D.C. prices down 25% from peak!

[Jack Seiden]

I was looking through some local mls data and D.C. proper is down 25% from the peak’s in June (725k vs 545k), Montgomery county is down 17% (620k vs 515k) not a shock to me, but still crazy to actually see in the data.

[Nicholas L.]

@Jack Seiden

interesting. is there a break-out between home types - like SFH vs condo vs multi?

[Chris Seveney]

@Jack Seiden

Be more specific what that data is? I don’t believe a $600k home is now worth $450k (ie a price drop of 25%)

[Jack Seiden]

Quote from @Chris Seveney:

@Jack Seiden

Be more specific what that data is? I don’t believe a $600k home is now worth $450k (ie a price drop of 25%)

 This is median price according to Gccar stats (I literally sold a row home for 735k at the peak, would be worth aboit 550-575k) while I’m sure this has something to do with the composition of sales, but that what’s makes is a median.

[Bill B.]

That’s awesome. I would definitely buy it back for $180k less. That’s pure profit to you. Unless you think it’s probably the worst market in the country outside of maybe San Francisco if it’s really down 25%. 

It’s hard for almost any of those reports to be real. Unless all the housing is identical. You’d have to have a report of a certain type of housing, in a certain tiny neighborhood, priced by the SF. Otherwise you’re going from a housing market where people sold high end houses to lock in profits (and drive up “median” prices) To a market where only the low end people are selling, As higher interest rates make hanging on to your expensive housing make more sense, driving down the “median”.). 

An easy way to think of this is I doubt neither the cheapest houses nor the most expensive houses are 25% cheaper. That means you just moved where the middle house happen to fall. 

[Mike Dymski]

373 home sold, mostly condos and townhomes...it's a small population; so that can skew the results.  Regardless, are you buying?

[Jack Seiden]

Quote from @Mike Dymski:

373 home sold, mostly condos and townhomes...it's a small population; so that can skew the results.  Regardless, are you buying?

 I’m definitely looking, considering 1031ing a property I have but giving up the 4% rate is tough. I’m well aware of composition effects and this kind of gets in into a interesting philosophical debate, while I’m sure the exact house isn’t down quite that much (especially in the suburbs, I actually think 25% is fairly accurate in parts of D.C.) the point remains that most people aren’t selling because if they sold they’d have take a substantial discount which is why the composition is scewed that way, and houses that do sell will pull down comps. This isn’t meant to be an alarmist post all, but I think it plays against the narrative I see from some people that prices haven’t fallen around the dmv, we can debate if it’s 25% or 20 or 15 but it’s clear both based on the data, and just play around with comps from June and now, that it’s definitely fallen substantially.

[Bill B.]

I don’t know anything about the DC market and I’m definitely not making a comment on its prices. I am frustrated with how fast anything decent is selling in my market. It seems like prices dropped about 10% with flippers and “have to sellers” getting out. Then inventory dried up and stuff is going pending in days. I don’t know if they’re getting multiple offers or just jumping on the first good offer, but it is frustrating. I truly thought I’d have a chance to buy some discounted properties. But they’re “discounted” to Jan 22 prices, big whoop. 

Lots of properties hitting the MLS as already pending when listed. I've got some leases ending in May, June and august. If any of them don't renew at higher rents I'd love to trade up, especially 2 for 1.

[Jack Seiden]

Quote from @Bill B.:

I don’t know anything about the DC market and I’m definitely not making a comment on its prices. I am frustrated with how fast anything decent is selling in my market. It seems like prices dropped about 10% with flippers and “have to sellers” getting out. Then inventory dried up and stuff is going pending in days. I don’t know if they’re getting multiple offers or just jumping on the first good offer, but it is frustrating. I truly thought I’d have a chance to buy some discounted properties. But they’re “discounted” to Jan 22 prices, big whoop. 

Lots of properties hitting the MLS as already pending when listed. I've got some leases ending in May, June and august. If any of them don't renew at higher rents I'd love to trade up, especially 2 for 1.

