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Papermill Court NW
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The association is a strong one: a low and consistent monthly fee, no history of special assessments, solid cash reserves, professional management and skilled board members that have been in place for some time now. In the past 12 months, six units have sold for an approximate average of $625 per square foot—well above the $500 per square foot general benchmark for other comparable South of M Street 1980’s associations.
For the most part, units tend to sell quickly, especially renovated, well-positioned properties. Available inventory is even lower than the historic interest rates, and pricing is on the rise. Simply put, units are selling for more and doing so quickly. The recent developments of the Ritz-Carlton, AMC movie theatres, 3303 Water Street, the Shops at Georgetown Park, Washington Harbour and the new waterfront park are game-changers for this exceptional neighborhood. These condominiums have been, and will continue to be, extraordinarily desirable. Don’t expect to see the upward pricing trend change anytime soon.
In last five years, I've sold close to 20 of these properties. If you have any questions, I am here to answer them. Please feel free to forward this message to anyone who would appreciate the information.
Thank you for checking out my video blog today!
Papermill Court NW Snapshot
• 101 units – most duplexes
• Exposed brick walls
• Wood-burning fireplaces
• On-site garage
• Community pool with lifeguard
• Evening security guard• Common area courtyards
• Stellar landscaping including a community herb garden
• Managed by Zalco Realty, Inc.
• Average condo fee is approximately $475 including parking space
• FHA approved – one of only two associations in Georgetown
• No special assessments are planned
• Good owner-occupancy ratio
• Nestled between M and K Streets NW in Georgetown
Monday, July 9, 2012
When Lenders Talk, Borrowers Listen
A Look at the Changing Mortgage Application
Gone are the days when all you needed to get a mortgage was a solid credit score, enough money in the bank to cover a sizable down payment and earning power to combat the famed debt-to-income ratio. Times have changed and they have changed in a big way.
At one point, people could literally walk right into a mortgage lender’s office, sign their names on a simple form and almost as instantly be deemed a homeowner. Of course after years of hard-learned mistakes and some pretty big lawsuits, lenders are now so cautious that there may even be a form before you can apply for a mortgage. In fact, there is.
The very first thing borrowers are made to do for the most part is to go through a preapproval process. Talking (or filling out a form) about all the factors that make the candidate an ideal one, the lender makes the predetermination as to whether this is a viable candidate to consider lending to. How do they do that? Quite simply, a loan officer or mortgage professional tasked to “screen” whether or not you fit the bill as a borrower will ask you some questions and then confirm whether your answers can be vindicated.
In fact, the entire process of mortgage applications has switched gears toward whether or not a person can justify their eligibility as a viable candidate (and healthy borrower). It’s done through intensely scrutinized and highly detailed documentation.
Recent loan applicants will tell you that they have had to endure the most rigorous checking, double-checking – and sometimes even triple checking of the information they provided to their loan officers. It has all come down to one ultimate goal as far as lenders are concerned and it centers on making sure every possible i is dotted and t crossed.
What does all this mean really? And why hadn’t borrowers faced this type of focused scrutiny prior to the late 2000s? Going back to the time when our mortgage market crashed, most consumers were hit hard because of plummeting housing values. That extreme dip in values was a result of a serious oversight on a mass number of erroneous mortgages delivered leading up to when the housing bubble burst. The history of why those bad apples came to the surface lies in the changing face of mortgage delinquencies as they noticeably began to rise in number, inflicting many markets across the nation.
The country’s biggest mortgage insurers learned of fraudulent practices taking place over the years, resulting from inaccurate representations of borrowers’ capacity to really “make good” on those loans. Fannie Mae and Freddie Mac ended up making mortgage businesses buy back these loans, ultimately causing most small and medium mortgage businesses to close their doors for good.
Fast-forward to today and the apparent ripple effect of holding those responsible accountable has touched upon every mortgage application in the system, regardless of the size of establishment providing the loan. Lenders are operating under the notion that as long as a loan’s file is perfect, not much can go wrong. It seems that the most important aspect of underwriting a loan is to ensure that everything possible under the sun is done to make sure it does not pose a threat to the lender as a potential loss.
