Two interesting items:
(1) I rent a townhouse in Arlington, VA. When I rented it in June 2000, the management company held a two-hour open house, and within two days had received thirteen contracts. Five years later, with local housing prices have almost tripled, the house is back on the rental market at an 18% higher rent. It’s been on the market for a week, but only five people have come to look at it. If the bubble is not a bubble, but is purely driven by increased demand for housing, I don’t see how one can explain this anomaly.
(2) The local Arlington newspaper reported this week that condo sales last month were down 33%. Condo sales is the most speculative, and overpriced, part of the local market. A very large percentage of condo buyers have no intention of occupying the condos, but instead plan to rent for a short time (or not at all) and then “flip” their condo. The severe decline in condo sales suggests that flipping is becoming increasingly difficult, which means that the most speculative part of the market seems to be cooling down.
UPDATE: (3) Just heard on the radio that last month housing inventories (number of houses for sale) in the D.C. area rose last month from 23,000 to 35,000.
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