January sales were up year-over-year in every Northern Virginia county with the exception of Alexandria City, where sales were down 2.6% (to an 11-year low).
Sales were up (again) significantly in Prince William County to an 11-year January record of 759 (up 111%). Prince William (including Manassas City & Manassas Park City) has shaved its months of supply down to 5 months' from 17 months' worth last year, which is remarkable. The median price of those sales was $165,000, which is the same median price as December 2008 and a 41% drop from the year before. Arlington County sales rebounded a bit from last year and were up 27%, although Arlington's in its third year of median price declines.
Source: MRIS
Tuesday, February 10, 2009
Northern Virginia January Housing Sales
Posted by Harriet at 2:53 PM
Subscribe to:
Post Comments (Atom)
25 comments:
At this point it looks like all regions are down at least 20% from the peak.
I wish we had a better measure of what the market was doing than just medians. We know the high-end of the market is largely frozen right now and that obviously affects medians.
(In Arlington for instance there were only 6 sales over $900k and 142 listings.)
Alexandria's one month drop in median price and jump in months of inventory is pretty stunning.
How much of this is small number statistics and how much is real pressure from the lack of sales is another question.
Thanks for getting these up so quickly Harriet. Now I'm patiently awaiting CRT's breakdown by price bracket. With that large of a price drop in only 75 sales in Alex, my guess is that the mixture of what's selling _must_ also have changed.
Come on down Loudoun County..!
Cara - my guess is its the mix has changed in Alex, but im not sure. I will wait for a few more months to render judgment on that.
As leroy noted the high end is suffering everywhere, even Arlington. Arl sales being up 26% YOY isnt as important to me as MOI which is just too high especially in the high end.
In that regard, here is the most current sales/lists in the 700K-2.5MM price bracket.
Arlington
Jan 08 23 sales/205 list (8.9 MOI)
Jan 09 18 sale/273 list (15.2 MOI)
Alexandria
Jan 08 9 sales/121 list (13.4 MOI)
Jan 09 8 sales/153 list (19.1 MOI)
Fairfax
Jan 08 59 sales/1223 (20.7 MOI)
Jan 09 46 sales/1101 (23.9 MOI)
Loudoun
Jan 08 25 sales/594 (23.8 MOI)
Jan 09 10 sales/389 (38.9 MOI)
PWC
Jan 08 5 sales/277 (55.4 MOI)
Jan 09 7 sales/178 (25.4 MOI)
In the top 4 counties sales are down and in each case MOI is growing. In fact, this look about as weak as any of the top 4 have ever looked...ever.
The one exception here is PWC where sales are up and inventory is down (MOI lessening). Its hard to say 25 MOI is "good" but its the only one that shows any real sign of improvement YOY.
Overall, there isnt much to say other than everything looks pretty awful to me. I dont think inventory will ever really come back, but if sales continue to stay slack like this, you will see alot more pain to come.
So thats what I see here. If sales come back in Arl & Alex, I expect this to be a repeat of last year (i.e. some mild price declines, some moderate price declines - nothing clear other than "down"). If sales dont come back, I expect they will show serious (and consistent) price declines as have the rest of the area since early 2008.
One more item of interest. Of the top 5 counties we track, I dont look at MOM prices because of their volatility with the seasons. The one exception is PWC where (a) the median price has been going down every single month, regardless of season and (b) the median YOY price decline has been accelerating.
In that regard, here is the median price and YOY price drop Aug 07 (the beginning of the credit crunch) til now:
Aug 07 363K (-2.8%)
Sep 07 335K (-8.3%)
Oct 07 325K (-13.0%)
Nov 07 310K (-16.2%)
Dec 07 310K (-16.2%)
Jan 08 280K (-25.5%)
Feb 08 265K (-27.4%)
Mar 08 260K (-29.7%)
Apr 08 253K (-29.7%)
May 08 244K (-33.0%)
Jun 08 232K (-38.1%)
Jul 08 214K (-39.6%)
Aug 08 206K (-43.3%)
Sep 08 190K (-43.3%)
Oct 08 177K (-45.6%)
Nov 08 176K (-43.3%)
Dec 08 165K (-46.8%)
Jan 09 165K (-41.0%)
Again, it was remarkable how every month from Aug 07 to Oct 08 how the Median price dropped MOM, and the rate of YOY decline, accelerated.
