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Tuesday, April 29, 2008
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26 comments:
I saw a sales record the other day that caused my jaw to drop:
222 South Lee Street
Alexandria, VA 22314
Bidg Sq. Ft: 5,259
Lot Sq. Ft: 5,623
Sale price: 5,150,000
It looks like this is a 2 parcel sale, with a small cottage house next door sold as well. Still even with the other parcel, the assessed value was 3.2 million (which seems high but fathomable for the neighborhood).
KH - you look more at these assessment records than I do. Is there something else to this property that I am missing or has someone lost their mind buying a place (only 7 blocks from the ghetto mind you) for $5,150,000???
http://realestate.alexandriava.gov/detail.php?accountno=12709500
Maybe its been rezoned.
I.E. for townhomes or condos.
crt,
Isn't that address the heart of Old Town Alexandria? It's a big house on a gigantic lot ... and in a very good area. When you say '7 blocks from the ghetto', do you mean the few remaining project areas that are near Old Town? Considering the size of the lot and the sq footage, I'd be existing zoning allows for far higher density. The problem of course will be adding that density without destroying the existing building ... assuming that building is a contributing structure to the historic district. None-the-less, that piece of land is invaluable.
looks like somebody wishes to pay a premium for the 18th century house. bought by corporation.
sale code: G = multi-lot sale
Building/Unit Area (Sq. Ft.): 5259
Fireplace(s): 7
Year Built: 1780
224 also got tacked on:
http://realestate.alexandriava.gov/detail.php?accountno=12706000
it was 1.2 million in 1996
01/25/2008
$5,150,000
ARNHEIM MADELEINE W
G
080001623
07/29/1996
$0
R
1584-379
07/29/1996
$1,200,000
ARNHEIM, MADELEINE W
Doug - unlikely its been rezoned its a 225 year old historic structure and (like all houses in the OT historic district) have severe restrictions on any alternative use. Most of these places are zoned residential/light commercial anyway.
Lance - yes heart of OT and yes 7 blocks from the rapidly disappearing ghetto. In some ways that is the irony I am pointing out. In many places, being so close to a ghetto would kill property values. Here there are places that can be so close to the ghetto and still sell for astronomical sums.
As to rezoning for higher density see my response to Doug - in sum it wont happen. The historic overlay & preservation regime is one of the oldest in the nation. Long term, the city sees it as its bread and butter - it derives its value from the fact that it is not like every other walkable "new urbanism" locale now being built across the country.
That said, this still seems high to me I see 2-3MM sales all the time but 5MM?
The 'ghetto' is not "rapidly dissapearing" in Alexandria
There are two full blocks of city housing east of washington street. There are many more blocks of city housing on Rt 1. That is a very dangerous area.
On a political note, its rediculous that this city housing is still around. Many politicians use it as a political crutch. Many residents use it to remain lazy, since there's not incentive to improve their situation.
Its a waste of taxpayer dollars plain and simple. No politicians in office in Alexandria (All democrats) are doing a damn thing to really help ( or require) these residents become self sufficient.
crt said:
"That said, this still seems high to me I see 2-3MM sales all the time but 5MM?"
Could it be that the very high end of the market is going up? There's a property in Sheridan-Kalorama (Embassy Row area) that's up for sale now for about that same price ... It last sold a few years ago for half that price. Could the renovations have really been that extensive? Ditto, I've seen large condos down near where I'm at going for over $2.2 million (these are 4 bedroom condos ... bigger than most SFHs). Sometimes prices "pop" like this when you have folks from more expensive areas moving in. They're used to paying relatively much higher prices where they are coming from and end up paying those same prices when they go to the lower cost area. Oftentimes higher priced houses aren't actually "up for sale". Someone is moving to town, likes what they see, and approaches the owner to see if there's an interest in selling. The place you're talking about seems pretty unique. If I were moving in from NYC or LA and I like the house (and had those kind of bucks), that $5.15M might seem reasonable.
"The 'ghetto' is not "rapidly dissapearing" in Alexandria."
Perhaps its not "rapidly disappearing" but it certainly is the "ghetto". I say rapid in that the last 10 years, 2 big projects were imploded and replaced with Chatham Square. Another was recently destroyed and now turning into some sort of Rec center.
