Standouts from June:
Prince William County sales up 82%, (Median Price down 34%);
Manassas Park City sales up 116%, (Median Price down 45%); and
Manassas City sales up 178%! (Median Price down 50%)
Source: MRIS
Thursday, July 10, 2008
A Decade of June Sales
Posted by Harriet at 9:05 AM
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44 comments:
Initial thoughts - really more of the same from last month. Sales up outer counties down in inner counties. Inventory (listings) are down everywhere YOYOY. The lone exception is bubble king PWC where it is just down YOY.
Months of inventory - in close no change - really no better or worse either MOM or YOY. 5 months ago, they posted a big number that hinted at big time doom. That now was pretty clearly a one time blip, its back to business as usual for them.
Outer counties are improving significantly both MOM and YOY to the point where they are getting close to the close in areas. The exception is Fairfax. Last september is when Ffx melted down, so its months of inventory probably wont start beating the YOY mark until then.
Question about PWC sales - 976 is about as good or better than 8 of 10 years, and only respectably behind the 2 biggest bubble years. Its very robust, and in a way almost too robust. At what point do you have to worry about sales not reflecting end users but a new round of flippers? Is 976 sales too many to be considered healthy?
One more thing about the truly exurban Faq & Stafford. While they are improving, why are they more or less still lagging Lou & PWC. Faq & Stafford had beat down prices the magnitude of Lou & PWC, why arent they improving at the same rate? Was there less flipping (and thus less foreclosures now)? Have gas prices made the commuter crowd say these areas are "too far"??? Dont know but its interesting to ponder.
CRT,
I asked the Fauquier question a few months ago -- mostly about why sellers' prices were so high relative to other closer-in counties. Result: slooow-to-adjust market.
Distressed sales are mostly concentrated in Bealeton, which is even further away from Northern VA than say Warrenton. Warrenton sellers seem to be willing to let their properties sit vacant for long periods of time. Example from two new listings two days ago that bug me:
5860 RIDGECREST AVE
WARRENTON VA 20187
(Vacant, selling for its 2006 sales price)
List Price: $499,900
08 Tax Asmnt: $529,200
Bed/Ba/Ba: 4/3/1
vs. house two cul-de-sacs down:
7324 FLEETWOOD CT
WARRENTON VA 20187
List Price: $299,900
08 Tax Asmnt: $335,500
Bed/Ba/Ba½: 4/3/1
I know #2 is smaller, but $200K smaller?
crt: I understand your concern with the rate of sales in PWC, but from my own anecdotal evidence here on the ground, the rate is very slow. Houses are routinely sitting on the market 90+ days; much longer unless they reduce prices. Lowest priced units still take forever to sell because of the bank involvement. Average loss to the banking industry appears to be well over $100,000 in principal. That means if the 976 sales number is accurate, and it reflects bank foreclosures and short sales actually being sold (not as I suspect it must, new foreclosures being added) the banks and mortage holders, primarily, IMB, CFC, and DB have lost about $100M in PWC just this past month.
So, to answer the question: There is no way this is healthy, even if it's not new flippers.
And I've not seen any evidence of new flippers. I've seen 'investor' types looking to buy and rent out, but no flippers.
Harriet & Xpovos the only thing I can think of is that it really is a bifurcated market at this point. Basically sellers have not come to jesus yet on pricing, and the only time they do is when the house is being ripped from them and crammed down the market's throat via forclosure.
Xpovos - I just checked PWC sales via 100K price ranges here
http://www.mris.com/reports/stats/
In a nutshell, the stats do not conform with what you are seeing. The stats suggest a pretty robust pace of sales all the way up to the 700K price point (above that nothing is moving).
The only way I can think to reconcile this is to go back to some realtors report we all saw and dismissed many months ago (I think on this site). He noted that in any given price range you would have say 500 houses. Of these 250 were sellers in denial & shortsales and the other 250 were foreclosures. He suggested the forclosures would come in and move out (i.e. get sold in 1-2 months - really really fast stuff) - but every time they did, another 250 new foreclosures would show up & replenish the market back up to the 500 point. Thus he suggested that the robustness seen via absorbtion rates was real, but it was not widespread throught the market.
