March housing sales were up year-over-year in every Northern Virginia county with the exception of Arlington County, where sales were down 6% (to a record low for March with 168 sales). Months of inventory in Arlington reached an 11-year high, but inventory showed a year-over-year decline in every other area. Prince William County now leads the region with the lowest months of inventory (under 4 months' worth).
Friday, April 10, 2009
Northern Virginia March Housing Sales
Posted by Harriet at 9:31 AM
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Thanks Harriet!!
An interesting things is although Arlington's MOI is the worst March in 11 years it's exactly the same numerically as Fairfax county. And the cumulative decline in price is quite similar to Alexandria. So, it's still hard to call this actually a bad market, just not as good as Arlington usually enjoys in spring, and no signs of a boost from the stimulus (no surprise as most buyers at Arlington price points don't qualify for the $8k even if they are first-timers).
The tiers are very revealing. In FFX if you list by 30k to >500k, you see that finally the listings are peaking exactly where the sales are peaking!! Price reality is here!! And then there's the >2400 listings over 500k with only 230 some sales...
Bottom tier is in price discovery/capitulation mode. Upper tier, not movin. (you'd need to look at more than one page to see if its been budging at all)
This doesn't mean I'm calling a bottom for the bottom tier in FFX county yet. But it could be true, and definitely sellers are being more realistic than fantastic in their pricing for the below median properties. Transactions could still pull the prices even lower, and we'll see what happens when the $8k and low rates go away, but at least comps are being respected which means "health" is possible.
also interesting (to me)
22015 looks a little less healthy MOI-wise than FFX Co as a whole, the under $350k market had 84 listings and 13 sales for 6.46 MOI. Not quite the chipper spring market that FFX Co as a whole is seeing. Not terrible, but not great. But given the concentration of solds amongst the under 30 day listed, and the 94% of list price, I would say price realism is doing just fine.
Initial comments. Cara - I agree MOI in Arlington isnt concerning. Its quite the improvement from the 10 MOI we saw there last month. Also, my guess is the price decline is a bit overdone due to the multitude of condos moving. (We will know in a few days when the NVAR report broken down by SFH/TH/Condo comes out).
Alex looks better than it has recently. Not reported here but average list price vs. average sales price increased YOY - first time in 24 months for Alex. (FFx, LOU & PWC have been doing this for a few months).
Outer counties (as a whole) continue to improve. YOY price declines are off their max rate of burn down (about 6 months ago). I agree its to early to call bottom for Lou or Ffx but PWC? Hmm, I want to say it, but one more month to be sure...
CRT,
we'll know it's bottom when Cara buys!
(j/k Cara)
Also, the worst news everywhere is the high end buyers strike continues. Heres 700K-2.5 MM sales in a few areas:
DC 69 sales/627 lists (9.1 MOI)
Arl 23 sales/307 lists (13.4 MOI)
Alx 14 sales/183 lists (13.1 MOI)
Ffx 81 sales/1284 lists (15.9 MOI)
Lou 15 sales/410 lists (27.3 MOI)
PWC 2 sales/167 lists (83.5 MOI)
Nowhere looks nearly as good as it did 6 months ago. All that sales activity has yet to translate to the high end. Also, as we have seen month after month for years now, the "detatchment from reality" gets worse and worse the farther out you go.
Its a bit to early to declare the high end market totally dead. I will check the NVAR report in a few days to see if the high C&C activity shows any signs of life for the high end. I think there is some, but im just not sure.
Bottom line, I think this a mixed bag report. Outer counties continue to suggest they are firming up, inner counties, while not bad, are lagging them. High end everywhere isnt hot, but there are some signs (albeit ephemeral) that the high end buyers will return. I guess we shall see.
I just looked at the MRIS #s for March, for the following zip codes: 22201, 22202, 22203, 22205, 22207.
It is clear that some of us were right that the activity is in the "lower" price categories and that the situation is pretty dismal if you are a seller in the "higher" price categories.
For condos, there were ZERO sales in these zips in prices above $800K; 23 condos in this range are "active."
For SFHs, there were 6 sales, and 53 actives, in the $800K - $999K range. There were 7 sales, and 116 actives, in the > $1 mill. range. For "golden" 22207 alone, only 3 >$1 mill. houses sold, with 75 actives in this range, i.e., 25.0 MOI.
I'd say that, for this segment of the market, MOI should be very concerning, if you are a seller. So while the < $800K market may be "healthy" above that certainly is quite different. Obviously, some price adjustment is in order!