What can borrowers do to make this process easier? The answer is simple. Give lenders what they want. If they are requesting tax records that date back further than you can remember, make those tax records available. If there is a question as to how much money was in the bank and what source the money came from, clarify it. If your loan officer wants to know why there was an income gap from 1997-1999, show them little Johnny’s birth certificate.
In a nutshell, do what you have to do to make sure all those i’s are dotted and every single t is crossed. Once you have accepted that it’s the only way to find true mortgage obtaining success, things will only get easier.
Gone are the days when all you needed to get a mortgage was a solid credit score, enough money in the bank to cover a sizable down payment and earning power to combat the famed debt-to-income ratio. Times have changed and they have changed in a big way.
At one point, people could literally walk right into a mortgage lender’s office, sign their names on a simple form and almost as instantly be deemed a homeowner. Of course after years of hard-learned mistakes and some pretty big lawsuits, lenders are now so cautious that there may even be a form before you can apply for a mortgage. In fact, there is.
The very first thing borrowers are made to do for the most part is to go through a preapproval process. Talking (or filling out a form) about all the factors that make the candidate an ideal one, the lender makes the predetermination as to whether this is a viable candidate to consider lending to. How do they do that? Quite simply, a loan officer or mortgage professional tasked to “screen” whether or not you fit the bill as a borrower will ask you some questions and then confirm whether your answers can be vindicated.
In fact, the entire process of mortgage applications has switched gears toward whether or not a person can justify their eligibility as a viable candidate (and healthy borrower). It’s done through intensely scrutinized and highly detailed documentation.
Recent loan applicants will tell you that they have had to endure the most rigorous checking, double-checking – and sometimes even triple checking of the information they provided to their loan officers. It has all come down to one ultimate goal as far as lenders are concerned and it centers on making sure every possible i is dotted and t crossed.
What does all this mean really? And why hadn’t borrowers faced this type of focused scrutiny prior to the late 2000s? Going back to the time when our mortgage market crashed, most consumers were hit hard because of plummeting housing values. That extreme dip in values was a result of a serious oversight on a mass number of erroneous mortgages delivered leading up to when the housing bubble burst. The history of why those bad apples came to the surface lies in the changing face of mortgage delinquencies as they noticeably began to rise in number, inflicting many markets across the nation.
The country’s biggest mortgage insurers learned of fraudulent practices taking place over the years, resulting from inaccurate representations of borrowers’ capacity to really “make good” on those loans. Fannie Mae and Freddie Mac ended up making mortgage businesses buy back these loans, ultimately causing most small and medium mortgage businesses to close their doors for good.
Fast-forward to today and the apparent ripple effect of holding those responsible accountable has touched upon every mortgage application in the system, regardless of the size of establishment providing the loan. Lenders are operating under the notion that as long as a loan’s file is perfect, not much can go wrong. It seems that the most important aspect of underwriting a loan is to ensure that everything possible under the sun is done to make sure it does not pose a threat to the lender as a potential loss.
What can borrowers do to make this process easier? The answer is simple. Give lenders what they want. If they are requesting tax records that date back further than you can remember, make those tax records available. If there is a question as to how much money was in the bank and what source the money came from, clarify it. If your loan officer wants to know why there was an income gap from 1997-1999, show them little Johnny’s birth certificate.
In a nutshell, do what you have to do to make sure all those i’s are dotted and every single t is crossed. Once you have accepted that it’s the only way to find true mortgage obtaining success, things will only get easier.
Wednesday, May 30, 2012
Washington, DC Housing Report April 2012
Market Summary
The Washington, DC housing market continued to suffer from a shortage of inventory in April with 33% fewer single-family homes, condominiums and cooperatives on the market than last year according to Real Estate Business Intelligence (RBI). There were 20% fewer new listings compared to April of 2011, but there was still an 11% increase in pending sales for the month. However, this increase came exclusively from the condo/co-op side as it continues to recover from a lackluster 2011 performance.
With the low inventory and high demand for homes, buyers are facing increased competition for homes as multi-offers have become more common. In April, the average days on market fell 19% (from 83 days on average to 67) from last year as 30% of the properties that sold during the month were on the market less than 10 days and 57% listed in April were under contract or sold by the end of May. Seventeen percent of buyers in April were cash buyers, compared to 28% a year ago and to 24% for year-to-date sales.
