November sales were still sparking in the outer suburbs, but more anemic in the closer-in areas.
Standouts from November: Prince William County YOY sales were up 121% and near a 10-year November record (second only to November 2004 with 1,098 sales), with the median price down 43%, and inventory still around 5 months; Fairfax County sales were up 14%, and the median price was down 24%. The City of Alexandria was a standout on the downside, with 39% fewer sales than last year and at a notable decade low. Inventory there is up to nearly 10 months' worth, and the price buyers were paying on those anemic sales were down nearly 20%. Arlington, too, is at a decade high for inventory and the number of sales was at a decade low.
Source: MRIS
Wednesday, December 10, 2008
A Decade of November Sales
Posted by Harriet at 11:39 AM
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39 comments:
Pretty slanted commentary against Arlington.
Clearly the situation is not much worse than last year, 30 less homes sold and 40 more listings.
And the acceleration of price declines is modest, even slowing, compared to every other county's massive decline.
Anybody else would have commented on how MUCH MUCH stronger the market is holding up in Arlingon, but I guess that would fuel the anger of the "fan club" of inside the beltway haters on this site.
Initial comments – well it looks like something big happened this month close in, far out, really everywhere – it looks like high end buyers just sorta disappeared.
As Harriet noted, the standout (downside) is Alexandria. Not only is 78 buyers a decade low, the high end buyers (the ones supporting high median prices til now) disappeared. Without them, the median price just dropped by its biggest amount ever (-19%).
Alexandria is thinly traded so 20 sales 1 way or another can make or break a market. That said, til now, it had remarkable consistency. Is this a one month blip or a new trend???
Going back to high end sales, you can really see them disappearing by looking at the MRIS report for sales 700K -2.5 MM.
http://www.mris.com/reports/stats/monthly_reti.cfm
I like this metric because it excludes most (yet not all) foreclosures, and gives us an idea of what individual buyers and sellers are thinking (i.e. did the market crash spook them)? Here is high end (700K sales/listings/ months of inventory) for the last 3 months on a year over year (YOY) basis:
Alexandria
700K+ sales/listings/months of inventory
2007
Sep 23 sales/ 180 list (6.4 MOI)
Oct 20 sales/ 177 list (8.9 MOI)
Nov 22 sales/ 140 list (6.4 MOI)
2008
Sep 19 sales/ 159 list (8.4 MOI)
Oct 24 sales/ 153 list (6.4 MOI)
Nov 8 sales/ 132 list (16.5 MOI)
In the high end, sales were doing pretty well til now (flat YOY). Yet in November something happened to cause high end sales to fall off a cliff – less than ½ of last year or last month! Even worse, the MOI number is the biggest Ive seen for Alex – in a word, the bid ask spread is now very very wide.
The same thing happened in Arlington but to a lesser degree:
Arlington
700K+ sales/listings/months of inventory
2007
Sep 40 sales/ 284 list (7.1 MOI)
Oct 39 sales/ 259 list (6.6 MOI)
Nov 37 sales/ 238 list (6.4 MOI)
2008
Sep 33 sales/ 268 list (8.1 MOI)
Oct 40 sales/ 282 list (7.1 MOI)
Nov 25 sales/ 284 list (11.4 MOI)
Again, sales were fairly flat to slightly off til Nov. They didn’t crater the way they did in Alexandria (hence median prices have held up this month), but they are not good. 11.4 months of inventory number is again about as high as I have ever seen for Arlington. This is not a positive development…
Now, I anticipate this will bring another round of the “correction is moving in” calls on this blog. I disagree, noting that whatever happened, has happened everywhere. Everywhere is now significantly worse.
Going back to Loudoun, Harriets numbers show total sales are up YOY (but just barely I might add), leading many to think capitulation is here. Is that really the case or is it just an ocean of high priced foreclosures causing sales to rise. Again, in an effort to weed those foreclosres out, lets look at 700K+ sales
Loudoun
700K+ sales/listings/months of inventory
2007
Sep 42 sales/ 830 list (19.7 MOI)
Oct 42 sales/ 765 list (18.2 MOI)
Nov 41 sales/ 716 list (17.5 MOI)
2008
Sep 35 sales/ 540 list (15.4 MOI)
Oct 23 sales/ 510 list (22.2 MOI)
Nov 19 sales/ 468 list (24.6 MOI)
So despite a full year of beat down prices, sales out here are also burning down. You can maybe make a case the burn down started a month earlier (Sept) than close in areas, but its clear, whatever just happened – happened everywhere. Prices are down nearly 24% yoy, yet even this isnt enough to motivate sales - they are now less than ½ of what they were last year.
