Monday, June 30, 2008

DC Sales: March 2008

I've [finally] finished my analysis of full value residential sales the District recorded in March 2008. One change I've made this month is to show each housing category's share of the month's dollar volume. I did this to identify categories that may be having an impact on average prices far beyond their share of sales volume.

Case in point:

  • Thirty one houses each sold for more than $1MM. That's 13.25% of all houses [rowhouses, semi- and detached] sold.
  • Those 31 houses, at a total dollar volume of $49,756,530, were 34.88% of the dollar volume for houses.
  • Excluding these 31 houses from the analysis lowers the average sales price for a house by 24.57%, to $459,704.
  • In fact, those 31 houses - 6.01% of all sales recorded in March - represent 20.5% of the District's dollar volume for the month. Excluding them from the analysis lowers the aggregate average sales price 15.3%, to $398,437 [vice $470,155]. All but two of those houses were purchased in Wards 2 and 3.

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

State of the Market

In March 2008 the District recorded 516 residential sales. Although detached homes represented 13.18% of units sold, they comprised more than 25% of the month's dollar volume.

Only one ward, Ward 6 had higher sales volume. Wards 3 and 8 had positive growth in prices; Wards 1, 4 - 7 were negative; Ward 2 split the difference. Ward 7 had the steepest drop in sales volume, down almost 58%.

Condo sales dominated sales in Wards 1, 2, and 6. In Ward 1, 74.19% of sales were condos; Ward 2, 78.05%; and in Ward 6, 65.91%. As in February, Ward 6 accounted for the most condo sales in the District, 30.85%, followed by Ward 2 at 22.7%.

Distribution of Sales

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

Changes in the Market YoY

In the aggregate, average prices were down 8.56% and median prices fell 8.78%. The slump in sales volume continued, spiraling down 35.09%; condos fell 36.49% and homes declined 33.33%. Overall, dollar volume plummeted 40.65%; it was worse for condos, down 49.81% YoY.

Condos

The number of condos sold [existing and new] fell 36.49% YoY, worse than the February performance. Average and median prices were much lower, down 20.98% and 17.74%. Several condo buildings have come online, both new construction (e.g., CityVista) and conversions (Potomac Place Tower). Others continue to sell their remaining inventory (e.g., 1010 Mass):

Single Family Homes

Overall demand for single family housing is down 33.33%. Average prices were up 2.1% and median prices were down 4.55%. All categories of houses had lower sales volume YoY.

Purchase the Data

For $5.00, you can purchase a listing of the March 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 appraisal data to calculate sales price per square foot. This data usually have a 6-12 month lag, or worse, meaning that typically the data don'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.

March 2008 Sales ListingsAdd to Cart


Detailed Data

Aggregate by Zip Code

March 2008 average and median sales prices and unit volume by zip code.

Aggregate by Ward

March 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.
  • Sales may have been recorded by the District's Recorder of Deed during the month yet may not appear in the District's real property sales database, my data source, many months later. Consequently, those sales will not be in the month's analysis.
  • 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.

Wednesday, June 25, 2008

At last!

Sales data for March 2008 has been uploaded and is now available at DCHomePrices.com and DCCondoPrices.com. Analysis is forthcoming.

Tuesday, June 24, 2008

S&P/Case-Shiller: April 2008 report is out

The April 2008 S&P/Case-Shiller report was released today.

Data through April 2008, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show annual declines in the prices of existing single family homes across the United States continued to worsen in April 2008, with all 20 MSAs now posting annual declines, 13 of which are posting record low annual declines, and 10 of which are in double-digits.

For the Washington, DC area, the market's not getting better [see the chart I created using their data below].

The data for the Washington, DC MSA show:

  • For March 2008 to April 2008, a 1.05% decline.
  • For April 2007 to April 2008, the market's declined 14.8%.
  • From its peak in May 2006, the DC area has fallen 19.86%

I'm well aware the S&P/Case-Shiller report for DC covers a very broad area and excludes condos, which are a significant part of the District's market. However, it is an important data point when considering the health of the housing market in the District.