I now hear it that Andrew Adkins Project is on the chopping block, and James Bland might be too. Per chance, have you heard anything different?
The Road to a Jumbo Mortgage Was Supposed to Get Easier
By MATT RICHTEL
In early February, Congress gave beleaguered mortgage borrowers a rare cause for celebration. As part of the economic stimulus package, it passed rules intended to make it easier and less expensive for people to take out hefty loans in the nation’s costliest housing markets.
Economists and legislators said that helping tens of thousands of borrowers take out billions of dollars in new loans could stanch the bleeding in the housing market, spur spending and reduce the pain of a likely recession.
Instead, the effort to make it easier to get jumbo mortgages — loans over $417,000 — has yielded frustration and disillusionment.
Since the rules took effect April 1, many prospective borrowers and their mortgage brokers say the new loans are either not available or the rates are far higher than they expected. Relief, they say, has been replaced by grief.
The program “is so much of a failure that it’s really unbelievable,” said Daniel M. Shlufman, president of the FCMC Mortgage Corporation in Clifton, N.J. Mr. Shlufman likened Congress’s effort to “coming up with a vaccine to a terrible disease, and then not giving it to people, or making it too expensive.”
http://tinyurl.com/5tko2w
On the housing market in general, Paper Money blog has some great charts.
http://paper-money.blogspot.com/
I like this one:
http://bp3.blogger.com/_ym8Q9yxUg34
/SBc8KKqmzAI/AAAAAAAADFA/GPgBF6W2eFM
/s1600-h/csi0208peakcomp.JPG
It just shows how long of a bust the last one was compared to now.
If you bought at the peak, it would have taken you 8 years before nominal values would reach what you bought at . . . a lot longer if you factor in inflation.
Compare that to the current bust. If you bought near the peak, its going to be a looooonnnnngggg time until nominal values reach those numbers again, unless of course we have hyperinflation, and then all bets are off on the entire economy and who knows what might happen.
gte said:
"If you bought near the peak, its going to be a looooonnnnngggg time until nominal values reach those numbers again, unless of course we have hyperinflation, and then all bets are off on the entire economy and who knows what might happen."
Do you really think it's a matter of "if we have hyperinflation"? Oil prices have gone through the roof. Oil is not only used to transport ourselves and our goods around, but to heat and cool us and to produce almost every good out there ... even to the point of being part of the materials for that good. Similarly, real estate prices have gone through the roof. Like oil, real estate, similarly plays a major part in making possible the production, sales, and distribution of goods. As the increased costs of both of these components get ultimately passed on to us in the way of higher and higher prices for everything we buy, we'll start to see the hyperinflation."
It's really not a matter of "if" but of "when" ... especially if you also factor in the pressure on prices owing to the massive war expenses we've been incurring. This is a perfect repeat of what we experienced in the '70s.
Yes, we should prepare for that hyperinflation ... where "all bets are off" in regards to what you think house prices (and mortgage costs) will do. Who's to say they won't follow the path they did in the '70s? (I.e., higher home purchase prices AND 18.5% mortgage rates.)
Cool...we have Lance stating he believes hyperinflation is coming. Is this the only way someone with large housing debt on an upside-down loan will be left unscathed in this housing market? :)
Please look up the Wiemar Republic for a classic example of hyperinflation. Zimbabwe is going through it now as well :
1999 56.9%
2000 55.22%
2001 112.1%
2002 198.93%
2003 598.75%
2004 132.75%
2005 585.84%
2006 1,281.11%
2007 66,212.3%
2008 164,900.3%
There is no fixed definition though, so make up your own.
BTW, the "ghetto" in Old Town is very defined and "confined". Folks know where it is and can choose to live as near or as far as they wish. It was probably planned that way. CRT is right though, there are multi-million places next to these areas.
goodness lance . . . study some history . . . there is a difference between hyperinflation and high-inflation.
Regardless of which case happens, you do want to own stuff vs. paper money. Unfortunately for you, houses are highly illiquid, in a high or hyper-inflationary period you want to hold highly liquid assets. And there is only one asset that is great in those times and is highly liquid and something that is truly money . . . gold.
If you convert the worth-less dollar into gold or metals, it won't matter what the actual dollar amount of a house is.
