| | | | | | | | | | | | | | | | | | | Arlington County | | | | | | | Year | Sales | Active Listings | Ratio | Median Sold Price | | | | 2007 | 303 | 1,012 | 3.33 | $515,000 | | | | 2006 | 283 | 1,371 | 4.84 | $465,000 | | | | 2005 | 313 | 521 | 1.66 | $510,000 | | | | 2004 | 392 | 383 | 0.98 | $427,800 | | | | 2003 | 355 | 374 | 1.05 | $353,500 | | | | 2002 | 309 | 328 | 1.06 | $310,000 | | | | 2001 | 323 | 333 | 1.03 | $250,000 | | | | 2000 | 301 | 398 | 1.32 | $225,000 | | | | 1999 | 339 | 590 | 1.74 | $202,500 | | | | 1998 | 304 | N/A | N/A | $199,750 | | | | | | | | | | | | | Alexandria City | | | | | | | Year | Sales | Active Listings | Ratio | Median Sold Price | | | | 2007 | 213 | 920 | 4.32 | $449,000 | | | | 2006 | 194 | 1,215 | 6.26 | $430,000 | | | | 2005 | 290 | 458 | 1.58 | $427,000 | | | | 2004 | 346 | 398 | 1.15 | $351,350 | | | | 2003 | 339 | 294 | 0.87 | $340,000 | | | | 2002 | 315 | 254 | 0.81 | $260,500 | | | | 2001 | 294 | 287 | 0.98 | $199,975 | | | | 2000 | 269 | 384 | 1.43 | $197,000 | | | | 1999 | 240 | 602 | 2.51 | $205,000 | | | | 1998 | 232 | N/A | N/A | $193,600 | | | | | | | | | | | | | Fairfax County | | | | | | | Year | Sales | Active Listings | Ratio | Median Sold Price | | | | 2007 | 1,288 | 8,208 | 6.37 | $480,000 | | | | 2006 | 1,349 | 9,093 | 6.74 | $485,000 | | | | 2005 | 2,388 | 3,772 | 1.58 | $503,000 | | | | 2004 | 2,659 | 2,970 | 1.12 | $397,000 | | | | 2003 | 2,589 | 3,127 | 1.21 | $325,000 | | | | 2002 | 2,218 | 3,015 | 1.36 | $282,700 | | | | 2001 | 2,427 | 3,214 | 1.32 | $244,900 | | | | 2000 | 2,131 | 2,967 | 1.39 | $213,000 | | | | 1999 | 2,192 | 4,471 | 2.04 | $209,000 | | | | 1998 | 1,910 | N/A | N/A | $209,000 | | | | | | | | | | | | | Loudoun County | | | | | | | Year | Sales | Active Listings | Ratio | Median Sold Price | | | | 2007 | 478 | 3,746 | 7.84 | $440,000 | | | | 2006 | 425 | 4,747 | 11.17 | $470,000 | | | | 2005 | 788 | 2,067 | 2.62 | $482,250 | | | | 2004 | 898 | 1,403 | 1.56 | $389,450 | | | | 2003 | 785 | 1,395 | 1.78 | $302,000 | | | | 2002 | 635 | 1,498 | 2.36 | $263,000 | | | | 2001 | 660 | 1,368 | 2.07 | $238,875 | | | | 2000 | 479 | 937 | 1.96 | $200,000 | | | | 1999 | 383 | 1,179 | 3.08 | $183,000 | | | | 1998 | 320 | 1,655 | 5.17 | $189,900 | | | | 1997 | 229 | 1,661 | 7.25 | $182,000 | | | | | | | | | | | | | Prince William County & Manassas | | | | | | | Year | Sales | Active Listings | Ratio | Median Sold Price | | | | 2007 | 470 | 6,491 | 13.81 | $354,450 | | | | 2006 | 632 | 6,296 | 9.96 | $389,200 | | | | 2005 | 1,315 | 2,400 | 1.83 | $391,000 | | | | 2004 | 1,274 | 1,544 | 1.21 | $292,700 | | | | 2003 | 1,174 | 1,651 | 1.41 | $230,000 | | | | 2002 | 934 | 1,428 | 1.53 | $190,750 | | | | 2001 | 944 | 1,419 | 1.50 | $168,000 | | | | 2000 | 709 | 1,361 | 1.92 | $139,950 | | | | 1999 | 562 | 1,859 | 3.31 | $138,500 | | | | 1998 | 421 | 2,622 | 6.23 | $146,500 | | | | 1997 | 370 | 2,792 | 7.55 | $133,250 | | | | | | | | | |
|
42 comments:
Very interesting sales number for July. It looks like most close in areas actually experienced a pretty good bounce.
