Bad news: According to S&P/Case-Shiller, month-over-month Washington, DC metro area seasonally-adjusted home prices rose 0.08% in April. Non-seasonally-adjusted home prices rose 0.8%.
For the Composite-20 average, seasonally-adjusted home prices fell 0.09%. Prices continued to fall in the four heavily-battered states of California, Florida, Nevada, and Arizona.
Inflation from March to April was 0.24%.
If Florida prices keep falling while DC prices start rising, I think I'm going to have to live where summer lasts all year long.
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Sadly I own in one of the most heavily hit areas of Los Angeles.
ReplyDeleteI knew the prices were going to fall some, but I never expected this.
There is such a glut of houses on the market that I don't foresee any gains for years to come.
this is what I am talking about....my husband keeps saying prices have to go down but I have been looking since January in NW DC for a detached house and not finding bargains. The inventory of detached houses under $950K is really small in our targeted neighborhoods (tenley, cleveland park, friendship heights/chevy chase). Most houses listed under $950K go for asking or above if they are well priced - yes I've seen multiple offers many times this spring!! On the other hand, houses $1.2M and up are sitting around...those often go for less than asking. A good question is why inventory in the < than $950K sf detached house market is so low in those neighborhoods...I'm guessing everyone is renting who doesn't need to sell...also people aren't trading up (that's why $1.2M houses are hanging around) because of the recession and uncertainty. Having said all this I do believe prices even in the <$950K detached house range are softer than they were at the peak in 2005 - 2006 but not by much (maybe 5 to 10%).
ReplyDeleteWe've got a long way to go, and we won't know how things are going to shake out until we reach the end. I fall prey to this all the time: trying to interpret the noise in the various measures and indices. It's a fool's game, though. There are so many outside factors and unusual forces at play right now that small dips and bumps in the data are not really indicative of long-term trends.
ReplyDeleteWhat's the hurry cccrewmom? Unless you are living in a box and walking over one another...why rush into an uncertain market?
ReplyDeleteHmm, cccrewmom I understand your frustration but the neighborhoods you're looking in aren't depreciating as fast as further-out areas (they also appreciated more slowly on the way up). So it helps to be patient -- even though there hasn't been a dramatic decline, prices are lower than they were in '05-'08. Franklymls.com is a good site to use. This search http://franklymls.com/default.aspx?m=R&l=0&h=1000K&s=(20015,+20016)+-condo for example, will give you the houses in zip codes 20015 & 20016 under $1M. From that search, this house: http://franklymls.com/DC7051907 is on the market for $937k, and it sold for over $1 million in 2007. So just be glad you didn't buy in the past few years.
ReplyDeleteThe neighborhoods you're looking in will always be expensive, though. If you're not comfortable spending a lot of money on a house, you might want to consider broadening your search to other neighborhoods or considering a rowhouse. $800k can go really far if you do that.
Hey Guys! I have not left yet for southern France-- Nice to be exact.
ReplyDeleteChevy Chase, Cleveland Park, Friendship Heights are prime locations but not immune to further reduction in prices. I know few people who have interest only loans and Alt-A loans. They have serious financial problems and may loose their homes. Some loans will adjust in September. Others in October. Be patient!
Au revoir!
I should make the observation that the problems in the higher end market (>$1M) will eventually lead to some price declines there, and those price changes will trickle down into the less expensive homes..
ReplyDeleteIs this .08% increase in prices in april a blip or is this a the bottom in the Washington, DC metro area?
ReplyDeleteMy expectation is that prices will fall a bit more this year once the spring / summer season is over. After that there will be many years of low price increases (1 - 3%).
"After that there will be many years of low price increases "
ReplyDeleteREALLY???
I would guess based on salaries alone, that if prices don't drop majorly, they will stay the same flat lined for at least 10-15 years.
David said...
ReplyDelete"Is this .08% increase in prices in april a blip or is this a the bottom in the Washington, DC metro area?"
The thing that worries me is that the seasonally-adjusted index is up. That should take into account the normal changes in the spring market. Another thing that worries me is that the Case-Shiller index has largely been resistant (but not immune) to monthly blips, likely due to the fact that the metro indexes are really 3-month trailing indexes.
As a 3-month trailing index, the April numbers really reflect Feb., March, and April. Perhaps we are seeing the effects of the $8,000 tax credit which took effect during that period?
"Perhaps we are seeing the effects of the $8,000 tax credit which took effect during that period?"
ReplyDeleteYeah, and low interest rates, I think.
hopefully this is a sign of things to come. I cant handle this anymore.
ReplyDeletewe don't have to buy a house but would like to...our family (me, hubby & 3 kids ages 6 and under) live in a 2 BR apt in NW DC. my husband's strategy has been to wait for prices to fall. he's encouraged by all the bubble blogs etc. but I keep telling him that NW DC is relatively immune. It's been 3 years of waiting...we'll see what the fall brings. We might have to give up and either rent a house or move to the burbs.
ReplyDelete"We might have to give up and either rent a house"
ReplyDeleteRenting is still cheaper than buying. If you love DC so much, I would rent. Renting your dream house for 1/5th the cost of owning it sounds like a better plan. Take any money you have for a down payment and pay off higher interest debts or invest it in something. You would be doing your small children a service to do so.
Think about your kids, not the Joneses
"foreign-born immigrants who moved into and stayed"
ReplyDeleteYeah cant wait for those non-english speakers with lower than junior highschool education coming in to bring up the value of properties!!!!
If its true that populations are migrating back to urban areas; what will that do to the suburbs? Make them more affordable? Will unskilled, unemployed people be able to afford the newly-affordable suburbs?
ReplyDeleteI think 900k for a detached home in a good area of DC is very affordable. Although the average salery in DC does not justify the price, you have to remember the average person who lives in DC does not own a detached house in a nice. The far major or residence live in appartments, condos or in crappy areas. DC is one of those cities where although the "medium" income is low, there are a lot of people who are very wealthy. Unless you are making in the top 5%, owning a detached home in a nice area is probably an unrealistic expectation. DC has a fairly large population of lawyers and other people who are making well over $300k a year and if you want to buy a house in a nice area you are competing with them.
ReplyDeleteAlso renting is not much cheaper then buying in a good chunk of the DC area. I purchased a home a few months ago and my mort+taxes+HOA total to about the same is what a lesser home in the neighbor is renting for. The only exeption are the uber expensive homes that most renters cannot afford. Other then that it is fairly common for someone to have to pay $2500 a month for a small condo.
"Also renting is not much cheaper then buying in a good chunk of the DC area. I purchased a home a few months ago and my mort+taxes+HOA total to about the same is what a lesser home in the neighbor is renting for."
ReplyDeleteYeah, I think this is starting to be true in some cases now that prices have fallen and interest rates are low. Not everywhere though. There are 1br condos on the market for over $300k that would rent for $1500-1800 and with the condo fees and taxes you'd be paying over $2000 to buy. And then with the large SFHs west of the park it's a little hard to tell because not too many are rented but I can't imagine they would rent for the $6000-7000k / month to buy them.
There is no way we could get the house we are buying for less than what we are paying for the mortgage+PMI+taxes+insurance. The least expensive 4 bd room in the neighborhood is $2500 month, which is several hundred dollars more a month than what we will be paying for in a mortgage. If we didn't need PMI our payment would be just a $100 or so more a month than the crappy house we live in now where we don't even have access to the basement.
ReplyDelete