Elizabeth Razzi of the Washington Post has a story on the region's July's market, based mostly on the change in median prices released by the Metropolitan Regional Information Systems in early August.
"There are two housing markets in the Washington area, divided roughly by the Beltway. The recovery has arrived for the District and close-in suburbs. It hasn't for communities farther outside Interstate 495. And in a few spots, most notably Manassas and Manassas Park, recovery is hard even to imagine.
In Arlington, Fuller and Leurdijk may have happened to hit the market's turn dead-on. In July, the median price for a single-family resale home in the county increased nearly 11 percent compared with a year earlier, according to Metropolitan Regional Information Systems, the local multiple listing service. That was the first significant increase since prices headed south in July 2006. (Technically, there was a price increase of 0.2 percent in December, but that's barely enough to register.) Sales volume went up during July in Arlington as well. The number of sales was 7 percent higher than one year earlier".
Here's a chart tracking 10 years of July data in Arlington. There were 303 sales in July and 1,012 active listings. It's definitely an improvement over 2006, when the sales/inventory ratio was slightly worse. But look at the whole 10 years. 303 sales aren't anything spectacular. There were more sales in 1999 (339) and only 590 properties on the market.
And yes, the median price shows an increase. In July 2007, there were 27 sales in Arlington County in the 1M to 2.5M price range. In July 2006, there were 14.
Still, at 3 months of inventory, Arlington's real estate market is doing well for most sellers.
29 comments:
"The recovery has arrived for the District and close-in suburbs."
Tell that to the folks who own the townhouses on Ellery Circle in Falls Church or other folks who own properties inside the beltway that are listed on this blog at 20 to 30% less than 2005/2006 prices. I think they'd disagree with Razzi's overly sunny prognosis.
Sure sounds like Post writer Razzi, who continually claims not to be able to forecast the future, believes the worst is over.
It's funny because while she says the recovery has arrived, I strongly believe we're still in the VERY EARLY stages of the correction.
*Cough* deadcatbounce *cough*
Razzi and Haggerty have often made ignorant comments. The reporting of Kristin Downey and Steven Pearlstein (Business editor) show they understand the fundamentals better.
Prices did see a slight bounce this spring, but only the ignorant would read a chart with a slight uptick as a trend and a'recovery.'
Look at the Housing Tracker website: http://www.housingtracker.net/old_housingtracker/location/DC/Washington
to see how the area as a whole is behaving.
Tedk,
Only the desperate would want to ignore the facts as presented by current data and as supported by past experience.
Harriet said:
"There were more sales in 1999 (339) and only 590 properties on the market."
By 1999 we were already into the full drag of the upswing. True, this wasn't the peak as in 2005 - 2006, but why would we be surprised that there would be a shortage of supply beginnning to occur (the 590 properties) while the sales (the 339) were already higher than normal?
"Only the desperate would want to ignore the facts as presented by current data and as supported by past experience. "
Yeah... the fact is that we are in the early stages of a major correction and the data shows a clear trend of declining values.
Oh yeah... and "past experience" teaches us that housing downturns don't last one year...
It has only been in the last 6 weeks that credit has really tightened. If I were you Lance I would declare victory and run away as fast as you can.
lance: "Only the desperate would want to ignore the facts as presented by current data and as supported by past experience."
Desperate? Get into your mind, lance, the close-in DC area holds no particular attraction to me. I work in Fairfax and I have plenty of choices if I decide to buy next year.
This thing here is about rationality and about the satisfaction of being right on the fundamentals. And in that, those of us who say prices will fall will be proven right.
What past experience are you talking about? Kristin Downey explained in the Post that people could buy a good SFH in 1997 for the price she paid for a condo in 1990, all in close-in areas of DC. This was despite a tech/internet boom then. How is that for experience?
There's no "recovery" inside the beltway since most of the nice neighborhoods never crashed in the first place. Alexandria City, where I live, has been flat for 2 years. Given the very recent blowout in jumbo spreads, I see prices in the nice areas as remaining flat (at best) for the foreseeable future. The other unknown is the impact of ARMs that are due for adjustment; Calculated Risk reports that there are more ARMs due for adjustment in the first six months of 2008 than for all of 2007.
The data compares apples and oranges. There are a lot of teardowns and renovations, in addition to new condo construction, that is pushing up the median.
In Arlington, we are seeing real reductions in non premium neighborhoods, like much of South Arlingon (save Ridge Road). Also 2BR condos in VA Square and Tower Villas are no longer going for above $600K.