If he is right, I have to believe that you are looking mostly in the sellers in denial & shortsales market. Would you think thats accurate?
Incidentally, I just tried to check the MRIS site again and it crashed.
Ive never seen that before. Harriet, has your "decade of sales" series become so popular that you have caused a cadre of users to check every month for the updated sales listings?
http://www.mris.com/reports/stats/
Closer look at two zipcodes:
20110 Manassas City
Harriet is absolutely right that median sale price is down 50% and sale activity is up almost 166% over last year (117 vs 44 sales).
But also note that the ave. sale price as % of ave. list price is down to 81%. DOM for solds up 27%. New listings outnumber contracts + cont. contracts. And 41% of all contracts are contingency contracts, a percentage that keeps climbing.
20111 Manassas Park City
Median sale price down 49%, sales up 154% (71 vs 28).
Ave. sale price as % of ave. list price is slightly better at 87.52%. DOM for solds up 26%. New listings outnumber contracts + cont. contracts. And 45% of all contracts are contingency contracts, a percentage that keeps climbing.
So houses are sitting on the market ever longer, those that sell are accepting an average of almost 20% less than asking, new inventory is outpacing even the way-higher contracts pace, and almost half of contracts are contingency.
Not to mention the foreclosure rate accelerating to about three times what it was last year.
What does that mean for finding the bottom?
Tabitha, the sales price as $ of list may be a meaningless statistic. As I understand it, MLS lets you report the most recent list price at the time you finally sell. So let's say you put your house on the market for $500K last summer, then dropped it several times, ultimately to $380K. If a buyer comes in then and you make a deal at $360K, it will show up as $360K/$380K, or 94.7% of list price. But clearly the house sold for MUCH less than list price (72%), if list price is defined as the original asking price.
ace, so true. Which is why seeing that number at 81% is significant to me, because I can safely assume the price has dropped considerably during the 100+ days it has been on the market, and even after all that, sellers are accepting so much less than asking.
Assessments were predicted to drop another 20% this year. I wonder if the county assessors would dare to drop them 50%?
CRT,
Harriet, has your "decade of sales" series become so popular that you have caused a cadre of users to check every month for the updated sales listings?
I can only surmise that housing is hot topic for many. Every month I have this small fear that MRIS will stop making the data public.
Tabitha,
What does that mean for finding the bottom?
I think we have to get through the Option Arm resets next year first of all, see a steady decrease in foreclosures, and finally an end to falling prices. I do wonder if this is just a bounce off of the first fall, something like this (Nasdaq) in the last quarter of 2001.
(My 2¢)
crt:
Certainly a large number of the ones I see staying on the market are the denial and the short-salers. But I've watched a large number of out-and-out foreclosures linger for a [b]long[/b] time. One finally had a contract put on it after about a year and a half on the market. Not all of that was as true foreclosure, but it was a wild ride. Started asking price was $499,900. Contract @ $234,000. Still waiting for the contract to actuall finalize.
And, even with 900+ moving, the areas I'm watching have so much inventory that Redfin's 500 per unit area needs me to zoom in pretty close, and then it gets very clustered. PWC has a lot more decline to go.
On the plus side, it's rapidly becoming an area where people can buy with sufficiently large downpayments and not have to worry about the liquidity crisis foisted on us by FNM/FDE/CFC/IMB.
Another month, another set of data.
I have noticed that our biggest real estate pumpers have pretty much given up and disappeared. I guess there are limits to how far denial can take you.
"Months of inventory - in close no change - really no better or worse either MOM or YOY. 5 months ago, they posted a big number that hinted at big time doom. That now was pretty clearly a one time blip, its back to business as usual for them."
This is not business as usual for the inner areas.
216 sales in June for Arlington?
That is far below decade low numbers and is actually down from May when the numbers should be climbing. This is the first time in the ten years of data we have that June has seen fewer sales than May.
