Wednesday, November 21, 2007

Bon Jour de Grace

Despite their best efforts, ni cheminots ni professeurs ni fonctionnaires going on strike will stop me from catching my Air France flight to Frankfurt Wednesday night for Thanksgiving dinner in Wiesbaden. I'm just glad I didn't leave Tuesday.

I'll be back the first week of December, raring to go to analyze September's sales in the District and create more heat maps, although mine aren't nearly as neat as these [Firefox required]. At least not yet.

Have a great Thanksgiving.

Sunday, November 18, 2007

Sales Heat Map: Zip Code 20009

Now that I've "heat mapped" 20005, I thought I'd next try my hand at 20009. As part of my continuous effort to understand what is selling where, I've begun analyzing 2007 residential sales per zip code per square to "heat map" the sales. In other words, I've taken 2007 home and condo sales through August 2007 [the last full month of data I have in my database] and, for each zip code, calculated and mapped the average sales price for each square in the zip code.

Squares

All properties in the District - for that matter,everywhere in the US - are identified by the square and lot on which they are located. Compared to 20009, 20005 was a cake walk: 20005 recorded sales in 19 squares while 20009 recorded them in 111. That 'volume' of squares is more than I can depict graphically using my antediluvian methods. Consequently, I used Google Maps' KML technology to create my heat map. I couldn't find a reference with the geocodings I needed for each square in the District so I had to improvise. The resulting map may be a little imprecise, but I believe it's close enough to give you an idea of what's going on.

Sales

According to my database, the District recorded 703 sales in zip code 20009 through the end of August. I've excluded anything the District has not designated a home [rowhouse, detached, or semi-detached] or a condo, leaving 661 sales recorded [multifamily conversions are excluded because I cannot be certain they're truly single family homes]. It turns out that 575 of those sales were condos; of the rest, 81 were rowhouses, 1 was a detached home, and 4 were semi-detached homes.

The chart below shows the distribution of sales in the area. Half [51.1%] of the units sold for $475,000 or less.

Total dollar volume for 2007 sales in 20009 during the period was $338,376,489, roughly four times that of 20005.

Heat Map

My data is granular enough to allow me to 'heat map' the District on a per square basis. My challenge has been finding the right technology to do this at an affordable price using my limited skills. Fortunately, Google Maps offers a solution that I can use without having to become a AJAX/PHP/Javascript coder; I just have to learn KML for zip codes like 20009. The interactive map below shows sales data for zip code 20009. I emphasize interactive because you can click on an icon on the map below and its data will be displayed; you can move and pan the map, too. You do not have to leave this site.

The legend at right explains the colors used for each pin on the map. For example, a yellow pin on a square means the average price for the square is between $700,001 and $850,000. You'll get the exact data when you click the pin.


View Larger Map

I'd appreciate feedback on whether using this type of map is helpful.

Wednesday, November 14, 2007

Sales Heat Map: Zip Code 20005

As part of my continuous effort to understand what is selling where, I've begun analyzing 2007 residential sales per zip code per square. In other words, I've taken 2007 home and condo sales through August 2007 [the last full month of data I have in my database] and, for each zip code, determined sales for each square in the zip code.

For my first such analysis, I thought I'd look at zip code 20005, home to Logan Circle and part of historic Shaw. The area has undergone a lot of renovation and development in the past 10 years; I've reported on quite a few condos that have been built there since 2003 [Lofts 14, Lofts 14 Two, Saxon Court, etc.]. A good friend lives off of Logan Circle so I've spent a fair amount of time in the area in the past four years, which is striking because when I first lived in DC in the late 80s and early 90s, no one ventured to Logan Circle because it was considered a risky neighborhood.

Squares

All properties in the District - for that matter, everywhere in the US - are identified by the square and lot on which they are located. The map below shows the squares for zip code 20005 for which the District recorded sales through August 2007. For example, condos located on the 1400 block of Church St NW are on square 0209. For those who know the area, Whole Foods is on square 0210.

Sales

The district recorded 186 sales in zip code 20005. To be consistent with my previous analyses, I've excluded anything the District has not designated a home [rowhouse, detached, or semi-detached] or a condo, leaving 179 sales recorded through August 2007 [multifamily conversions are excluded because I cannot be certain they're truly single family homes]. It turns out that all 2007 sales for zip code 20005 have been condos; not one single family home has been sold in the zip code.

The chart below shows the distribution of sales in the area. As in previous analyses, more than half of the units sold [97 of 179, or 54.2%] were sold for $450,000 or less; $450,000 seems to be the magic number for the District.

According to the table below, square 0211 has the honor of having the highest average and median sales price recorded in the neighborhood, averaging $554/sq ft.

Total dollar volume for 2007 sales in 20005 is $82,103,001.

Heat Map

One thing I've always wanted to do is depict District sales using a heat map, i.e., using color to indicate price ranges on a spatial basis. My data is granular enough to allow me to 'heat map' the District on a per square basis. My challenge has been finding the right technology to do this at an affordable price using my limited skills. Fortunately, Google Maps offers a solution that I can use without having to become a AJAX/PHP/Javascript coder. The interactive map below shows sales data for zip code 20005. I emphasize interactive because you can click on an icon on the map below and its data will be displayed; you can move and pan the map, too, You do not have to leave this site.

The legend at right explains the colors used for each pin on the map. For example, a yellow pin on a square means the average price for the square is between $551,000 and $650,000. You'll get the exact data when you click the pin.


View Larger Map

I'd appreciate feedback on whether using this type of map is helpful.

Sunday, November 11, 2007

MRIS October Housing Report: Stability?

