June 26, 2007
Morning Roundup: Housing of Cards Edition
Good morning, Washington. Still can't get enough post-Pants Proceeding wrap-up? The Post's Henri E. Cauvin has a nice write-up and a video of the Chung family's press conference for you, conveniently located on A1. Still no word yet on whether Pearson will appeal yesterday's decision, but given the sheer volume of news stories published about this case all over the world, he can be sure whatever he decides to do from now on, people will be watching, if only out of a perverse fascination with insanity. That is, of course, only if they can ever stop talking about Paris Hilton.
It's Time for New Housing Reports!: And the news seems to be bad no matter how you slice it. The Examiner notes that sales of new homes and condominiums dramatically fell late last year in the District -- though as observers are sure to point out, that may only mean the previously white hot market is coming back to a more normal balance. The Post focuses on the worse news, that the number of low-income families obtaining mortgages to buy houses in the District has plummeted the past decade. Just over 4 percent of D.C. home buyers in 2005 could be considered low-income, compared with 17 percent ten years ago.
Catania Threatens Greater Southeast with Probe: D.C. Council Member David Catania (I-At large) is considering whether to introduce a measure to force Greater Southeast Community Hospital into receivership or to allow the Council’s health committee to investigate the hospital’s management. Yesterday an executive for the problem-plagued hospital refused to participate in a Council hearing about its future.
Briefly Noted: Triple shooting in Northwest leaves one dead, two injured ... Police will install 19 new crime cameras by weeks end ... Rhee meets with Gray.
This Day in DCist: In 2006 we noted the Post's introduction of Page 3 in the Metro section and the buzz around Snap in Georgetown.
Photo by JamesCalder
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Did you use David Catania and the words "threaten" and "probe" on purpose? If so, it gave me a chuckle.
Whenever I get depressed about the housing market, I always checkout the laughably positive podcasts over at the Mortgage Bankers Association. You couldn't ruffle those guys feathers if you hit them with a cinderblock. No matter how many mortgages default, how housing starts decline, how many sales tank, they always foresee that the current market "correction" will bounce back in the next quarter...every quarter...for the past 2 years. It's like Saddam's spokesman denying any U.S. troops were in Bagdad while U.S. troops invade Bagdad right behind him. Steve Jobs has nothing on the MBA's reality distortion field.
As for the housing news, it's not all bad. At least for condos in decent neighborhoods, it's more of a buyer's market than we've seen in a while.
Buyers market for now, but inventory is shrinking in Condo market.
From Urbantrekker:
"Inventory of condos was at 700+ for the month of May '06 that was supposedly "Spring Season" or, peak season for housing. What a difference a year make! Because since then, with additional new listings coming to the market every month and yet -- inventory of condos stands around 528 units in 5/07. That means -- more people take advantage of the situation (low prices and interest rates) and bought condos. The number of condos that went under contract last month is 178. With the current absorption rate, Arlington condo market is, a seller's market!"
Is the Examiner serious? They are little behind the times. We are now into the 2nd Quarter of 2007, and getting ready to go into the 3rd Quarter of 2007. They are reporting on something almost a year ago? Well, we should already know this housing news. How about some more current numbers, let's say the 1st quarter of 2007? Ok, here you go:
District home sales jump in first quarter
Washington Business Journal - 12:27 PM EDT Tuesday, May 15, 2007
by Jeff Clabaugh
Staff Reporter
Home sales in the first quarter were down 6.6 percent from a year ago nationally, but sales of existing homes in the District jumped 9.3 percent, the second biggest increase in the country.
The rest of the article here:
www.bizjournals.com/washington/stories/2007/05/14/daily19.html
What’s the point of using a sign in procedure for the comments when anyone can use the Guest feature and make the comments even more anonymous?
The Examiner's staff is mainly the B-team of journalists. There's nothing new about the data that was the main focus of the Examiner article. But the Urban Institute released its quarterly Housing Report yesterday, so the Examiner focused on the negative aspects of home sales. They did the same sort of lazy crap a couple of months ago when they reported the 40% increase in foreclosures in DC from March to April. Except that they never revealed what the actual numbers were, just the percentage increase. And the reason was simple: a website that tracks foreclosure sales said there was a 40% increase in DC, and the Examiner ran with that story. Now, a good journalist would check with the Recorder of Deeds' office to see what the actual numbers were and how they compared to last year. But that would require actual investigation and reporting. And it's much easier to just re-write someone else's press release.
The only useful part of the article was Cheh's comment that DC can't expect the good times to keep on rolling forever. If revenue drops from the deed recordation tax, transfer tax, and property taxes, then the city is looking at some major funding problems. But no one seems to want to focus on that minor problem.
I don't like this guest commenting that Gothamist instituted as I enjoy the snarky names that people sometimes use.
-GuestCommentsBites
Guest comment #7 is me. -- Cranky.
As for the news that lower income people are not getting mortgages in DC, I would've liked to have seen more in-depth reporting from the Post. It's well known that the run-up in the housing market was fueled in part by a huge increase in the number of "liar loans," where a buyer's stated income is never verified by the bank. I therefore wonder how useful it is to do a study based upon income stated in loan applications (which seems to be how the Urban Institute study was run). All it would take is a few banks in the area subtly or unsubtly encouraging borrowers to inflate their income to throw off the entire study.
Also, if the number of people buying and the number of units both increased (as I think is the case), then the actual number of low-income borrowers could remain constant even while there were more middle and high income borrowers.
the statistic the Washington Post is using as "proof" the number of low income families receiving home loans has plummeted is horrendous.
Although no-doubt there has been a reduction to some degree in real numbers, looking at the percentage of applications coming from that group is pretty useless. DC has gentrified a lot over the past decade, with many low income families moving to the suburbs, many yuppies moving in, and the population decline reversing. Those factors alone will account for the decline Post is citing, and tells us nothing about loan opportunities for low income residents. It highlights the dramatic demographic shift DC has experienced but DOESN'T reveal anything specific about the plight of low income families trying to find housing.
A statistic that WOULD tell us something, however, would be to look at the percentage of all low income families that are applying for loans, and the rate of approval for those loans. But that might actually help readers understand the topic...