Tuesday, February 27, 2007

As Housing Run Ends and Reverses, Property Assesments Fall

In Northern Virginia the runup in housing prices came to an end and prices are now declining. Acoordingly, property assessments are down.

A six-year run of double-digit percentage increases in Fairfax County home assessments came to an abrupt end yesterday, as notices mailed to taxpayers showed that their properties have lost value for the first time since 1998.

Fairfax's falling assessments are consistent with declines reported by other Northern Virginia localities in recent weeks. In Loudoun County, the average assessed value of a single-family home dropped 7.1 percent. Preliminary estimates show a 4 percent drop in Prince William County. Arlington County housing values are down eight - tenths of a percent, and Alexandria's average fell about 3 percent.

Under Virginia law, property assessment are valued to be at "100 percent of fair market value. The Virginia Supreme Court has provided the following definition of fair market value: The fair market value of a property is the price which it will bring when it is offered for sale by one who desires, but is not obliged, to sell it, and is bought by one who is under no necessity of having it."

The declining assesments are more evidence that this housing market is undergoing significant decline. Expect further declines in property assessments next year.

Friday, February 23, 2007

January 2007 MRIS Numbers

The new monthly numbers for January 2007 are out from the MRIS (Metropolitan Regional Information Systems) the multiple listing service for the area. YoY = Year over Year, that is the comparison between January 2007 and January 2006. These numbers include all housing units ( not just single family residences, but also condos and co-ops).

The housing market in the Washington and Baltimore area had already started declining in fall 2005. Thus the year over year comparisons only represent a portion of the declining housing market.

Northern Virginia (Fairfax County, Fairfax City, Arlington County, Alexandria City, & Falls Church City, VA (NVAR))

  • Median Price: $455K
  • Median Sales Price YoY: 0%
  • Average Sales Price YoY: -.1%
  • Total Units Sold YoY: 10%
  • Average Days on Market YoY: 82%
  • Active Listings YoY: 18%
Baltimore City Area (Anne Arundel, Baltimore City/County, Carroll, Harford, Howard (BALT AREA) )

  • Median Price: $265k
  • Median Sales Price YoY: 6.0%
  • Average Sales Price YoY: 4.3%
  • Total Units Sold YoY: 4%
  • Average Days on Market YoY: 69%
  • Active Listings YoY: 39%
Washington, DC (just the District of Columbia, no suburbs)

  • Median Price: $385k
  • Median Sales Price YoY: -3.7%
  • Average Sales Price YoY: -3.9%
  • Total Units Sold YoY: 18%
  • Average Days on Market YoY: 80%
  • Active Listings YoY: 20%
Prince George's County, MD

  • Median Price: $330K
  • Median Sales Price YoY: 6.5%
  • Average Sales Price YoY: 4%
  • Total Units Sold YoY: -20%
  • Average Days on Market YoY: 95%
  • Active Listings YoY: 83%

Montgomery County, MD

  • Median Price: $435K
  • Median Sales Price YoY: 2.4%
  • Average Sales Price YoY: 1.3%
  • Total Units Sold YoY: -2%
  • Average Days on Market YoY: 118%
  • Active Listings YoY: 34%

Loudoun County, VA

  • Median Price: $420K
  • Median Sales Price YoY: -10.4%
  • Average Sales Price YoY: 0%
  • Total Units Sold YoY: -5%
  • Average Days on Market YoY: 119%
  • Active Listings YoY: 4%
Arlington County, VA

  • Median Price: $435K
  • Median Sales Price YoY: -16.8%
  • Average Sales Price YoY:-15.4%
  • Total Units Sold YoY: 3%
  • Average Days on Market YoY: 61%
  • Active Listings YoY: 16%
Fairfax County, VA

  • Median Price: $456K
  • Median Sales Price YoY: 1.4%
  • Average Sales Price YoY: 3.7%
  • Total Units Sold YoY: 12%
  • Average Days on Market YoY: 86%
  • Active Listings YoY: 18%

For more numbers on jurisdictions not mentioned here please go to MRIS Market Statistics.

These numbers are in sharp contrast to what occur ed between January 2005 to January 2006. For example in Northern Virginia (NVAR):

December 06 YoY Median Sales Price: 11%
December 07 YoY Median Sales Price: 0%

That is a turnaround of 11% which goes to show the significant change this market has shown.