CRT,
I think it is very safe to call the Bottom of the Bottom in PWC I.e. – The low-mid level stuff is selling quick and at reasonable prices – the Medium-High/High is languishing. – One thing I have noticed is the 2009 county assessments seem to be very accurate – a rarity in life that should be savored.
-Kingmer
You Are correct KingMer-
Those high-end sellers in Haymarket & Gainsville have got to get in reality-
Anything there over a Million - crazy.
I guess they think they are in Fairfax Co.??
mm
If you knew when I bought GE and CISCO stock after the DOW crash you wouldn't say that. (even though it was a joke)
( i meant the dot.com crash)
is there an official definition of "bad market"? pardon my newbiness. the yoy is still in increasing decline, which says to me people may be buying, but the prices are still going down, therefore still worth waiting.
"So, it's still hard to call this actually a bad market, just not as good as Arlington usually enjoys in spring"
I don't have any problem at all calling this a "bad" market.
This is the worst MOI showing in over a decade, the worst sales numbers in over a decade, and a 20% decline in median prices YoY.
If that isn't bad, what on earth is bad?
Ivan
There are a number of different things all under discussion at once, which can confuse things.
Healthy versus unhealthy market is asking whether houses are being priced to sell or if there's a big divide between what sellers list at and what buyers are willing/able to pay. MOI reflects this. In this respect what we're seeing in the low tiers is a relatively healthy spring market.
This helps transactions because it means things will also be more likely to appraise for the "needed" price.
However, as you rightly point out, a healthy market doesn't mean prices can't continue to fall. The thing is you need to look at both the median price drops and the sale/list price to tell what's going on. Because the fact that only the low tier is moving pulls the median down into that low tier, and can keep the YOY changes negative even if the actual price on a given low-end property has stopped dropping. Once the low-end inventory overhang has cleared, the median may start going UP, as transactions shift to higher price brackets even if the reason that happens is because those higher-end homes moved their prices down to get sales.
So you really need to keep a watch on the tiers to know what's going on these days. Harriet posted a link on the previous post to the raw MRIS data, which they will give to you in price bins.
So, whether the time is ripe to buy now or not depends strongly on what you're buying and where. But there are now places where buying beats renting on a cash-flow basis and the market seems to be getting price support. (I haven't seen that in SFHs yet anywhere, but I haven't been focused on that)
(oh w.r.t SFHs, there are some cash-flow positive ones on the MLS, but they are currently the exception)
22102 McLean:
128 properties for sale over $800,000.
0 sales of $800,000+ plus properties.
dollar volume down 62.13%
22207 North Arlington:
dollar volume down 63.36%
only 3 sales above $900,000
units sold 2008: 35
units sold 2009: 15
One thing I noticed w/ the Mar vs. the Feb numbers, and tell me if I am misreading/wrong:
It seems the YOY "median price % change" numbers for Feb are generally better than Mar.
03: 12.2 v 7.4
04: 19 v 24.2 (exception)
05: 27.4 v 22.5
06: 12.7 v 8.1
07: -4.5 v -4.4
08: -9.8 v -13.4
09: -24.2 v -19
It is interesting that 04 and 09 are the only 2 months where they are better and they are exactly reversed and negative of one another: 24.2 and 19 or -19 and -24.2.
What does this indicate? I know it has nothing to do w/ "seasonal" because they always are Feb v Mar in every year.
While the avg sold in higher in Mar 09 (320) and the avg sold in Feb 09 is 307, that is seasonal. But the % YOY, is improving for the first time since 2004 when looking at these Mar vs Feb numbers.
leroy
"This is the worst MOI showing in over a decade, the worst sales numbers in over a decade, and a 20% decline in median prices YoY.
If that isn't bad, what on earth is bad?"
Well said.
I think "bad" was well illustrated by CRTs numbers on the >700k market segment...
I was trying to make the point that you "couldn't" use these data to say that Arlington is now worse off than other nearby markets. I guess I also just still haven't gotten aclimitized to the fast turnover markets of the DC area. 4-6 months of inventory is still "normal" to me.
t,
mostly this comparison makes my head hurt, but I'll try....
With greater YoY declines in the past two years in March, maybe there's less "room" for a huge decline than there was in February? Just as there was less "room" for an increase in March on the way up?
Still crossing fingers for you T. (for all the good that does). There are definitely buyers at your price point out there though, in droves compared to anything above it. You've already closed on the new digs, right?