MRIS released its report on October sales of existing homes and condos [those listed or sold by real estate agents] in the District this weekend. September's YoY data was jaw-droppingly bad, but October's shows that the effects of August's mortgage crackup may be lessening . Key YoY data points:

  • Dollar volume was up 3%
  • The average price was up 5.66%
  • The median price rose 4.73%
  • The number of units sold - transaction volume - was down 2.52%
  • Average days on market fell 4.62% to 62 days

In October we see:

  • Sales volume. Overall, down 2.52%. YoY, condo sales volume was up 5.65% and home sales volume dropped 10.16%. Sales volume was mostly negative across the board, the only bright spot being detached homes with 4+ bedrooms, which had a 10% increase in sales volume. Condos represented 52.37% of the units sold.
  • Dollar volume. In aggregate, up 3%. YoY, dollar volume was positive for both condos and homes. Homes with 2 or fewer bedrooms took it on the chin, experiencing a -44.47% fdecline. Condos constitute 40.66% of the dollar volume.
  • Average sales price. Overall, positive, growing 5.66% YoY. Condos fell 1.33% to $387,792 [despite positive unit sales growth] while homes increased 13.71% YoY to $622,384.
  • Days on market. DOM is 62 days. A closer look shows that more than 60% of all homes sold within 60 days, a performance metric that's been pretty consistent these past few months.
  • Inventory. Based on the month's transaction rates and active listings, there is a 6.83 month supply of condos, a 6.67% drop from September, while home inventories rose to a 8.23 month supply, a decrease of 14.74% from September. Before anyone starts popping the champagne corks, these inventory levels are 65.24% and 57.87% [condos and homes, respectively] higher than August's inventory levels and remain higher than at any point during the year prior to September.

Assuming that September's data reflected the August credit and mortgage meltdown, I suppose October's data may indicate that the market has regained its equilibrium, but inventories remain high.

Looking at the pricing trends chart [see below], it's beginning to look like prices in 2007 will be flat. At a glance, October's average prices are roughly the same as January's.

Although there was no change in transaction volume YoY for attached homes with 4+ bedrooms, their average price grew 19.71%; 8 of 45 sold were sold for more than $1MM.

Detailed Data

Average Sales Price Trends: 2007

Average Sales Price Trends: Year over Year


Average Sales Price

Dollar Volume

Transaction Volume

Friday, November 09, 2007

Update: Saxon Court

One month ago, I wrote about Saxon Court [1440 Church St NW, 20005]. Unit #504 was the catalyst for the article:

MLS DC6536200: Unit #504, listed for $1,595,000. A 2/2.5, advertised as 2300 sq ft although the District's appraisal data states 2167 sq ft. Using the District's data, the list price is $736.04 / sq ft. According to the District, it was purchased in March 2003 for $1,140,456.

It's now available for $1,500,000. Price cut: $95,000.

I also mentioned unit #603:

MLS DC6555662: Unit #603, listed for $995,000. It has 2/2 and 1441 sq ft per the District. Using the District's data, the list price is $690.49 / sq ft. According to the District, it was purchased in June 2005 for $951,000. At this price, the seller will be taking a loss on the sale after an assumed 6% real estate commission is paid.

It can be yours today for $925,000. Price reduction: $70,000.

Finally:

MLS DC6556556: Unit #604, listed for $889,000. It has 2/2 and 1476 sq ft per the District. Using the District's data, the list price is $602.30 / sq ft. According to the District, it was purchased in January 2003 for $619,930.

Apparently, this one is under contract. I'll keep an eye for it when it hits the District's sales database.

For some perspective, in zip code 20005 the median household income is $45,705, the average household income is $69,691. These condos are reducing their list prices by more than most of their neighbors earn in a year. Not that there's anything wrong with that...

Wednesday, November 07, 2007

There is justice in the world

From today's NY Times. Read it and weep [crocodile tears]:

"Wall Street bonuses may be the latest victim of the subprime mortgage collapse and the tight credit market. Over all, bonuses are expected to be flat to down 15 percent, according to compensation experts and Wall Street executives...

But this year, bonuses for some fixed-income professionals, who have been the kings of Wall Street for more than six years, will fall 5 to 20 percent, say analysts and Wall Street executives, while investment banking is expected to be up about 10 percent."

Monday, November 05, 2007

Fortune Magazine to DC: Watch out below!

I received the November 17 issue of Fortune magazine Saturday. It has an interesting article entitled "Real Estate: Buy, Sell, or Hold?" The gist of the article is:

  • There's a long standing relationship between housing prices and rents in each real estate market.
  • Thanks to the real estate boom, the Price/Rents [P/R] ratio in most markets got out of whack.
  • Now that the boom has gone bust, the P/R ratios should begin reverting to their historic averages through a combination of falling housing prices and rising rents.

Fortune calculated the P/R for 54 markets and then determined how large a price decline would "bring prices back to their historical relationship to rents." For the greater DC area, they calculated that the P/R ratio in June 2007 was 26.0 while the 15 year average was 15.9. The magazine estimates that prices in the DC market have to fall 38.9% to "return to normal levels."

To further illustrate how bad it could get, they took the typical high end home and projected its price in five years [a high end home is defined as one selling for double the local median price]. Fortune estimated the typical high end home in the greater DC area sells for $856,000 today; in five years, they project it will sell for $641,000, a 25% drop.

I'll link to the article once [if] it hits Fortune's web site.

Thursday, November 01, 2007

Early Holiday Shopping

Received these in my email this evening. I've already made my list for the holidays, but in case you're still in doubt, this might help.