Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
carayeah, i probably should discuss this as MOI,but when the MOI is above 2, it seems prices stagnateor turn south, and when MOI is close to 1, prices increase.i'm not sure if the sellers get sick of showing the place or if the brokers can only do so much work.
I agree for individual listings, 1 month without a sale generally means it has been priced too high and needs an adjustment downwards. And over 2 months (in most price brackets) sellers really need to take a good look at what their goals are and whether selling now is realistic given that they're going to have to take a lower price.However, what's true on individual listings can't be directly translated into a total MOI figure. One would think the math would work like that, but somehow it doesn't... See below: recharts FFXSo while an individual listing cut-off of 1 is right, (see how in the run-up times by far and away most sold listings were active less than 30 days, but during the plummeting prices it was long-sitting sellers who had to drop price to meet reality) in aggragate MOI it doesn't seem to pan out that way.I agree wholeheartedly that MOI below 2 prices increase, MOI was below 2ish throughout the entire bubble run-up.But using 2 as the upper bound as well, such that above it prices should decrease, I don't see any evidence for. MOI reached 6 before any movement in the median in FFX, and reached 10 before the real plummet in prices. And in the latest mini-bubble sponsored by our dear government, prices have risen with MOI just staying under 6.So, I wouldn't use the aggragate MOI of 2 as a cut off above which prices should fall in the market as a whole, even though it makes perfect sense listing by listing. (sorry this whole thing is a little disjointed, I re-arranged it after I figured out where you were coming from but didn't re-write it well...)
What is the general consensus for a healthy market vis a vis MOI. I don't think comparing 2005 to 2010 is a valid comparison.
"Cara said...But using 2 as the upper bound as well, such that above it prices should decrease, I don't see any evidence for. MOI reached 6 before any movement in the median in FFX, and reached 10 before the real plummet in prices. And in the latest mini-bubble sponsored by our dear government, prices have risen with MOI just staying under 6."Agree Cara. Pat, no offense, but the above 2 MOI cutoff for price declines is absurd. Sure, for most of the early decade MOI was below 2, but as is easily noted, that was a superheated market which unsurprisingly led to several years of 20% annual increases. Clearly that is not what you want to see again right?Calculated risk has a good series showing why 6 MOI seems to be the breakpoint between rising & falling prices on a national scale. Some people here (who are comfortable recognizing "its different here" btw) have made some decent arguments for why MOI should be lower here than elsewhere, and I agree. However, those arguments are more akin to 5 MOI or maybe even 4 MOI as being the magic number between rises & declines. However to suggest that 2MOI is the magic number is so far out of the mainstream that you would have to perform a significant amout of research and present an ironclad case to get anyone to really believe you.
Va,I like CRT's general idea, under 4 means hot, over 8-10 means slowing, anything in between is neutral (i.e. prices could go up or down, but it won't be MOI that's doing it)
cara,CRT,I always thought that 6 was the demarcation line.
I think 6 MOI is balanced.The arguments presented here that 4 or 5 MOI is the long-term average forget one small point...7% YOY price gains are the long-term average as well.So 6 MOI for no price movement, 4.5 MOI for 7% YOY gains.
Va,Right, 6 is balanced, i.e. neutral, but the only subtle difference I'm making is the concept of how wide is 6? How far do the numbers need to deviate from 6 to be a concern in either direction? Under 6 seller's market, over 6 buyer's market just seems naive. I'm not arguing (right now) that 4 is the new 6. I toyed with that idea, but that's not what I'm saying here.
that should have been more directed at Robert, sorry VA.
cara, cherylif you look at 2001-05 MOI was 1-2 months which was a hot market, i wish the charts went to 90s here we had a cooler market.i think once moi gets above 3 the market starts losing price growth.now tht said we have a shadow inventory problem zero short term rates are letting people rent on 30 year leases and keeping them stuck...
"Robert said...The arguments presented here that 4 or 5 MOI is the long-term average forget one small point...7% YOY price gains are the long-term average as well." Good point Robert. Maybe so.
"Pat said...cara, cherylif you look at 2001-05 MOI was 1-2 months which was a hot market"And you also see +20% price growth YOY. You recognize this is not normal right? "Pat said..., i wish the charts went to 90s here we had a cooler market."Agree. Good 90s data would be very helpful -- something we have been looking for here for years now..."Pat saidi think once moi gets above 3 the market starts losing price growth."OK so we got you to back off of 2, but why 3? What evidence, if any do you have is that 3 is the breakpoint between gains & declines?
If this seller is NOT delusional and gets his/her asking price, then Arlington needs to do a serious reevaluation of its assessment process, then hike a lot of people's taxes in Arlington and drop people's like mine:do nothing for ? years, then ask almost $300K over assessed valueMaybe the huge lot can be divided for a developer, but if so, then the land value needs to be bumped up.If instead this listing is another delusion, note that this is another example, like MM's, of an Arl. house that has dropped about 7% in assessed value--and in a deluxe neighborhood.
Ace - If you look at the tax records you will find that is exactly what Arlington did. The tax increase on the house has been negligible, but the tax on the land portion has multipled 480 percent since 1997.
Or, to more more precise, the tax assessment value multipled. Obviously, the taxes went up wsith it.
c, as an Arlington homeowner for 10 years, I am well aware that Arlington has increased assessed values of land--on all of our properties. But if you will look at the assessment for the whole property, it is far below the asking price of the house. My point has to do with *how far* below asking the assessed value is, given that the owner has done no improvement to the property. Others of us have put in lots of $ and our houses would likely sell for assessed value or slightly over. Generally, houses selling above AV at this time are houses that have been updated, sometimes to the point of hundreds of thousands of $.
arlington should immediately reasses based upon listed sale price, if you list above they raise it and if you lowerr it they lower
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