Ivan - "bad" is obviously a relative term for Arlington. Bad would be last month when Arlington had 90 sales - the worst not just for that month but for any month in 11 years.
Bad would be last month when Arlington had 10.28 MOI - the worst not just for the month but for any month in 11 years.
By comparison to Feb numbers, these numbers look much much better.
Also, "bad" would be relative to other areas which in years past had double digit MOI numbers. This year too, if Arl MOI is bad, Ffx, Lou, Faq, Culpepper, Stafford, Montgomery, PG, DC, etc, etc. would be "worse"...
T - perhaps a better way to look at the YOY price trend in PWC is by looking at monthly rates of median price drops.
For example, heres PWC yoy median price drops for the last 20 months:
2007
Aug -2.8 (363K)
Sep -8.3 (335K)
Oct -13.0 (325K)
Nov -16.2 (310K)
Dec -16.2 (310K)
2008
Jan -25.4 (280K)
Feb -27.4 (265K)
Mar -29.7 (260K)
Apr -29.7 (253K)
May -33.0 (244K)
Jun -38.1 (232K)
Jul -39.6 (214K)
Aug -43.3 (206K)
Sep -43.3 (190K)
Oct -45.5 (177K)
Nov -43.7 (176K)
Dec -46.7 (165K)
2009
Jan -40.1 (165K)
Feb -36.0 (170K)
Mar -35.4 (168K)
First thing to note is the YOY rate of decline peaked probably in December, and is likely to continue to decline this year. This was expected.
What was a bit of a surprise is how the price drops pretty much halted altogether in Dec. Last year (really since Sep 07), PWC exhibited no seasonality in pricing. Every month was down farther than the other. It was the only place in the area that did that.
My first guess was that PWC would continue to show some price declines this year - to perhaps around 150K. That may still happen, but it is looking unlikely at this point.
My guess now is PWC will continue to trade in the 160-170K range all year - still showing no seasonality, but not going down further still (hence the "bottom" call).
As you know, you really can't compare across months like that. Feb may have been the worst single month in the last decade or so, but that doesn't mean March is better just because it has more sales.
Sales always go up in March, these are still the worst sales numbers Arlington has seen in more than a decade at this time of year.
On a similar note, you can't compare MOI numbers across regions. I am not trying to say Arlington is doing worse than those other areas, but clearly 5 MOI does not mean the same thing in Arlington as it does in other areas.
What can we say about Arlington right now?
The market is largely frozen and sellers remain in denial, a condition that has persisted for months.
Accurately valuing a market when the market is nearly non-functional is difficult, all we can say for sure is that these houses aren't worth what sellers are asking for them.
Thanks Cara! That was a really helpful explanation.
Leroy, I generally agree with most of your points.
However, if someone wants to do the analyses for the <$800K bracket (or whatever figure one wants to use as a cutoff) for years prior to 2009 (as I did for 2009 for the higher brackets), it would be interesting to see if the 11 year-low-sales and price drop for Arlington are fully attributable to the YOY changes in the >$800K end. I suspect that the March 09 activity (both sales volume and price) is pretty consistent with the activity (over at least the past few years) for modestly priced Arlington houses, and this is being masked by the disaster that is the high end. It's a disaster for sellers who want high prices, and it's a disaster for buyers who are being priced out of houses they should be able to afford, if market prices were operating.
It just appears to me that a lot of the "lower" or "middle" sellers are pricing their houses much more closely to assessed value plus a premium for premium improvements not reflected in the assessed value, and that Arlington assessments are pretty reasonable for these houses, whereas the high end sellers are largely pie-in-the-sky and Arlington seems to have grossly overassessed a few of these, which may reinforce the sellers' thinking. What's my basis for this? For the few upper end houses that HAVE sold, many sellers have taken a pretty good haircut relative to assessed value and/or a recent prior purchase price.
However, it would be interesting to be proven wrong.
What I really don't understand is why so many developers who have empty houses for sale, eating up carrying costs, and sellers who have owned their houses a long time and should have substantial market produced inflation value, keep dreaming about that price they hope to get instead of getting serious and selling. They really seem to have convinced themselves that this is only a temporary glitch in the market and keep hearing that Arlington is doing pretty well, etc., etc. but they aren't paying close enough attention to the data or the news to figure out what the reality is.
CRT,
I think there is not much farther that PWC low-end can fall. It seems that the median is down about 54% for the PWC from the peak. That's a lot. And there are plenty of properties that actually dropped more than 50% there. Certainly in C-S terms the drop there is not anywhere close to 50% since high-end stopped selling dragging the median down.