History rhymes but does not repeat, what we are and will go through will be similar but very different from the 70s.
A hyper-inflationary period would almost certainly mean a collapse of the current political system.
The only thing you are completely forgetting in this whole mess is that unlike gold . . . houses are completely tied to incomes.
Until incomes rise, housing will fall.
We can very easily have a period of high price inflation in commodities without incomes rising for several years. It just means the standard of living in the US goes down.
So sure if we start seeing 10% increase in pay . . .then housing would stop and then after a few years would prob. rise. However with the way the gov. works, hell would have to freeze over now before they admit 10% inflation and consequently give a 10% COLA increase. Since a large portion of incomes are tied to the gov. here, it means that incomes aren't going much of anywhere.
GTE said:
"The only thing you are completely forgetting in this whole mess is that unlike gold . . . houses are completely tied to incomes."
How so? Isn't housing a fairly inelastic good when you get down to it? Even a person who doesn't have any income needs a place to live.
GTE,
If you view housing as an expense and not as an investment, I think you might actually see why the price of houses aren't directly tied to incomes as you assert. If it were an investment it might be. But people have to live somewhere, and as such housing must take priority. I think the gold will get sold off first before someone decides to let themselves be homeless. I.e., investing is a secondary concern to acquiring shelter.
lance your theory of how housing is not tied to income is so far out there and lacks such a complete understanding of economics that I won't even attempt to answer it.
GTE,
That's right, I forgot. You are an economics expert ... Every moment that you are not at your day job bagging others' groceries, you are polishing up your skills in economics.
Not! ... as is so obvious from your posts where YOU demonstrate a complete misunderstanding of economics. I think the problem is that you probably did read a story about economics once upon a time and now you think yourself an expert in it. A little knowledge is dangerous in your case. So sad.
Please lance . . . tell me what economic books you have read.
Actually economics is a hobby of mine, is it yours? Books I have read or am reading.
"Man, Economy and the State" Rothbard
"Socialism" Mises
"America's Great Depression" Rothbard
"Causes of the Great Depression" Mises
"Road to Serfdom" Hayek
"History of Money" Rothbard
"Mystery of Banking" Rothbard and
"The Case Against the Fed" Rothbard
among plenty of others.
I understand you prob. don't even know who the above people are as you are so ignorant with economics, however they are some of the brillant minds on economics.
I subscribe to the Austrian economic view . . .do you even know what that is? or is the only word you know Kenysian?
Let me see what are my other credentials, just so you understand that I'm not some punk 22 year-old kid who doesn't understand the world and that you are an idiot.
BS Electrical Engineering
MS Electrical Engineering
I previously lived and worked in Argentina for 2 years, plus other locations around the world . . . how much overseas work experience do you have lance? oh wait did I mention I'm under 30 . . . let me see what else I can do with my life in the next 30 years.
So lance . . . what are your qualifications?
Your continued idiotic comments about the housing market, inflation, DC pan-global, economies, etc, demonstrates that you are a two-bit joker, some 50+ year-old bitter man who believes he is the center of the universe and whatever he says is gospel. You sir are a buffoon.
If you could kindly point me to some great economic thinker who professes your point of view (i.e. that housing is not tied to incomes) I will retract my statements. I have no problem with being wrong, but you'd better come up with something besides your own words, otherwise you are the one who doesn't understand economics.
So unless you can the above, you are a moron and I have nothing further to say to you.
might I add the degrees are from Georgia Tech, one of the premiere institutes of higher learning for engineering only below MIT, Stanford, Caltech, (maybe UCBerkley) in engineering. What two-bit college did you graduate from? Podunk College USA?
GTE said:
"I understand you prob. don't even know who the above people are as you are so ignorant with economics, however they are some of the brillant minds on economics."
Sounds like a bunch of no-name whacko commie eoncomists. Why didn't you just add Marx to your list?
electrical engineering degree ? ... no wonder you haven't a clue as to how the market works.
Do you do electrical work too? I could use a good cheap electrician. ;)
I see you changed your one comment of
"electronical engineer" to
"electrical engineer".
You don't even know what an electrical engineer is. I'll give you a hint it doesn't have anything to do with "electrician" work.
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