The majority of bubble markets are experiencing large prices declines. In general price declines continue to accelerate. Hat tip to HousingPanic. Indeed, Money Magazine reports that:
Residential real estate has posted another record decline.
The S&P Case/Shiller Home Price index of 20 key markets, released Tuesday, shows that home prices plunged 10.7% in the 12 months ending January. That marks their lowest level since the index launched in 2000.
Of those 20 metro areas, 16 reported record annual declines. Ten of those cities posted double digit declines through the 12 months that ended in January. The survey's 10-city index fell 11.4% year-over-year, its steepest decline since its inception in 1987.
Las Vegas and Miami reported the weakest markets in January, with each city posting an annual decline of 19.3%. Phoenix was the second worst with a decline
of 18.2%.
The Washington, DC area an average housing unit is down 10.9% from January 2007 to January 2008. I'm sure Lance will say that his desirable rowhouse hasn't decline that much during that time period. He probably is correct. However, in general, prices are declining precipitously in the outer suburbs and certain condo developments, strongly in the inner suburbs, and slowly in desirable neighborhoods in DC.
Prices will fall further in the Washington, DC area. Despite the paid spinners at the NAR who think this is around the bottom.
A real estate agent that I have worked with, just said that "sales are up 3% in the area and we are really seeing the market make a change. Prices will continue to be high in our area, and I'm not sure that will ever change. "
Posts
"The Washington, DC area an average housing unit is down 10.9% from January 2007 to January 2008. I'm sure Lance will say that his desirable rowhouse hasn't decline that much during that time period. He probably is correct."
ReplyDeleteDavid - thank you for having the honesty to admit to something that alot of us who live around here know. To bad certain out of towners (read Neil) are convinced that arlington, alexandria & DC are suffering just as much as the rest of the DC area are.
How's the Dow doing, by the way? You folks getting rich with all of your money in securities?
ReplyDelete"The Washington, DC area an average housing unit is down 10.9% from January 2007 to January 2008. I'm sure Lance will say that his desirable rowhouse hasn't decline that much during that time period. He probably is correct."
ReplyDeleteDavid - thank you for having the honesty to admit to something that alot of us who live around here know. To bad certain out of towners (read Neil) are convinced that arlington, alexandria & DC are suffering just as much as the rest of the DC area are.
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Just use your real name, lancey poo.
"How's the Dow doing, by the way? You folks getting rich with all of your money in securities?"
ReplyDeleteHow aweful that you wish bad thoughts on people, SHAME ON YOU,SHAME ON YOU,SHAME ON YOU,SHAME ON YOU,
It's great to see a bunch of bitter relitters holding tin cans and moaning.
ReplyDeleteFU NAR!
How's the Dow doing, by the way? You folks getting rich with all of your money in securities?
ReplyDeleteWhy do you keep posting this false dichotomy in every thread? Avoiding real estate is not equivalent to buying stocks - stop conflating the two. This site is about real estate, not stocks.
I just stumbled across this blog what the hell does "relitters" mean? Am I missing someting?
ReplyDelete"To bad certain out of towners (read Neil) are convinced that arlington, alexandria & DC are suffering just as much as the rest of the DC area are."
ReplyDeleteLOL - have you SEEN Neils blog? His focus is on the bubble NATIONWIDE, but he has entry after entry dedicated to not just DC but ARLINGTON! I mean he has an entry subtly titled "4 horsemen of the apocolypse" with a full segment devoted to Arlington for god sakes!
http://recomments.blogspot.com/2008/01/horsemen-of-apocalypse.html
On another occasion on the NOVA blog he and lance were getting into it and out of the blue Neil said something like "I dont care what you say Alexandria is going down". Problem is not a single word in the entire 30+ entry chain had spoken a word about Alexandria - Neil simply imagined it! When confronted with this, Neil pulled his usual M.O. and slinked away quietly.