But eventually I think C-S for this area can get much lower than now.
Same applies to the high-end elsewhere. Currently in Arlington there is not much of drop in prices, most of the homes sell slightly (5-10% max) below their 2008 assesments, but I expect that it will continue slowly bleeding for the next couple of years.
The thing that really worries me now is taxes. I think they will rise a lot and will rise soon. This can offset any benefits from leveraging youself with debt at low rates. So it is probably prudent to buy slughtly below your current means now, keeping in mind that real incomes can drop in the future.
Leroy - its obvious you dont think MOI is working or tells us anything yet. For myself, Cara, Harriet, Ace, etc. we continue to discuss it because while its not perfect we think its as close as anything to tell us whats going on. For example
DC 69 sales/627 lists (9.1 MOI)
Arl 23 sales/307 lists (13.4 MOI)
Alx 14 sales/183 lists (13.1 MOI)
Ffx 81 sales/1284 lists (15.9 MOI)
Lou 15 sales/410 lists (27.3 MOI)
PWC 2 sales/167 lists (83.5 MOI)
Looks to me that DC high end sellers are having a better time
selling their place than do the high end sellers in Loudoun. I dont know why thats controversial...
"However, if someone wants to do the analyses for the <$800K bracket (or whatever figure one wants to use as a cutoff) for years prior to 2009 (as I did for 2009 for the higher brackets), it would be interesting to see if the 11 year-low-sales and price drop for Arlington are fully attributable to the YOY changes in the >$800K end. I suspect that the March 09 activity (both sales volume and price) is pretty consistent with the activity (over at least the past few years) for modestly priced Arlington houses, and this is being masked by the disaster that is the high end. "
That is certainly possible. It is obvious that the lower end of the market in general is seeing a lot more activity. Regardless of area, the higher end sellers appear more likely to be in denial about prices, or more willing/able to try to wait the market out.
"Leroy - its obvious you dont think MOI is working or tells us anything yet. For myself, Cara, Harriet, Ace, etc. we continue to discuss it because while its not perfect we think its as close as anything to tell us whats going on. For example"
I never said MOI numbers don't tell us anything. It just doesn't make sense to try to compare them across regions when they clearly don't mean the same thing everywhere.
For that matter I don't think medians are reliable right now either. They are interesting to follow... but they can't really be compared to a normal market where a normal ratio low and high-end homes are being sold.
"DC 69 sales/627 lists (9.1 MOI)
Arl 23 sales/307 lists (13.4 MOI)
Alx 14 sales/183 lists (13.1 MOI)
Ffx 81 sales/1284 lists (15.9 MOI)
Lou 15 sales/410 lists (27.3 MOI)
PWC 2 sales/167 lists (83.5 MOI)
Looks to me that DC high end sellers are having a better time
selling their place than do the high end sellers in Loudoun. I dont know why thats controversial..."
I don't think that is controversial to say a quantity and percentage of high-priced homes are selling in close. What I disagree with is saying that somehow Arlington's market is not "bad" when by any reasonable measure it is awful.
Konstantin - I still think theres a geography component to this that we are seeing Low end everywhere is doing OK, but especially in PWC, Mid end, not as clear, High end - huge difference.
Heres a head to head comparison of the low and mid end for each area:
0-300K
Arl 44 sales/214 lists (4.9MOI)
Alx 54 sales/283 lists (5.2MOI)
Ffx 461 sale/2074 list (4.5MOI)
Lou 173 sale/779 lists (4.5MOI)
PWC 708 sale/2301 list (3.3MOI)
Obvious the clear winner here is foreclosure heavy/ investor choc PWC. With regard to the rest of them, they seem pretty similar though all within .7 MOI. PWC low end should bottom first, but the other 4 shouldnt be far behind...
Mid tier 300-700K
Arl 99 sales/454 lists (4.6 MOI)
Alx 86 sales/276 lists (3.2 MOI)
Ffx 496 sale/2567 list (5.2 MOI)
Lou 167 sale/1102 list (6.6 MOI)
PWC 173 sale/1030 list (6.0 MOI)
Here its not so clear. Alex is probably a bit overperforming this month, but it again looks like the inside is doing (slightly) better than the outside.
Finally, while a bit redundant heres the high end.
