Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Thursday, June 11, 2009
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
113 comments:
"in hindsight, it was all wishful thinking. They dispensed the doomish-kool-aid (doom-aid), and those of us wanting to see big drops in arlington just lapped it up...glug, glug glug!!!"
Thank you for your honesty and the entertaining image.
In my circles, I'm the doomster. That's one reason I bought a small place in a prime area, Beverly Hills, zip code 22305. That's also why I took defensive measures in my pension and investment accounts over a year ago.
The facts to date are that Arlington, and my area, Alexandria did not bubble nor bubble burst.
All the wishing and fantasizing were simply that.
Some number-people here got it wrong and a few are still intellectually dishonest enough to be no-bubble-deniers.
There was no bubble here, by that, I mean Arlington, Alexandria and DC proper. This is not to say that the economy won't crater further and in doing so, take a hundred grand or so from my home equity. If that happens, I'll deal with it.
So far, the action is in Michigan and California, maybe Nevada.
The smart money, which includes recent buyers like Tabitha, and VA_invest, is taking action to benefit over the next 5 to 10 years.
I haven't decided what I'm going to do. I'll learn something here that will help me with my options.
Thank you.
@J@
None? No bubble at all?
Aarlrenter's moving average, are pretty definitive that price corrections have occured:
"If you do a three month moving average of the average sales price by different types of housing (from March through May), comparing 2008 to 2009, you get the following results for Arlington:
Detached $768,876 to $682,945 (-11.1% YOY)
Attached $586,173 to $526,187 (-10.2% YOY)
Condo $375,642 to $371,388 (-1.1% YOY)
That's a broader and fairer picture of the spring buying season than any one month.
Other YOY indicators -
Average days on market: 80 for 2009 vs. 68 for 2008 (worse)
Average Sales price as a percentage of average list price: 92.19% for 2009 vs. 92.31% for 2008 (same/very weak)
Months of inventory 4.17 for 2009 vs. 4.62 for 2008 (better)
It will be absolutely fascinating to see the effect of higher interest rates - they've risen by about 1 percentage point since late April according to today's MBA survey - going into the summer season. "
10% down is indeed far less than "everyone" was hoping for. And the Anonymous may be right that predicting and believing in doom and gloom way back in 2003 was a terrible plan in retrospect. But it's hardly an indication of a lack of a bubble. If you look at other extremely posh areas that have now fallen hard like Cupertino CA, it had 3-4 straight years of flat prices at the peak bubble prices before it finally cratered. That's what happens at the top of a bubble, that's how you can tell it's the top. That doesn't mean that cratering will happen here, because we do have a much better jobs picture going forward than Silicon Valley, but the current lack of support for peak prices does mean that properties did get overvalued, even in the most improved areas.
Tabitha and Va_investor are not paying anywhere near peak prices for their purchases. Nor are they buying in the ritziest areas. Tabitha's was listed over 750k?? at one point, and Va_investor just picked up a TH that was purchased for $350k at $200k.
The drops that Arlington and Alexandria and DC will see are indeed unlikely to be what some had hoped for, but being able to pick up a million dollar home for 8% off list within weeks of it being listed (Ace posted, yesterday?) indicates quite a bit of fear on the part of certain sellers, and the distinct possibility that roll-backs to 2004 are likely once rates creep back up.
Yes, that's not the 2003,2002 rollbacks that can be found where I'm interested in buying, but it's nothing to sneeze at.
What I guess it comes down to is this. In areas where prices have reached rental parity, like most of Fairfax County, PWC and others I'm less familiar with, it's easy to make an informed decision on buying. Jobs are good going forward, so you know that the most you stand to lose is the difference between what you're paying and what a landlord would pay. And with a little luck and instinct on which developments are going to remain owner-occupied, you'll do just fine (or if you're buying now at investor prices to rent out anyway).
In areas that are developing a distinct separation between renters and owners, with a huge equity barrier between the two, it's much harder to know where the bottom will be. These areas lapped up the liquidated bubble equity from the starter-home stock. This keeps the current owners both secure against default and heavily invested in their property. But 7-9 years of equity just evaporated from the buying pool. The housing ladder just failed a huge swath of residents in this area. Filling in that gap are those who waited patiently accumulating liquid cash in no-risk holdings (or got them out of the risky ones in time), long term owners who've had significant raises over the years, and those with earnings in the top quartile of the income distribution of their target area. This is clearly providing enough buyers for the current tiny inventory.
But can you blame aspiring Arlington owners for continuing to wait to see how this all plays out? They've waited this long, what's another year for a greater sense of confidence and security that you're not shooting yourself in the foot?
http://franklymls.com/FX7081495
New winner for best value on the market in Burke
SS $395k 4(5?) bed, 3 bath 1 half bath, built 1984. No apparent basement and only a 1 car garage, but 1990 sq feet + large screened in porch.
Downsides, can't walk to the VRE, and if you need to turn left onto Lee Chapel in the morning good luck, but if you're going down to FFX Cnty parkway anyway, you're fine.
If it really doesn't have a basement that could be a deal killer for a lot of buyers and will seriously negatively impact resale value, as will the 1 car garage, but if you're looking now, and price sensitive, and willing to pass on that lower price to the next buyer, this is the best deal I've seen in Burke in a while.
I agree there was alot of doom aid dispensed, but I have to disagree with you J@J that there was "no" bubble. We know that there were sales in excess of population gains. We know that there were junk loans here - all hallmarks of the speculative element constituting the buble. Granted, they were much smaller than in surrounding areas but they were here too.
Its a shame this had to happen simultaneously to perhaps the largest demographic shift in 140 years - thereby obscuring the fact that many of the gains were real and based on fundamentals.
Still, the fact remains, we saw elements of the bubble here - a little bubble or bubblette perhaps, but a bubble nonetheless.
I detect the beginning of a reaction on this website against the iron rule of the housing doom-and-gloomers. Their ideoloogy is increasingly being challenged by posters noting such inconvenient facts as the strength of Arlington real estate.
It's starting to feel like Berlin in 1989!
Cara-
I don't think you can count short sales as the best value in an area. For normal sales and foreclosures the owner is usually happy to sell for list. With short sales owners often put unrealistically low prices and the bank simply will not accept that price. So if you think it is the best value in Burke the bank will probably agree and refuse to sell it for that price.
housebuyer,
True. But this is not actually unrealistically low. There was another sale down at the $325k level for a 1600 sq ft that was older with also no basement a few months back. It's more that this price-range/ house size is totally unpopulated in the current Burke market right now. There's bigger or nicer or more interesting or closer to the VRE listed at $450k on up, but very very little out there at this price point.
It's priced 100k over only slightly smaller attached homes, and 75k over the 1200 sq ft detached homes w/o garages.
No, I'm pretty sure a bank would be happy to accept this price. SS's can't command full market value because of the hassle. Banks are aware of this.
Personally, I think this place is only "worth" at most $350k because of it's distance to the VRE, and the lack of a basement. But it will go for more than that now.
