Here is a link to a list of the last five days' price reductions on properties in Arlington County and Alexandria City. I've been subscribing to lists like these (from Fairfax Realty) for several years. They keep a person informed of new listings as well as price changes. In years like 2004 I only noticed price increases from builders and very few (if any) reductions from resellers. There were two small price increases included in the Alexandria list today.
These daily lists exemplify to me that prices are still under pressure in Northern Virginia.
Price Reductions 3/26/2008 (Click on link for entire list)
ARLINGTON
Listing: AR6684562 for $124,900 Update Type:Price
1 Bedrms 1 Full Bath 0 Half Baths Prior Price:$134,900
5106 COLUMBIA PIKE #2 ARLINGTON, VA
Listing: AR6605961 for $2,500,000 Update Type:Price
3 Bedrms 4 Full Baths 2 Half Baths Prior Price: $2,750,000
1405 NASH ST ARLINGTON, VA
Listing: AR6651829 for $525,000 Update Type:Price
3 Bedrms 2 Full Baths 1 Half Bath Prior Price: $561,100
1945 WOODLEY ST N ARLINGTON, VA
CITY OF ALEXANDRIA
Listing: AX6627633 for $725,000 Update Type:Price
3 Bedrms 2 Full Baths 1 Half Bath Prior Price:$745,000
204 BRADDOCK RD E ALEXANDRIA CITY, VA
Listing: AX6671638 for $725,000 Update Type:Price
3 Bedrms 1 Full Bath 1 Half Bath Prior Price:$739,900
314 ROYAL ST N ALEXANDRIA CITY, VA
Listing: AX6656662 for $199,990 Update Type:Price
3 Bedrms 1 Full Bath 1 Half Bath Prior Price:$220,000
5925 QUANTRELL AVE #303 ALEXANDRIA CITY, VA
Thursday, March 27, 2008
Price Reductions -- Arlington and Alexandria
Posted by Harriet at 9:04 AM
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Curious for your thoughts. My husband and I are renting in Arlington and have a roomate. Roomate declares she's leaving August 1st. We have a good chunk for a downpayment on a $450-500K SFH/TH. We're looking to live either in Vienna within a couple miles from metro, Falls Church, Reston, possibly near proposed metro, or maybe Fairfax. Should husband and I find somewhere else to rent (and then we'll be stuck in a year contract but we would be prepared to break our lease if a deal came up, and we'd make sure if we remained there over a year, the lease would become month to month), or should we try to buy now? Our rent will increase a few hundred dollars if we move and there's the typical $400 move-in fee. We would rent a 1 bedroom near metro (say $1600-$1800/month), which would cost less than PITI on a house (say $2800+/month), but I'm not sure after the tax deduction(approx $700/month) it would be worth the money to rent. Obviously if housing continues to slump, we can get more house for the same money. We're just not sure if we should pay more money to wait it out, or dive in now. I'd greatly appreciate your thoughts.
Thanks, Harriet. Very interesting.
It looks as if many of these price reductions in Arl. are for condos, though maybe that's the same proportion as what's on the market. I still think more reductions will be needed for some of these properties (at least the SFHs) and many others on the mkt. for them to sell. But we'll see!
(Also, your Fairfax Realty link didn't work for me.)
Mjc, just my opinion: if I were you, I would stay in the apt. for now and possibly go month to month after August, and start looking for a home to buy now. If you don't see anything that excites you or you think those that do are overpriced, you can always look in July for another apartment if you don't like your current place or feel it's too expensive without a roommate. I would research the neighborhoods carefully and try to narrow down your preferences a bit. I also believe that proposed metro stop will not be built for many years, if at all, given funding and political problems (and today's story in the Post about inadequate $ for repairs of current metro lines.) So I would not make a home purchase decision that depends on that at all.
no one is biting on this one?
from the list:
Listing: AX6506331 for $279,900 Update Type:Price
2 Bedrms 2 Full Baths 0 Half Baths Prior Price:$299,900
from redfin:
Listing Price History
Date Price Aug 13, 2007 $358,900
Oct 28, 2007 $339,900
Nov 19, 2007 $334,900
Nov 30, 2007 $324,900
Dec 06, 2007 $299,900
Mar 23, 2008 $279,900
These are hardly reductions.
It's like the sellers are months behind in pricing to get an offer..
I wonder if they've gotten 0 offers, or any offers in this lower range that they rejected.
It's fun to see them holding out hope to get as much as they can. Gotta love it!