I suspect that the big spike in interest rates that took place between early May and mid-June played a role by convincing some fence sitters to jump in before rates climbed any higher.
See here for a chart:
http://www.bankrate.com/brm/graphs/graph_trend.asp
These sales suggest that buyer psychology rather than a credit crunch is still the dominant factor impacting the housing market.
The next few months of data will show whether this proves to be a "dead cat" bounce or not.
PWC is looking downright ugly there. I have to say it doesn't look all that bad on my route. Better than last year, even. Fewer "For Sale" signs, even a few "Sold". Price are still out of whack, though. House across the street is up for sale $150K above a comparable's assessment. $140K above the most recent sale in the neighborhood. Of course that's what he needs to pay off his mortgage and the upgrades he's put in.
Leroy:
I own in Alexandria City (Del Ray), but I've been worried, and bearish, about the market since early 2004.
Interest rates on jumbo mortgages (more than $417,000) have exploded in the last two weeks; since Fannie and Freddie don't buy those, they've been caught in the fallout from the subprime mess. If the spreads on the jumbos stay wide, then Arlington and Alexandria City will finally get hit. I think subprime and Alt-A are toast, as are the high LTV HELOCs. The Fed's and ECB's recent liquidity injections won't do squat there. With regard to jumbos to borrowers with high FICOs, however, I see the spreads heading back down, and this will mitigate the losses to the prime close in areas. We shall see . . . .
One thing to remember is that this data is for sales that were closed in the month of July, most of these sales went under contract in May or at the latest the first couple weeks of June.
It won't be until probably the Sept sales numbers that we get a chance to see what affect the changes that have taken place in the last couple weeks have. I do agree that the higher rates we are seeing on jumbo loans will have an affect.
Since when is a low volume of sales good for buyers? In every other instance, I think most people on here would understand that higher sales volume usually equates to lower prices other things being equal. I mean, you open Wal-Marts and you lower prices. You implement NAFTA (or the Common Market) and you get lower prices. The higher the number of transactions, the better value for the consumer ... all other things being equal. It's interesting how despite lower sales volume, prices have risen per the numbers listed. Surprised? No. If I were a potential buyer, the lower sales volumes would scare me.
Lance, you could fill a library with what you don't know about economics....
...of course, someone else would have to fill those books, because you wouldn't know what to put in them.
It is shocking how little some people know about economics and finance. I count economists amongst my friends. They concur with most of those who contribute to this blog. The prices are still far too high for basic economic fundamentals in this area. People can't afford to buy and have their biggest purchase drop in value before they close.
In fact I had dinner last week with an economic advisor to the Senate banking committee. Personally he says a bail-out would be a terrible thing in the long run. He wonders if the government has the stomach to do what is right though. Politicians often cave and bring pressures to bear on entities that do have the power to artificially "fix" the cave-in. He was adamant that most of the troubled mortgages are not worth re-financing and most will not be able to. Most need to cut their loses and move on. It will be quite a long time before housing valuations will rise to what they paid in the last 3 years.
We also discussed impact on local governments that got on the hysteria bandwagon. The re-sell values for houses has dropped thus eroding county tax base. Their projected budgets are shot. People are filing appeals. Many have neighbors who are trying to sell their homes who have had to deeply discount their homes to even get lookers.