Arl 23 sales/307 lists (13.4 MOI)
Alx 14 sales/183 lists (13.1 MOI)
Ffx 81 sales/1284 lists (15.9 MOI)
Lou 15 sales/410 lists (27.3 MOI)
PWC 2 sales/167 lists (83.5 MOI)
Again, no where is good but wow, when will the Lou & PWC sellers get with it?
In any event, I agree PWC will be the first to bottom, but the other 4 arent so clear. What I do find interesting is that years after the bubble burst, the price declines 06,07,08 &09 are generally bigger the farther out you go, and with the exception of PWC, the outside looks like it has farther still to drop.
CRT,
Just curious, when you look at high-end, why do you take out the $2.5MM+ segment? I'm guessing your thinking is that that segment is just so far out of reach to even the people buying $1 million homes that it has virtually no effect on the market for regular folks - is that correct?
"Leroy said...
It just doesn't make sense to try to compare them across regions when they clearly don't mean the same thing everywhere."
They most certainly meant the same thing on the way up. During this and every month from 2000-2005 all of the big 5 were generally between 1-3 MOI each and every month.
Starting in 2006, MOI by area really started to diverge, peaking in 2008. Arl & Alex spend most of that period in the 4-7 month range while outer coutnies spent much of it at the 7-12 month range. Its thus no surprise to me that the price rundown has been more severe the farther you go.
I think it's been pretty obvious that the low to mid level properties in PWC have bottomed for some time now. I said it a month or two ago in some of my comments here. As I've said before, prices have fallen so far that single income families can now afford to buy in PWC. This hasn't been the case in the entire DC region for years. This opens the market to many more possible buyers. It's no wonder that the market is heating up so much. People that could previously never afford to buy a house because they are single, have a disabled spouse, have a stay at home spouse, etc can now purchase on their income alone. People with two lower level incomes can now afford to also buy in PWC. When prices fall to these levels, it's hard to predict exactly what will happen but I can predict that a SFH in PWC isn't going to drop down to $100,000. That would place townhouses in the 45k range! PWC has bottomed and we have five months of relative price stability to show it. If you are looking to buy in PWC and believe these people that prices will continue to fall, tell me, how far will your house go to? If a house sold for 425k in 2005 or 2006, what do you think it should go to? It's already at 230k or 240k! If a townhouse that sold for 325k at it's peak is now selling for 150k what should it fall to????
"CRT,
Just curious, when you look at high-end, why do you take out the $2.5MM+ segment? I'm guessing your thinking is that that segment is just so far out of reach to even the people buying $1 million homes that it has virtually no effect on the market for regular folks - is that correct?"
Anon - generally yes. Even during good times, that market is so tiny, its very very inefficient. Plus buyers are so few and so picky that 1-2 years of MOI isnt uncommon for a well priced home.
CRT,
MOI can lie and lie big time. I think we agree that the bottom tiers in PWC are done, after all at 50-80k for a livable house, that is well under 500$ mortgage, you can’t rent anywhere for that – however I have been hunting quite a bit in PWC (I want a Mid-High end property for mid-low price) – I like to talk to realtors, even though I personally feel that most are scum and still pumping the kool-aid – MANY sellers who wholly own their properly are holding back because they will not be able to get sufficient retirement or simply have an problem with a seller in 2005 getting 2-3x as much, many of these people need to sell – I looked at a nice property in Haymarket, the retired gentlemen was giving guided tour – His wife was already living in the retirement properly waiting for him to come ‘home’ – she died (his story) last weekend after living in the new place for *6 MONTHS* while waiting for the husband to sell. I flatly told him (but very nicely, as he inquired what I would pay) the price I would pay, 100k less than his asking and right at 2009 assessment (for most houses I have looked at in PWC, I have found that the county did a really good job) - Add to this to the Bank throttled inventory and there is a TON of “Pent-up-Inventory”, the real MOI is probably into the years.
-Kingmer
"KingMer said...there is a TON of “Pent-up-Inventory”, the real MOI is probably into the years."
Thats probably true KingMer, but its true in any other downturn as well. Case in point, during the early 1990s DC downturn. The majority of the price declines were in the (1990-92) period - for the next 4 years, prices basically stagnated or rose slightly.
Take a guess when the sales bottom was? 1996! Specifically, NVAR indicates in 1996 that there 13,783 annual sales - a TWO DECADE low - which is incredible given the population of fairfax doubled in that 20 year period...