Cara-
We will see. The properties I am looking at are going under contract at a much slower pace than a month ago. I think now that interest rates are approaching 6% people are thinking they should hold off longer on buying. Unless the fed does something quickly to lower rates I really do think the recent strength in the market will back off. Causing prices to fall ~1%/ month from now until next spring where we see the bottom. If they do however figure out a way to keep rates low I think enough buyers will come in to put a permanent bottom in.
"you look at other extremely posh areas that have now fallen hard like Cupertino CA"
Yes, absolutely. It could still happen. My point is that it hasn't.
I'm sitting here in Beverly Hills 22305 (near Del Ray) in a small older home that is stubbornly holding value in an neighborhood and town that is equally defying the stats and national trends.
This is playing out as I hoped it would play out. The facts are confirming my guesses from 5 years ago.
Neil, Popcorn-Boi, and the other extreme housing doomers have no credibility, none. For all their stats and cutie-cutie writing, they got it wrong.
This could certainly change. I have real money at stake. Money talks and Popcorn-Boi walked.
That's all I'm saying.
housebuyer,
Rising rates could just as easily push people off the fence.
@J@
Those people also aren't still here.** Why are you fighting ghosts? As far as I can tell, most of us on here now are trying to make informed decisions based on the evolving data.
There are still sources for more downward pressure or at least a few good deals appearing (law-firm layoffs and I/O loans), and there's no compelling reasons to believe prices will go up quickly (despite Robert's best efforts), why buy now?
housebuyer,
You could be right, that this won't go quickly. The last "best value in Burke" that I posted has gone in and out of contract 3 times since I posted it.
**(other than contrarian, but that's different, contrarian doesn't think Arlington in specific is going to crash, he thinks the entire world economy is going to crash and burn, sorry if I'm misrepresenting you, contrarian).
It's like I've been transported back in time to 2005: "there's no bubble here, lalalalalala"
@J@,
The thing that always made me shake my head was that the 40-60% decline crowd did not think that they would be personally affected by a Great Depression.
Their jobs, investments, etc. would remain intact while all the "home-debtor's" were living in a tent city on the Mall and standing in bread lines.
They were wrong on the demographics. They failed to account for "turn-over". They failed to account for the assets that the well-off have to carry them through tough times.
It's the no-down, liar loan, paycheck to paycheck neighborhoods that got creamed. And rightly so because these are the areas that doubled or more in price.
As I've said before, how would I possibly expect my house to drop 50% when it only went up 20-30% during the "bubble".
I think Cara has the best answer here. Clearly there have been price declines in Arlington and Alexandria. Look at the charts yesterday. Neither is still at peak prices. The question is whether the eventual price declines are modest.
I know a few couples with $300k+ combined incomes who were going to buy in Arlington County but now are looking in Fairfax County. Before anyone blows a gasket, I'm not arguing substitution effect. I'm just saying that if the Arlington prices really do not fall that much, then you are going to find the people who buy there are the Steve Rattner types Robert thinks are coming in force to the area because of the Obama administration's expansion of the government.
Even the ridiculously wealthy $300k+ families I know are not going to pay $1 million plus for a SFH in North Arlington (or pay less but get a small rambler.)
VA_investor-
It may push some people off the fence, but for people with small downpayments(most people) it really does lower the amount of house they can buy or the price they are willing to pay.
anielarke said yesterday..."Also for Kevin who thinks no one really "has" to buy: obviously you have never lived in a one bedroom apartment with a pregnant woman. Kevin, if you had, you would have already bought a condo/townhouse/house."
I rent a 3BR house on a quarter acre lot. For cheap. Equivalent purchase price would cost nearly double per month. Nice try though, throwing the "renters live in tiny apartments and hate their pregnant wives" b.s. That's the kind of disinformation that sleazy realtors say to naive first time buyers.
Bloomberg via patrick: 15,000 for everybody!! coming closer to reality...
Just what the doctor ordered more market manipulations. Do you think this will make a few buyers hold off on their purchases, just in case?
"The bill would extend the tax credit, which now applies to homes purchased from Jan. 1 to Dec. 1, 2009, to one year after the new measure is signed into law, according to Watson. Isakson’s bill would make the credit available to all borrowers, not only borrowers who haven’t owned a home in the previous three years as is the case under current law. It would also let borrowers divide the credit over two years. The legislation wouldn’t be applied retroactively to purchases completed before the date of enactment, Watson said. "
@J@ and others,
Maybe you guys will keep more of your bubble gains than Ffx, Lo, and PW (I'm still skeptical).
But if that happens, I will enjoy my seat on the Orange Line train while you struggle to squeeze onto the train at Ballston (let alone Courthouse or Rosslyn). ;)
Of course, the way you guys make it sound, you will all be so rich from your Arlington real estate that you will have a limo driver taking you from your home to your Obama job in DC making $1 million. ;)
Cara,
Thanks for that link. Given no Democratic senator (other than quasi-D Lieberman) has signed on I think we might see some tinkering in the final bill.
I suspect many will want it to only apply to first time homebuyers and not everyone.
tbw
Christopher Dodd is a co-sponsor. He's not a democrat? Okay so he's a democrat who got special treatment from country-wide, but still.
But yes, I don't think that this or any other legistlation will go straight to law in its initial form. Still, this is the most substantive move towards continuing or expanding the tax rebate that I've seen yet.
"@J@ said...Thank you for your honesty and the entertaining image."
Glad you enjoyed it. I debated between that and us newbies as baby birds with our mouths agape. The doomers were momma birds puking up tales of "trust me, Arlington will implode bigtime", and we just gobbled it up, constantly clamoring for more "doom, yes doom in arlington, please momma, please tell me more about what its gonna be like"!!!!!
kevin,
I'll add in my part of DC there are plenty of married couples with infants who live in 2 BR or above apartments. To my knowledge, none of the husbands hate their wives.
In fact, there are so many more couples with little kids now that they refurbished one of the parks:
http://voices.washingtonpost.com/dc/2008/12/mayor_dc_open_stead_park_in_no.html
Cara,
Oops. Sorry, I was looking at the list of co-sponsors at the end of the article.
"@J@ said...Neil, Popcorn-Boi, and the other extreme housing doomers have no credibility, none. For all their stats and cutie-cutie writing, they got it wrong."
As much as I used to disagree with him, I have to give him some credit. Mid 2008 it became obvious to him that Arlington wasnt going to fit with his 40% down prediction, and he just sorta faded away.
Last fall he came clean (not here, but on his own blog). He admitted he was wrong on Arlington, he admitted Arlington was different and the trendlines suggested arlington will not be subject to the catastrophe seen outside the beltway.
http://recomments.blogspot.com/2008/10/some-inventory-graphs.html
So I give him credit, better late than never I always say. As a doomer he was "late", other doomers seem to be "never".
@J@ and the Anonymous,
Can we get out of this recession first and/or see months of price stabilization or increases before you open the champagne bottle for Arlington? :)
You guys might end up being right but I think you are totally jumping the gun here in declaring yourselves the victors. Let's see where Arlington prices are in December 2009.
Extension and expansion of the tax credit: This would have a bigger impact than the $8k would. $15k on every single real estate transaction in the country.
