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Uncle! D.R. Horton conference call comments: No more tax credits!
Wednesday, August 4, 2010
Northern Virginia Bits Bucket 8/4/2010
Posted by Harriet at 6:00 AM
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21 comments:
That was pretty amusing, Harriet, no please no, stop trying to "help".
So, my predictions for July's MRIS numbers for FFX Cnty.
June 2010 new pendings 1533
sold 1567
median $425k
May 2010 pendings 1416
sold 1426
median $390k
April 2010 pendings 2247
sold 1321
median $379k
March 2010 pending 1940
sold 1065
median $355k
May sold = 73% of March pendings
June sold = 69% of April pendings
so say 70% would take July to 991 sales.
But I think we can assume that May contracts are less likely to be duplicates or under-qualified buyers making a shot in the dark, so 85% of May would put us at 1204 closed sales.
So MoM sales should be down 23% to 37%.
July 2009 new pendings 1752
sold 1484
median $390k
July 2009 new pendings 1897
sold 1687
median $380k
So, YoY sales down 19% to 33%
At a wild guess median stays flat from June. $425k would be a 9% YoY increase.
In my usual, assume FFX Cnty is a decent proxy/average for the region as a whole, I'll go out on a limb and say the post-tax credit slow-down will not be as bad as the national mortgage application numbers would leave you to believe, such that sales will be down 20-30% not over 40% like national purchase applications.
Cara-
That sounds about right. I think the 8k was less important here than in many parts of the country because 8k is a smaller percentage of a houses value here than most places.
Either way sales are going to take a big hit. It will be interesting to see if inventory starts coming down soon. We are approaching the end of the summer selling season inventory and inventory is still up dramatically since the start of the year. If not months of inventory will increase substantially, which will put a lot more pressure on housing.
Hb,
I also think it will look less bad nationally than people think, because (1) purchase applications spike in April included a lot of duplicates from less well qualified applications, so the sales per application is off, which already showed up in the June sales numbers. (2) Duplicate contracts in April also already translated to lower sales in June, such that the drop-off in pendings is not a strong as one would naively think, given that the pendings of May and June are more "serious" buyers.
If my sales numbers are about right, then MOI will still be under 6 for FFX. So, while high for this region in this season? Probably not high enough to do anything to prices.
What I'm watching for are July's pendings. They ticked up ever so slightly from May to June, (well 9.9% actually) if they go up another 10% to 1723 in July, I think the hangover from the tax-credit is over, and prices in the inner suburbs this year won't retreat much. If they stay around 1500 or drop, then we're about to see another leg down.
I like the fact that some can predict future prices based on housing data. Is there an article somewhere in the net which explains how to do this?
Can you stay "style mishmash"? I love some elements of this house and hate others. And it's big, esp. for the lot. What do you think?
Underwood
freindly-
I don't think there is any hard science about how to predict housing prices. I think we are mostly trying to predict what we think the supply and the demand will be. If demand is higher than supply prices will generally go up and if demand is lower than supply prices will generally go down.
This article from calculated risk show that in general months of supply of housing is anti correlated to prices on the case-shiller index. housing prices So many of us are predicting housing prices will fall some going forward because inventory has been increasing and sales have started to decrease after the housing credit ended.
Ace-
I like how they keep on talking about how green it is. Somehow I just struggle to think a house is green when it is 5600 sq.ft. Sure it is more efficient than it could have been, but a lot more materials and energy were made making something that sized compared to a smaller house.
friendly,
Don't read too much into my predictions, they're usually wrong. I'm just having fun testing myself. For me it's more entertaining to look at the month's numbers if I've come out and stated a prediction.
That said, I don't think I'm totally blowing smoke either. The best predictor of price direction is MOI. Calculated Risk on current MOI.
But "normal" months of inventory is not the same for all price points and all regions. The most expensive houses of a given area do have pickier buyers and sellers and thus do take longer to sell even in good times. OTOH 6 MOI, while normal for the country as a whole is kinda long for here. But consensus on this blog is basically, under 3 months is a hot market which will induce rising prices, over 10 months is a weak market which could easily lead to falling prices.
