Tuesday, February 26, 2008

S&P/Case-Shiller: DC Worsens

The press release will come out tomorrow, but the latest data for the S&P/Case-Shiller Home Price Index show that the housing market in the DC metro area continues to deteriorate.
  • Month over month [December/November]: Down 2.54%.
  • YoY [December 2007 / December 2006]: Down 9.43%. The December 2007 index for DC is 217.78 vice 240.45 for December 2006.
Looking at month/month comparisons for 2007, the downward trend is accelerating alarmingly. For example, the month/month decline in February 2007 [February/January] was -0.36%. DC's December 2007 index value matches that of March 2005 [217.86]. 
 
As quoted in the NY Times:

U.S. home prices lost 8.9 percent in the final quarter of 2007, Standard & Poor's said Tuesday, marking a full year of declining values and the steepest drop in the 20-year history of its housing index.

''We reached a somber year-end for the housing market in 2007,'' said one of the index's creators Robert Shiller. ''Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look things look bleak."

The S&P/Case-Shiller home price indices, which include a quarterly index, a 20-city index and a 10-city index, reflect year-over-year declines in 17 metropolitan areas with double-digit declines in eight of them.

Will DC hit double-digits in next month's report?

Sunday, February 24, 2008

MRIS: Gaming the system

MRIS has taken a self-serving turn in reporting a home's days on the market (DOM). According to an article in Saturday's WaPo:

When home shoppers see that a house has been on the market for months, they will probably conclude that it's priced too high -- and that there could be room to negotiate a lower offer.

Last week, Metropolitan Regional Information Systems, the Washington area's multiple-listing service, made it easier to hide that information.

[SNIP]

The change allows sellers to withdraw their property from the market for 90 days, then place it back on the market as a new listing. Previously, a seller had to wait 180 days to do that. As a new listing, it gets more attention from buyers, MRIS says. But others say the change favors sellers at the expense of buyers, who may not know to ask about an earlier failed attempt to sell the house.

But wait! It gets better.

The change was made because agents considered the previous six-month resting period too long. Those who favor the new rule say market conditions are changing more rapidly, so 90 days is enough to count as a new market cycle. "The home deserves another look in less than 180 days," said Mary Jo Powell, a spokeswoman for MRIS. The new rule "helps it pop up in the search without changing the facts at all."

Without changing the facts at all? Conceivably, a house that has been on the market for 200 days could, under the change, be reported as having been on the market for only 20 days [90 days listed, 90 days "resting period", 20 days listed]. Bargaining leverage sure changes when a listing goes from 200 DOM to 20 DOM. Not surprisingly, the rule change "was supported by a majority of the 4,169 agents who responded to an MRIS survey."

...an agent with W.C. & A.N. Miller Realtors in Bethesda, supports the change. She said the MRIS argument that 90 days is a full market cycle makes sense because most buyers have found the house they want in that time.

I would buy that argument if 100% of homes were sold within 90 days of listing. However, MRIS' own data shows that in January 2008, only 66% of homes sold had been listed less than 90 days [71% in December, 75% in November].

I guess the local real estate industry believes it better to obfuscate the truth about a home's market condition than give buyers accurate market information. However, buyers aren't the only ones being gamed. Add lenders to the list.

But the way it will change the appraisal side of her business underlines what potentially is the bigger impact -- blunting the bad news of declining prices and sales by presenting a lender with a rosier picture of a neighborhood because houses could show as being sold after fewer days on the market.

[SNIP]

"As an appraiser, I like it," Bradley said of the change. She said she has seen 10 sales fall through in the past six months because lenders would not offer loans at the terms the buyers needed when they saw the patterns of slow sales and dropping prices.

"So many lenders are requiring [reporting of] days on market. When they see 233 days, they kind of freak out," she said.

If the lenders don't see those long times before a sale, they won't call her for clarification about those properties, which she said is "more work on our part."

Ah, that's what we need: the mortgage industry being dealt more bogus information!

Tuesday, February 19, 2008

DC Sales: December 2007

I've finished my analysis of full value residential sales the District recorded in December 2007. Same old, same old [second verse]. 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 December 2007 the District recorded 466 residential sales, 36.86% less than the same month in 2006. Dollar volume fell, too.

Wards 1-3 and 7 had positive growth in prices; every ward had lower sales volume. Condo-dependent Ward 2 had the steepest drop in sales volume, down 55.02%

Condo sales continue to dominate Wards 1 and 2. In Ward 1, 71.05% of sales were condos and in Ward 2, 81.91%. More than half of all sales in Ward 5 were rowhouses [51.22%] while detached homes dominated Ward 3 [42.62%].

Distribution of Sales

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

Changes in the Market YoY

In the aggregate, average prices were up 12.38% while median prices were relatively flat, eking out a 1.14% increase. Sales volume continued its downward spiral, falling 36.86%; condos fell 41.07% and homes declined 30.94%.

Condos

The number of condos sold [existing and new] fell 41.07% YoY. Average prices fell 4.59% and median prices fell 6.14%. Once again, a factor that may affect the YoY comparison is that a number of new buildings were coming online in December 2006, including Columbia Residences, the Alta, Q14, the Rhapsody, the Whitman, the Artisan, and the Fedora, among others. Sales in Wards 1 and 2 [Dupont Circle / Penn Quarter / Logan Circle] represented 51.57% of total condo sales. Sales for TenTenMass are finally appearing in the district's sales database! Several condo buildings have come online (e.g., CityVista) and others continue to sell their remaining inventory (e.g., the Whitman):

Single Family Homes

Overall demand for single family housing is down 30.94%. Average prices jumped 25.68% and median prices leapt 12.7%. All categories of houses had declining sales volume. Once again, Ward 3 has the honor of having the highest average and median prices in the District. I continue to believe the high end homes are skewing the results. For example, one home in Georgetown sold for $7.5M and another in Wesley Heights sold for $3.775M; those two alone represent 7.75% of the dollar volume for single family home sales.