To loudoun's credit, total inventory is down, but not as much as sales. Again, the bid ask spread, (already far wider than it is close in) is widening even further. Maybe some day, with a lot more of price cuts from delusional sellers, Loudoun can improve its MOI to where it is "only" as bad as it is in the close in areas.
Also, I havent watched them as closely, but the same thing is happening in Maryland in the 700K + category. In Mo Co, high end sales went from 100 (nov 07) to 63 now. MOI went from 9.1 (nov 07) to 14.1 MOI now. Median prices are off 19% by far its worst month ever.
In previously “immune”, very wealthy Howard, sales went from 21 (nov 07) to 7 now. MOI went from 12.3 (nov 07) to 46.2 MOI now! Prices still are down only slightly, yet with MOI building like this, its only a matter of time...
In sum, whatever just “happened” this last month (or two), pretty much happened everywhere area wide. The question now is, is this a 1 month blip, or is it the beginning of a new reality for everywhere? That remains to be seen, but as far as I can tell, there is no good news out of this months MRIS report…
I think this shows that the correction is moving in.
I'Ve been looking at DC proper and it's shown a similar pattern to Arlington.
Arl/Alex/DC is now in the stage where the glut of inventory is forming. This glut will continue to swell, and at some point some sellers will give in and lower prices. Then sales will pick up, and prices will continue to decline. In 1-2 years Arl/Alex/DC will be at the point in the process where PW is now. Of course, the magnitude won't be as great -- we're probably not gonna see 30-40% declines in Arlington or NW DC -- but where I think prices in PW County may rise (or at least stay flat) over the next few years -- the declines are just beginning in Arl/Alex/DC.
Inner-county MD is similar as well -- CRT talked about MoCo, but check out PG County: 333 sales and 7,577 listings -- 22.7 months of inventory!
The "way out" counties (Fauquier, Culpeper, etc.) look pretty anemic to me. MOI is very high. Looks as if prices need to fall dramatically out there.
Doug, would you include me in the haters club? For 10 months, despite all the doomish calls on Arlington & Alexandria, I have been pretty positive on it. The reason was simple, the data WAS pretty positive!
That said, notice how my tone has changed this month? Negative data elicits negative comments from me - and this months data was very very negative. For 35 out of 35 months, Arl AND Alex moved in lockstep - both looked relatively good til now. As I see it there is no reason for Alex to diverge from Arl, and as I noted, there is some real signs of distress on the high end market. Even in Arlington.
That said, this is only 1 month - and we saw this last January too. Later this January sign of doom turned out to be a headfake. Is this another headfake, or is this a sign of new stress everywhere? We shall see in the months ahead.
In the mean time, excuse me as I call it as I see it, positive or negative.
"slanted commentary against Arlington"
lol
All she pointed out was that Arlington is at a decade high in inventory, and a decade low in sales.
What she didn't say is that the only year in the last ten that had sales CLOSE to as low as this year was last year when sales had already fallen off a cliff.
130 sales this month... compared to 238-248 back in 1998-2000.
That is a nearly 50% drop from the level we would expect from historical data, this is despite the price declines already seen in Arlington. (Three straight years of declines of 6%+)
Arlington's median sales price has fallen from 549k at its peak to 445k this month.
"Anon 412 said...
Arl/Alex/DC is now in the stage where the glut of inventory is forming. This glut will continue to swell, and at some point some sellers will give in and lower prices. Then sales will pick up, and prices will continue to decline. In 1-2 years Arl/Alex/DC will be at the point in the process where PW is now."
Anon 412 - for starters, welcome to the blog. Also, if I may, I think your view on a building glut of inventory and the correction moving in, is mistaken.
If I may, take a look at this which shows inventory in all 5 VA counties for the last 4 years.
http://www.recharts.com/nova/nova.html
You will note, the inventory "glut" was back in 2006. Back then, Arl, Alex, Ffx & Lou had their glut - but that now looks to be long gone.
Further, look at where the inventory levels are now relative to 2005 when the bubble first burst. You will note that the ones in the best shape are Loudoun and Alexandria (inventory is down year over year over year over year). Arl, Ffx & PWC are a bit off that pace, but they too look to have down inventory YOYOYOY in the very near future.