The median price for properties sold in April was up 13% from April of last year, while the average price remained even. For the first four months of the year, the median price is up 3% and the average price up 4% compared to the same period last year. The bump in median price for the month of April is an indication that the coming months could very well see additional increases higher that the 3% year-to-date increase.
The forecast for the late spring and early summer real estate market is for more of the same. The summer months could see a lessening in intensity as some buyers take a summer vacation from the home-buying process, but with only 2.09 months of inventory it is likely that he current sales pace will continue through the summer and into the fall.
Single Family
The number of new listings for single-family homes was down 17% from April of last year, and the overall number of available homes at the end of April was down 27%. The largest losses came in the block of homes priced below $500,000 (the median price of homes sold in 2012 is $472,000). The were 39% fewer homes on the market from 2012 at this price point, while the top half of the market priced over $500,000 had 10% fewer properties on the market.
At the end of April there was 1.96 months of single-family inventory. This was the first time this number has fallen below two months since August of 2005 -- not so far off the marks set in the Aprils of 2010 and 2011 of 2.31 and 2.60 months, but substantially lower than the 5.64 and 4.60 months of April of 2008 and 2009.
New contracts on single-family homes fell 4% from April of 2011. Only two price categories registered substantial losses from last year. Pending sales of homes priced below $200,000 were down 30% and for home $700,000 and $800,000, down 31%. Homes priced from $800,000 to $900,000 were up 55%, while homes prices from $900,000 to $1,000,000 were up 36%.
For the year to date, sales of single-family homes were down 5.5% from 2011. The largest gains from last year came in the $1.25 million to $1.5 million range (up 59%) and the $600,000 to $700,000 range (up 30%). Sales of homes below $200,000 were down 27%. As the market improves it will become even harder to find lower priced homes in the District, but it is possible that we could see some relief in the middle and upper price points as the year goes on.
The median price of homes sold in the first four months of 2012 is up 5%, while the average price is up 3%. Median prices have now risen 16% from the bottom of the market in 2008, but they are still 11% below the top of the market reached in 2007.
Condominiums and Cooperatives
Condominiums and cooperatives continued their 2012 resurgence with a strong April performance. The number of new contracts on condos and co-ops in April rose 27% from 2011, to register the second best sales month in two years. Pending sales on units priced between $500,000 and $800,000 (25% of the market) were up 77% from last year, while units priced between $200,000 and $300,000 (21% of the market) were up 45%.
Through the first four months of the year, sales of condominium and cooperative units were up 12% from 2011. The highest gains were seen in $400,000 to $600,000 price range, which was up 32%, and in the $1.5 million and up range, which was up 60%.
The inventory of available units has fallen 31% from a year ago, with 23% fewer units coming on the market in April of 2012 compared to 2011. All price ranges under $800,000 have suffered double-digit inventory losses from 2011. The number of units priced over $800,000 is only down 5%. At the end of April there was 2.45 months of available inventory, compared to 4.53 months last year. In 2011, there was over four months of inventory in all but one month of the year. So far in 2012, all but one month has registered less than three months of inventory.
The average price of a condominium/cooperative unit in 2012 is unchanged from 2011. The median price is up by 3%, and has now equaled the high point reached in 2005. Condo/co-op prices have avoided the double-digit, double-dip loss seen in 2009 on the single-family side and have remained more stable since the peak of the market.
Friday, April 27, 2012
Stunned Home Buyers Find the Bidding Wars Are Back
By NICK TIMIRAOS
Wall Street Journal
A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.
From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today's are a result of supply shortages.
"It's a little surprising because we thought bidding wars were done with," said Andy Aley, who is looking to buy his first home in Seattle's Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.
Competitive bidding in the current environment isn't producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.
An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.
"We very much believe we've hit bottom," said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.
The Wall Street Journal's quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. Real-estate agents consider a market balanced when there is a six-month supply of homes for sale. At the height of the housing crisis, in 2008, there was an 11.1-months' supply. In March, there was a 6.3-months' supply.