The $8k is only people that haven't owned in the last 3 years. What % of transactions are using the $8k? I doubt it is 50%, but if it is the $15k would still cost 4x as much.
Robert,
Good point. That's part of the reason I think it's totally insane. This thing clearly would also need a phase-out in time, otherwise it could be catostrophic, creating a whole new mini-bubble with a built in crash. The least they can do would be to let the air out slowly...
Robert,
If they remove the requirement I actually live there, I might buy a $15k home in Detroit, take the $15k tax credit, and have guaranteed profit even if the home goes down to $2k in value. ;)
Cara,
Remember that Isakson's original tax credit proposal was similarly generous last year. The odds of it remaining this generous are low. I think the House cut it down in size last time around so it may be do it again this time. Or maybe the Senate will be skeptical as well.
tbw,
True. And I do think extending the current credit through next summer is warranted by conditions. (says me who's thinking of maxing out our allowed retirement contributions to see if that will squeeze us under the income limit for taxable income...)
Cara, average sales prices is a garbage measurement.
Look at same home sales prices to get the real story.
Im not arguing there has been no correction, just that your measurement is rubbish.
Doug,
I'm not going to go looking for the house-to-house comparisons in N. Arlington, I don't live there.
If someone else wants to, and feels that the existence of price declines needs more support, feel free.
Part of the problem is when you do find things that sold at peak and are for sale now, usually they can be talked away as anomolously high. You need to accumulate a lot of them to be truly convincing. The sales have been so few, that it's hard to do things like people have done tracking a particular homogenous TH neighborhood, or a given housing type in a semi-uniform zip code.
And I, frankly, don't care. I know what's happening and happened in the market I plan to buy in, that's plenty of work for me.
These rough metrics, that at least were broken down by housing type, are enough for me, since I have no vested interest in this argument.
It's been interesting reading this blog on NVA real estate. As a renter now entering my second year of renting in NVA, my wife and I decided in early May to not buy in the zip codes we were interested in (22182,22181, 22180 etc...). It was apparent to us that the difference in sales prices from last year to this year were dramatically down. The more we researched, the more we learned about the NVA real estate market, the more we were able to identify disconnects between what we were being told (fed) by some folks, and what the hard data was showing to use in terms of prices, inventory, and trends. Our decision, and what led us to rent for another year, was to continue to rent, and not buy, because this market is trending down for prices, and up for inventory.
If you look at the Shiller graph on housing prices vs. family income it's a roller coaster style line.
What I picture in my mind is this. We, the nation, are on a roller coaster. From 2000 to 2007 we were on the tick tick tick climb up to the peak of that first long hill. We were all happy nervous riders anticipating and enjoying that thrill....until we peaked and started down the other side. And then the screaming began in 2008. It's 2009. We're still screaming. The station is a long way off. We will all giddily discuss how scary/fun the roller coaster ride was when we get to the station but that is a long way off. So, for now, it's hang on, scream your head off, and wait for the end of the ride.
There are in my opinion two types of folks looking at this market, those that use data, cross checked, and analyzed to support a hypothesis, like Cara, and those that don't. Real Estate is about data, not emotions.
We, the wife and I, survived the great housing bubble and didn't get suckered into the trap. So did a lot of other folks. We aren't likely to make a mistake now. It's still possible, but not likely. :)
Them's my .02.
Just for the record, our house had been listed for $899K last year, but that was ridiculous. Its last asking price was $750K last May. We paid $550K, but it is only assessed for $513K, about the 2004 assessed value. Since we plan to stay here forever and ever, we let that difference slide.
We bought as-is, and so far, we did some cosmetic changes (new paint, new light fixtures), changed all the lightbulbs to energy-efficient (there were a bazillion recessed lights), replaced carpet with Pergo in the dining room, and bought a super riding lawnmower (or "tractor," as my husband prefers it to be called). We still need to address a wet corner of the basement (replace the sump pump and carpet) and replace the garage door opener...and put together the ridiculously complicated playset the grandparents got. All told, about $4,000 for everything.
Since then, I have seen interest rates shoot up. The difference between what we have and what we would get now? $160,000 in interest over the life of the loan.
But it was just a miraculous chain of events that led to our timing. I mean, I owe the circumstances to the advice found here, but it's not like we got the best deal with cold calculation. We got the house of our dreams, and happened to do so when low interest rates and the $8,000 tax credit were available.
And for the record, there was a bubble to end all bubbles in my part of PWC. We're down more than 60% from peak, down to 2000-level prices in the hardest-hit zips.
It's amazing how such a small spec gets giant amounts of attention. Seriously, do half of the people on this blog live in North Arlington?
And if Tom replies with how everyone wants to live in North Arlington because it's the greatest place in the world, I'm going to jab my eye out with a pencil.
Oh, yes--as for the $15K, that was tried in the very recent past, to no avail. I know we're throwing money around like crazy, but I'd be surprised if they get all they are asking for...
And Texas Native, what do you think are the percentages of buyers who use the free data available to them, and those who trust The Man? It seems to me like numbers-crunchers are in the distinct minority, even still...
"Of course, the way you guys make it sound, you will all be so rich from your Arlington real estate "
I never expected my little place to make me rich. While that could happen, my expectation is that my expenses remain under control while I work, live. Generally go about my life.
This is still an issue because there is a theme that goes, "Just wait, Arlington is next."
Remember the convoluted rationalization, rent to purchase, average salaries. Those don't matter because very few people plan to sell or have to sell.
Several of my neighbors have paid off their houses. They bought 10, 20, 30 years ago. The fact that they could sell their 3/2 for $750K is meaningless. "Where would I go?" and "I like it here."
If I thought that prices would fall to half, then, yes, absolutely, I'd consider selling but that did not happen.
I currently don't expect prices to fall. Perhaps someone will present a compelling reason for that.
"The Anon said...
So I give him credit, better late than never I always say. As a doomer he was "late", other doomers seem to be "never"."
That is the thing that had me stumped. For those of us here that liked data (inventory, MOI, DOM, sales, etc.) it became increasingly clear that all areas in NOVA were (more or less) in this thing together. There was perhaps a delay of a few months outside to in, or inside to out, but not years as some would like to think. Most trends roughly correlated between areas, it was only the intensity (massive inventory build ups, massive price drops) that varied.
Yet, even as late as this January, we had some posters (dataheads at that) thinking "it (it being the big Arlington specific drop) just hasnt happened - yet". That was just mistifying to me.
Note thats not to say it COULDNT happen - even today. Remember Sarah? She pretty much discarded the data and chalked all up to mentality - an arlington specific mentality that could change any minute (and cause a cataclysm). I disagreed with her, but at least I understood it, a blind faith belief (its not different anywhere) that data could not quantify.
I think thats the case today. There is nothing, I repeat, nothing in the data to suggest Arlington (and arlington only) is on the edge of a cataclysm, about to fall in - thereby proving it is no different than the rest of nova.
Still, thats not to say it couldnt happen - it would just have to be something that the data missed.
"Let's see where Arlington prices are in December 2009."
Yes.
Out there, California, Michigan, the wheels have come off the cart.
