despite not having a huge imbalance of supply and demand. The substition effect is real, and this is pretty good proof of it as far as I am concerned.
Outer counties (FFX, LOU & PWC). No surprise, prices are still imploding like never before. At the same time however, notice what is going on with sales. Last month I suggested all 3 could beat their YOY sales numbers and it looks like they all have!
Now as Ted K pointed out, the increase is likely due to all the REO's in which case its a bit early to say a bottom is being established. At the same time however, it is clear that alot of the garbage is being cleared out of the system as can be attested to by its relatively healthy 7.98 months of inventory - the best number it has posted since mid 2006.
It looks like price discovery has taken place in Loudon and PWC, as total sales are increasing and months' supply is down significantly from last year. That is, sellers have capitulated and the stare down has ended in the buyers' favor. Prices there are somewhere between 2003 and 2004 levels. We shall see if prices flatten out in upcoming months.
As for Fairfax, Arlington, and Alexandria, the stare down is still in effect. But I hope we can put to rest the notion that prices haven't yet fallen in close-in communities; this data is clearly telling us that prices are down even inside the beltway. And yet total sales are still falling, and months' supply is flat or increasing. We're not done. In the "bullet proof" zip code 22207, sales in May 2008 were 27 units whereas sales in May 2007 were 48.
With regard to a related matter, did anyone else see the WSJ article explaining how Prime ARMs are now defaulting at a greater rate than Subprime ARMs? Talk amongst yourselves:
http://tinyurl.com/5mcyrh
CRT @ 5:31PM
Months of inventory is still good - it is now half of what it was just 5 months ago when it looked like they were going to join their outer conty conterparts with double digit months of inventory.
This is indeed peculiar. Here's my humble opinion, FWIW: Since the sales volume is so low for such nice areas, it seems that potential buyers won't pay current asking prices and price-anchoring owners are carrying a perceived value of their house equal to the 2006 peak. Such owners won't sell, nor even list their homes. A classic stare down, with low sales and low inventory.
"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 agree that a turning point of sorts has been reached out west. We are now seeing houses move again rather than the total market freeze we were observing last year. It appears sellers there have finally accepted the fact that the bubble is gone and if you want to sell you are going to have to cut the price, a lot.
It looks like we are seeing the first signs that the bust will not continue forever.(Which logically we know it can't.) I suspect we have a ways to go before prices stabilize however.
The standoff continues in the inner areas but even there progress is being made...
Arlington and Alexandria sellers are now averaging 92.3% and 94% of their asking price respectively.
Average sales prices, median sales prices, and volume are all down. (from last year's already falling prices)
Terminator X said...
This is indeed peculiar. Here's my humble opinion, FWIW: Since the sales volume is so low for such nice areas, it seems that potential buyers won't pay current asking prices and price-anchoring owners are carrying a perceived value of their house equal to the 2006 peak. Such owners won't sell, nor even list their homes. A classic stare down, with low sales and low inventory.
Not so sure about that. I broke down Alexandria by category for prices 300K to 1 million everything is selling. In fact, by 100K intervals the sales rates are even better than the county wide average.
300k=3.3mos
400K=2.7mos
500K=4.7mos
600K=2.2mos
700K=8mos
800K=4.1mos
900K=5.7mos
So whats the big difference between prices this year and last - cheap stuff. Last year there were just 24 condos under 200K for sale. This year - 108. Last year, there were 0 residences under 300K for sale. This year 29. In most cases these are the REOs - they are out there and they are being sold
Thus the expensive stuff sells just as good as it did last year. This year, there is now a bunch of cheap stuff on the market, some of it which is selling which undoubtedly weighs down prices.
In fact - what more evidence that the cheap stuff (REO's) is out there and is weighing down the market? Look at PWC.
LAST YEAR IN PWC THERE WERE 28 HOUSES ON THE MARKET FOR LESS THAN 200K. THIS YEAR, 2,201!!!!
Tabitha - this answers your question re hidden inventory - there can be no doubt - this is the REOs and they are out there.
Terminator X said...
"this data is clearly telling us that prices are down even inside the beltway. And yet total sales are still falling, and months' supply is flat or increasing. We're not done."
