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Friday, March 11, 2011
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19 comments:
http://www.arlingtonva.us/departments/CPHD/planning/data_maps/page66091.aspx
Can someone please explain what's going on here?
Total Housing units increased 16% in a decade, Vacant housing units went up 85%
Pat-
I assume you are confused how the 85% number is so high. If so this number just looks very high, because it came from a small base. There was 4K vacant units and now there is 7K, which is a 85% increase. Although this is a huge percentage change the percent of units that are vacant is still only 7%, which is significantly lower than most of the country. I assume a lot of this increase is from the large condo and apartment buildings that have been built. These tend to have higher vacancy rates than SFH or TH.
HB
2-3% vacant is normal, now if i read it right, i figure there are mostly condos sitting vacant as shadow inventory but is it reasonable there are 3000 condos sitting vacant?
The map that goes with it matches
my story of the lady who said Arlington Village was loaded with foreclosures.
last year 2640 properties sold in Arlington, are there more then a years worth of empty units hanging around?
Pat-
Where do you get your 2-3% number? Historically rental units (at least nationally) have a ~8-9% vacancy rate vacancies I assume vacancy rates are usually lower in Arlington than most areas, but as more condos/apartments are made the vacancy rate probably increased. So yes I am sure some of the increase is shadow inventory, but some/most is probably just from the change in mix in housing.
This looks like a nice, affordable home in Falls Church (FX CTY). 4/2 brick cape.
FX7521952
$319,900!!!
hb, mtc,
7-1 v The Big Green. Go Big Red! Frozen Four.
Won't know about the CU men until tonight.
Realty Trac has been corresponding with me regarding "stale" listings on their site. They claim that deed transfer records can take up to 4 months to appear in official (county) sites.
I questioned this as I believe the FX Cty delay is only a couple of weeks. More importantly, redfin, sawbuck, frankly, etc. send alerts the day after a closing (or listing). I am waiting to hear why Realty Trac does not interface with MLS data.
As far as I can tell, the only benefit provided by Realty Trac is some advance info on upcoming Trustee Sales. This can also be obtained by reviewing WaPo notices. In some cases Realty Trac provides the amount of the lien being foreclosed on, but this may just be in cases where this info appears in the NOT sale.
All in all, I was surprised to even get a reply. They asked if I would participate in an investor forum to advise on ways the site could better serve member needs.
My guess is that, for whatever reason, Realty Trac does not have access to MLS data.
btw: still alot of "funny business" going on. I got an alert on a terrific buy. When I clicked on the listing (immediately) it was UC 0/0.
VA_I says
""Owning is supposed to be cheaper than renting"
I don't even know where to start...2% interest rates increase means a 20% drop in value?? Huh? Got data?"
if you hold a constant payment, a 1% increase in interest rates means the price needs to drop 8% in order to balance out.
Pat,
There is no historical evidence that home prices are that sensitive to interest rates. This has been talked about ad nauseam since at least 2004.
If you "feel" otherwise and wish to continue using this baseless point to support your arguments, please provide historical evidence.
My $0.02
RealtyTrac does not have access to the MLS, in part because they are not a brokerage firm in all 50 states.
I have yet to find somebody that is happy with the information on that site. I did find an agent that loves the site. Why? Because the data is so bad that people end up clicking on his ad on the page, and he helps them find... homes on the MLS.
Also thanks for mentioning FranklyMLS, but I don't agree with the order you listed us.
Thanks
Frank
Frank,
Perhaps RealtyTrac can use your site for current info:).
In all seriousness; how many rely on their numbers? I noticed the CEO opining on shadow inventory in the MSM. Perhaps their auction data is a little more reliable, but I did notice several properties that are UC as shorts.
IF their auction data is valid, it may be useful in determining the number of properties in default by subdivision.
Their latest feature: "appreciation potential" is seriously flawed. Two condo's in the same building - one rated a 65 and the other a 95. Whaaaat????
pat,
Do you have a comment on the listings hb found for you?
"Pat said...Meanwhile if Long term interest rates go up 2%, your property value goes down 20%...."
Its fun to fabricate things, huh Pat?
Just make any outlandish statement, completely devoid of any basis in fact, and post it as the truth of what is or will happen...
Meanwhile, back here in the real world, things do not work out so neatly. As HB, VAI, $0.02 and countless others have said, time and time and time again, there is NO EVIDENCE that an increase in interest rates leads to a decrease in prices.
