Friday, April 18, 2008

Sales in Silver Spring, MD

Housing Unit Sales in Silver Spring, MD

31 comments:

  1. I'm missing the point of the graph. 2000 - 2005 was a boom time ... exceptional in the number of sales by any measurement at any time. Now that we've returned to a normal market and are on the downside of it, sales have gone down as everyone would expect. What's the point of the graph? I.e., what's it telling us that your average person wouldn't have expected to see given the return to normalcy of sales numbers?

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  2. Hi guys, have been a long time reader of this blog, which saved me from buying a house 2 years ago. I live in Brookfield, Milwaukee. Now I just signed a long contract with my employer, we are expecting a baby, so time to start looking for a house. I have a stable income, excellent credit score and all that.
    Looking at houses here (which is a very upscale suburb of Milwaukee), prices have definitely come down about 5-10% from 2 years ago. I am planning to make a few low bids and try my luck.
    My questions :
    Any way to know how long a house has been listed? What was the original listing price? I have been checking zillow and trulia.com. Any other good websites I should be aware about?

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  3. For 2-3 years now, as DC area prices have ground down relentlessly, the remaining housing cultists have kept saying that it isn't happening in the close-in parts of the DC area.

    Your chart clearly shows that it is.

    Now, I know there are some on this blog who have claimed that Silver Spring is somehow some boondock faraway land, but from my Silver Spring rental, I can easily walk to the DC line. You can not get close r to DC than Silver Spring.

    ARF

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  4. And with asking prices for most houses at 10% off peak asking price, it's going to get a lot worse... especially for the McMansions in the outer burbs.

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  5. Good. Let the prices drop more if they want to sell. 1998 hear we come!

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  6. Lance wrote "What's the point of the graph?"

    That sales have fallen tremendously since the boom years. When sales fall tremendously at the same time that inventory increases tremendously one will almost always get large price declines in a housing market.

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  7. anil - try redfin.com
    Their listings show the original list price, subsequent drops, numbers of days on the market. It's the most useful site I've found.

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  8. to ARF:

    The graphs show VOLUME of sales -- NOT price declines.

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  9. The point of the graph is simple. The boom is over.

    We had a real estate mania. No denying that.

    Now its time for a real estate depression.

    Note: Depression used to equal recession. I still think this downturn will be a recession. But sometimes its appropriate to remember why mania and depression are paired. If the first is excessive... so is the later.


    Got Popcorn?
    Neil

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  10. "the remaining housing cultists have kept saying that it isn't happening in the close-in parts of the DC area.

    Your chart clearly shows that it is."

    Hey Arf - know who just joined the ranks of "cultists" who say prices close in are holding? Case Shiller or at least the Chief Economst of Case Shiller. I heard it on NPR just this morning.

    Let that sink in for a minute. This is not some realitor or pumper who said this. This is Case Shiller - THE gold standard of price declines in the DC metro area and every Bear's favorite son.

    Hopefully it will come out on their website soon. Man I cant wait to rub this in all the bears faces!

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  11. "Now that we've returned to a normal market.."


    hahahahahahahahaha.....no seriously...bewahahahahahaha...oh man, it hurts to laugh that hard.

    Good one, lancey boy!

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  12. Lance
    I have followed this blog for a couple of years and have (rather had) been as bullish as you - but lets face it--this is looking really bad. Huge inventory, sales dropping - this is basic supply and demand stuff. A 50% drop from peak is looking quite possible...

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  13. So Lance's tune has changed from
    'any simpleton can see that there is no bubble'
    to
    'any simpleton can see that we're returning to normal'
    pretty soon it will be
    'any simpleton can see that the housing bubble was an insane, speculative frenzy in which I only pretended to participate. Brother can you spare a dime?'

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  14. have a look at and sign http://www.angryrenter.com/

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  15. Dave -- that may be true of goods (like TV's) but houses are not the same. People don't HAVE to sell -- especially one in the close-in/DC Proper. The DC proper residents can sit tight -- where would they want to move to? Whereas, I think most people in say Oakton, Springfield, or Rockville would choose moving to Bethesda, Capitol Hill or DuPont in a heartbeat.

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  16. "That sales have fallen tremendously since the boom years. When sales fall tremendously at the same time that inventory increases tremendously one will almost always get large price declines in a housing market."