However, median sales prices 1992-1996 did not decline because inventory continued to shrivel up. From 92-96 there were undoubetdly thousands upon thousands of holdouts who simply refused to list, and as fewere listed, fewer could buy (hence the 2 decade record low sales). Thus, MOI was certainly lying then, as it is now. However, they are only relevant if they choose to list, and if history is any guide, inventory will continue to decline for years to come til enough people decide its safe to come back out of hiding agin.
Hey -- I don't ordinarily post, but I want to get everyone's thoughts on the much discussed topic of months of inventory. Unless I'm missing something, it seems like a very poor indicator, at least for Arlington. There are many condo and/or townhome units that are not MLS. For example, last time I checked, there are at least a hundred available condos in this development:
http://www.redfin.com/search#lat=38.85227502279777&long=-77.05415725708008&market=dc&min_price=375000®ion_id=21282®ion_type=6&status=3&uipt=3,2&v=4&zoomLevel=13
The developer has not put them ALL on the MLS, but they are for sale, truste. Similarly, there are probably 50-60 (est.) condo and/or townhomes available here:
http://www.redfin.com/search#lat=38.88803486282628&long=-77.08483099937439&market=dc&min_price=375000®ion_id=21282®ion_type=6&status=3&uipt=3,2&v=4&zoomLevel=17
Again, the developer has listed only a couple on the MLS, but not his entire inventory. With this in mind, can someone please explain why MOI is relevant? Thanks.
Also, I will say the one thing that is different between then and now is the avalanche of foreclosures. Can you imagine what outer county sales records would look like if there wasnt a ton of foreclosures out there ?
A hint is it would look alot like the high end where sales are at historic lows.
Further, look at Loudoun 355 sales, vs 350 last March. As Loudoun runs out of foreclosures (look at its active listings) very soon, sales are likely to drop on a YOY basis and again be at decade lows - incredible given the county has doubled in size in the last decade.
Look too at Fairfax. Inventory is declining rapidly, and soon sales are likely to again fall on a YOY basis. Like Arlington, Fairfax soon could again have a decade low number of sales...
Now, if Lou & FFX YOY sales fall, does that mean that after years of beat down prices, Lou & FFx are getting worse? Probably not, if inventory is falling as well - with constantly declining inventory, it becomes increasingly hard to beat YOY sales records, when you are running out of homes to sell.
"Mike said...
Again, the developer has listed only a couple on the MLS, but not his entire inventory. With this in mind, can someone please explain why MOI is relevant?"
Because thats the case historically as well. Even in good times, developers do not list the bulk of their new homes - its always "hurry only 5 units left". In fact, in very good times, they do not even list them at all. So MOI is certainly skewed by this, but no more skewed than it has been historically.
Mike - as an example of this, look at the 9th chart down on this list which is new construction:
http://www.recharts.com/mris/mris_15.html
As you can see, the peak Inventory and MOI was back in 2006 when the flipper party stopped cold. Since then, developers have slowly worked through their backlog, constantly lying about how much they had, but doing so as they had always done...
You can see the same thing here in PWC (9th chart)
http://www.recharts.com/mris/mris_11.html
Like Arlington, PWC developers are working through their mountain of inventory (lying again about whats available - hurry only 5 homes left!!!), but even there, with all the progress to date - the MOI is around 15 today versus 10 MOI in Arlington.
To CRT:
I appreciate the response, but I guess we see things differently. The fact that "MOI" has been misleading historically, doesn't mean to me that it has any relevance today. It would seem, instead, that MOI has been historically a poor indicator of the housing market.
"They most certainly meant the same thing on the way up. During this and every month from 2000-2005 all of the big 5 were generally between 1-3 MOI each and every month.
Starting in 2006, MOI by area really started to diverge, peaking in 2008. Arl & Alex spend most of that period in the 4-7 month range while outer coutnies spent much of it at the 7-12 month range. Its thus no surprise to me that the price rundown has been more severe the farther you go."
It is certainly true that during the bubble all areas saw low MOI and rapidly rising prices... but look at the late 90s.
Places like PWC or Loudon were showing numbers literally double what was being seen in places like Arlington and Alexandria, but prices performed similarly.
"Mike said...
It would seem, instead, that MOI has been historically a poor indicator of the housing market."
It could be Mike, its just trying to measure the basic economics supply versus demand...when the number is low, prices will rise, when the number is high, prices will fall, when the number is very high, prices will fall further...
On a national basis - we know it works.
http://1.bp.blogspot.com/_pMscxxELHEg/SceXoVhmexI/AAAAAAAAE2o/HNYi02vCywE/s1600-h/EHSFeb2009Months.jpg
Number was steady (although skewed) to 2005, national prices rose. Number got higher (still skewed) after 06 prices fell...
