The lovely Byron Condominiums,
"A Luxury Condominium Complex in the Heart of Falls Church"
A person who wishes to remain anonymous sent me illustrative information regarding falling prices in a condo building in Northern Virginia (suburbs of Washington, DC) . Thank you to this individual.
- Developer's site: http://www.thebyron.com/
- HOA's site: http://513westbroad.googlepages.com/
- Location: Google Maps
"Sales data collected from the City of Falls Church real estate assessor's site. The sales are listed in chronological order. There have been 67 residential unit sales, with 18 units still unsold. The most interesting take away from the table is the incredibly significant decrease in the price per square foot. The peak price of $505 / sf was in Dec 2006. The trough to date is $345 / sf in Feb 2008."
"A scatter chart of the Price/sf relative to Date of Sale. Again, incredible."
In October 2006 a 2br condo unit (#404) in this building which has 1814 sq. feet sold for 808,226K. This is 446 per sq. foot. On the floor below it there is unit #304 which has the same layout and size. It sold in February 2008 for 625,000. These two units, #304 and #404, in 2008 were assessed for about the same (less then 1% difference). These units for nearly all purposes are equivalent. However, the price for this type of unit in this building has fallen 22.5% in nominal terms or about 183,000 dollars. In inflation adjusted terms this type of unit is down more more then 25%. Falls Church is an inner suburb. The price per sq. foot has fallen from $446 to $345, or 22.5%. Waiting to buy a housing unit has been prudent over the past few years in the Washington, DC area.
Condo prices are definitely falling in the Washington, DC area. Generally, prices on condos have fallen significantly more then single family housing units. Condo prices have generally fallen 15 - 40% in inflation adjusted dollars from their peak. Expect further prices declines on housing units in the Washington, DC area.
Posts
The HOA site is pretty interesting too...Looks like the board recently approved a $26k special HOA assessment. And many of the recently adopted policies and board minutes deal with renting condo units.
ReplyDeleteIt gets better. Across the street from Byron is the Broadway where there are 5 or 6 units for sale. Catty-corner from the Byron is a new development called the Spectrum which they just slapped up. The sign at the Spectrum says there are "only 8 units left". Out of curiosity, I dialed the # listed for the Spectrum sales office and I got a recording in Spanish. I double checked my dialing to ensure I got the right number and I did.
ReplyDeleteI do not know what sort of time pressure they were under to get the Spectrum up, but there were workmen that were working on Christmas Eve, Christmas Day, and New Year's eve to get the building completed. I know this because I stopped to ask one of the construction guys why he was working on Christmas Eve and he told me in broken English that he just knew they had to get a lot of work done. There is a ton of vacant commercial space on the first floor of the Spectrum and it looks nice--I'm guessing that the assumptions regarding what it would rent for changed dramatically from when the plans were drawn to when the building was completed.
Adding additional supply is another mixed-use development that's going up less than a block away. The Falls Church voters saw fit to vote in favor of additional mixed-use development in Falls Church City, where all of these places are located.
They're all very nice, but I suspect they're having trouble making the numbers work out now that the projects are being completed and the financing environment for their buyers has changed so much.
Certainly the buyers of Units 403 and 503 (both in September 2006) cannot be very pleased!
ReplyDeleteLook for a further 10% drop in values (minimum)...
Great work, David.
ReplyDeleteI can't believe there are still people in denial about the housing problems creeping into even the inner-beltway real estate market.
I am beginning to think they are just trolls, because I am not sure anyone is making that kind of argument publicly anymore.
ARF
I don't remember the unit #, but in 2005 the Byron called and offered to sell me a 1BR + Den for $575K. I like the area, but I can rent in the area for considerably less than the mortgage/HOA/taxes at current levels.
ReplyDeleteFor sale now:
#202: $698,000
#303: $589,900 (paid $647,020) = $421/SF
#309: $738,900
#314: $509,900
#401: $663,900
#413: $368,900 (paid $399,500) = $406/SF
#607: $567,900
Housing starts are up 8.2% in April! Eat that bitches!
ReplyDeleteMay 16, 2008 8:04 PM
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That is misleading because of the following:
-that data has an error rate of almost 50% (revised later on)
-that includes multi-family units (apartment complexes)
So, in conclusion, that number means absolutely f'in nothing. Do some research next time. Eat that idiot!!!
The Byron is an attractive mid rise in the heart of Falls Church. Development was approved by the city council as part of a strategic growth plan designed to increase the number of high-income, no-child residents (high taxpayers requiring few city services).
ReplyDeleteThat strategy was approved by city residents who for years had been paying ever-rising property tax rates and who now benefit from new sales and property taxes generated from the Byron and other new properties which have helped keep tax increases to a minimum. From that narrow perspective, the Byron has been a success for the rest of us who live in Falls Church.
Looking at the most recent history of sale prices at the Byron IS a rather sobering exercise...people simply paid too much and got too little, but really, that is just a snap shot in time for the building which will generate tax revenue for for decades to come.