It is clear he is OBSESSED with Arlington, Alex & DC but I dont know why. My guess is someone pointed out the FACT that the Beltway hasnt suffered the way the rest of the region did and he simply refused to believe it. Now he spends an inordinate amount of time trying to PROVE "its not different here" - he tries and he tries and he tries, but NO ONE, not even fellow bears like Leroy or Kieth think he is right about this. Yet he continues to blog with entry after entry dedicated to Arlington.
Normally you would think a diatribe like this would make someone rise up to defend themselves - but Neil is different. THis is a sensitive subject for him that he refuses to answer. Thing is he SEES the posts, he KNOWS the question has been asked, but yet he still REFUSES to answer!
Maybe if we all get after him he will finally pipe up - I encourage all the rest of you to ask him - Neil - why are you obsessed with Arlington. I'll start and maybe I can annoy an answer out of him.
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
NEIL - WHY ARE YOU OBSESSED WITH ARLINGTON?
"Why do you keep posting this false dichotomy in every thread? Avoiding real estate is not equivalent to buying stocks - stop conflating the two. This site is about real estate, not stocks."
ReplyDeletePlenty of the best known trolls on this site have spent the last year or two bragging about their smarts in investing in stock rather than real estate. They have been hoping for bad things to happen to homeowners, so I hope that bad things happen to them.
Like most Americans with a little bit of money, I own both stocks and real estate, so I'm taking it in the dumper from all angles.
"David - thank you for having the honesty to admit to something that alot of us who live around here know. To bad certain out of towners (read Neil) are convinced that arlington, alexandria & DC are suffering just as much as the rest of the DC area are."
ReplyDeleteit is obvious the exurbs are down more than the innards, but it is not obvious the innards are UP, lance
"Like most Americans with a little bit of money, I own both stocks and real estate, so I'm taking it in the dumper from all angles."
ReplyDeleteI'm conservative on stock but I've taken a 20 grand hit in the last few months.
http://blogs.wsj.com/economics/2008/03/25/closer-to-housing-bottom-or-signal-of-a-deeper-trench/?mod=WSJBlog?mod=economy_real_time_blogs
ReplyDeleteThe original post is Wall Street Journal material of economists reacting to the drop and they seem to say that the declines are steepening from what is a 23.2% drop on an annualized basis (10.7% measured YOY).
Although I want to get into the market, I am afraid by being hit by the collapsing market.
The farther out exurbs went up faster and more ridiculously in value. But since the DC areas value appreciated at about the fifth fastest rate from 2000 to 2005, expect a steep fall here also.
ReplyDeleteThe other markets that appreciated more or similarly have fallen: Las Vegas, Phoenix, Miami, San Diego. The high flyer of Manhattan is falling like a lead baloon, with the financial sector layoffs, after growing even more this past year from the record bonus season -- all based on a ridiculous bubble market.
For those that don't remember, in 2000 you could buy a two bedroom condo of about 1100 square feet in newer building off Mass Ave in Dupont for around $200,000. Now similar units list for $600,000. Even though I believe they were undervalued at the start of the market, appreciating at a rate of 20% a year for six years is absolute nonsense.
For those who follow, there have been a few DC foreclosures in the Whitman, the Rutherford and others. There is also a growing surplus of class A rental apartments in the 36-month pipeline, with rents expected to be flat or fall even without a recession.
The inner metro area will fall in line with the outer suburbs...just a lot more slowly. It may happen from a lack of appreciation in values, but it will happen. An equilibrium will be found between prices in the exurbs and closer in...as always.
Chew on that.
DC is up year over year. Sorry, it's true.
ReplyDelete"The inner metro area will fall in line with the outer suburbs...just a lot more slowly. It may happen from a lack of appreciation in values, but it will happen. An equilibrium will be found between prices in the exurbs and closer in...as always."
ReplyDeletePeople will accept this about a year after it comes to pass. Until then... expect to see the usual suspects try to dream up theories about why their block is different.
