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Wednesday, March 26, 2008
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41 comments:
Price/Income Price/Rent
2007-3Q 4.7 264.0
2007-2Q 4.8 265.5
2007-1Q 4.8 265.6
2006-4Q 5.0 279.4
2006-3Q 5.0 277.7
2006-2Q 4.9 276.1
2006-1Q 4.9 272.3
2005-4Q 4.9 275.7
2005-3Q 4.8 267.6
2005-2Q 4.6 258.9
2005-1Q 4.4 248.1
2004-4Q 4.5 223.5
2004-3Q 4.4 218.9
2004-2Q 4.2 208.5
2004-1Q 4.1 202.8
2003-4Q 3.9 207.8
2003-3Q 3.7 197.1
2003-2Q 3.5 191.3
2003-1Q 3.5 187.7
2002-4Q 3.2 225.8
2002-3Q 3.1 221.5
2002-2Q 3.0 214.4
2002-1Q 2.9 207.1
2001-4Q 3.0 209.8
2001-3Q 3.0 205.1
2001-2Q 2.9 198.9
2001-1Q 2.8 193.5
2000-4Q 2.8 N/A
2000-3Q 2.7 N/A
2000-2Q 2.7 N/A
2000-1Q 2.6 N/A
1999-4Q 2.7 N/A
1999-3Q 2.6 N/A
1999-2Q 2.6 N/A
1999-1Q 2.6 N/A
1998-4Q 2.8 N/A
1998-3Q 2.7 N/A
1998-2Q 2.7 N/A
1998-1Q 2.7 N/A
1997-4Q 2.8 N/A
1997-3Q 2.7 N/A
1997-2Q 2.7 N/A
1997-1Q 2.7 N/A
I see no problem here. Home prices will drop maybe 5%, then continue on up at 7+% a year.
Dunno about that. Looks like they need to fall another 30%.
In more up beat news:
The best places in the US to get ahead.
http://www.forbes.com/realestate/2008/02/22/income-job-growth-forbeslife-cx_mw_0225realestate.html
You know where half of them are? Right here.
The market might go down for another year or two. We are probably in one of the best locations in country for long term growth.
credit crunch still happening
mortgage insurers blacklisting 1/4 of all us zipcodes.
http://www.msnbc.msn.com/id/23731299/
Alexa: Where are those numbers from?
"Dunno about that. Looks like they need to fall another 30%."
I think that was her point.
Going back to the discussion of when the "bubble" began look at where the numbers diverge from historical norms.
From 1997-2002 the price to income ratio went from 2.7 to 3.2.
2003 took it to 3.9.(a greater increase than over the previous 5 years)
2004 took it to 4.5.
2005 took it to 4.9.
It peaked in 2006 at 5.0.
That article is one of many about a return to reasonable lending.
As of early 2005 over half of all homes purchased in the District were purchased with an IO loan.
(54% according to this Washington Post article)
http://tinyurl.com/937ar
Think about the implications of those numbers. Literally every other home in DC was purchased with an IO loan at one point and those loans are largely no longer available.
First time posting here.
I'm curious about Lance and his theories -- and whether he actually holds them, or is pulling a Colbert on everyone?
You know, talking the anti-bubble talk not from conviction but as "devil's advocate". One of the possible benefits of such a contrarian view would be to help get the BHs to see the limitations and excesses of their position. For instance, that in some areas inside the beltway, near Metro stations, etc., there hasn't been a big decline, nor is there likely to be one.
And who knows, maybe he also enjoys the entertainment value of some of his posts.
Just a thought.
"For instance, that in some areas inside the beltway, near Metro stations, etc., there hasn't been a big decline, nor is there likely to be one."
My personal view is that this is wishful thinking. I currently rent in a very high price zip inside the beltway near the metro. I do this because renting is far cheaper than owning. At current asking prices in this zip there are tons of homes on the market and no takers. To move the excess supply, econ 101 takes over and prices must fall.
"For instance, that in some areas inside the beltway, near Metro stations, etc., there hasn't been a big decline, nor is there likely to be one."
