Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, off-topic ideas, and links here.
Lance, did you ghost-write this:Home Sweet Investmenthttp://www.nytimes.com/2008/03/18/opinion/18tabarrok.html?ref=opinion
GeorgeSalt asked: "Lance, did you ghost-write this:Home Sweet Investmenthttp://www.nytimes.com/2008/03/18/opinion/18tabarrok.html?ref=opinion"No ... but the author is from NoVa ... maybe he's been reading my comments on this blog? ;)
That GMU economist is stuck in a time warp; he's still espousing the fully debunked myths the home builders and realtors were spewing a few years back:-immigrants surging into the country and snapping up houses-people are desperate to live on the coasts-the vague "strong economy" notion-low interest rates (is he suggesting this is permanent?)-an ever-growing government (in the DC area)It's an embarrassment that someone in his position is still clinging to these ridiculous reasons to justify house prices that make no sense based on fundamentals such as incomes and rents.
That's right John ... there're no new immigrants moving into this area ... and the rust belt folk aren't all coming to the coasts for jobs ... and our GDP hasn't grown and grown ... and low interest rates? no ... there isn't a surplus of capital from a bustling world economy driving rates down ... and the war in Iraq/growing government? no, that hasn't happened ... It's all an illusion ... and John Fontain is the ONLY one not seeing that "illusion" ... LOL
Your right John, it seems like the author is just spouting catchy phrases. "WILL WE PERSEVERE, YES!!!"
Here's a video from California.Could Neil be right?
I think Alex Tabarrok needs to get out of his campus office/classroom and go driving around the area because I think he has isolated himself in that academic bubble. Apparently he is unaware of like in Fairfax between 2006 and 2007 the foreclosure rate jumped 664% and who knows how many there will be in 2008.
I'm surprised he's not one of the paid shills at the Center for Regional Analysis.
Where’s the heresy in Prof. Tabarrok’s op-ed? He’s writing about 10-year time horizons and warns that even in that time frame the people who bought at the top of the market won’t see any windfalls. He argues that there is a risk that credit markets may exacerbate the present problem, but also offers argument as to why he doesn’t think the price decline will be as bad as Japan. Of course, I realize, that Prof. Tabarrok should be writing that people who bought at the top of the market should suffer many torments for their stupidity and sell their house at a substantial, savings depleting loss as well as give the bargain hunting buyers a bottle of champagne as well.
Anyone know when Loundon Co. comes out with the 2008 assesments?
"John Fontain is the ONLY one not seeing that 'illusion' ... LOL"Lance, my opinion is that you are right over the long haul but on the short term, I see evidence of problems close in.When I checked my zipcode last night, prices for two groups of "commodity" housing had fallen about 10%. This is a real price pullback. Older 3/1 TH's that were selling for $450K are now straddling $400K, two are under $400K. 1/1 garden apartments that were over $200K are now below $180K. In addition, the new THs on 0 W GLEBE were listed presale in the 800's two years ago are $550K today.Compare those to this nearby bank owned garage TH at $384.9K. SFH are another matter. There is so much variation that it is hard to find comps.
Couple more comments.Thanks to Harriet for setting up this Bucket for general comments. On another thread, Lance mentioned living in the center of the area and IT people working at the various government and private firms, which are close in.There's another aspect to that. I've known many IT contractor-consultants who live way-the-heck out there and also work way-the-heck out there.The problem is, they live on one side of the city and work on the other side. One fellow drove from Manassas to Ft. Meade for 2 years. Another drove from Columbia, MD to Reston. Two drove from south of Annapolis to Tysons.About 25% of the people I know do these horrible commutes. Figure that out. It turns out that unless you've got a very generic skill like Windows server management, you go where the work is. If there's a job on the other side of the city, that's where you go. You can see this in the traffic patterns. These people are on the Beltway at 6:00 AM and crossing the Wilson and Cabin John bridges. Living in the center of the city gives you a reverse commute at worse.
kh: that's a helluva price drop, considering that is what equivalent townhouses sold for in South Riding last year.
Well the fact of the matter is, South Riding should have never experienced the type of boom that occurred inside the beltway. Instead, in what amounts to a bizarre twist, the housing values out there actually escalated quicker and more than inside areas - probably because there was more room to grow. The problem is that nobody wants to live out there. South Riding is an abomination of a housing development. The only way in/out is a 30-40 minute stop and go nightmare to Centreville! On top of that the community is an absolute eyesore, a mix-mash spotting of wildly varying architectural styles, with virtually no trees or natural landscape. There is nowhere to work within 30 minutes of the place. I have some friends who bought out there and we went out and visited them once - never again! They absolutely hate it, and had major buyers remorse almost as soon as they put a deposit down. The prices there will likely plummet to 1999 levels, or even worse the place may end up an abandoned shanty-town within a decade.