This suggests the market is growing worse, not better.
I don't know how well the months of inventory rule of thumb ever applied to Arlington, but it certainly doesn't appear to apply right now.
4.79 months of inventory "should" signal a healthy market, if not a sellers market, but that is also the highest level we have seen for June in a decade and tripple the level seen in 1999 and 2000 before the bubble got rolling.
"Leroy said...
This is not business as usual for the inner areas.
216 sales in June for Arlington?
That is far below decade low numbers and is actually down from May when the numbers should be climbing. This is the first time in the ten years of data we have that June has seen fewer sales than May.
This suggests the market is growing worse, not better."
In terms of months of inventory it is absolutely business as usual. Yes sales are down, but so is inventory relative to sales! What whould it take in terms of sales relative to inventory for you to say this was business as usual? Would you need to see 0.98 months like we saw back in the go go days of 2005?
Better yet, since you are so focused on sales and only sales, lets flip this around, lets say Arlington inventory balooned from 1,034 to say 4,000. If sales then jumped to 309 (beating last years sales) are we then to conclude that Arlington is doing better????
I will answer that one for you - the answer is hell no!!!!
First, I am not focused on sales and only sales. I am looking at the total package, all the data I can get my hands on.
What is taking place in Arlington right now is in no way business as usual.
You are looking at the ratio of sales to inventory and concluding that it is "business as usual" because the close in areas have a relatively low ratio when compared to a general rule of thumb.
I am looking at the fact that prices are dropping sharply and sales are far below decade lows. (and probably falling) Those are simply not things that happen when it is "business as usual."
Not only that, but though the ratio of sales to inventory looks "healthy" compared to the standards of "most" housing markets the ratio is extremely high compared to the historical data we have available for these areas.
However well the months of inventory rule of thumb generally applies, in most markets, it is clearly predicting very very poorly in these markets right now.
Fairfax, Arlington and Alexandria are all showing less than 6 months of inventory...
...and yet they are also showing large declines, and sales at or far below decade low levels.
CRT:
The months of inventory stats you quote are biased down (just as traditional unemployment statistics are biased down). They do not include individuals who have, out of frustration, taken their homes off the market. Simply put, there are plenty of sellers out there that are not currently counted in inventory. A slight uptick in the market will draw some of them out, which will further exacerbate the problem--namely, a drawn-out price decline in the metro area.
crt-- Months of inventory may generally track price pretty well, and maybe it will go back to doing so in Arlington and Alexandria sometime soon-- however the fact remains that at the moment it's not. Prices have now declined for 6 straight months in Alexandria and for 7 out of the last months in Arlington. Unless and until inventory begins to correlate with price again it doesn't seem to me to make a lot of sense to keep focusing so much attention on it.
Sorry-- that should have been 'seven out of the last eight months'. Wish blogger had an edit button!
Here's another one for my House Stalking list (if you don't like 70s contemporaries and waterfalls, you won't like it!):
http://franklymls.com/AR6811975
Lets go back to the blurb that seemed to irk you:
"Months of inventory - in close no change - really no better or worse either MOM or YOY. 5 months ago, they posted a big number that hinted at big time doom. That now was pretty clearly a one time blip, its back to business as usual for them."
Would it have been more palletable if I had said, "back to business as usual since may 2006" (i.e. around the time the close in markets went from scorching 0-2 month turn times to the ones we see now)? If so you should know thats what I meant to say.
"Fairfax, Arlington and Alexandria are all showing less than 6 months of inventory...
...and yet they are also showing large declines, and sales at or far below decade low levels."
As to the 6 months rule, Ive said it before and Ill say it again now, and again later if necessary. Some say 3 is the breakpoint number, some say 7 is the breakpoint number, some say its somewhere in between. Where is "it" in that range really? I dont know.
However, I still believe in certain principles of Econ 101. Principles such as "supply and demand" and that pesky little thing called the "substition effect" some here like to deny.
Thus, I am no more likely to throw out supply and demand than I am to say the substitution effect is not real.
