Here is an inventory chart that includes the "Jim Ratio", assuming that the difference between "active" and "total" is in fact "pending" according to these numbers at Virginia MLS.
The Jim Ratio is Realtor/Blogger Jim Klinge's ratio of the number of active listings, divided by the number of pending listings.
Score Guide
under 3 -- Hot market
3-4 -- Regular market
4-5 -- Market in trouble
5-7 -- Too many choices, buyers are winning
7+ -- Freefall
Update 3/3 - Cara clarifies that these numbers are fudgey for us in this current market where most sales in PWC (for example) are foreclosure sales (I don't know the exact percentage, but let's say conservatively more than half). I opened this post by saying "assuming" normal "pendings" are the difference between active and total listings. But this isn't a normal market, considering all the foreclosure sales. And inventory might be artificially low due to banks holding onto shadow inventory and sellers being reluctant to list unless it's absolutely necessary. Cara also makes a very good point about lingering listings that should normally be removed faster but tend to stay on and stink up the place.
"Cara said ... Another obvious thing to point out about the Jim numbers. In most market times REO and short sales are the exception. So, the average time from contract to close is longer now than normal, thus many more zombie listings (or nascent sales) are on the MLS than would usually be the case. At a guess this could be corrected for by adding 0.5 to 1.0 to the Jim ratio. This still makes PWC a healthy market, but not hot. Maybe this was too obvious for anyone to bother pointing it out. But comparing these numbers directly to years past when closings were less complicated is obviously fraught with fudge factors."
These inventory numbers were extrapolated from VirginiaMLS.com. The total "Northern Virginia Inventory" represent the combined housing inventory (that's listed on the MLS) of Alexandria City, Arlington County, Fairfax City, Fairfax County, Falls Church City, Loudoun County, Manassas City, Manassas Park City, and Prince William County.
43 comments:
PWC is the big winner!!!
Last one down is a rotten egg!
Arlington is the "slowest" according to the Jim ratio. I'm sure Lance would tell us that the Arlington contingency's are more likely to close, because those are the "real" buyers with the wherewithal to obtain proper financing even in this tight credit market, so that the Arlington numbers are healthier than they appear, and in fact superior to PWC.
Decent impersonation? Eh, I didn't capture the tone.
Actually, Cara, the Lance parody you just wrote is probably closer to actual fact than many here want to hear!
Tom,
Well, it wouldn't be any fun unless there were a grain of truth to it.
The sales numbers for March, when the January and February contracts should have closed, will be telling.
I'm guessing for Fairfax County, financing won't be an issue, because many of these are getting bought in cash by landlords. This may be the case for the bulk of the under 100k stuff out in PWC as well. Cash beats fickle financing any day. But it could also drag the median down even further, if those are the only transactions to close.
To accompany this we have the most awesome CR post of graph-aliciousness evar!!
CR February economic graphs summary
The turnaround in PWC is amazing. We all know that the lower-priced houses are selling and pushing the median price down significantly -- and added to that the bottom-feeders are paying 20 cents on the dollar.
Still . . .
I heard this on the WTOP and found it laughable: Pr. William was unprepared for shifting demographics "With that, and considering the nation's economic downturn, the study [by Brookings Institution] called on Prince William leaders to revisit their policy as they look to the future. It said that the county's ability to weather the financial crisis will depend on its success in attracting new homeowners and retaining businesses." (reading between the lines, the anti-illegal effort will damage its economy. I'm wondering if it's having the opposite effect).
Here's the weekend WaPo article:
Take a Deep Breath
Cara your link wasn't working for me though it might be something with my browser.
oops trying again...
CR link for february data
http://www.calculatedriskblog.com/2009/02/february-economic-summary-in-graphs.html
Jeff B,
There's just way too much of the intoxication reflected in this piece still:
"Diego, wearing glasses, jeans and layered gray T-shirts, has already spent countless hours researching the housing and mortgage markets online -- and watching house-buying reality shows on HGTV. "
Great... and buying a house is not just an investment it's also your castle?? And housing always turns around in a year or two (not last time it didn't). Bunch of baloney. But still, I shouldn't complain, it's closer to reality so far (only two pages in)
Tom,
There are two emotions that drive investment decisions: hope and fear. I do not see any reason for you to have much fear since you bought your house in 2001 for a reasonable price and you enjoy your home a lot. Neither I see much hope for Arlington --- no upside absolutely, but quite likely not enough downside to rush to sell your home now.
jeff B
Yup, that was a fabulous profile of the continuing greed in this country. They're trying to buy a first home at almost 400k!!! WTF? With unbearable commutes, but that's so that they can get everything new and to a T. Oh, but they wouldn't want to live there for 10 years, the horror!! What a pair of dimwits.