So if the "glut was building" and the "correction moving in" we would certainly see the inventory rising in Arl & Alex - yet we dont. As I see it, inventory no longer has the power to take down the Arl & Alex markets. That said, slack sales can certainly do a number on them, and if what we saw this month is any indication, there is clearly more pain to come.
CRT - thanks for your response. I guess my language was off -- what I meant was the rising inventory relative to sales. In DC proper there 10 months of inventory defined as a ratio of sales to listings, and I think this is a lot higher than it's been in a long time.
Arlington's prices have fallen each year for the last 3 years. Median prices have fallen to a level not seen since 2004. Months of inventory are the highest they've been since recorded history (which goes back to 1998).
Is that slanted?
"Anon412 said...
CRT - thanks for your response. I guess my language was off -- what I meant was the rising inventory relative to sales. In DC proper there 10 months of inventory defined as a ratio of sales to listings, and I think this is a lot higher than it's been in a long time."
Anon412 - now I see what you are saying and I agree 100%. In Arl & Alex, months of inventory (MOI) is at its second highest point in the last 10 years (highest was Jan 2008).
It bears repeating that last year at this time, all the outer counties were suffering under month after month after month of double digit months of inventory, another reason why the price declines have been so severe the farther out you go.
It remains to be seen if the inner coutnies MOI will ever get that high or stay that high longer than one month. If the buyers come back in Dec, there probably isnt much damage - the sellers can likely withstand a 1 month disruption. However if this continues for a few months - I would expect to see very healthy price declines next summer.
doug,
How much stronger arl/alex have been (until this month?) is the known knowns, we like discussing the unknown unknowns.
crt,
thanks again for those details. I'm starting to see why you look at that segment of the market. It will continue to be even more important as we move into the recession phase of the housing downturn, as opposed to the housing only phase.
Doug - a little (and I stress little) good news for you. I emailed the realtor who puts out the whisper numbers as I am still in shock as to Alexandria sales. He said 14 sales were logged in on 12/1/08, by one realtor. This suggests to him that these really were Nov sales that werent entered in time. If thats true, that would knock Alex MOI back down to 8.04 - slightly off arlington's pace - meaning Arl & Alex are still acting similar as they have for the last 35 months.
Also good news for you, I looked again at the results from over the river in MD - they are astounding. Recently, some MD counties were posting YOY sales increases - yet not a single one did in November - they are all down.
Also, these were relative pockets of strength, relatively low MOI for the last year led to mild price declines (-5 to -15%) generally. That said, MOI is now at close to record levels across the board in MD
Mo Co. - 10.67 MOI
Howard - 14.18 MOI
Anne Arundel - 15.47 MOI
PG Co. 22.75 MOI
Charles - 16.14 MOI
Calvert - 34.3 MOI
So congratultions, relatively speaking, arlington is still the strongest market out there. It remains the tallest of midgets.
http://tinyurl.com/bvcu7
I can imagine Doug now...
"All of the really worthwhile decks are doing fine!"
"Cara said...
crt,
thanks again for those details. I'm starting to see why you look at that segment of the market. It will continue to be even more important as we move into the recession phase of the housing downturn, as opposed to the housing only phase."
Cara - yeah, the reason I am focusing on it is Harriet gives us a headline number for the whole county - listings/sales/MOI, yet it doesnt say where those lising/sales are in the housing spectrum.
Wanna see something else interesting? Lets look at the ultra low end (0-300K) - this is likely where most foreclosures would be found.
Lets start with Loudoun going back 3 years
Loudoun 0-300K market
2006
Sep 37 sales/283 list (7.6 MOI)
Oct 31 sales/300 list (9.7 MOI)
Nov 35 sales/280 list (8.0 MOI)
Sales were OK, but a little slack, notice what happens to inventory next year:
2007
Sep 40 sales/535 list (13.4 MOI)
Oct 48 sales/620 list (12.9 MOI)
Nov 48 sales/718 list (14.9 MOI)
Sales were up a bit, but inventory EXPLODED - hence MOI grew too large too long, leading us to what we see now:
2008
Sep 193 sales/879 list (5.3 MOI)
Oct 180 sales/852 list (4.7 MOI)
Nov 154 sales/817 list (4.6 MOI)
Sales are way up, but by god look how much cheap inventory is for sale! The countywide trend for inventory is DOWN (YOYOY), yet this pipeline of cheap inventory keeps growing and growing.