Case Shiller seems to suggest lower sales in inner areas is not that important:
"During market downturns, home prices fall the least in the most desirable areas of a metro region. As housing affordability improves, home buyers who were previously priced out of their preferred towns will be able to purchase...So, EVEN AS OVERALL SALES VOLUME DROPS, REALTIVELY STRONGER DEMAND FOR HOUSING WILL LIMIT PRICE DECLINES IN NEIGHBORHOODS WITH SHORTER WORK COMMUTES...When combined with large inventories of unsold housing on the edges of urban areas, this shift in preferences will mean that PRICES FOR HOMES IN OUTLYING NEIGHBORHOODS WILL CONTINUE THEIR MORE RAPID DECLINE AND WILL BE SLOWER TO REBOUND WHEN HOUSING MARKETS FINALLY START TO REVOVER."
This explains why even though they have declining sales, the inner counties are not experiencing high months of inventory - every time the prices fall even slightly - the next marginal buyer goes in and snaps one up, limiting further declines. It is almost like the substitution effect in reverse.
In sum - if Case Shiller is right, Arlington will never see 2003 prices again whereas places like Loudon & PWC will see it/are seeing it and could possibly go lower. I hope they are wrong but given their track record so far - I doubt it. God I should have bought!
http://www2.standardandpoors.com/spf/pdf/index/052708_Housing_bubbles_collapse.pdf
Here's the thing I noticed about PWC...there are almost 7,000 active listings, more than ever before. Yes, sales volume is what it was in 2006, but that is WITH prices almost at 2003 levels. And if foreclosures stay on track to beat last year's levels, which they are by 2-5 times, depending on the source, that'll be at least 6,000 more (CRT, I still see your point, but when they come back as REOs, they are priced accordingly, as you noted, and the people waiting to sell will have to compete with them). There aren't enough qualified buyers to get on top of that inventory, not with gas prices what they are...
Need to go look at Manassas specifically...
Wow. For Manassas, the median sold price is down 40% YOY, to $180,000. There are now 805 active listings, the most ever, as far as I can tell. And 43% of the new contracts are contingency contracts. Not a single house sold over $450K.
But sales volume is up 55%, so some people are buying...at the bottom tiers.
The Anon:
I don't know the context in which Case-Shiller said that. i.e., do they mean during a normal cycle or in the aftermath of a bursting bubble?
If they are arguing this in the aftermath of a bubble, though their argument may seem valid superficially, it is incomplete in that it does not say anything about why the premium one would pay for close-in properties compared to the outer region would not return to pre-bubble levels.
It seems to me that they are looking at one aspect of the problem --unaffordability--in vague terms, while forgetting the crucial point that people do not want to overpay for homes even when affordable. And buyers' sense of value--their psychology about overpaying--will be impacted as long as the surrounding regions continue to see falling prices and as long as the asking premium for living close-in remains much higher than the pre-bubble norms.
I think part of it is that the outer areas, having grown so much faster, had a much higher percentage of new loans-- which have predominantly been of the 'creative' type -- that is, written on the basis of the 'teaser' rate, without any real examination of ability to pay.
Another thing is that we're just now getting to the actual foreclosures of the subprime loans. We still haven't gotten to the resets of the 'prime' option arms and interest only loans-- which is what most of the buyers in the most expensive areas have used. This means that most of the holders of these loans haven't gotten in trouble yet, so they have no reason to put their homes on the market. If they don't have to start paying the full, amortizing payment for another 5 years or so, they have every reason to wait and hope that prices will go back up.
Once the resets start the foreclosure train going I expect the price drops to be just as sudden and dramatic as they have been in nearer, metro accessible neighborhoods just outside the beltway. Those, too, were holding up well price-wise and with fairly low inventories until the first short-sales started resetting the comps last fall.
Tabitha-- I don't really understand Manassas. The other areas, yes, but I would have supposed that an established town with a nice Old Town and lot of long-term residents would hold up a lot better than the brand-new mac-cookie-cutter 'burbs.
the Anonymous:
First, neither Case nor Shiller had anything to do with that article. It was the opinion of David Stiff who is an economist at Fiserv Lending Solutions. He does do some work on the “methodology and maintenance of the S&P/Case-Shiller Home Price Indices.” Case/Shiller is an index, not a forum to express ecomonic opinions. In fact, Case and Shiller often do not agree on economic forecasts.
