Bay400 is looking to buy something in Warrenton. Asking prices in Fauquier seem to defy the "drive 'til you qualify" rule. Here's just one example from a new listing today:
5701 MARIGOLD LN
Warrenton, 20187
$399,900
Beds: 4 Baths: 3
Lot Size: 1 acre
Year Built: 1975
Listing Date: 05/22/08
A dated (if you ask me) style -- a split foyer.
Here's another example. Three condos, and the worst value, from appearances, seems to be in Warrenton:
641 WATERLOO RD #322
Warrenton, 20186
List Price: $149,900
Beds: 1 Baths: 1
Sq. Ft.: 699
Year Built: 1973
Listing Date: 04/11/08
vs.
22641 BLUE ELDER TER #104
Ashburn, 20148
List Price: $159,999
Beds: 1 Baths: 1
Sq. Ft.: 900
Year Built: 2005
Listing Date: 05/16/08
(Description: 9 ft ceilings, open floor plan.)
vs.
223111C CASTLE ROCK SQ #31/11C
Reston, 20191
List Price: $124,900
Beds: 3 Baths: 2
Sq. Ft.: 1,029
Year Built: 1974
Listing Date: 05/19/08
I want to tie in these examples of what's happening in Fauquier with an article in yesterday's Post that KH pointed out yesterday:
These measures are another symptom of the fallout from the subprime mortgage crisis. In many cases, sellers are struggling to compete with the record supply of foreclosed homes listed at rock-bottom prices. In Prince William County, for instance, the number of single-family houses listed for sale for less than $200,000 shot up 15,000 percent last month compared with a year earlier -- from 5 to 768. There was a 66 percent increase in listings under $500,000.(Mr. Hendricks assumes the 199K house is "an extreme fixer upper" but offers no proof of what the repairs will actually cost).
That's what the Hendricks family was up against when they tried to give away their Mustang. At the time, at least 30 homes were for sale within a mile of their house, they said. One similar to theirs was listed for $199,000. They were asking $375,000.
"It was probably an extreme fixer-upper, and our house is not," Mark Hendricks said. "But we had to do something. So we suggested the car idea to our agent. Why not try?"
The car failed to stir buyer interest, and they gave up on the idea after three weeks. Instead, they slashed their price a second time to $339,000.
So far, no offers, no foot traffic.
There seems to be two markets -- a strong foreclosure market (multiple bids) and a second market run by these "desperate sellers". As a buyer, a natural instinct is to get the best house for the least amount of money. So perhaps we will see a return to "normal" when these two markets are less diverse in price, and when sellers, after a few years, develop amnesia about what their houses were formerly worth and go with the market as it is.
But back to the main point of this post. Do Ashburn and Fairfax still offer more value location-wise than Warrenton or has something changed? Five years ago (2003) I remember seeing small older $300K Falls Church townhouses vs. small new $300K Ashburn townhouses vs. new $300K single-family houses in Warrenton.
26 comments:
An identical listing in Warrenton, listed today for 100K less than the SFH pictured in this post:
7309 HUNTON ST
Warrenton, VA 20187
Split Foyer, Built in 1975
List Price: $299,500
Lot Size: 1 acre
Beds: 4 Baths: 2.5
I realize the MLS is a free-for-all among real estate agents and sellers -- asking prices can be whatever they choose, no matter how absurd.
But it is absurd, nonetheless, to ask 100K more than comps.
Check out this article on iTulip from March 2006: http://tinyurl.com/gugva
It seems to have nailed the progression of the housing bubble and correction pretty well, and suggests 2008 as the year when the "desirable" inner ring properties finally crack. LA Times has an article that suggests this is also happening right on schedule: http://tinyurl.com/4ewgk2
If things continue to play out as the iTulip article predicted, DC / Arlington have only begun to feel the contraction.
-Jason
Harriet,
I absolutely agree with your insight that there are two markets right now: the explosion in the low-priced market that simply didn't exist one year ago, which is seeing some movement, and the stagnation of the segment of the market that refuses to let go of the idea that they missed their chance.