Moreover I also believe that arlington & alexandria are not "different" or "special" or "magically protected" or whatever. Therefore I refuse to belive that whatever breakpoint applies to close is any different to farther out areas.
I will not now deny, nor have I ever denied that prices close in are falling. However to suggest that the laws of supply and demand are somehow different for close in areas or not direcly related to the degree of the declines is akin with throwing the baby out with the bathwater, and I am just not wiling to do that.
Bubbleboy, that's a good analogy, and Sarah, you're right. If the market were in balance, prices would not be declining.
Crt, let's get to basics and maybe that will reduce the conflict.
What do you believe that "months of inventory" predicts or causes?
"bubbleboy said...
CRT:
The months of inventory stats you quote are biased down (just as traditional unemployment statistics are biased down). They do not include individuals who have, out of frustration, taken their homes off the market."
Nor does it (directly) count buyers waiting for prices to come down. Things like supply and demand and market clearing prices rely on the concept of a WILLING buyer and a WILLING seller. No more no less. No one here is suggesting otherwise.
"Sarah said...
crt-- Months of inventory may generally track price pretty well, and maybe it will go back to doing so in Arlington and Alexandria sometime soon-- however the fact remains that at the moment it's not."
No doubt Sarah, but at the same time there are obvious limitations with median prices. Case in point, median prices in DC proper has been up 5 of the last 6 months, even with inventory levels higher than arlington & alexandria. Do I believe this is true? Are prices really going up in DC?? Absolutely not.
At the same time however, I am not going to throw out median prices either. In the abscence of anything better, they will have to do.
Nevertheless, as a disciple of the laws of economics, I am always going to go to them first, with median prices being a "secondary moderating influence" if you will.
ace: is it a new listing or re-listed as new?
it's stunning. but won't be on my stalking list... haha
Crt,
I don't see anyone here pretending that basic concepts of economics don't apply. What they are trying to say is that your analysis appears to be oversimplified and that you are failing to take into account other relevant factors. Until you clarify what your dependent variable is -- is it price relative to last year's price? price relative to last month's price? some measure of quantity of houses sold? something else? -- your argument is not only not convincing, it hasn't even been articulated.
MM, I don't know. I haven't seen it on the market before, but I don't always look at that price range. Maybe someone else here knows.
MM, just to clarify, I'm only a vicarious stalker!
Ace - months of supply is real estates version of supply and demand. A group of willing buyers get together, along with a group of willing sellers, all of which dictate market clearing prices - The same thing we see on the stock market, in the commodities market, in sports betting, etc. etc. etc.
Now if you have an imbalance, say more willing buyers than willing sellers, prices will rise until they go back into balance and achieve a market clearing price. The same thing works the other way, forcing prices down.
The problem in houses, as opposed to really any other commodity, is that prices do not instantly adjust. We are all familiar with the stubborn seller, well this is it. If there are more stubborn sellers (i.e. only willing to sell at their price) than they will back up and more and more of them will enter the market, RELATIVE to the number of willing buyers out there.
This ratio is expressed as months of inventory. 5.2, 3.3, 8.6 whatever...Now there is some debate as to where that balance point is between rising and falling prices. However there is no debating that the higher the number the worse the prices will be.
For example, Clarke county, VA got as high as 46 months of inventory. Closer in PWC got as high as 17 months, closer in fairfax got to 11, closer in arlington got to 9. The worse thos numbers get, and the longer they stay high, the more prices have to come crashing down to put the market back into balance again.
This is all I have been saying, or perhaps trying to say, but doing a poor job.
Honestly this blog seemed to have a good handle on this concept til recently. In fact it was only in the last few days this really seemed to get askew.
"Ace said...
Crt,
I don't see anyone here pretending that basic concepts of economics don't apply. What they are trying to say is that your analysis appears to be oversimplified and that you are failing to take into account other relevant factors. Until you clarify what your dependent variable is -- is it price relative to last year's price? price relative to last month's price? some measure of quantity of houses sold? something else? -- your argument is not only not convincing, it hasn't even been articulated."