On the surface these numbers would seem to indicate a mixed bag with some jurisdictions showing rising and others showing declining median sales price Year over Year growth.

However, if one looks more closely at individual categories one finds that there ha been significant declines in certain subcategories:

Loudoun County,

  • Condos & Coops: -18% YoY [From $ 323,438 Average to $264,945 Average ]
  • Attached 3br Residential Units: -10% YoY [From $ 323,438 Average to $ 264,945 Average]

Washington, DC

  • Condos & Coops: -8.6% YoY [From $ 407,11 Average to $371,9675 Average ]
  • Attached 2br or Less Residential Units: -3.7% YoY [From $ 371,293 Average to $ 357,643 Average]

The housing market in the Washington, DC area is in decline. The above numbers are nominal dollars, looking at real dollars (inflation adjusted) the declines are even greater.

The Washington - Baltimore area will not have a spring bounce that will save the housing market from further declines in 2007. In the metropolitan area a declining housing market is a reality.

Thursday, February 22, 2007

Farewell to The Southern Maryland Housing Bubble News Blog

The Southern Maryland Housing Bubble News Blog has ceased operations. Patch Tuesday, the blogs founder wrote
I pulled the plug on the Southern Maryland Blog. The REIC is collapsing under its own weight now, so I felt like my work was done, and it's time to move on to other pursuits. Special thanks to David and everyone that supported the blog.
The Southern Maryland Housing Bubble News Blog (SMHBN) was a high quality blog that offered insightful commentary. Patch, if you want to post something you can email me and I'll be glad to post your thoughts on Bubble Meter. :-) SMHBN stood strong fighting the Real Estate Industrial Complex (REIC). We will surely miss Patch.

Tuesday, February 20, 2007

Mortgage Daily News Attacks David Lereah

Mortgage Daily News Attacks David Lereah & the National Association of Realtors

But did you notice a trend in the figures reported above? Not only is Lehreah's forecast typically optimistic, but while the report did say that sales were down or prices fell in this region or that, the only specific areas which were mentioned (Salt Lake, Pittsfield, Port Arthur) were where sales improved or prices were up. The report went so far as to fall back on reporting that typical sellers in metropolitan areas "experienced healthy gains on the value of their homes over the last five years in almost all 131 available areas, even in areas with recent price declines." Yeah, we know. It was called "the bubble."

If the market appears to be bad in your state, we are sorry we cannot tell you where you are vis-vis the overall statistics. If the situation in your area improved in terms of sales or price appreciation, NAR trumpeted that information but if your metro area or state is in trouble you will have to learn about it elsewhere. Perhaps we can tell you when the quarterly same house report from the Office of Federal Housing Enterprise Oversight is issued later this month.

NAR stands to lose credibility unless it also loses its Pollyanna approach to reporting the data for which it pretty much holds a monopoly. Realtors and by extension their customers and clients, rely on this information to price homes and set business strategy. It is time that NAR bites the bullet and get real about the full measure of statistics it collects. It is a public service to do so and even the most transparent of cover-ups eventually has drastic consequences.

The media should do more to attack on the half truths, fact manipulation and blatant cheerleading that the Natioanl Association of Realtors and other in the Real Estate Indsutrial Complex (REIC) regularly engage in. Enough is enough!

Wednesday, February 14, 2007

BubbleSphere Roundup

News of the housing market's continuing decline keeps rolling in. I have been slacking off recently when it comes to blogging. :-( Thankfully, we have many excellent blogs to help track and make sense of all this information. Check the links on the sidebar.

Paper Money reports on January's New Construction Report. Paper Money eloquently writes "Reported as showing the slowest pace of housing starts in more than nine years, yesterday’s “New Residential Construction” report seemed to have shaken Wall Streets confidence that the housing decline is in the process of stabilizing. That is, until bullish optimists ran with the notion that this report signaled a good sign for housing as it indicated that home builders were working through inventories and reducing production."

Calculated Risk
continues to do an outstanding job reporting about the economy. In a post titled Subprime: The impact on Existing Home Sales in 2007, Mr. Calculated Risk asks "What will be the impact of tighter lending standards in the subprime mortgage market on existing home sales?"

David Lereah's primary residence and Alexandria condo both drop in value.

Locally, DC Housing Bubble Blues, Southern Maryland Housing Bubble News, Baltimore Metro Area Housing Blog continue to report about the housing bubble in the Washington - Baltimore Metro area. Frankly Realty has joined the blogging effort anbd is based in the Commonwealth of Virginia. One of his posts warns buyers about Exclusive Buyer Agency Contracts. Don't Sign Them... Yet."