I think of a few fine, large houses close to me, some upgraded and some not, that sat and sat until the banks that owned them lowered prices from about $500K to $300K or less. They sold for $220K, $210K, $297K, $352K...most with ample seller's concessions, most for a 40%-60% discount from peak. But they sold.
Then there are dozens of homes that have been vacant and for sale for one, two, three years, and are still asking $100K-$400K over what the seller paid 5-20 years ago.
The rare listings are the ones purchased during the bubble where the sellers are still trying to break even. The vast majority of bubble homes now for sale are already foreclosures or short sales.
When those two disparate markets come together, prices may begin to make sense. Now, they simply don't.
I am not too familiar with Warrenton, but Manassas has led the way with a brand-new under $200K market (5 to 768?)...
I was preparing to make an offer on a home, really I was. It had everything I wanted AND what my wife wanted too!
They were asking 460,000 and my realitor said he knew the listing agent and would feel it out for us, because he said "No one pays list in this market."
He got back to us and said the listers got an offer for 440,000... and refused it! And they are relocating to California!
I think the sellers need a little more time to soften up.
Warrenton has always been more than a DC suburb. I was more familiar with it in my college days, but assuming it hasn't seen the mass scale of development that neighboring places such as Culpepper and Gainesville have, then I'd expect Warrenton's market to behave like Arlington or Alexandria's. There's old money there and it's not going anywhere. Prices will remain stable as they have in Arlington, Alexandria, etc. It's really the same analysis kh, myself, Doug and others have been trying to explain ...
lance . . . are you truly an idiot, or do you actually work at being an idiot.
Zip code stats (Warrenton):
20186:
MOI: 11.53
April '08 '07 Change
Avg: 333k 400k -16.72%
Med: 350k 419k -16.65%
20187:
MOI: 15.7
April '08 '07 Change
Avg: 373k 410k -9.16%
Med: 315k 374k -15.88%
I hardly think those stats above show that Warrenton is like Arlington or Alexandria.
Repeat after me:
"lance is a moron"
I have a dear friend in Warrenton who has watched three homes for sale on her culdesac for the past year or two drop their prices to no avail. So when Lance said Warrenton is "old money" and has steady values, I didn't know enough to pass judgment. I just thought I would take peek at MRIS numbers for the Warrenton zips:
20186 April 2008 vs April 2007
Avg Sale Price as a
percentage of Avg List Price: 89.29% vs 95.39%
Median Sold Price: $350,000 vs $419,900 -16.65%
Total Units Sold: 15 vs 21 -28.57%
current inventory:
15 sales vs 173 active listings
20187 April 2008 vs April 2007
Avg Sale Price as a
percentage of Avg List Price: 88.54% vs 92.88%
Median Sold Price: $315,000 vs $374,450 -15.88%
Total Units Sold: 10 vs 16 -37.50%
current inventory:
10 sales vs 157 total listings
(Average Days on Market: 200 vs 173 15.61 %)
20186 foreclosure activity (Realtytrac): 60 houses in some stage of foreclosure
20187 foreclosure activity
(Realtytrac): 361 houses in some stage of foreclosure
The numbers are not quite as spectacular as Manassas, but whereas Manassas (and PWC in general) has seen an increase in sale activity over last year, sale activity is down in Warrenton. Total sold dollar volume is down over 40% in both zips.
These numbers seem to support Harriet's insight that Warrenton is learning slowly.
Tabitha said...
I absolutely agree with your insight that there are two markets right now: the explosion in the low-priced market that simply didn't exist one year ago, which is seeing some movement, and the stagnation of the segment of the market that refuses to let go of the idea that they missed their chance.
Tabitha - as far as I can tell what is happening now is all the flippers were chased out of the market, the banks reposessed, and they are now dumping them en masse. It will be interesting to see how the market responds...Right now it looks like the buyers are taking whatever foreclosures & REO's they can get their hands on, and setting a new market clearing price.
