Thursday, January 31, 2008

Condo Sales: Solo Piazza

Solo Piazza as described by this site:

DC real estate developer Furioso Development built - and won many accolades for - the Solo Piazza in 2002, when the area was just beginning to not feel like a crime scene in the making, a far cry from its current status as a hip, not inexpensive local. Designed by Bonstra Haresign, the exterior includes colored concrete unit masonry, aluminum framed glass bay windows, and projecting balconies to give dimension from any angle, with the rear of the building curving around an open courtyard with soaring bamboo. Interiors are clean and modern with a warm contemporary feel. Most units offer private balconies, and the building has one of the best roofdecks in the city. A short walk from the 14th Street retail strip, the building also sits across from a gas station and, even less pleasantly, the unsightly Park Princess.

What I want to know is whether this was the first building in DC to have that circular roof ornament that's now become de rigeur in local architecture circles. And when is that mechanic's lien placed in 2003 on several condos going to be taken care of?

Solo Piazza 1300 13th St NW, DC, 20005

Sales Through November 2007

The District has recorded 119 sales of Solo Piazza's 77 units through the end of November. The ownership and sales price for two units is unclear to me despite extensive research of the Recorder of Deed's database.

The table below details the average price, average price per square foot, average unit size, and the number of sale for each unit size at Solo Piazza.

The distribution of sales on a price per square foot basis is depicted below.

For example, 31 units sold for prices between $401-$500/sq ft.

Rental / Resale Activity

By my count, there have been 44 resale transactions since 2002. The table below shows the sales history of the five sold in 2007, each a resale. This building's appraisal data is available so I've been able to calculate price per square foot for each sale.

You may recall I began calculating each sale's CAGR to determine its return to the seller. For example, the first owner of unit #106 had a 33.02% CAGR on the sale made on 9/14/2004. That person received a much lower CAGR on the subsequent resale made on 8/10/2007.

Of course, the CAGR omits all transaction and carrying cost considerations.

When all sales / resales are reviewed since 2002, it's interesting to notice that average sales prices peaked in 2005/2006 and price per square foot peaked in 2005. Based on 2007's sales, prices are retreating to 2004 levels. A harbinger?

As of January 30, I find one unit advertised for rent, unit #804. It's a 2/2 available for $2900 / month.

Three are listed for sale:

  • MLS DC6600034 : Unit #801, listed for $839,000. A 2/2 advertised as 1482 sq ft, the list price is $566.13 / sq ft. According to the District, it was purchased in January 2004 for $704,000.
  • MLS DC6609188: Unit #707, listed for $634,000. It has 2/2 and 1004 sq ft per the listing. Using the District's data, the list price is $631.47 / sq ft. According to the District, it was purchased in September 2005 for $705,000.
  • MLS DC6549760: Unit #608, listed for $629,000. It has 2/2 and 1134 sq ft per the listing on Realtor.com, resulting in a list price of $554.67 / sq ft. According to the District, it was purchased in February 2002 for $477,000.
Given that 2007's sales averaged $519.40 / sq ft, one could conclude that these condos will have to be reduced to move.

Tuesday, January 29, 2008

DC Sales: November 2007

I've finished my analysis of full value residential sales the District recorded in November 2007. Same old, same old. Sales volume in the District is down, condo prices are falling, single family home prices continue to appreciate despite falling sales volume.

All data has been uploaded for viewing on DCHomePrices.com and DCCondoPrices.com.

State of the Market

In November 2007 the District recorded 431 residential sales, 32.87% less than the same month in 2006. Dollar volume fell, too.

Only Ward 6 had positive growth in prices and sales volume; the rest had lower prices and/or sales volume. All but one ward had lower sales volume, some of it quite significant [e.g., -59.12% in Ward 2].

Condo sales continue to dominate Wards 1 and 2. In Ward 1, 76.86% of sales were condos and in Ward 2, 62.59%. More than half of all sales in Ward 1 were rowhouses [57.37%] while detached homes dominated Ward 3 [55.13%].

Distribution of Sales

The chart below shows the distribution of November's recorded sales by sales price.

Changes in the Market YoY

In the aggregate, average prices were up 3.34% and median prices increased 3.47%. Sales volume continued its downward spiral, falling 32.87%; condos fell 39.48% and homes declined 22.96%.

Condos

The number of condos sold [existing and new] fell 39.48% YoY. Average prices rose 1.29% while median prices fell 2.81%. Once again, a factor that may affect the YoY comparison is that a number of new buildings were coming online in November 2006, including Columbia Residences, the Alta, Q14, the Rhapsody, the Whitman, and the Fedora, among others. Sales in Wards 1 and 2 [Dupont Circle / Penn Quarter / Logan Circle] represented 59.55% of total condo sales. One new condo building has come online and others continue to sell their remaining inventory:

Single Family Homes

Overall demand for single family housing is down 22.96%. Average prices flat-lined at 0.17% and median prices grew a stronger 3.94%. All categories of houses had large declines in sales volume. Once again, Ward 3 has the honor of having the highest average and median prices in the District.