This article is essentially about buyer's expectations still not aligning with purchasing power or pragmatism.
(except for the librarian who bought for 307k in Silver Spring, good for her!!)
Gah. Thanks for posting this.
I wonder about the librarian in Silver Spring. My wife was reading that article yesterday and mentioned it because it seemed like a good deal. I was curious and in reading the article this morning I noticed that she closed in September of 2008. I have a feeling that house had some serious issues. $307,000 in Sept 2008 for a 4BR screams 'something wrong' to me.
Cara - actually I do think that according to the Jim Ratio, PWC is and will continue to be the big winner.
Reason being, inventory outside the beltway (especially PWC) is crashing. That doesnt mean that more doesnt exist however. To the extent that banks continue to have REOs, I think they will continue to dispense them, little by little, onto the market in the hopes of reaching price stability.
In fact, I wouldnt be surprised to see PWC post the best MOI during the upcoming spring and summer - banks will list, as soon as it is taken down - list some more - repeat as necessary til you run out of REOs...
As for the main subjects of that article I think they're about to be very unpleasantly surprised by their commute from Gaithersburg to Georgetown. I commuted from Arlington to Rockville for a while and I was always very glad that I was going against traffic on 270.
I liked this tidbit too:
"At the end of their row of houses-to-be, there's a derelict strip mall, with a boarded-up beer and wine store, and a laundromat. It looks ready for the wrecking ball, and Diego says he's asked about its status and that at some point, "there's supposed to be boutiquey shops with condos above.""
lol! Boutiquey shops with condos above...suuuuure. What did he expect the people at the sales office to tell him?
I would only live in Gaithersburg if I worked in Gaithersburg. I cannot believe they didn't test drive the commute during RUSH HOUR!
i also think Arlington numbers are healthier than they appear because many of the listings are 'WTF' listings and sellers are not truly motivated (read: stressed) like the majority in PWC.
I know plenty of families (5+) who bought brand new townhomes in Gaithersburg area circa 2005. All are foreclosure-minded right now. Not that they cannot afford the place, it's just nobody's dream home and housing ladder didn't work for them quite well, being in the hole for about 150k. Add a nightmarish commute to it and it becomes a dream come true. Bad dream it is.
"In fact, I wouldnt be surprised to see PWC post the best MOI during the upcoming spring and summer - banks will list, as soon as it is taken down - list some more - repeat as necessary til you run out of REOs..."
Therein lies the problem - we are not running out of REO'S anytime soon & their closing prices set new Comps in neighborhoods -
whether the Sellers want them too or not, any good/informed Buyer now knows ALL the Comps in areas they are looking to buy
These numbers certainly bear out my street-level perception in PWC. But it is crucial to note that the properties selling are at the bottom of the bottom, or they are aggressively priced, as in 2000-2001 pricing.
What has not been selling at all is the high-end stuff, over $500K our here. I am eagerly awaiting the February numbers to see if that has changed. From what I have been tracking, I highly doubt it.
(The Gaithersburg story was satisfying to me, because I finally got to know who "those people" are: the ones still buying not-that-great new construction in not-that-great areas with brutal commutes for lots of money.)
Tabitha-
We were out looking at some 5-10 acre REO's over the weekend in Haymarket (650-699 K range).
People were buzzing all over them like flies on puppy doo.
I think you may see some Contracts for Feb in PWC in the > 500K range for places like these
We'd bite on them, but the Banks are obviously trying to create a bidding war scenario for these places (and I don't feel like participating)
Not to mention that the pricing will probably drop further, plus these places need some $$ spent on them as well.
The owners weren't happy when they were leaving..
spunky--
I'm sorry, I should have narrowed my "PWC" reference down to the zip codes I am watching: 20110, 20111, 20112, 20136, and a little of Nokesville and Warrenton. Though I will keep a close eye on the county-wide numbers, as well, so that is good to know about Haymarket.
I just saw a bank-owned, 5BR/4BA, 7.5 acre place in Warrenton go under contract after just a few days, for $388K, last sale $360K/1999. Wish I could live out there.
This is just a feeling, and I could be wrong, but it seems like people have lost their heads a little out here, like PWC got a lot of exposure as the bargain basement corner of NoVA. When does the spring market really heat up--I forget?
Spunky, I also agree with you about foreclosures. There were almost 900 new ones in January. Last January, there were less than 200. They will all come out sometime, and I have heard that banks are letting them out bit by bit, also. So prices are most certainly not improving anytime soon.