John, however, is overselling the drop in the hip neighboroods. Fact is, Pople want to live on the Orange Line and starting big law firm salaries are $160K (yes, for 1st years). While I do agree there is some hurt left in the Arlinton market, there are other factors that will keep the Orange line market from plummeting. It will be interesting to see what happens in Arlington when Zoso opens behinds Clarendon 1021.
Lance,
1999 was not in the upswing. In 1999, I bought a 1BR at Barton Place for 105K. In 2000, I bought a 2BR in Rosslyn Heights East for 105K. In 2001, I bought a 1BR for 120K in Rosslyn Heights South. It wasn't until after the dot bust did real estate take off as a safe haven.
While I am not sure I disagree with her point, the fact that Razzi capitalized "Realtor" ("We did a gut check on it, and we talked to our Realtor," Fuller said. "We stuck with our decision.") automatically puts her in the "shill" catagory, IMHO.
Bill,
I don't know what was going on in Arlington at the time, however, I do know for a fact that prices started rising in the District in 97/98 ... and that the District was lagging places like NYC and California .. being a relative bargain at the time. I'd be surprised if "the wave" hadn't at least started to hit Arlington by 1999. Perhaps someone can supply some data on that period?
I read this piece as well and thought she was making some pretty broad generalizations and prognostications on one months data.
There is no doubt that July numbers saw a slight uptick in sales compared to July 06, but that fails to demonstrate that "the recovery has arrived" there are multiple explanations for the July uptick, not the least of which is morons listening to their "R"ealtors who have been saying "prices won't go down in this neighborhood. Clearly there were some people who avoided buying in the spring waiting for prices to come down who blinked.
But just watch the August and September numbers after the credit crunch ramped up, and the October, November, and December numbers after refis start peaking. Then we can talk about whether there are signs of a recovery.
Caveat,
Realtors with a capital R is the correct way of writing it as it is trade marked like that. Just like Internet is supposed to have a capital I ... I don't see how being correct makes one biased ...
As for "recovery" ... doesn't there first have to be a true "fall" for there to be a recovery. Most places around the country --- including the District and inner burbs --- haven't even experienced price declines, never mind a fall. How can we be talking about "recovery"?
Caveat.
Yep, in MRIS, 20009 (both median and average) was down in April, May, and June 2007. But Lance and KH are ready to declare victory over July's numbers?
Again, desperate confirmation bias and wishful thinking on their parts.
I've offered KH an opportunity to run an experiment: Given July's numbers, I'll type "Lance was right" with no caveats, additions, or further postings on that thread, if the MRIS median price in August and September in 20009 is higher YOY. However, KH must type "Lance was wrong" if both August and Septemember MRIS median price in 20009 is lower YOY, again with no caveats, additions, or further postings in that thread.
Does KH have the guts to take that offer, or will he secretly wish to concede that Lance is full of it by trying to make up some excuses not to do it?
Oh, and OF COURSE the inner burbs have experienced falls. Heck, just go to Alexandria or Arlington's assesment websites and you can see for yourself, if you're not a lying sack of crap like the L-troll.
I'll be kind enough to give an example:
105 East Alexandria Avenue, in 22301, the Del Ray section of Alexandria.
2006 assessment: $542,700
2007 assesment: $518,876
108 E alexandria
2006: 474,900
2007: 454,041
106 e Del Ray Avenue
2006: 710,400
2007: 692,641
And that's one of the GOOD sections.
Landmark area
4000 Duke Street
2006: 430,100
2007: 412,079
All 7 of my properties' assessments went down in 2007 in Arlington. 3 are in Rosslyn, 2 are in Clarendon, and one is in Ashton Heights. The other one is in Lee Heights, which is not quite as desirable.
Delurking to share a relevant experience. This Saturday I bought a kitchen island off of Craigslist from a guy who was moving out of his South Arlington townhouse. I asked if he was moving out of the area. His response was that he had decided to cash in as close to the peak as possible and rent for the next couple of years.
He was pretty relieved that his sale went through, since his buyer had closed just before the jumbo spreads increased. According to him very few of the other houses for sale had closed since that happened. But that's OK, because the recovery has arrived!
-Jason
Lance,
Here are the assesmments from my original townhome (3BR, 3.5 BA, 22201 Zip). As you can see, 2003 is the first bubble like jump.
EFFECTIVE DATE LAND VALUE IMPROVEMENT VALUE TOTAL VALUE
2007 $92,700 $503,000 $595,700
2006 $92,700 $518,700 $611,400
2005 $92,700 $499,800 $592,500
2004 $92,700 $364,800 $457,500
2003 $92,700 $292,300 $385,000
2002 $78,500 $185,000 $263,500
2001 $74,100 $175,000 $249,100
2000 $54,900 $170,700 $225,600
1999 $48,100 $160,100 $208,200
1998 $48,100 $160,100 $208,200
1997 $48,100 $160,100 $208,200
Here are the assessments from a 1BR/1BA in the same development.