Purchase the Data

For $5.00, you can purchase a listing of the November home and condo sales recorded in the District discussed in this post. Information in the listing includes [see below]:

  • Address
  • Sale price and sale date
  • Unit number [if a condo and if available]
  • Price per square foot
  • Square footage
  • The number of bedrooms and baths for each unit


Note:
I use the District's downloadable data, which usually has a 6-12 month lag, meaning that the data doesn't include condos or homes completed within the past year. Data may not be available for all properties. My analysis is dependent upon the completeness and fidelity of the District's appraisal data.

November 2007 Sales ListingsAdd to Cart


Detailed Data

Aggregate by Zip Code

November 2007 average and median sales prices and unit volume by zip code.

Aggregate by Ward

November 2007 average and median sales prices and unit volume by ward.

Category by Zip Code

Category by Ward

Disclaimer:

  • Unlike MRIS, my data and analyses include new units [primarily condos] so there will be some differences in my conclusions about the market's state compared to a similar analysis based solely on MRIS reports, which only report sales of existing units sold and/or listed by real estate agents.
  • This analysis is of sales recorded by the District during the month as opposed to sales settled in the month, which is what MRIS reports, so there may be some discrepancies because of timing issues. However, I believe the data do provide a helpful indicator of trends in the District.
  • My analysis is based on District sales and appraisal data that I've collected and processed. I've deleted those sales that appear to be of questionable data quality. Errors are always possible.
  • My analysis is limited to condos and single family homes; I omit properties the District classifies as multifamily conversions. I'm sure I'm excluding some properties that are legitimate single family homes, but I want to eliminate uncertainty.

Sunday, January 27, 2008

For Condo Renters

Coincidental to my earlier post about a condo "investor" who'd had a lien placed on his "investment" by his condominium's home owner association for non-payment of condo fees, the WaPo published a letter today from a person renting a condo whose owner was being sued for non-payment. Worse, the tenant was listed as a defendant in the suit! The WaPo's advice might be helpful for the many in DC who're renting a condo from "investors" whose condo "investments" have soured.

Not too surprisingly, as negative cash flow from such investments [I'll knock off with the " "] takes it toll, this is becoming a greater problem for condo home owner associations.

Disputes over unpaid assessments are on the rise, said [a lawyer], who also occasionally represents homeowners in disputes with their associations. Historically, community associations' budgets have assumed about a 4 percent delinquency rate. It's more than 6 percent now, she said, a situation that worries many boards. "Every association is focused on it."

Tuesday, January 22, 2008

Dupont Renaissance: Update

Choices, choices.

You may recall my analysis of the Dupont Renaissance, a 15 unit building located on 1704 T St NW, 20009. As I mentioned in the post, within the first month of its closing approximately 75% of its units were being flipped by its "investors." My records show that three have flipped, two with a nominal profit.

I'm now scrubbing the District's sales data for November 2007. As I meander through the data, I've noticed a few units that have recently sold for significantly less than their original sales prices. Random examples:

  • 1125 12th St NW #34. Sold 11/23/2007 for $300,000. Original purchase price: $370,000 on 11/07/2006. Market reduction: 18.9%
  • 3900 D St SE #302. Sold 11/19/2007 for $139,900. Original purchase price: $220,000 on 12/06/2006. Market reduction: 36.4%
  • 1451 Belmont St NW #117. Sold 11/23/2007 for $387,000. Original purchase price: $600,185 on 10/13/2006. Market reduction: 35.5%

Anyway, as I was perusing the Internet to scrub the data, I saw that 1704 T St NW #202 will be auctioned at a foreclosure sale next week, January 31, at 11:04AM. It's a 2/2 of about 900 sq ft. Deposit of $22,000 required. However, I also found that it's listed for sale for $587,000 [MLS ID: DC6612671] or $652/sq ft. It was originally purchased in December 2005 for $529,900.

So a buyer's choices are:

  • Go to the auction next week and get it for a good price if it's still available, or
  • Buy it for a "boom time" price and hand the desperate seller a nominal profit of 10%.

And the seller's choices are:

  • Sell the condo at a loss and minimize damage to his/her credit, or
  • Lose the condo to foreclosure and kiss his/her credit good-bye.

BTW, a unit at Gallery Place Residences is being auctioned at foreclosure, too.

Update: You might want to stay away from #202. The seller hasn't paid his property taxes since 2006 and the condo association put a lien on the condo [since removed] last year. This wouldn't be a pretty one to deal with.