Now, the rate of decline has slowed twice Nov 08 & Jan 09 and for the first time in 17 months, the MOM price didnt drop!
This may not tell us much given that PWC is the poster child for foreclosure sales. Still, I have been expecting to see the YOY rate decline, and median price to show some seasonality, and perhaps not it has. If so, I expect PWC median prices to show -30% or -20% this summer, and (given the amount of inventory left) median price to stabilize around 140K.
Again, this may mean nothing but a curious anomaly about PWC. However, you could also look at PWC as a severly exaggerated version of what every county is going through. If so, it will be interesting to see if other counties follow its lead and the rate of decline moderates this year.
Agree, Leroy.
Note also that, despite the jump, Arlington's at its 2nd lowest level in the 11 years.
Thanks, CRT.
CRT said...
"...I dont think inventory will ever really come back..."
I'm curious why you say that, in particular irt Arlington.
From what I've seen in the last few months, lower-end homes (<$700K) in N Arl have been selling (or at least getting contracts) and these sales should translate to some decent trade-up sales in the high-end market soon. And once that takes place, my guess is more listings are going to show up to test the water, and inventory will 'come back'.
Thoughts?
CRT,
I would say that PWC is cheap now, given the incomes in the area. Come on, 165k is peanuts in greater DC area. Nobody really wants to live there, but this is another question. It is back to pre-bubble values if you consider inflation. Prices shouldn't drop much below replacement costs for the house especially if there is a lot of land attached to the house.
But for other areas we are nowhere near the expected decline to the pre-bubble trendline. And it is not clear if we'll see it or not.
For some areas where there is not much foreclosure activity, like much-discussed Arlington --- I still see plenty of families coming to open houses for the 2-bedroom condos that cost 500-600k, and these are not very large condos, mind you, 1000-1100 sq.ft. And they are buying bloody condos. With the 500-600 condo fee on top of it. And most of these people will have a kid living in this place, so they will have a childcare bill, too. And most of them make 60-80k, let's say 130-160k for the couple on average. Not your lawyers with 250k+ incomes. Most of these people won't get a huge raise in their incomes in the next few years, pretty confident about that given state of the economy. But they are still buying above their means, and buying very little of the house. I think they are making a mistake, I believe that their inability to move up in the future will hurt the higher range of housing --- but they won't foreclose unless they lose their jobs. So I think in the segment where sales are still happening, prices will stagnate or go down very slightly.
So the only real answer to the housing bubble I see for myself is to make more money (I don't want to get stuck in the condo, even 1300 sq.ft, I want to have three kids). At least don't have to rush anywhere these days.
It's always difficult to ascertain the state of the market from January numbers. We'll get a better sense as we see the numbers from March and April.
It looks like more of the same; potential buyers in the immunozones are refusing to buy at current asking prices, and potential sellers are refusing to "give their houses away." So sales are much lower now than ten years ago. This problem is most acute for more expensive homes, where the jumbo spreads (mortgages over $625K) are making financing that much more costly.
"MM said...
And once that takes place, my guess is more listings are going to show up to test the water, and inventory will 'come back'."
MM - this gets back to my long asked question, that no one really knows how many units of inventory "should" there be?
Theres an underlying assumption here - Arlington inventory is low - it will come back. Are we sure about that?
Take a look at Harriets inventory for the last 11 years - its still the highest on record. While it was probably too low during the bubble years, take a look at 1999 (614 active listings). If 1999 was where Arlington inventory "Should be" you can argue that inventory is still too high and will continue to slowly decline as the crisis works its way through.
The next few months should tell us. My gut tells me this will be a repeat of 2007 and 2008 (but not 2006). Inventory will rise little as holdouts (of which there are many) continue to wait on the sidelines til they deem the crisis is over (2010, 2011, or whenever).
In the mean time, watch sales. If they stay low like this - problems are ahead, even without increased inventory.
CRT, thank you for your ever-insightful and eminently usable data.
I'm starting to sound like a broken record, but I'm still focusing on high-end sales in my PWC target zip codes, and the numbers are abysmal. One property finally sold over $500K in Manassas, the first since last spring, but I know who bought it, and with concessions, I think they actually paid less than $500K. The Manassas Park zip code has seen 0 sales over $500K in four of the past five months. The high-end inventory is not shrinking because the properties sell, but rather because they drop into lower price brackets.