Inventory levels in many markets were at the lowest level in years. At the current pace of sales, it would take just 1.5 months to sell all the homes listed in Sacramento, Calif., and 2.4 months to sell all the homes listed in Phoenix. San Francisco and Washington, D.C., each have 3.4 months of supply, while Miami has 4.1 months of supply.
Other markets have plenty of homes. Chicago, for example, has 9.4 months of supply, while New York's Long Island has 16.1 months of supply. Even in those markets, the number of houses for sale is edging down.
Increased competition is frustrating buyers and their agents. "We're writing a record number of offers, but we're not seeing a record number of closings and that's because it's so competitive," said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.
Nearly 83% of offers that Redfin agents have made on behalf of clients in the San Francisco Bay area this year and 71% in Southern California have had competing bids. Redfin represented a buyer that made the winning bid on a Gaithersburg, Md., home earlier this month after agreeing to adopt the dog of the seller, who was relocating and looking to find a new home for "Buddy," a white toy poodle.
Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.
In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation's biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.
Banks and other mortgage investors owned nearly 450,000 foreclosed properties at the end of March, and another two million mortgages were in some stage of foreclosure.
Inventories could rise, putting more pressure on prices, if the banks and other lenders step up their efforts to sell their properties. Real-estate agents say they aren't concerned. "There's an enormous appetite for foreclosures. Release the inventory. It will sell," said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands.
The declining inventory of older homes is spurring sales of new homes. New home sales are up 16% so far this year, compared with a year ago, while inventories of new homes fell in March to their lowest level since record keeping began in 1963.
Meritage Homes Corp., a builder based in Scottsdale, Ariz., reported Thursday a 36% increase in orders for the quarter ending in March versus the previous-year period.
Even though bidding wars are pushing prices higher, many homes are still selling for prices far lower than a few years ago. Increased demand is "entirely affordability driven, which tells me there will be strong resistance to price increases" by buyers, says Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm.
Rents are rising at a time when mortgage rates have fallen to very low levels. The result is that the monthly mortgage payment on a median-priced home is lower than any time since the 1990s. Freddie Mac reported on Thursday that mortgage rates fell to 3.88% for the average 30-year fixed rate mortgage, near its lowest recorded level.
Rates are "so low that we can afford a house that was out of our price range before," said Aarthi Srinivasan, who is looking with her husband for a home around Palo Alto, Calif., one of the country's hottest real-estate markets.
Ms. Srinivasan says she fears that prices are being bid up too quickly. She says she had her "aha moment" earlier this year while touring a 50-year-old house that needed extensive remodeling. The home, listed at $1.1 million, received nearly 10 offers and eventually went under contract for more than $1.3 million to a buyer who hadn't even viewed the property.
"There are only so many buyers who are going to be in such a hurry, so we're hoping it'll top off soon," she says. On Monday, they offered to pay more than the $1.2 million list price for a four-bedroom, bank-owned foreclosure. They haven't found out if they made the top bid.
On the other side of those transactions are sellers like Debbie and Bill Wetherell, who had 17 offers in four days for their four-bedroom home in Danville, Calif. "I was floored. It was so fast, it was surreal," says Ms. Wetherell. The home sold on Wednesday for $796,000, more than $50,000 above the asking price.
Still, the sale is for nearly $180,000 less than what they paid for the house in 2005. Ms. Wetherell's husband has commuted to Reno, Nev., for five years and they have decided to relocate.
Housing markets face other headwinds. More than 11 million homeowners owe more than their home is worth. It is a big reason that the "trade-up" market has been stalled. These homeowners can't sell their current homes, let alone come up with the down payment for their next home.
Mortgage-lending standards remain tough. Real-estate agents say an unusually high share of deals are falling apart because homes won't appraise at the price that buyers have agreed to pay sellers.
Still, borrowers with stable jobs are looking to make deals. Kelly Pajela-Fu and her husband offered to pay the asking price of $600,000 for a four-bedroom home in Marblehead, Mass., within a day of the property hitting the market.
"We just knew this house would go quickly," says Ms. Pajela-Fu, a 31-year-old doctor who had lost out on an earlier offer. Their strategy to avoid a bidding war paid off: The sellers accepted their offer before having an open house
Wall Street Journal
A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.
From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today's are a result of supply shortages.