 Yeah I’m seeing 2018-19 prices even some 2017 and while I think this is a fantastic buying opportunity in D.C. and given we are the nation’s capital and have a fantastic cultural scene and I have no doubt we will bounce back. There are real reasons prices are down this much, even with that reduction we are an extremely high priced market with actually relatively cheap rents which makes the calculation tough to justify in certain sections on the city (I’m renting for $2700 on a 2bd 2ba literally overlooking nats park, an equivalent condo would have been 700k and about 5k a month) we have the most remote workers in the entire country, and with the hollowing out of dc crime has definitely returned (we are tracking 1995 murder numbers so far ) so while I’m extremely bullish on d.c. and think it’s incredible deal right now, there are reasons it’s fallen so sharply, so quickly. 

[Jay Thomas]

Real estate prices can be highly variable, depending on location and composition of sales. Median prices provide a good indicator of what the market is doing at any given time. For example, Gccar stats show that in certain areas, the median price was at its peak when I sold a row home for 735k - a price which would likely be valued now at between 550-575k. This demonstrates the volatility of real estate markets and the importance of staying up to date with pricing trends.

[Brad Jacobson]

Here in Utah, we haven't seen a dip that dramatic in home prices but we are down at least 10%.

However, I still see and hear a lot of fear in the market.  Many still think "the market is going to crash" and yet, it's already dropped 10-25% which historically, is one of the largest "crashes" ever.

The market has "crashed" but the narrative we've been fed doesn't confirm that so people have a harder time grasping it.

[Bud Gaffney]

@Jack Seiden wow! Time to buy!

[Bud Gaffney]

@Jack Seiden buy buy buy

[Jack Seiden]

Quote from @Brad Jacobson:

Here in Utah, we haven't seen a dip that dramatic in home prices but we are down at least 10%.

However, I still see and hear a lot of fear in the market.  Many still think "the market is going to crash" and yet, it's already dropped 10-25% which historically, is one of the largest "crashes" ever.

The market has "crashed" but the narrative we've been fed doesn't confirm that so people have a harder time grasping it.

Exactly! That’s why I posted this, while we can debate composition effects there’s no doubt most markets are off at least 10% and the high priced markets high teen’s at least. It seems like mostly realtors pushing the narrative that prices have been stable, which makes no sense tbh, it’s a much easier sell to tell people they are getting a 10-20% discount vs paying top dollar but 🤷‍♂️ 

[Scott Mac]

How does the 25% compare to the (adjusted for inflation) volume and prices of the 07 catastrophe for DC???

Poor brokers and sales staff's it looks like lean times might be coming, better stock up on canned tuna, rice, ramen and PB and have some fallback living arraignments.

That's hardly any volume, and mainly condos...

Good Luck!

[Andrew Ricker]

That's pretty wild to hear. In the Tampa Bay Metro, Median Home Prices are down ~7% from the Peak back in May-June of '22, and continuing to fall. 4 months of inventory and climbing. Interested to see where we go from here. 

[Michael P.]

Quote from @Jay Thomas:

Real estate prices can be highly variable, depending on location and composition of sales. Median prices provide a good indicator of what the market is doing at any given time. For example, Gccar stats show that in certain areas, the median price was at its peak when I sold a row home for 735k - a price which would likely be valued now at between 550-575k. This demonstrates the volatility of real estate markets and the importance of staying up to date with pricing trends.

 Anyone else sick of this guys AI generated posts that are always generated off of previous comments in the thread

[Caleb Brown]

Quote from @Bill B.:

I don’t know anything about the DC market and I’m definitely not making a comment on its prices. I am frustrated with how fast anything decent is selling in my market. It seems like prices dropped about 10% with flippers and “have to sellers” getting out. Then inventory dried up and stuff is going pending in days. I don’t know if they’re getting multiple offers or just jumping on the first good offer, but it is frustrating. I truly thought I’d have a chance to buy some discounted properties. But they’re “discounted” to Jan 22 prices, big whoop. 

Lots of properties hitting the MLS as already pending when listed. I've got some leases ending in May, June and august. If any of them don't renew at higher rents I'd love to trade up, especially 2 for 1.

Seeing that here too. We saw for a few months some discounts but it was a small window of time. Prices have been rising still and I am not seeing a lot of inventory hitting the market. This Spring seems like it's going to be hectic.

