These inventory numbers were extrapolated from VirginiaMLS.com. The total "Northern Virginia Inventory" represents 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.
Total inventory is at its lowest point since July-August, 2005. Here's a picture of Prince William County's inventory roller coaster.
(Here's the spreadsheet on a separate page.)
Update: It looks like you all were bright eyed and bushy tailed this morning and on top of these new numbers -- discussion has already started in today's Bits Bucket's comments.
Friday, June 12, 2009
Current Housing Inventory
Posted by Harriet at 10:11 AM
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28 comments:
Wow, it's almost enough to make you think that things are normalizing. PWC is definitely in line with what many here have been saying for the last month or so when looking at listings (particularly low end listings) and noting that 90% of them had contracts.
Heres a little different way of looking at it - number of homes available now versus total number of homes in the county (i.e. Lo Co 1,486/97,790 = 1.52%). As of todays date:
Arl - 0.74% available
Alex - 0.83% available
Ffx - 0.90% available
Lou - 1.52% available
PWC - 1.08% available
Arl/Alex have a greater % of rental stock that is never available so they should naturally be a little lower than the outer three which have more similar percentages. Standout here is Loudoun - either it has farther to go or FX & PWC have undercorrected/need to go up.
This is what it was 1 year ago.
Arl - 0.95%
Alex - 1.18%
Ffx - 1.90%
Lou - 3.08%
PWC - 3.74%
All have improved, but especially the last four YOY as they got that much closer to Arlington's performance.
FYI - if you want to see how bad things got, this is what they looked like at their (respective) peaks:
Arl - 1.22%
Alex - 1.58%
Ffx - 2.08%
Lou - 4.58%
PWC - 3.98%
Compare these levels to what we see today and you can really see why Lou & PWC had to suffer that much more than the rest for all of them to get back to where they are today.
Very interesting/informative stuff CRT.
The higher end ( > 1M ) in Arlington is still correcting, other than that things are looking pretty healthy here.
From what I understand, normal inventory in Arlington is around 500 available listings.
crt,
interesting metric.
You could consider factoring in the "normal" (defined how?) turnover rates in those same areas. At a shot-in-the dark guess, PWC and Loudoun didn't use to have as much of a housing ladder as the inner areas do/did. If the population moves less frequently, that should make their "natural" states for % active lower too. This complicates the cross-county comparisons.
But as far as trends go, it's pretty compelling.
From today's Real Estate Live at the WaPo:
Potomac, Md.: I know you don't have a crystal ball, but if you could go back to early 2006 and tell yourself one thing about the real estate market since then - what would you say?
Elizabeth Razzi: I would remind myself of something I know is true, but which sometimes takes discipline to remember: Never assume that current circumstances will be permanent.
Good motto for now, too, huh?
Someone (apologies for forgetting who) said it sounds like 2005 here again. I agree. In fact, it feels like 2005 when I talk with some friends who are buying.
Friend A: I'm thinking about putting a bid in.
Me: Oh, you just started working/just graduated. I didn't realize you had a down payment saved up.
Friend A: I'm trying to buy with an FHA loan where I only need 3.5% down payment.
Friend B: I'm buying a place, renting it out while I go to grad school, and then moving back.
Me: Why do you want to buy if you are not going to be in the area within 1-2 years.
Friend B: Well, it seems a guaranteed way to make money. Housing is a good investment...
Friend C: I'm buying a townhouse.
Me: Oh, that's nice. I've always felt you need more space than a 1 BR condo when you get settled in life.
Friend C: Well, no, I'm getting the TH and renting out the other rooms because otherwise I could not afford it.
Me: Do you have anyone lined up?
Friend C: No, but how hard can it be to find roommates?
Friend D: I'm buying at 2nd and Q St NW. It's going to be the next up and coming area.
Me: I think it's going to be a while before any more DC neighborhoods gentrify, if ever. I don't think it's safe.
Friend D: I currently live around there. I've only been mugged once. It's just part of urban life.
Me: (refrain from comment, thinks about how I have never been mugged in my part of DC)
Most friends are waiting out the market. But there does seem to be a good amount of people making odd decisions. A lot of people seem to think 2000-05 will happen again and housing is still a chance to make a lot of money.
tbw,
Those made me chuckle, somehow 3 steps removed people's bad decisions are funny rather than scary.
But, some people always do make bad decisions. How else do bankruptcy lawyers stay in business outside of recessions?