Good point Ace. Lets not forget what started this though. The fact that I pointed out relative to where months of inventory have been for the last few years, they really havent changed much.
What I am saying, or what I am trying to say, is that there is little doubt that whatever pressures there are on close in areas they are causing prices to go down. As much as I dont like median prices, it is worth noting that Arlington started experiencing some high numbers 2 years ago.
Arlington median prices 2006
July -8.82%
Aug -14.29%
Sep -5.00%
Oct -11.33%
Nov -7.02%
Or better yet, lets do a straight YOY comparison. Median prices 2007
Jan -16.75
Feb -8.74
Mar -0.02
Apr -7.62
May -8.23
Jun -6.64
Average -8% per month
Now here we are 1 year later, months of inventory are about the same as last year. Have median prices gotten worse, or stayed at the same rate of burn down?
Jan -2.87
Feb -9.57
Mar +3.21
Apr -2.06
May -12.89
Jun -14.61%
Average -6.46%
Now I will grant the difference between -8 and -6.4 is just noise. the point is has it gotten any worse relative to last year??? Nope...
BTW - its worthwhile to sometimes put all the pricing data out there for review. I think these numbers will shock some who think prices have not fallen, and will also shock some who think prices still need to fall. Sure there are some positives thrown in there which I didnt show, and sure this is the whole county meaning it may be mostly due to "icky" areas like south arlington. They may not be fallin much in the areas we want them to, (i.e. clarendon) but they have fallen, make no mistake about it.
This gets back to my much bigger point - this is it kids, this is what you wanted to see, I really dont think there is anything left out there that needs to work its way in. As long as months of inventory does not change, this is what we are going to see and the rate we are going to see it burn down from here to recovery, whenever that may be...
Incidentally, if you think this is bad, you should look at either Loudon & PWC. The numbers out there (where months of inventory was much higher much longer btw) will totally blow your mind...
Harriet
I completely agree with you about Warrenton sellers, but it just doesn't make any sense. There are a couple of properties I am interested in-but they are so outrageously overpriced that even my realtor thinks the listing agents are crazy. I am not sure they could have gotten these prices even at the market peak.
It has already been pointed out that sales in Alexandria City and Arlington are well below 1998 levels. Ask yourself why, given what Arlington offers, would there be less willing buyers than at any time in the past 10 years? Prices, perhaps? The asset class is now more thinly traded and, thus, more vulnerable to disruptions in supply and demand.
I've quickly run through the numbers of contingent sales to determine whether buyers now have more bargaining power, notwithstanding the flat months of inventory figure. The answer is "yes," but I'll leave it to the readers here to chime in further. This is limited to ARL, ALEX, and FFX for June 2006-June 2008:
ALEX (units sold/cntg)
June 2008 -- 191/92 (48% contingent)
June 2007 -- 228/94 (41% contingent)
June 2006 -- 232/64 (28% contingent)
ARL
June 2008 -- 216/105 (49% contingent)
June 2007 -- 308/115 (37% contingent)
June 2006 -- 300/93 (31% contingent)
FFX
June 2008 -- 1453/771 (53% contingent)
June 2007 -- 1423/570 (40% contingent)
June 2006 -- 1680/417 (25% contingent)
One final note: It looks like price discovery has occurred in PWC, as sales are increasing again now that prices have fallen to 2003 levels. As the correction continues to move in, that 2003 price level could be the floor.
CRT: "Nor does it (directly) count buyers waiting for prices to come down. Things like supply and demand and market clearing prices rely on the concept of a WILLING buyer and a WILLING seller. No more no less. No one here is suggesting otherwise."
Actually, yes it does. The numerator of sales rate is transactions. That captures families/persons willing to buy from the active housing stock at that stocks' current asking price (or thereabouts). The denominator is active listings, which (currently) understates people who want to sell at the CURRENT ASKING PRICE. The denominator is understated because sellers are worried that DOM > X will scare off the people willing to buy at current prices. Therefore, they take the place off the market for a while, hope sales pick up in the next season/months/whatever and then try again.