I wonder about the web of transactions in places like that Gaithersburg townhouse mentioned in the story.
The buyers don't necessarily know what it's worth or have any idea what the value might fall to. They're just trusting the realtor and the bank.
I think things won't really change until banks start honestly looking out for their own best interests. If they know that a townhouse is only worth $300k and someone is about to buy it for $400k, do they grant the loan? If the person taking on the loan has great credit, maybe. They still have to worry about holding 300k in collateral on a 400k loan though. They have to trust the buyers to eat that 100k loss if it develops. It sounds pretty risky to me.
The part that stuck out to me were the incentives to use the builder's lender. If it costs a builder 200k to throw up one of those townhouses they're making a tidy profit on a 400k sale. In an unregulated world couldn't they offer to 'insure' the bank in some way against a price decline? They get together and the builder agrees to repay up to a $100k loss on the house should the bank be forced to take ownership and sell it. The builder is still making a guaranteed $100k but they get the immediate and potentially permanent benefit of that extra $100k. They also get to keep comps propped up in their development. The bank gets a $400k loan and a good deal of protection on their collateral.
I have no idea what the legal restrictions are in these cases but it seems like it would be somewhat easy and very beneficial for banks and builders to collude in these sales. I guess a lot would also depend on the actual building cost for the developers.
Tabitha --
Do you have historical comparisons for MOI on 500K+ properties? Yes, it would be a good exercise to get the "Jim Ratio" divided up that way. I guess I could look back through the MRIS numbers for some ideas.
I *think* one more aspect to the hot sales is the fact that it beats out renting when considering rents for SFHs. Renting has been difficult in PWC or Fauquier. We toyed with the idea of an apartment to rent for our family to really save cash, but they don't exist if you have a certain income level (Anything above like 50K). Everything I called on in Gainesville/Warrenton/Culpeper was income restricted. So we rented a single-family, which was fine in the sense that we "saved" hugely from the big drop in house prices, but long-term it made little sense.
Great, so what happens when the banks unload their shadow inventory onto the market?
That WaPo article was fascinating. The wife was a catering manager at a hotel but was positive her job situation was stable. ?
Meshell,
Yeah, this catering mention was nice. Still it is a decent locale, many government functions are there, diplomats, IMF/IFC/Worldbank are close by.
Cara,
I am sadly provincial, I've really only lived here (except for college, and I certainly wasn't house-shopping then!).
This one was particularly homely:
http://franklymls.com/FX6985580
Incidentally, my husband lived on Patience Court with roommates during law school (99-00). The townhouses were actually pretty big inside and there was a nice wooded pathway to Springfield metro. Not sure what the neighborhood is like today though.
See eg:
FX6875381
Meshell,
Windsor Park is definitely on our top 4 list of neighborhoods. There's tons of pride of ownership evident in the detailed mini-landscaping most people have done. And lots of variety in age of residents. I like the silly 70's esque ones in there. We'll see, we haven't actually been inside to decide if they're big enough for us yet.
"Beverly Park" has some real winners for the Land of Misfit Toys category if you do a Frankly search for that. Most are under contract (and at cash-flow positive).
Really? I had no idea! His house was always very quiet (I always went over there to study)--I think they were well=insulated because they were older.
The walk to the metro was about 10 minutes and it was great-no busy streets, just woods. I didn't love it after dark, though. It was really, really dark!
The one he lived in had a decent yard for a townhouse, a little patio and some green space, then the back fence door opened up right to the metro path. THe kitchen was big for a TH but narrow (galley-style) and there was a nice fireplace on the main level and a nice finished rec room with plenty of ceiling height. The rec room opened up into the backyard, so it wasn't dark and depressing.
Oh. and one caveat--not sure if this is the norm but people there were crazy after a big snow. It was free-for-all parking (no assigned spots) and people would shovel out a spot in front of their house and then claim it for weeks. They would put a mop in it and keep it 'reserved' for weeks after the snow melted-it was hilarious!
Just did a search for Beverly Park and my eyes! my eyes!
Who knew windows were a luxury item?
http://franklymls.com/FX6910468
Meshell,
Good to hear. The parking situation was definitely one worry for us, there even with only one car. Amberleigh seems to think it's 100k better than Winsdor Park, but while larger and with slitghly more parking, it's further and I don't think the construction is anywhere near as good.
That one's a real gem, no? Take a look at the overhead view. It's bizarre.
And yours made me think, wow, I'd rather live in a trailer. They make some nice trailers these days you know.
Harriet--
I will try to compile some data about MOI >$500K.