    Agreed but David, has inventory increased tremendously? Last time I checked, Arlington inventory was lower YOY than 06 and Alexandria was lowyer YOY than 06 and 07. How they continue to defy the odds, I dont know, but it is what it is. What about Silver Spring's inventory? Was 06 their high as well?

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  17. Prices in some need to fall another 20% for the market to turn around. Sellers still have unrealistic ideas regarding the value of their homes based on the flippers and speculators who contributed to the situation.

    Once that happens, there is still the credit situation which is going to keep many buyers out of the market.

    So, the housing market will not improve any time soon.

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  18. Lance has either been missing the point since this blog was initiated, or he has been a plant from the REIC.
    Hmmm...maybe both.

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  19. David,

    Great blog.

    I'm thinking of buying in the Silver Spring area. 20910 (really close to DC, and much of it really expensive looking) seems to be holding up, but 20902 seems to have plummeting sales and increasing time on market (at least according to MRIS for Mar 2008, year-over-year).

    How long---just as a guess---do you think it will take for much of the price decline to occur? I can wait a long time, but my wife doesn't want to. ;-)

    Cheers.

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  20. hi. frequent lurker, new poster. re: 20910, i'm very familiar with it. i lived there for 6 years and sold my townhouse in 2005. it's also one of the zips i watch closely.
    prices are softening, but not as much as they should. sellers seem to feel that they should make a profit regardless of when they bought the property (including in 2007). i'd say about 15% is newer construction with the rest older homes replete with low basement ceilings, lots of dated wood paneling, awkward kitchen configurations, no decks, and 50-year old rusty fences, to name a few. granted, many of the homes have some updates, but they're not gut rehabs. for $500k, you might still have to spend more to get rid of the 1967 look.

    if i were you, i'd watch and wait.

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  21. Yes, I should have said that this chart shows that sales, not prices, are plummeting. Nonetheless, clearly inner-Beltway, very-close-to-DC suburbs are crashing.

    For prices, I like the "housing tracker" website that David has linked to. It shows that asking prices are also falling off a lot, though for the whole DC area. (I don't like sales data as much, as those represent such a small percentage of the houses for sale in the DC area these days.)

    As for 20910, I personally am very bearish. I have lived in 20910 for ten years now. I really like the downtown Silver Spring development, but we should be realistic about it.

    1) they have flooded it with cops and security, which is good, but with Montgomery County not increasing the number of cops in the future (due to budget constraints), serious problems are just under the surface. A few very bad apples hang out in downtown Silver Spring, and they could ruin things if the security presence is reduced. 20910 is very close to some rough parts of PG and DC.

    2) the idea of building an upscale shopping area there is failing. A lot of storefronts there are empty, and the nearby mall (City Place) is seemingly half-empty. There is not the money here to be upscale. That's fine- but that means a different type of development needs to be pursued.

    3) I have lived long enough to see things like this fail before. The downtown development is typical of town center and mall developments all over the country for the last 30 years. They do not all work. I remember that Laurel was done over this way back in the late 80s and early 90s. Now, they are re-doing it because that rebuild didn't work out.

    I have found 20910 a good place to rent. I am not going to buy anytime soon, though, and I may even move soon as well.

    ARF

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  22. to one of the "anonymouses", who posted:

    "Agreed but David, has inventory increased tremendously? Last time I checked, Arlington inventory was lower YOY than 06 and Alexandria was lowyer YOY than 06 and 07. How they continue to defy the odds, I dont know, but it is what it is. What about Silver Spring's inventory? Was 06 their high as well?"

    I don't think the April figures for Arlington SFH have been released yet, but for April, the NVAR report shows:

    Units Sold:

    March 07 = 90
    March 08 = 75 (down 17%)

    Active Listings:

    March 07 = 327
    March 08 = 382 (up 17%)

    The figures are worse in the $1Mill and up range than in the <$1Mill range (10 sales/106 actives, vs. 65 sales/276 actives).

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  23. Hi, David,

    I just wanted to let you and your readers know that there is a petition against any mortgage bailout at:

    http://www.angryrenter.com/

    You don't have to be a renter to sign, just angry and opposed to the bailout. Don't let Congress spend your tax dollars to bail out the greedy, irresponsible borrowers, lenders, builders, and investors who caused the housing bubble!