In fact my landlord appealed to the country to re-assess my condo. He bought in June 2005 (not very smart) and since then the units (4 in our building) that have re-sold sold for $75K - $100K less. Two are still for sale and have only had a few lookers. The county caved when looking at the comps of the last 12 months. In fact at the last HOA meeting all those who attended said they appealed their assessments. The county plans to raise the millage rate to compensate for the declining values.
Again, most of you are on track.
"Politicians often cave and bring pressures to bear on entities that do have the power to artificially "fix" the cave-in. "
The biggest enemy to a bail out is the simple fact the correction is moving faster and faster at this point. We have all seen the charts showing the upcoming ARM resets. Washington simply isn't going to move fast enough for most of those people.
As usual, I suspect that if there is a major bail-out... it will come about a year late.
Ah yes, the charts--and facts--show the horrible housing market in Arlington....
or not...
"Ah yes, the charts--and facts--show the horrible housing market in Arlington....
or not... "
Did someone say something about Arlington?
Not you, but many others on this site and others have claimed a 20% market correction in close-in areas such as Arlington, which is wholly unsupported by the facts.
The jump in inventory over the last 2 years is pretty high for all of the counties shown. It may take some duration of bloated inventory to really see the negative pressure on prices. Right now it appears to be a standoff. If the rates stay high on jumbo loans, there will have to be an even stronger downward pressure on prices because the pool of qualified buyers will shrink. There is no denying that a good chunk of homebuyers over the last few years would not have qualified without loose lending and toxic loans. I don't get how people seem to think that a quadruple increase in home prices with relatively little increase in salaries makes sense. It just doesn't. Everything I've read suggests that when your rent to buy ratio is this out of whack, something is fundamentally wrong with the market.
Fd-I would agree with many others on this blog. It is going to take some time for the "facts" to play out as inventory continues to rise and lending rules tighten. I very much believe we will see a 20% or more correction in all of these markets, obviously some more than others, but Arlington is not immune.
Kelly said...
"The jump in inventory over the last 2 years is pretty high for all of the counties shown."
Considering we're coming out of an unusually active period, is it really that surprising that inventory is higher now than when properties sold over a weekend? Look at inventory periods 10 years ago as the boom was just starting, and you'll see that today's numbers aren't that much higher than those ... and that was already a boom time!
Kelly also said:
"I don't get how people seem to think that a quadruple increase in home prices with relatively little increase in salaries makes sense. It just doesn't."
You are overlooking two things. Firstly, it's not the house of the price that determines its affordability for those of us who must use mortgages to buy. It is the monthly payments. Interest rates --- and thus monthly mortgage payments --- dropped a lot in that period. So, it isn't true that "prices quadrupled" when the real price people are paying is what it costs them each month. Secondly, perhaps people were just lucky before ... to be able to buy so affordably. Property prices go in cycles. I know that back when my people were first buying back in the late 70s/early 80s period, they too thought that prices were now out of whack with fundamentals ... because due both to high mortgage rates and high prices, buying a house had overnight become much more expensive. But guess what ... prices never did drop back down.
prices never did drop back down.
1. Yes, interest rates dropped for 22 years. And they rose steadily for the 25 years prior to 1982.
2. Adjust those prices for inflation.
okay Harriet, now you're starting to understand. correct, interest rates came back down ... but the prices didn't. Apply that lesson to now and you'll understand why those folks who smartly locked in their payments last month or the 10 years prior at low rates will do just fine as interest rates rise from their historically low levels ... and nominal prices stay essentially where they are at.
Lance,
Why will nominal prices stay unchanged?
"okay Harriet, now you're starting to understand. "
Lance, you really need to drop this fake expert routine. Over and over and over again we have had to correct you on basic facts.
Why don't you go to this link, and look at the numbers for a little while...
http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_May1235.xls
Make that link:
http://tinyurl.com/2f9gcg
Harriet said...