CondoFlip.com Flops

The Condoflip.com website which was proudly declared that "Bubble Are for Bathtubs" is now longer operational. The site has been 'retired.' Instead there is now a website called Condo Super Center. They explain what happened:
How Did The Market Change in 2004 and Beyond? We saw a dramatic shift in how preconstruction condos were bought and sold. The condo boom was driven by overly-ambitious speculators, many of whom had been successful in flipping condos in the past. As condo inventories grew and prices rose many speculators realized that further purchasing was increasingly risky. So, buyers just stopped buying.

What Kinds of Results Did Condo Flip See? We saw thousands of sellers, and very few buyers. It didn't make sense for us to maintain a marketplace where there were few buyers

That is the supply of condos has now overwhelmed the demand. Much of the demand for condos in the Miami during the 2001 - 2005 period was speculators anyway. Despite, the meltdown in the Miami condo market. The site goes on and writes:

We have NOT seen prices drop, nor do we expect them to drop. The rapid appreciation, however, seems to have stabilized to about 5-7% per year.

No. Prices for individual condo units are down in the Miami area as speculators are trying to unload unwanted properties. Back on July 18th, 2006, I wondered how long this site would last "We will see how long this internet based condo flipping company lasts. This gives a whole new meaning to dot condo."

Friday, February 09, 2007

NAR Email Ad Campaign

Sales Agents for Mica Condos Promoting Toxic Mortgages

-----Ad for Mica Condos in Silver Spring, MD-----

Own at MICA for Less Than You Think--and Nothing Down!*

The best value in urban living is well within reach. In fact, it's right here at MICA. Now you can own a sunny, spacious one-bedroom MICA condominium for only $1,315.20** a month--with NO down payment. It sure beats renting!

Base Price $304,900

First Mortgage $762.25
Other Financing $374.71
Real Estate Taxes $254.08
Condo Fee $392
Estimated Monthly Tax Savings ($500)
Total Monthly Payment $1,315.20**

**Terms and Conditions: Based on a sales price of $304,900; no down payment required. First-year payment quoted based on interest-only first trust for 60 months with a 2/1 temporary buydown off the note rate of 5.75%: first year, $762.25; second year, $965.52; years 3-5, $1168.78; interest-only second trust, $374.71 (note rate of 7.375%); property taxes, $254.08; condo fee, $392.00; total monthly payment for first year, $1,783.04; estimated monthly tax savings, $500.00; net monthly payment after tax savings, $1,315.20. Net monthly tax savings based on a 28% tax bracket. First trust APR, 8.356%. Limited offer, valid only for qualified buyers purchasing a primary residence. Prices, taxes and terms subject to change without notice. Please see sales manager or on-site loan officer for details.

Silverton Condos

Seven lockboxes on one of the gates of there cently built Silverton Condominiums in downtown Silver Spring, MD. Picture was taken on Feb 7th 2007. Silver Spring, MD is an inner suburb of Washington, DC. There has been a huge increase in the number of condo units in downtown silver spring in the past few years. More condo units are under various stages of construction

Silverton Condos (from the northwest side)

Tuesday, February 06, 2007

Various Items

I'm back in the Washington, DC area. My trip was amazing. I'm glad to be back and blog posts will be much more frequent.

Go to Virginia MLS to check current inventory levels for Northern Virginia. Listings are
  • Available: 12677
  • Total Listings: 15875

Since the beginning of the year the total listings have slightly increased from 15,530 to today's 15,875 listings.

"ForeclosuresMass.com, which reports monthly on the foreclosure filings in the state's Land Court, said filings increased nearly 70 percent from 2005, and that the pace accelerated at the end of last year. In the final quarter of last year, there were twice as many filings -- 6,525 -- as in the same period in 2005." (Boston Globe)

The Metropolitan Regional Information Systems MRIS will be releasing its yearly numbers soon.

Mid-February is when MRIS releases Year End Statistical Reports on mris.com. The release date is based on the February first deadline for agents to submit their comparable data for production awards purposes. The MRIS Statistics Group then leaves itself two weeks in which to thoroughly review and cleanse the data, ensuring you accurate results.

Bubble Meter will be reporting and analyzing this data once it is available.