I agree that there seems to be a subtle settling occuring in PWC, with month-to-month drops flattening. But DOM is steady over 100, and the YOY increase in # of sales has fallen off dramatically--I know that is partly seasonal, but it started dramatically when the economy really hit the skids. And don't forget all those foreclosures hiding out there, somewhere. I can't see too much reason for joy, though I think spring will be busy.
Does anyone know what percent of loan originations in 2005 and 2006 in the D.C. metro were interest-only or negative amortization - or where I can find that information?
I was just reading on Irvine Housing Blog that 80% of loans in Orange County during that time were interest-only or negative amortization!
Does anyone else have alerts set up on FranklyMLS? I've set up several but it really seems like it's not emailing me all the results. I can run the search manually and a number of new listings show up that weren't sent to me.
Dad (Mark): I believe those stats were available from the NY Fed until last January or so. I think someone has the old data cached.
[Even with 'Mark' in parentheses, it's creepy to call you 'Dad']
eff B: Yeah, I was kinda wondering if Frankly was sending the alerts in a timely manner or not. My gut says 'no'. My checking of Redfin or Zip says 'yes'.
Of course, my checking of Redfin and Zip is just a quick glance and wildly anecdotal. So I don't know if Frankly has some bugs to work out or if the market is absolutely dead.
I believe prices in the $1 million plus range will have to come down in price to something closer to what is selling (400k-600K for example in Arlington). This is true for every region which has high inventories in this range.
I do not believe the assumption that those who sell in the lower range will move up to the $1 million plus category. That requires lots of cash or a much bigger, probably jumbo mortgage. I do not see this happening, particularly in this economy.
Historically housing bubbles took 10 years to deflate. That is what happened with the previous bubble. No reason this one would not take just as long.
I expect houses in the higher end to depreciate at least 20 percent if not more, depending on how highly priced these are. Some can lose 50 percent of their value (for example a house price at $3 million).
Looking at these numbers, it really is amazing how much prices have dropped throughout the area. This time last year we still had several people on this blog insisting that their neighborhoods were special and that what happened "out there" had nothing to do with them.
Another year or two before that (on other blogs) we had people insisting there was no bubble or that a bubble wasn't even possible.
Now the "best" areas in the region are down >20% and does anyone really think they are done falling?
til they deem the crisis is over (2010, 2011, or whenever).
Maybe 2014 to 2016? At the earliest!
Just sayin'
In terms of the mix, I haven't looked back to prior months, but compare and contrast Alex and Fairfax to understand the +400k -> 322k single month drop in the median.
Alex list/sold MOI
condos coops etc 47/379 8.01
SFH/townhouse 28/322 8.47
Fairfax list/sold MOI
condos coops etc 151/1191 7.89
SFH/townhouse 639/4580 7.17
In terms of months of inventory the differences aren't very impressive, but the trend is interesting. In Fairfax condo prices have been slammed, and their still not selling as well as SFHs and townhomes. In Alexandria condos and coops are the only affordable priced products and their selling faster than SFH and townhouses right now. It's also the case that a larger percentage of the inventory in Alexandria is condos than further out (which seems like a pretty obvious direct reflection of the housing stock). A year ago in Alex, the solds were basically equal (38 condo vs 39 SFH) with a lot more inventory in condos (449 condo vs 335 sfh).
So I call this huge drop as primarily due to the change in which type of housing is still selling. Not that that isn't indicative of the zeitgeist as well.
Oh, and for anyone who's missed it here's a link to where you can find all this data in gorey detail yourself:
MRIS monthly data
cheers!
"Cara said...
So I call this huge drop as primarily due to the change in which type of housing is still selling. Not that that isn't indicative of the zeitgeist as well."
Could be Cara. My only caution would be to not read too much into this single month - my guess is there are times where SFH outsold condos, skewing the median up.
I think we need a few months of consistency to decide the fate of Alexandria & Arlington. For example, Arlington is 20% down from the peak in large part because of the -16% drop in Jan 07 - its biggest monthly drop ever. In March of this year, Arlington likely wont show that given the -0.02% drop in Mar 07 and the +3.21% gain Mar 08.
