DC Area Condo Developers See ‘Handwriting On The Wall’
The Washington Post reports the air is coming out of the local condo bubble. “Citing slow sales and a cooling real estate market, two major developers are abandoning plans for two condominium projects in the Washington region. The decisions are among the strongest signs yet of how much, and how quickly, the market for new condos has softened here.”
“Monument said it would not go forward with its plan to convert the 574-unit Park Center apartment complex in Alexandria to condos. Wood Partners said that it would continue building its 300-unit building in Annapolis but that the apartments would be rentals, not condos as planned.”
“What happened at the two projects could be just the beginning as developers who had counted on continued rising prices realize that their numbers no longer work, said Gregory H. Leisch, chief executive of a real estate consulting firm in Alexandria. ‘It’s a precursor of more to come.’”
“Leisch estimated that developers would take 1,200 more units out of the pipeline by year-end. About 25,000 condo units are being marketed now, 16,000 of which are under construction, according to Delta. ‘The development community is seeing the handwriting on the wall,’ Leisch said.”
“Russell Hines, VP of Monument Realty, said financing for the $170 million Park Center project required that buyers be in place for 25 percent of the units before settlements could take place. But by the time the company started selling the units in September, the market had started to slow. Ultimately, only 50 units were sold before Monument notified its buyers last month that it would not convert the complex, he said. Apartments in the buildings will remain rentals.”
“‘We’re still pretty bullish about the residential market in the long run,’ Hines said. ‘It’s just that right now, there are some markets where we probably got a little bit ahead of ourselves.’”
“Wood Partners, a national developer of multifamily housing, said its project had generated buzz, with 4,000 potential buyers signing up over the Web and more than 1,000 showing up at its sales opening party at a restaurant in Annapolis on March 9. But only 27 contracts were signed over the next 30 days, said Dean Wilson, director for the Mid-Atlantic region for Wood.”
“‘That’s not where we needed to be,’ he said. ‘We’re opening the leasing doors this week as we speak.’”
“Wilson said: ‘We have some patient capital that can ride the ups and downs. We have to be more sensitive to market swings and.. make sure that when the music stops, we always have a chair to sit in.’”
‘financing for the $170 million Park Center project required that buyers be in place for 25 percent of the units before settlements could take place. But by the time the company started selling the units in September, the market had started to slow. Ultimately, only 50 units were sold (out of 574)..4,000 potential buyers signing up over the Web and more than 1,000 showing up at its sales opening party at a restaurant in Annapolis on March 9. But only 27 contracts were signed’
Free chips and dip aren’t selling condos in DC anymore.
DC will be especially hammered after the administration change. Gov’t is spending like drunken sailors, so even a modest change is going to create havoc.
President Rice will probably put Vice President Watts in charge of a federal streamlining overhaul.
From your lips to God’s ears Robert!
I thought Cheney would take over after Bush is arrested and we’d all live under the utopian United States of Halliburton.
Yea like the republican party is ever gonna nominate a unmarried black woman (with rumors of her being a lesbian) as POTUS.
That was good for a laugh.
Comment by KennyBabes
2006-06-08 11:54:49
Yea like the republican party is ever gonna nominate a unmarried black woman (with rumors of her being a lesbian) as POTUS.
That was good for a laugh.
________________________________________________
But but but “She’d make a wonderful president” sez the blind man…. [lmao]
Yeah, but you’re NOT a Demonrat.
Somehow, I’d bet a million dollars you voted for Kerry the traitor in the last election. The odds are with me, fer sure!:)
But you agreed that this is NOT a political message board.
So you are a big fat LIAR!
And, by the way, where is your apology for your racist remarks, you racist demonrat?
Notice that the Demonrats would NEVER let a person of color hold high office.
There is NOTHING they hate, and that’s going some, than African American conservatives!
The USGOV is already starting to cut back several segments of its spending. The DoD is cutting back a noticable percent on new programs and sustainment. Still in “drunken sailor” mode though.
Where? And what’s the difference if they’re also cutting revenues (taxes)? Less spending but less revenue is a wash.
Yes, voodoo economic only works when you reduce revenues and increase spending.
I love how they call an estate tax the “death tax”. How much more drama and lies can one take?
Comment by jp
2006-06-08 06:17:54
DC will be especially hammered after the administration change. Gov’t is spending like drunken sailors, so even a modest change is going to create havoc.
______________________________________________________
So long as we rid DC of the republiCriminals and finally get some oversight and open the books, I’m game.
“DC will be especially hammered after the administration change. Gov’t is spending like drunken sailors, so even a modest change is going to create havoc.”
No, the bubble will deflate in DC much slower than anywhere else in the US. We are going to need thousands of spaces for the Republican criminal party that currently infests DC. The condos can be converted into upscale penitentary living. The jail cells in The Hague are just not going to be sufficient.
