Skyrocketing Gasoline Prices

Skyrocketing Gasoline Prices.

Housing units where working people live which are far from jobs are being affected by high gasoline costs. Prices are now experiencing further downward pressure due to high commuting costs to jobs. Think Lancaste, CA or Prince William County, VA, and Pahrump, NV.

From 2005: Mocking the Existence of A Housing Bubble.

From 2005: Mocking the Existence of A Housing Bubble.

From the discredited shills at the California Association of Realtors.

Price Per Sq. Foot Plummets in a N. Va Condo Building

The lovely Byron Condominiums,

"A Luxury Condominium Complex in the Heart of Falls Church"

A person who wishes to remain anonymous sent me illustrative information regarding falling prices in a condo building in Northern Virginia (suburbs of Washington, DC) . Thank you to this individual.

• Developer's site: http://www.thebyron.com/
• HOA's site: http://513westbroad.googlepages.com/
• Location: Google Maps
• Falls Church Property Assessment
  

"Sales data collected from the City of Falls Church real estate assessor's site. The sales are listed in chronological order. There have been 67 residential unit sales, with 18 units still unsold. The most interesting take away from the table is the incredibly significant decrease in the price per square foot. The peak price of $505 / sf was in Dec 2006. The trough to date is $345 / sf in Feb 2008."

"A scatter chart of the Price/sf relative to Date of Sale. Again, incredible."

In October 2006 a 2br condo unit (#404) in this building which has 1814 sq. feet sold for 808,226K. This is 446 per sq. foot. On the floor below it there is unit #304 which has the same layout and size. It sold in February 2008 for 625,000. These two units, #304 and #404, in 2008 were assessed for about the same (less then 1% difference). These units for nearly all purposes are equivalent. However, the price for this type of unit in this building has fallen 22.5% in nominal terms or about 183,000 dollars. In inflation adjusted terms this type of unit is down more more then 25%. Falls Church is an inner suburb. The price per sq. foot has fallen from $446 to $345, or 22.5%. Waiting to buy a housing unit has been prudent over the past few years in the Washington, DC area.

Condo prices are definitely falling in the Washington, DC area. Generally, prices on condos have fallen significantly more then single family housing units. Condo prices have generally fallen 15 - 40% in inflation adjusted dollars from their peak. Expect further prices declines on housing units in the Washington, DC area.

BubbleSphere Roundup

The Federal Reserve Building in Washington, DC

U.S. Consumer Debt Surges in March (Calculated Risk)

Jonathan Miller is interviewed in PBS Nightly Business Report Clip for 5-6-08">[In The Media] PBS Nightly Business Report Clip for 5-6-08.

Do we need a Blanche Evans Watch? She is the senior hack from Realty Times!

A letter to the editor: "One lesson we should all be able to draw from the foreclosure crisis is that the government has a duty to protect and inform consumers about what is not only the biggest investment most individuals make, but also the cornerstone of family wealth and community stability." Amen brother! Amen!

Are you an Angry Renter? Are you against a housing bailout? Then check out Angry Renter!

He's Baaaaaaaaack!!

David Lereah is back giving more opinion on real estate on the mainstream media. This time in a Newsweek article. Remember, Lereah was probably the biggest cheerleader for the housing market during the bubble years.

Lereah is infamous for calling the bottom many times. Will he call the bottom once more?

His answer: not yet. "We're not at the bottom," he says. "[People] want it to be near the bottom, but we're not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There's still supply out there in abundance … This thing is going to get worse before it gets better."

Wow! Lereah is actually saying that the housing market will continue to decline. The article continues ".. That's quite a turnabout from the view he articulated in his book, first published in 2005." In his book he wrote that "Today's real estate market is the result of rational decision making based on supply and demand conditions with today's economy, home owners are in no danger of experiencing a widespread fallout of home prices."

So what is David Lereah up to these days, career wise?

It turns out he has recently set up a new firm called Reecon Advisors, which is advising Wall Street firms and institutional investors about the real estate market. "Wall Street has an intense interest in [this], because they're looking for when is the recovery going to come, and at what point does the cycle turn," Lereah told me.

After Lereah's history of grossly wrong predictions, why are Wall Street firms taking advice from him? Anyone? Lerah continues and discusses what he got wrong.