On a regional basis we know it works (white line 8th chart down)...
http://www.recharts.com/mris/mris_1.html
Prices rose a bit 98-99, rose tremendously when the skewed line went way down (2000-2005), and fell significantly 06-08 when the skewed line was above its historically skewed average.
"Leroy said...
Places like PWC or Loudon were showing numbers literally double what was being seen in places like Arlington and Alexandria, but prices performed similarly."
Thats kinda debatable isnt it. Earliest records harriet has for all (Mar 99) is
Arl - 2.7
Alx - 3.7
Ffx - 3.3
Lou - 4.0
PWC - 5.1
We dont know what Arl & Alex looked like before that. In any event the last 10 years is clear - they were very similar during the price run up. They were not very similar during the rundown when the price divergence emerged.
"Leroy Said...
What I disagree with is saying that somehow Arlington's market is not "bad" when by any reasonable measure it is awful."
I think its all semantics personally. The following are all true statements about Arlington.
1. Arlington is in the midsts of a historic decline, the likes of which it has never seen before.
2. Arlington is one of the strongest markets in the country right now.
3. Forward looking metrics indicate Arlington high end has alot of pain ahead of it.
4. Forward looking metrics indicate Arlington high end is one of, if not the most resilient market in the area.
5. Arlington is not immune.
6. Arlington has been hit the least hard of anywhere around here.
They are all true, its just a matter of what parts of that truth you wish to emphasize.
"2. Arlington is one of the strongest markets in the country right now."
Huh?
It is a long long way from that.
There were some markets that barely experienced the bubble and as a result haven't seen much of a bust at all.
"4. Forward looking metrics indicate Arlington high end is one of, if not the most resilient market in the area."
I also disagree with this. Holding out and simply not selling isn't "resilience." All that is is refusing to accept market prices.
"Leroy said...
Huh?
It is a long long way from that.
There were some markets that barely experienced the bubble and as a result haven't seen much of a bust at all."
Fair enough. I mispoke. I was refering to the metrics for the whole USA which includes disasters like CA, & probably OK places like Iowa.
USA median price declne since peak
-22.5%
Arlington median price decline since peak
-17.4%
USA MOI = 9.7
Arlington MOI = 5.9
"Leroy said...
I also disagree with this. Holding out and simply not selling isn't "resilience." All that is is refusing to accept market prices."
Now wait a minute here -- CRT showed us the high end picture in Arlington.
Arl 23 sales/307 lists (13.4 MOI)
If that is "Holding out, simply not selling and refusing to accept market prices", give me a description for what they are doing here.
Lou 15 sales/410 lists (27.3 MOI)
PWC 2 sales/167 lists (83.5 MOI)
"If that is "Holding out, simply not selling and refusing to accept market prices", give me a description for what they are doing here."
The same thing, even worse.
The point remains, just because a greater percentage of people are holding out for wishing prices doesn't mean a market is doing better somehow.
KingMer-
Sounds like you & I are "sniffing" the same turf.
Haymarket sellers seem to want to forget they are in PWC (especially those on the Mountain or Evergreen CC)
"The point remains, just because a greater percentage of people are holding out for wishing prices doesn't mean a market is doing better somehow."
Oh I see... So
Arl 23 sales/307 lists (13.4 MOI)
Is not doing better than
PWC 2 sales/167 lists (83.5 MOI)
Ok. Got it...Thanks...
A more current look at Arlington sales might be helpful to consider the relevance of MOI. MRIS data show that there were 62 houses which settled in March 2009. The average sales price was $612,380 and the median was $564,500. So far in April, there are 42 single family houses which have either settled in April 2009 or which are under contract and scheduled to settle in April. Not included are the 73 houses which have contracts with contingencies, some of which might also settle in April. The hopeful sign is that the type of house which is selling is increasing in value. Look at the chart below to see the price breaks. For April we do not have the final selling prices, so the list price is shown.
Feb Mar Apr
<200K 0 1 0
200-299999 0 3 3
300-399999 5 10 3
400-499999 5 8 4
500-599999 6 16 8
600-699999 3 7 8
700-799999 5 5 3
800-899999 1 5 8
900-999999 0 0 1
>1 M 4 7 5
Sales 29 62 42
To me it looks like sales are creeping up the price bracket with fewer low price sales which tended to be short sales and more sales in the most popular price range of $500,00 to $900,000. The median list price of the 73 properties with contingent contract is $679,900, an indicator that the market is swinging toward normal sales and away from the winter's short sales.