The Bush administration with their supporters keep regurgitating that W is not getting enough credit for the ‘robust’ economy in an effort to find anything positive to hang their hat on in the climate of 35% apporval ratings.
If developments continue at the current pace and the economy does indeed start to show signs of cratering under this house of cards, how much credit will they want for that?
That’s funny because I heard that Rove’s idea was to brag about the economy in order to help the GOP in the Nov mid-terms.
Rove may have to come up with a new strategy from his jail cell.
Rove and Jeff (Sucky4Money) Gannon can share a cell…. in the same prison as the rest of the LogCabinRepubliCriminals.
I agree the two of them together can help to bring new meaning to Roves moniker: “Turd Blossum”.
Maybe Crabs will?
http://bubblemeter.blogspot.com/2006/06/crab-feast-to-sell-condos-in-silver.html
Don’t forget the fake families. Wasn’t that also in DC (exurbs)?
http://financialsense.com/fsu/editorials/2006/0607c.html
Good info on the “short sale”. Great comment at the end of article about the power of the internet, especially blogs, to disseminate news.
‘We’re still pretty bullish about the residential market in the long run’
Yes, “in the long run” as in 10, 15, 20 years?
I hope this starts to change pricing in Southern Maryland about 1 hour southeast of DC. The prices here are still creeping up even as inventory is increasing. The locals are telling me, “This area is different, we are still the cheapest area 1 hour from DC, building restrictions will keep prices going up, blah blah blah.” Hope it makes it down here soon. I see people renting homes they paid $350-$450K for and renting for $1800-$2000 a month. I don’t understand it and that alone to me is proof that something has got to give. Oh yeah and the fact that rates will continue to climb as foreign investors stop financing US debt.
I was watching a property that went up for auction in the VA exuburbs of DC. It was on 11 acres. The starting bid was going to be $650K and they advertised it about two months in advance. The auction was held on May 20th, and this is June 8th and the exact same property is now on the MLS for $850K. I guess the auction didn’t get any high enough bids! The funny thing is that on that same lane there is a nicer home on 7 acres for $570K. (And that has been reduced several times).
Out here in the exurbs the rural land has exploded in “value”. Someone who paid as little as 250K five years ago think they can sell for a million. But it’s just not so, now.
I am short NVR they are exposed big to that market
at $554 per share? Better make sure there ’s no wardrobe malfunction on your shorts.
Near the beach rentals in Southern Delaware are even more absurd. You can rent a new 2400 sq. ft. town home, 4BR 3.5 BA for 1400-1500 per month. These units are a few miles from the beach. The speculators haven’t even moved in, but many are trying to sell for $440,000+. There is so much building here that it is clear that this will be a very hard landing.
Slightly off-topic, but yesterday I was driving through The Crest at Waterford Lakes, one of last year’s condo conversions in Orlando, and noticed a fairly new sign pointing towards a “Leasing Office.” Has anyone here from the Orlando area heard anything about this? Could this be the beginning of the end for The Crest?
Ripples, ripples. A lot of investors in Fairfax bought heavily in areas around the new developments, thinking that their property values would go up dramatically. It will be interesting to see what happens if they projects cancel…
March 9 opening.
27 contracts were signed over the next 30 days. [of 300]
‘We’re opening the leasing doors this week as we speak.’”
“Wilson said: ‘We have some patient capital that can ride the ups and downs.
Patient capital my a$$. Once again another “deer in the headlights” dazzled by the “speed of the turn” “no one saw coming.”
Where is DC_BUBBLE to tell us how DC is so different and that the bubble is only a myth?
He is at a foreclosure avoidance seminar with LV_Landlord. LOL.
There is no Housing Bubble in DC (outside of the real estate market) and things are going well in Iraq (except for the instability, war and chaos).
I was in DC yesterday and in talking with a colleague who works there during the week said that the low ball offers on condos Alexandria and Arlington have commenced and sellers are coming down. How much I don’t know but if rentals signs are any indication of the market, I’d say bargains are on the way in DC soon.
http://tinyurl.com/orzfa
Denver info.
30k+ for sale.
Threre are still two projects in DC proper that are being built. Townhomes…one in the 400K range and one in the 500K range. I wonder how these will fair. They aren’t located in the more prime locations of the city either. The projects are being built by Pulte and the other by K Hov. It would be very interesting to see if any condo projects within the actual city limits have also been cancelled.
There is a sign for a project on 3rd and L NE, near where I rent a house. One of the people on my block has said that the sign has been there for like 6 months, and there is no construction activity yet, not even demolition. I suspect it has already been canceled, just no announcement yet.