Saturday, June 21, 2008

District Sales: March 2008 [preliminary]

The District has finally posted records of sales recorded in March 2008 in its real property sales database. I've just begun scrubbing the data and have identified a few dubious records. However, the table below reflects preliminary sales figures.

I can guarantee this will change, but it's at least a first glance.

Thursday, June 12, 2008

MRIS May Housing Report: Price Bounce?

MRIS has released its data for signed sales contracts for existing home sales in May 2008. Compared to May 2007, fewer units sold, lower dollar volume, but higher average prices for condos and single family homes. The condo market is still challenged. High end homes are propping up average prices; as I noted in yesterday's post, approximately 10% of units sold were valued at more than $1MM.

Key YoY data points:

  • Dollar volume: Down 17.58%.
  • Units sold: 533, down 22..87%.
  • Average sales price: $ 564,310, up 6.85%.
  • Median sales price: $ 440,000, up 5.01%.

I'm really having a problem with the average prices MRIS is reporting. I'm trying to reconcile how prices can be going UP while dollar and sales volume is DOWN significantly YoY. The fact that the data are not granular makes it difficult to determine the impact higher end homes - those costing more than $1MM - have on skewing the pricing data.

Almost 10% of units [52] sold for more than $1MM and, of those, 7 went under contract for more than $2.5MM. Except for 2 bedroom detached homes, every housing category reported by MRIS had at least two units go under contract for more than $1MM. Assuming 45 sold for $1MM and 7 sold for $2.5MM, then those 52 homes/condos represent 20.78% of May's dollar volume. Subtracting them from the dollar and unit sales volume leaves us 481 homes/condos selling at an average price of $495,379, 12.21% less than reported by MRIS.

Ultimately, I'm beginning to place less value on MRIS' reported average and median price and putting more weight on total dollar volume and unit sales volume to get a sense of the market's pulse.

What I'm seeing in the data [without adjustments for the high end] is:

  • A huge increase in units going under contract in May compared to April - increases MoM of 63.25% for condos and 29.7% for homes.
  • However, for almost every category of housing reported by MRIS, unit sales and dollar volume has fallen dramatically YoY. Condos are down 25% on dollar volume and 27% on unit volume. Homes down 12.14% on dollar volume and 18.13% on unit volume.
  • [Updated 6/14] In aggregate, the average price in the District has risen 1.4% in 2008 [May compared to January]. Average prices for condos are essentially flat for the year [+0.07%] while those for homes have risen 5.05%, compared to January 2008.
  • [Update 6/14] Based on May's sales volume, there's now 6.24 months of inventory for condos and 7.25 months for homes, decreases of 39.67% and 22.94% from April 2008. But, compared to May 2007, the number of condos listed has risen 4.8% and for homes, 22.7%.

Given the huge increase in unit sales MoM despite the lower unit sales and dollar volume YoY, I'm coming to the conclusion that most units are selling for lower prices. Unfortunately, MRIS' data makes it difficult to categorically prove it.

I'd appreciate insights others might offer to resolve this conundrum.

2008 Trends

Average Sales Price


Change in Sales Price

Unit Sales Volume


Detailed Data

Average Sales Price

Dollar Volume

Transaction Volume

Wednesday, June 11, 2008

MRIS May 2008 Sales Report: Preliminary data

MRIS released data on May's sales of existing homes and condos in the District this morning. I won't get a chance to do a full analysis until tonight, but it looks like the market is still challenged.

  • Dollar volume is down 17.58%
  • Number of units sold fell 22.87%
  • Average and median prices are up 6.86% and 5.01%
  • Almost 10% of homes and condos sold - 52 - sold for more than $1MM and 7 of those sold for more than $2.5MM.

At a glance, it looks like the number of condos sold fell 27%, but their average price rose 2.68%.

Update [June 12]: Our A/C died Monday night. We've gone from simply replacing the [34 year old] furnace to that, the indoor coils, and the outside condenser. The net effect is we've spent our evenings at the local Days Inn while awaiting the installation of the new equipment so I've been unable to get to the MRIS data as promised. If all goes well, I should be able to get to it tonight.