As for owner-occupants who paid too much during the blow-up, well I suspect they have quite a different perspective on all of this...I hope there aren't too many DINK yuppie couples now trapped in that building who otherwise could be entertaining thoughts of raising a family in a nearby comparably-priced SFH, but I suspect there are actually a few who thought buying into a hyper-marketed "lifestyle", with an exotic mortgage, WAS a smart move when they did it.
AFTER the bubble deflates, as part of a multi-block mixed-use retail-residential "midtown" along the city's busiest traffic corridor, the Byron will be an attractive property for the long-term investor. For NOW, the Byron simply represents the bubble slowly deflating.
bubblegirl said...
ReplyDelete"Do some research next time. Eat that idiot!!!"
Hi Bubblegirl,
If you had followed the link, you would have seen that my post was entirely sarcastic. :-)
robert said...
"Wheeeew. Thanks goodness, more inventory!"
OK, prices are currently falling because of declining demand and homebuilders are now going to increase supply. How does that work out on a supply and demand curve again? Oh yeah! Prices fall REALLY FAST!
Anon, I got it. Yea housing starts! Add more fuel to the flame!
ReplyDeleterobert said...
ReplyDeleteWheeeew. Thanks goodness, more inventory!
ROTFLMAO
The best part is that builders always put up one of each unit into the MLS. This shadow inventory will take years to burn off.
I feel for those construction workers who gave up their holidays. Its not worth it considering the lack of work circa 2009. Hopefully they restart the rail projects (as oil breaks $129/bbl).
Got Popcorn?
Neil
Thx liveoak.
ReplyDeleteWe can all drink single malt Scotch to wait it out.
I've been watching with interest the debates on the pages of the Falls Church News Press, the local weekly, about the recent referendum on the ballot. The city management is very intent on pushing additional growth of these commercial/residential developments. I think they are an eyesore and detract significantly from Falls Church's charm as a small town. They are basically replicating the Ballston-Rosslyn "condo canyon" corridor on Route 7. Why Falls Church needs to continuously expand the tax base is a mystery to me, especially if by doing so they permanently change the character of the city.
ReplyDeleteAnonymous said...
ReplyDeleteHousing starts are up 8.2% in April! Eat that bitches!
Great! this is the favorite part I have been waiting for. Eventually the builders cannot wait on the side lines any longer. They have to improve their bottomlines by continuing building and selling homes.
We all know what happens when they compete with existing home to sell their inventory.
Also notice how monthly sales fell off a cliff beginning in Jan 07.
ReplyDeleterobert said...
ReplyDelete"Anon, I got it. Yea housing starts! Add more fuel to the flame!"
I know you got it. I was just elaborating on your sarcastic remark.
The house, the house,
The house is on fire.
We don't need no bailout,
Let the mother f*cker burn!
mjhlaw,
ReplyDeleteRegarding your comment about "permanently changing the character" of Falls Church...you're right, Falls Church is changing.
Entering Falls Church from Seven Corners on Route 7, there are two side-by-side, overpriced, poorly sited, hideous, hulking McMansions squeezed onto barren lots previously occupied by two modest brick colonials and mature tulip poplar and oak trees. The McMansions are an eyesore...and they're apparently also still empty over one year after construction...thus producing no revenue for the city beyond the property tax.
As for change, it seems to me, that kind of NEW low-density ugliness is as unbecoming the "character" of Falls Church as was the OLD low-density ugliness represented by a rundown seafood restaurant (remember that decrepit Red Lobster the Byron replaced?)
For all their contribution to changing the character of the city, the new mid-rise buildings in the rejuvenated "Midtown" ARE producing BOTH property tax AND retail revenue. I agree that they are an abrupt change from the previous motley mix of single and two-story buildings, but they are hardly comparable to the 20+ story skyscrapers in Ballston or Rosslyn.
Tiny Falls Church is land-locked, and it is being strangled with commuter traffic. With no room to grow "out", the only way is to grow is "up". Higher density in the city center is good land-use. Providing retail shopping opportunities for existing and new high tax-paying residents who live there is good city planning. Yes, it certainly does change the character of the city. I'm simply hoping some of those Route 7 commuters now passing through Falls Church might stop and browse the new shops or have dinner on their way home to wherever they live.
Now, if we can just do something about that blighted strip of low-density hell along Lee Highway toward Fairfax...
I find it interesting that the source of the Byron pricing data is a speculator himself. (He) owns the domain www.expresshomebuyers.com and several others. That source has mailed and dropped >> 1000 datasheets identical in content to that posted on your blog, along with the aside that "it's as if we are doing business with a friend or family member". You can reach him at 800-735-5287 to confirm this.
ReplyDeleteI wonder if my friend or family member would work overtime to drive down even further the price of Byron owners' residences?
With U.S. stock markets, this is a prosecutable offense of interest to the SEC... Hmm...
Times area not easy thats for sure
ReplyDelete