My point in all this is that your initial assessment "Months of inventory - in close no change - really no better or worse either MOM or YOY" (as of May 08, but I suspect is the case with June too) is incorrect, as total inventory at current prices is understated by MRIS active listings.
"Terminator-X said...
I've quickly run through the numbers of contingent sales to determine whether buyers now have more bargaining power..."
can you elaborate? i'm confused by the causal effect of these two #s. thanks!
I don't think the sales increase in PWC is the result of flippers. I think it's shoppers who are being selective in what they buy.
In each of the past three months that sales have picked up in PWC, the median price has fallen. It was $244,000 last month, $232,000 this month. It's falling because there's still a ton of inventory and fear, so buyer's still rule. But why are they are buying?
This is what I think is going on in PWC:
- Yes, the housing market is still risky and prices could drop but with 20% down the mortgage/tax cost in PWC isn't far from a rent. They are betting that price they are paying is in the safe range.
- There is a ton of inventory. That means buyers can go after houses that don't need new roofs, electric and plumbing upgrades, etc. They can get their pick. If they wait for the "official bottom," the competition for housing in the best condition and location ought to increase. And foreclosed properties typically need more work.
-- Buyers know that PWC has declined fast and far. This is one big difference from prior downturns and I think it is extremely important in figuring out how buyers re-enter the market. Buyers today can track prices and trends with a sophistication that wasn't easily available even a few years ago. Type in NOVA housing and this blog is very high on the list. Anyone shopping will see this blog, its data and informed discussion. (I'm not putting myself in the informed camp.) Consequently, buyers, I suspect, are more likely today to target areas where they think they can get best value.
CRT, the issue is not that anyone here doubts that as a general rule a higher "months of inventory" ratio generally signals a weakening market.
The problem is the specifics of how that measure applies to specific areas.
You look at the close in areas and say it is "business as usual" because their ratio looks low compared to other regions experiencing the same bust but we don't really know what the historical numbers look like. For the last 10 years the months of inventory have always been extremely low.
Second, it isn't clear the months of inventory are being measured consistently with historical numbers in the first place.
Anecdotally we have numerous examples of sellers periodically relisting, or pulling listings completely. That combined with sales far below record lows with relatively stable inventory suggest many "sellers" are not listing their houses.
Months of inventory is certainly worth tracking, but you seem to be relying on it overly heavily.
For Arlington,
In 2008 there have been 2326 "new" listings recorded in MRIS.
In 1999 there were 1986 "new" listings recorded in MRIS.
So far in 2008 there have been 1048 sales.
In 1999 there were 1448 sales through June.
Active listings this year have gone from 859 to 1034 from Jan to June.
Active listings in 1999 went from 614 to 633 from Jan to June.
In summary, this year:
2326 new listings, 1048 sales, inventory grows from 859 to 1034.
1999:
1986 new listings, 1448 sales, inventory grows from 614 to 633.
Ratio of homes listed to homes sold:
2008: .45
1999: .73
Even if I add the inventory growth into the "sold" number I get...
2008: .53
1999: .74
Where are the extra listings going?
In 1999 ~3/4ths of all listings between Jan and June can be accounted for as sales or inventory growth.
In 2008 that number has fallen to roughly 1/2.
That means half the houses listed for sale so far this year have neither sold nor stayed on the market.
How smart is MRIS's data collection? If you relist a house will it be counted as a "new" listing? Does anyone know?
Are these houses that are being pulled from the market or are they houses that never really existed in the first place?
mm,
My observation is that there is a stare down in effect in the close in areas. Some sellers are unwilling to depart from prices they feel they deserve, and are having more difficulty finding buyers. Thus, sellers are willing to accept a contingent contract rather than no contract. All other things being equal, however, a seller would prefer a non-contingent sale over a contingent sale. During the peak, there were bidding wars and relatively few contingent contracts, suggesting that buyers had little bargaining power. That is no longer the case.
leroy @ 1:58:
Thanks for the late night comment. This goes a long way towards connecting the dots. So the "low" months of inventory may not suggest that supply is being absorbed through sales, but rather, that supply is being decreased by sellers pulling their homes from the market. This being the case, it is possible for months supply to be below 6 months with accompanying price decreases. That's because the raw inventory number is not accurately capturing the state of the market.