You seem to be trying to tie together two assertions that don't really belong together. Certainly some ares have held up better than others, but that in no way implies that they will not decline.
Neighborhoods that did not experience a bubble on the way up are likely safe from the effects of it popping.
As for lance? I think he really believes it. If all he wanted to do was play the devil's advocate he could do a much better job of it than by making up various economic theories and telling people they would be priced out forever.
While I disagree with much of Lance’s argument (and do wonder about his true position), it does strike me that PART of his argument is valid: the good places are not falling off a cliff, and won’t in the coming years. Decline, yes.
But there’s a substantial difference between a 5-10% decline and a 25-30% one. The good places are not dropping very rapidly, and perhaps they simply won’t.
By “good places” I mean those with either a short commute (less than 40 minutes each way) or within walking access to Metro, that have desired features like a garage, plenty of room and storage, upgraded kitchen, that have been well maintained.
Even out around Herndon where my wife and I have been looking for a house (SFH or TH) since January, those properties which have the desired features listed above have dropped only around 10% of their value since the high-water mark of 2005-6. TH’s that sold for $430-450K in 2005-2006 are now right around $400.
The places which are outright dives, or that have been abused, never updated, or don’t have things like attached garages, decks or sufficient storage space, have dropped anywhere from 20-40%.
(For instance, we put a bid on a short sale that listed for $405K, down from its $550K sale price in 2006.)
I’ve been hoping and waiting for those 15-20% drops in price to hit the properties that are actually in the running for my wife and me. It hasn’t happened yet, though I suspect that since we’re looking out in Herndon, it probably will within the year.
But inside the beltway – in good neighborhoods and with good houses – I wonder whether those places will actually drop more than roughly 10% top to bottom.
Good point nuf-said.
Most of the houses that are located on the front page decline section of this site, are a good examples. They are all run down houses that really had no business selling for those prices. I can't believe the county/bank appraised them for that high.
Yet there are several examples of well maintained houses that flipped several times to huge figures that have also dropped 30 % as well.
I figure the better time to buy will be this winter/next spring. Long term growth for this entire area is great (10 years), but the short term 1-3 years looks bad.
I would try to take 5 -10% off the 2008 county assessments and if you could get a decent house for that price, then you did ok.
http://www.housingtracker.net/affordability/
BTW, alexa = AlexA = Alex A = male :)
And in case anyone didn't see my sarcasm...I was being sarcastic.
I think people in teh exurbs need to be looking at purchasing at about 20-25% off peak at this point and plan on staying put for at least 5 years.
A key is going to be the economy turning around and consumer phsyche becoming positive once again. In my opinion, your looking at a declining market for another year or so, followed by a year or so of flat prices, then some modest gains following that.
Just an opinion, but there are deals out there if you look for them.
Nufsaid said: "The good places are not dropping very rapidly, and perhaps they simply won’t. By “good places” I mean those with either a short commute (less than 40 minutes each way) or within walking access to Metro..."
Like this place in Ballston?
880 POLLARD ST #601
Arlington, VA 22203
List price: $399,000
Prior sale: $509,900 8/2/05
List date: 3/23/08
-21.7%, $-110,900
or this one in Ballston?
880 POLLARD ST #1004
Arlington, VA 22203
List Price: $395,900
Prior Sale: $600,900 06/30/05
Listing Date: 03/10/08
-34.1%
or this place in Clarendon?
1021 GARFIELD ST #817
Arlington, VA 22201
List price: $419,900
Prior sale: $533,900 8/10/05
List date: 3/19/08
-21.4%
$-114,000
or this huge house in great falls?
9810 ORCHID CIR
Great Falls, VA 22066
List price: $1,270,000
Prior sale: $1,600,000 2/22/06
List date: 8/6/07
-20.6%
Are those the type of properties that won't drop in price?
Steve –
I just wish I could wait. We’re renting now, but our lease runs out in May. We’re feeling quite a lot of pressure to buy now (from ourselves) due to having lived in a much too small apartment for too long. Plus, we’re planning to start a family (Mother Nature willing).