As for the Brookings Institute "study," I have nothing but contempt. How absurd. Recent immigrants left here in droves because the jobs they followed disappeared, and when the jobs disappeared, immigrant-led businesses failed, and even more jobs disappeared, and many recent immigrants to PWC took on mortgages they could never afford from the start, by gamble or by being taken advantage of. I cannot tell you how many foreclosures happened immediately--so much so, I think that is possibly a deliberate fraud perpetrated by developers so they could flip their own houses.
The measures taken against illegal immigration is a topic for another forum, but I am so tired of reading the same old baloney that PWC is full of racists and xenophobes who are shooting themselves in the (financial) foot with their racism and xenophobia. That's political gamesmanship, rhetoric, fantasy, ridiculous.
Harriet--
I will need to do some more work on this, but the little I did is fascinating:
PWC 4BR+ >$500K
Date sold/listed MOI
1/09 21/361 17
12/08 19/381 20
11/08 22/438 20
10/08 39/471 12
9/08 25/500 20
8/08 42/565 13
7/08 37/609 16
6/08 62/675 11
5/08 39/717 18
4/08 40/771 19
3/08 31/800 26
2/08 22/833 38
1/08 23/845 37
1/09 21/361 17
1/08 23/845 37
1/07 86/1314 15
1/06 115/1369 12
1/05 106/278 3
1/04 31/186 6
1/03 7/137 20
1/02 7/83 12
1/01 1/36 36
I hope these columns come out OK, but quick observations:
-->$500K inventory is half what it was when 2008 began, but after a dip in the summer, MOI is creeping up again.
--It has never been easy to sell >$500K in PWC, except for the height of the bubble. It almost seems like people looked around in astonishment and said "People actually WANT to pay this much! Quick, put a for sale sign out front!" in 2006...but it was too late.
--MOI is improving because prices are dropping, not because more houses over $500K are selling. Except for a brief spike in the summer, the # sales/month has remained almost constant this past year, but the available listings >$500K has dropped by half.
My columns did not come out ok. Drat. The emphasis is lost. Help!
Check out this one
I heard that a contract on this is imminent, close to the asking price of $575K. This spring, if the contract info I am getting for properties in the area is right, buyers are still willing to pay a lot more than twice the 2000 tax assessment.
That puzzles me. The 2009 county assessment is relatively high, but if you look at the history of assessments on the county website, it is still bubble territory outside the beltway.
Tabitha,
If you keep Excel files, just copy and paste or import to Google Docs. Then you can just post a link. (But not to spend too much time on it -- you explained the data well.)
Ted,
I don't think anything has been done to that kitchen since the owner bought the place in 1981.
I love the sunroom/deck. And the house is in one of the desirable school pyramids in Annandale. But I have no clue what a fair price would be.
Tedk,
That's a pretty nice house, especially with a little updating on the inside. It's pretty close to 236, which is a bit of a negative, but it's also across the street from a park.
Oh, geez... just read that story in WaPo... Are they ever getting ripped off! I'm looking at slightly smaller townhouses in Gaithersburg right now for less than $150,000. Prices are plummeting. They could get a decent 4 bedroom 2 bath single family home in Twinbrook for $350,000 that's within easy walking distance of the metro. That's just nuts.
Another obvious thing to point out about the Jim numbers. In most market times REO and short sales are the exception. So, the average time from contract to close is longer now than normal, thus many more zombie listings (or nascent sales) are on the MLS than would usually be the case. At a guess this could be corrected for by adding 0.5 to 1.0 to the Jim ratio. This still makes PWC a healthy market, but not hot. Maybe this was too obvious for anyone to bother pointing it out. But comparing these numbers directly to years past when closings were less complicated is obviously fraught with fudge factors.
TedK,
Thats in Mantua, one of the most desirable areas of Fairfax county.
I lived there during the time I went to high school. My dad bought our house for 175k in 1980, and sold it for 375k in 1993.
At the peak of the bubble it sold for around 900k.
Doug,
Good to know you lived in Mantua.
Although this property is within the Mantua ES boundary and feeds into the same Fairfax schools, it is technically in Annandale.
Prices are stagnating in that area and have fallen slightly, but the spring season is usually hotter.
Meshell, JeffB,
Thanks for your comments on the property.
I have a mental block on paying more than twice the 2000 county assessment. I take that as an upper limit on prices.
This one has only a 1-car garage and lacks gas heat. And with a 2000tax assessment of $260K, it makes sense to me only if it falls within $485--$520K.
But the 2009 assessment is $595K, so, for a regular sale, they are unlikely to reduce it much below the current listing of $575K.
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