Doug said:"The prices there will likely plummet to 1999 levels, or even worse the place may end up an abandoned shanty-town within a decade."I'll admit to not knowing the development, but I don't see how any development in the DC metro area .. or Virginia for that matter ... will end up "an abandoned shanty-town within a decade" or "plummet to 1999 levels".Please folks, for your own good, get realistic. Haven't you been watching the news and seen the lenghts the government will go to? And no, this is nothing new. We've been all through this before including the sudden ballooning of house prices. Do any of the bubbleheads on here realize that "average" house prices in the '60s were somewhere between the low teens and the mid-20s? That's $10,000 - $20,000 ... And that the "mature" folks back then were saying "how expensive that was compared to what they'd paid for homes a generation earlier. Of course, that was also when a $15,000 salary was a senior executive's salary. Over the years inflation constantly wears away at the value of the dollar. And yes, there'll always be periods where housing prices stagnate (such as in the 90s and now) where people can get relative values, but there will also be "catch up" periods as we saw earlier in the decade. The moral of the story is prices will always go up ... and the value of the dollar will always go down ... plan for it.
darren,I think they've already come out.http://inter1.loudoun.gov/webpdbs/
Please folks, for your own good, get realistic. Haven't you been watching the news and seen the lenghts the government will go to? Its not doing much good. Look at the TED spreads. The Fed is pushing on a rope. Cest la vie. Vietnam is the latest country to drop the dollar. Yes. Get Realistic. There is no avoiding a recession. Many areas are going back to 1990's era prices. Look at prices to incomes. Nothing the Fed is doing is going to boost incomes. I've seen home prices drop 40% in some of the most desirable areas of the USA. This downturn is being called "The great Squishdown" for a reason: There are too many people in "high end housing" who speculated.http://calculatedrisk.blogspot.com/2008/03/financial-crisis-third-wave-still.htmlA recession isn't a horrid thing. Read quotes from Volker last night. They were quite sensible. We're already in the recession. Oh... not officially; but when 70% of the population believes we're in a recession, we're in a recession. This too shall pass. At least oil is going down. But wait... pump prices don't yet reflect $100/bbl... Also, surplus housing is being absorbed at 100k units/year. Bummer there are so many surplus units. Got Popcorn?Neil
Democrats Draft Plans for Distressed HomeownersUnder the program envisioned by Frank and Dodd, a distressed homeowner could contact an FHA-approved lender for assistance. The new lender would determine how much the house is worth and how much the homeowner could reasonably afford to pay. The existing mortgage holder would then be asked to accept the lower amount, which would be paid in cash by the new lender. The mortgage would in turn be insured by the FHA.By Lori MontgomeryWashington Post Staff Writer Wednesday, March 19, 2008; Page A04 www.washingtonpost.com/wp-dyn/content/article/2008/03/18/AR2008031803072.html?hpid=topnews
The existing mortgage holder would then be asked to accept the lower amount, which would be paid in cash by the new lender. The mortgage would in turn be insured by the FHA. That's a recipie for failed banks and broke 401k's. The legislators keep ignoring the fact that there aren't enough bond buyers with the failing I-banks.Its like Fannie and Freddie's jumbo loans... Its not a solution unless it can move more money.The solution is simple, let prices drop back to affordable levels. Require large down payments to prevent defaults of convienience.As I noted before, full doc loans will not re-ignite this bubble.Got Popcorn?Neil
For what it is worth, I just got my listing under contract in 4 days. I know many areas are doom and gloom, but just wanted to chime in that it isn't everywhere.Here is the listing www.6210n12st.com
What did it sell for?Ive heard rumblings that appraisers are not appraising 1$ more than current tax values.