Monday, January 21, 2008

Prescience

In this posting from late 2006, I commented on an article in Fortune magazine entitled "Can the economy survive the housing bust?" Quoting the beginning of the November 2006 article:

Tucked away in the briefcase of Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., is a chart so scary she's hesitant to show it to investors. It plots the National Association of Home Builders' Housing Market index - a monthly measure of builder confidence - against the Standard & Poor's 500 stock market index, with a one-year lag.

It turns out that the mood of builders is a terrific stock market bellwether: The correlation between current builder confidence and future stock market returns over the past ten years is downright unnerving.

Not only did the NAHB index presage the start of the post-1994 bull market in stocks, but its decline starting in 1999 foreshadowed the equity market collapse that came the following year. Builder confidence rebounded in November 2001 - a year ahead of the stock market upswing that began in October 2002.

Why is Sonders worried now? Just look at the chart [Keith: see below]. Over the past year, the NAHB housing index plummeted 54 percent. Were stocks to follow suit, the S&P - 1400 in late October - would be trading below 700 this time next year.

Here's the graph:

So how are builders feeling today? According to a report from the AP last week, not well at all.

A reading of U.S. homebuilders' sentiment remained near a record low in January, as gloom engulfed the housing industry.

The National Association of Home Builders said Wednesday its housing market index, which gauges builders' perceptions of current conditions, interest from potential buyers and expectations for home sales over the next six months, came in at 19 in January — the second-lowest point on record.

The group also revised December's reading downward by one point to a new record low of 18, the lowest result since the index began in 1985.

Here's a graph of the NAHB Housing Market Index for January 2007 to January 2008:

The S&P 500 Index on January 18, 2008 was 1325.19, down 7.09% from January 18, 2007's 1426.37. Assuming Ms. Sonder's theory is correct, then the S&P 500 index should fall 48.57% by December 2008.

To be fair, there were a few boneheaded statements made in that Fortune article, at least from today's perspective.

"The effects of the housing correction will be entirely contained within the housing sector," says Mike Englund, chief economist of Action Economics.

Tuesday, January 15, 2008

MRIS Sales: 2007 Consolidated Data

It'll probably be February before MRIS releases its consolidated report on sales of existing homes and condos [those listed or sold by real estate agents] in the District in 2007. However, I've performed my own analysis using the data I've collected during the year. Key data points for 2007 compared to 2006:

  • Dollar volume was down 3.74% to $3.7B.
  • The average price for a home [single family homes and condos] was up a slight 1.17%, to $532,681.
  • The number of units sold - transaction volume - was down 4.85% to 6,940 homes and condos.

I don't have data for median sales prices and average days on market; that'll have to await MRIS' 2007 report.

Compared to full-year 2006, in 2007 we see:

  • Sales volume. Overall, down 4.85%. Unit sales for single family homes declined 13.02%; condo sales volume grew 4%. Every category of single family home experienced a decline in sales volume in 2007 vice 2006. Condos represented more than half of the units sold, 52.46%.
  • Dollar volume. In aggregate, down 3.74%. Condos were up 3.13% while single family homes were down 7.81%. Dollar volume was negative for every category of single family home except 3 bedroom detached, which rose 3.57%. There was roughly a 60/40 split in share between single family homes and condos.
  • Average sales price. Overall, slightly higher than flat, up a mere 1.17%. Condos fell 0.84% to $404,760 while single family homes rose 5.99% to $673,863. Exdcept for 2 bedroom attached homes, every category of single family housing experienced higher average prices in 2007.

To sum up 2007: Homes made up in sales price what they lost in volume. More condos sold, but for lower prices.

Note that 2006 sales figures were significantly lower than 2005's, the peak of the boom. Comparing 2006 to 2005:

  • Dollar volume was down 22.63% from $4.96B
  • Average sales price was a tad lower, down 0.35% from $528,363
  • Sales volume retreated 22.36% from 9,395 units.

Given that the 2006/2007 rate of decline was not as steep as 2005/2006, it'll be interesting to see whether 2008 marks the bottom of the District's market or that 2007 was simply the eye of the hurricane.

Detailed Data

Average Sales Price

Dollar Volume

Transaction Volume

Monday, January 14, 2008

MRIS Consolidated Data for 2007

I've consolidated MRIS' 2007 data for the District in preparation for a more detailed analysis.

Quick results comparing 2007 to 2006:

  • Dollar volume down 3.74%
  • Average sales price up 1.17%
  • Sales volume down 4.85%

More later.