So, I sure wish we could wait for another 6-9 months, but we can’t. (And we already explored moving to a different area, Charlottesville, but that would jeopardize my job plus there’s family nearby which is a big plus if children are on the way.)
I’m hopeful that if we can actually settle on a good place near Herndon, the decline in value this year and next won’t be steep, though I suspect the recovery will be quite drawn-out.
Of course, I have this fear (fed in part by this blog) that this summer won’t just be flat but flat-out awful, and that places throughout the region around Herndon-Reston down to Fairfax, Oakton, Vienna will see a major price drop.
I fear that, but in all honesty, I’ve not seen hard evidence that it’s happening to good places as well as bad . . . yet. There seems to be plenty of circumstantial economic evidence that it SHOULD drop precipitously (inventory levels, foreclosure rates, price/income ratios, tighter lending standards, maybe a recession), but I’m now becoming skeptical about whether it ACTUALLY will come to pass.
So going back to Lance’s argument (or my moderate rendition of it), it seems that this spring-summer may be the big test as to whether his view is essentially correct or not. The sales data will tell us whether the expanded beltway area is essentially iron-clad: immune from a major Bubble Burst of more than a 10-15% decline for even the good places (and so a 20-30% decline overall).
My hope is that NOVA is at least somewhat immune. Because if it’s not, then my purchase of a house in the next month could be a very bad one . . .
I had a question on the stimulus plan? Is this "rebate" really a rebate, or is it an advanced payment on part of my refund?
From what I've read, it won't be taxable and will not "reduce" my refund for 2008; however, thats not clear as whether reducing my refund means my refunded is not affected.
What I mean is this: If I am due to get $5000 back in my refund for 2008, and I received a stimulus rebate of $1500, does that mean my actualy refund amount will be $3500 at the end of the year because I had an advanced payment on that $5000 I overpaid?
Or conversely - will I get the $5000 as a refund on top of my $1500 rebate?
The language surrounding this whole thing has been confusing, but it seems that, though it does not technically reduce the refund at the end of the year, the actual amount you will receive at the end of the year will be what they owe you (if you overpaid) minus the amount you got as stimulus money.
Somebody help me out on this one...
880 POLLARD ST #601
880 POLLARD ST #1004
1021 GARFIELD ST #817
9810 ORCHID CIR
Those all look like short sales to me, who knows what the inside condition is like. I looked at about 15 short sales/foreclosures last year and they were all garbage.
You would need to put in about 50 - 100 k in repairs to make them look decent.
Not saying the declines aren't there for nicer houses, there are just not as many at this time. Later this year and next will probably be a different story.
nuf-said, good luck in your search. I had to move for the exact same reason, starting a family. I'm lucky I didn' rent even though I wanted to. It seems two of the houses we were looking to rent got foreclosed on within 6 months of our moving date. I probably would've had to move 3 times in one year with a 2 year old, and pregant wife and 2 large dogs!!.
Check out redfin.com though, I like the way they have their site set up. You can tell how long they have been on the market as well as the last sale. Something I haven't seen in other sites.
William asked:
"The language surrounding this whole thing has been confusing, but it seems that, though it does not technically reduce the refund at the end of the year, the actual amount you will receive at the end of the year will be what they owe you (if you overpaid) minus the amount you got as stimulus money. "
That's what the govt did the last time they passed a stimulus package. I suspect it's the same this time around since the snippets I've heard of the president talking about it always says something like "you're going to get a check in the mail ..." and not, "we're giving you money". There's a difference, you know.
John Fontain —
I’m not suggesting that there are no deals to be found, or that “really” there was no Bubble and no Bursting taking place. I’m saying that the idea that you can EXPECT to find what you’re looking for at 20-30% off its 2005-2006 sales price is not realistic.
Those three properties in Ballston/Clarendon are 2BR, 1Bath, condos. I didn’t investigate what the condo fees were, but my limited experience suggests at least $150/mo. To pay $400K for a small condo like that is not a great deal – at least not for me and others like me who need a place for 2 adults and kids (hopefully).