Cara,
I just wonder how direct I should be with them. On here I am blunt and speak my mind. In real life if you do that you can lose friends.
I know you've said you have talked people out of bad decisions. Have you found the right way to do it without harming a friendship?
I guess one difference between 2005 and now is these friends don't then say "why aren't YOU buying a home?" So that helps me keep calm and not get into a big argument over where home prices are going.
TBW,
The two people I talked out of buying now weren't anywhere near as set on their buying plans as these people sound. They were still in the "now or 1 year from now" question stage. So I just helped them make an informed decision on their own question.
Very different beast.
If the people you listed are your friends, I would just keep asking leading questions, about what their thinking is, and if they themselves show signs of doubt in the goodness of your plans then you can feed them some information or insight. But mostly, you need to be listening, and getting them talking so that it occurs to them, that their plan makes no sense or is premised on questionable grounds. It can come from you, it has to come from them, but you can ask the right questions.
This is basically what my friend did recently for me, talking me down from my "buy our (extremely modest) dream house soon" plan towards are current, stick absolutely to within what one income can comfortably pay and just get purely what we need and will suffice for 5-10 years.
please read what I meant not what I wrote with respect to can/can't.... sorry.
tbw,
Americans have short memories. Some of those comments sound so 2005.
Keep your friends, keep your mouth shut. I put my 2 cents out there to a few friends and co-workers. Nothing but grief.
The person that gave me the most grief was a co-worker. This guy was a housing pumper and made it known daily that I was “just a renter throwing money away”. The last time we spoke housing was when he told me he was facing foreclosure and asked if I would buy his TH. “You gotta be F’n kidding me right?”
TBW - for me its all about ones risk tolerance. I have some clients/friends far more risk tolerant than I am. I think what they do is insanely risky. Some are bankrupt, others are far more wealthy than I will ever be.
I am more than happy to educate (as cara noted make sure they make an informed decision). For example, during 06/07 I pointed out to buying friends things like "did you know that inventory is at an all time high"? If the answer was "yes but I am not worried because of ______" I would leave it alone. However, if the answer was "no, I didnt know that" or "why is that relevant" I was more than happy to explain the risks involved.
In one case, a good friend bought in Charlottesville in 06. She knew nothing about real estate - I was happy to educate her on the risks involved. At the end of the day she knew the risk was high she would lose money - she said she was OK with it because "she loved the house" / "she planned to stay there 15+ years". She has in-fact lost money, yet she is still happy with her decision. In fact, even today, im pretty sure she would be resentful of me if I talked her out of buying that place - if I in effect substituted my judgment for hers. To each their own I guess.
TBW-
I think it should be easy to talk the landlords out of it. Just tell them you have a couple of friends that are landlords and have a really hard time collecting money from people. Particularly for the one going out of town to school, it will not be easy to deal with bad tenants.
For the final person if they have a safe job and good cash flow I am not that opposed to someone putting down 3.5%. Although make sure they know closing costs and furnishing a house can easily add another $20K+
TBW, just tell your friend who thinks it's no problem to find roommates what Judge Judy says (something like this), after dealing with many, many bad roommate/tenant/landlord cases:
"I'd rather live alone in a CLOSET than share housing with someone who isn't in love with me!"
It wasn't that she was being romantic, but just saying that when people have separate lives they can be very inconsiderate, or at least very different from each other, making living in the same place difficult, nightmarish, or impossible.
I think Cara and CRT have given you good advice. You can ask questions and offer your help and knowledge, but if they act as though they don't want advice, you can save it and the friendship.
Sheesh, it's hard keeping up with the output on this blog recently!
Hasn't it been stated that 20% of homeowners nationwide now have underwater mortgages?
If someone stood to lose $5000 last June if they sold their house they would probably still do it if they had a reason to. What happens if their house is worth $50k less this year? Doesn't it seem like people would be MUCH less willing to sell their house as its value decreased more and more? Might that not have an effect on inventory?
Yes Jeff, that is a consideration. It still means less inventory which means movement to price stability. It doesn't matter why they don't list their property.
Great advice from everyone.
As for the Judge Judy comment, I think that is a good point. And from speaking with married friends, I think they struggle sometimes too with how to share that space.
Jeff B and Va_Investor,
Quasi-related is the issue of the now retiring (or soon to be retiring) baby boomers. What they decide to do regarding selling will affect the housing market but which housing market is the issue.
Option A: They all give up on the waiting game, put their homes up for sale, downward pressure on DC market.