"It's a little surprising because we thought bidding wars were done with," said Andy Aley, who is looking to buy his first home in Seattle's Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.
Competitive bidding in the current environment isn't producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.
An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.
"We very much believe we've hit bottom," said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.
The Wall Street Journal's quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. Real-estate agents consider a market balanced when there is a six-month supply of homes for sale. At the height of the housing crisis, in 2008, there was an 11.1-months' supply. In March, there was a 6.3-months' supply.
Inventory levels in many markets were at the lowest level in years. At the current pace of sales, it would take just 1.5 months to sell all the homes listed in Sacramento, Calif., and 2.4 months to sell all the homes listed in Phoenix. San Francisco and Washington, D.C., each have 3.4 months of supply, while Miami has 4.1 months of supply.
Other markets have plenty of homes. Chicago, for example, has 9.4 months of supply, while New York's Long Island has 16.1 months of supply. Even in those markets, the number of houses for sale is edging down.
Increased competition is frustrating buyers and their agents. "We're writing a record number of offers, but we're not seeing a record number of closings and that's because it's so competitive," said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.
Nearly 83% of offers that Redfin agents have made on behalf of clients in the San Francisco Bay area this year and 71% in Southern California have had competing bids. Redfin represented a buyer that made the winning bid on a Gaithersburg, Md., home earlier this month after agreeing to adopt the dog of the seller, who was relocating and looking to find a new home for "Buddy," a white toy poodle.
Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.
In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation's biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.
Banks and other mortgage investors owned nearly 450,000 foreclosed properties at the end of March, and another two million mortgages were in some stage of foreclosure.
Inventories could rise, putting more pressure on prices, if the banks and other lenders step up their efforts to sell their properties. Real-estate agents say they aren't concerned. "There's an enormous appetite for foreclosures. Release the inventory. It will sell," said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands.
The declining inventory of older homes is spurring sales of new homes. New home sales are up 16% so far this year, compared with a year ago, while inventories of new homes fell in March to their lowest level since record keeping began in 1963.
Meritage Homes Corp., a builder based in Scottsdale, Ariz., reported Thursday a 36% increase in orders for the quarter ending in March versus the previous-year period.
Even though bidding wars are pushing prices higher, many homes are still selling for prices far lower than a few years ago. Increased demand is "entirely affordability driven, which tells me there will be strong resistance to price increases" by buyers, says Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm.
Rents are rising at a time when mortgage rates have fallen to very low levels. The result is that the monthly mortgage payment on a median-priced home is lower than any time since the 1990s. Freddie Mac reported on Thursday that mortgage rates fell to 3.88% for the average 30-year fixed rate mortgage, near its lowest recorded level.
Rates are "so low that we can afford a house that was out of our price range before," said Aarthi Srinivasan, who is looking with her husband for a home around Palo Alto, Calif., one of the country's hottest real-estate markets.
Ms. Srinivasan says she fears that prices are being bid up too quickly. She says she had her "aha moment" earlier this year while touring a 50-year-old house that needed extensive remodeling. The home, listed at $1.1 million, received nearly 10 offers and eventually went under contract for more than $1.3 million to a buyer who hadn't even viewed the property.
"There are only so many buyers who are going to be in such a hurry, so we're hoping it'll top off soon," she says. On Monday, they offered to pay more than the $1.2 million list price for a four-bedroom, bank-owned foreclosure. They haven't found out if they made the top bid.
On the other side of those transactions are sellers like Debbie and Bill Wetherell, who had 17 offers in four days for their four-bedroom home in Danville, Calif. "I was floored. It was so fast, it was surreal," says Ms. Wetherell. The home sold on Wednesday for $796,000, more than $50,000 above the asking price.
Still, the sale is for nearly $180,000 less than what they paid for the house in 2005. Ms. Wetherell's husband has commuted to Reno, Nev., for five years and they have decided to relocate.
Housing markets face other headwinds. More than 11 million homeowners owe more than their home is worth. It is a big reason that the "trade-up" market has been stalled. These homeowners can't sell their current homes, let alone come up with the down payment for their next home.
Mortgage-lending standards remain tough. Real-estate agents say an unusually high share of deals are falling apart because homes won't appraise at the price that buyers have agreed to pay sellers.