As you point out, it’s 20-30% below what someone overpaid 2-3 years ago. And I’m completely willing to acknowledge that there are great deals out there. But when they’re looked at closely, I think you’ll see that a big majority of those great deals have big drawbacks. Condo fees. Too small. I have no idea what the neighborhood is like on those particular blocks.
(I’ll leave it to others to look into that Great Falls place . . . maybe it has TOO MANY bedrooms . . . )
“Like this place in Ballston?
880 POLLARD ST #601
Arlington, VA 22203
List price: $399,000
Prior sale: $509,900 8/2/05
List date: 3/23/08
-21.7%, $-110,900
or this one in Ballston?
880 POLLARD ST #1004
Arlington, VA 22203
List Price: $395,900
Prior Sale: $600,900 06/30/05
Listing Date: 03/10/08
-34.1%
or this place in Clarendon?
1021 GARFIELD ST #817
Arlington, VA 22201
List price: $419,900
Prior sale: $533,900 8/10/05
List date: 3/19/08
-21.4%
$-114,000”
Steve,
I appreciate the suggestion.
And to everyone, I appreciate the frank discussion, especially the thoughts of those who are economists, real estate agents, etc. who are willing to put their ideas into the public sphere in this manner.
Very helpful!
steve said: "Those all look like short sales to me, who knows what the inside condition is like. I looked at about 15 short sales/foreclosures last year and they were all garbage. You would need to put in about 50 - 100 k in repairs to make them look decent."
Short sale does not equal garbage condition. The Great Falls property, for example, has lots of pictures in the MLS and it is immaculate. It's a perfectly good example of massively falling prices that are fast becoming the norm.
nufsaid said: "but I’m now becoming skeptical about whether it ACTUALLY will come to pass."
What about the people who had that exact same thought at this time last year?
Look, we are nowhere close to being done with this correction. The closer in areas are just starting to pick up steam with regards to price declines.
Maybe reading this article will help talk you off the ledge:
http://money.cnn.com/2007/11/06/real_estate/home_prices.fortune/index.htm?postversion=2007110711
It was written in November and says that we are still due for a 39% correction in the price to rent ratio in the DC area.
I think it's too early to tell what is really happening in Arlington, at least in all zip codes except 22204, where there are a lot of foreclosures relative to the rest of Arlington. My basis for saying this is, if you go to http://franklymls.com/ and search for all Arlington houses, you will see many, many houses, particularly high end houses, that have been sitting on the market for many weeks and months. As long as they sit unsold they are not entering the #s for average price sold. On the other hand, houses that have been put on the market in the last month at a good price, and which don't have significant flaws, such as being on a busy street, tiny or no usable yard space, overlooking the waste treatment plant, etc., are already in contract. It's just that these seem to be in the minority. Most sellers seem to be hanging on to the idea that they will get a price that is 10-20% above the 2008 Arlington Co. assessment. Are they right or wrong?
nuf-said said:
"Of course, I have this fear (fed in part by this blog) that this summer won’t just be flat but flat-out awful, and that places throughout the region around Herndon-Reston down to Fairfax, Oakton, Vienna will see a major price drop.
I fear that, but in all honesty, I’ve not seen hard evidence that it’s happening to good places as well as bad . . . yet. There seems to be plenty of circumstantial economic evidence that it SHOULD drop precipitously (inventory levels, foreclosure rates, price/income ratios, tighter lending standards, maybe a recession), but I’m now becoming skeptical about whether it ACTUALLY will come to pass."
This divergence in prices that you fear may very well happen ... if for no other reason than that the rich are getting richer, the poor are getting poorer, and it's becoming more and more attractive to live closer to the center of the metro area for many, many reasons. And who is in a better position to pay for being closer to the center ... and push up (or at least maintain) the prices there? While it may have started in the Reagan era, the disparity has grown even more in this last administrative era. Would it be unusual for housing prices to reflect that disparity ... particularly in a metro area which many have said has crossed the threshold from "administrative city" to true "international city"?
nufsaid said: "To pay $400K for a small condo like that is not a great deal – at least not for me and others like me who need a place for 2 adults and kids (hopefully)."