Everyone points to the fact that sales are up countywide - well excuse my french, but no shit sales are up! This is what happens when you have a never ending pipeline of very cheap inventory hitting the market. Its the same thing in PWC, but even worse - countywide inventory is down, yet the cheap stuff inventory is at an all time high now.
Without all this cheap, never ending stream of inventory to prop up the sales, something tells me, the whole market in Lou & PWC would look alot like its high end where sales are at a decade+ low.
Sorry, but I wanted to follow up - what do you think YOY sales in Loudoun & PWC are going to look like once this enormous snog of (mostly foreclosure inventory) disappears? The answer is it will look a lot like this:
Alexandria 0-300K Market
2006
Sep 47 sales/248 list (5.3 MOI)
Oct 53 sales/233 list (4.4 MOI)
Nov 35 sales/280 list (5.3 MOI)
Sales are pretty good, and inventory is low - what about 2007?
2007
Sep 36 sales/302 list (8.4 MOI)
Oct 34 sales/290 list (8.5 MOI)
Nov 29 sales/298 list (10.2 MOI)
MOI is no good, but thankfully for Alex the summer 07 sales were brisk, meaning total inventory only slightly built YOY. So how about that low end inventory now in 2008 - did it explode like it did outside the beltway?
2008
Sep 47 sales/295 list (6.3 MOI)
Oct 49 sales/274 list (5.5 MOI)
Nov 30 sales/269 list (8.9 MOI)
Unlike in Loudoun, there is/was no explosion of low end inventory to prop up the sales market today. Countywide inventory (all price points) is down YOY and this low end price point is no exception.
Sales in 2006&2007 were meidocre, but apparently good enough to keep this segment from getting flooded the way Lou & PWC did. Again, its very very hard to have increasing sales YOY when you dont have much to sell in the first place.
BTW, we see the same thing in Arlington, the low end inventory is a bit elevated compared to last year, but its noting compared to the 100-200% jump in cheap YOY inventory we saw outside the beltway.
CRT, I always appreciate your broken-down-by-price observations. Here's one for the city of Manassas:
Properties over $500K:
Date/sold/available
1/2008: 0-26
2/2008: 1-23
3/2008: 0-20
4/2008: 1-13
5/2008: 0-14
6/2008: 0-13
7/2008: 0-10
8/2008: 0-9
9/2008: 0-9
10/2008: 0-7
11/2008: 0-6
Tabitha - glad to see someone appreciates my random musings.
Yeah - manassas fits the pattern we see in all of PWC Man City & Man Park city as a whole. high end inventory is declining, but sales are nowhere near robust enough to assume it is all being sold. Instead what is happening is sellers are de-listing (holding out for a better day) or (more likely) moving to a lower price point outside of the high end category.
The stats bear this out, look at how much 0-300K inventory has grown in the 3 jurisdiction PWC area in the past 3 years...
Nov 2006 - 89 sales/677 listings
Nov 2007 - 153 sales/2347 listings
Nov 2008 - 804 sales/3191 listings
Amazingly, total inventory (all price points) is declining YOY - yet despite that, the low end inventory count is still increasing - truly amazing!!!
Tabitha - another thing interesting about PWC (all 3 areas), is that it is the only county where median prices no longer show seasonality. Even hard hit Loudoun shows some ability to support higher month over month prices during the warmer months - yet PWC is just in freefall...
Normally I dont track month over month numbers, but this is just too facinating!! Here is what PWC has done in the last 16 months - notice how every month (a) price declined from the month before and (b) the rate of decline (percentage wise) has increased from the year before:
Date/ Median price/ % decline YOY
2007
Aug 363K (-2.8%)
Sep 335K (-8.3%)
Oct 325K (-13.0%)
Nov 310K (-16.2%)
Dec 310K (-16.2%)
2008
Jan 280K (-25.5%)
Feb 265K (-27.4%)
Mar 260K (-29.7%)
Apr 253K (-29.7%)
May 244K (-33.0%)
Jun 232K (-38.1%)
Jul 214K (-39.6%)
Aug 206K (-43.3%)
Sep 190K (-43.3%)
Oct 177K (-45.6%)
Nov 176K (-43.3%)
Notice what happened this last month - for the first time in 16 months the rate of decline (percentage wise) did not go up. That is to be expected - after all, with prices down 16.2% from last Nov, its getting harder and harder to post -45% or greater numbers. My guess is we will start seeing the percentages decline from here on out.