TBW, my doom credentials are solid but so far, there was no bubble nor bubble-bust in Arlington, Alexandria, or DC.
I eagerly await any information or substantive comments.
"The Anon said...
So I give him credit, better late than never I always say. As a doomer he was "late", other doomers seem to be "never"."
That is the thing that had me stumped. For those of us here that liked data (inventory, MOI, DOM, sales, etc.) it became increasingly clear that all areas in NOVA were (more or less) in this thing together. There was perhaps a delay of a few months outside to in, or inside to out, but not years as some would like to think. Most trends roughly correlated between areas, it was only the intensity (massive inventory build ups, massive price drops) that varied.
Yet, even as late as this January, we had some posters (dataheads at that) thinking "it (it being the big Arlington specific drop) just hasnt happened - yet". That was just mistifying to me.
Note thats not to say it COULDNT happen - even today. Remember Sarah? She pretty much discarded the data and chalked all up to mentality - an arlington specific mentality that could change any minute (and cause a cataclysm). I disagreed with her, but at least I understood it, a blind faith belief (its not different anywhere) that data could not quantify.
I think thats the case today. There is nothing, I repeat, nothing in the data to suggest Arlington (and arlington only) is on the edge of a cataclysm, about to fall in - thereby proving it is no different than the rest of nova.
Still, thats not to say it couldnt happen - it would just have to be something that the data missed.
@J@
those are not "convoluted rationalizations"
The difficulty is what CRT described. Before this bubble, N. Arlington was a place where those metrics applied, just like almost everywhere else in NoVa. But a sea-change may have occurred simultaneously with the bubble, leaving a permanent disconnect between renters and owners, like the one that exists in Manhattan or Germany.
While the bubble was still building, before access to the census updates was known about, it was impossible to tell that N. Arlington wouldn't revert to the fundamentals like everywhere else. Sure, the lower percentage of both new builds and wierd loans hinted at it, but justifying a divergence from historical trends was unconvincing.
Texas Native,
Aw, thanks.
"Cara said...
While the bubble was still building, before access to the census updates was known about, it was impossible to tell that N. Arlington wouldn't revert to the fundamentals like everywhere else. Sure, the lower percentage of both new builds and wierd loans hinted at it, but justifying a divergence from historical trends was unconvincing. "
Yep. Another way to put it is, Arlington, Alex, etc are reverting to the fundamentals, it just wasnt til very late in the game that we found out the fundamentals had changed..."revert to the mean" is likely still true, we just had no idea that "mean" had changed so much in these areas.
@J@ (and some others),
You are using a strawman argument. I don't think anyone has argued prices will decline 30% in one year in Arlington.
Now, will there be a 30% decline in Arlington prices between 2006 and end of 2010? Or end of 2011? The jury is still out.
Again, please do not pop that champagne until you can point to months of stable home prices or increases.
What makes me happy is that no one here is claiming Vienna, Oakton, and Fairfax are going to keep bubble gains. One of those areas is where I was ultimately going to settle. The bubble may take so long to deflate I'm going to skip a condo/TH in DC or Arlington phase.
Or the bubble will not deflate but apparently will deflate in Oakton, Vienna, Fairfax and I'll just get a SFH there at a younger age than I expected.
"Cara said...
While the bubble was still building, before access to the census updates was known about, it was impossible to tell that N. Arlington wouldn't revert to the fundamentals like everywhere else. Sure, the lower percentage of both new builds and wierd loans hinted at it, but justifying a divergence from historical trends was unconvincing. "
And another thing, part of the reason we could not "tell that N. Arlington wouldn't revert to the fundamentals like everywhere else" is because that was near taboo to discuss it.
Every time you even hinted the big "it" may not happen inside the beltway, you were shouted down from the gallows - accused saying "its different here" or "new paradigm". The answer was always "just wait it will happen"...
How many more years were we supposed to wait til we were allowed to discuss such things? How many more years till you could discuss what might be before you werent accused of foolishly cooking up lance type theories? Were we destined not to have an intelligent back and forth on the merits of that discussion til the bottom was in view?
Sorry, this is just something that irked me to no end.
NoVAwatcher said: "if Tom replies with how everyone wants to live in North Arlington because it's the greatest place in the world, I'm going to jab my eye out with a pencil."
Everyone wants to live in North Arlington because it's the greatest place in the world.
CRT,
That was definitely true too. I joined in only near the final months of this impasse, so it didn't irk me as much, having not listened to it as long, but even a year ago it was completely verboten.
I think you and I had the conversation about the changing dynamics of cities post bubble sometime last summer, but that's probably the first time it was broached without being completely shouted down.
What I'm shocked by is that some of you are acting like the housing stock in Arlington has remained static this decade instead of incredibly dynamic. Don't you realize how many nice condos and new SFH were built? Or additions? Or renovations?
Think of it this way:
Say that in 2002 you had 10 homes in an area Arlington that were built in 1940 and each had 1000 square feet, outdated kitchens, and outdated bathrooms. Each of these homes went for $400,000.
Now say that between 2002 and 2009 each 1940 home was gradually torn down and rebuilt. The new homes thus were built in some year between 2002-09, each has 2000 square footage, new kitchens, and new bathrooms. Each home is now going for $900,000.
Average price in 2002: $400,000
Average price in 2009: $900,000
Now some of you would look at that data and say "Wow, Arlington is RED HOT." But really the average price became higher not because the land become dramatically more valuable but the home became so much nicer.
Now obviously not every home in Arlington was torn down and replaced. But a lot were or expanded. So even if Arlington settles at 2004 prices you would still be getting a lot more square footage and nicer home features in 2009-10 for that 2004 price then you would have in 2004.
OTOH I do still think DC's on the precipice, or parts of it are. But that's because of my impression from looking at the incomes of renters there (no pool of waiting 100k+ earners that's any bigger than it was in 1998), the huge increase in ownership percentage, and the steep declines in certain individual units prices from last year, and the number of short sales. Add in all the new builds which by definition have underwater homeowners in a shrinking job market, and you've got a recipe for disaster.
These things are not true of the more established neighborhoods of Arlington and Alexandria. And I expect places like Capital Hill, Foggy Bottom and Georgetown to emerge relatively unscathed even if a couple hundred super rich people lose some money in the sale of their exclusive RE. (always a risk for the truly high-flying stuff).
Cara - let me say for the record, that you were instrumental in breaking that logjam when you found that census data. You and I have disagreed at times, but you have always been able to discuss the merits of various theories however hypothetical they may be.
Cara,
Also there is the crime factor in DC. I think a lot of areas (say Columbia Heights, Shaw, etc) were sold to people under the premise "just wait, in a few years the crime rate will be as low as Dupont Circle or Georgetown." Instead, you open up the WaPo and see articles about a recent homicide in Columbia Heights.
CRT,
Thanks. I think the conclusion I reached last year on our, will DC become stratified like Manhattan and Paris question boiled down to, okay that's a valid theory, but "meh, why does it have to happen here, right after I decided to settle down here? Meh!"
But rent/own fundamentals seem to be reappearing in force out where I want to buy, so it's all fine by me now.
