Thursday, December 28, 2006

WaPo: $1M Condos built over a soup kitchen

Yesterday's Washington Post had an article about PN Hoffman's latest project, which involves building a 150-unit building on top of a church that runs a soup kitchen for the less fortunate among us. PN Hoffman is confident the building will sell ("I don't think I'm going to have any problem finding 140 families who want to call this building home," DeSantis [PN Hoffman's vice president of sales and marketing] said.)

While one can debate the likelihood of a buyer willing to plunk down $1M for a condo and deal with homeless folks hanging aroung the building, the article included an interesting statement:

Charles Klein, a managing broker in the District for the real estate firm Re/Max, said buyers will be interested if the "units are a knockout" and because they're downtown.

But Klein said so many condos are on the market that buyers have many choices. More than 18,000 condominium units are under construction, planned or proposed, according to the Washington DC Economic Partnership.

"You don't need the soup kitchen to make it a tough sell," Klein said. "It's a tough sell because it's a condo, and if there's anything we need less of now, it's condos. It's like overkill. There must be five years' worth of supply in the pipeline."

So here we are in a tough market for condos and PN Hoffman decides to roll the dice and, to make it even more exciting, adds a soup kitchen to the mix. They're daring or nuts, I don't know which.

Monday, December 11, 2006

MRIS November Housing Report: DC Declines in all categories

MRIS' report on sales of existing homes in DC in November came out last week; I returned from vacation this weekend and have just now had a chance to analyze the data.

Highlights of the report (comparing YoY data):

  • Dollar sales volume: -26.06%
  • Average sales price: -10.96%
  • Median price: -6.82%
  • Days on market: +123.23%
  • Total units sold: -16.96%
  • Average list price for solds: -8.26%

To summarize: fewer houses are selling; those that sell, sell for less; and houses are staying on the market more than twice as many days as last year. This is the first month in 2006 that average prices and sales volume have declined across all categories of housing units (detached, attached, and condos).

Average condo prices declined 13.24% and sales volume declined 2.49%. My operating assumption this year has been given the fact that condos represent such a large share of the District's housding market (49.1% of all units sold in November), the severity of the downturn in the sales of exsiting detached and semi-detached housing units has been masked and is actually worse than reported by MRIS. When condos are excluded, we see that the statistics are bleaker:

  • Dollar sales volume: -31.65%
  • Average sales price: -17.69%
  • Total units sold: -27.37%

On another topic, the District has finally finished posting its data for September (!), so I hope to upload new housing data to shortly.