    More than 40,000 people have signed so far. The first 12,000 names were hand delivered to Congress on April 24, 2008. They will be delivering the rest of the signatures in waves as they come in.

    We (renters, homeowners who've paid off their mortgage, and those who are current on their mortgages are the majority. Let's make our voices heard. NO BAILOUT!

    Sign the petition. Ask everyone you know to sign. And, lets vote any Congressmen who votes for this bill out of office in the fall!

    Thanks!

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  24. Ben Bernanke urges action to stop foreclosures while he is cutting interest rates causing food and gas prices to increase, leaving less to pay the mortgage.

    http://reddit.com/info/6ibpq/comments/

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  25. ARF, as soon as you start factoring fuel prices and traffic congestion into your analysis of forces shaping communities in the future, you'll be credible. Otherwise, you sound very 1953.

    A Honkey Fan

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  26. I agree that fuel prices are going to be a major issue for the foreseeable future, and of course that is a major plus for close-in communities. However, Anacostia is even closer-in than Silver Spring, and still not as desirable. Crime and improper urban development also matter.

    Thanks for saying my analysis sounds very 1953! I am glad my analysis reflects the past housing mentality, the one that led to a stable, accessible housing market for most, rather than the insane nonsense of the last 10 years.

    ARF

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  27. "Thanks for saying my analysis sounds very 1953! I am glad my analysis reflects the past housing mentality, the one that led to a stable, accessible housing market for most, rather than the insane nonsense of the last 10 years."

    Note that suburbs did not exist in 1953. Do some research, and start with "Levittown, NY" You'll find that the nation's first suburb cam online in 1951. "Housing market accessible to most" in 1953? The market you are thinking of did not exist in 1953. You may also want to investigate the genesis of the Interstate Highway system in the US (Think: 1950's) After you've done that, graph a correlation between retail fuel prices and suburban sprawl. Inversely or directly correlated? Can you guess without a graph?

    A Honkey Fan

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  28. Well ARF, this is for you. This is definitely not your father's world. We have manned spaceflight, nuclear power, and even heart transplants now! (gasp!):

    Clark Wins Poplar Point
    Mayor Fenty announced this morning that Clark Realty Capital was chosen as the developer for Poplar Point - 110 acres of undeveloped land with a full mile of Anacostia waterfront, sitting just across from the new baseball stadium. Development of Poplar Point is the key to the District's $10 billion, with a "b", Anacostia Waterfront Initiative.

    The District began the process with a solicitation last August, bids were due by last November. According to the District, it sought development teams based "on their vision, qualifications, financial capacity, and commitment to community engagement." The District and Clark still have an uphill battle to get the land secured; it is still owned by the federal government and transfer depends on a suitable environmental impact study. The final plan will include a 70-acre park, a "hub for businesses" and an assortment of mixed used development in an area the District has called "underused and isolated." Clark's plan included a bridge over I-295 to make the park accessible to pedestrians from Anacostia.

    Clark Realty is based in Arlington, Virginia, and offers a broad range of real estate development, management and financing services. Mayor Fenty called the project "the largest economic development project the District has ever embarked on and we are making investment where it is needed most - East of the River."

    www.clarkrealty.com

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  29. When is all this development in DC going to end? Everywhere I look, old buildings are being renovated, and new buildings are being constructed. Is the construction crane now the official symbol of DC?

    Don't these people know that there is a recession out there?!!

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  30. I've lived in the DC area a long time. This is what always happens.

    The rest of the country starts to show economic growth? DC area lags.

    The rest of the country starts to show economic levelling off? DC area now just picking up.

    The rest of the country teeters into recession? DC area going full steam ahead for a few more years.

    The DC area economy always seems to be about two-five years behind the rest of the country.

    ARF

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  31. I lived in 20910 for a few years; recently moved. Two years ago the Downtown SS was nice, in the last 9 months it has gone downhill (which was the reason why I moved). The area will get much worse as a consequence of PWC's stances on illegal immigrants and MC liberal policies.

    Watch the crime stats for SS over the next few years...the neighborhood has changed and that in part is a reason why prop values are falling and will continue to fall...unless things changes, I will not even consider purchasing in the area and renting their is dicy.

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