Wednesday, March 05, 2008

Inventory Is High In Northern Virginia

Total active listings in Northern Virgina remain at a high level going into the spring. Total active listings in Northern Virgina stood at 17,382 on March 3rd which is 32% greater then one year earlier when inventory was 13,081.

At the beginning of 2008 inventory stood at 17,062 or 1.8% higher then the beginning of the year. In 2007, inventory had decreased ever so slightly from 13,104 on January 1st to 13,081 on March 3rd. The inventory continues to increase at faster rater then last year. (VirginiaMLS). With January 2008 sales much weaker then January 2007 sales the spring is shaping up to be another disappointment for those in the real estate industrial complex (REIC). Oh don't forget the current general economic downturn.


Fairfax County, VA: Notice how inventory in Jan 08 is much higher then Jan o7.

6 comments:

  1. So now is a great time to buy! ;)

    Seriously, afford ability isn't anywhere close to what it needs to be for a bottom to be declared. In fact, its still worse than previous bubbles. Cest la vie.
    index

    I'm very curious to see February sales/inventory broken down.

    Got Popcorn?
    Neil

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  2. Its interesting, in most outer counties, inventory keeps going up YOY with no end in sight. By contrast, Arlington (and Alexandria) had what looked like a spike in 2006, followed by a drop in 2007 - suggesting the worst was over for them. Now here we are in early 2008, and once again we are going back up.

    BH's can crow about the increase all they want - thats fine - here is a serious question though - WHY was it different? WHY did they even have a drop? It doesnt make much sense to me - THOUGHTS???

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  3. Despite the downturn, I think a lot of those Arlington homes would sell if the sellers would get real about prices. If you look at the many houses that have been for sale for weeks or months, nearly all of them are priced at least 15% (and often much more) than the Arlington County assessments for 2007, which are generally higher than for 2008. This is true even for many houses that have not been substantially improved (which the Co. often fails to take into account). Many of these homeowners have not bought recently, so it's not as if they would lose money to sell.

    Realtors tell me that Arl. homes are currently selling on average for close to their assessed values (with obvious exceptions, such as run down houses (-) or houses with expensive new kitchens, windows, etc. (+)). I suspect many sellers have convinced themselves that the spring market will loosen up the buyers' purse strings, but I don't think they will. We'll see who's right shortly.

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  4. The realtors will always tell you to ignore the assessed values. This approach is ill-advised. When I was a prospective buyer, I recall walking away from properties that were listed at $525K but had just been assessed two months prior at $350. The realtors acted like I was some kind of idiot with unrealistic expectations. State law requires that the local governments assess properties at fair market value, and these entities obviously have a vested interest in doing so to maximize their tax base. So yes, these valuations are reasonable to help gauge the valuation of a property. Ultimately discouraged, I moved away from the metro area entirely and avoided the $3500 mortgage on an otherwise unimpressive home that might rent for $1800.

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  5. "State law requires that the local governments assess properties at fair market value, and these entities obviously have a vested interest in doing so to maximize their tax base."

    I wouldnt put much stock into this. For starters, some counties are far more agressive in setting a realistic FMV than others. Also, several local jurisdictions in MD are notorious at setting incredibly low tax assessed values (even when considering the 3 year phase in). I can tell you of many occassions where I challenged assessed values on behalf of my clients, and was able to receive sizeable reductions, even though the client and the assessor both knew full well that the assessed value was well below FMV.

    In sum, each county is different, and unless you know how agressive or lax each county is (or is not) and whether the prior owner lobbied for (and got) any reduction, tax assessed value cannot tell you much about FMV.

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