Oops. "You knew there were a couple of [regional] balloons out there, and [I] said you could have a couple of these balloons pop," Lereah says now. "But I didn't think this would turn into an all-out bursting of a balloon for the whole nation." He, like other prognosticators (including Greenspan), points to his lack of understanding of the profound effects that subprime lending was having on housing markets. "[I] just didn't realize the scope, the extent, the magnitude of the loose underwriting—not looking at incomes and wages, just providing so many mortgage loans based on [expected] future price appreciation rather than the creditworthiness of the borrower," Lereah says. "That got so out of hand, and none of us realized the magnitude of it until it was too late."

None of us? There were some who did warn about these issues including by not limited too Dean Baker, Robert Shiller, the Economist, and the housing bubble bloggers. It is simply plain wrong to say no one realized what was happening. It is easy to blame his wrong predictions on the subprime mortgage mess. Lereah is desperately trying to restore his credibility be saying 'well gee no one was correct about this mess, so I'm ok.' Lereah is wrong. Others did realize what was happening and let it be known and did speak up. David Lereah has lost his credibility a long time ago.

My other blog, the David Lereah Watch was linked to in the Newsweek article. Thanks for the link. :-)

Here is what others have to say about Lereah's statements in this article:

• David Lereah Comes Clean

• No Housing Bottom: Hell Hath Frozen Over. David Lereah Proclaims Housing not Hitting Bottom.

• David Lereah is back with more predictions
• David Lereah takes a turn as Chicken Little (Salon)
  
  

Sales in Silver Spring, MD

Housing Unit Sales in Silver Spring, MD

Foreclosures Rose In March

The number of foreclosure in the US rose In March. The foreclosure rate continues to remain very high. There is a fresh wave of mortgages that are resetting during this year. The foreclosure rate is likely to continue to increase as the year progress, especially in the 3rd and 4th quarters.

The number of U.S. homes receiving at least one foreclosure filing jumped 57 percent in March to 234,685, compared with 149,150 properties a year earlier. Filings include default notices, auction sale notices and bank repossessions.

The overall foreclosure rate is 5 percent higher than in February, which saw an unexpected month-to-month decline over January. March marked the 27th consecutive month of year-over-year increases in national foreclosure filings.

Nevada clocked in the worst foreclosure rate for the 15th straight month. Last month, one in every 139 households received a foreclosure-related notice, nearly four times the national rate.

In Florida, 30,254 homes reported at least one filing, down nearly 7 percent from February, but up 112 percent from the year before.

Rounding out the states with the highest foreclosure rates were Arizona, Colorado, Georgia, Ohio, Michigan, Massachusetts and Maryland.

The situation is so bad in Nevada that "one in every 139 households received a foreclosure-related notice, nearly four times the national rate." If March is an average month for foreclosures compared with other months. Then in a year period one would expect about 1 in 12 home in Nevada to receive a foreclosure related notice. That statistic is shocking.

In many bubble markets, foreclosures are already making a significant contribution to dragging prices lower. From Southern California "More than one out of three Southland homes that resold last month, nearly 38 percent, had been foreclosed on at some point in the prior year. (DQ News)"

Locally, in the DC area, foreclosures are widespread in many of the middle to outer suburbs. These places include, but are not limited to, Manassas, Woodbridge, Waldorf, Sterling, Laurel. These foreclosures are contributing to the downward trend in prices for housing units in these areas. In Washington, DC proper and many inner suburbs foreclosures have been rare.

MRIS Numbers for March 2008 in Baltimore DC Area

The new monthly numbers for March2008 are out from the MRIS (Metropolitan Regional Information Systems) the multiple listing service for the area. YoY = Year over Year, that is the comparison between March 2008 and March 2007. These numbers include all housing units ( not just single family residences but also condos and co-ops). These are for housing units listed on the MRIS's MLS (and thus do not include some foreclosures or private sales, or many new home sales).

The housing market in the Washington and Baltimore area has been declining in the Washington, DC for about 2 years. Thus the year over year comparisons only represent a portion of the declining housing market.

Northern Virginia (Fairfax County, Fairfax City, Arlington County, Alexandria City, & Falls Church City, VA (NVAR))

* Median Price: $401K
* Median Sales Price YoY: -12.8%
* Average Sales Price YoY: -10.6%
* Total Units Sold YoY: -29%
* Average Days on Market YoY: 8%
* Active Listings YoY: 25%
* Months Supply: 8.1

Baltimore City Area (Anne Arundel, Baltimore City/County, Carroll, Harford, Howard (BALT AREA) )

* Median Price: $260k
* Median Sales Price YoY: -3.2%
* Average Sales Price YoY: -2.9%
* Total Units Sold YoY: -34%
* Average Days on Market YoY: 43%
* Active Listings YoY: 20%
* Months Supply: 10.1