Friday, June 06, 2008

Anchor's aweigh!

My parents are celebrating their wedding anniversary by taking the whole family on a cruise to the Bahamas this weekend, so I won't be around for a few days.

I did want to convey that my recent lack of activity here is due more to a paucity of data than anything else.

  • Here it is, early June, and the District still hasn't finished posting March's sales data.
  • I made a valiant effort to map April's foreclosure data, but the data needed so much work that I gave up.

Have a good weekend. I'll have an umbrella drink for each of you.

Sunday, June 01, 2008

Madrigal Lofts: The Bond Trader Discount™

Announcing the Madrigal Lofts Bond Trader Discount™. I got the idea after reading Saturday's WaPo article on the fine art of lowballing real estate offers:

Falling home prices have unleashed bargain hunters offering to pay well below the price listed by sellers.

These bidders see an opportunity to pay a fair price after years of spiraling home values or to get a good deal from a desperate seller. But sellers might view those offers as annoying or even insulting if they are convinced of their homes' value.

The article told the story of a bond investor [more likely, a trader] who was able to buy a condo at the Madrigal Lofts for $60,000 less than the listed price.

As a bond investor, Matt Watson, 26, said he found the lowballing strategy naturally appealing when he began searching for a home. "The way you make money on bonds is by buying it for a low price and making money on the yield. It is the essence of lowballing -- buy low, sell high," Watson said.

Amazing insights, eh?

Watson's first try failed. He attempted to buy a one-bedroom condominium in a new building in Southeast Washington for $270,000, nearly $60,000 off the list price. The developer was willing to negotiate and lowered the price by about $11,000, but Watson decided to move on when it became apparent that he could not wrangle the price below $300,000.

Next he set his sights on the Madrigal Lofts, in a trendy neighborhood near downtown Washington. The condo he wanted was originally listed at $343,900, including a parking space. Watson signed a contract for $283,900, including the coveted place to park his car. He also got $5,000 in closing-cost help.

But it was not an easy process. It became a part-time job as Watson endured four rounds of counteroffers and negotiations, he said. "You have to look for desperation because with desperation comes a willingness to negotiate," he said.

Essentially, this fellow couldn't afford more than $300,000 and he tried a few places before he found one desperate enough to close a sale that it would sell him a new unit within his price range. It was tough slogging, though - he had to "endure" four torturous rounds of counteroffers and negotiations - but he got the place for 17.5% less than the listed price. A tip of the hat to this intrepid young fellow.

Now that Madrigal Lofts [811 4th St NW, 20001] has opened the door for more lowballed offers - I don't see how they can close the barn door now that the bond trader, er, horse has left - here's some information about the building courtesy of these folks:

Madrigal Lofts is a new 12-story condo in Mt. Vernon. Currently priced from low $300k's (Jr. 1 BR) to mid $800k's (penthouse), but prices were dropped by about 10% in January '08. Sales, by Mayhood, began June, 2005, many units still available. Delivery was delayed when contractor Glen Construction went belly-up, but the first units finally settled in December, 2007. This corner building will have a glass front, balconies, and 10' ceilings. The Mt. Vernon area, 4 blocks from Judiciary Square Metro, was once barren, but once contained as many as 9 construction cranes. Development continues nearby, but the status of vacant lots, where the developer was going to build another condo, is uncertain. The city plans to remake K Street into a commercial boulevard, making this at one point the biggest construction zone in DC (now eclipsed by the ballpark). One-beds start at $371,900, two-beds start at $452,900. Developed by Wilkes Co. & Quadrangle; Designed by Davis, Carter, Scott Ltd.

I'm unsure whether the prices quoted reflect the Madrigal Lofts Bond Trader Discount™. However, since according to the District only 48 of the 259 units have sold, I think some negotiating room remains. Call now - maybe you won't have to go through four torturous rounds of counteroffers and negotiations.