Second, most of the price declines have been in the lower priced houses, as these were the ones financed with subprime loans. Subprime loans were the first loans to reset from low teaser rates. There were less than 600 subprime loans in Arlington County. The impact of resets relating to Alt A., Option Arms, Interest Only, Prime ARMs loans is an open question. These loans were used to purchase more expensive properties and generally have longer reset periods than subprime loans. Further, some of these other loans recast after a period of years, or once negative amortization reaches a certain percentage of the original loan. If a substantial number of these other loans default and wind up as bank REO, there could be some major price adjustments, even in Arlington. If the economy falters, defaults may also increase in the area. So far, Arlington has not seen many forced sales, but that could change.
Third, the Washington DC area has many good jobs that are not located in DC, so while Arlington is certainly an attractive area, it won’t necessarily be convenient for many looking to purchase a home.
Fourth, jumbo loans are more difficult to obtain these days, and often require larger down payments than they did in the past.
So, if you are genuinely interested in purchasing a home in Arlington, sit back, relax and wait things out. Prices are not going up, and they could fall substantially.
Time will tell.
Here is the link to the article: http://tinyurl.com/62hnbp
Great data. But it there anyone who compiles and publishes similar stats for the Maryland suburbs?
I am also curious how long the dam of pent-up prices can hold before breaking. Homes are still being priced on the market at unrealistically high prices compared to their assessed values. With a change of administration nearby, and loss of some House and Senate seats, I can only assume that pressure to sell is only going to mount. It is very interesting to watch this phenomenon.
Great data. But it there anyone who compiles and publishes similar stats for the Maryland suburbs?
You can do it yourself -- here is a link to the data.
http://tinyurl.com/3a9nzz
Edward A:
You bet!
Baltimore Housing Bubble
Scroll down for April stats. I'm sure May's are on the way.
"So whats the big difference between prices this year and last - cheap stuff. Last year there were just 24 condos under 200K for sale. This year - 108. Last year, there were 0 residences under 300K for sale. This year 29. In most cases these are the REOs - they are out there and they are being sold
Thus the expensive stuff sells just as good as it did last year. This year, there is now a bunch of cheap stuff on the market, some of it which is selling which undoubtedly weighs down prices."
The "cheap stuff" was around last year as well, it just wasn't as cheap.
The same types of properties that are in those bottom price brackets today would have been priced higher last year.
zerodown-- Thanks for that link! Looks like I'm going to be playing around with excel charts this week.
;>)
Thanks, Harriet. MRIS has posted data by zipcode, finally. Within Arlington, there appears to be a slight pattern - in some zips (e.g., 22202) # of sales are almost the same as 2007, but prices are down substantially, probably due in part to a different mix of properties for sale in those years -- now, lots of inexpensive condos are selling better than other properties. In other zips (e.g., 22207 IIRC), sales are down but prices haven't moved much.
If people from outer areas were snapping up homes in Arlington once prices dropped and if this is keeping prices from dropping further, there would have been a lot more sales throughout Arlington in April 2008 than there were. On the other hand, this might have happened more frequently, if more sellers weren't still clinging to their high prices, i.e., we might have seen more sales than we saw in April 2008, but at somewhat lower prices than April 2007.
From the limited info we have, it appears terminator-x is right that many Arlington sellers still don't "get" that prices have to fall to sell their houses. It will be interesting to see if April is an aberration or if there is a developing trend over the next few months, particularly with the reset issues coming up that others have described.
Do these "sales" data include bank reposessions?
Would that expain why PWC has ssuch a large increase in number of sales?
Harriet - Do you happen to have "peak to trough" price change data by county available? It looks like Manassas is down by more than 50% so far, and I'm just curious about other counties (and am being lazy).
John Fontain:
Peak-to-trough for medians for some zips I'm tracking:
47.3% Manassas (20111)
84.0% McLean (22101)
97.2% Oakton (22124)
85.3% Herndon (20171)
I can vouch that using repeat sales (ala Case-Shiller) or norming to 2006 assessments both produce bigger drops, especially for Oakton. Unlike those methods, using an analysis like means or medians is more susceptible to changes in the mix of housing that makes up the transactions. For example, Oakton is more in the range of 80-85% using those two methods compared to the 97.2% using medians (I'll post the data this weekend).