Median price though is another matter. It is still down month over month for the last 16 months. I expect this to continue to go down, possibly into the 140K range before everything is said and done (this is just a guess based on how much low end inventory is still on the rolls to work through).
That said, the fact that it only declined from 177K to 176K last month is a bit surprising when considering that for a while 5-10Less each month was common.
Again, one month does not make a trend, but I find this interesting. PWC was the bellweather going in, will it be the first one to start leading us to a bottom? We shall see...
How about a PRO arlington biased post:
Arlington prices continue to hold up very well compared to other counties in Northern Virginia.
Arlington YOY -6.3%, Peak -18.9%
Alexandria YOY -16.1%, Peak -16.1%
Fairfax YOY -23.8%, Peak -33.7%
Loudoun YOY -24.7%, Peak -36.4%
PW YOY -43.3%, Peak -54.8%
The price declines in Arlington are about half that of Fairfax and Loudoun on a peak decline basis, and only 1/4 on YOY basis.
"Shamrock said...
How about a PRO arlington biased post:
Arlington prices continue to hold up very well compared to other counties in Northern Virginia."
Really Arl is holding up well compared to much of the USA right now. I started tracking median prices for the whole US (which includes bubble & non bubble markets alike).
Right now, the NAR reports the whole US has over 10 months of inventory (has been suffering under this burden for nearly a year now). Further, median prices for the whole US are down 11.3% YOY, (thats on top of being down -5.1% YOY in 2007 and -3.5% YOY in 2006.
Amazingly, Arlington is one of the stronger markets in the US right now. When considering how much prices have risen here since 200o and how little they have declined since, its performance is really astonishing.
"Amazingly, Arlington is one of the stronger markets in the US right now. When considering how much prices have risen here since 200o and how little they have declined since, its performance is really astonishing."
As a N. Arlington homeowner, I'm not astonished. My numerous previous postings offer numerous outside commentary that explain Arlington's real estate price strength. I see no sign of that changing.
I have to disagree with the assessment of Arlington's strength, to the extent that sales remain at decade lows (and for other reasons articulated previously). Obviously, yes, the median prices and months of inventory are better than those of some other counties. Obviously, also, there have not been nearly as many short sales and foreclosures, which is a huge factor in bringing down median prices elsewhere, and we have data suggesting this will remain a strength in Arlington.
But there remains a stare-down. Taken to the extreme to make a point: let's say we get as low as 2 sales (both of million-dollar homes) in a given month, and everyone with an overpriced unsold house simply removes his/her house from the market, rents it out for awhile, or lets it sit on the MLS unsold a few more months, while other potential buyers and sellers stay out of the market. I certainly would not say that those data (including the high median sales value, $1MM) show that Arlington is doing well. Unfortunately, I think the talk about how well Arlington is doing (among Realtors, in the media, and would-be sellers, i.e., not just on this website) is one of the causes of the stare-down. If the talkers would pay more attention to the low volume of sales (and that homes that are fairly priced relative to the features/flaws possessed are selling quickly), the market would be healthier.
"Ace said...
But there remains a stare-down. Taken to the extreme to make a point: let's say we get as low as 2 sales (both of million-dollar homes) in a given month, and everyone with an overpriced unsold house simply removes his/her house from the market, rents it out for awhile, or lets it sit on the MLS unsold a few more months, while other potential buyers and sellers stay out of the market. I certainly would not say that those data (including the high median sales value, $1MM) show that Arlington is doing well. "
Ace - I understand and agree. Like all things here "stare down" "doing well" etc are a matter of degree and comparison relative to other areas and other times...
In a normal market, Arlington looks awful - in a vacuum, its a pure "stare down", and buyers are winning it, hence prices are declining.
However, in a bubble market, where flippers, junk loans, lack of lending standards, etc etc, disort measures going up, AND, on the way down, the prospect of historic job loss, a recession/depression, deflationary presures, liquidity traps, tightening credit, etc, etc, etc, not to meniton crippling, historic price declines 20 miles to the west, suddenly, Arlington looks like its "doing well" by comparison.
