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.
Fairfax already has a provision for "name withheld by request".
Pat -- regarding your comment Monday about Arlington:"Decreases in Volume while prices increase and DOM increases is consistent with a local top."Did you happen to check those metrics in some other counties before you declared Arlington top? Did you happen to consider whether, say harder hit places were experiencing the same thing?Take PWC for example. Lets try your "local top" criteria here:1 "Decreases in volume" Check -- PWC down 28%2 "while prices increase" Check -- PWC up 2%3 "and DOM decreases" Check -- PWC down 48%So whatdya think? Is PWC at a local top? What about hard hit Loudoun? It too has down volume, increasing prices, and down DOM. Local top in Loudoun? Same in FFX...and in Alex...Local tops there too?Personally, I find it hard to believe that places like PWC, the home of earthshattering declines 2006-2009, is now at a "local top". If I had to, my guess would be that you decided "local top" for Arlington based upon one factor -- price (you think its too high, but the market disagrees). Is that basically what happened?Sorry to be so hard on you, but I personally think its foolish to make a declaration that an area is peaking without first applying those same criteria to other places where the idea of a peak is kinda silly. Take a broader view of factors, (including inventory) and you will likely be able to make better decisions, IMO.
Went with friends to see this one this weekend:FX7574729All I can say is Wow. It's a "subdivided lot." But what it really is is that someone in Vienna has carved off their backyard, put a tiny home on it and is asking $528,000, no scratch that, now asking $445,000.DOM = 91/271.The way they carved out that lot is pretty amazing. I just hope whoever buys that home is reaaalllly comfortable with the folks that live in their front yard.Look at the photo out the front door! Your bumper can touch the front doorknob. No SUV's please....LOL....Hilarious.My gut tells me the seller is probably the homeowner in front, an agent, or both, and underwater, or about to be.No clue how the local planning board allowed this.
"TX native said...The way they carved out that lot is pretty amazing. I just hope whoever buys that home is reaaalllly comfortable with the folks that live in their front yard."Ive seen that in S. Arlington too -- its pretty awful. Who I really feel sorry for are the neighbors. Its gotta suck to wake up and see a house going up in the adjacent back yard, not to mention the hit they take on their property values for the eyesore next door. "TX Native said...My gut tells me the seller is probably the homeowner in front, an agent, or both, and underwater, or about to be."Unlikely. Tax records indicate the front guy (Howard Pansy) has been living there since 1975. It appears he subdivided the back lot in 1981, and sold it in 2010, pocketing 330K.The current back owner (Naim Mohammed) is in for at least 330K, and now looks to be flipping it for 445K. Its unclear of Mohammed bought the place renovated, or renovated himself. He may be in trouble if the price falls, say below 400K.
Def. a flip. Looks like a guy named Ellison bought it in 1997 and sold it last year for 330K. Tax records say house was built in 1900(?) and notes that the quality of construction is "CHEAP".lol. I've never seen "cheap" before.There are other pipestem lots in the neighborhood.
Anonymous,You may want to check your "and DOM decreases" bullet point. Pat's quote was DOM increases.
"Jeremy said... Anonymous,You may want to check your "and DOM decreases" bullet point. Pat's quote was DOM increases."Good catch Jeremy. I dont know what I was thinking when I said DOM decreases, when in fact we saw DOM increases across the board.DOM....2010....2011...ChangePWC....33......49.....+48%Lou....42......60.....+42%Ffx....41......44.....+7%Alx....60......74.....+23%So again, the larger point stands. Pat said "Decreases in Volume while prices increase and DOM increases is consistent with a local top."OK, so given that we see (1) decreases in volume while (2) prices increase and (3) DOM increases (thanks Jeremy) in Alexandria, Fairfax, Loudoun and PWC, are we supposed to conclude that they too, are all at a "local top"?Do you really believe this Pat?
anonit's a pattern signal.Prices increases just mean price increases.DOM increases just means DOM increases.Volume decreases means an inflection is occurring.but put all three together, and it means a scenario that the mass is slowing down, and the market is trying to catch it's breath after a sprint. That's also consistent with a local top. Now will prices takeoff again? Hard to say. however, given June should be a good sales month, it's very strong warning sign when June is losing volume.so, is FFX, PWC, LO, ARL into a local top? Seems to fit the pattern.
http://patrick.net/forum/?p=880146nothing for sale in SFO either.
pat,Do you think the first time homebuyer tax credit had anything to do with the difference in sales volume or DOM? (YOY)
cherylMe I cant see how the First time home buyers credit didn't goose the market even in DC, because it affects people at the margin.Those who can't swing a deal take it, those who can but are tight now are less tight,,,,now is this what happens when the adrenalin is removed?
pat,The Market was distorted last year. Should that year be the proper basis for looking at this year? I was witness to the frenzy first hand having sold two properties during the credit period.I would expect DOM to be longer this year. Until inventory and months of supply start rising in a significant and sustained manner, it would be impossible to call a "local top".Witness the extreme inventory increases starting in the summer of 2005. I knew the party was over in the summer of 2005 when I saw those numbers start climbing.The Redfin monthly report shows a strong demand for prices at current levels. Where is the tsunami of shadow inventory? How do you reconcile the dramatic decrease in foreclosure filings with your "local top" statement?I think it's just wishful thinking on your part. Affordabilty is close to peaks seen over the past few decades.By "local top", are you suggesting that prices will start falling?
