You Got Punk'd by the Media -- Arlington Real Estate Market Stats

Market News--Arlington VA Real Estate, Northern Virginia & DC

Media Predicts 25% Decrease in Arlington Virginia Home Values?

Once in awhile I get so frustrated about the lack of either forthrightness, common sense or expertise demonstrated by various real estate media sources both locally and nationally.  A classic example recently came out in this article in BusinessWeek titled Housing Meltdown.

    It stated that housing prices would come down 25% with some of their sources claiming up to 40%.  Nowhere in the article is any strong point for how hyperlocal real estate is including Arlington real estate for sale.  Such stories are in essence fear mongering & hype when no disclaimers or explanations are given for how the story has almost nothing to do with any particular reader's local real estate market.   That's my grind with the real estate media hypesters--a totally irresponsible portrayal of data without clarifying how "unlocal" their info and forecasts are to any particular reader.

For those of you who don't want the whole story here's the bottom line on the real estate market in Arlington Virginia.

Average sold price for 2007 versus 2006 for Arlington county real estate was +1.45% and # of units sold was flat (+0.26%).  This is hardly the precipitous market place portrayed by BusinessWeek hypesters and the "experts" they interviewed.    In fact these are the kind of stories that have been reported for the past 2 years.  Except for quick correction in condos over a year ago things have been fairly stable here price wise.  You want to know who your experts really are in today's world on your local marketplace?  I'll tell you who--your local Arlington real estate bloggers.  There are several of us and the same goes for almost any city where there are real estate 2.0 practitioners.  Why?  Because to write with any substance the real estate consultant--I don't use the word "realtor" anymore for various reasons--must study the markets a lot and they tend to have their pulse on the marketplace compared to regular realtors or media types.  And real estate bloggers also tend to be passionate about transparency meaning if I don't know about the market I'll say "I don't know."  So you get to avoid a lot "fluff"--fluff being a euphimism. 

Extreme Real Estate Quotes from BusinessWeek

BusinessWeek Article 

"And that could be just the start. Brace yourself: Home prices could sink an additional 25% over the next two or three years, returning values to their 2000 levels in inflation-adjusted terms. That's even with the Federal Reserve's half-percentage-point rate cut on Jan. 30"

"While a 25% decline is unprecedented in modern times, some economists are beginning to talk about it. "We now see potential for another 25% to 30% downside over the next two years," says David A. Rosenberg, North American economist for Merrill Lynch (MER), who until recently had expected a much smaller slide."

"Pessimists aren't impressed. One of the first high-profile bears on housing, Ian Shepherdson of consulting firm High Frequency Economics, is looking for a 20% decline in prices from their peak but says 40% wouldn't shock him. "We've never been here before, so there's no road map," he says."

More Perspective on the Arlington County Market &  Clarendon Real Estate

 For Clarendon (22201) the median sales price has been +2, +6, -7% the past 3 months of Dec 2007, Jan 2008 and Feb 2008.  That is pretty standard in terms of monthly fluctuations.  One really can't tell much from looking at month to month #s because by chance a few expensive units could sell such a $900,000 2BR at the Mercer & Wooster Lofts that distort the more common sales prices in a zip code.  One thing that stands out is that there seems to be more inventory with 941 active listings in Feb 2008 for Arlington VA (entire county)  versus 722 active listings in Feb 2007. 

This 30% increase in the # of listings tells me that some of the county wide price averages will have to come down.  How much is debatable.  And it could be that a strong Spring/summer will erase the higher inventory at the start of the year.  Nobody knows so deal with it.   I'm hearing about a lot of units being sold in various condos and seeing a good number quick sales.  In fact for 22201 and Clarendon VA real estate the average Days on Market (DOM) has been -7, -40 & -50% compared to a year ago for Dec/Jan/Feb.  That means the listings have been flying off the shelves so to speak compared to a year ago.  However for Arlington VA as a whole the average DOM hasn't changed much.

I know of communities where price have gone up a bit and vice versa.  There are different real estate trends looking at quarterly reports for different Arlington Virginia zip codes.  And within those zip codes the trends and data are different dependent on the type of real estate: condo, single family house or townhouse.  And they are also different depending on the building if you are looking at condos.  The conclusion?

Conclusions to Clarendon Real Estate Reports & Market Data in General

Real estate is hyperlocal and therefore keep in mind the following:

• take media stories with a grain of salt...seriously
• national media stories are almost completely irrelvant to your situation
• what's happening market data wise depends on the type of home you are interested, its zip code and or its building among many other factors
• find the home you want and then analyze its niche market data to buy the home for a fair or below market price if you have extra time (can take several contracts)
• hire a real estate consultant who knows what the heck they're doing
  

Related Links:

• Housing Meltdown
• Ouch! Buyer Loses $40,000 -- Don't Be a Floater

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Date: Sunday, March, 16th 2008 @ 10:52:13 AM
Views: 2111

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