The WashingtonPost is reporting: "MetroStudy's Kenneth Wenhold, director of the company's Virginia-Maryland division, predicted in an interview that so many condos are under construction or planned, particularly in Arlington and Fairfax counties, that "there is a very significant problem" of overbuilding and the potential for projects to go bust."
"Arlington and Fairfax have 14,156 units under construction and almost 28,000 planned or proposed, Wenhold said. "But in the same area, last year we only sold 4,001 condos." In 14 counties in Maryland, including those around the District and Baltimore, Wenhold said, 3,901 condo units are under construction"
"MetroStudy's fourth-quarter analysis of the area said listings of all types of housing for sale have doubled since July and new-home inventory for sale has jumped from 6.6 months of supply to 12.2 months. But much of that jump is due to the flood of condos. "If you remove the thousands of condominium units that are being built in Arlington County, Va., housing inventories drop to a much more reasonable 7.6 month supply," according to the report."
The supply is jumping like a mad man in the DC area. Expect the supply to continue to climb in the spring as more properties flood the market. Properties will be moving slowly in the normally busy spring season. The only way the supply is going to come down is when suppliers (sellers) lower their prices.
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I hope this will lead to a significant price drop around DC area this year. I see a new condo going up in my neighborhood in Alexandria, too. It'll be interesting to see what happens in another month.
ReplyDeleteDavid,
ReplyDeleteNice copy of Housing Bubble 2.
A perfect example of price drops would be the Northampton Place condo along 395. I could only find 1 listing there below $350K 5 months ago. Now there are tons. And two new towers going up right next to it.
ReplyDeleteSkins fan here.
ReplyDeleteI live in an apartment. It's a nice life. I'm in a downtown area and can walk to everything. I don't worry about maintenance or utility bills. I also don't worry about the long-term value of the apartment building. And the rent is a small portion of my income, so I can save a lot.
I wouldn't mind living in a condo, on several conditions. First, it would have to be priced so low that my monthly payments would be lower than what I pay now, even if I put 20% down.
Second, it would have to be priced so low that I could be fairly assured of being able to sell it at a small profit when I needed to move.
The condos in my area grossly fail both my conditions. So I'll just keep happily renting.