An equilibrium will be found between prices in the exurbs and closer in...as always
ReplyDeleteYou are ignoring the soaring cost of fuel; fuel to get from the exurban home to the workplace, and the fuel to heat and cool the over-sized (and poorly insulated) exurban home. Lets not forget the cost of fuel to mow the lawn, or the rising cost of food as a direct result of rising fuel prices (look it up, it is happening now and was headline news within the past week). Oh, and the soaring traffic congestion experienced while traveling to and from the exurbs to the cultural and employment centers plays a role, too.
"Exurban" factors did not exist 50 years ago because exurbs did not exist. In fact, suburbs scarcely existed 50 years ago. (look it up; see "Levittown")
Since suburbs and exurbs are a relatively recent phenomenon, your "as always" point is moot.
Anonymous said...
ReplyDelete"DC is up year over year. Sorry, it's true."
Don't be sorry. MRIS shows an increase in February YOY for DC. For the uninitiated, the question is what is hidden in the statistics. You will note that condos make up about 49% of the units sold in February 2008, while only 36% in Feb 2004, 35% in Feb 2001. They also sold at the higher ranges. Why? Not sure. But a good guess is that it is some of the many new condos coming on market that must be sold.
Case Shiller is seen as a more accurate market indicator because it uses same house sales.
I predict you will soon see the YOY declines in the MRIS soon...and I won't be sorry.
"DC is up year over year. Sorry, it's true."
ReplyDeleteJust keep telling yourself: "Everything is fine. The housing market isn't crashing. My condo is increasing in value. Everything is fine."
One day it will be true.
You can't have it both ways.
ReplyDeleteEither values here will stick because everyone is filthy rich, or they won't.
People who can't afford expensive gas will buy a $1 million condo so they can take the metro?
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You are ignoring the soaring cost of fuel; fuel to get from the exurban home to the workplace, and the fuel to heat and cool the over-sized (and poorly insulated) exurban home. Lets not forget the cost of fuel to mow the lawn, or the rising cost of food as a direct result of rising fuel prices (look it up, it is happening now and was headline news within the past week). Oh, and the soaring traffic congestion experienced while traveling to and from the exurbs to the cultural and employment centers plays a role, too.
"Case Shiller is seen as a more accurate market indicator because it uses same house sales.
ReplyDeleteI predict you will soon see the YOY declines in the MRIS soon...and I won't be sorry."
ARE YOU KIDDING ME!!! Using Case Shiller to tell you whats happening IN DC!!!!
Look here genius - Case Shiller is good but its based on resales of the ENTIRE FREAKING AREA including burbs going out all the way to WEST VIRGINIA! Less than 1 in 10 resales measured by Case Shiller actually takes place IN DC - the other 9 happen in the SUBURBS. So if the question is whats happening IN DC, please tell me again, HOW IS CASE SHILLER ACCURATE?
"Either values here will stick because everyone is filthy rich, or they won't. "
ReplyDeleteNot every home in DC is priced at $1 Million dollars.
Condos starting in the $100,000s, brownstones/rowhouses in the $200,000 - $400,000 range, and SFH in the $350,000 - $11,000,000 range can all be found in DC today.
Condos starting in the $100,000s, brownstones/rowhouses in the $200,000 - $400,000 range, and SFH in the $350,000 - $11,000,000 range can all be found in DC today.
ReplyDelete----------------------------------
No where anyone would actually want to live
So when do I buy a condo in D.C.? I want a new two bedroom within 15 miles of the U.S. Capitol. Do I wait a year? What to do, what to do?
ReplyDelete"ARE YOU KIDDING ME!!! Using Case Shiller to tell you whats happening IN DC!!!!