(79 DAYS ON REDFIN)
Listing: AX6627633 for $725,000 Update Type:Price
3 Bedrms 2 Full Baths 1 Half Bath Prior Price:$745,000
Listing Price History
Date Price Jan 08, 2008 $765,000
Jan 31, 2008 $745,000
Mar 26, 2008 $725,000
(33 DAYS ON REDFIN)
Listing: AX6671638 for $725,000 Update Type:Price
3 Bedrms 1 Full Bath 1 Half Bath Prior Price:$739,900
Hi All: I have been watching for awhile and, while I'm about to give my experience, I would like to ask indulgence from the others as if I get too much negative feedback, it might kill me (kidding, sort of). My husband and I recently purchased a SFH within walking distance of a near-in metro stop. Originally listed in the mid 800s, we got it for 650K and 8K closing help (4br/3bath/finished b/ment, 1900sq ft above grade). We are still paying our lease on apt (don't get me started on that bait-and-switch). Anyway, this offer was accepted after 5 others were rejected. We began our housing homework in May of 07. We learned the mkt and developed our own price for the property. First offer was made in Oct and rejected as all others. Although we are prepared for a market slump, we feel that it's a good decision for us given "lifestyle choices" and in a recession, we've got to put our money somewhere. BTW: Some of the houses we made offers on are still on the MKT and so, yes, sellers aren't getting. However, we "lost" some houses at prices we could not logically understand...that's my thought.
PS: I'm a bubble-blog addict!
mjc,
I suggest shopping. There's a good way to know how you really feel, and that's to start going through the process.
If you can buy a SFH/TH for the same cost as renting, and find something you like and are happy with, I don't see a problem.
I don't think I would be able to buy for the same price as renting. I'd be paying $1600/month to rent versus $2800+/month to buy but I get the mortg. interest deduction by buying. I will ultimately pay at least $500+ more/month if I bought, but I'd also build equity. However, I'm just not sure if I should buy now if prices may decrease enough for me to buy a nicer house for the same amount of money I'd pay now. I guess I'm just thinking that a lot more ARMS are going to reset shortly and the number of foreclosures will rise. Obviously, more supply means prices will fall. If we're just starting to feel the effects of 2002 5 year ARMs resetting, then I would think there are a ton more that will reset from later years when the run up in prices continued. But of course, this reasoning could be wrong.
"If you can buy a SFH/TH for the same cost as renting, and find something you like and are happy with, I don't see a problem."
I think this sums up an intelligent buyer's decision perfectly. The only thing that I would add is that it helps to look for places where the previous owner purchased before 2002 (and certainly before 2004/5). Those owners seem more likely to lower price significantly to get the deal done.
mjc said:
"If we're just starting to feel the effects of 2002 5 year ARMs resetting, then I would think there are a ton more that will reset from later years when the run up in prices continued. But of course, this reasoning could be wrong."
Good reasoning ... but remember (as AlexA pointed out), rates are so low now that we have people with ARMs refinancing to fixed rate mortgages at interest rates lower than they are now paying. And that probably won't change anytime soon given the Fed's stated objective to keep interest rates low ... for this specific purpose.
Lance said:
"rates are so low now that we have people with ARMs refinancing to fixed rate mortgages at interest rates lower than they are now paying. And that probably won't change anytime soon given the Fed's stated objective to keep interest rates low ... for this specific purpose."
that is true, however, if you look further at the underlying rates these ARMs are tied to, you will notice that over half are linked to the LIBOR rate which is at 5.9% in the past week (much lower than the 10 year T-bill other ARMs are linked to). As a result, the resetting ARMs should have some impact, however, maybe not as large of an impact as one would expect given the reduction in rates.
there's a bits bucket for a reason people, let's use it.
related to this post though...
bas-madone
they are just getting the price in line with their neighbors, the next door unit is asking 265, even though it has a fewer bath. but why would you need a 2br/2ba if you only get one parking space (hence not likely to get a roommate)?
mjc . . .
I agree with harriet, however, I would also add that you should take into account other things besides the mortgage deduction. You need to make sure you take into account taxes, HOA/TH/fees, and maintenance. This in my opinion is pretty big b/c very few REALTORS, or housingheads (like lance) ever admit these. They will only sell you the deduction, but leave out all the extra costs of owning-which are not insignificant (i.e. do you need to buy a washer/dryer, lawnmower, roofing, pipes, etc).
Now my price range is a good deal lower, but I have generally found that for a back of the envelope calculation what you get back in the mortgage deduction is canceled out in the addition of the aforementioned expenses, which you do not have as a renter.
I also believe that it is good to have other money management criteria before you buy.
Personally I will not spend more than 25-30% of my TAKE home on housing, that leaves plenty of wiggle room for 10% charity, car loans, student loans, savings, and investments, family, food, fun stuff, etc.
Along those same lines, I will not get a mortgage for more than 3x my salary (hmm, it's funny how the two above actually corresponds to a $ figure that is relatively close in value.
I will also have 1 year of savings before I buy in addition to my 20% down-payment--this translates into a lot of cash saved before I buy.
