Well, posting the June sales and then leaving for the day was unintelligent. Sorry about that, everyone.
Here are the July sales. Sales are down by an average of 20% YOY in all the major counties. What do you think? Just more evidence of the tax credit pulling sales forward, or something new? Inventory's up slightly over last year everywhere, too.
Calculated Risk has some notes about the FOMC action today. I liked this from the comments:
"Wally: When mortgage rates hit 1 percent I'll be able to afford the million-dollar mansion I've got my eye on. Except I'll have no job then, couldn't afford the taxes and could never sell in my lifetime because I couldn't pony up to cover the equity loss."
19 comments:
Gee, I sure am glad I waited all these years so I could now buy at a new peak price in Arlington :)
In all seriousness, the decline in sales is interesting. In the 5 main counties we track, the declines were substantial, but when you look at the changes in MOI, not seeing much to make me think we will see any major change in price direction.
What is also interesting is look at the changes in sales in Faquier, Stafford &, Culpepper. Why did they show basically no change in sales while the areas we follow dropped 20%?
The eyebrow house is under contract:
Eyebrow
The Anon,
The NVAR report statistics imply that at least some of it is mix. The # of condo sales were down >30% YOY, more than for other types of housing, and for SFH there were fewer low end (<300K) houses and a few more very (900K) high end houses sold this year. Since we're dealing with few sales in those ranges, a small change can make a big difference.
Sorry, I should have said my comment responded to The Anon's first pgh. I have no idea why the outer counties behaved so differently, other than that the obvious. Prices may have already dropped to clear a lot of inventory there, whereas the tax credit and low rates pulled demand forward more in the inner counties.
http://www.nytimes.com/2010/08/08/realestate/08cncforeclose.html?_r=1&source=patrick.net
no place is immune
i wonder how the DoD cuts match the NGC relo to nova?
Harriet,
No problem, I think we all survived waiting a day. That's an awesome comment from the CR hoocoodanode. Too bad it would take an I/O loan to make it true...
The Anonymous,
If you want to look for signs of stress I think you need to go to the NVAR reports and watch the breakdown by price distribution.
In FFX there's clear weakness in the 400-499 and neighboring bins in that sales are down and listings are up.
In Arlington?
Let's see condo active listings are up 20% or more in everything but the 500-700 range, but sales are down YoY 25% or more in all but the 600-700 range. So lots of would be condo sellers.
totals:
2009 156 sales, 448 actives, 2.87MOI
2010 98 sales, 546 actives, 5.57 MOI
SF-attached, median sales price down 25% YoY, but there's only 22 sales, so I don't think we can make much of anything of this...
(I'd need to add together to make a quarterly sum or something...)
SF-detached, median down sharply from June... (but again it's noisy) Sales down YoY in all the 700k and under brackets, active listings dissappearing in the under $400k bracket (REO's? S. Arlington?). But relatively constant (small number statistics noise) in the 400-900k range.
400-800k
2009 93 sales, 208 actives, 2.24 MOI
2010 71 sales, 202 actives, 2.8 MOI
A 20% decline in sales year over year is nothing to sneeze at, but it's hard to call 2.8 MOI weakness.
So really, signs of weakness in Arlington this month seem (dare I say) "contained" to condos. It's altogether possible that most of these will simply delist once they realize the slight rise in prices from the $8k buyers is over. (arlington condo # of sales were up 5% YoY in June...)
cara,
great analysis.
exhibit 1A to weakness in Arlington condos
(in my old building Odyssey)
8/6/2010 $860,000 (regular sale)
last sold when new: 11/17/2006 $1,130,000
MM,
Wow, 24% off one gorgeous condo, stumbling distance to the metro.
It's pretty...
Cara -- I pretty much agree w your take on the Arl condo market. It makes sense in that this is the market that was the most likely beneficiary of the 8K credit.
"pat said...
no place is immune"
No, but some places are pretty well insulated arent they?
In July 2006 when it was painfully obvious that there was a bubble everywhere, what if a "median" buyer, got into the bubble blogs to wait out the decline before he bought a "median" house? What if he bought into the "no place is immune" mantra and waited til his area saw the magnificent price declines the bubble blogs promised him were sure to come?
CHANGE IN MEDIAN PRICES 6/06 - 6/10
ARLINGTON
Median Price Change +70K
Percentage Change +15%
-- Our median Arlington buyer holding out for better deals might as well go ahead and kill himself now. Believing "no place is immune" applies to Arlington has thus far proven to be a terrible terrible mistake.