NoVAwatcher,
Do you have that info for Manassas 20110, by any chance?
Tabitha: Nope, I just grabbed a handful of zip codes to track, and 20111 was the one I grabbed for Manassas.
If you want to calculate it yourself and not have to wade through too many web pages to find the peak, for 20111 was between June and October of '06.
P.S., looking at my spreadsheet, I'm using smoothed peaks, so my data is a little off.
Whoops, when I had calculated the peaks, I had been using a moving average, so my peaks were a little low. Here are the new numbers:
mean of last 3 months' medians divided by average of 3 peak median prices:
52.8% Manassas (20111)
80.0% McLean (22101)
80.8% Oakton (22124)
73.7% Herndon (20171)
novawatcher said:
"mean of last 3 months' medians divided by average of 3 peak median prices:
52.8% Manassas (20111)
80.0% McLean (22101)
80.8% Oakton (22124)
73.7% Herndon (20171)"
So in other words, prices are down almost 50% in that Manassas zip, about 20% in the McLean and Oakton zips, and about 26% in that Herndon zip?
John: Yup, but by price, you should say median.
For example, I've been tracking repeat sales of 4+br homes, and the drop in Oakton for those isn't as large as the median drop. Oakton is made up of two section: a section west of 123 that is almost exclusively SFHs, and an area of east of 123 that is overwhelmingly condos and townhouses. If condos increased their share of the mix of sales, that could pull the median down faster.
Unfortunately, MRIS does not break down the zip codes by detach/attach.
Re: the David Stiff Article - to clarify, he is the chief economist for Fistserv Lending Solutions. Fistserv is the parent company that produces the Case Shiller index.
His rationale as to why inner areas will always hold up better is interesting. What is more interesting is he suggests something I have been harping on for a while - Speculation.
"Real estate speculations also boosed housing demand in fringe areas...Speculative demand was also pushed outward because investors, although they only expected to hold their properties a few monghs, needed to reduce their mortgage costs. For developers, speculators were a new source of demand for their product, so as the bubble continued to expand, developments in outlying suburbs became even more profitable"
Want to see first hand evidence of this? Here is a comparison of Arlington & Fairfax SFH sales. I used these two because their populations increased by roughly the same amount 3.4 vs 3.8% 2000-2005. Notice something about the sales:
Arl %Chg FFX %Chg
99 1781 N/A 16307 N/A
00 1556 -12% 16312 +0.1%
01 1524 -14% 16441 +0.1%
02 1699 -5% 17396 +7%
03 1758 -1% 19102 +17%
04 1838 +3% 20319 +25%
Bursting - % change from 04 peak:
05 1683 -8% 17934 -12%
06 1412 -23% 12348 -39%
07 1297 -29% 10551 -48%
Again, population in both areas went up by roughly 3% during that time period. Arlington SFH purchased increase by just over 3% while Fairfax increased by 25%. It gets MUCH worse the farther you go out from the center, but its harder to track because of the population increases out west (im not smart enough to segregate that out of the sales). Nevertheless, can there be any doubt that Fairfax experienced much more speculation than Arlington? Doesnt this explain alot of the differences we are seeing?
NoVAwatcher, thanks. We're moving this week and next, so I am about to lose my internet for a while, but I will have to get around to doing that sometime. Down about 50% from peak sounds about right, though. 20111 is Manassas Park, which has been pretty close to 20110 numbers from when I've been watching.
Here are some new listings from today that just about match that drop:
10387 GODWIN Dr
MANASSAS, VA 20110
Price: $245,000
Last sale: Aug 23, 2005 $490,000
10001 UMBRELLA Pl
NOKESVILLE, VA 20181
Price: $323,000
Last sale: Aug 11, 2005 $556,240
listing says "Please don't use as a comparable The property is a foreclosure."
8839 MORRISANIA Mews
MANASSAS, VA 20109
Price: $274,900
Last Sale: Dec 01, 2005 $489,000
Oh, and before anyone jumps on me saying in essence that Arlington was infested with condo flippers - take a look at this. Condo sales for Arlington & Fairfax 99-07 (using a different format for clarity)
County-sales-%change
ARL
99 - 1302
00 - 1420 +9%
01 - 1559 +20%
02 - 1698 +30%
03 - 1917 +47%
04 - 2086 +60%
Change in sales since 2004 Peak
05 - 1807 -13%
06 - 1670 -20%
07 - 1793 -14%
Now, clearly there was some speculation here - there is no reason Condo sales in arlington should jump 60% when the population jumpes by less than 4%. However what about Fairfax? Get ready for a shocker!