Still, borrowers with stable jobs are looking to make deals. Kelly Pajela-Fu and her husband offered to pay the asking price of $600,000 for a four-bedroom home in Marblehead, Mass., within a day of the property hitting the market.
"We just knew this house would go quickly," says Ms. Pajela-Fu, a 31-year-old doctor who had lost out on an earlier offer. Their strategy to avoid a bidding war paid off: The sellers accepted their offer before having an open house
Tuesday, March 13, 2012
Washington home prices rise 6 percent in February
By Sara Kehaulani Goo
The Washington Post
A 'sale' sign is seen outside a house in Alexandria, Virginia in this July 22, 2010 file photo. (MOLLY RILEY - REUTERS)
Home prices in the Washington area rose 6 percent to $317,900 in February, according to a report issued Monday showing encouraging signs that the local housing market is improving.
It’s unclear whether the unseasonably warm weather has anything to do with it but the report showed price increases in all segments of the market. The median sale prices of townhomes, condominiums and co-ops, and single-family homes rose 9.5 percent, 6.8 percent, and 2.8 percent, respectively, in February compared to the same month in 2011.
More encouraging, the number of foreclosure sales plunged nearly 42 percent in February, compared to a year ago. And the percentage of homes for sale that are foreclosures has dropped to 3 percent of the market — the lowest since March 2008. (That compares to last year, when one in 10 homes for sale in the area was a foreclosure.)
“The trends are looking up,” said Corey Hart, of RealEstate Business Intelligence, a division of the region’s multiple listings service, which issues the monthly report. “If supply stays low, there’s nothing in most recent numbers pointing to anything but positives.”
As the housing market has struggled, few sellers have put their home up for sale unless they really needed to. And as a result, the inventory of homes for sale remains at a low not seen since August 2005.
But Hart said that could also mean continued pressure on prices to move them higher. There currently is 2.9 months of supply of homes for sale, which is technically a seller’s market, so long as there are enough buyers interested. While sales activity increased in February with a 1.9 percent rise in contracts compared to a year ago, many potential homeowners have been unable to buy because of stricter lending standards and concern about resale value.
“Should this trend continue where there’s a shortage of inventory, that should have a positive impact on pricing,” Hart said.
Of course, some economists worry about the so-called “shadow inventory” of foreclosed homes that have not yet hit the market, as the states attorneys general worked out a settlement with the five largest banks over foreclosure fraud and robo-signing. But local real estate experts say they don’t expect a new, sizable glut of foreclosures to hit the market suddenly in the Washington area.
The Washington Post
A 'sale' sign is seen outside a house in Alexandria, Virginia in this July 22, 2010 file photo. (MOLLY RILEY - REUTERS)
Home prices in the Washington area rose 6 percent to $317,900 in February, according to a report issued Monday showing encouraging signs that the local housing market is improving.
It’s unclear whether the unseasonably warm weather has anything to do with it but the report showed price increases in all segments of the market. The median sale prices of townhomes, condominiums and co-ops, and single-family homes rose 9.5 percent, 6.8 percent, and 2.8 percent, respectively, in February compared to the same month in 2011.
More encouraging, the number of foreclosure sales plunged nearly 42 percent in February, compared to a year ago. And the percentage of homes for sale that are foreclosures has dropped to 3 percent of the market — the lowest since March 2008. (That compares to last year, when one in 10 homes for sale in the area was a foreclosure.)
“The trends are looking up,” said Corey Hart, of RealEstate Business Intelligence, a division of the region’s multiple listings service, which issues the monthly report. “If supply stays low, there’s nothing in most recent numbers pointing to anything but positives.”
As the housing market has struggled, few sellers have put their home up for sale unless they really needed to. And as a result, the inventory of homes for sale remains at a low not seen since August 2005.
But Hart said that could also mean continued pressure on prices to move them higher. There currently is 2.9 months of supply of homes for sale, which is technically a seller’s market, so long as there are enough buyers interested. While sales activity increased in February with a 1.9 percent rise in contracts compared to a year ago, many potential homeowners have been unable to buy because of stricter lending standards and concern about resale value.