"Lance,
Why will nominal prices stay unchanged?"
Partly because interest rates are rising (i.e., monthly mortgage payments will be higher even if amount borrowed isn't) and partly because maximum sustainable price levels have been reached (i.e., buyers are already at their limits.)
I wouldn't style myself an expert as Leroy implies, but I will say I've witnessed this happen more than a few times in my lifetime. There's something "sticky" about real estate prices ... They don't rise gradually ... They go up in jumps... and then don't really go back down. They just become more affordable by staying where they are ... until the next big jump ... like the one we just came out of.
I'm not saying you won't see any price declines out in the exhurbs where you are looking (or even here in the District if you are looking at condos), but they won't be substantial (i.e. no "blood in the streets"). Higher interest rates may negate even that savings though.
I'm sure there are ways to "time it just right" and make a killing by buying/selling at the exact right moment. But I just don't think that makes sense if you are buying your home to live in it. There are just too many things that can go wrong .. such as rising interet rates.
Leroy,
Your link proves my point that over the longrun prices always rise? Why did you post it?
I'm suspecting we see things very differently. To give any regard to the fluctuations shown in the link you gave us, one would need to view a home purchase as a financial investment to be "timed" in regards to buying and selling as the market dictates. Personally, I don't think the market should be dictating when I buy or when I have to sell my home. I'm not in it for "the money" ... I'm in it for having a "home". Longterm prices always rise. If you have your monthly costs reasonably locked in (and even an ARM can give one a reasonable lock in because of its caps), and you know you'll sell if for more than what you paid down the road, then why would you put off buying? One risks a lot by putting off a purchase ... For example, you don't know if interest rates will go to double digits like they did back in the late '70s due to the expenses related to the Vietnam War.
"Your link proves my point that over the longrun prices always rise? Why did you post it?"
lol
I love the strawmen lance... I am picturing you sitting there at your computer thinking you are being really clever and that no one will notice that you keep trying to argue against assertions no one ever made.
Yes lance, pat yourself on the back, in the "long run" RE prices tend to rise... of course, no one ever debated that point.
The reason I sent you that link was so that you could look at some actual data. I was hoping that equipped with something other than your own wishful thinking you would be able to discuss events in the RE market like an adult.
At the end of the last RE boom in 1990, prices peaked at 93.22 in April 1990.
Prices then fell, hitting a low of 87.56 in April 1991, but also falling into the 87 range in 1992.
Prices didn't match the 93.22 seen in April 1990 until...
December of 1998, more than 8 years from the previous peak.
For a look at a much worse bust in LA, check the data from June 1990 where the peak was 100.24.
LA fell to a low of 73.07 in March 1996 and didn't return to 100 until Jan 2000. (10 years...)
RE busts do happen, and when they do, they last a long time.
This isn't about timing the market down to the exact month or week. This is about not being underwater on a house for a decade.
A little bit of patience goes a long way when it comes to managing finances.
Leroy,
You keep proving my point! You are worrying about small matters and missing the big picture. The 5 1/2 percentage point drop from 1990 to 1992 you refer to is inconsequential if you really bought that house to live in and not to flip it in 2 years. You need to look at the big picture. What were interest rates doing then? What did you "buy" in getting that house in terms of stability. Etc. etc. The 5 1/2 percentage points are but "noise" ... interfering from letting you make a good decision overall. You could say you are "penny wise and pound foolish" or "not seeing the forest for the trees". In any case, what you are pointing out is not the "blood in the streets" that many positing on here are looking for. They aren't looking to save 5 1/2% on the price of a house. They're concerned that they've been left out of the chance of buying a house because prices have gone up some 100% to 200% in the last 10 years. Why would they care about a 5 1/2% drop ... ?
"You keep proving my point! You are worrying about small matters and missing the big picture. The 5 1/2 percentage point drop from 1990 to 1992 you refer to is inconsequential if you really bought that house to live in and not to flip it in 2 years."