ALEXANDRIA
Median Price Change +18K
Percentage Change +4%
-- While better than Arlington, the median Alexandria buyer is pretty pissed he held out for all these years, only to buy at higher prices. Once again "no place is immune" is a big fail in Alexandria.
FAIRFAX
Median Price Change -45K
Percentage Change -9%
-- At least this guy got to see some price declines. It will make up for the fact that he paid 4 more years of rent in the interim.
LOUDOUN
Median Price Change -90K
Percentage Change -19%
-- Now we are getting somewhere. This guy is pretty happy he believed in the "no place is immune" mantra.
PWC
Median Price Change -149K
Percentage Change -31%
-- WOOHOO, believing in "No place is immune" paid off for this guy in spades!
Still though, its just too bad for our Arlington & Alexandria median buyers that they bought into the "no place is immune" hype. Just imagine how much better off they would have been pricewise if they just ignored all the "no place is immune" mutterings and just went on with life...
"contrarian said...
No place is immune. The day of reckoning is coming."
Such mantra was uttered in 2006, 2007, 2008, 2009 & 2010...
And will be repeated in 2011, 2012, 2013, 2015, 2020, 2030, 2050, glug, glug, glug, glug, glug...
The Anonymous said...
FAIRFAX
Median Price Change -45K
Percentage Change -9%
-- At least this guy got to see some price declines. It will make up for the fact that he paid 4 more years of rent in the interim.
You say that like it is a bad thing. Renters spend less per month on housing and have the opportunity to save more "equity" in a savings account than the homeowner has in home equity (in this case -45k). Throwing money away paying interest is no different than throwing it away paying rent.
Jeremy,
I have to agree with you (shocking!) that renting over the past 3 or 4 yrs was probably a good idea in most areas.
There are/were some bargains out there that could have been purchased in the last year and a half that would negate that 9% decline.
There are intangibles that should be factored in, but to what extent varies by individual.
Still, 9% is not the carnage predicted by some. Whether we drop further remains to be seen. The new unemployment numbers are not encouraging.
Va_Investor said...
There are intangibles that should be factored in, but to what extent varies by individual.
Agreed. For us personally, a couple of DINKs, the good things about renting are no maintenance, no yard work, and an awesome commute at a very nice monthly rate - allowing us to save over 50% of our take home pay toward a down payment. I'd be happy to rent a townhouse for another 5 years (when we plan to have kids old enough to need a yard/good schools) for the same reasons, but the wife wants a house sooner. She wants to start buying furniture without worrying about if it will fit in our house one day, planting things, etc.
We did renew our apartment lease through May 1st today, but plan to either buy something or rent a townhouse by the end of next spring.
Jeremy -- your argument(s) are roughly akin to a "rent forever" rationale. This is fine, and probably not a bad move for many people here.
Sure you can rent for 4 years, spend 100K on rent and save 50K or whatever. If so, why not rent for 40 years, spend 1 million on rent and save 500K? Nothing wrong with this...
My point was, most of us are going to buy eventually, and most of us are going to spend 30 years (or close to it) paying off the mortgage.
If you were truly "ready" financially 4 years ago, you would be that much being closer to being mortgage free by now, and have the benefit (presumably there is one since you want to buy) of living in that place for the last 4 years. Perhaps your tolerance is high (or her hints are subdued) such that it isnt worth much to you, but for some I can guarantee that not having the spouse on ones back is worth far more than the cost of waiting.
Anon,
Please, do not start the gender wars, it's ugly and unecessary. There are prudent, delayed gratification people of both genders. As well as hopelessly irrational spenders. Partners can be matched in this regard or opposing. I would say finding a partner who is matched well with you in this regard is a big hunk of marital problems avoided... (well unless neither of you manage money in which case, good luck...)
Don't really want to touch the gender stuff. My wife is mostly logical and we are like-minded about waiting so far. Like I said before, we are DINKs so we don't need a large home. We have saved a lot of money renting rather than buying with an FHA or subprime loan right after we got married in early 2008. We do want to start a family soon, and I don't want her to have to walk up to the 4th floor every day when she's pregnant, so we will be moving this coming year. Hopefully we find the right house for us, but if not we are both okay with the idea of renting a townhouse and waiting a bit longer. At this point it's not really about the money anymore for us, it's about not having to settle since we've got the funds and flexibility to avoid it.
My point is, our home requirements are changing. Renting has provided the flexibility for us to save a down payment without the transaction costs and risks associated with the housing ladder - which would have killed us over the past few years had we tried to use it.
Post a Comment