I will buy below my means . . .thus allowing me to make extra payments to my mortgage . . . debt is not wealth. The quicker I pay of my mortgage the quicker I don't have to pay interest and I can put that money towards other investment or savings vehicles.
What this translates into is that I rent the lowest $ value I can while still in a safe area-and just sock as much money away as I can.
I realize this way isn't glamorous and it takes a long time to build up the kind of wealth I am looking to build before I buy. It requires a sacrifice now in order to have a better life later.
However, I know I have one thing that the vast majority of americans out there don't have, peace of mind and security. I have a child on the way and I know that no matter what happens to me, my family will be taken care of for at least 2 years right now-without going into debt, and without relying on some assistance.
I'm not saying don't buy . . . I'm just saying there will always be housing out there and the market isn't going anywhere for several years. With renting, if you screw up it's only a year. . . or maybe you lose your deposit. If you screw up buying a house, it's a long road . . . with being stuck, foreclosure, credit dings, can be tough to move if you lose your job, etc.
Slow and steady wins the race. Buy when you've got all your ducks in a row, and it makes sense.
I might be in the market this winter . . . but that depends on if I take a job transfer or not.
apologies gt . . . just want to finish my thought.
mjc . . .
I wouldn't worry too much about equity in the house. The first couple of years you don't build much equity. From http://www.mortgagecalculator.org/
on a 400k loan, in the 1st year you build ~4.5k of equity . . . after 5 year 25k. During those 5 years you've paid ~125k in interest.
If for example you pay 500 less to rent vs. buying, and you saved that money at say 5%, at the end of 5 years you'd have ~35k. You could take that money and put it towards the house, and you would have more equity by renting and saving vs. buying now IF prices stayed the same.
I realize I am playing with #s, and the emotional benefits of having a house can easily overcome any $ savings from renting. Just pointing out that there are cons as well as many pros to buying a house. Each person should make a logical decision based upon their circumstances and determine what is right for them.
Check this out;
http://tinyurl.com/2gfo42
It's a Mortgage Deliquency map of the entire U$A courtesy of Equifax and Economy.com
This at least puts the NOVA area into perscpective with the rest of the country.....it's not as bad as it could be, but NOVA is clearly one of the most deliquient areas in the mid atlantic region in terms of paying a mortgage on time.
We all know what happens when you don't pay your mortgage.....
ps - you can click on a state to enlarge it.
Date Price Aug 13, 2007 $358,900
Oct 28, 2007 $339,900
Nov 19, 2007 $334,900
Nov 30, 2007 $324,900
Dec 06, 2007 $299,900
Mar 23, 2008 $279,900
Wow!
Who was delisional to price it $79k high? That sort of time history is required to truly understand. However, that property isn't that impressive. Some of the other blogs have found homes on the market for over a year!
I agree, its great if TCO owning and renting is about the same. :) Not yet... ;)
Got Popcorn?
Neil
mjc,
Your willing to pay 500 more a month to buy, in order to build equity.
Thats a fallacy. Use the extra cash to invest - many good investment opportunities will come up. Also yes, you'll build equity, but its not worth it if the house declines further in value which is very likely.
The realtor "building equity, vs throwing it away renting" is a trick argument. People hear it and just agree. However that argument is based on buying/renting the same house at the same monthly payment - which simply isnt true right now. Houses are priced above rent - so the argument doesnt hold water.
A house is probably a bad investment right now. There are always times when people have to sell (job loss, etc), but you never have to buy. I'd rent for at least another 6 months.
"that is true, however, if you look further at the underlying rates these ARMs are tied to, you will notice that over half are linked to the LIBOR rate which is at 5.9% in the past week"
You are way off.
1-Year LIBOR is at 2.4% right now. If you throw in the 2.25% margin, ARMs are resetting to 4.65%.
Oh and MJC - you wont find anyone here who thinks its good to buy right now.
I disagree, I think if you can easily afford the place, and intend to stay there at least 10 years, you should be ok.
Whatever you do, dont buy a house that you plan on selling within 5 years, or think you might outgrow in that time frame. Thats too risky.
At that point, your considerations should primarily be - does the house have any issues that you cant fix - i.e. bad location - near busy road, power lines, in a depressed area ( PWC ), high crime, low ceilings, bad floorplan, or does the house need a lot of work?
If the house is in a great location, is in great shape, and you can see yourself living there a long time, and you can easily afford it, go ahead and make a lowball offer and start the negotiations!
Doug,
I don't know about resetting to 4.65%, maybe they are . . .but when I take a gander at bankrate looking at refi and regular financing (I know it's not a reset . . . but) I get only 1 lender that has rates from 4.6-4.9 and the rest are from 5.0-6.0. I think it just depends on who your lender is what they are resetting too, the range seems to be 4.8-6.0% . . . quite a wide range.