County-Sales-%change
FFX
99 - 2406
00 - 3582 +49%
01 - 4540 +89%
02 - 4907 +104%
03 - 5119 +113%
04 - 5398 +124%
drop since 2004 peak
05 - 5180 -4%
06 - 3966 -27%
07 - 3006 -44%
Can someone please tell me what in gods name these flippers were thinking? A 124% increase in fairfax county over 5 years??? As incredible as it seems even the condo speculators were eschewing the more expensive Arlington condos for the cheaper ones available in Fairfax. Again, thats not to say speculaiton didnt happen in the Arlington condo market - a 60% increase in 5 years makes that clear.
What is the shocker here is that the assumption that it was "condo mania" in close is not as common as we all assumed. As was noted in the Case Shiller piece, prices drove the flippers out farther to Fairfax & beyond and in far greater percentages than was seen close in.
LAST YEAR IN PWC THERE WERE 28 HOUSES ON THE MARKET FOR LESS THAN 200K. THIS YEAR, 2,201!!!!
Holy cow. Two orders of magnitude! And the banks haven't yet fessed up to those losses...
tabitha said:
There aren't enough qualified buyers to get on top of that inventory, not with gas prices what they are...
Yep. We're seeing the last few dried up. Not much exciting between now and the fall.
crt said:
What is the shocker here is that the assumption that it was "condo mania" in close is not as common as we all assumed. As was noted in the Case Shiller piece, prices drove the flippers out farther to Fairfax & beyond and in far greater percentages than was seen close in.
Somewhat. There are still plenty of close in DC condos looking for either buyers or renters. Nothing like Palm Beach Florida or San Diego, but enough to distort the market for years.
It will be interesting to see the August numbers. Until then? Yawn.
Got Popcorn?
Neil
CRT: Before you jump to too many conclusions about condos, you should probably take the number of condos available into account. Or to be less obtuse, Fairfax could have seen a larger increase in the number of new (either conversions or new construction) condos compared to Arlington. Hypothetically*, that in itself could have driven sales.
I don't know if the data is available, but if you could norm the sales by dividing them by the number of condos (each year) in Arlington and Fairfax, then it would be easier to draw conclusions.
* Hypothetical just means its possible, not that I necessarily believe it. Undoubtedly there was a ton of flipping.
Novawatcher said...
"Or to be less obtuse, Fairfax could have seen a larger increase in the number of new (either conversions or new construction) condos compared to Arlington."
Novawatcher - that might be right, but that is exactly the problem!!! As was mentioned in the Shiller piece:
"For developers, speculators were a new source of demand for their product, so as the bubble continued to expand, developments in outlying suburbs became even more profitable"
It really doesnt matter if they were new condos or conversions. The point is, the demand (i.e. end users) was not really there! The builders saw the spike in sales and said, "hey we need to get in on this". They built/converted it, and the flippers came - that is until the merry go round stopped.
An arguments raised on this board is the idea that crashing prices in the West will drive down prices inside the beltway.
Based on this data, it seems as if prices have bottomed out in the West, notably Prince William County.
With the implosion argument in mind, does it follow then that stabilizing prices in the west will provide a psychological lift for inside the beltway houses?
kob,
Why do you think prices have bottomed out in PWC?
Why would stabilizing (i.e. bottomed) prices in the west provide psychological lift (increased prices) close-in?
Tabitha,
I am basing this purely on the increase of sales; in the last two months PW County has seen 828 and 766 homes sold, which is a significant jump from the year ago data.
Even though sales increased month to month, the most recent housing price median of $244,000 still represents a 3.5% decline from the prior month. That’s a big negative to my bottom argument and if that continues then the market is on track for another 30% or so decline by this time next year. But is that likely? (I know that there are people that housing won't stop until it hits 2000 levels or so. I'm not one of them.)