Uh huh... I continue to be unimpressed with your ability to make sense of the data I have made available to you.
Let me make this simple for you, not all cycles are the same.
There is no such thing as a "normal" cycle. The last downturn in DC was relatively mild, you are right about that, but that in no way relates to this downturn.
"Past performance does not guarantee future results," and all that.
The point I was making in directing you to look at that data was that even in a mild cycle the downturn can last the better part of a decade.
In worse cycles, like the LA one I also directed you to, large price declines are possible. Your theory that "it is always a good time to buy" is based on emotion, not facts.
"You need to look at the big picture. What were interest rates doing then? What did you "buy" in getting that house in terms of stability. Etc. etc. The 5 1/2 percentage points are but "noise" ... "
Heh...
If you are curious what interest rates were doing, look here:
http://mortgage-x.com/trends.htm
(They dropped roughly 33% between 1990 and 1998, so much for your theory that they must have increased.)
"They aren't looking to save 5 1/2% on the price of a house. They're concerned that they've been left out of the chance of buying a house because prices have gone up some 100% to 200% in the last 10 years. Why would they care about a 5 1/2% drop ... ? "
See? You have some of the right data floating around in your head somehow, but you still seem to stumble when it comes time to put it together.
There has been a massive and unprecedented run-up in prices all across the nation, and for that matter most of the western world.
What makes you think this will be comparable to the relatively mild previous cycle?
You are absolutely convinced that you can't "lose" at RE. You spend half your time trying to scare people into buying by claiming that interest rates are about to climb, or that they would be "priced out forever" then when the numbers don't suit you you claim that buying a house isn't about the money...
I have an idea, since you are so confident in your ability to predict the market. Where do you see the Case Shiller index in 6 months, 12 months, and 60 months?
Oh yeah, and don't waste our time trying to dodge the question by same some variation of "it doesn't matter where it will be because it is always a good time to buy," or "it isn't about the money, you should rush out and buy now even if prices are dropping like a rock," or anything similar.
If you think prices are going to be steady moving forward, then say so. If you think prices will drop but that interest rates will shoot to the moon, by all means, please say so.
We are all interested in hearing an outsider's view on economics.
Leroy, you said: "Your theory that "it is always a good time to buy" is based on emotion, not facts."
I've never said "it is always a good time to buy". What I've said is that "there is never a bad time to buy" ... i.e., yes, there are "better" "easier" times and "worse" "harder" times to buy, but someone looking for a home --- who is in a position to be in a longterm "home" situation --- should never feel that "now is not a good time to buy, I will wait for better/easier times to buy". Smart buyers know they can make it work under any housing market conditions. You still aren't understanding what I am saying ... I can only guess it is because you are fixated on "monetary gain" from your home. Or ... now that I think of it ... you are looking for reasons to justify a fear of making the commitment that buying a home is. You're like my 40+ old never-married friend who continually finds reasons why she will find someone better if she just keeps waiting.
Lance,
So why did you divorce your condo? Isn't moving like you did violating the principle of buying to stay in place long-term?
"You still aren't understanding what I am saying ... I can only guess it is because you are fixated on "monetary gain" from your home. "
Yeah, that or I understand exactly what you are saying, but unlike you I have the ability to see the numerous flaws in your various theories.(you know, the ones that are all designed to prove you made the right decision when you bought...)
I will say it for you one more time as simply as I know how.
Just because I don't want to overpay for something that will be cheaper next year, doesn't mean I am trying to play investor with a house. It simply makes more financial sense to wait. I can save money faster by renting and of course an equivalent house will be cheaper when I do buy. My down-payment is rising while prices are dropping.
As for "monetary gain," you once again just don't have a clue what you are talking about.
I am predicting flat to declining values for most of the next decade, yet I am planning on buying in the next 18 months.
Does that sound like the sort of thing an investor would do?
I expect prices to drop or at best remain stagnant for at least the next 5 years. If I were trying to make money I would put it into something I thought might appreciate.