Washington, DC (just the District of Columbia, no suburbs)

* Median Price: $400k
* Median Sales Price YoY: -8.1%
* Average Sales Price YoY: -4.7%
* Total Units Sold YoY: -40%
* Average Days on Market YoY: -5%
* Active Listings YoY: 26%
* Months Supply: 8.7

Prince George's County, MD

* Median Price: $286K
* Median Sales Price YoY: -13.5%
* Average Sales Price YoY: -9.5%
* Total Units Sold YoY: -57%
* Average Days on Market YoY: 61%
* Active Listings YoY: 59%
* Months Supply: 21

Montgomery County, MD

* Median Price: $403K
* Median Sales Price YoY: -6.5%
* Average Sales Price YoY: -1.8%
* Total Units Sold YoY: -39%
* Average Days on Market YoY: 14%
* Active Listings YoY: 37%
* Months Supply: 11

Loudoun County, VA

* Median Price: $358K
* Median Sales Price YoY: -19.9%
* Average Sales Price YoY: -20.5%
* Total Units Sold YoY: -20%
* Average Days on Market YoY: -4%
* Active Listings YoY: 1%
* Months Supply: 9.8

Arlington County, VA

* Median Price: $485K
* Median Sales Price YoY: 3.2&
* Average Sales Price YoY: .7%
* Total Units Sold YoY: -32%
* Average Days on Market YoY: -10%
* Active Listings YoY: 15%
* Months Supply: 5.5

Frederick County, MD

* Median Price: $290K
* Median Sales Price YoY: -5.7%
* Average Sales Price YoY: -5.0%
* Total Units Sold YoY: - 38%
* Average Days on Market YoY: 61%
* Active Listings YoY: 16%
* Months Supply: 14


Fairfax County, VA

* Median Price: $395K
* Median Sales Price YoY: -13.3%
* Average Sales Price YoY: -11.9%
* Total Units Sold YoY: -26%
* Average Days on Market YoY: 13.5%
* Active Listings YoY: 30%
* Months Supply: 8.6

Howard County, MD

* Median Price: $362K
* Median Sales Price YoY: -6%
* Average Sales Price YoY: -8.2%
* Total Units Sold YoY: -44%
* Average Days on Market YoY: 28%
* Active Listings YoY: 24%
* Months Supply: 10.9

Prince William County, VA

* Median Price: $273K
* Median Sales Price YoY: -30%
* Average Sales Price YoY: -26.7%
* Total Units Sold YoY: 20%
* Average Days on Market YoY: 0%
* Active Listings YoY: 27%
* Months Supply: 11.5

For more numbers on jurisdictions not mentioned here please go to MRIS Market Statistics.

These numbers show a declining housing market in the Washington - Baltimore area compared to last year. For every jurisdiction listed inventory remains elevated and sales remain low.

In Prince William County, VA lower prices are driving higher sales with are up 20% compared to March 2007. Median sales price stood at 273K which is down 30% from last year. The peak median price was 379K in July 2005. For more information on Northern Virginia please see A Decade of A March Sales at Greater Northern VA Housing Bubble Fallout.

The Washington - Baltimore area is not recovering from the housing decline. Prices continue to fall. Although prices are falling slowly in the desirable neighborhoods within the Beltway. Far out suburbs and condos are experiencing larger price declines. In the metropolitan area a declining housing market is reality. For real estate, this spring's real estate season will not see increasing prices. Housing busts usually last many, many years. Further price declines are coming this year.

BubbleSphere Roundup

Cash For Keys (The Real Estate Bloggers)

The Boom That Wasn't (NYTimes)

NARcasting The Future: April 2008 (Paper Economy). Do you need more evidence that the NAR has a very lousy prediction record over the past 4 years?

Tomorrow, on April 10th, is the March MRIS numbers for the Washington, Baltimore area. Stay tuned. These are important number because almost always March has many more transactions then February.

Lawrence Yun: Nobody Expected Housing Bust

Lawrence Yun is wrong once again, this time he is being a revisionist:

"Even though there was some risk, the ratings agencies fooled the market and the investors into thinking housing was rock solid," says Lawrence Yun, chief economist for the National Association of Realtors (NAR). "It was the speed and the scope of the losses that nobody expected."

Nobody expected? What about all Nouriel Roubini, Dean Baker and Robert Shiller and dozens of housing bubble bloggers?

Message to Yun: You have lost your credibility, it is time to resign. Become a whistle blower and tell us what really is going on in the housing market and especially at the NAR.