In that regard, I do like to take the longer view and compare annual medians (all 12 months combined) which should be available in the next few days. This helps smooth out the volatility of the big highs +25% (Aug 07) and the big lows -16 (Jan 07), and gives us a single number which is probably a bit closer to reality.
I will be sure to post those numbers when they are available.
dc2, I have been watching those houses and those priced a bit lower - in Arlington and to a lesser extent other areas - for quite some time. I really think a lot of that inventory could be cleared out if sellers would face today's reality.
The unsold inventory, which is the vast majority of all inventory, tends to fall into one of two categories:
(a) huge new houses built recently by developers, who may have sunk close to the current asking price and land price into the house and are reluctant to take a financial loss (and who believe the pumpers who say Arlington isn't dropping, the spring will be great, just wait 'til the stimulus is passed, etc., etc.).
(b) older houses that are priced substantially over Arlington assessed value (see 22202 in particular for delusional sellers) without the level and type of renovations that would justify paying such a premium over assessed value. These owners have tended to own for more than 5 years and do NOT have the level of investment in the house to justify the price and would NOT lose money if they lowered the price to current market levels (unless they used their house money on boats, vacations, etc., which I still don't consider a house loss). These people believe the pumpers also and ignore comps., their many days on the market, and other far more relevant data.
In the case of (a), who really needs those huge houses? Only a few large families. And many have flaws not tolerated by most rational people with $1M to spend on a house, such as being located next to a run-down rental, having a tiny lot, being on a busy street, having cheap materials or poor construction or ugly design, etc. In bubblemania, developers might find a few people desperate enough for the space to put up with those flaws and able to get risky loans, but now, if you don't need 4400 square feet plus a finished basement, why in the world would you buy them - and could you get a loan today?
Re: b) these sellers have created their own problems that can easily be solved by recognizing that not everyone loves their 40 year old wallpaper, appliances, cabinets, roof, plumbing, etc., as much as they do and pricing their houses to take into account what the buyer will have to shell out on these repairs and updates.
I guess there are a few houses in category c) - take a 1500 square foot house you bought for $450000, put in $100000 of your own taste in upgrades, ask $1 million. You could group them together with category b).
Re: both of these categories - How many prospective buyers in 2009 are willing to deal with all these issues AND the possibility of home prices declining AND the possibility of unforeseen misfortune - job loss, illness, etc.? Not many. How many people can afford these places without selling their current house that has a lot of equity first?
Yet their agents keep telling them not to consider contingent sales - ignoring the 6/142 ratio Leroy pointed out. Good luck with finding people with $1+ million cash or $300-400K or more in annual income and no other debt. Maybe people are willing to take a chance on a $200K place that's less than perfect, but they wouldn't at 5 times that amount or more. That's far more risky.
So I think the problem is really simple, in this range in Arlington. Sellers have to get real about what their houses are worth today. I think there are buyers on the sidelines who would pay a fair price, but they are far more savvy about what this price is, than the sellers seem to be.
"Leroy said...
Another year or two before that (on other blogs) we had people insisting there was no bubble or that a bubble wasn't even possible."
I remember those guys. However, I also remember the blood in the streets type - the ones who said even Arlington was in for a HUGE decline - 2000 prices or bust!
It was 6 years ago when I started listening to them and patiently waiting for prices to come down. I was told there is no difference between Arlington & places like Loudoun - its not different anywhere....
In places out west, they were right. Out there, its better than they could have imagined. However, by my calculations, we have another 44% decline in Arlington to get down to the prices I was told was just around the corner.
This is nothing against you - you have always been more restrained in your calls about price declines. However, as those "blood in the streets" types are now long gone, you can understand why I am a bit frustrated.
I may get lucky and someday get within the range of the price I passed on in 2003. Then again, seeing as I will not get the last 6+ years of my life back, it looks like waiting for the bubble to burst was the biggest mistake I could have made.
Ace,
Agreed. Not every house can be a $1million plus house. Incomes did not increase at those levels among enough people to absorb these houses.
Those who can afford the $1million plus houses already have a home and are not going to risk trying to sell their current home to get into one of these more expensive homes in this economy.
Therefore, the $1million plus house will sit on the market forever (1-3 years) until sellers get tired and take off the market, or sell for a lot less.
Post a Comment