I didn't provide those examples as suggestions for places you might buy, they were examples of prices falling in "good places" (where you said they weren't falling), that's all. And I agree, even at $400k, those condos are nowhere near a good deal. Another hundred and a half thousand off and we'll be at reasonable prices. Those condos are a great example of why prices still have a long, long way to fall. It's just a matter of time.
“I didn't provide those examples as suggestions for places you might buy, they were examples of prices falling in "good places" (where you said they weren't falling), that's all. And I agree, even at $400k, those condos are nowhere near a good deal. Another hundred and a half thousand off and we'll be at reasonable prices. Those condos are a great example of why prices still have a long, long way to fall. It's just a matter of time.”
John –
First, by a “good property” I meant something that’s located in a “good place” (commute and neighborhood wise) and is in “good order” (updates, features you desire, etc). And I agree that BOTH of those criteria are subjective.
But my main concern/issue is the following:
I’m suggesting that there’s potentially a basic problem in some of the thinking here. A problem that I shared, until my ongoing house-hunting experience suggested I think otherwise.
There seems to be an inference that since (A) $400K for a 2BR/1BA Condo is too expensive and (B) there’s lots of pressure for places to drop in price, that the 2BR/1BA condo that works for someone is LIKELY to drop in price so that (C) you can find what you’re looking for at a reasonable price pretty soon. Just wait – it’ll come.
I’m suggesting that if those 3 places are in a desirable location for someone (which they likely are), and they have some good features to them, then they’re going to sell and probably sooner than later, for close to the asking price, if not right there. And while that’s 20-30% below the 2005 price, it’s still a good 20-30% “too high” to the rest of us looking from the sidelines.
Maybe what I’m suggesting is that the rationality we’re wishing for (that would supply the truth to the IF (A+B) THEN (C) inference above) doesn’t actually exist out there, not to the degree that the numbers would suggest.
Maybe the numbers are more like this: lousy places have dropped in price by 50-60%, decent places have dropped much less, and the result is the 20-30% overall, but that median drop is hard to find in practice. There’s a gap, not a continuum of properties . . . . At least that’s what I’ve experienced the last 3 months looking for a house.
"So going back to Lance’s argument (or my moderate rendition of it), it seems that this spring-summer may be the big test as to whether his view is essentially correct or not."
Why do the bubble deniers keep moving the goal posts?
Not in DC/Nova.
Sales will get better after the Superbowl 2006.
Not on the Orange Line
Expect a winter uptick!
Not in Ballston.
Wait 'til this summer!
Not on my street.
Price drops are zeroing in on DC in a vaguely concentric manner, from the exurbs inward.
Not just a river in Egypt, it would appear.
Same thing is happening in SF. Not in SF or Palo Alto! The Google kids are buying. Not in Noe Valley! Not on my street! Not my house. Puh-leeze. Post 2002 hoem-owners going downnnnnnn...
Sorry no links or refs. I find these truths to be self-evident.
Mr Bubble
"This divergence in prices that you fear may very well happen ... if for no other reason than that the rich are getting richer, the poor are getting poorer, and it's becoming more and more attractive to live closer to the center of the metro area for many, many reasons. And who is in a better position to pay for being closer to the center ... and push up (or at least maintain) the prices there? While it may have started in the Reagan era, the disparity has grown even more in this last administrative era. Would it be unusual for housing prices to reflect that disparity ... particularly in a metro area which many have said has crossed the threshold from "administrative city" to true "international city"?"
Beware the jabberwock, my son!
The jaws that bite, the claws that catch!
The real question here is: "If you speak enough gibberish will anyone know if you are actually saying something?"
I'm not denying the Bubble. I'm not denying the Bursting of it. I'm not even denying the probable increase in the severity of the Burst over the next year.
I'm suggesting that it's bursting in ways that are not uniform, and that the good properties (however subjective a term) are not dropping precipitously. I’m asking whether there’s evidence that the overall % drops are masking a deep divide between the good/desirable places and the bad ones.
