Inside Market Conditions (with charts)

Commentary on what's going on in the Northern Virginia and DC Metro real estate markets. Three Northern Virginia counties with charts.
There are 59 articles written on this subject. The most recent 10 are listed here:

Housing market observations: March Madness? NVAR produces new format market reports New market indicators added above the fold Prince William County added to Daily Market Watch A well stated perspective on market forecasting

NOVA Single Family Homes Price Trends Loudoun and Fairfax County Monthly Trend Charts The Northern Virginia Real Estate Guide Is Evolving A spring real estate surge party but few RSVP's Taking the mystery out of days on market

You will find a complete Index of Articles by Category and by Month in the Archives.

October 10, 2007

September is showing a continued downturn in price trends for single family, detached homes under $1,000,000 in the three largest counties in Northern Virginia. Interesting to note is Prince William sales are significantly lower than assessed value while Loudoun and Fairfax are selling at about assessed value (this is indicative of the significant softness in Prince William). What we don't know is the contribution of short sales and bank owned properties to this data. My anecdotal experience working with a current buyer is about half the homes that match our criteria (less than $425,000) are tagged as short sale or third party approval.

Instead of embedding all three charts, here are snapshots of the charts and links to the real ones:

From left to right:
FAIRFAX COUNTY | PRINCE WILLIAM COUNTY | LOUDOUN COUNTY



(Note: Embedding the Fusion Charts considerably slows the page load. Click on the chart images above for a large view.)

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July 19, 2007

The Loudoun and Fairfax County monthly trend charts are updated with June, 2007 data. It is later than normal due to my planned absence. The Loudoun New Construction chart is also updated. All the charts can be found under the topic Market Conditions.

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May 13, 2007

Performed some minor re-arranging, added a bit of self promotion (I apologize in advance) and, here's the biggie: I added the capability to display ALL the Daily Market Watch tables by record or by date going all the way back to when we started saving the records, December 11, 2006. Here's what the controls look like:



View by specific date or simply go backward and forward one record at a time. How cool is this? I thought you might like it. I do. Although, the charts actually tell a better story.

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May 4, 2007

The Northern Virginia 2007 Spring Surge Gala appears to not be well attended. The Daily Market Watch is showing interest in the party starting in early January when inventory rose rapidly but, so was contracting activity. The averages for the last 30 days show contracting activity leveling off or even slightly declining. The good news for sellers that are getting contracts and actually closing is that prices appear to be holding up.

I wonder if we would get more interest if we relaxed the dress code?

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April 19, 2007

Days On Market continues to be somewhat controversial in some areas of the country and widely misunderstood by many readers. The following is a quick tutorial of the meaning as it applies to our MLS (MRIS with a coverage area of the Washington Metro region):

MRIS tracks "days on the market" in two convenient and important ways. They are referred to as DOMM and DOMP:

1. DOMM: Defined as days on the market - MLS. This is the number of days on the market that a property is "active" from the list date of the current listing. Current listing you ask? Yes, current. A home can be withdrawn from the market, a listing may expire or it may be taken "temporarily" off the market for completely valid reasons. The MLS stops counting days (DOMM) for any of the these reasons in addition to a property changing status to "contract." If a property then comes back on the market (for instance: a contract is voided for some reason) with the SAME MLS ID number, counting days in DOMM resumes. In this case, DOMM and DOMP will be equal. Read on to see what happens if a property comes back on the market with a different MLS ID.
   
2. DOMP: Defined as total days on the market for this property. If a listing comes off the market for reasons stated above and then comes back on the market with a new MLS ID within 180 days of the last "off" date, DOMM is reset to zero BUT DOMP continues counting days from the first (original) list date. A property can go on and off the market many times but, as long as it is within 180 days of the last "off" date, DOMP continues counting.
   

