Wednesday, September 27, 2006

Analysis of August MRIS Sales Data for DC

A constant refrain I hear is that while the DC condo market is tanking, the market for single family homes (SFH) is doing well. Is that true?

At first blush, MRIS's data for August SFH home sales in DC doesn't look too bad once condos are excluded. Except for two categories that experienced small drops - attached homes with 2 or less bedrooms and detached houses with 3 bedrooms - all housing categories experienced price increases in August YoY (see below). The average price for detached homes with 4 or more bedrooms went up 16.5% YoY!

MRIS's summary data doesn't look too good, but one assumes that's because it includes condos. However, further analysis shows that SFH homes are in trouble, too.

When all housing categories (again, condos excluded) are pooled together to gauge the overall market's pricing trend, it turns out that the weighted average price for SFH housing in DC went up only 0.75% YoY in August. And, comparing YoY sales volume, one finds that sales for detached homes were down 48.8% and that of attached homes was down 29.3%.

So the data really shows that for SFH homes, too, pricing momentum has stalled and demand has fallen off the cliff. It'll be interesting to see what September's data shows when it's released by MRIS within the next two weeks.

Tuesday, September 26, 2006

Flipped Houses: Detached Homes (NE)

Of the 96 detached homes flipped in DC between January 2005 and July 2006, 51 sales were in NE DC. The average unadjusted profit was $143,275 and the average days on market was 254. Two houses were flipped twice each; the first sale is highlighted in yellow, the subsequent sale in tourquoise. Four sales were clearly losses for the seller.

Monday, September 25, 2006

Flipped Houses: Detached Homes (NW)

I'm aware that most of my posts have focused on the condo market, which can be explained by the fact that condos constitute about 50% of all housing sales in DC. However, to maintain a "fair and balanced" approach, I've begun researching flips involving single family homes (SFH).

DC groups SFH into three categories: rowhouses, detached houses, and semi-detached houses. My first analysis is of detached houses flipped between January 1, 2005 and July 31, 2006. To be included in the analysis, the home had to have been purchased and then resold during that period; initial purchases pre-dating January 2005 are not included. During the analysis period, 96 detached homes were flipped in DC. Of that number, 31 were sold in NW, 51 in NE, and 14 in SE.

I'll first post information about detached homes sold in NW DC. The table below shows those homes that were flipped in the analysis period, with each sale's profit/loss and days on market (DOM) shown. In the aggregate, the flip of a detached home in NW DC yielded a $119,970 nominal profit after an average 200 DOM.

My analysis depended upon real property sales data available from DC; it's quite possible there are errors in their data (believe me, it happens quite frequently), but I've done my best to either correct the data or delete records with egregious errors that I cannot correct. Two flips in NW DC were excluded from this analysis because I had doubts about the data.

Monday, September 18, 2006

Analysis of July Sales (Part III)

I've posted information on July YoY sales and average/median prices by zip code. When I look at sales by housing type by zip code, it's interesting to see that condos:

  • Comprised 43% of sales
  • Were sold in every zip code in the city except for 20006
  • The largest portion of condo sales (39.7%) were in zip codes 20001 and 20009

Wednesday, September 13, 2006

Quincy Court Condos

The Quincy Court Condos (1117 10th Street NW) closed in late Spring 2006. Through July, five units have been flipped, most recently units 304 ($67,000 nominal profit within 75 days) and 310 ($64,000 nominal profit within 74 days). Unit 1004, purchased for $629,050 in May, is being advertised on craigslist for $724,990.

The building was reported to have 146 units, but DC sales records show that only 119 units have closed through July.

The block this condominium is on has the distinction of having the most housing units sold in DC in 2006 (to date).

Monday, September 11, 2006

Analysis of July Sales (Part II)

Having determined that the July 2006 citywide average and median sales prices were $536,685 and $421,000, respectively, I wondered how each zip code's average and median prices compared to that of the city.

Interestingly, more than half of the zip codes (14) had lower average sales prices while ten had lower median prices.

The three zip codes with the highest average prices were 20007, 20015, and 20016.

Sunday, September 10, 2006

MRIS August Housing Report: DC Home Prices Flatten

Prompted by a posting on DC's craigslist, which asserted that, excluding condos, MRIS data for existing home sales in August showed that the average price for housing in DC had risen approximately 12% YoY, I put the data through the Excel mixer to see what had really happened.

Excluding condos, the weighted average price of housing in DC rose 0.75% Y0Y .

Less than 1%.

And the transaction volume had fallen 35.6%.

DC Condo Prices Fall in August

I just ran an MRIS report for August housing sales in DC; it shows that YoY transaction volumes and prices for condos sold in DC have fallen.
  • Volume: down 32.9% (332 units in 2006, 495 in 2005)
  • Average price: down 12.74% ($391.6K vice $448.7K)
The August transaction volume is in line with what my analysis of DC data for July showed. Since MRIS reported a 6.5% decline in average price for July's sales, the fact that the decline accelerated - almost doubled - in August must be worrying to sellers.

MRIS doesn't break out median prices by type of housing unit, but "eyeballing" the report shows that the median August sales price for condos was approximately $350K. The report also shows that the aggregrate transaction volume (all types of housing units) declined 34.4%.

Note: MRIS reports only sales of existing units. It'll be interesting to see what the data show once DC posts all August sales records next month. I suspect that, as in the past, including the sale of new units will improve the aggregate average price, if not the median.

Analysis of July Sales (Part I)

After posting DC July sales data to last Friday evening, I had a chance Saturday to begin my analysis of the data. At a glance, the data do appear to indicate that the DC real estate market is slowing down, at least in terms of transaction volume if not in terms of prices. This is the first time in 2006 that monthly data show YoY declines in sales of all types of housing units.

Several facts are immediately apparent:
  • In the aggregate, YoY transaction volume is down almost 35% although average and median prices have gone up.
  • For the first time since at least January 2005, condos constitute less than 45% of all units sold.
  • Across the board, YoY transaction volume is down for all types of housing units.

Please understand that my data includes new and existing homes so there may be some discrepancy between my data and that from other sources, such as MRIS, which only report sales of existing units. As I may have mentioned in previous posts, condos typically constitute approximately 50% of housing units sold in DC and given the number of new units closing each month, that may skew my data vice MRIS. However, I get my data from the DC government so I am collecting actual sales data.

MRIS showed that average prices for condos in DC declined 6.5% in July, but since my data include new and existing units, I have to assume sales of new units provided enough price support to show an aggregate 8% gain. However, the median price for condos did fall 1.9%.

Thursday, September 07, 2006

Interesting Economic Analysis on Housing

I found a link to an interesting economic analysis of the housing market on craigslist last night.

It provides an interesting explanation of the drivers of the booming housing market in the first part of the decade and describes a scary prognosis for the country's economic future as the housing boom unwinds.