I don't agree with Lance, not entirely – certainly not when he bashes BHs and tries to make them/us look like we’re out to lunch. I suggested earlier that he might be pulling a Stephen Colbert, and thereby does not even fully agree with himself.
What I'm aiming at is a modified version of his argument. I guess I’m curious whether others see some validity to the idea that due to some aspect of the region (maybe plentiful and well-paying job opportunities?) the beltway area and some places just outside it (Oakton, Reston, Vienna, Mclean, Fairfax come to mind) are only dropping steeply if the particular property is either in a bad location or in terrible shape.
I’m posing a question. I’m trying to zero in on something that’s bugging me. And honestly, I’m coming at this from the perspective of one who does NOT deny the Bubble or its Bursting . . .
Obviously the bursting of the bubble is not affecting the entire region uniformly. (Just as it is not affecting the entire country uniformly.)
In DC's case the bust is moving from the outer areas towards the inner areas.
It is certainly worth noting, but it doesn't at all call into question whether or not the inner areas will eventually feel the bust.
The inner areas experienced the same 100%+ increase in prices that was seen around the edges of the city. This price increase was not supported by any sustainable fundamentals.
This increase in prices was the product of risky exotic lending and a classic market mania. Lending standards are now returning to sanity and the market's mentality is shifting.
Nice houses in nice areas are the quickest to rise when the market is good, and the last to fall when the market is bad. The market is always set at the margins.
The worst house in a neighborhood doesn't compete directly with the best... but it does compete with the houses slightly better than itself, and they in turn compete with houses slightly better...
This is a process that will take a long time to unwind. When all is said and done traditional ratios will be restored. (or close to it)
There is no "new paradigm." The "new paradigm" was that 54% of buyers in DC were using interest only loans at one point...
http://www.nytimes.com/2008/03/26/business/26leonhardt.html
Guys like the ones mentioned in the article are waiting for people like Nuf-Said. He has reached a point where he has to get an home. Looks like he can afford it...
"Real estate, though, is different. For both economic and psychological reasons, there is no asset more conducive to hopeful overvaluation."
This sums up a lot doesn't it?
Nuf-Said,
Thanks for your input here.
A possible suggestion for you is to see how much SFH rentals in your target area cost as opposed to buying, or perhaps request to extend your current lease a few more months. In the past few years, the spring sellers have been too exuberant in their asking prices but more ready to make a deal in the summer and autumn.
It's nice to have stable housing with children, but they won't remember where they lived until they're about four. A good thing to have is some grass and a fenced yard, though.
I think your beltway question will take some time to answer (I think it will continue to be a slow, stubborn market). I know of a retiree looking to sell a nice SFH in Oakton. He mentioned that the neighbors on both sides were renters and it had always felt like an unstable neighborhood. I know of another 1980's cul-de-sac in Vienna where several families (original owners) all stayed on for 20-30 years, and then retired and moved to the exurbs in the last few years. And since then, the houses have been turned over yet again (probably due to the ease of selling in the last few years). I get the feeling that boomer and immigrant demographics are the unknown in the areas you're talking about.
Nuf: another way to approach this is that you won't need* the room until the kids are entering kindergarten (at the earliest). Until then, what you need** is 2 (1 for you, 1 for the kid), maybe 3 (office, place for MIL to stay) bedrooms. In the meantime, you can rent a TH or SFH for a lower monthly payment.
I know lot's of people that were born and raised in an apartment, and didn't live in a house until years later (I think I was 3). Believe me, your infant won't notice the difference.
* Yes, there are some old curmudgeons who will reply 'my mother raised my 10 brothers and sisters in a 10 sqft shack...'
** Don't confuse 'want' with 'need'.
harriet: Renters on either side in Oakton? That tends to be an expensive area.
Thanks for the input Harriet, Leroy, NovaWatcher, and Point.
We've put an offer on a place in the McNair Farms TH subdivision. It's a foreclosure which we're hoping to pick up on the cheap. Should know in a few days if the bank likes our offer.