"Or ... now that I think of it ... you are looking for reasons to justify a fear of making the commitment that buying a home is. You're like my 40+ old never-married friend who continually finds reasons why she will find someone better if she just keeps waiting."
Yeah, except I am young... and have a definite plan in place for my future... I can really see all the similarities.
If it helps you wrap your head around the concept, you can think of me as engaged, the wedding is set for next year though.
BTW, I noticed you didn't provide us with your prediction as to where housing values are going.
Lets hear it lance:
6 month,
12 month,
60 month Case Shiller predictions.
Feel free to make interest rate predictions while you are at it.
"So why did you divorce your condo? Isn't moving like you did violating the principle of buying to stay in place long-term? "
I can tell you for sure that it wasn't about money!
Lance doesn't know and couldn't care less what the value of his house is at these days.
He bought it as a home and hasn't once thought to check where the market has gone since he did so!
In fact, that is why Lance used an interest only loan when he "bought" his house. He is SO disintrested in the meaningless paper value of his home that he doesn't even care if he builds equity or ever actually pays off the balance of the huge loan he took out.
Some people might plan around the foolish idea that they can pay off their house and own it free and clear, but what does that really get you afterall?
The important thing is being a "real citizen" and the only way to do that is to "own" a home, it doesn't matter if you are actually paying for the home. You can just rent as much money as you like and look just as good as everyone else on the street.
It is all about the payment, not the price afterall.
Harriet asked...
"Lance,
So why did you divorce your condo? Isn't moving like you did violating the principle of buying to stay in place long-term?"
No, it made sense to move into something that cost me less to live in once all was said and done AND provided me more in the sense of the amenities a home provides. It was a smart move. It fell into my strategy of having the home I need AND minimizing my longterm housing expenses. If it wasn't financially feasible AND better from a "home" perspective, I would have been fine just staying were I was at.
I've never said you must stay in the home you've bought. Note that I didn't move for financial gain ... which is what I'd be doing if I let market conditions dictate to me when I should move or buy. I moved because it better satisfied my two goals related to housing (1)minimizing long term expense and (2) giving me what I want out of a home. Do you understand the difference between that and what Leroy is advocating? In a nutshell, my home is not a financial vehicle ... it is a home. I don't think Leroy intentially views his home as a financial vehicle, but when he starts looking at it as if it were a share of equity, he is de facto treating it like a financial vehicle ... and he has lost sight of what the purpose of having a home.
Leroy,
I just read your justification for holding off buying another 18 months with great interest. What you say makes sense ... from my "minimizing long term costs AND maximizing home amenities" sense ... based, of course, on your beliefs with where prices/interest rates are going.
However, trying to compare your "good" decision vs. recent buyers' "bad" decisions is not equally admirable. When you do your numbers, you are looking at your own situation and, based on your price/interest assumptions, coming up with a good decision for you specifically. And I can buy that ... since you are doing exactly what I advocate ... being a smart buyer for your individual requirements. However, when you look at what recent buyers have done, you are making a lot of assumptions that don't take their individual circumstances and needs into account. Why? How does this help you justify holding off?
"It was a smart move. It fell into my strategy of having the home I need AND minimizing my longterm housing expenses."
You do realise that in the long term interest only loans cost quite a bit more right?
If you were really interested in minimizing your long term housing expenses you would have gone for something like a 15 year fixed rate mortgage that you could have paid off sometime around the time you retire.
"I don't think Leroy intentially views his home as a financial vehicle, but when he starts looking at it as if it were a share of equity, he is de facto treating it like a financial vehicle ... and he has lost sight of what the purpose of having a home."
The purpose of having a home? In your case that appears to be fluffing up your ego...
I will buy when the time is right. Rushing into things doesn't do a bit of good at a time like this.
"I just read your justification for holding off buying another 18 months with great interest. What you say makes sense ... from my "minimizing long term costs AND maximizing home amenities" sense ... based, of course, on your beliefs with where prices/interest rates are going. "
Uh huh...
