Tuesday, February 14, 2006

Average Sales Price in Greater Northern Virginia Falls Significantly

The Northern Virginia Association or Realtors (NVAR) has posted their monthly January Market Summary here is an excerpt:

Although the number of single family homes and condos sold in January was down by almost 30% when compared to 2005, the average sales price did top the 2005 January average sales price by 10.3%.

Active listings increased dramatically when comparing homes on the market in January 2005 versus January 2006, with a 392.5% increase.

Sales prices for the first month of 2006 in Greater Northern Virginia (including Prince William, Loudoun and Fauquier Counties) also followed an upward trend as did closer-in Northern Virginia region. The average sales price was up 15.22% from the January 2005 average of $417,395 to the January 2006 sales price average of $480,931.

But here is the kicker. Here is an excerpt from the December report:

Sales prices in Greater Northern Virginia (including Prince William, Loudoun and Fauquier Counties) followed the same upward trend as the closer-in region. The average sales price was up 18% from December 2004 at $525,274 for December 2005. Units sold were 20% below December 2004 levels with 3,984 units sold in December 2005. The number of active listings is up 199% over December 2004.
The average sales price for a single family home and condo in Greater Northern Virginia in December 2005 was $525,274, a month later, in January 2006 the average sales price was lower at $480,931. Therefore, the average sales price was 8.5% percent less in January 2006 then in December 2005.

Wow! Try spinnin that!


  1. Hey David

    a 392% increase in inventory- holy shit! and the last time I looked the DOW was up 140
    something is wrong- I wonder if those buyers know that this kind of horrific data is being generating on the blogs......

  2. The ratio of condos to homes sold hardy changed between those two months. Realtors how are you gonna spin these numbers?

  3. Wait til ARM-ageddon comes later this year. Let's see how realtors are going to explain the forclosures following that!

  4. In all fairness, these guys are using "averages," not medians. All you need is one million dollar sale to yank the numbers out of proportion to the upside, if you use "average." These guys will stop at nothing to keep the spin machine running...

  5. skytrekker,

    My friend has a theory that speculators are now pulling money off the RE market and putting it into the stock market. That may work in the short term, but in the longer term, wouldn't a housing crash going to take the economy with it?

  6. Based on the information in the December press release, December 2004 average prices were $445,147 meaning that prices dropped 6% from December 2004 to January 2005. It appears there is a reason that data are described year over year rather than month over month.

  7. the gambling economist,

    Your numbers are inccorect.

  8. My friend has a theory that speculators are now pulling money off the RE market and putting it into the stock market.

    With the fed/government/fannie mae allowing the huge increases in paper (debt, paper, etc), you have to wonder where to put your money. Putting your savings in the bank is risky as well. If 100K buys you a condo in the year 2000, but only buys you 1/3 today, is saving money in the bank a good idea?

    My opinion is I like putting my monye in Motorola, Apple, Toyota, Cemex and other companies with CEO's that are going to work to increase the value of my savings.

  9. If prices were up 18% from December 2004 to $525,274, then December 2004 prices = $525,274/1.18 = 445,147.

    In January 2005 the average price is stated as $417,395.

    ($417,395/$445,147 + 1) * 100% = 6%

  10. Arlington et al: Notwithstanding anyone's "theory" about where the speculative money is going, do not forget that stocks are no less sensitive to the pin that may ultimately pop the real estate bubble - Interst Rates. If they spike, Wall Street will get caught with its collective trousers down, right along the real estate crowd.

    Just be very careful out there...

  11. the gambling economist:

    For Northern Virginia:
    Dec 2004: $476,941 avg vs. Jan 2005: $475,321 avg (a 0.34% decrease).
    Dec 2005: $$552,621 avg vs. Feb 2006: $524,314 (a 5.1% decrease).

    For Great Northern Virginia:
    Dec 2004: $444,396 avg vs. Jan 2005: $440,426 (a 0.89% decrease).
    Dec 2005: $525,274 vs. Jan 2006: $480,931 (a 8.4% decrease).

    Please check
    mktsum.lasso for NVAR's official Data.

    Oh, my GOSH! Did anyone notice what I just noticed??? There are inconsistency in the Great Virginia SpreadSheet! In the Jan. 2005 spreadsheet, the average sale price is $440,426 for Jan. 2005. But for the Jan. 2006 spreadsheet, it says that Jan 2005's sale price is $417,395. If $440,426 is the true one, it means YOY increase is 9.2% in Great Northern Viginia from 2005 to 2006. If it's less than 10%, that's really bad news.

    Are these people spinning the data to whatever way to their favor? Please confirm yourself before they change their spreadsheets.

  12. They also changed the January 2005 quantity in the two reports though the definition of Greater Virginia remained the same. Not sure what to make of the discrepencies. Makes it impossible to make reliable comparisons without more information.

  13. I posted about this in a new post. Additionally, I contacted the Realtors regarding this discrepency. Thanks to my readers for pointing this out.