Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Here's a new listing with a steep discount:$649,90011768 CHANCEFORD DRWOODBRIDGE, VA 22192Sales HistoryDate Price Appreciation 06/28/2006 $1,150,000 15.9%/yr 12/29/2004 $922,104 --
Just a poll: how many of you readers have experienced a 5x increase in income necessary to justify a 5x increase in these average prices? I've done ok in that time period, but not 5x. Not even 3x. And I consider myself to have done quite well.If anyone is interested, the New York Times published a rent vs buy calculator. I haven't looked into the assumptions (e.g., estimated tax benefits, opportunity costs, etc.) but if you're interested in playing with it, it's at:http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html
Still can't really afford a currently build/for sale house at $339 in Stafford, you're looking at a 2000-2500 sq. ft. nothing special house. Tiny rooms & tiny yard.We've opted to owner/build (not a modular)... for about $65 a square foot with a full basement (move-in ready), on a 3 acre lot I got at a firesale price!We'll wind up with about 12x the land (mostly treed), and almost twice the house! It's going to be a lot of work -- but work we can do.And, our final price tag will be about $375k (which includes landscaping, septic, well... propane tank, concrete driveway -- and my dh favorite a 4-car, side-load garage for our 2 cars and his workshop). The other house in our new neighborhood was originally for sale at $849k, and now listed at $589 (brand new).They will probably wind up selling it for closer to $500.
LisaK,Yeeeesss!If you've got a few acres of trees, may I suggest driving over to Charlottesville and checking out one of these babies:TulikiviI think these sound interesting, too:Geothermal Comfort Systems
"how many of you readers have experienced a 5x increase in income necessary to justify a 5x increase in these average prices? "What time range? $50K was common in 1990 for skilled computer types. Those same jobs pay more like $120K today. Call it about 2.5X.There are computer specialists, consultants who bill $250K and more but that's not common.I'd guess that only 1 in 10 is earning over $250K and only if they are independents. They pay their own benefits, social security taxes out of that money.5X is unusual but good salaries, which I'd define as $100K and up, are common.
Lisak, sounds very nice!Hariett, thanks for the URLs.Kh, the amount a company bills is a lot different than what the engineer gets. A company billing $100/hr may only pay $50. The contract engineer at $250 exists, and probably has plenty of work most of the time, but is also theoretically setting some aside for when times aren't so good. They're the first on the chopping block when money gets tight.$100k/year sounds like a lot, but supporting a family of 4+ on that salary is really only possible if there is no debt, other than perhaps reasonable mortgage payment.The time frame parallels the bubble. A $150k house is more affordable to someone earning $50k/yr than a $500k house is to someone earning $100k or ever $120k. That's the point.
"Kh, the amount a company bills is a lot different than what the engineer gets. A company billing $100/hr may only pay $50. The contract engineer at $250 exists, and probably has plenty of work most of the time, but is also theoretically setting some aside for when times aren't so good."I'm not certain what you're saying but I think we agree. Computer specialists with good skills can bill $250,000/year or more, somewhere between $100 and $150 per hour. These are average, not the absolute highest rates. If they work for themselves direct to the client, they capture that entire amount. My guess, and this is from my experience, is that about 1 in 10 of the good ones work that way. Of the $250,000, social security and other costs take a sizeable chunk. There are many in this area who earn that much for themselves some are independents, partnerships, their own Sub-S corps, or LLC. Someone who earns $150/hour for themselves in Federal Triangle does not want to drive 3 hours a day from Manassas. The extra $300, $400 that they can earn a day pays for some nice accommodations. Lance and Bill made the point months ago that computer experts and lawyers can afford the million and two million dollars for close in places.I'm not saying that every LAN engineer or lawyer can afford that but there seem to be more than enough.
"The time frame parallels the bubble. A $150k house is more affordable to someone earning $50k/yr than a $500k house is to someone earning $100k or ever $120k. That's the point."This is absolutely true. However, say my place is worth $500K, I'm not paying on a $450K mortgage because I bought many years ago. Two of my neighbors have paid off their places. Another is 2 years away from paying off their place, they bought in 1994 ($250K but now worth $700K) rolled her condo and his TH into the place.Of this entire area, I'd guess that 80 or 90% of the owners are like the above examples. The price doesn't matter because they've either paid off their places or the mortgage is very small. There are not that many places for sale in Arlington, DC, and Alexandria, compared to Fairfax and Loudoun.The demographics are different. Lance has been saying to buy because over time, the ownership gives advantages and the mortgage becomes affordable. (tempered with know your budget, the market, and have a career plan) I'm not telling anyone to do that but the hundreds of thousands who bought 5 or more years ago, are in a good position.They have a small or no mortgage.
lisak,I'm also building a house with a contractor's help in stafford (builder-owner/construction management), and our cost per sq.ft is a lot higher than your estimates, which sub-contractors did you pick? We are having a hard time finding a framing laborers whose cost would be under $5 per sq.ft.
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