Option B: They give up on the idea of selling their home and moving to a retirement area, live in DC area until death, (further) downward pressure on Miami/Phoenix/oceanfront properties.
Sidenote (anecdotal evidence?): There is a building called the Jefferson Retirement Community in Ballston. They seem DESPERATE for people to buy places there. Leisure World of Virginia seems to be running a lot of ads in the Washington Post lately.
TBW - I hope you are changing your advice to others over time. In 2006, once things had turned/slowed down, it became pretty obvious that things were headed down. Same thing in 2007, same thing in 2008.
It is now 2009. Things arent nearly as obvious as they were in 06 07 & 08. In fact it does feel alot like 2005 - in 2005 we had our first hints (like declining sales and exploding inventory) that the worm has turned. We have those same hints today, except in reverse. Things arent nearly as obvious anymore. Is this the bottom, or is this a shelf? Is it a V recovery or is it a L recovery?
Also any advice you do dispense should have some serious caveats. The guy I listened to was arrogantly certain -- things will come down -- even in arlington -- its not different anywhere -- 2002 prices soon.
He was terribly wrong in his timing and I watched in horror as prices kept climbing in 2003, 2004 and 2005. Also, his advice was so general to the DC area. On Arlington specific scale (an area he knew nothing about) he was unbelievably wrong.
Had he qualified his advice to say "I dont know anything about that area", or "if I am wrong, here is what might happen" I might think differently about him. He didnt and thats one of the reasons I curse him to this day.
Bottom line, tread lightly.
twb,
Hard to know the affect of retirements. Many people stay put, many have 2 places...the rest?
There must be data. Two of the places I own in FL have the vast majority of owners (I'd say 80%) owning another home up North.
My tenants are snowbirds and only come down for the season. This has always been my experience down there. Not statistically relevant, I know.
The Anonymous,
If your friend told you in 2006 that Arlington prices would go down to 2002 levels, how did you then look "in horror" as prices went up in 2003, 2004, and 2005? Do you have a time machine? ;)
Also, what recovery are you referencing? We are not even done yet with the downside. Plenty of industries in the area are not done with layoffs.
TBW - no we had that conversation in 2003, when he told me not to buy.
Regarding the layoffs, ignoring that it seems to be a lagging indicator, yes there are some indicators that still indicate weve got a ways to go. However, there was once a time when they ALL indicated we had a ways to go. Now we have alot that are going the other way, one of which is the subject matter for this thread (inventory).
Note too that there are alot of long timers here that disagree with your conclusion "we have a ways to go" (im assuming you mean housing prices). And not all are cockeyed optimists like Robert. CRT, Cara, Leroy, Terminator X, Ace, etc. All are respected, capable of arguing both sides of the coin, have a ton of knowledge, and have been at this thing for a long time. There are likely many others that I just cannot think of off the top of my head.
They arent always in agreement in their views, and some might think its just "close" as opposed to "here" but I think they all can make a respctable case for why the bottom is much closer than you think.
I really wish you were around for the days when it was lance versus everyone. Back then, it was clear, you have some outliers, but most of those same people I mentioned thought the bottom was far far away. The tone of this blog represents a very new reality. Those same voices that thought it was "far far away" now acknowledge that the bottom "might" be here whether we like it or not.
TBW: Interestingly enough, 3 of the houses I was most interested in were/are owned by retiring military. All have moved from the area to warmer climes. One guy is stuck as he bought in 2004 and is "renting it out until the market returns".
well on the condo side, there appears to be lots of empty condos still in virginia square and ballston.
i like this place it seems affordable, but
it's $189/SF, it's got the beltway in the back yard
and it's fairfax county.
http://franklymls.com/FX7057426
i really don't like spending that kind of $/SF for
a place especially with the beltway in the back yard.
The Anonymous said: "The tone of this blog represents a very new reality. Those same voices that thought it was "far far away" now acknowledge that the bottom "might" be here whether we like it or not."
Yep, that's exactly the shift that's happening on this blog, though the doom-and-gloom ideologues are still snarling away. But now they're increasingly in a minority. I think they realize that reality has shifted, which seems to make them angrier.
Interesting figures on inventory in Arlington -- yet more confirmation of its strength.
SFH prices continue to fall in Fairfax.
Data analysis here (scroll down for pretty, clickable graphs):
http://novawatch.blogspot.com/
novawatcher,
very interesting graphs. Thanks for taking the time to follow that.
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