These condos aren’t in DC. They’re in Anapolis and Alexandria. It’s no shock to see this happening in the suburbs and exurbs. Let’s see what happens if some of the new high rises in DC proper start converting to rental units.
Agreed. I lived in DC for 10 years and rarely ventured out to those suburban wastelands. When Dupont Circle and Georgetown are feeling the pain, you’ll know it’s bad.
Dupont inventory is up 51% since March 06 (in 3 months) - if you don’t believe me go to homesdatabase.com, and check 20009 - the list still shows the number back in March (249), but perform the actual search and see how many listings pull up.
I’d say that Dupont is already feeling the pain
Agreed - add zip 20036 in your search.
I’ve been considering moving to the DC area but the last time I checked, the housing market was too crazy for my taste. Now that it’s correcting itself, what’s the 5-10 year employment outlook for the area in Technology?
I understand the current administration has been spending like a drunken sailor, but is that expected to continue once Bush is gone?
It simply cannot. But then again, what the hell do I know? It would seem to me that, like Bernanke and Greenspan, whomever comes in after Bush, whether Repub or Dem, has a huge mess to clean up. If it’s Dems, they’ll make a big deal about the deficit; if it’s Repubs, they’ll quietly cut spending so to not make Bush’s legacy any worse than it already will be (and don’t delude yourself, history will not be kind to Mr. Bush II, particularly after the kids of today understand how badly he’s screwed them)
They are looking at printing-press engineers at the treasury.
Having lived in DC 35 years I can tell you that gov. spending hardly ever decreases. Something the real estate always goes up crowd ignores is terrorism. It makes physically concentrated government undesirable. Telecommuting makes it unecessary. Wash, DC might revert to being a sleepy backwater.
the WashPost has covered speculation, ARMs, condo cancellations… i’d like to read something about developer sales competing w/ specuvestor resales and how they can afford to drop their prices way below the specuvestors. and of course have it full of examples of the ensuing “bitter specuvestor” phenomenon and how they threaten to sue but the developer has their signature saying they were an owner-occupant and not an investor (to secure better financing terms) so they have no legal ground to stand on. i would frame that piece.
“We never thought we would see 30,000, but here we are,” Bauer said. “We may hit 31,000, but I don’t think we’ll go much beyond that.”
Could someone ask Mr. Bauer.
Mr. Bauer, Like why won’t it go much beyond that? and then some?
Well the liquidity binge is OVER.
Emerging market ROUT.
^HGX hurtling towards 200..indicating markets anticipation of builders’ rout.
INventory in bubble market is reaching 12 months.
Gold speculators+other commodities speculators are on the run.
Folks, Bear market is here. So enjoy and prosper.Buy puts if you have the balls.
Fed rate is headed higher.5 is too inflationary at this point. Lag , notwithstanding.
And, donot buy properties till at least winter of 2007.
I agree with you miamirenter, I got out of all mutual funds but my Roth IRAs on Tuesday. Between gains and losses I preserved most of my capital. Had I not done that I would be down several $1,000s of dollars today. I wipe sweat off my brow with each passing day as I see the declines continue. SO many red arrows!
and dollar, just as i had asserted, found support around 0.78 EURO.
Best place to hide is still dollar cash+ short term US treasuries.
little off topic but does anyone know why mls in chicago doesn’t give out dom anymore? I have access to it, and I checked yesterday and days on market are gone. Is this on purpose or????? If this is for real and they are concealing that, boy someone should sue their ass.
Check out the recent condo sales data for 22201 zip code. Look at the North Garfield St condos that were made available July 2005. Every flipper has lost money on the sale and they are the lucky ones losing maybe 1-2% after the 9% roundtrip in commissions and fees.
I still can’t believe there were fools who bought early this year for those prices.
that’s not all, walk a block up Garfield to recently delivered Station Square, then hike down Wilson to Odyssey, on your way down to Courthouse look around at the other dozen condo developments coming online. All are huge busts fueled by hollow demand.
what’s really funny is the Post had an article a year ago about who could afford these places, the answer was older accomplished singles w/o children. that’s fine, but how cool is someone that’s late 30s/early 40s living alone w/ two cats?? not the type of neighbor i’d like to have beers and cook out with on a Sunday afternoon (and just to be fair, they wouldn’t want to hang out w/ me either).
so these units are either a) empty/in process of flopping, or b) owner-occupied by a complete douchbag. i guess c) could be “rented to someone making enough to afford $1600 for a one bedroom” but lets get real about rent for once and check that option at the door.
There was a great businessweek article that came out today–has everyone seen it? Doug Duncan at the MBA called out Liareah’s pathetic plea to Bernanke, hilarity ensued (at least for me…)
http://tinyurl.com/j64xy