"tiredbubblewatcher said...
What I'm shocked by is that some of you are acting like the housing stock in Arlington has remained static this decade instead of incredibly dynamic. Don't you realize how many nice condos and new SFH were built? Or additions? Or renovations?"
TBW again, no offense but this was also discussed at length in 06&07. I think everyone acknowledges that the housing stock is that much nicer.
But its also true out in Loudoun which went from say a 50/50 spilt in 2500 sf ramblers vs. 3800 sf mcmansions in 2000 to now perhaps a 70% McMansion vs 30% rambler split today. I believe the consensus was its a draw, or if anything, Loudoun should have risen much higher given the 58% populaiton increase and nearly unlimited room to grow.
Again, nothing against you but this one that the veterans of this blog seem to put in the asked and answered category. Thus, thats why it isnt brought up anymore.
Tom,
I would say of the people I know considering living in Arlington, 10% love Arlington. The remaining 90% like Arlington's location and put up with Arlington.
Most people I know prefer Fairfax County (or Loudoun or Prince William). They just do not like how long it takes to get from those places to DC.
TBW,
Tear downs and renovations...excellent point. Almost impossible to calculate, but has a huge impact in values, especially in somewhere like Arlington. Arlington gains are not what they appear to be at face value.
CRT,
No, I think a lot of the comments (and Cara and your Census data posts) were implying all the Arlington gains came from changing demographics, higher income levels, and traffic woes. In other words, that the land was worth more.
But if you admit that some of the price gains has come from nicer housing stock, then I am content. Just please make it more clear that you are not saying changing demographics and traffic issues are alone the reason for the higher prices.
"Cara said...
OTOH I do still think DC's on the precipice, or parts of it are."
You know, every time I think I have this all figured out, all I have to do is look at DC and MD to realize how much I dont know. I was trumpeting the DC/MD fall for a while, but now I "may" be backing off a bit because it isnt doing what I expect.
I may be sliding into the MD may be OK but DC is still in jeopardy category, but really, I dont know. I need to go back and look at it all again as ive been neglecting the MD side of the equasion. It may still be there, just more delayed than I thought.
"Sorry, this is just something that irked me to no end."
Concur.
"You are using a strawman argument. I don't think anyone has argued prices will decline 30% in one year in Arlington."
... not inside the beltway, not in my neighborhood, not on my street, not my house...
"But if you admit that some of the price gains has come from nicer housing stock, then I am content. Just please make it more clear that you are not saying changing demographics and traffic issues are alone the reason for the higher prices."
Yes, its not just changing demographics - its that and the better housing stock - clearly. Traffic? Im not as sure, (it was bad then, it is bad now), perhaps some, but the big ones for me were housing stock (improved everywhere) and demographics (improved some places).
Robert,
You'll enjoy this cover of the American Lawyer (national magazine).
http://www.law.com/jsp/tal/in_print.jsp
Unfortunately I cannot find a larger version of the cover but it's a nice drawing.
It reads "A Capital of Lawyers: In a down market, it's D.C.'s moment"
On a related note though, I've had some headhunters encourage me to apply to NYC lawyer positions. I'm just so set here that I'd never consider it.
It made me wonder how many people would really move here even if the recession is much quicker here than elsewhere. Certainly I'm not the only one very attached to a region. I wonder what percentage of Americans are relatively immobile like me.
Then again, if I had no job and my savings were much lower, I probably would not hold my nose at applying in NYC.
[Note though that the American Lawyer article admits DC firms are doing layoffs despite the potential for more work because of the stimulus.]
not to distract from the all clear sirens, but has anyone else noticed more SS listings lately?
There were hardly any new ones for like 3 months, just a couple REOs, and now 4 in one day. I only have 2 zipcodes in my alerts, so don't have much of a sample there. This could be the result of new notices of default finally going out and owners deciding to list instead to hold on a while longer, or it could be owners who've given up on the refinance refief options ever panning out for them, or it could be a statistical fluke, like the 6 blue M&M's in one handful I got earlier today...
hmm, have to see what I can dig out of frankly...
Okay so there are false positives in here but:
search criteria:
FX* short
sorted by DOM,
listed 100 per page,
give 2044 results, the first ~450 of which were put on the market in the last 7 days. 25% in the last week. Um, yeah, that's not just me. 714 within the last 2 weeks. Um, yeah, I'd call that a spike.
Anyone have a better method to get _just_ the short sales? There's about 10 false positives per page...
oh, yeah, forgot to say, I picked an upper limit of $700k, to keep the results smaller, feel free to choose your own criteria.
FX* short sale -not short sale <700k gives 1650 results, 317 within the last 6 days, ~550 within the last 13 days.
(we may be missing some sample here, but way fewer fals positives)
So, you wanted to see what happens when the foreclosure moratorium ends? Owners freak out at the NOD, realize they could actually be evicted and decide to try to sell it hoping for the debt to be released scott-free.
OTOH, that's a lot of "fake" listings inflating the sense of the inventory, though with the huge numbers of them "under contract" they may not be so fake after all if those deals close.
Arlington is a nice place, but it has some problems. Architecture in general is horrible. Not much happens there in terms of nightlife (honestly it is relevant to the DC overall). But Arlington and Bethesda are obvious standouts in greater DC area if you like/value proximity to DC, walkability, good schools, yappies and low crime.
no way that i would live in arlington if i/my job was more mobile. new york, sf, london, southern france --- all these places have so much more appeal than the intersection of washington and wilson boulevards.
Cara-
That is a spike, but it is not that absurd. 22% seems a little high, but it doesn't really surprise me. I think a lot of the old inventory got destroyed in the past month or so. So even if 450 have been coming on every week the fact that the low end inventory got demolished over the last month might mean that there are only a couple thousand left.
Sorry Arlington potential buyers:
(AR7*,AR6*) short sale -not short sale (no price limits)
only has 95 results for all price ranges. 30 or so in the last month though, if that's any consolation.
95/1000 listings, compared to 1650/6000 listings isn't much distress.
housebuyer,
my hypothesis was that this many coming on the market was a new thing, and hasn't been happening all along. I base this partially on the fact that these last under contract so much longer that you can keep track of how many there were just with the current listings much longer.
What's kinda scary? Is that if the SS's are this much of the inventory, then in actuality, "real" inventory has been declining all spring, or at least since May. As you said, the low end getting "destroyed" (otherwise known as bought...).
Unlike banks themselves which I expect will try to pace themselves, distressed owners will market as soon as that distress is felt and acted on, so if this spike keeps up for a couple of weeks we may indeed see "another leg down" in FFX county even at these small inventory levels.
Don't forget, realty track thinks there are 3000 bank-owned properties too, only some of which are on the MLS.
Sure, there could be just these thousand or so, but remember I'm only looking for an "extra" 3k above and beyond the 11k buyers who bought prematurely to make up the gap to the 14k fence-sitters and then the balance will be tipped, and sellers will have to dip down into the next income bracket for support.
Tom said Everyone wants to live in North Arlington because it's the greatest place in the world.
Great. Now I'm blind in one eye. How am I ever going to explain this pencil to the E.R.?
