Did The “Double-Dip” Already Happen For Orange Line Condos?

If you spend time listening to the national media and reading financial publications then the idea of a “double dip” in housing will be nothing new to you. The basic premise is that we had an initial dip in real estate prices, the government stepped in to slow down the momentum, but the market still wants to correct. The thought behind this theory is that once the government involvement eases prices will resume the “normalization” process and continue to fall. The result being a double dip in prices. Some experts believe this additional correction could be as severe as 20% nationally. Some of the government involvement has, in fact, eased, most notably with the expiration of the first time home buyer tax credit back in May of last year.

I am not here to say that I believe a double dip is likely, or even a reasonable expectation. However, as I was doing my own market research this morning I came across these charts below, which spawned this post. Have a look at them and meet me below…

Ballston

Clarendon

Looking at these charts for Ballston and Clarendon respectively it would appear that a double dip is not only eminent, but has already happened for condo’s along the Orange Line, though this is much more clearly illustrated in the chart for Ballson (22203). The chart for Clarendon is a bit masked by bi-annual peaks and valleys, but is clearly on the downward slide for condo prices.  So is that good news that a “double-dip” has already occurred or is happening now? That will depend on your position in today’s market.

If you are a buyer interested in Orange Line corridor condos you are probably glad you’ve waited, however if you are an owner these charts likely make you cringe, or worse. The only solace for owners right now is the fact that prices will only go down so far before things level off and hopefully improve, and each tick downward brings things one step closer to the end of the fall. That is reaching, but it is something.

Both charts continue to be on a downward trend as of Friday of last week. Inventory remains high, days on market is on the rise, and more buildings are under construction, so we are not in the clear just yet. Owners who are caught on the wrong side of this data will find that it is going to be a long road back to the break even point, and that may only be for the folks who fall into purchase time-lines on these charts. Peak prices for both of these markets fall well off of their respective charts. When you look at it that way one could actually argue that the Orange Line corridor condo’s are not into triple-dip territory.

Obviously the longer this sort of market activity continues the more difficult things could become for condo owners along the Orange Line Corridor, while at the same time the the opportunity becomes for buyers becomes greater.


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