Novawatcher
I said it might create a psychological lift; I don't believe it will cause a rise in prices for close-in areas. I don't think anyone is expecting that. Even if people aren't happy about what their home may sell for today, they may feel little better about their investment if they know the end has been reached somewhere.
But the real point or question is where does the bubble bottom? Or, what is the last area to see a recovery?
I tend the think that the Western areas will fall the furthest and fastest in price and consequently hit bottom first.
And their "recovery" -- whatever that may mean -- will take longer because their drop was the most extreme. But I do believe that housing sales pick up out West because prices are attractive, that's going to have a positive impact because it signals an end to this, and perhaps a more stable period.
The Western suburbs were never an index of how deep prices would go; they are the radical fringe.
KOB SAID:
"The Western suburbs were never an index of how deep prices would go; they are the radical fringe."
AMEN. KOB you are the voice of sanity!
crt: The builders saw the spike in sales and said, "hey we need to get in on this". They built/converted it, and the flippers came - that is until the merry go round stopped.
Right. Absolutely right.
BTW, I can confirm/expect that 1) prices have fallen in my part of Alexandria, 2) the median price will likely continue to fall, 3) sales totals have/will drop.
However, those are artifacts of the data.
A few months ago, there were 70-80 listings. Now there are 54 of which one, WAGON, isn't in this zipcode. Sales are off because offerings are off.
Look at what sold recently, places that you might like are selling even though those are all pricey. 10 out of the first 20, GONE.
Once you drop below the top 25 places for sale, you're on E REED AVE! $375K.
Older commodity TH's are askin'/have sold for $350-$400K, down from $400-$450K, about a 10% drop since 2005. Some sold higher but it still works out to about 10%.
Every slumlord in E REED seems to be selling, trying for a quick score, which is understandable.
That pulls the median down.
There's a scarce inventory of better quality places. What's available are the lower priced units. You can see that in the data.
kob,
Thank you for your insights. I can see your points.
But there are other factors, some of which I have noted previously, such as the far higher foreclosure rate this year (2-5 times what it was last year), which will either return or present (from walk-aways) lower-priced inventory to the market in the future.
There is also the very unique situation that most of the population increase in PWC in the earlier part of the decade was due to immigration of workers for growth industries. Now that those industries, expecially construction, are taking a huge hit, coupled with the crackdown on illegal immigration, there is a quatifiable exodus occurring in PWC (you may have noticed the articles in the Post about the huge numbers of ESL students who have left in the middle of the school year, with the expectation that many, many more will leave at the end of the school year). So just when supply is at an all-time high (almost 7000 active listings, compared to less than 2000 every year right up to 2006), people are leaving the county.
Then I was thinking that while the numbers are better than last year, they are a little depressing and deceptive, too. Depressing because they are down 30-40% YOY, 40-50% from peak, and sales are still only up 50-60% from the awful numbers last year. Deceptive, because 40+% of the contracts are contingency, (a much higher percentage than years past), and may never go through.
And you can't get away from the fact that most of the sales are occuring in the absolute worst of the market. So the increase in sales is not spread across all segments. Some parts of the market are still just sitting there.
AND there are pockets in PWC, with Manassas leading the pack, I think, where inventory has not stabilized at all, but is still steadily increasing at a faster pace than the increasing sales.
I'm most interested to see the numbers of foreclosures this year.
Totally off topic rant: there is a house about to go for sale in my neighborhood that, to me, signifies all that is wrong with sellers these days. Built in 1965, 2200sqft, carport, small/sloping lot at main entrance to neighborhood, partial basement that is unfinished, still somehow assessed around $380K (maybe because it's close to VRE), middling school district, surrounded by split-levels and ranches. Realtor owner was going to put it on at $499K, but decided to "sacrifice" and start at $450K.
Good grief. A 6000 sqft McMansion less than a mile away from the VRE just went under contract after being on the market for six months with a last asking price of $474K. If someone had almost half a million dollars to drop on a house, why would they ever ever EVER look at this guy's place? What is WRONG with people?
"AMEN. KOB you are the voice of sanity!"
Says the guy who still insists that "90%" of the region is still stagnant or climbing...
"Look at what sold recently, places that you might like are selling even though those are all pricey. 10 out of the first 20, GONE.
Once you drop below the top 25 places for sale, you're on E REED AVE! $375K."