“Should this trend continue where there’s a shortage of inventory, that should have a positive impact on pricing,” Hart said.
Of course, some economists worry about the so-called “shadow inventory” of foreclosed homes that have not yet hit the market, as the states attorneys general worked out a settlement with the five largest banks over foreclosure fraud and robo-signing. But local real estate experts say they don’t expect a new, sizable glut of foreclosures to hit the market suddenly in the Washington area.
Friday, January 27, 2012
2011 Washington DC Housing Report
Market Summary
The 2011 Washington, DC residential real estate market withstood uncertainty in the financial world, rigid credit guidelines, threats to the mortgage interest tax deduction and inventories of single-family homes, condominiums and cooperatives were at their lowest levels in six years. The end result was a 2% decline in sales from 2010, but with only 3.36 month supply of inventory at the end of 2011(compared to 6.2 months nationally) the DC real estate market remained one of the strongest in the country. Average and median prices were on the rise in 2011 (led by strong single-family sales) and with a healthy local and regional economy the forecast is for continued growth in 2012 as we continue to struggle with a lack of inventory.
The main obstacle to a more robust market in 2012 continues to be found in the mortgage industry. Tighter credit guidelines and higher down payment requirements are keeping many willing buyers on the sidelines. On a home seller’s perspective, many who purchased homes in and around 2005 still find themselves underwater (despite rising prices on the single-family side) and unable to sell without taking a loss. These obstacles are having the effect of keeping housing demand in check despite similar conditions during the boom of the mid-2000s (low rates and low inventory), which ironically is a positive effect for the market.
Single Family
Sales of single-family homes in 2011 were down 3 % from 2010, and 31% off the market high set in 2004, ending a two-year streak of year-over-year gains. The previous two years had seen end-of-year gains of 19% and 11% respectively. In 2011, the largest gains occurred in the upper brackets, with homes over $1.5 million up 15% over 2010. Sales of homes priced between $600,000 and $700,000 were up 13% and those priced from $800,000 to $900,000 up by 11%.
This slight decline in sales after two years of positive movement is due almost entirely to the lack of inventory in the market. At the end of the December there were only 825 single-family homes available in the District of Columbia in the Metropolitan Regional Information System (MRIS), a 31% decline from the same point in 2010 and the lowest number of available homes since August of 2005.
The effective inventory of 2.93 months at the end of December was typical of what was seen throughout the year. There was an average of 3.1 months of single-family inventory in 2010 without any month of the year exceeding four months of available inventory. At the end of the year, homes priced from $600,000 to $700,000 had an even lower effective inventory of 1.14 months, and homes priced between $800,000 and $1 million stood at 1.48 months.
The demand for homes combined with the low inventory pushed single-family prices up in 2010, with average prices gaining 5% and median prices gaining 7% over 2010. This was the second consecutive year of price appreciation in this market after reaching the bottom in 2009. Note that despite the gains of the last two years, average prices are still 14% off the high average price point and 15% off the median high, both reached in 2007.
Condominiums and Cooperatives
Sales of condominiums and cooperatives remained virtually even from 2010 to 2011, with only a 0.4% decline. 2011 totals were off 6% from 2009 and off 36% from the high point set in 2005. For 2011, units priced under $150,000 were up by 43% over 2010, while units between $900,000 and $1 million were up 25%. The upper end of the condo/co-op market fared the worst in 2011, with sales of units priced over $1 million down 18% from 2010.
The inventory of available units at the end of December was 26% lower than a year ago and, like DC single-family homes, reached the lowest point seen in over six years. There was a noticeable decline in more affordable units in 2011 with 44% less available inventory under $200,000 by the end of the year.
At the end of December there was 4.04 months of available condo/co-op inventory, higher than the 2.93 months on the single-family side, but still technically a seller’s market. But with Urban Turf reporting 42 new condo projects in the pipeline for the upcoming year in the District, the market should change substantially by the end of 2012 with the strength and resilience of condo demand put to the test.
Average and median prices of condominium and cooperative units each fell 2% from 2010 totals, but are only 3% off the top of the market reached in 2005. With new condo inventory typically at higher price points, it would not be surprising to see prices start to edge up rapidly in the second half of 2012 as these new units start to go to settlement.