Another "new" listing that violates all the rules:8139 BLANDSFORD DR MANASSAS, VA 20111 Price: $449,900 It has actually been for sale for more than two years. Its asking price since last summer was $429,000. I still have that flyer. It looks like it might have been taken over by a bank in February--I guess that would explain it.The last owner paid $600,000 for it in 2005. I can't even imagine why. It's on a super-duper steep hill, with an incredibly precarious driveway that begins right at a sharp turn in the road. Most of the acre is vertical hill, and the backyard is just a drop-off to a ravine.Besides all that, the listing says "Steal of a deal, this home is priced over $100K below assessed value." Since it is supposedly a "new listing" as of today, the seller cannot possibly try to say they don't know the 2008 assessment is $467,200.
http://www.homedatabase.com/FX6693020 http://www.homedatabase.com/FX6693440 ok maybe someone can help me figure this one out. i posted about the first link in monday's bits bucket. 290 seemed like a great price. then i click on homes within .5 mile on ziprealty (great feature), and the same address is listed at 390. both listings are active. is this deceptive or what?
kh-yea i remember those TH @ 0 W glebe. the advertisement as i drove by everyday, starting in the 800'2, nothing but the road being built for over a year, then from the 700's still nothing being built and i believe the last time i drove by it was from the 600's? what a joke of a place, great location little salvadore
GT, here's the current listing for 0 W Glebe, $499.9K.I drove by this morning. They've got two rows up, one looks finished. Seems to be about 1/3rd sold which says they're not selling fast.Compare to the nearby older unit at 10 W Glebe for $384.9K.If I were buying, I'd take the place at $384.9K. The prices are all over the place. Go figure.
Kristina, All the site is showing is 2007 so far...
khhmm i'm confused, i looked earlier and a map said 0 w glebe was close to where south glebe splits from west glebe but now it's showing as being near commonwealth ave. anywho i am referring to the ones near south glebe where they found 100 feet of unused land and decided to throw (2 i believe) rows of TH's. but yea at those prices i would rather be in cameron station (as it appears they're made by the same)
"i'm confused, "No, you got it right, the map is wrong. The $499K, used to be $800K, places are on the old Vepco parking lot. They are just to the right of where Valley Drive hits W Glebe Road and are built almost on Glebe Road. The entrance to the 1st floor garage is on the back side, away from Glebe.Getting back to valuations. These are fairly big TH's. Their price of $499.9 is probably forcing the prices of the nearby $450K units to $400K and lower.They had bad timing, if they had started a few years earlier, sold in the 2003 and 2004 time frame, the units would occupied and not applying pressure on the market.
I drove right by there the other day, awful location overlooking a noisy road. Who wants cars driving by 10 feet from their front door all day/night? Builders have to start getting it through their head that location is everything!
darren,You're right, the site is only showing property assessments for 2008. I wonder if they're still debating the 26% increase in the tax rate.
doug, exactly, those places might as well have their deck built over glebe and structured on the other side, actually not a bad idea.kh, yea my wife used to rent a smallish th with another girl who had just bought the place with her fiance and they paid 450, or maybe even 499, right off glebe and executive ave, early 2005 and i was awe struck this young couple, 24ish, could afford (and willing) to buy it. probably worth 400 now
GT, On my way in to work this morning, I saw the $384.9K place at 10 W GLEBE. It's right where you said it was, near Commonwealth (and 2 blocks from E REED, the armpit of Alexandria.)I recognized it by the big "BANK OWNED" sign in front. There's something weird about the house numbers. 0 W GLEBE is at the other end, near where the GLEBE's split at the Fish Market.
In contrast to Condo's and TH's, here's a peek at what SFH are doing in 22305.I offer up these stories. First up is 3610 NORRIS, an older 2/2 + 2 half bath SFH listed on 2/5/2008 for $25K under assessment. It sells in about 5 weeks. The closing price isn't on the city's site yet. Compare to 399 TENNESSEE, also older and similar, a 3/2.5 SFH listed on 2/23/2008 for $5K above assessment. It sells in 2 weeks. These two houses are next to each other on a quiet street, 1 block from GLEBE and EXECUTIVE. They are about 2 miles to the Pentagon, Crystal City, Metro (slightly more than walking distance but there is a bus). Both houses are on 5,000 sq ft (1/8th acre) lots in a neighborhood with mature trees.The nicer, modest, close-in SFHs are holding their value. They are selling well.Personally, I don't think of $600K as affordable. However, that is the going price. I looked at the pictures for both (for some reason, they're not loading this morning). Neither place has been McMansioned nor gussied up with Viking/Sub-Zero. They are nicer, older places with good, used appliances, small comfortable rooms. Not fancy but livable. There are not many places for sale in my zipcode, 22305. There are very few SFH available at any price.
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