"Oh I see... So
Arl 23 sales/307 lists (13.4 MOI)
Is not doing better than
PWC 2 sales/167 lists (83.5 MOI)
Ok. Got it...Thanks..."
What on earth are you talking about?
I said... "the same thing, even worse."
I just said they were doing worse.
Just because somewhere else is doing even worse doesn't mean Arlington is doing well. By that standard our entire area is doing well, just look at Las Vegas.
"Leroy said...
Just because somewhere else is doing even worse doesn't mean Arlington is doing well. By that standard our entire area is doing well, just look at Las Vegas."
Thats the whole point! Look very carefully at the words I wrote. Did I say anywhere that the high end market was "good" or "doing well"? No, I said "most resilient".
By definition, one of them will be most resilient - and Arlington is it. Sorry if that upsets you...
resilient
1. springing back; rebounding.
2. returning to the original form or position after being bent, compressed, or stretched.
3. recovering readily from illness, depression, adversity, or the like; buoyant.
Arlington is doing poorly in general. To say it hasn't been hit as hard as some other areas in the region would be fair... but it is still down, still falling and looks to continue to do so for a while.
Doing the least poorly is not the same thing as being resilient, that is just not what the word means.
Sorry if that upsets you.
leroy, anonymous et al
If I may, I think part of what Leroy's point might be is that >800k or whatever the designation for the high end is, is only one way of splitting up the data. CRT and I went back and forth on this a while ago. Basically, CRT was choosing to look at this same price point across all jurisdictions because (a) there are very few ALT-As, I/O loans or foreclosures in this bracket, so it gives a good picture of "real sales" and (b) he believes that people with a certain amount of money to spend on a house will then just choose how far it will go house-wise, commute-wise, etc when deciding where to spend it.
Another, much more labor intensive, way to split up the data would be to look at 4 bedroom 2-car garage SFHs across jurisdictions. This would capture the people who decide I need X much house, where should I buy it to get the best mix of what I want? Under this comparison, I postulate that Arlington has a lot larger percentage of such dwellings up in the >700k bracket than does Loudoun, PWC or even most of FFX Cnty. Such SFHs in the DC metro area typically have fewer than Y MOI (at a guess 4?). Thus while the upper echelons of Loudon or PWC or whathaveyou may be slowly turning to stone while we wait, and the 4 bdrm 2car garages SFHs may still be overpriced, in Arlington, those SFHs are in the bracket that's in the 12 MOI territory.
So, anyone up for doing a lot more data mining and seeing how 4bdrm 2car garage SFHs are doing in terms of MOI across counties??
If I can jump in, it could get even more complicated than Cara suggests. I would propose that:
a) a $700K house is essentially a very different place in Arl. from what it is in most counties farther out, since so much of that $700K is going for land and
b) (perhaps aside from 22207) there aren't very many true 4 BR, 2 BA homes in Arlington, not as most people think of them. The 4th BR is usually in the basement, carved out of a fairly small space, and perhaps a 3rd BA is in the basement as well. There are a lot of 5/6 BR, 4/5 BA (much more $ than $700K of course), and a lot of what I would consider true 3 BR, 2 BA (above ground) homes, but not much in-between.
c) If you agree with b) the typical $700K house in Arlington is really a 3 BR, 2 BA, maybe 1500-1600 square feet.
So for a cross-county comparison to make sense, one may need to compare apples to apples.
For what it's worth, and I'll be happy to butt out, I think Leroy's key point is that he believes that Arlington is doing better than the outer counties, but that does not mean, to him (or to me) that it is doing "well", when he looks at other statistics. I think The Anon's key point is that s/he thinks the comparisons with the other counties are really important, and that simply by that standard, for him/her, Arl. is doing pretty well.
This thread may be dead by now, but I thought I would add one clarification to my post: I was speaking primarily about No. Arl. zips, plus 22202. However, we need to be sure not to forget 22204 and 22206 which accounted for 60-70 SFH sales last month, if I recall correctly, and which offer substantially lower prices. 700K gets you a very different house in these zips than it does in the other Arl. zips.
What is the source of this data? Does anyone know where I can find this type of data for Central, VA including Richmond, VA?
I believe Harriet compiles this from the
MRIS data I don't know the name of the county Richmond is in, but I don't see Richmond explicity listed on the pull down menu...
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