But things like the median price are just as affected by the mix of sales as they are by actual price reductions on the same product. Hence I predicted a rise in the median post-tax credit as a lull in FHA buyers happened. But instead the median kept rising even during the last of the tax-credit closings, which I post-facto decided/hoped was mainly due to cash-strapped people chosing move-in ready homes. So now I'm just guessing flat.
As you can see I just enjoy trying to predict the future but I don't actually have any actionable insight. And no, there isn't someplace online that accurately advises you on how to predict prices based on market data.
HB,
You're so right...to say nothing of the energy that will be consumed in a big house vs. a smaller one, even if both are "green." I suspect a lot of people have been scared off by the expected energy costs due to size and the two story rooms, so the agent is trying to offset those.
Of course 2000 of those square feet are below ground, or maybe they are including the porch (Arl. says it's ~3600; with a few exceptions (e.g., some bilevels or split levels) they include only above grade and exclude open porches from their totals.
Did you see the half bath with the "modern" salad bowl sink, Japanese style vanity, and mirrors from the 80s? Did we really need all those eyebrows in the roof and mirror tiles above the fireplace?
But I love the kitchen.
Ace-
Yes there were some really strange choices. Maybe its an optical illusion, but the first picture of a bath looks like the bath is either really skinny or super long.
Ace,
This is much more typical of what I've seen coming through 22205. That's why I was surprised to see something close for over $800k (what you posted the other day)
And some of the other things I've seen are nicer than this one.
http://franklymls.com/AR7359690
My $0.02
Ace, is that actually an Arlington address for that house? I thought that would be Falls Church or Mclean.
My $0.02
Blogger Ace said...
Can you stay "style mishmash"? I love some elements of this house and hate others. And it's big, esp. for the lot. What do you think?
Underwood
I smell Architect as homeowner. Always is one when you see a layout like that.
Texas-
According to the tax records the house was made this years, so I doubt the architect lived in it. Maybe when they started they were thinking about living in it, but my guess is that the architect just has somewhat unusual taste
mytwocents,
Yes, if the mls # is "AR..." and you can click on a link to the Arlington tax assessment, you can bet that the house is in Arlington.
I'm really not getting your point with the house you posted. That house is half the size of the Underwood house, and significantly smaller than the house I posted yesterday. I don't really think appraisers would consider them remotely comparable, even with adjustments that they can make. I think the one you posted is nice, and it is certainly more typical of that neighborhood, and would be a much safer bet, if it would meet someone's needs/wants.
To be more correct, this house:
Jacksonville
is approximately 1300 square feet above grade per official Co. records.
The house I posted yesterday was 2300 or so square feet above grade.
The Underwood house is 3600 square feet above grade. It's also on a bigger lot.
So no one would expect them to have similar prices.
TN, HB, wouldn't it be possible that an architect intended to live in it but ran out of money during the recession, or a bad life event may have happened? The current owners live elsewhere (per Arl. assessment records).
I know of a couple of other situations like that, including another one where the family built what I thought was a really beautiful place (unlike this one - though I may be the only one here who would have thought that!). But it was huge, with a few questionable choices, and in a bad location (it's FSBO now, I think). They just could not accept that other buyers, in this market, not going to pay them what they spent during a more exuberant time, to build their own taste-specific, out-of-synch with the neighborhood, etc., house.
Here's more info on the eyebrow house (see additional links at this site):
Designer's website
Hey, TN, you nailed it! The architect does own the house (see Arl. Co. site linked to the Underwood listing I linked above). My guess is he won't stay in business long...
arch.
mytwocents,
I like the designated dance floor in the basement... Or is that where you center your pool table? I don't think the fisheye lens was doing them any favors, according to the tax records it's 1316 sq ft above ground but I have a hard time believing it's as big as my house from those pictures. Makes it look even smaller.
Cara, we might also like that gray house next door, in one of the photos.
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