"Cara said...What's kinda scary? Is that if the SS's are this much of the inventory, then in actuality, "real" inventory has been declining all spring, or at least since May. As you said, the low end getting "destroyed" (otherwise known as bought...). "
Cara - thats interesting. You might want to track that - pick say X number of houses and see what their fate is (how many sell, vs how many sit, vs how many just disappear). Are SS growing as a % of all listings or declining? Actually, I dont need to tell you that - you probably will do that on your own.
Re the status of short sales, I agree that the more likely presumption is that they come on "wherever whenever" especially when a NOD comes out so yes this could lead to a spike.
OTOH, if the banks are doing a time release of REOs, why not SS as well (within reason)? If I was bank's counsel, and I knew they were trying to not flood the market, I would have the borrowers sign an agreement - we (the bank) agree to take a short sale and forgive the balance due...you (the borrower) agree we get to set the terms of sale, including when it is listed.
Honestly, I have no idea if this is true, but it wouldnt surprise me. Bottom line is (if you are so inclined) track it, I think its worthwhile.
Put me in the category of folks that don't think Arlington is nice. The only appeal is location, but that is mitigated by terrible parking. If all of nova were priced the same, I'd rather buy in Vienna or Mclean than Arlington.
CRT,
Some short-sales are preapproved, others are not, so the bank only has control over the one's it's signed off on the list price. Very few (that I've seen) have a statement to that effect in the listing. (184 of the 1650have "approved" somewhere in them)
But some of this spike if it's real, is going to be coming from a number of sources, the end of the moratorium, the 3yr I/O's from 2006 recasting nowish, the 5yr I/O's from 2004 recasting nowish, and possible the permeation through the zeitgeist that short sales are an option, and are actually closing now.
I'll keep track of the number and percentage of listings, but doubt I'll pick out ones to follow, that would require setting up a dummy email account specifically for that purpose and dumping all the frankly notices there. Bleh, no thanks.
Cara-
I just looked at your search. Don't you need to add "active" to your search. The place I am buying says that it is less than 7 days on the market, because they stop counting DOM when it is under contract. So what you are actually finding out is most short sales go under contract quickly. If you look at things that are active it lowers your count from 1650 to 400
housebuyer,
I left off "active" intentionally because I wanted all of them, but didn't realize it was having that side-effect thanks!!
Still an interesting thing to know that short sales are going under that quickly, but no longer a spike in activity. Still, a goodly chunk of the current inventory also.
RE: shorts
Active isn't always active. Many Lenders are requiring shorts under contract to remain active.
also,
Lender's have staffed up and are "pushing" shorts. They are no longer the waste of time they were.
I wonder, is there any corresponding change in the number of reo's?
va_investor,
Yep, that's what's been true in Burke for the most part, so that's why I didn't think about the DOM stopping once a contract was made...
Still, my bad.
Sigh, half of my brilliant data-related revelations turn out to be half-baked.
I am pretty convinced that the short sales are being added at the same pace they have been. There are 63 short sales that are active and came on within the last week. At this rate you would have expected ~3,000 over the last year. There are ~400 still active ~1250 under contract, and ~1,500 that sold in the past(15 months). With these numbers it implies that perhaps a slightly more short sales are appearing but not many.
"Cara said...
Still, my bad.
Sigh, half of my brilliant data-related revelations turn out to be half-baked."
See - thats the great thing about this blog. You came up with something, I bought into it, we both could have spent an inordinate amount of time chasing rainbows before we realized the flaw.
Thanks to the open discussion and peer review homebuyer and VA investor took down in 90 minutes what you and I might have discussed for who knows how long before we realized our mistake?
Now if we could only have back the last 18 months of our lives and direct this open discussion towards "it just hasnt happened in Arlington - yet" :)
CRT, housebuyer, va_investor
Indeed, and now I've put in a request with frank for a new sortable column for date of first listing for lists and sold-date for solds.
So, if a trend does appear, we'll be able to track it!
Yeah, it really is a lot like the old bubble days with all the real estate pumpers back.
Since we are having a reunion...
KH, Why did you change your name to @J@?
Did you announce the change when you returned and I just missed it, or was this some attempt to start over again with a clean slate?
Hey Leroy,
What do you make of some of the doomer's capitulating instead of the N.ARL homedebtor's?
Gotta take into account market sentiment and buyer psychology - self-fulfilling prophecy. If people think a bottom is close, then it is.
"Cara said...Thanks. I think the conclusion I reached last year on our, will DC become stratified like Manhattan and Paris question boiled down to, okay that's a valid theory, but "meh, why does it have to happen here, right after I decided to settle down here? Meh!"
Tell me about it! I think the Inland Empire chamber of commerce should pay me to move there. The day I do property values will shoot up. Such is my lot in life.
CRT Said...Every time you even hinted the big "it" may not happen inside the beltway, you were shouted down from the gallows - accused saying "its different here" or "new paradigm". The answer was always "just wait it will happen"...
Ahh memories. Here is a typical conversation back then.
A: Anyone notice inventory is down in Arlington?
B: What are you saying??? Are you saying Arlington is IMMUNE!!!
A: No Im saying inventory is down.
B: OH, so now you are claiming "its different here"!!!
A: No im saying inventory is down.
B: OH, so its a "new paradigm"!!!
A: Huh? Im saying inventory is down.
B: If inventory is down, its temporary. Just wait -- Arlington isnt immune.
A: Why is it temporary just in Arlington?
B: See you ARE foolishly claiming its IMMUNE. Just wait it will happen.
A: Huh?
B: All housing reverts to the mean!
A: What are you talking about? What does that have to do with inventory in Arlington?
B: (crickets).
Rather startling to find myself characterized as a data ignorer-- and by CRT no less. My skepticism about Arlington and Alexandria as exceptions is based mainly on the quite sudden nose dive taken by Montgomery County starting in the Fall of '07.
I tracked the data on sales, new inventory, median price, % change, for Alexandria, Manassas City, DC, Loudoun and Montgomery, later adding months of inventory, CRT's favored metric, and Arlington when it seemed to become the focus of this blog. I have the data for July 2005 (just after we sold our Del Ray townhouse) until the present.
While I can see CRT's point about inventories for much of the Virginia data (in Manassas, for instance, inventories were high for at least 6 months before sustained price declines began), for Montgomery Co. it just doesn't hold. The first month inventory hit the 6 month level was July of 07. In August it was 6.2. In September-- corresponding with the first price decline it suddenly went to 10.
Prices have declined steeply since then and inventories have remained high -- but if you were looking for signs of it in the data you wouldn't have found anything resembling a warning.
This is a Northern VA blog, after all, and it seems most of the people here are quite strongly attached to the area, so I haven't wanted to get too much into this kind of comparison.
And frankly, the whole argument on whether Alexandria and Arlington now have the sort of cache that means that the well to do are willing to pay a premium to live there isn't of great interest to me. It's certainly possible. I saw a lot of young, presumably well-off couples moving into our Del Ray neighborhood while we were there. It obviously became a very trendy place to be in a fairly short time.