ReplyDeleteLook here genius - Case Shiller is good but its based on resales of the ENTIRE FREAKING AREA including burbs going out all the way to WEST VIRGINIA! Less than 1 in 10 resales measured by Case Shiller actually takes place IN DC - the other 9 happen in the SUBURBS. So if the question is whats happening IN DC, please tell me again, HOW IS CASE SHILLER ACCURATE?"
Don't get your panties all in a bunch! Your shock and awe frightens me.
I said Case Shiller is a more accurate indicator than looking at MRIS stats in general. I did not say that it gives a definitive conclusion for the Distict, in particular. It is clear that each method has its flaws. I pointed out a flaw with the MRIS stats.
But...I predict you will soon see a drop in YOY in the MRIS stats.
"No where anyone would actually want to live"
ReplyDeleteSpoken like someone with a true lack of current information. By the time you get around to deeming areas near Metro stations "desirable", you may not be able to afford them:
"Over the past few years, Washington, DC has emerged as the strongest and most resilient economy in the country. From office and residential markets to the hospitality/tourism industry and educational institutions. Washington has a development dynamic best illustrated by $15.2 billion worth of projects completed since 2001 and the $7.5 billion currently under construction.
With new development occurring in each of the District's core economies - office, retail, residential, education, hospitality/tourism and media/communications - investors are discovering the opportunities that DC has to offer. Washington, DC is ranked as the #2 national and #4 international investment market among foreign investors (AFIRE) and the #9 retail investment market by Marcus & Millichap. Residential investors are also discovering the appeal of the District's neighborhoods as thousands of new housing units are under construction.
Washington, DC, a city created as the symbol of democracy, has become an economic engine that anchors an entire region and beyond. An urban renaissance is transforming the nation's capital into a world-class city with an unparalleled business environment."
www.wdcep.com
Note that the dollar value of projects currently underway ($7.5 Billion) is half the total amount of all projects completed in the past 7 years ($15.2 Billion). Did you know 9th St NW was a "Bad" neighborhood a few years ago? Now it is a tourist destination with dining options at places like McCormick and Schmick (all hail Suburbia!) and Zatinya.
Assuming you are in the market for such things: Good luck buying a new condo or renovated brownstone anywhere near the Gallery Place or Archives/Navy Memorial Metro stations now.
""Exurban" factors did not exist 50 years ago because exurbs did not exist. In fact, suburbs scarcely existed 50 years ago. (look it up; see "Levittown")
ReplyDeleteSince suburbs and exurbs are a relatively recent phenomenon, your "as always" point is moot."
Equilibriums will always be found. And the exurbs were there in 1998, which is the relevant time frame.
"Less than 1 in 10 resales measured by Case Shiller actually takes place IN DC - the other 9 happen in the SUBURBS."
ReplyDeleteI guess just making stuff up on the fly will never go out of style. I love how you throw total BS out there like that and expect nobody to notice.
Assuming you are in the market for such things: Good luck buying a new condo or renovated brownstone anywhere near the Gallery Place or Archives/Navy Memorial Metro stations now.
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*yawn* already own in the city. Save your lectures RE Booster Troll, I am well aware of the city. Sounds like you aren't, but you can google and regurgitate...
*yawn* already own in the city.
ReplyDeleteSo you aren't the anon who was claiming that the city is too expensive because everthing costs $1M? Or are you the same anon who was claiming that the city is too expensive because everything costs $1M? Which is it? Yet you "already own in the city"? You aren't making sense. Please clarify.
Sounds like I'm not aware of what is going on? I've been in DC for 12 years. You?
"Less than 1 in 10 resales measured by Case Shiller actually takes place IN DC - the other 9 happen in the SUBURBS."
ReplyDeleteI guess just making stuff up on the fly will never go out of style. I love how you throw total BS out there like that and expect nobody to notice."
Here you go dummy - assuming you can count, look it up yourself - just take the number of sales in DC (excluding condos just like Case Shiller) and the dozen or so surrounding counties (excluding condos just like Case Shiller) and see which number is bigger!
http://www.mris.com/reports/stats/monthly_reti.cfm
Jeebus - some people can be so freakin dense!
