About 10 days ago the Washington Post featured an article called Playing Lowball: From the Reasonable to the Ridiculous, A Guide to Small Offers. Among the anecdotes in the piece was a bond trader disclosing a deep discount he achieved through negotiations at the Madrigal Lofts. I first saw this news on DCHousingPrices.com and later in a posting on PQLiving.
I do want to say upfront that The Triangle blog does not advocate one condo over another. Our knowledge and experiences will naturally tend to have a focus on the places we reside. As my screen name suggests I am resident at Madrigal Lofts. The aforementioned “Playing Lowball” WaPo article was of obvious interest to me as it relates to my recent purchase. However I did not want to rush to a reaction and pile on in an uninformed way. I wanted to take time to gather more information to gain a greater understanding of the situation.
My first goal was to understand what type of unit at Madrigal Lofts this deal was on and secondly review a large volume of local sales data to determine whether this sale was an exception or part of a macro trend. I’m going to table the specific Madrigal Lofts analysis for another post later in the week (Tuesday). Below I will discuss what I found when I tried to obtain a larger volume of sales data.
First I visited DCCondoPrices.com, a sister site of the blog DCHousingPrices.com, to review what data they had. The creator of DCCondoPrices.com uses data that is public record and applies it Google mashup style. Due to the lag in the public record data the most recent displayed sales are from February. Unfortunately 3 month old data is not current enough to answer our questions about the Playing Lowball WaPo article.
Searching for alternatives I came across Penn Quarter Residential which displays the 20 most recent sales in the Penn Quarter neighborhood (spanning 3/26-5/30). I contacted the blog owner to inquire whether similar data could be pulled for the Mount Vernon Triangle. Realtor, Jessica Wilke (www.jnwilkie.com) was very helpful and shared with me the recent MRIS results for our area.
The largest drop from list price to sales price among those 10 sales was < 5%. Several actually went for 5-10K over list price – but in these cases the increase was offset by a seller subsidy so it was a cashflow device.
I was underwhelmed by the volume of sales in the MRIS report. As it turns out when developers sell units in their buildings the sales are considered “For Sale by Owner” (FSBO). Properties of this type are not always entered into MRIS as listings or sales. Therefore using sales information in MRIS to analyze the condo market is more effective in mature neighborhoods that are experiencing re-sales as opposed to areas of predominantly new construction.
I’ve basically hit a dead end on getting a substantial volume of current new construction sales data to do macro analysis but I did learn something about MRIS. If anyone else has suggestions for another avenue to try please chime in.