I also saw it-- over a much longer time frame-- with the first house I bought in California in the late 70's. Within walking distance of the beach, I always thought it would make a come back, although it was in the heart of gangland when we moved there. It took 25 or 30 years, (and I still have fair amount of post-traumatic symptoms) but I was eventually proven right.
Overall my interests are both wider-- the effects of the option arm recasts on the market-- and narrower-- I'm looking at apartments and townhouses near my folks in Montgomery Co.
TBW,
TC Williamns and McLean HS are night and day. I've lived in FFX County most of my life. Everyone who does any research and asks around will tell you the same. Unnecessary to even have to spell it out.
"the intersection of washington and wilson boulevards."
There's more to Arlington (and Alexandria) than that. Some areas, Courthouse, Rosslyn, Glebe is much worse.
The old Clarendon of 15 years ago was interesting and had potential.
"The only appeal is location, but that is mitigated by terrible parking."
There's more to Arlington (and Alexandria) than that...
Check out these places at FranklyMLS
"Va_Investor said...
Hey Leroy,
What do you make of some of the doomer's capitulating instead of the N.ARL homedebtor's?
Gotta take into account market sentiment and buyer psychology - self-fulfilling prophecy. If people think a bottom is close, then it is."
Good question! The first sign of a turnaround may have been "Wannabuy (got popcorn?) Neil's" sudden disappearance. He was a bigtime Arlington hater, clueless about the area too, but he wasnt stupid. As soon as Arlington data didnt seem to follow the rest of the area down the path to hell, he capitulated. Eventually he redeemed himself and admitted Arlington wont do as bad as outside the beltway. That was this last summer and sign #1 -- we probably should have paid more attention to that.
It was quiet for a long time, but sign #2 was probably last winter when Arlington doomer John Fountain turned over to the "dark side" as he put it and bought. At the time, he was still predicting a major downturn for Arlington. He justified his purchase by saying he priced the major downturn into his offer which was accepted.
Now that the Arlington downturn is seriously in doubt, if he did as well pricewise as he hinted, he got one of the best deals in history. The bigger sign was the fact that he bought -- that was probably signpost #2.
Sign #3 for me was probably the sudden disappearance of Terminator X. Just last winter, he was sure Arlington's downturn was coming. He didnt seem to backdown either. He did later suggest that maybe it aint gonna be as big as he thought, but then suddenly, poof, he was gone, and hasnt been heard from since.
This I think was a big one. He was a smart guy. My guess is he suddenly realized "oh crap it aint gonna happen", knew there would be rehashing of the doom days like this, and got going while the gettin was good.
Heres another one. Our ol buddy Contrarian has recently suggested that this area may not see as much unemployment as the rest of the USA. He also suggested (I think) that perhaps prices in this area will "only" go down 75%, not 90% as the rest of the USA.
Contrarian is in a different league than any of the other 3 bloggers I noted, so im not sure what to make of this.
hey hey hey
And don't forget, Cara, ridiculously, scrupulously buying must beat renting person is looking at buying, only prohibited by her own life/financial timing (okay not in Arlington) that must mean something. (I.e. the bottom must be long gone)
Ahh yes Cara. Im not sure what kind of indicator/counterindicator it will be when Cara buys. And what about me? I may have changed my outlook on Arlington, but I still havent bought yet.
Actually, I think I know what happens when I buy. When I buy, Contrarian's deflation comes into play, and doesnt let up til I decide to sell years later.
VA_Investor, et al
Regarding short sales: "under contract" doesn't always mean "under contract." Sometimes it simply means that the owner has accepted your offer, but is waiting to hear whether the bank will accept the offer. Thus, it should be of absolutely no comfort that "most" or "many" short sales go "under contract" soon after being listed. They're not really under contract.
"Hey Leroy,
What do you make of some of the doomer's capitulating instead of the N.ARL homedebtor's?
Gotta take into account market sentiment and buyer psychology - self-fulfilling prophecy. If people think a bottom is close, then it is."
What is happening in Arlington is more similar to what takes place in a "normal" real estate bust. Volume has dried up, and prices are slowly falling.
In comparison to PWC it looks "good" prompting some of our local housing pumpers to declare it is "doing great," etc. In comparison to the worst parts of this area maybe that is true, but in comparison to the non-bubble zones in the country, or a normal market, it is doing terribly.
Ultimately Arlington will return to its fundamentals. CRT has made some good points with regard to demographic shifts, etc, but those don't come close to fully explaining what happened to Arlington prices. What we are seeing is largely attributable to nothing more interesting than sticky prices.
The big question is what happens with inflation, and when it spikes. I don't think there is any question at this point that inflation is in our future. When and how it arrives will do a lot to dictate how Arlington corrects.
Of course, this whole response is probably a waste of time on you, as I know you are really just here to wage your never-ending war against "bubbleheads."
Have you ever actually admitted there was a bubble or are you still doing that "this is a normal cycle" thing?
crt said "Its a shame this had to happen simultaneously to perhaps the largest demographic shift in 140 years - thereby obscuring the fact that many of the gains were real and based on fundamentals."
I can't believe you are still talking about the less than 1% decline in the hispanic population as if it were a tidal wave.
"I can't believe you are still talking about the less than 1% decline in the hispanic population as if it were a tidal wave."
I cant believe you are still going back to the decline in hispanic & black population when I very clearly said the big issue was the reveral of the white decline.
1970-80 -2,572
1980-90 -585
1990-00 -4,239
2000-07 +14,795
There are only a handful of counties across the USA that saw decade after decade of white decline like this. Most of them had names like Detroit, Buffalo, etc. It was exceedingly rare for a suburban county.
That decline not only stopped but reversed in a big way. Generally speaking these things move slowly - even during the turmulent 60s & 70s a few percentage poings per decade was a big deal. In percentage terms, this growth in white population will (if it holds in 2010) be the biggest seen since reconstruction - a period of 140 years.
Honestly, I wish hispanic/black populations stayed flat so you would focus on the principal issue here.
crt, now that we agree that minority emigration was immaterial we are left to ponder why a bunch of white people moving into newly built condos caused the price of all other real estate in Arlington to rise dramatically (if i am understanding your theory correctly). i, being a resident of arlington for many years, don't buy the theory that r/e prices just happened to mushroom at the same time that r/e prices everywhere else did because some white people moved into new condos. i really don't believe for a second that the price of r/e in country club hills jumped because new condo buildings were built in Courthouse.
your theory sounds nifty on paper, but its when you actually start to think about real life examples like the one above that you realize it doesn't make any sense at all. maybe i'll go take a survey of residents in country club hills who purchased in recent years and find out how many of them bought there because of all the new white people living in condos far away from their neighborhood.
Not to butt in and/or sound like a broken record but:
Wealthy areas have wealthy people with plenty of assets to stave-off a distress sale. They also tend to be move-up buyers with a big down-payment and these are there destination homes.
Hence, no reason to sell and no reason to care if their lifetime home declines in value. They aren't selling; except for the very small percentage that truly want to or need to.
John - the demographic shift is important for establishing one thing - increased desirability. For the longest time we heard "nothing has changed" or "its no more desirable than before" or "urban living is no more in demand than before". That is simply not true.