" And the exurbs were there in 1998"
ReplyDeleteNo. Ten years ago, Prince William County was not a bedroom community for workers who commute to Tysons, Arlington, and DC. The bulk of the volume of new housing developments standing there now came online within the last 10 years. Not within the last 20 or even 15. The "equilibrium" you are seeking has not been a factor for the whole duration of the relevant timeline.
Prince William County will not be a bedroom community for commuters to major employment centers 10 years from now.
"Here you go dummy - assuming you can count, look it up yourself - just take the number of sales in DC (excluding condos just like Case Shiller) and the dozen or so surrounding counties (excluding condos just like Case Shiller) and see which number is bigger!"
ReplyDeleteUm, see which is bigger? Moving the goalposts a bit from 1 in ten aren't you?
I know you are posting annoymously which seems to be a liscense to act like a total idiot much of the time but do yourself a favor and check your facts before you spout off.
Add DC and NVAR and see what you get... then go "count" the sales in the rest of the region and see if there are ten times as many.
and don't even start trying to redefine Alexandria, Arlington and Fairfax as "suburbs" when they are the heart of the city. (and make up the overwhelming majority of its employement, commerce and everything else)
"Fairfax is the heart of the city."
ReplyDeleteLOL! That is a good one! Thanks for the laughs!
"and don't even start trying to redefine Alexandria, Arlington and Fairfax as "suburbs" when they are the heart of the city."
ReplyDeleteBoy you are freakin dumb! And talk about re-defining, FAIRFAX is now THE HEART OF THE CITY??? lets take a trip in the way back machine to earlier in this post what do we see?
"Less than 1 in 10 resales measured by Case Shiller actually takes place IN DC - the other 9 happen in the SUBURBS"
Thats right the operative word in that post is DC, the District of Columbia. That is what started this whole thing.
You or another anon said I made this up - I then say here is the stats go look it up - you respond NO YOU GOT TO INCLUDE ARLINGTON ALEXANDRIA & FAIRFAX
So who again is moving the goalposts here?
Back to my earlier statement 9 in 10 resales happen OUTSIDE OF DC.
http://www.mris.com/reports/stats/
Show me how this is wrong or lets move on.
"No. Ten years ago, Prince William County was not a bedroom community for workers who commute to Tysons, Arlington, and DC. The bulk of the volume of new housing developments standing there now came online within the last 10 years. Not within the last 20 or even 15. The "equilibrium" you are seeking has not been a factor for the whole duration of the relevant timeline."
ReplyDeleteA crock.
Here's a wiki page (http://en.wikipedia.org/wiki/Prince_William_County,_Virginia) showing that population going back generations. PW has grown about 25% since 2000.
Yes, there are a low of new homes that were built out there, but stop trying to change reality.
Anon 3:25,
ReplyDeleteIt's apparent you weren't living here 10, 15, or 20 years ago. Had you been, you'd know that PWC's role as a bedroom community is very very new.
Ok, so I went to your wiki page about PW County.
ReplyDeleteThe wiki information starts with this: Prince William County is a county located in Northern Virginia. The estimated population in 2007 of the county was 383,644, a 36.6% increase since 2000.
Now, do you see what I see? The population there increased over 36 percent in seven years. 36% in 7 YEARS!
Get it? That is over 103,000 people in 7 years. That is over 170,000 in the last 15 years. They all moved into what? Existing homes? High-rise condo buildings? No. The moved into new McMansions and less expensive tract homes.
It is a massive, significant "ex urbanization" that occurred only recently. Hence, there will be no "return to equilibrium" for all those new McMansions and tract homes.
I just returned from visiting family in Woodbridge. I saw homes selling fro 50% of the price two years ago. It is unbelievable. I also expect prices to fall more.
ReplyDeletePrices were inflated to crzy levels two years ago. Now the bubble popped