[Ryan Randall]

Quote from @Michael P.:

Quote from @Jay Thomas:

Real estate prices can be highly variable, depending on location and composition of sales. Median prices provide a good indicator of what the market is doing at any given time. For example, Gccar stats show that in certain areas, the median price was at its peak when I sold a row home for 735k - a price which would likely be valued now at between 550-575k. This demonstrates the volatility of real estate markets and the importance of staying up to date with pricing trends.

 Anyone else sick of this guys AI generated posts that are always generated off of previous comments in the thread

 I'm glad you noticed. I noticed that as well. Time for biggerpockets to add some reCAPTCHA for fishy posters. I'm guessing this guy is trying to build up a "reputable" track record of consistent posting to sell people something.

[Taylor L.]

@Russell Brazil your thoughts on trends in DC and the DMV market?

[Russell Brazil]

Quote from @Taylor L.:

@Russell Brazil your thoughts on trends in DC and the DMV market?

 The information provided here is incorrect. It would be the greatest collapse in real estate history. For example the actual housing collapse of 2007 saw a 19% drop from peak quarter to low quarter, and 10% from peak year to low year. The theory that prices have dropped far more than the housing collapse and no one else seemed to notice, is well just not a correct assessment of reality. Every single month has shown year over year increases except December which were off about 0.3% from the year before...but January jumped up to 0.2% up year over year.

[Jack Seiden]

Quote from @Russell Brazil:

Quote from @Taylor L.:

@Russell Brazil your thoughts on trends in DC and the DMV market?

 The information provided here is incorrect. It would be the greatest collapse in real estate history. For example the actual housing collapse of 2007 saw a 19% drop from peak quarter to low quarter, and 10% from peak year to low year. The theory that prices have dropped far more than the housing collapse and no one else seemed to notice, is well just not a correct assessment of reality. Every single month has shown year over year increases except December which were off about 0.3% from the year before...but January jumped up to 0.2% up year over year.

 Again it’s not really a debate that the median price point was 725k in June and it’s 545k now, we can debate composition effects but that’s hardly inaccurate, and fwiw anyone here is welcome to run comps at the peak and look at what things are selling for (frankly sitting at now) and see what they think the actual comps are, but it’s not inaccurate, it’s in fact very publicly available information anyone can find online.

[John Morgan]

Sacramento and Phoenix already bottomed out and starting to climb in the last month, as well as less inventory. I bet things pick up this spring and summer and we see more markets rise a bit from their lows.

[Carlos Ptriawan]

Quote from @Russell Brazil:

Quote from @Taylor L.:

@Russell Brazil your thoughts on trends in DC and the DMV market?

 The information provided here is incorrect. It would be the greatest collapse in real estate history. For example the actual housing collapse of 2007 saw a 19% drop from peak quarter to low quarter, and 10% from peak year to low year. The theory that prices have dropped far more than the housing collapse and no one else seemed to notice, is well just not a correct assessment of reality. Every single month has shown year over year increases except December which were off about 0.3% from the year before...but January jumped up to 0.2% up year over year.

 Many folks even the professional unable to decipher that this is mostly a statistical issue. In other very long thread of more than 2K post I already mentioned if you have 10 houses with 9 house has average price of 500k , but one house dropped 2mil from 5 mil to 3 mil, it makes the whole trends to be collapsing, although actually only few luxury market that experienced 'crash' level. 

When real estate market entering bear market, the comps between low comps and high comps are widening, that's what actually happening, but if I see the data modelling via dot plot chart, it's hardly trending down.

[Chris Seveney]

@Carlos Ptriawan

Also contribute to sample size. Only 373 homes sold in DC during January with it was over 600 a year ago.

Without looking into all the data yes the high end market is slow but I would not call it a crash.

I am over the bridge in northern Virginia which like dc has limited inventory and still stuff moving swiftly.

[Mark F.]

Quote from @Michael P.:

Quote from @Jay Thomas:

Real estate prices can be highly variable, depending on location and composition of sales. Median prices provide a good indicator of what the market is doing at any given time. For example, Gccar stats show that in certain areas, the median price was at its peak when I sold a row home for 735k - a price which would likely be valued now at between 550-575k. This demonstrates the volatility of real estate markets and the importance of staying up to date with pricing trends.

 Anyone else sick of this guys AI generated posts that are always generated off of previous comments in the thread

 I was wondering why his posts always seemed "off". Good catch.