In fact what we do know is that as interest rates spiked up as high as 18% in the early 1980s, prices just kept going up as if nothing had happened.
http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png
Think this graph of king county, WA is unrepresentative? Think again. Bubble meter keeps a historical log of prices and interest rates, just not in graph form.
http://mysite.verizon.net/vzeqrguz/housingbubble/
Nevertheless, if you did graph it out, it would look similar to the graph shown above.
Imagine the horror of the early 80s buyer who glug glug glugged down Pat's "higher interest rates = lower prices" meme, only to see prices continue to move upward. Lets hope that no one falls for that meme this time around.
HB
There is a difference between Owner Ocupied and Rental Housing.
The Vacancy rated on O-O is 2-3%
because they are actually living there, so aside from the frictional move in/move out, heavy remodeling thing, they aren't vacant much at all.
Now Rental you should figure on a higher vacancy rate, it's why when I pencil out the rental analysis for property, I add a 10% vacancy rate,
Anon says
"here is NO EVIDENCE that an increase in interest rates leads to a decrease in prices."
But a decrease in Interest rates will drive prices up?
I seem to recall people paying psychotic prices just a few years ago because cheap mortgage money was available. What were thos 5 year Option Arms other then Cheap money driving up prices.
Now for a more scholarly look at
Interest and prices....
http://www.calculatedriskblog.com/2008/12/house-prices-and-interest-rates.html
http://docs.google.com/viewer?a=v&q=cache:RpOsRh6gQDMJ:www.law.yale.edu/documents/pdf/cbl/Mayer_Hubbard_House_Prices.pdf+relationship+between+house+prices+and+interest+rates&hl=en&gl=us&pid=bl&srcid=ADGEESgyGvyQJIFSdNsgOVlXZeHixiRSiLFTJyYTbWNpz6Rx2mIc-931FHT93-m5_VfVK5KjsEJreJAKUgRj0Y2egSROdv2-fvxGTsy4FDiIud8Z3SJVkWiITmDzxwgRMpOvcI-apfKp&sig=AHIEtbQ9S1W59GIQ3sOSklCprUwy4skCkg Read pages 5 and 6 of the Mayer/Hubbard paper.
a graph
i think the graph says it all.
HB
can you repost the property links you said I ishould look at.
I kind of was busy and operating mobile that day.
Pat-
You are correct that there is a big difference between owner occupied and rental housing, but I believe that stat you were showing included both. I was saying that over the last decade there has probably been a large increase in rental housing in Arlington compared to owner occupied.
The calculated risk article makes sense that there is a relationship, between interest rates and prices, but it is very week. The chart you showed is missing two important pieces of information. One is how much the housing stock has improved from 1975-2010. I am pretty sure the average house is ~20-30% larger and the index does not adjust for this. The other important data is that the chart is missing the last three years of data. This would show housing prices falling another 10+% while interest rates were at all time lows.
My post is in the March 10th bucket and was at posted at 3/10/11 5:31 PM
"Pat said...i think the graph says it all."
No, it doesnt. Honestly, I wish you were here in 2008 when we first saw that graph.
What it does show is that in REAL (i.e. inflation adjusted) prices, prices go down, just as we see here:
http://seattlebubble.com/blog/wp-content/uploads/2010/02/USA-Home-Price_1950-2009-real.png
We all know this Pat, and we understand it. Yes, in inflation adjusted terms, prices go down when interest rates rise.
Still, in NOMINAL terms, its still more money out of your pocket:
http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png
Understand how this plays out in real life however... basically all that is happening is that inflation (and wages, a lagging, yet necessary part of any inflationary cycle) are rising. Thus if inflation was 8%, the house which was 100K in 2011 is more "affordable" at 103K in 2012 because it rose less than inflation (8% vs 3%).
Still, this is a FAR different proposition than your original one:
"2% interest rates increase means a 20% drop in value"
A "drop in value"??? When inflation rises 2%, the 100K house suddenly becomes 80K??? Bullshit - complete and utter bullshit.
So understand the difference here as this is critically important. Yes, as inflation rises, houses will likely become more "affordable", but that is not because prices "drop" - all that is happening is that the inflationary cycle is rising faster than nominal home prices. Still, prices are rising nominally nevertheless.
So if you want to sit back and wait for that 330K place to become more affordable at 350K, thats not a bad idea because (presumably) you too will be making that much more such that the place will be that much more affordable. Still understand that in terms of nominal dollars (i.e. the number of dollars that will come out of your pocket), you will be paying a higher price.
There's a detailed discussion at the National Association of Home Builders.
http://www.nahb.org/generic.aspx?genericContentID=37153&fromGSA=1
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