Also, lets take your hypo and run it out. Say there are hundreds or even thousands of potential sellers renting or sit on the sidelines - how they re-emerge has everything to do with how the market does.
Do they wait for a few months and then come out in big numbers? If so, its trouble.
Do they wait for a year or maybe two, and then come out, in fits and starts? If so, they will cause some intermittent pain.
Do they wait for 2-3-4 years or more - occasionally renting, occasionally sitting and waiting - eventually coming out maybe a handful at a time for the next decade? If so, assuming there are 100-150 normal sellers out at the time, will we even notice their presence?
Its really debatable. The fact of the matter is, if they do not come out and create a "critical mass" they wont have much of an effect on the overall market.
Further, how do we know thats not what we see now? You have to be really desperate to list right now. How many of today's realistically priced sellers are 2004, 2005 or 2006 vintage sellers who listed at wishing prices, couldnt sell, sat, rented, waited, etc, only now re-emerging and priced to sell? If they arent making a big impression now, will the 2006-2007 vintage sellers who re emerge in 2009 & 2010 make much of a difference? If they arent making a big impression will the 2007-2008 sellers who re emerge in 2010, 2011 make much of a difference? It really is debatable...
I posted recently on the movement of delinquencies and defaults from subprime to Alt-A to prime. Credit Suisse is predicting increased prime defaults, and B of A is reporting an enormous jump in Jumbo Prime delinquencies. More from implode-0-meter:
http://tinyurl.com/5cwezh
But N. Arlington will be immune, because all of the peak buyers there could afford their mortgage, even after it adjusts. Right.
Tom said...
"...I see no sign of that changing."
Nov #s for 22207:
Average Sold Price:
2008 $ 678,805
2007 $ 941,808
% Change - 27.93 %
Median Sold Price:
2008 $ 630,000
2007 $ 790,000
% Change - 20.25 %
Average List Price for Solds:
2008 $ 732,255 (132 listings)
2007 $ 999,465 (126 listings)
% Change - 26.74 %
tom, 132 of your fellow owners are seeing things you're not seeing. i wonder why. let me suggest this again: list your home on the market then share with us what you see.
"Terminator X said...
I posted recently on the movement of delinquencies and defaults from subprime to Alt-A to prime. Credit Suisse is predicting increased prime defaults, and B of A is reporting an enormous jump in Jumbo Prime delinquencies. More from implode-0-meter:
http://tinyurl.com/5cwezh
But N. Arlington will be immune, because all of the peak buyers there could afford their mortgage, even after it adjusts. Right."
Terminator X - if this is a problem (or more particularly a new problem, we will see it). Before these guys default, they will at least try to sell - inventory will rise.
That isnt the problem now, the problem now has nothing to do will sellers - its all about the buyers (or more particularly, the lack thereof).
Also, with regard to the less than prime market, recall what has been posted here time and time again.
In the subprime world, 0.7% of the Arlington borrowers had adjustable loans (by comparison 2.4% of Loudoun borrowers had subprime loans. Today over 50% of these have reset.
In the Alt A world, 1.4% of arlington borrowers had adjustable loans (by comparison, 3.5% of Loudoun borrowers had adjustable ALT A loans). Today over 40% of these have reset.
We know little of the prime world ARM borrowers, but if the above 2 categories are any indication, the pain will be more intense the farther out you go...
The whole debate about whether Arlington is doing "well" or not is pretty silly to me.
Anyone taking an honest look at the data can see that Arlington is doing terribly. Steadily dropping for three straight years? Down 19% from peak? Sales at roughly half their pre-bubble level?
Arlington looks "good" when compared to the areas where things are utterly imploding, but by any other standard it is getting crushed. Real estate prices just don't drop 19% over three years when things are going "well."
Thanks CRT, Its tough always finding out I am right, again and again, much to the chagrin of Leroy!
:)
Maybe you can afford a house out in PW county now huh Leroy?
:)
CRT,
Wow, those low-end numbers are astonishing! That's an unbelievable amount of inventory in PWC. Wow. It's going to take a long time to clear that out. And maybe some bulldozers.
Can I be a pest and request Fairfax County numbers since that's where I'm looking? I expect it will lie somewhere in between PWC and Alex but there's a lot of distance between those two. I know first-hand that 70-80% of the under 300 stuff in Franconia/Springfield is shorts and foreclosures for the last year, but stats would be nice if they're easy for you to pull up.
