District Sales: 4Q 2008 [preliminary]

I'm still processing District sales for 4Q 2008. Lots more to do, but the tables below should give you an idea of how things looked.

BTW, it looks like my friends at UrbanTurf have proposed sponsoring a happy hour [see this]. I think I'll take them up on their offer.

S&P/Case-Shiller: December 2008 report

The S&P/Case-Shiller Home Price Indices report for December 2008 was released yesterday.

"The broad downturn in the residential real estate market continues,” says David M. Blitzer, Chairman of the Index committee at Standard & Poor’s. “There are very few, if any, pockets of turnaround that one can see in the data. Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight of those MSA’s now with negative rates exceeding 20%.

The DC area's market continues to decline; YoY, prices fell 19.24%. Prices fell 2.3% from November to December. The DC area's home price index is now about equal to that of April 2004.

The charts below reflect home price data for the Washington, DC MSA.

On another note, I read in today's Wall Street Journal that Citibank "chafes under US overseers." Since I always try to solve problems, not gripe about them, I propose a solution below that should ease their chafing, at least until they repay the billions and billions of dollars they received from the US taxpayer.

Decimal Points

I've just corrected 17 of the most egregious data errors in the District's data for sales during 4Q 2008. I learned:

• Decimal points disappear when sales are recorded, hence a $720,592.35 sale is transformed into one for $72,059,235. One error like that I can understand, but 17?
• Of those 17 sales, 12 were foreclosures.
• The Republic of Poland dropped $9.55MM for 3041 Whitehaven St NW. Built in 1927, it has 8 bedrooms, 5 bathrooms, 2 half baths, 6 fireplaces, and is 9422 square feet in size [according to the District's CAMA database. The sales listing says 10 bedrooms, 7 1/2 baths]. Bill and Hillary are neighbors. Apparently it once belonged to Paul Mellon. By the way, this sale was recorded correctly.
  

DC Sales 4Q 2008

I've started processing District sales data for 4Q 2008. The usual data problems have to be fixed, e.g., the $27MM and $72 MM condos, missing addresses, misspelled street names. One tidbit I noticed as I scanned the data is that units are finally closing at the Metropole. This will take me a week to finish...

MRIS January 2009 Housing Report: No let up

MRIS released its data for signed sales contracts for existing home and condos in the District during January 2009 last week. Compared to January 2008, the bloodbath continues: unit sales, dollar volume, average and median sales prices all fell. Key YoY data points:

What I'm seeing in January's data:

• The condo market's freefall continues: unit sales and dollar volume fell 34.67% and 36.99% YoY, respectively. Home sales were no better: unit sales down 7.74%, dollar volume down 24.75%.
• YoY, average prices for condos fell 3.56% while those for homes declined 18.44%.
  
• Based on January's sales volume, there is a 15.66 month inventory of condos listed [a 102.79% increase from December] and 11.94 month's supply for homes [a 41.44% increase]. This, when a 6 month supply indicates a stable market. Compared to January 2008, the number of condos listed is up 7.72%, while home listings grew 15.48%.

Detailed Data

Average Sales Price

Dollar Volume

Transaction Volume

Woof!

It's that time of year again - MARDI GRAS!

February 24 is Mardi Gras day, but my partner and I will be there this weekend for the kickoff. The main event will be the Krewe of Barkus parade on Sunday. If you're in the French Quarter, you'll find us somewhere [walking carefully] along the parade route [see below], libations in hand.

Have a good weekend!

MRIS January 2009 Sales Report: Preliminary data

MRIS released January's data for sales of existing homes in the District and it shows the market isn't improving. Condos continue to take it on the chin. Key points:

• Dollar volume down 29.18%
• Unit sales volume [aggregate] down 20.44%
• Home unit sales down 7.74%
• Condo unit sales down 34.67%

Notably, sales prices were 89.5% of list, the worst I can recall seeing.

At January's sales rate, the condo market has almost a 16 month supply listed for sale.

Analysis forthcoming.

Wall Street in WaPo

I saw this headline in today's WaPo: "Wall Street Slams Plan With Sell-Off." Seems there wasn't enough detail in the plan Secretary of Treasury Geithner announced Tuesday to satisfy Wall Street so the market tanked more than 300 points yesterday.

OK, excuse me while I stand on my soap box. Fair warning, what follows will be neither polite nor pretty.

FUCK WALL STREET and the horse it rode in on!

Detail? They want detail? Those assholes can't tell you what assets they have, what they're worth, and who they owe money to. And they have the nerve to demand detail from Geithner?

FUCK WALL STREET!

OK, I'm off my soap box. We return to our regularly scheduled blog.

CityVista: Rent or Buy?

I noticed in today's WaPo that CityVista is advertising the V at CityVista, the rental component of the three building residential development known as Cityvista. The advertised rents are:

• Studio from $1429
• 1 bedroom from $1985
• 2 bedroom from $2246

Did I mention that they're also offering 2 months free rent and no pet deposits/fees for the first year?

As a public service to those of you who may be considering purchasing a unit at K or L at CityVista [assuming any are left], I thought I'd run the numbers to see whether renting a unit from V at CityVista would be better [ignoring the advertised incentives]. I based my analysis on an L at CityVista unit [2/2, 825 square feet] that sold for $430,900 in June 2008. I extrapolated condo fees using information from my friends at UrbanTurf.

I used the NY Times' rent versus buy calculator to perform the analysis. My input to the calculator: 10% down, 30 year note, 6% interest rate, $345 condo fee, $3663 annual property taxes, 0.46% home insurance / 1.32% renters insurance rate. The trick metric was guessing future home appreciation rates. My instinct is that prices will go down this year (in fact, the District's 2009 assessment for the condo in question is $393,150, 8.7% less than the purchase price), so I tested -1%, 0, and 1% growth rates.

Results. Assuming rents grow 3% annually, at an annual appreciation of:

• -1%, renting beats buying for 14 years.
• 0%, renting beats buying for 9 years.
• 1%, renting beats buying for 4 years.

See the graphic below.

I know:

• Home values may rise sometime in the future. The NY Times' model doesn't account for the ups and downs of home values.
  
• There's an intangible psychological aspect to buying one's own home. It's great to have the freedom to paint a bedroom chartreuse.
  
• There are tax benefits to home ownership. Assuming the buyer is in the 20% bracket, owning that condo will reduce taxes by about $4600 / year. However, the opportunity cost of the $43,000 down payment is a trade-off to consider.
  

However, I have to go with renting at V a CityVista versus buying, at least for the near future. I may be too conservative, but right now I prefer to have $43,000 in the bank than in an asset that may decline another 8.7% this year.

Ward Three Rules!

David Brooks writes in today's NY Times:

What you must realize, above all, is the rich no longer control the economy and its mores. [DC's] Ward Three people do, and their rule has just begun.

Amen, brother! Long may we reign!

It's Monday