"Pat said...but put all three together, and it means a scenario that the mass is slowing down, and the market is trying to catch it's breath after a sprint. That's also consistent with a local top. Now will prices takeoff again? Hard to say."Now here I actually agree with you. In a vacuum, when all 3 metrics are doing with what their doing, its a sign of either (a) a market slowing down, trying to catch its breath or (b) a local top. Thing is though, we are not in a vacuum. We have other metrics at our disposal such as inventory that lean us more toward (a) than they do toward (b). Perhaps you underestimate how important inventory can be. If so, I invite you to peruse this post from just over 5 years ago entitled ITS THE INVENTORY STUPID: http://bubblemeter.blogspot.com/2006/05/its-inventory-stupid.htmlThis pattern was clear well before prices even started declining, yet it was the clearest most unmistakable early warning signal that an inflection point may have been reached. Particularly, take a look at this:http://photos1.blogger.com/blogger/1783/1012/1600/thehousingbubble.jpgA year before prices started falling, in Mid 2005, it was obvious here that something major was happening. The rise in inventory was simply breathtaking. Sure enough, about a year later in 06, it was confirmed, we had indeed reached a local top.Now, compare that chart I gave you to this one:http://www.virginiamls.com/charts/PrinceWilliam.htmor if you prefer looking at the whole area, this one:http://www.recharts.com/nova/nova.htmlAgain, in 05/06 this early warning system of explosive inventory growth (along with the 3 metrics volume, prices, dom) were clearly indicating "local top". Today however, thats simply not the case. Today we have inventory that is flat to down on a YOY basis, a condition that (to my knowledge) has never in history been a sign of a "local top". Thus, to rely exclusively on the 3 metrics (Volume, Prices, DOM) to declare a "local top" while ignoring perhaps the best metric out there, is simply foolish. Note, im not saying inventory needs to explode like it did in 05/06 in order to see a topping process. However, in my mind, you do at least need some inventory growth, something beyond a mere rounding error before you even think about looking for, less yet, declaring a "local top".
"Va_Investor said... pat,The Market was distorted last year. Should that year be the proper basis for looking at this year?"Agreed and yet another sign that the market simply isnt as hot as last year, versus declaring that it has "topped"."VAI said...By "local top", are you suggesting that prices will start falling?"This is actually a good question. IMO too often here there doesnt seem to be enough nuance in the minds of our resident bears. Some people here have a tendency to see some sort of negative report, or metric as causing an out and out decline in prices, versus say a mere slowdown in the rate of price growth.Case in point. Pat appears to be saying that the metrics (volume, price and DOM) suggest that Arlington (where prices are increasing +5% on a YOY basis) will soon see some sort of negative price number (-1% YOY, -5% YOY etc.), and that this negative number will be sustained for a long enough time that in the future, with hindsight, we can say, "yep, that was indeed the top".In my mind, this assumes far far to much. In my mind, the 3 metrics he mentioned may, if sustained, turn a environment of prices rising +5% YOY to perhaps a mere +3% or +2% YOY. However, without more negative factors providing a drag on Arl (say rising inventory, job loss, etc) its simply foolish to declare a "top" in the sense that prices shall start declining from here.
AnonI sort of think there is going to be a long stagnation.if bernanke is going to print another couple of trillion, who knowsthe inventory thing does have a point,but, if prices are rising, why isn't supply increasing?
http://franklymls.com/AR7647024this was the auction i attended...sad story.
Pat-I know in econ they say if prices rise than supply will increase, but in reality that is not always true. In fact sometimes it is the exact opposite. For example if you look at the oil markets prices going up is often because people fear turmoil in the middle east, which ends up reducing supply. Also as stock prices go up people are more comfortable with the stock market so there ends up being less people selling.Even in the housing market you can clearly see that supply was super low in 2005 when prices were going up the fastest. Seeing that most people don't want to move to a different area they don't care if prices go up. Its not like they are going to sell their house for more and than move to their neighbors house, because that house also went up
pat,What happened at the auction? How many people were there? How many properties were sold vs. went back to the bank?I was going to go to an auction earlier this week but over-slept. I'm thinking about going for a couple of places next week that have low balance first trusts.I just wonder if the over-bidding is as crazy at the Courthouse as it is for mls properties. I made an offer a couple days ago and there were 9 others. This property was not livable as the baths and kitchen had been gutted.I could make a pretty penny selling what I have bought in the past 2 or so yrs. I'm going to hold out for the metro and take my chances. Worst case is that I own these properties free and clear in 10yrs (unless contrarian's world-ending scenario comes true).
Heres an interesting take on the budget issues, in the form of a game.http://marketplace.publicradio.org/features/budget_hero/It seems like the end goal is not to permanently fix anything, but to kick the can down the road as far as possible. I guess that makes sense in that its impossible to predict the future that far out. I was able to kick the can to 2039 pretty easily.
Whoops, I meant 2041
cherylback in the fall, i attended a courthouse auction, pretty sad story.wife didn't know the husband had done a refi, took the money and left town.
pat,I bought one in 2001 where the wife had hidden all the notices from the husband. I showed up at their house and left a note that I had purchased the property and needed to talk to them.Husband comes to my house the next day. He is in total shock. Wife handles all bills. They rented back from me for two months during which time I showed and sold the house. I felt sorry for them too, but another investor would have bought it and may not have given them the flexibility in moving.
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