Whites are a very good proxy to measure this because, rightly or wrongly, they are usually the ones with the means and opportunity to live where they want. What we have seen in in this country for at least the last 50 years is that when an area becomes more desirable, they move there. When an area becomes less desirable, they move away. I dont see how thats controversial.
When an area becomes more desirable, I think it can affect prices. Moreover, within that area the most desirable subareas will see a price increase. In this case, if we can agree that Country Club Hills is more desirable than Clarendon Condos, its is reasonable to assume buyers will first seek out (and bid up the price) of the more desirable area. Again, I fail to see how thats controversial.
By the way, I have a real issue with your statement "now that we agree that minority emigration was immaterial". Excuse me but where or when did we disagree? In the earlier conversation last month, you said:
"Forgive me for being cynical, but I don't buy the theory that a 1% cumulative non-white rate of attrition caused houses in my neighborhood of Arlington (which was almost entirely non-white during the entire period from 2000 to 2007) to more than double in price over that time period."
I responded:
"John - I think to the more compelling thing is not the "rate of non-white attrition" as you said, but the presence of whites moving in after leaving for decades."
You then said:
"Again, I don't see how a 1% decline in non-whites in Arlington County can be considered a "monumental change in demographics."
I again replied:
"I agree John - the 1% decline in non-whites is just an interesting anomaly. The far more interesting thing is the other side of that which is the white growth."
Fast forward to this thread and you said:
"I can't believe you are still talking about the less than 1% decline in the hispanic population as if it were a tidal wave."
I responded:
"I cant believe you are still going back to the decline in hispanic & black population when I very clearly said the big issue was the reveral of the white decline."
Now you say:
"now that we agree that minority emigration was immaterial"
Are you serious??? Now that we agree??? Where exactly did we disagree??? This is a verbatim posting of the relevant portions of that conversation. If anything it seems like you time and time again go back to "minority emigration", and I, time and time again, try to make you focus on the "white immigration".
You know, some of my first years have this insanely annoying habit of resolving a fabricated disagreement in their favor in an effort to score points with their opponent in debate. Its a bush league move and I call them on it every time.
Id like to think thats not what happened here. Id like to think that this is just a case where didnt remember what exactly was said as the record is very clear, there never was a moment in time when we "disagreed that minority emigration was immaterial". Is there something here I am missing?
crt, you've now backed yourself into to the overly general "arlington is just more desirable than it used to be" argument.
you are surmising the cause based on the effect. you are basically saying that if prices have gone up, the area must be more desirable. tell that to the folks who bought in PWC in 2005.
"John Fountain said...
crt, you've now backed yourself into to the overly general "arlington is just more desirable than it used to be" argument.
you are surmising the cause based on the effect. you are basically saying that if prices have gone up, the area must be more desirable. tell that to the folks who bought in PWC in 2005."
This is PRECISELY what I am doing! This is the "new paradigm" theory, with stats to suggest the same. You are right, we know the effect. Prices exploded everywhere - they imploded some places other places they just slid. Why? What is the cause for this very disparate performance by area?
For years the prevailing theories to answer this disparate perfomance was "its moving in" or "it just hasnt hit - yet". This worked fine for 2005, 2006, 2007 and 2008.
We are now nearly halfway through 2009. It looks very clear that the bottom is within striking distance. Are we still supposed to sit here saying "its moving in"/"it just hasnt hit yet"? How much longer before we are able to suggest alternate theories?
We now have 2 PLAUSIBLE theories to consider:
(1) its moving in/it hasnt hit yet
(2) Thanks to increased desirability/demand its here, it just isnt going to hit as hard.
Are either of them perfect? No. Are they both plausible? Yes - absolutely.
Personally I like mine because it fits well with the reality of mid 2009. It also happens to fit quite nicely with the I tulip article of yore, suggesting prices will fall dramatically from their peaks in the exurbs, less so in the suburbs, and least in the core areas. I also like mine because it fits with the case shiller article that thanks to increasingly favorable demographics, inner areas will be the least hit, last hit, and first to recover.
You have made it perfectly clear, again and again, that you disagree. That is fine. Your objection is so noted. If you want to continue to rely on "its moving in/it hasnt hit yet" thats fine. Also, if you want to advance a third theory that happens to fit nicely with what we see, by all means, please submit it.
Also, In the past youve said im trying to make sense of something (the increase) that doesnt make sense. Now you are saying im trying to use the effect, to determine the cause.
To this I plead guilty on all counts. For some reason, this irritates you, but Im sorry, thats just what we do here - try to make sense of things based on what we see.
Really, for some reason, its only when I (or really anyone) suggests that Arlington isnt going to implode that you exhibit this tendency. In the past ive suggested Arlington may very well implode because of X Y or Z. To my knowledge, youve never once got upset on those occasions.
As time went by however, I have changed my views based on what I see in front of me. I still go back and forth on this from time to time (its moving in could be correct, and we are just missing something). Still as time goes on I am leaning towards something other than "its moving in" and its only then that you and I keep going round and round on this (trying to make sense of something that doesnt).
May I suggest, very respectfully, get over it. It is 2009, you have your house, and the bottom may be here. If it is, the speculaton over how Arlington/Alexandria are going to perform from here on out is only going to increase.
Over the long term, housing must be in balance with fundamentals - on this I think we all agree. In most places, the fundamentals didnt increase, so the prices had to fall substantially to meet them. In some places, maybe, just maybe, prices wont fall much while the fundamentals play catch up. Please excuse us here for discussing those maybes.
crt, you are trying to forecast the weather in the future by overanalyzing the temperature today. i hope you see the problem with that.
"John Fontain said...
crt, you are trying to forecast the weather in the future by overanalyzing the temperature today. i hope you see the problem with that."
I do. Fraught with problems. Easy to make mistakes - like the time last year I thought increasing sales in PWC could signal lesser declines ahead - oops. Still, since it quickly became obvious that wasnt correct, I quickly changed my position. Problem solved.
Contrast that with your preferred option of sticking with the original forecast, no matter how many things suggest it may not work out the way you originally thought. Is this really any better?
Now that I think about this, you know who is firmly in this camp? Contrarian. This could end in inflation or deflation. The rest of us sit here "overanalyzing" this issue on a near daily basis.
Contrarian disagrees and refuses to accept any answer other than deflation, no matter how much time goes by or how many signs we see to the contrary.
As the years go by, if this isnt playing out like a deflationary grand whatever, the rest of us will slowly dissipate to the winds, purchasing homes and living our lives. Still im sure he will still be here, angrily calling us all fools and saying it just hasnt happened - yet. Do you really see that ending well for him?
In all seriousness, I am sorry this search for alternative answers irritates you, but its not going to stop. For the rest of us, after years of waiting on the original forecast to come true, that time to look for other answers is now. I hope you can accept this and be comfortable with this reality. Otherwise, I suggest we both save this thread, as in another month we will right back here again. Regards.
6/15/09 12:10 AM
Posted to Northern Virginia Bits Bucket 6/11/2009
Delete Comment Cancel
Post a Comment