Prepared by Fred Kendrick, TTR Sotheby’s International Realty (202-333-1212)
Data from the Greater Capitol Area Association of Realtors (GCAAR) and RealEstate Business Intelligence (RBI)
The 2011 Washington, DC residential real estate market withstood uncertainty in the financial world, rigid credit guidelines, threats to the mortgage interest tax deduction and inventories of single-family homes, condominiums and cooperatives were at their lowest levels in six years. The end result was a 2% decline in sales from 2010, but with only 3.36 month supply of inventory at the end of 2011(compared to 6.2 months nationally) the DC real estate market remained one of the strongest in the country. Average and median prices were on the rise in 2011 (led by strong single-family sales) and with a healthy local and regional economy the forecast is for continued growth in 2012 as we continue to struggle with a lack of inventory.
The main obstacle to a more robust market in 2012 continues to be found in the mortgage industry. Tighter credit guidelines and higher down payment requirements are keeping many willing buyers on the sidelines. On a home seller’s perspective, many who purchased homes in and around 2005 still find themselves underwater (despite rising prices on the single-family side) and unable to sell without taking a loss. These obstacles are having the effect of keeping housing demand in check despite similar conditions during the boom of the mid-2000s (low rates and low inventory), which ironically is a positive effect for the market.
Single Family
Sales of single-family homes in 2011 were down 3 % from 2010, and 31% off the market high set in 2004, ending a two-year streak of year-over-year gains. The previous two years had seen end-of-year gains of 19% and 11% respectively. In 2011, the largest gains occurred in the upper brackets, with homes over $1.5 million up 15% over 2010. Sales of homes priced between $600,000 and $700,000 were up 13% and those priced from $800,000 to $900,000 up by 11%.
This slight decline in sales after two years of positive movement is due almost entirely to the lack of inventory in the market. At the end of the December there were only 825 single-family homes available in the District of Columbia in the Metropolitan Regional Information System (MRIS), a 31% decline from the same point in 2010 and the lowest number of available homes since August of 2005.
The effective inventory of 2.93 months at the end of December was typical of what was seen throughout the year. There was an average of 3.1 months of single-family inventory in 2010 without any month of the year exceeding four months of available inventory. At the end of the year, homes priced from $600,000 to $700,000 had an even lower effective inventory of 1.14 months, and homes priced between $800,000 and $1 million stood at 1.48 months.
The demand for homes combined with the low inventory pushed single-family prices up in 2010, with average prices gaining 5% and median prices gaining 7% over 2010. This was the second consecutive year of price appreciation in this market after reaching the bottom in 2009. Note that despite the gains of the last two years, average prices are still 14% off the high average price point and 15% off the median high, both reached in 2007.
Condominiums and Cooperatives
Sales of condominiums and cooperatives remained virtually even from 2010 to 2011, with only a 0.4% decline. 2011 totals were off 6% from 2009 and off 36% from the high point set in 2005. For 2011, units priced under $150,000 were up by 43% over 2010, while units between $900,000 and $1 million were up 25%. The upper end of the condo/co-op market fared the worst in 2011, with sales of units priced over $1 million down 18% from 2010.
The inventory of available units at the end of December was 26% lower than a year ago and, like DC single-family homes, reached the lowest point seen in over six years. There was a noticeable decline in more affordable units in 2011 with 44% less available inventory under $200,000 by the end of the year.
At the end of December there was 4.04 months of available condo/co-op inventory, higher than the 2.93 months on the single-family side, but still technically a seller’s market. But with Urban Turf reporting 42 new condo projects in the pipeline for the upcoming year in the District, the market should change substantially by the end of 2012 with the strength and resilience of condo demand put to the test.
Average and median prices of condominium and cooperative units each fell 2% from 2010 totals, but are only 3% off the top of the market reached in 2005. With new condo inventory typically at higher price points, it would not be surprising to see prices start to edge up rapidly in the second half of 2012 as these new units start to go to settlement.
Prepared by Fred Kendrick, TTR Sotheby’s International Realty (202-333-1212)
Data from the Greater Capitol Area Association of Realtors (GCAAR) and RealEstate Business Intelligence (RBI)
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