DOMP is important because it gives the true picture of how long a property is "really" listed and is designed to keep agents from gaming the system (unfortunately some try) to make an old listing look new. Here are some common questions:

• How is DOMM/DOMP controlled? It is through the unique Tax ID that is assigned every property by the county in which it resides.
• Can a property have more than one MLS ID at the same time? Yes. Some are very valid. In fact, I had a listing in a community of townhouses that were also referred to as "patio homes." To be sure this property was recognized in distinct searches (town home and patio home) I listed it twice. But, because of the tax id, they were linked and both listings tracked the same DOMP even though the "list date was different." After settlement, I closed one with a status of SOLD and withdrew the duplicate. Can't close both with SOLD.
• Are there other ways to "game" the system? Probably. And, some may have figured it out.
• Are there penalties for being caught manipulating DOMM/DOMP? YES from a warning on the first discovery to several thousand dollars in penalties and/or suspension. An agent's broker can be fined too. The key word in the rules and regulations are "material." Days on the market is a material fact that both agents and consumers have a right to know to make an intelligent, informed real estate business decision.
• Are the rules and fines for violations made public? Yes. Here is the link to the MRIS Compliance section of the public Website.

I reacted to a comment made by one reader several months ago that inferred that RE/MAX taught their agents how to manipulate "days on the market." Logic tells me there is too much at risk to agents AND brokers to even think about it. After all, we are trying to make a living in this profession.

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March 15, 2007

Here we are in Northern Virginia with spring like weather in the mid 70's. Thank goodness we are warming. It feels like an earlier than normal spring. The housing market is warming up too! The following are my March Madness observations (taken from the Daily Market Watch data and charts):

Fairfax County

• Inventory and listing activity: After reaching a 12 month low of about 4,000 homes on January 1st, inventory for sale rose a bit and remained somewhat flat through the end of February and is on a slow rise again through the first half of March. It now stands at 4,367 properties. Listing activity nearly doubled in the same period through March 15th and continues on a path to higher levels. New listings are currently averaging nearly 1,700 per month. This trend is what we would expect through this period.
• Contracting and selling activity: The good news for the market is reflected in contracting activity rising 75% during the January through mid-March period. This is also reflected in the number of closings (homes sold) delayed 30 days (average time between a ratified contract and settlement).
• Price: After a steep decline in average price through September of last year, the average sold price bottomed and is holding at about $500,000.

Loudoun County

• Inventory and listing activity: Loudoun trends closely follow Fairfax, the absolute numbers are smaller. After reaching a 12 month low of about 1,900 homes on January 1st, inventory for sale rose a bit and remained somewhat flat through the end of February and is on a slow rise again through the first half of March. It now stands at 2,169 properties. Listing activity more than doubled in the same period through March 15th and continues on a path to higher levels. New listings are currently averaging nearly 750 per month.
• Contracting and selling activity: The same good news for the market in Loudoun is reflected in contracting activity also rising 75% during the January through mid-March period.
• Price: Loudoun home prices also declined rapidly through September of last year. Although a bit more erratic than Fairfax, the average sold price appears to have bottomed and is holding at about $470,000.

Prince William County

• Inventory and listing activity: Prince William trends are quite a bit different. After reaching a 12 month low of about 2,600 homes for sale on January 1st, inventory started rising rather sharply and has not leveled off. As of this date, inventory is 3,250. Listing activity more than doubled in the same period through March 15th and continues on a path to higher levels. New listings are currently averaging nearly 1,100 per month.
• Contracting and selling activity: Not so good news in this area. Although contracting activity is picking up, it is slower than the neighboring counties. Contracting activity is up about 52% in the January through mid-March period. This slower pace is reflected in the faster rise in total listings.
• Price: I have to assume Prince William home prices also declined rapidly through September of last year as I didn't start collecting this data until mid-December. Average sold price appears to have bottomed and is holding in the $390,000 to $400,000 range.

Some ask: "Why are we so focused on the daily aspect of data collection and presentation? Daily changes don't tell us anything." And they are right. Daily numbers in themselves don't tell a story. But, the collection of them over time are invaluable to spotting short term trends that might tell us where the housing market is headed.

Here's the madness in it all:

1. We have an early spring. That's good. I like the warmer weather. Forecasting the weather is a tough science and is often wrong. I suspect it will get cold again. Always does.
2. College basketball is in full swing. Forecasting the winners and losers is any one's best guess. There are Cinderella teams that come out of nowhere and surprise us.
3. Forecasting housing market activity is also difficult at best and is very local. The overall local economy has something to do with it and locally, we seem to be holding our own. How will the dramatic increase in foreclosures going to effect us locally? It will have an impact but probably less significant than other depressed areas around the country (see this article).

