The Census Bureau released a new report today on residential vacancies and homeownership for the fourth quarter 2007.
The Census Bureau said the rental and homeowner vacancy rates were not statistically different from the fourth quarter rate last year or the rate last quarter. But the homeownership rate at 67.8 (+/-0.5) percent for the current quarter was lower than the fourth quarter 2006 rate (68.9 percent) and also lower than the rate last quarter (68.2 percent).
Tuesday, January 29, 2008
Census Bureau Reports Q4 2007
Posted by Harriet at 11:56 PM
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Anyone here with experience with buying a home built in 1950's in NoVA and renovating/adding extra bed rooms?
I would like to hear your comments on whether it is worthwhile to add to such old properties. Would it become a money pit? Is one better off buying newer properties (or tearing down and building anew) even though the older one has some advantages because of location, schools, etc.?
Thanks in advance fo all comments.
Tear down is the best idea if you can afford it.
The big problem with old homes is low ceilings and room size. You can knock down walls to increase room size and open up the floor plan, but that will reduce the number of rooms. You cant raise ceilings without tearing out rooms from the upper floor. So if you start wirh a 4 bed 3 bath home you may end up with a nice renovated 2 bed 2 bath.
If you decide on doing a teardown, look at modular homes. They have some really nice designs that will save you money and time. Quality is excellent. I just saw a book on them at Barnes & Noble and it made me wish I did this ( We had a builder build our home ).
doug,
Thanks for the info. I am just looking at all options as I am looking at some REO properties with 2003 prices.
By the way, today's 0.5 point Fed rate cut did not lead to long term rates falling. As Marketwatch says in an article today, long term rates may in fact go up because bond traders may fear inflation later; that is why I said that one cannot be sure of mortgage rates falling.
Wait a few weeks, the same thing happened after the first 0.5 reduction last fall but investors eventually started hitting the treasuries.
I know they are not technically linked but if you look at the curves over history they are very closely related, and the longer this cut is in effect the more it will weigh on mortgage rates.
Many if not most of ARMs are tied to the LIBOR which the Fed has zero control over. (http://en.wikipedia.org/wiki/LIBOR)
Yes Im aware of LIBOR based loans, that was not the topic of our discussion.
LIBOR does tend to follow FED rates, unless there is uncertainty in the market. See the FED rate is the rate at which banks are allowed to lend to each other. The LIBOR rate is the true average that banks are lending to each other. LIBOR is always higher than the FED rate, but they usually follow each other.
Earlier in the subprime mess, LIBOR went up when the FED rate went down. This was because banks were paranoid to lend to each other because they expected some banks to close.
Here is a nice chart which shows everything...
http://cmcgroup.files.wordpress.com/2008/01/ratecomparisons2.jpg
May I suggest a slightly different approach to Doug's suggestion? If the place is some of the 1950's typical military surplus housing stock, then a teardown is not a bad idea. However if it is more of the bungalow, or some other recognizable style (i.e. something with character), you might be better served adding on. Also, if you do go with a teardown, may I suggest going with something other than a modular for reasons noted below.
The reason being, in Arlington, Alexandria, etc. there is a big push against the homogenized McMansion style of house you see out past fairfax. Few here object to a big/bigger place per se - but they do object to the tyipcal - vinyl on 3 sides, brick on the front, multiple rooflines without purpose, or any other design elements or cost cutting materials completely devoid of character.
By building something a bit unique you will pay a bit more up front in building materials, architectural fees, etc. and you may think you are limiting your potential pool of buyers in the long run because what buyer will want to pay extra for that stuff? However, I dont think thats the case. For starters, the people who dont care about character and who are obsessed about "most house for the money" are the ones most likely to fight you on price. By contrast, look at what a tiny "Sears House" will go for in Del Ray or a 1920's refurbished bungalow in North Arlington or a "Flounder House" in Old Town Alexandria. On a strict dollar per square foot basis, it makes no sense - however people who appreciate unique design elements are willing to pay dearly for them.
Think of it another way, much of the 1950's housing stock found in Arlington are being torn down because they are homogenous looking crappy built military/government housing units that completely lack character. Most now think those were a mistake and are glad to see them go. The problem is many of them are now being replaced with McMansions that often trade space and pretension for quality and lasting architectural value -thereby ensuring that at some time in the future, the occupants will determine they are ugly, worn out pieces of crap that are not worth remodeling. It is nearly a perfect circle.
The point is, while the homogenized, souless brick/vinyl townhouses play well with the crowd that lives out past Fairfax, shops at the strip malls and eats at the chain stores, that stuff does less well here. This may well come off as elitist, but then again, many of us who live in these areas think they are fantastic, and realize they are thay way because they truly are unique in the suburban sprawl otherwise know as NOVA.
Just to make a point - you can get modular homes of just about any architectural style.
The only difference between a modular home, a custom home, and the track homes that you see in Fairfax, is that modular homes are built in a factory, to tighter specifications, and thus are cheaper and usually higher build quality.
We went with a custom builder, but I probably could have saved 100k by going modular and had the same house. Time will tell about the quality of our home, but I trust the builder ( been around 50 years ) so I am optimistic.
"The point is, while the homogenized, souless brick/vinyl townhouses play well with the crowd that lives out past Fairfax, shops at the strip malls and eats at the chain stores, that stuff does less well here. This may well come off as elitist, but then again, many of us who live in these areas think they are fantastic, and realize they are thay way because they truly are unique in the suburban sprawl otherwise know as NOVA."
There are always people without taste. You could build pretty much any kind of monstrosity you wanted anywhere in the area and still expect to be able to find someone to pay for it if only because it is huge.
I agree that most of the homes built in recent years are pretty horrible, but it isn't a "past Fairfax" issue that is somehow tied to "chain stores." It is simply the only thing the builders are building right now.
The problem is building a high quality house made out of high quality materials is just absurdly expensive. This is a problem all over the world, not just DC.
If land values are high people are going to tend to try to get as much out of the land as they can. Few people seem willing to pay for a house that will still be desirable 50 years after its construction if it means settling for a house half as large.
Check out the building codes in old European cities sometime. There is a reason it has been made almost impossible to do new construction there and it doesn't have anything to do with chain stores or Fairfax.
"Just to make a point - you can get modular homes of just about any architectural style".
I actually just googled them and you have a decent point Doug. I wasnt aware of such variety. I guess then its just a shame that right now, it seems like everyone is choosing the same sort of style.
"I agree that most of the homes built in recent years are pretty horrible, but it isn't a "past Fairfax" issue that is somehow tied to "chain stores." It is simply the only thing the builders are building right now."
I think I agree to a point. I think it is a past fairfax issue in that these areas were not developed until recently and all in a very short timeperiod (save for a few old farmhouses that remain and some very small historic city centers). Once the residential is there the retail follows, and the builders for each are thinking almost exclusively on "dollars per sqhare foot" terms. Thus the answer to both is McMansions and strip malls.
Thats not to say a similar thing didnt happen close in. If you look at the history of Alexandria & Georgetown, the first generation (early mid 1700s) stuff put up was put up in a short period of time and was pretty awful. Most of it is now long gone and replaced by stuff from early to late 1800's and then here and there afterwards. Hopefully in time, the outer areas will evolve along these same lines and thankfully the building has stopped for a while - giving them a chance to recuperate.
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