Cara, Harriet included Fairfax County numbers in the table (or she's added them since your post).
CRT said: "Further, how do we know thats not what we see now? You have to be really desperate to list right now. How many of today's realistically priced sellers are 2004, 2005 or 2006 vintage sellers who listed at wishing prices, couldnt sell, sat, rented, waited, etc, only now re-emerging and priced to sell?"
The key word is "realistically" - maybe the answer is that there aren't very many. My argument is that there are far more unrealistically priced sellers.
This should be approached more systematically, which I'm too lazy to do. However, when I give the Franklymls listings "the eyeball test" I see an AWFULLY large number of Arlington detached homes, particularly in the higher end, which are still sitting, sometimes for months. Very few of these houses are priced at or below assessed value. Now, many of these are new, added onto, or extensively and well-renovated, so the assessed value will be artificially low such that the numbers for them are useless, and we have to rely simply on the fact that they are unsold for so long to suggest that it is overpriced.
However, many other houses that aren't new or with renovations that do not appear to fully justify the high price (as evidenced by their unsold status) are well over assessed values from PAST years in which values really were higher. There have been either no price reductions, or a starting price that was so outrageous that a modest reduction still hasn't brought it to market value today. Take a look down Frank's % of assessed value column and you'll see what I mean. I would argue these data show that there are a lot of un-desperate sellers who still are not priced to sell.
Cara - yes, I was blown away when i saw those numbers. In the outer counties, you would think that given the large price declines thus far, the low end inventory would be drying up, yet it keeps coming growing bigger and bigger while total inventory (upper middle and lower) is declining.
Fairfax is in the middle, but it is more like Lou & PWC than Arl & Alex (whose low end inventory count remains small). Heres the low end picture in Fairfax:
Fairfax (0-300K)
2007
Sep 113 sales/1222 lists (10.8 MOI)
Oct 122 sales/1305 lists (10.7 MOI)
Nov 132 sales/1357 lists (10.3 MOI)
Anemic sales looks to have done them in, notice how much listings have grown in the past year:
2008
Sep 530 sales/2285 lists (4.3 MOI)
Oct 424 sales/2287 lists (5.4 MOI)
Nov 379 sales/2245 lists (5.9 MOI)
The robust sales (and much improved MOI) suggest things are now moving, but again, look at how much inventory has grown! County wide (all price points, inventory has dropped by about 1200 listings in the past year, yet despite that sign of "progress" low end inventory has increased by 1,000 units! Again, when this vast pipeline of low end (mostly foreclosure) inventory disappears, you can imagine what sales are going to look like - I dont think its going to be pretty.
Incidentally, I know we dont look much at it here, but the low end picture in Maryland is striking. I think alot of the action (big price declines) is going to move this way, and here's why:
Montgomery (0-300K)
2007
Sep 111 sales/1145 lists (10.3 MOI)
Oct 120 sales/1243 lists (10.4 MOI)
Nov 124 sales/1340 lists (10.8 MOI)
Again anemic sales - not good for tamping down inventory:
2007
Sep 269 sales/2237 lists (8.3 MOI)
Oct 226 sales/2236 lists (9.9 MOI)
Nov 206 sales/2228 lists (10.8 MOI)
Countywide total inventory count is only down by 200 YOY - still the 800+ unit rise in this low end category, combined with the high MOI cant bode well for prices. In MO CO, it looks like the table is set for big price declines, its just a question of when buyers show up and start eating.
Wow CRT, thanks.
In Fairfax County this Nov 2008 the active listings peak in the 250-299k bracket: 554 (SF?) + 215 (condo), but the 300-350 and 350-399 brackets aren't far behind at: 485 + 114, and 489 + 61. So, some percentage of the increased inventory is the compression of the distribution towards lower prices. But 1000 more units!!! Yup, you need foreclosures to explain that, I'd put it at ~700 foreclosures to ~300 price drops at best. (a wild guess really)
PWC, well, that's foreclosures for you, that inventory isn't drying up with price declines as it would for hold-out sellers, it's increasing with forced sales. Indeed. And dramatically at that.
MoCo is scary. Similar listings to Fairfax but ~half the sales. Ouch.
The speculators heading for the exits has long since passed, but the foreclosures on the unfortunate home buyers caught in the bubble are now.