Saturday, January 12, 2008

MRIS December Housing Report: The Santa Claus rally

MRIS released its report on December sales of existing homes and condos [those listed or sold by real estate agents] in the District on January 10. The data show that condos and single family homes are selling for higher prices despite lower sales volumes. Key YoY data points:

  • Dollar volume was down 13.59%
  • The average price was up 8.75%
  • The median price rose 3.03%
  • The number of units sold - transaction volume - was down, 20.54%%
  • Average days on market increased markedly, 15.94%, to 80 days

In December we see:

  • Sales volume. Overall, down 20.54%. YoY, condo and home sales volume dropped, 26.07% and 14.78% respectively. Sales volume was negative across the board except for 2 bedroom homes. Condos represented less than half of the units sold, 47.46%. From November to December, volume fell 3.45% for condos and rose 10.22% for homes.
  • Dollar volume. In aggregate, down 13.59%. YoY, condos were down almost 24% while homes were down 6.66%, values almost mirroring those for November. Dollar volume was negative for 3 and 4 bedroom homes in general, although detached 3 and 4 bedroom homes had positive growth. Condos' share of the dollar volume, 35.2%, fell compared to December 2006.
  • Average sales price. Overall, up 8.75% YoY. Condos rose 2.85% to $408,012 while homes increased 9.52% YoY to $678,325.
  • Days on market. DOM was 80 days. A closer look shows that slightlyless than 59% 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 month supply of condos, a 12.07% drop from November, while home inventories are at 6.19 month's supply, a 19.17% decrease from October.

Compared to outlying areas such as Loudoun County or Prince William County, VA, the District fared well in December. The former saw declines in average and median prices [-8.05% and -6.82%] and a steep drop in sales volume [-30.51%]; the latter saw large declines in average and median prices [-15.68% and -15.77%] and a 22.54% drop in sales volume.

Looking at the pricing trends chart [see below], 2007 turned out to be a good year for housing in the District. The aggregate average price for homes and condos rose 10.16%. For single family home, average prices are +8.68% for the year [January - December]. Surprisingly, condos had a good year too, seeing a 9.69% gain for the same period. The center is holding. I'll provide an analysis comparing 2007 to 2006 shortly.

Detailed Data

Average Sales Price Trends: 2007

Average Sales Price Trends: Year over Year

Average Sales Price

Dollar Volume

Transaction Volume

Thursday, January 10, 2008

"These boots are made for walking"

It's possible you may recall some comments made on a recent post about 1010 Mass. I don't want to beat a dead horse, but in that post I replied to one comment:

Does "over 75% sold" mean over 75% have closed? If so, it's curious that the Recorder of Deed's office has recorded no deeds.

If it simply means that 75% are under contract, well, "these boots are made for walking."

The last sentence was a tip of the blog to Nancy Sinatra's classic song, "These Boots are Made for Walking" [I must admit I remember when it was new]. In an oblique way, I used that line to refer to people who today are walking away from contracts they'd signed on pre-construction condos when the real estate boom was in full swing.

Although visions of effortless and riskless profits danced in their heads as they signed the contracts and put down their money, the reality of the post-boom market place and the real probability of losing their shirts/blouses once they closed on the condos has encouraged many "buyers" to simply walk away from their contracts and forfeit their deposits.

So why do I bring this up? Well, a reporter for a major metropolitan newspaper contacted me to say he is interested in talking to folks who let their boots do the walking on a District condo. If you're willing to tell your tale, drop me an email with your story and contact info and I'll forward it to the reporter.

Tuesday, January 08, 2008

Ten Ten Mass: I surrender

In several of my most recent posts, I've wondered why I wasn't seeing any closings for units in 1010 Mass even though it looks like the building's been "delivering" units for the past few months.

Fortunately, faithful readers have been kind enough to let me know that, indeed, units have closed in the building. In fact, some closed way back in June 2007.

So I will no longer speculate on why the District has not published recorded sales for 1010 Mass on its web site. I will move beyond anger and denial, skip bargaining, and simply accept that I'm working with data that cannot always be trusted.

Thursday, January 03, 2008

Sales Heat Map: Zip Code 20007

With the holidays and 2007 behind us, I thought I'd restart my heat mapping effort. As I've mentioned in earlier posts, I've been 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 October 2007 [the last full month of data I have in my database] and mapped the average and median 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. I use Google Maps' KML technology to create my heat maps. I haven't found an authoritative reference with the geocodings I need to map each square in the District so I've 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 403 sales in zip code 20007 through the end of October. After excluding anything the District has not designated a home [rowhouse, detached, or semi-detached] or a condo, I'm left with 380 sales to heat map. Of those sales:

  • Condos: 174
  • Row houses: 133
  • Detached homes: 50
  • Semi-detached homes: 23

The chart below shows the distribution of sales in the area. The average sales price for zip code 20007 during this period was $935,986; 72.37% of all home and condo sales were at this price or lower. The median price was $716,500.

Total dollar volume for 2007 sales in 20007 during the period was $355,674,637.

Heat Map

My data is granular enough to allow me to 'heat map' the District on a per square basis. The interactive map below shows sales data for zip code 20007. 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 $200,001 and $400,000. You'll get the exact data when you click the pin.


View Larger Map