Purchase the Data

For $5.00, you can purchase a listing of the December 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.

December 2007 Sales ListingsAdd to Cart


Detailed Data

Aggregate by Zip Code

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

Aggregate by Ward

December 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, February 17, 2008

Dupont Renaissance: Update on #202

A brief update on the condo at Dupont Renaissance I mentioned in an earlier entry.

It didn't go to auction. It is still for sale, but the price has been reduced from $589,000 to $525,000 [after a brief stop at $587,000] and it's now advertised as a "short sale". Or, as another version of the listing states, "BANK ACCEPTING OFFERS UNDER MORTGAGE BALANCE". The fellow paid $529,900 in November 2005 and took out two loans to get 100% financing.

Property taxes for 2007 are still outstanding and the 2006 taxes were sold at auction last year. Total owed is a little more than $9000.

Saturday, February 16, 2008

December data uploaded

I've uploaded data for residential sales the District recorded in December 2007 to DCHomePrices.com and DCCondoPrices.com; it's available for viewing now. The data analysis is forthcoming.

Wednesday, February 13, 2008

MRIS January Housing Report: It's Ugly Out There

MRIS released its report on January sales of existing homes and condos [those listed or sold by real estate agents] in the District on February 11. It isn't an auspicious beginning to the year.

The data continue to show that condos and single family homes are selling for higher prices despite collapsing sales volumes. I think the high end market continues to distort how well the overall market is performing. Of the 318 units that sold, 34 - or 10.69% - sold for more than $1M. Lacking data granularity, it's hard to discern the dollar volume weighting of those units. However, if each sold for only $1M they'd represent almost 20% of the month's dollar volume.

Key YoY data points:

  • Dollar volume was down 29.81%
  • The average price was up 11.46%
  • The median price rose 11.17%
  • The number of units sold - transaction volume - was down, 37.03%%
  • Average days on market increased 7.41% to 87 days

In January we see:

  • Sales volume. Overall, down 37.03%. YoY, condo and home sales volume dropped through the floor, down 40% and 34.12% respectively. Sales volume was negative across the board. Condos represented less than half of the units sold, 47.17%.
  • Dollar volume. In aggregate, down 29.81%. YoY, condos were down almost 31.16% while homes were down 29.03%. Dollar volume was negative for every category of housing. It really became "which did worse?" The "best" [least worst] performance was -19.07% for attached homes with 4+ bedrooms.
  • Average sales price. Overall, up 11.46% YoY. Condos rose 14.73% to $426,763 while homes increased 7.73% YoY to $672,357.
  • Days on market. DOM was 87 days. A closer look shows that half of all homes sold within 60 days. Ominously, DOM has steadily increased since August 2007, from 59 days then to 62 [October] to 68 [November] to 80 [December] and now 87.
  • Inventory. Based on the month's transaction rates and active listings, there is a 9.5 month supply of condos, a huge 60% increase from December, while home inventories are at 9.14 month's supply, a whopping 41.54% increase from December.

Essentially, January continues a downward trend that began in July. However, it seems that it's gathering steam on its way down.

Detailed Data

Average Sales Price

Dollar Volume

Transaction Volume

Tuesday, February 12, 2008

MRIS January Housing Report: First Glance

I've collected MRIS' data for sales of existing homes and condos in January 2008. I've not had a chance to do extensive analysis, but at first blush it looks like dollar volume and unit sales have fallen off a cliff despite higher average and median prices. I suspect the high end of the market is distorting the market reality. It's telling that days on market is approaching 3 months.

More later.

Saturday, February 09, 2008

Recovery completed

From Mardi Gras, that is. We've returned from warm and sunny New Orleans. I was able to have calas and grits at the Coffee Pot, my partner had at least one fried oyster po' boy [I had two catfish po' boys [on separate days, thank you] made with Leidenheimer bread], and we each had a few strong libations. One thing I love about the Coffee Pot is that the pre-Katrina wait staff is still there. Now it's back to reality in DC [such as it is].

I've downloaded December's sales in the District and have begun scrubbing / processing that data. I may be interrupted as I gather the MRIS statistics for January 2008 sales of existing homes. However, I have created the following tables [see below] to give an overview of sales recorded in the last month of 2007.

One more story about the Coffee Pot. We went there one Saturday in April 2005 as part of the weekend-long celebration of a friend's 50th birthday [the same weekend Pope John Paul II died, I remember St. Louis Cathedral being draped in black]. One of the fellows attending, a native New Orleanian, had come all the way from Reykjavik, Iceland [a place he loathed] to join in the party. He ordered a coffee. After one sip, he told the waitress: "I don't want that tourist water. Bring me a real cup of New Orleans coffee with chicory." She understood completely.

Love that New Orleans. You have to go.

Friday, February 01, 2008

Throw me something, Mister!

We're going to New Orleans for Mardi Gras so I won't be posting for a few days. You can watch all the fun here. I'll be back after I've dried out.

Happy Mardi Gras!