"However, trying to compare your "good" decision vs. recent buyers' "bad" decisions is not equally admirable. When you do your numbers, you are looking at your own situation and, based on your price/interest assumptions, coming up with a good decision for you specifically. And I can buy that ... since you are doing exactly what I advocate ... being a smart buyer for your individual requirements. However, when you look at what recent buyers have done, you are making a lot of assumptions that don't take their individual circumstances and needs into account. Why? How does this help you justify holding off? "
What on earth are you talking about?
I have explained where I think the market is going, for most people it makes sense to wait in the present conditions. If someone has specific concerns, well that is their business.
YOU are the one on this blog, and others, with an agenda.
I have watched you try every different laughable justification for why you think housing in this area is going to keep going up. "new paradigm" "it is different here" "next Manhattan" "panglobal node"
You thought it "wasn't a bad time to buy" at the absolute top of the bubble...
Heck, just days ago you said you thought 75k was an acceptable income for someone that wanted to buy a $400k house...
As recently as this Jan you said you expected to see bidding wars in May...
Please stay around lance.
Leroy said:
"I have explained where I think the market is going, for most people it makes sense to wait in the present conditions."
I see, so for YOU it makes sense to wait because it allows you to put money away, gives you time to look around, yadda yadda yadda. But for everyone else they should just wait because for "most people that makes sense". Nonsense. If you want to get into the "most people" arguement, then it doesn't make sense for "most people" to wait till the market bottoms out as that is when buying a house will be like trying to land a chair as the music stops in "musical chairs." Fortunately markets don't operate as you wish they did. There are different price points and ideal times to buy (or sell) for each and every person out there. And each and every person out there gets to decide for themselves based on their situation, wants, needs, and circumstances. You don't get to make that choice for them. Sorry.
"Nonsense. If you want to get into the "most people" arguement, then it doesn't make sense for "most people" to wait till the market bottoms out as that is when buying a house will be like trying to land a chair as the music stops in "musical chairs.""
LOL...
Scroll back up lance and reread those numbers I provided you, again.
The market is likely to sit and do nothing for YEARS once it is done falling.
There will not be a "bottom" followed by bidding wars the next spring or any similar scenario. For someone that claims to have been around a while you sure don't seem to have a clue what the heck you are talking about.
You have already been corrected more than once on this particular error.
"Fortunately markets don't operate as you wish they did."
You think I am "wishing?"
If you think I am wrong about where the market is going, by all means, post your predictions.
6 months, 12 months and 60 months from now, where will the CS index be?
"There are different price points and ideal times to buy (or sell) for each and every person out there. And each and every person out there gets to decide for themselves based on their situation, wants, needs, and circumstances."
Gee, you think so? That is quite a revelation! Sounds like the housing market is some kind of... "market." An interesting theory...
"You don't get to make that choice for them. Sorry. "
Heh, I actually think it is funny that through all of this you still don't have the vaguest clue what the heck is going on, sad, but funny.
I am not making a choice for anyone. I am not even trying to make a choice for anyone. People can do whatever the heck they like.
Some of us will wait until prices show some sign of stabilising before buying to avoid throwing money away, others will no doubt go looking for one of the remaining interest only lenders so they can "buy" more house than they could afford if they had to actually pay for their house...
Leroy,
You continue to frame the home buying decision as an "investment vehicle" decision. Perhaps this question will help you understand your error in doing so:
In retrospect, do you think you did the right thing by not buying in 2000 and waiting instead for the bubble to "burst"? (Which you are still doing.)
i.e., Have you put away more in savings then it would now cost you to buy a house 7 years --- and 200% appreciation --- later? Have you and your family enjoyed living in that cramped apartment? Do you think your interest rate at 7 1/2% is not more than what you could have gotten back then? Do you not see the folly in "I'll wait for a better day!"?
