Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
So we're somewhere around 2005 prices already? I'm looking for something in the 2003 vintage myself.
It's truly amazing looking at the prices going over time. It's not the magic of compound interest either. It's greed, fraud, speculation, and generally a huge subversion of the financial services industry's fiduciary responsibilities to those whose money they manage and to whose with whom they do business.It's interesting to read craigslist too: "Get a house for the price of a townhouse" type of comments. Do people really believe they're sitting on gold mines?I'm not sure that prices wont drop below 2003 levels over the next several years. It'll be interesting to see if some folks who are buying now end in foreclosure, because the prices are still too high.
Ralph,Great comments.I've seen that comment about houses/townhouses too. Oftentimes the townhouses in question are in much better shape and more livable, but obviously we have a problem with those being overpriced as well.In many cases the "short sales" I find for this blog were purchased in 2006 for a "quick flip" this spring. I'm also starting to see a few that were purchased as foreclosures and are currently on the market as higher-priced flips. (They're not selling). I also know people/investors personally who were gushing at the "such a steal" prices very early in 2006.I think one has to decide whether a price is reasonable based on the current market situation, the median local income, and comparable rents, and look less at whether the house sold for 200K more two years ago.On advantage to being a month-to-month renter is the ability to use a fast closing as an incentive for the seller. (In lieu of offering anything close to full price). I've met a number of would-be buyers who have a house to sell in the same vicinity. That can be a losing proposition in this market, unless they can offer it for a price acceptable to the real estate "food chain".
Harriet,Your point that prices should relate to incomes and not necessarily to prior prices is a good one. I'll keep that in mind going forward.I'm irritated about the yearly price increases, because I'd hoped to buy when I return to the D.C. area. That's clearly not possible now.I don't mind renting per se, but had looked forward to actually owning something. I am concerned about finding a good, safe, family friendly, and affordable place to rent. If you have any hints, let me know!
Ralph,I don't think you'll have too much trouble finding a rental in a neighborhood suitable for a family. There many failed sales in Northern VA (especially exurbs)that are turning into rentals. Those don't necessarily make for the most stable rentals, but I've seen some of them handed over to rental management agencies, which at least provides for decent management.I like to use http://www.fairfaxrealty.com/search.html for its simplicity in searching the MLS for rentals. Take the prices with a grain of salt. Oftentimes the rental prices start out way too high for what the local market will bear. Those sellers who are unrealistic on their sales prices tend also to be unrealistic on what rents will fetch.There's a nearly new house outside of Warrenton, VA (way out there), that's been sitting vacant for over a year because the rental asking price is too high.If you do desire more stability and you're coming to the market without a house to sell, don't hesitate to lowball asking prices on houses for sale to something more affordable for you. Especially on foreclosures. Check the Countrywide link on this website, and take note of little remarks in the MLS about "third party approval" required on sales.
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