Housing Market Situation
Being a homeowner in the Washington, DC area as of 2004, this article has me concerned. The article is only eight sentences long, but tells the recent history of the housing market succinctly in ~20 graphs of the year over year % change of home prices in twenty major cities. Houses in the Washington, DC area between the years of 2001 and 2004 were increasing at a rate of about 10-15% per year, and spiked around 26%, but in 2006-2007 have showed a major dip down to -5%. From this chart, they expect DC prices to drop another 4.2% in 2008 over 2007 prices. Ouch.
Not a good situation for those who bought in 2005-06.
A couple years ago, I agreed with most people in the area: There would be no bubble bursting for the DC housing market, but the twenty graphs for cities all over the country beg to differ. You can look at this situation two ways: 1) With all the prices in the area dropping and the slowing of the market, this can be a great time to buy or 2) If you want to sell your house, you might have lost some equity in the last two years, so if you can’t afford that, you might have to hunker down and hold onto your property until the market recovers. With the current trends, who knows - it could be 2-5 years until the prices turn around. The results are disturbing in that all but one city (Charlotte) is on the decline. Kudos to a couple of my friends that decided to jump ship from the DC area, and buy places in Charlotte. I knew it’d be a hot market, but compared to DC, what the heck are you going to do when you’re in Charlotte?
Charlotte’s the only city profiled with housing prices on the rise.
I’m lucky enough to have decent equity built up in my house so I can sit around for a little while but I’m always on the lookout for my next potential home. This set of graphs really spells out the US housing situation, and for a numbers and metrics guy like me, less words and more graphs make it all the easier to understand. My only complaint is that the chart should have a standardized y-axis so that each city’s line is relative and easily comparable. This is data presentation 101. Otherwise, to the untrained eye, someone might not see the benefit of buying in 2001 and selling in 2005 in DC vs. Charlotte. (For a $200k house, an increase of ~140k vs. only ~21k in DC and Charlotte, respectively). What to do, what to do…only time will tell.
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Yay charts! Charlotte with see a “market correction” in a few years, it’s just behind the curve because people are still jumping ship to the area. I think the trend in DC is certainly worth watching but I don’t consider it alarm. Anyone who bought in ‘06 and didn’t expect their house to decrease in value, even for a couple years, was drinkin’ the kool aid.
Wow that english mine of suck.
Good point about Charlotte experiencing a market correction in a couple years…and…your English didn’t improve much on the second comment!
That was kinda the point so I tried to go way out there… guess it didn’t work.
also… if you own in Arlington the concerns aren’t as great as the “DC Metro Area”. a lot of that decrease really impacted the suburbs but Arlington wasn’t really hit hard. if you’re near the city (and especially near the metro) it’s not nearly as bleak as if you bought out in the boondocks.
right, i think that’s true to an extent, but I think everyone has taken at least a small hit. -5% isn’t much, but it’s not +13%. The people who really have to worry are ones who bought condos in the boondocks (where there’s definitely no metro)…if you’re far out and you don’t have a lot of land, space and close by amenities, there’s not much incentive for someone to swoop in and buy your crib.