Leroy - the Arlington question is perfectly legitimate, especially for the long time renter waiting for price declines. Consider:
From the year 2000 to peak, each of Loudoun, Farifax, Arlington & Alexandria median prices rose between +128 and +134% (PWC rose much higher, but is crashing much harder).
Given the tight grouping on the way up, why is the rate of burn down so different? Credit started tightening USA wide in Sept 2007 - its not like they took it away later in Arlington.
Its now very very late 2008, the junk loan pool has been drained. Outside the beltway, buyers are no longer willing to pay the high prices. Why are they still willing to do so in Arlington (and why are the banks approving them)?
The case shiller piece this summer suggested places like Arlington will fall the least and be the among the first to recover. Are they right, or is it all a bunch of BS?
These are all very legitimate questions and the relatively mild price declines and relatively good looking forward indicators are essential pieces of the puzzle.
It funny, as much as I speak about Arlington, I personally do not like it. Of all the places in the DC area, it would be maybe my 4th or 5th place choice to live. However, I have found out that just because I dont care much for Arlington doesnt mean there are a lot of other people out there who think differently than I do.
crt,
I followed up a touch more, in Nov 2007 the 350-399 bracket was the peak inventory for FFX Cnty, with 845 + 159, this suggests that as much as roughly 500 = 1000 (2007) - 500 (2008) or more of the new lower listings are the result of capitulation and realism on the part of sellers not foreclosures, persay. Of course some of that capitulation is on the part of banks as well, since I've seen plenty of REO's throughout the 200-600k price range around FS metro.
This is good. Health, health is returning to the FFX Cnty market. Others are willing to buy and provide the comps, and sellers are willing to price to sell. It's not just in my head. I predict that the bottom of the market for the low end in FFX County will come this spring/summer.
And this will free up the few remaining move-up buyers who haven't lost their homes to start buying the mid-range homes elsewhere. Recovery for the DC market in 2010. (prime foreclosures aside)
Wow, I sound like NAR.
"Ace said
This should be approached more systematically, which I'm too lazy to do. However, when I give the Franklymls listings "the eyeball test" I see an AWFULLY large number of Arlington detached homes, particularly in the higher end, which are still sitting, sometimes for months."
Ace - if I may, this could be a lot of it. You are focusing on Arlington and on individual homes - you are a prospective buyer.
I am not looking at any houses anywhere, just data. To me its all just numbers on a page. I am not a buyer, I am just an ogling spectator, and curious observer.
And again, the data is leading me to my conclusions.
Look at high end Loudoun - they have 2-3X as many houses for sale as Alexandria, yet they can only attract a few more buyers per month than does Alex (save this last month which was nearly "Loudounesque").
Look at high end PWC - they have slightly less high end listings than does Arlington, yet each month, Arlington is able to attract 3-4X as many buyers.
So maybe its all just semantics. If you want to call the high end situation in Arlington a "stare down" fair enough. However, if so, we need to come up with a new word to describe the situation in Loudoun & PWC.
"Cara said...
So, some percentage of the increased inventory is the compression of the distribution towards lower prices. But 1000 more units!!! Yup, you need foreclosures to explain that"
Cara - yeah its really something isnt it? I wish you were active early this year when we saw this coming. At the time we noted that the number of listings in PWC in one price category went from under 20 to over 2,000!!! You just knew that a serious snog of foreclosures was going to hit PWC prices hard!
Again, sorry I dont explain myself better when I obsess on this data point or that. As active as you are now, I keep forgetting you werent here when we first noticed many of these things.
"Cara said...
Recovery for the DC market in 2010. (prime foreclosures aside)
Wow, I sound like NAR."
Thank you Lawrence Yun :)
Cara, I'm not disagreeing that the market is relatively better (for sellers) in Arl. than in Loudoun or many other counties. I think I said that in earlier posts. What I am disagreeing with some (not all) posters here about is whether that makes Arlington a healthy or "good" market at this point.
Remember that I also own a house in Arlington so if there is biased self-interest involved, it's on both sides of the transactions. But given that the data do support my interpretation for the reasons I stated (though I'll bow to someone who does a more in-depth analysis that shows otherwise) I don't think my interpretation is biased in either direction.
(I believe, Ace meant CRT, not Cara, since I was having my own random discussion about FFX county)
I suggest we call the situation in PWC and Luodoun (and where ever else) "carnage" to distinguish from "stare down".
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