The Mystery of the Thirteen Lockboxes

Above are the lockboxes outside of Quincy Court at 1117 10th St NW. Not quite Logan, not quite NOMA. Near the convention center and loads of other condo/lofts. Walkable to downtown. (A transitional 'hood going from abandoned to "upscale," somewhere on the road from dangerous to no man's land.)

The 13 lockboxes look dramatic and suggest the condo bubble is bursting because there are soooo..... many unsold units. So how come the MLS only has six units listed accordning to ZipRealty?

Upon closer inspection two of the six units are list by JP Real Estate Group and another two by condo marketer McWilliams/Ballard Inc. The JP Group website lists yet another unit as well, so seven total. Sounds fishy. What's going on here? How many units are there? Have the realtors forgotten to remove thier lockboxes after a unit sold? Unlikely.

My dear Watson, units being mothballed by the developer!!! Indubitably. Or maybe not. Prices have begun to creep up, but that could be artificially created by developers holding on to units. If I had deep enough pockets that what I would be doing too.

WashExam: DC Real Estate Market Recovering

WashExam headline says it all: "National, local housing market data mixed, but District shows recovery signs."

In the DC and Inside the Beltway, however, the market is beginning to gain steam, according to real estate broker Donna Evers. Volume is down, prices have started to go up after months of steady declines.

“The closer you get to the city, the hotter the market is,” she said. “If you look across the country, recovery has not occurred; they’re still in 2006 mode. Recovery has certainly occurred in Washington this spring.”

Further evidence of a nacsent turnaround:

• Condo market is healthy;
• "The market is soft if its not priced right"

Another Reason DC Housing Remains Strong

Losing sleep because you worry that mortgage foreclosures will harm the DC housing market? Time to rollover and hit that snooze button.

There were 58 foreclosures in DC in April, compared with 25,198 in California, according to the Bargain Network. Of course, California is a much, much larger market but a high level of foreclosures is not a factor here. For one thing, we have a very stable job base and economy.

So when you read headlines warning about concerns about housing prices and their impact on the DC market: we say forgetaboutit.

The New Mantra for the Slowing Market

"The market is soft if you don't price it right." Repeat.

Elaborating Jane Fairweather of Coldwell Banker in Bethesda told the WaPo "You're now seeing probably 10 to 15 percent of the sellers out there who are going to see multiple contracts. Two years ago, it was probably 40 to 50 percent of the market that got multiple contracts. And the year before that and the year before that, 60 percent of the market got multiple contracts."

Some real estate agents say that, despite key statistics that show the slowest housing market in years, they are seeing cases of multiple bids and rising prices concentrated in close-in neighborhoods such as Chevy Chase DC and American University Park.

Peter Morici, an economic professor in the University of Maryland, added "with higher prices of gasoline, the preference of living far away is going to diminish, and that is going to make housing within the Beltway more attractive."

Further Signs of Chill in the Outer Suburbs

Robert Toll, chairman and chief executive of Toll Brothers, during a conference call Aug. 3 with analysts, said "we do see cooling in some local markets that were red hot a few months ago." Specically demand for McMansions in Las Vegas, New Jersey and the Washington D.C. area have relaxed a bit. Orders for luxury homes that sold in a matter of days or hours now take a couple of weeks, he said.

Is It or Isn't It?

Do I think the residential market is overvalued and all homeowners will lose their shirts soon if not sooner? No. Fear and panic are almost never are the best responses to an uncertain situation. But let's face it, the market must cool. Prices have come too far, too fast not to.

Even if you are now buying at the peak (and no one knows whether you are or not until after the fact), no matter what you will be richer in ten years, if:

• your property is in a gentrifying neighborhood (i.e. U Street),

• you did not wait too long to get into the game and/or

• you did not engage in the equivalent of a nuclear bidding war when you originally bought the place.

Needless to say, the days of buying a property, flipping it after holding for 6 months and then enjoying a 20% jump are over. But that does not mean when prices come down they will drop, say, as fast as when they went up.

We are talking real estate here, not equities. Unlike stocks, which can be dumped in an instant, real property takes longer to sell because of the legalities and because it usually is occupied, possibly by you. In other words, the housing market is less volitile than more liquid market, like high-tech stocks or Dutch tulips. Bottom line, the market soon will fall slowly.

Then again I have been wrong before about the direction of d.c. housing prices. Years ago even before guru Alan Greenspan warned of an over-ripe market, I was saying prices could not go higher. Well I sure was wrong then and could be wrong now.

Any wanna buy a seven-figure one bedroom in Dupont Circle?