L,
We purchased our first house in NoVA in 1993 and didn't see any appreciation (to cover the commission to sell) until 2001.
The years 2003-2006 were bubble years that made it difficult for most Northern Virginians to afford a house without "creative" financing, and renting was a lot easier on the pocketbook. We're currently paying less than half of our landlord's mortgage in rent.
I've spoken with the current economist for the Mortgage Bankers Association. He was mentioned in the LA Times two years ago because they were going to sell in NoVA and rent in 2005. Part of that was lifestyle changes, as they were older and didn't desire as much space. But he mentioned moving to the area in the late 1980s and declined to buy a house then because the prices were outpacing inflation. And they picked up a foreclosure in the early 1990s for their family home. Yes, from 1993 to 2001 would have been a fine time to purchase a house in Northern Virginia. I'm not convinced that 2003-2006's unaffordability was the norm rather than the exception.
"i.e., Have you put away more in savings then it would now cost you to buy a house 7 years --- and 200% appreciation --- later? Have you and your family enjoyed living in that cramped apartment? Do you think your interest rate at 7 1/2% is not more than what you could have gotten back then? Do you not see the folly in "I'll wait for a better day!"? "
LOL... I take it from this post then that you realise you don't have a strong argument and are forced to cook up ficticious scenarios.
First things first, I haven't been waiting since 2000.(How did you pick that year? Random choice right? Why not 2006?) I first seriously looked at buying in late 2005. (I didn't even move to the DC area until 2004)
Second, 200% appreciation? You think it is fair to count appreciation but not depreciation? Why don't you ask some of the 2006 purchasers who have seen their house's value drop tens of thousands of dollars in the last year how they feel about their purchase... For the price of waiting a few months they could have saved a year or more worth of take-home pay.
Third, cramped apartment? I live in a nice single family home with my wife. The people I feel bad for are the ones that stretched themselves to buy a small condo in the last couple years and are now going to be stuck there for who knows how long even when they get married, or have kids, or want to take a job in another city.
Fourth, there is of course nothing wrong with waiting for a better day. That is called being intelligent with your money. Saving rather than borrowing. Waiting rather than rushing in.
You are glad you took your chance to borrow a huge sum of money so you can feel successful. I hope that works for you. I am completely debt free and saving thousands of dollars per month.
Leroy said:
"You are glad you took your chance to borrow a huge sum of money so you can feel successful. I hope that works for you. I am completely debt free and saving thousands of dollars per month."
Okay, so the truth comes out as to why you find it necessary to think that current homeowners have all made bad decisions by not waiting to buy as you are doing. You're jealous. Why else the comment about "feeling successful"? Or is it more just "regret" that you didn't act sooner ... like we did ... ?
Harriet,
It sounds like you have a plan. That is a good thing of course.
Out of curiousity ... the house you sold back in 2001 ... Do you know what it is worth now? Has it "resold" since you sold it?
Did you sell it to "cash in" on the appreciation that occured between '98 and '01, or for other reasons such as a job move or a growing family? Have you saved more in monthly rent since then than the appreciation you gave up by selling it to someone else back in 2001?
Assuming it fit your needs location-wise, size-wise, etc., looking back ... would you have been better off staying in that house?
"Okay, so the truth comes out as to why you find it necessary to think that current homeowners have all made bad decisions by not waiting to buy as you are doing. You're jealous. Why else the comment about "feeling successful"? Or is it more just "regret" that you didn't act sooner ... like we did ... ? "
lol...
I could buy today lance.
I could have bought yesterday... and I could have bought last year.
It is clear to me that you think you are somehow a better person because of the house you "bought."
I don't have any reason to be jealous of you. I could make the same decision you did, I just know better.
Lance,
As stated on the opening post for this blog, we sold our last house in '05.
Wow, Leroy and Harriet are totally humiliating Lance in fornt of everybody. Or, more accurately, they're helping Lance to humiliate and abase himself completely in front of all who read this blog.
Post a Comment