I reiterate my position that the white collar job market in this area will deteriorate over the next year; this will finally cause capitulation among sellers in the close in areas, and price discovery will follow.
P.S. -- I kinda miss Lance. There, I said it.
If I had the time I would really like to put all the data into a spreadsheet and really track what has taken place. Adding these numbers up manually(which is what I did this morning) is time consuming and error prone. I picked 1999 at random, I haven't looked at 1998 or 2000 at all. I might do that later today if I find the time.
I wish I knew how MRIS counted relistings.
Leroy, thanks so much for the data and analyses. Very interesting and informative.
Re: data fudging, you might be interested in this frankly blog post:
http://activerain.com/blogsview/34936/Part-2-Illegal-MLS
http://tinyurl.com/y6bnte
I think I recall seeing on another site that recently MLS in NoVA changed its rule - if you take the home off for x days (maybe 90?), it is treated as a "new" listing (the former rule had a different time period). I will search for the site on this and if I can find it I will post the url here.
Term, I completely agree with you about the sticky prices issue with many (not all) sellers. Homes with sellers who have been willing to drop prices to the current market value levels ARE selling in Arlington, it appears.
Leroy, check this out:
http://tinyurl.com/63eget
"# If a property is off the market for more than ninety (90) days and then comes back on the market it will show as a new listing with zero (0) days on the market. In this case the market history report will have a "previous listing" button if you need to view the prior listing data.
# If a property is off the market for less than ninety (90) days and then comes back on the market it will show as a new listing and the calculation of DOM will pick up from the prior listing.
# If a property is put under agreement, and the transaction does not close, the days it was off the market will not be included in the days on market calculation."
Term, another point to be made re: inventory divided by sales during a period is this: By definition, all the inventory is in the specified geographic area, e.g., all "sellers" are in Arlington. But we don't know where they would be if they did sell. Some may stay in Arlington, but others may take jobs in another city, or may move elsewhere in the DC region, or may retire to FL or Santa Fe, etc. So if the current environment makes it difficult to sell, the numerator may be depressed below a "normal" market. But we can't say that this is canceled out by having the same effect on the denominator. In other words, they are definitely "sellers", but aren't necessarily "buyers", since our sales number is only for the same geographic area.
Bubbleboy - this may be correct, but isnt that always the case that we see this in a deflationary pricing environment. Hasnt this been going on since mid 06?
Leroy - I note that for much of the bubble period, inner and outer counties stayed within a pretty tight range - all were at somewhere between 1-2 months and stayed very close relative to one another.
Starting in mid 06 when those numbers rose, they really started to diverge too, (inner areas settled in at 4-6 months, outer areas climbed to 7-10 months).
This divergence got much worse Mid 07 (inner areas stayed 4-6 months, outer areas got even worse to 10-17 months). Given how close together they were during the bubble, and how much they have diverged since the bursting tells us a lot about the price differentials we are seeing.
Second, once the bubble had burst, the inner areas went from 4-6 months (mid 06) to 4-6 months (mid 08). There was one brief period Jan 08 where they started to really swing, but since then they have remained remarkably consistent, especially given (as terminator X noted) how thinly traded they are. Again, prices are going down, and are continuing to go down, but by this metric, not much has changed in really 2 years (hence my business as usual comment).
Remember back in Jan 08 when they all posted huge numbers I was the one leading the charge to say they were dead. My assumption was, now they are going to join their outer county parties, regularly posting double digit numbers and spectacular price drops. I still think this could happen, and this is what I am looking for. Since it didnt happen this month, I said nothing has changed.
Also, regarding your comment on new listings and where they go, see Ace's links. I would be interesting to see how many of these really are new listings, and how many are really retreads.
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