I'll give more details later. I wish that our current landlord would allow us to extend our lease another 6 months, but they said 1 full year or month-to-month. And we don't want to be stuck needing to find and close on a place in 30 days . . .
As for renting for another 1-2 years, the thought of moving 2 more times in the space of 2 years (which would make it 3 moves in 6 years for my wife and me) sounds like a recipe for marital strife.
I do believe "biting the bullit" is the apt phrase. (Although, if our offer is accepted, then we'll have pulled off a good deal.)
Lastly, Kudos to your blog, Harriet. Very helpful. I've been reading it and the comments for 6-8 months now.
nuf-said,
No question that you won't be paying as much as the previous owners, and that's a big help to your finances.
Yes, moving too much is not always easy.
Novawatcher,
Oakton is expensive to buy, but perhaps easier to rent. These are from the MLS (currently showing 18 'active' 4-bedroom detached rentals):
201 APPLE BLOSSOM CT
VIENNA, VA 22181
List Price: $2,750
Bedrooms: 4 Full Baths: 2 Half Baths: 1 Levels: 3
10517 MEREWORTH LN
OAKTON, VA 22124
List Price: $2,900
Bedrooms: 4 Full Baths: 3 Half Baths: 1 Levels: 3
8424 WOODFORD CT
VIENNA, VA 22182
List Price: $2,950
Bedrooms: 4 Full Baths: 2 Half Baths: 1 Levels: 3
1336 STOKLEY WAY
VIENNA, VA 22182
List Price: $3,199
Bedrooms: 4 Full Baths: 3 Half Baths: 1 Levels: 3
"I'll give more details later. I wish that our current landlord would allow us to extend our lease another 6 months, but they said 1 full year or month-to-month. And we don't want to be stuck needing to find and close on a place in 30 days . . . "
Nuff said - if you are seeking flexibility, why would you object to your landlord offering you month to month? Some Tenants seem to fear this as it may mean the Landlord will kick you out with little notice - however, this is really the minority of cases.
In most situaitons, a Landlord would gladly keep an on time good tenant than risk the unknown of having to relist the place, possibly have it go without being rented, or even worse, obtaining a deadbeat tenant for which they then have to go through eviction proceedings just to get the place back (not that there is a chance they will ever get back rent even if a judge awards it). Often month to month rentals can go on for years as long as both sides are happy with it.
If it makes you feel better, perhaps you can offer month to month but, either party must give the other 60 or 90 days notice. If this is a big complex they may not go for it because they dont give their lackeys in the leasing office autonomy to do anything other than a few standardized things. However, if you are a good paying on time tenant, the chances the Landlord will kick you out are remote.
Pollard and Garfield st. properties will have a condo fee in the 300 (1br) to 500 (2br) range. They are not trashed, investors bought them. Very small units though, not a great deal and given likelihood of a short sale getting to the settlement should not be taken into consideration.
Still, there will be plenty of activity of this type in 22201 and 22203 since there were several new condos delivered in these zips within 6 months where everybody walked out on the contract (signed in 2005). Builders need to sell, they will lower prices eventually, i can bet their debt was structured to be paid off within couple of months of delivery date and it is not so easy to borrow cheaply for the builders these days.
Prices already dropped in many of these condos by 10-15%, but they look very overpriced to me. At the same time builders managed to sell some units and i do not know how much lower the prices will drop. People who buy in this neighborhood these days seem to be pretty well-off.
On the other side --- with Herndon i would be very cautious, this area is full of flippers, i know quite a few personally. Many of them gonna foreclose on their properties (investment ones) even though they have income to support the payments. They bought with almost zero down and have plenty of negative equity now, so they prefer bad credit history than being 100k+
upside down.
If the economy conditions deteriorate there will be huge cut of the IT budgets around Dulles tech corridor, like Herndon, Sterling, Ashburn and even Reston.
I am not sure that the prices will go down sharply in all of the bubble affected areas since i've seen pretty of strange things happening to asset prices in my lifetime.
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