Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Maryann Haggerty (WaPo Real Estate Editor) and Elizabeth Razzi (Staff Writer) will be online today at 1:00 pm for an online discussion of the Washington area housing market.Submit questions here.
Would love to see a transcript of this session afterward to see if they touch on the true state of the market in the area or if it's a cheering section for realtors and homebuilders.
Yeah, it should be the usual rich discussion. As I recall ( Months ago at one of these "live sessions") Ms. Haggerty herself stated that she had investment properties (or a least more than 1 house...I forget). No wonder she gives a one-sided spin - wonder if she's dumped her properties yet?
I got that part answered:Manassas, Va.: Can we please have full disclosure at start: If Maryann and Elizabeth themselves have any investment properties/second and third homes, etc.?Elizabeth Razzi: I own only the roof over my head, with the bank's help, of course. I've owned a townhouse before, and had the all-too-exciting exprience of trying to sell it in the dead of winter, and after we'd moved into our current home. Put me down for a couple of remodelings, as well. I'd like to own a vacation home someday, though._______________________Maryann Haggerty: And my disclosure: I own my residence, plus a share in a nonprofit co-operative that owns a rustic camp in the Virginia mountains.I see no conflict in owning investment property. I simply have never done so. In fact, my residence is in reality two legal apartments that we use as one house. We've always just been too lazy to rent one of them out. Also, if we rented out the downstairs apartment, we would have ZERO storage...
mg,That was a good question. This was also one of the better ones. The age-old "IT'S DIFFERENT HERE" argument. (I didn't write it, but it was an astute observation).Washington, D.C.: These two comments could have come from NAR complete with exclamation points and a total failure to take account of empirical evidence that points the other way. Makes one question seperation of church and state at The Washingotn Post: Elizabeth Razzi: Well, the market is correcting as we speak, don't you think? Job creation is actually pretty darn stellar in the Washington area -- and those jobs aren't just in government. DC is a darned desirable place to live! Maryann Haggerty: Yes, we did take a hit in the late '80s/early '90s recession. And a good part of that was because of cutbacks in government employment. In the intervening years, those jobs have been more than replaced, largely by government contractors. But it wasn't a crash. A crash is what happens when a region's unemployment rate heads into the teens and when abandoned factories sit empty, not when they're turned into loft apartments. And let's face it, the government-type empoloyment base has turned out to be relatively stable. What we're seeing now is much less severe. It's the disappearance of those unrealistic jumps of the first half of the decade."----------What empirical reason do you have for thinking the housing market wont "give back" those "unrealistic jumps of the first half of the decade?" If it does revert to the mean, we are talking about a major correction. Elizabeth Razzi: Forgive my exclamation points. But I do think this is a desirable place to live -- one of the best in the country, in fact.
Today's WashPost real estate chat was full of bad advice and misinformation. And as usually, they can't predict the future other than knowing that home prices won't fall. Here are some examples:http://www.washingtonpost.com/wp-dyn/content/discussion/2007/04/13/DI2007041301860.htmlOn the lack of affordable homes in the DC area:"The sad truth is that the nation's capital is an expensive place to live, and it's been that way for a long time."[This is simply not true. Prices were less than half today's levels, and affordability was much, much higher, just 5 short years ago.]On why the recent doubling in Arlington County home prices is sustainable:"Job creation is actually pretty darn stellar in the Washington area -- and...DC is a darned desirable place to live!"[There's the soft, touchy-feely, non-quantitative response we've come to expect from the Post. Don't spend time talking about hard numbers, just say DC is desirable and, therefore, imply that any price is justified and sustainable.]On the biggest threat to home prices now:"The big question, though, is how many buyers took out sub-prime mortgages that they cannot afford. I think that's the biggest threat to values now."[Sorry, but the biggest threat to prices are the high level of prices themselves. Subprimes or not, prices cannot be sustained by current fundamentals.]On the benefits of having a down payment over putting zero down:"you will have insulated yourself against short-term swings in the market."[huh? does having a lower mortgage balance prevent the market price of your home from fluctuating? and why should an owner worry about short-term swings in price anyway? i'm not suggesting putting zero down, but this answer doesn't make sense.]On whether today's prices are good for real estate investments:"It's only smart if the numbers work."[Good so far...]"Can you get enough rent to carry your mortgage, taxes, insurance, repairs and other expenses?"[...and then the advice goes downhill fast. By suggesting that the "numbers work" when you can cover your expenses, Elizabeth appears to be suggesting that breaking even is an acceptable result from an investment property. This is terrible advice.]
john fontain,"The sad truth is that the nation's capital is an expensive place to live, and it's been that way for a long time."Not true, you're right. In 1994, a 3 bed 2 1/2 bath townhouse with a nice patio in Reston was $130K. That was affordable on two entry-level salaries of about 22K each. Brick ramblers in Vienna could be had for $190K, and in Fairfax for $140K. Interest rates were 7.5% on a 30-year fixed, and with an FHA loan only 3% was required as a down payment. It was a good time to be a college graduate. You could easily get a 3-2-1 buydown loan, making the first years' interest rates only 5.5%.
Alright, I'm at wits end with her bad advice. Following David J.'s template for the David Lereah Watch, I have set up...http://maryannhaggartywatch.blogspot.com/
Post a Comment
Subscribe in a reader