NoVA Home Sales Increase for 13th Straight Month
The Northern Virginia Association of Realtors reports that:The number of Greater Northern Virginia region homes sold in April was 2,904, a 5.75% increase from April 2008’s total of 2,746 sales. This marks the thirteenth consecutive month of increased year-over-year sales totals for Greater Northern Virginia. The average sales price of $331,600 in April 2009 continues to lag behind the 2008 average by 18.6%. The April 2008 average sales price was $407,500 (see chart above).
Across Greater Northern Virginia, the number of listings showed a decrease from 2008 numbers, with 15,683 listings active, which is 33.2% less than this time last year, when 23,471 homes were available. The average number of days on the market (DOM) for a home sold in April 2009 was 89 compared with last year’s 112 DOM, a decrease of 20.5%.
MP: Although the average sales price in April ($331,600) was down from a year ago by 18.6%, it was up from the average price in March ($317,158) by 4.55%, which was above February's average price of $305,000. The $303,000 average price in January 2009 appears to mark the bottom of the market for Northern Virginia, followed by 3 months of increasing average prices. Now with both unit sales increasing (13 consecutive months) and average home prices increasing (three consecutive months), along with reduced marketing time by 23 days, we can probably conclude that the real estate market in Northern Virginia reached a bottom in January 2009 and is now coming back.
For some perspective, consider that in April of 2006, the average sales price was $507,585, or 53% above the April 2009 average price.
8 Comments:
Mark, have you been using this again?
Followup: The March 2009 Case-Shiller tiered prices for the Washington, DC, MSA are here.
The rollbacks are: lower tier back to 6/2003, middle tier back to 9/2003, upper tier back to 4/2004, overall back to 12/2003.
If prices keep rolling back at the same first derivative rate for another 6 months, at a minimum 25 million homeowners(debtors) in the US will be swimming with the fish by year end 2009.
That's one helluva a water born algae green shoot. :-)
Is not northern VA the home to a substantial number of federal government overpaid bureaucrats? I don't know the percentage, but I suspect that our recession-immune "New Aristocracy" is no small factor in keeping NoVA home sales prices up -- at the expense of the rest of the country.
Holding up one segment of the U.S. economy - home sales - and declaring "severe economic weakness" while ignoring the plethora of improving/good news happening both here around the globe. Hmmmm...talk about cherry picking!
The big hole in the cherry picker's case is, "...markets are 'correcting' in a handful of states and failing to correct in all the others." The reason is simple: because only a handful - primarily CA, AZ, NV, FL, and MI - accounted for roughly 90% of the housing bubble! Prices in the other 45 states didn't get that far out of whack.
Add in the fact that housing affordability is higher today than it's been in who knows how long and it's no wonder most of the country isn't experiencing major real estate headaches.
The second big hole is, "As more mortgages recast in the coming two years, the foreclosure rates will skyrocket." Wrong. The vast majority of homeowners already have their mortgages paid off or are in fixed-rate mortgages (the latter group is getting bigger by the day with all the refis taking place). And with interest rates where they are today vs. where they were a few years ago, those relatively few mortgages that DO reset will likely be resetting at a LOWER rate.
In conclusion, fire sales of foreclosed and distressed properties - although bad for the homeowner - is a good thing for the economy as the term "fire sale" implies panic-selling which implies the real estate bubble is nearly deflated. The sooner the excess inventories are cleaned out - and they're being cleaned out quickly - the sooner the housing market and economy can move on.
To paraphrase, where do the naysayers get this panglossian view of "wilted weeds" from such absolutely wonderful data?
This comment has been removed by the author.
Anonymous said:
The sooner the excess inventories are cleaned out - and they're being cleaned out quickly - the sooner the housing market and economy can move on.Excuse me, but every new foreclosure, pre-foreclosure, and short sale adds to this inventory. Foreclosure rates and delinquency rates are increasing, not decreasing.
The vast majority of homeowners already have their mortgages paid off or are in fixed-rate mortgages (the latter group is getting bigger by the day with all the refis taking place). And with interest rates where they are today vs. where they were a few years ago, those relatively few mortgages that DO reset will likely be resetting at a LOWER rate.You are quibbling. Yes, a majority of mortgages are fixed rate, but there are enough ARMS out there to be a big problem. $1-2 trillion of mortgages are recasting by 2011.
You obviously do not understand the difference between a mortgage resetting and recasting:
http://seekingalpha.com/article/72612-mortgage-resets-subprime-may-be-ending-option-arms-have-just-begun
Option ARMS and Alt-As will not be resetting to lower interest rates like conventional ARMS. Their monthly payments will be tripling when the mortgage hits a certain loan-to-value target or the five year period ends, whichever comes first.
Only people with high incomes, high credit scores, and low loan-to-value ratios are refinancing. That's why there is a large disparity between the all-transactions index and the purchase-only house price index. There is a bias towards refi of high priced homes.
None of the Alt-A or Option ARM mortgages will be eligible for refinancing. The loan-to-value ratios will be too high.
The national inventory of homes rose in the month of April. Rising home sales in some states aren't keeping pace with the foreclosure rate:
http://seattletimes.nwsource.com/html/realestate/2009267386_apushomesales.html
There's a dual market where low-priced homes are in bidding wars but high-priced homes aren't moving at all.
The S&P national house price index was down by a record 19 percent.
“We see no evidence that a recovery in home prices has begun,” said David Blitzer, chairman of S&P's index committee.
“Clear signals (of improvement) would be several months of a trend line, which we don't see,” Mark Riedy said. “It's just too early for me to call something close to a bottom, much less, giving credence to a slowdown in declining prices as being at the bottom.”
“We continue to believe that it is unlikely we are anywhere near a bottom in nationwide home prices,” said Joshua Shapiro, chief U.S. economist for MFR Inc. He estimated that Case-Shiller's index is two-thirds of the way through its ultimate decline.
“Indeed, we project that housing prices will continue to drop into 2010, because foreclosures are still rising and because of high inventory levels,” Patrick Nugent said.
CRE in NoVA is collapsing:
http://washington.bizjournals.com/washington/mobile/stories/2009/06/01/story2.html?b=1243828800%255E1835406
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