May 2007: Market for DC Condos, Single-Family Homes

The Story:




Link: Greater Capital Area Assn. of Realtors

The Dish:
--- Condos: Invetory is down. Contracts up over last year. Prices are flat. No bubble bursting. Neither buyers, nor seller have an advantage, but this could turn into a sellers market.
----Single Family Homes: Supply of new homes to the market is down. No real direction in prices, but they are higher than last year. Again no real advantage for buyers or seller.
---Buyers and sellers should remember the Mantra: "A well priced property will move in this market."

Dow To Hit One Million in 50 Years.

And housing costs in the region will likely soar about 2,800 percent from $477,000 now to $14 million in 2057, reports WTOP. Gasoline dropped in price six cents this week so it will be free in 50 years.

"We already have an affordability problem," said George Mason University professor Stephen Fuller, who directs the school's Center for Regional Analysis. "But this is really scary. It is going to take 11 times the average household income to afford the average-priced house." Ya right.

Anybody want to buy a bridge? How about the Washington Monument?

What's Wrong With Conversions?!?

"The Bad News" On Condos: In Q1 2007, 3,472 condo units that were either in the planning stage or about to come on line in the Washington area were changed to apartments and another 790 were simply canceled, says the WaPo. Sounds like the signs of a healthy market to us because many investors want to own rental units based on the belief that people want to rent in this market.

Need more another sign of health: there were 395 condo contracts in April of 2007 compared with 354 and 434 from the same month in 06 and 07. So April 07 was a good month, not great, not horrific.

We beleive where the bubble is bursting is outside the Beltway, not in DC.

USA Today: DC Condos A Relative Bright Spot

USA Today reported that "Condo sales have propped up residential real estate in the nation's capital this year." This is what DC Bubble has been saying.

While USA Today adds that the median condo price in the District of Columbia in April was $350,000, 4% lower than last year, it fails to note that month-over-month sales have begun to creep back up. For April, the median sales price was $350k, up 2.3 percent since the prior month.

Developers "built a lot of condos in a relatively short period of time," Vanessa de Merode, an agent at Long & Foster, told USA Today. "It slowed the market down. There were larger price adjustments."

The market for single family homes has been more mixed. One of the strongest segments is homes priced from $800,000 to $900,000, said USA Today.

Believe It Or Not: The DC Condo Market Is Healthy

Prices for condos and co-ops in DC have been nudging up this year. We will say it again: prices for condos in DC – not Rockthesda or 703 – are up. The median sales price is $350k, up 2.3 percent since last month.

Sales are up too. In April, there were 395 contracts for condos in DC. That’s an increase of 11.5 percent over the same period last year.

Want more: Inventory is down by 6.3 percent to 1,352 units. Adding to this trend, the number of new units on the market is down 9 percent, with only 640 new units on the market.

Bottom Line: It seems neither buyers, nor sellers, have an advantage, though the balance is tipping toward sellers. See last month's numbers.

source: Greater Capital Area of Realtors

Mixed Bag for Market for DC Houses

Prices for Single-Family homes in DC have pretty flat over the past 12 months. The median price in April was 505k, up 1.3 percent from a month ago.

But sales are down and inventory is growing. In April there were 362 sales, down 14%, over the same period last year. And total market inventory grew to 1334, up 9.25% from the year ago period.

Bottom line: Prices are hold their own so sellers should be pleased, but there are warning signs that should give buyers some hope for better days ahead. See March numbers.

Greater Capital Area of Realtors

DC CONDOS OUTSHINE NATIONAL TREND, HOUSES ON PACE

Nationally, sales of existing single-family homes and condos dropped 8.4% in March adding to the year-on-year decline of 11.3%, said the National Association of Realtors.

But DC condos and co-ops fared significantly better, said DC realtors association. Sales contracts jumped 8% in March 07 compared with March 06. Inventory declined almost 14% too. Not so bad, if you ask us.

Sales of single family homes did not do as well and more or less (ok less) matched the national trend. Contracts in March were 12% fewer than a year ago. But again inventory is down about 4.5% and prices are up almost 10%. So there is some good news there for DC homeowners.

The WaPo picks up the story this way: Existing Home Sales See Highest Monthy Drop Since 1989.

Another Year Of Fewer Crimes and Rising Housing Prices

Well almost. The DC housing bubble has been discussed at length. But crime rates are a different story.

Not since the mid-1980s will DC have endured/enjoyed two years in a row with less than 200 murders. As of Dec. 30, there have been 194 murders in DC compared with 195 for the same date last year when the total number for the year was 198. The last back-to-back years when there were fewer than 200 murders was in 1985 (147 murders) and 1986 (194 murders).

Even better, DC is way off the high water mark when our city was declared "the murder capital." In 1991, there were 481 murders. In fact during each year of the 1989 to 1993 period, DC had over 400 murders annually.

Not surprisingly, the turn around in the DC real estate market also began around this time. Of course, one could argue rising prices were a national trend and DC was just part of it, but then again we could have missed out on the jump altogether. It seems like the two trends fed off of each other here in town. As crime fell, condos were developed and new neighborhoods (U street for instance) became safer and more attractive, which led to even lower crime rates and more development.

AND WHERE DID THAT CRIME GO? In contrast to the situation in DC, Prince George's County has experience a sharp increase in murders with 168 homicides in 2005 compared with 148 the same time last year. Fairfax also experienced a crime wave of its own as murder jumped from 11 to 22. Putting the violence into perspective, even as far back as 1960, DC (81 murders) had more murders then than Fairfax does today.

One Liners

Hoping to ward off a glut, condo and single-family home developers are offering incentives to potential homebuyers.

Three new supermarkets are slated to open in DC in 2006, says the Washington Times. Three stores are opening in the District -- Harris Teeter in Adams Morgan in the old skating rink and on Capitol Hill by the Potomac Avenue metro and a Giant in Van Ness. The timing and newness of these openings seems fuzzy to us.

With arbitration hanging over DC's head, DC and major league baseball met on Saturday, Dec. 31, to discuss ways to manage the cost of building the stadium. Under consideration are: selling development right within the stadium footprint, using a special WMATA fund to pay for metro renovations and getting MLB to kick in more free tix for city youth.