I notice you have now resorted to trying to slice and dice a single zipcode...
So lets get this straight, first it was "inside the beltway is safe, no bubble here."
Then it was, "close in inside the beltway is safe, there is no bubble in Alexandria or Arlington."
Then when Alexandria and Arlington started heading negative you switched to "the northern tip of Arlington on the orange line and my personal zipcode are doing great, no bubble here!"
Now you have reached the point where you are trying to exclude portions of your own zipcode because they pull the numbers down... lol.
Find me a zipcode that wouldn't have a higher median if you ignored the cheapest part.
Here are the numbers for your zipcode:
Dollar volume down 54%
Average sale price down 18%
Median sale price down 36%
Total units sold down 44%
Days on the market up 107%
Only one single house in the entire zipcode over $700k sold.(It was in the 800-900k bracket.)
Now obviously these numbers are on very light volume and are likely to jump around quite a bit from month to month because of that... but there is simply not a shred of good news here.(for a housing pumper)
Your continuing attempts to put a positive spin on this shows your real agenda has nothing to do with honestly observing the market.
Kob - I doubt the increase in sales will provide much of a psychological lift in close. For whatever reason, close in has (thus far) operated almost as a separate market from the western markets. Cant exactly explain why, but I doubt stabilization out west will five a psychological lift for close in areas.
Tabitha - a few comments to add to your analysis of PWC:
Sales - dont be fooled by sales being down so much from their 04 & 05 peaks. Those peaks were almost certainly due to rampant speculation - they never should have happened in the first place! If I had to guess, I honestly think that 800+ sales maybe 900 tops is where this market "should" be if it were "healthy" (that said see my comment on sales below).
You are 100% right about inventory not stabilizing in Manassas or MP. Unfortunately, these two often get lumped in with PWC in general which looks like it is stabilizing. Just a reminder for all of us, that when looking at "PWC" its important to note if you are including or not including the independent cities in the county stats.
Sales - it clearly looks like all those REOs are driving and really setting the market. Basically nothing in the county sells for over 400 maybe 450K. Question though, are the REO's "nice" ie comparable to some of the stuff on the market in the 450 range? If so, its a pretty safe bet those REOs are resetting the "nice" market for years to come. If they are not really the same, then its tougher to say.
Prices - if I had to guess, as a big believer in months of inventory (and with it still being a bit too high at 8 months) I would say median prices will continue to fall, perhaps all the way down to the 220K range. At that point, it will be important to watch the huge bulge of low end foreclosures - how long will they continue? When do they start letting up? Do they move up or down a price category?
I will say this, stuff like gas prices, immigration, etc, that is all being priced in to PWC as we speak. Stuff to come that we know about (like Alt A's, option arms), honestly, I dont think they can drive this market as much as it is currently being driven. Thus, if nothing else is coming down the pike (specifically job losses close in) I feel confident in saying a floor in median prices is being established. My rationale? Median prices are now driven in PWC by foreclosures. Once those foreclosures are gone, I dont think we'll ever see another foreclosure spike like this in PWC.
Kob - that last sentence of my first paragraph should have said "give" a psychological lift to the market.
KH @ 7:53:
A few months ago, there were 70-80 listings. Now there are 54 of which one, WAGON, isn't in this zipcode. Sales are off because offerings are off.
You may have put the cart before the horse. I suspect that sales are off because demand is lower, which, in turn, reduced prices, which, in turn, reduced the amount of sellers who are willing to sell.
KH... you are getting nuttier by the day.
"2005 - Prices peak and start to fall, except inside the beltway. BH call out "Bubble, it's happening. Praise be Shiller.""
Not inside the beltway? Have you not been reading the data Harriet has provided? Every single county in NoVA is now showing declines, in most cases large ones. Not only that... but we are nowhere near the bottom.
"2008 is approaching a decade after the first discussions of the "Bubble". It still has not happened inside the beltway."
A decade? Who the heck was saying there was a bubble in 1998? This is nothing but another lame strawman...
With prices falling throughout the region and even the "best" counties already hitting or passing your 10% drop prediction with much more to come you now appear to be left with nothing but strawmen and a bruised ego.
Just to be clear though, since you still cling to your 10% drop prediction... are you now calling the bottom? Both Alexandria and Arlington are now down more than 10% in the latest data...
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