2007 $35,600 $253,000 $288,600
2006 $35,600 $291,100 $326,700
2005 $35,600 $257,600 $293,200
2004 $35,600 $184,400 $220,000
2003 $35,600 $139,000 $174,600
2002 $30,200 $83,000 $113,200
2001 $28,500 $80,000 $108,500
2000 $21,100 $88,700 $109,800
1999 $23,900 $79,600 $103,500
1998 $23,900 $79,600 $103,500
1997 $23,900 $79,600 $103,500
Even with the downturn, real estate has been very good to me. Hell, I want it to go up. But for years I have wondered where the money has come from to buy townhomes and condos at these high prices ($400K for 1BR????).
Ohhhh, poor Lance....poor KH. Getting so publicly humiliated like that by people who know what they're talking about.
I mean, sure KH and Lance's wounds are self-inflicted, but I am compassionate enough to feel bad for them nonetheless.
It's okay, Lance and KH, buck up. Please keep posting, we really all appreciate your insights and admire you very, very much. Really.
I think we all just need to ignore Keith. He hasn't figured out yet that he is adding nothing to the conversation ... in addition to making a fool of himself.
For example, first he says that monthly data taken in isolation means nothing ... (I.e. the current and latest July figure.) And then what's the first thing he does? He post monthly data himself ... Contradicting himself ... and making it worse by posting OLD monthly data.
It's no wonder this guy can't figure out how to buy a house ... I don't want to be encouraging him from getting in the way of the valuable things most posters have to say ... I'll just be ignoring his posts from here on in.
Do note that he was barred from posting on Bubble Meter last year after he got out of hand.
Bill, what do you think about the Ashton Heights/Lyon Park area?
"Do note that he was barred from posting on Bubble Meter last year after he got out of hand."
Lance ends as he started, with nothing but lies. And thus, he implicitly declares that I was right about him all along. Once again, thank you, Lance.
I love it--I live there. I thought I paid too much for my house in 2003. Given my other real estate gains and my salary at that time, however, I thought I could swing it. In addition, it was where I wanted to live. Even with the recent drop, my home value is still pretty strong.
The area is strong but "crap" is no longer selling for $800K+, like it did in 2005 when people were panic buying. For example, there are a lot of older homes that have only 1BA on the upper floor with 2 or 3 BRs, so there is no true Master BR (No one cares about your 2nd BA in the basement, c'mon). Also, these homes often have their original small kitchens and no 1/2 BA on the main level. Even though, in some cases, they have been restored in nice condition, no one wants to pay top dollar for these older layouts. See the house at 5th and Nelson as a great example of this.
It may sound wierd, but I think there is value for new construction/renovation at the $1million+ range. You can get a lot of house vs a $700K home with 1 BA built in 1936.
Bill, I think Ashton Heights is a nice area. And if you bought relatively early in 2003, you likely still got a great deal. Interest rates were so low that buying was practically cheaper than renting.
Bill, it's funny, as I have been looking in the neighborhood, I have been struck by the difference between the bumped-out bungalows and the colonials--the former, as you say, have odd layouts and cramped upstairs bedrooms while the latter, though sometimes smaller in square footage, seem to flow much better.
My main problem with some of the older places I've seen is the cinderblock basements. Cinder block is just so porous.
Keith,
We have a cinderblock foundation in Del Ray, where every basement is essentially a well. A french drain with sump pump takes care of the moisture and mold -- although it set us back $4,500.
We really like Del Ray, Ashton Heights, Lyon Park, and Lyon Village. Others would agree - hence the high prices. But our house (a 2/2 townhouse) would rent for $2K/mo and sell for approx. $440K. That still strikes me as out of whack (18X rent) but not too crazy. As I've posted before, I think the blow out in the jumbo spreads, as well as a potential recession w/layoffs, may finally hit the high end, close-in market.
Bill said: "It may sound wierd, but I think there is value for new construction/renovation at the $1million+ range. You can get a lot of house vs a $700K home with 1 BA built in 1936."
That speaks for doing a knock down. I've spoken with a few neighbors about that. Several places on my street have been renovated to twice (or more) their original size.
One place is on a hillside. From the front, it's a modest colonial. From the back, it looks like it escaped from "Architecture Today". The ultra modern addition dwarfs the original house.
I actually like both sides, but, on the same house????
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