We will have a spring bounce. How high this ball bounces is any one's guess. What I do know is that the local economy remains relatively strong, interest rates are flat and holding at lower levels than the last half of 2006. The short term trends are positive, buying activity is increasing. Now just might be the right time to be a buyer.

I am a John Wooden, UCLA basketball fan. When will the dynasty return?

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March 8, 2007

I stumbled upon new market reports being generated for NVAR by the George Mason University Center for Regional Analysis. Reports for the major areas in Northern Virginia and are available by Condos/Coops, Single Family Attached and Single Family Detached. The reports are in chart form and show one one year trends for:

• Close Price vs. Net Price
• Units Sold
• Average Days on Market

Current reporting month data is displayed as a distribution of:

• Units Sold by Price Range
• New Listings by Price Range

Very nice presentation indeed. It appears "new construction" is included in the analysis. Check these out at NVAR Market Reports and January 2007.

The Center for Regional Analysis is noted for their substantial analysis of the local economy and under the direction of professor Stephen Fuller. Here's an excerpt from the George Mason Website:

The George Mason School of Public Policy's Center for Regional Analysis is the authoritative source of information on economic, housing, and employment trends in the Washington, D.C. metropolitan area. The center, under the direction of Stephen Fuller, a Dwight Schar Professor of Public Policy, uses a proprietary econometric input-output model to forecast reliable economic trends and their impact on job creation, housing, commuting, and population growth.

You may also want to check out the Center for Regional Analysis to see the most recent research reports on the local economy and housing.

A good supplement to the charts produced here ;-).

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January 31, 2007

I added some interesting (to me anyway) real estate market indicators to the top of the Front Page. I won't go into a lengthy explanation here; the definitions are at the bottom of the Northern Virginia Daily Market by the Numbers tables.

One of the most interesting is what I might call the Leading Price Indicator (Price ↑↓). This is simple the percentage increase in the list price compared to the list price of current solds (30 day average prices) adjusted by the list to sold percentage. It stands to reason as the average contract list price increases, the average sold price will follow in the short term as those contracts go to closing. This is a short term indicator only.

The other is Backlog. It is simple how many months it would take to sell the current inventory at the current sold rate.

I'll have all these charted in the next few days or so as I have time. Market watchers: enjoy!

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December 14, 2006

ANNOUNCEMENT:
Prince William County, Virginia, one of the largest counties in Northern Virginia and a magnet for homeowners outside the Washington Metro area and the beltway, is added to the Daily Market Watch. Only the tables are implemented as of this date with charts to come soon. Charts implemented December 13, 2006 at Prince William Daily Market Watch.

Initial Observations:

• Active Inventory is higher than Loudoun County
• Average Days on market (domp) is slightly lower than Loudoun
• Average sold price is about $100,000 less (more affordable?)
• The absorption rate is lower than Loudoun and Fairfax indicating greater weakness
• Buyer Intensity is also more negative

All criteria for extracting data is the same as Fairfax and Loudoun counties.

Other Changes:
The LIST PRICE is added to each data category. I will eventually have these charted as well (as time and coding expertise permits). I spent the better part of this morning and afternoon getting the above additions debugged to display properly. Sorry for the delay.

Enjoy!

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December 1, 2006

Finding a great Blog is intriguing because I get to read all the good stuff that I missed not knowing about it. This is a case in point. Steve Berg of the San Diego Home Blog (and husband of Kris Berg, see a previous article) wrote this piece on Bubbleheads, Prognosticators and Shrinkage. Here is the closing paragraph:

The moral of this story is that trying to anticipate the future market and precisely when may be the perfect time to buy or sell is a losing proposition. We, as agents, do have an advantage over all those who are writing the doom and gloom newspaper articles and preparing economic forecasts with only the objective historical data (think Zillow). Our advantage is embodied in the instincts we derive from the everyday "in the trenches" experiences we have simply by listening to buyers and sellers. It might be a mistake to ignore the benefits of these experiences.

I could not have said it better.

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