Thats not what rates are resetting to, thats completely different.
BTW rents are going through the roof!
I check occasionally on an apartment complex near me. Its not particularly nice but I frequently recommend it to new hires in my office because its close to work.
For a 1 bed 1 bath with den, prices were around 1100/mo during most of the boom. The lowest I ever saw was 1050/mo in 2006.
Last fall, the last time I checked before today, they were at 1315/mo and I just checked today - 1585/mo!
They know people dont want to buy right now so they are cranking up the rent!
doug: that's odd, because my place (townhouses near a metro in a v. good neighboordhood) had several units that were empty for at least 3 months at a time.
Taking a look at this (granted, it's Q3), the only group with sizable samples that seems to be increasing are high-rise prices, but I'd expect that to stall as more units come on the market:
http://www.nvar.com/market/rentaldetail.lasso?articleno=nvarn100457
novawatcher - thats a different situation.
Rental homes may indeed be under price pressure, but they are likely still priced well above rental rates for single people who are looking for a 1 or 2 bedroom with 1 bath.
I bet neither of those townhomes are being offered at $1600/mo right? More like $2400+/mo I bet.
Date Price Aug 13, 2007 $358,900
Oct 28, 2007 $339,900
Nov 19, 2007 $334,900
Nov 30, 2007 $324,900
Dec 06, 2007 $299,900
Mar 23, 2008 $279,900
Wow!
Who was delisional to price it $79k high? That sort of time history is required to truly understand. However, that property isn't that impressive. Some of the other blogs have found homes on the market for over a year!
they paid on 02/16/2006 $338,055 for the property. probably trying to cover realtor fees.
It was assessed 01/2006 for a high of $376,300 by city of alexandria.
"they paid on 02/16/2006 $338,055 for the property. probably trying to cover realtor fees."
Typical house flipper who bought high and didnt bother to do any improvements/renovations.
Likely they were counting on the market continuing to boom and now they are caught out.
Look for it to become bank owned soon and sold for something fair, like 150k.
~$2k
doug,
As a renter who has pretty much changed places 1 a year for the past 5 years, I can tell you that a jump in rentals at this time of year is expected.
A lot of people move during the spring. Another time that rates jump is Aug. timeframe. The time to get the best deals on rents is somewhere Nov-Jan. Luckily for me, that's happened the vast majority of the time for me.
Just like the housing market, it's not the month-to-month trend that is real important (although it can be useful) it's the YOY that is important.
So before you go off spouting that rents are increasing astronomically, please show that rents are increasing YOY astronomically-otherwise it doesn't mean jack.
And I'd like to know where you find your info. on what rates are reseting too. I suspect that what the rate resets too, has a lot to do with the lender, i.e. rates resets won't be uniform across the market and they won't be uniform across one lender . . .just like normal mortgage rates and refi's.
I don't know . . . but unless you can point me to some document or website that specifies exactly what rates are reseting to right now your guess is as good as mine . . .except I used Refi/finance rates.
In addition one of the bigger problem with the housing boom/bust is the oversupply. Yes oversupply.
Typically housing vacancies rates run at 1.2-1.5%, it's running at about 2.9-3% right now. So we had an increase in the % of people who own their home, and an increase in the vacancy rates . . . hmmm. That can only mean two things, people are a lot more wealthy now and can afford 2 houses . . . or there is an oversupply of homes. This is why even with more people wanting to rent . . . rents can (and probably will) indeed fall . . . too much supply.
gte, I did post up year over year data.
As I said, rents at this particular complex were around 1100 during the housing boom, its clearly stated in my post if you bothered to read the whole thing.
Here is an explanation on ARM resets so you wont go posting on blogs about stuff you have no clue about...
http://www.bankrate.com/brm/news/mortgages/20040415a1.asp?caret=1a
doug,
I can't get to the link . . . it resets the webpage. But thank you for the link . . I admit I might be wrong on resets, I don't own and don't particularly care to get an ARM when I buy, so I have no reason to know or care too much about it.
In any case your YOY stats are absolute BS. I did read your post and that's not YOY data, which is at x month XXX year it was z amount, vs. x month XXX+1 year it was y amount. That is YOY, not what you posted.
You take anecdotal evidence that is in no way scientific or can even be construed to be a sampling of what is going on in the rental market. Your statement above was/is utter trash.
Maybe rents are rising.
However my anecdotal BS-o-meter says no b/c the apartment complex that I rented in last year dropped their rates $125/month. So by my anecdotal evidence they are drastically down. You see, just like I can't prove rates are in general down, you can't prove rates are drastically up. I can state that I THINK they are in general down, and that during the summer months rents in general rise . . . but I can't prove it unless I've got data. So either find some real data to back up your statement or take your ball and go home.
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