The remainder of the market is those that do not have pressure (from the banks to sell) and they are trying to hold on. The problem is, the market is setting a new price which (as you said) is a 40-60% discount from peak.
Eventually, the long time sellers will have to get more realistic with their pricing - however, noice what a large number of purchased REO's and foreclosures are doing is (likely) establishing a floor for the whole market.
For example, say 3-4 houses in a subdivision were bought by flippers for about 400-425K each. They tried to get out and couldnt - and they were repossessed and resold by the banks at 210-230K. The neighbor next door, the long time owner was asking 400K 2 years but is now asking 325K.
Please note, for the long time neihbor, a new floor has been set at 210-230K. Thus, it is unlikely he will ever be mentally able to let it go for less than say 240K. Moreover, a buyer realizing this is NOT a foreclosure is unlikely to try and take him below 240K either.
The above case is a general rule and assumes we will be heading eventually into a more balanced market as far as inventory goes. If it turns out inventory kees rising, this floor will not hold and a new round of sub 210-230K prices will set the market. However, my guess (and this is just a guess) is that is becoming unlikely.
The good thing for you is that you still have plenty of time. Those long time owner/resellers will not quickly change their minds and thus they will be very reluctant to drop even further down (closer to) the new floor that is being established. That said, you need to be cognizant that it is infact likely that the REO/foreclosures are in fact setting a floor. Thus, I personally would not expect the unrealistic sellers to ever drop their prices BELOW a round of foreclosures in the neighborhood.
Again, though - the good thing is you still have plenty of time as the chance the prices start to rise from that floor (if this is in fact one) are just about zero.
John: They were asking 460,000 ...
He got back to us and said the listers got an offer for 440,000... and refused it!
What would you offer?
I was going to start at 417,000, claiming jumbo loan limitations. But, as an update they have now dropped the listing from 460,000 to 448,000. I think that thier agent may have been less than honest with us. My wife wants to put in a bid tomorrow for the 417. If they really had the 440, I think it would have sold.
I hate taking advantage of people, but then again, I hate being taken advantage of. Thats why I am not in sales
John said...
"I was going to start at 417,000, claiming jumbo loan limitations. But, as an update they have now dropped the listing from 460,000 to 448,000. I think that thier agent may have been less than honest with us. My wife wants to put in a bid tomorrow for the 417. If they really had the 440, I think it would have sold"
John - until Dec 2008, jumbo amount has been pushed up to 600K-700K something, so I would not say 417 because if the Sellers agent is on the ball, he will notice this is no longer the limit, and then you have no "reason" not to go higher. What I would do is start at 415K with the full intention of going as high as 420K if necessary just so the seller can think they got some sort of concession out of you.
Now as to your agents remark that he was told they "refused 440", let me ask you - no offense, but how well do you know YOUR agent? The reason I ask is you have to keep in mind your agents motivation. While its true he wont get paid unless the deal goes through, if he thinks you (or perhaps more likely your wife) will be willing to offer 450 instead of 440K, its in his best interest to ensure that you do so (i.e. it will work out to be at least another $300 in his pocket).
Secondly, what do you know about your agent and his relationship with this other agent? For example, some savvy sellers will offer their agent an extra 5K for a full priced offer. The Sellers agent will sometimes convey this to they buyers agent, with the explicit or implicit assumption they will split the extra 5K in commission that they have just soaked you for.
I hate to trot out a parade of horrors here, but you really need to be cognizant of "your" agent's motivation. I am not saying you should not listen to him or her, but at the same time, listen critically to everythng they say, understanding what their potential movivations are - and take everything they say with a grain of salt. When it comes down to it, trust your gut.
In any event, good luck to you. I hope you end up getting something you like at a price you are comfortable with.
gte811i,
I think Lance has a point to some degree. There certainly is a particular set of large landholdings that are worth millions. And with zoning and conservation, they create a unique market just as historic parts of NoVA close to DC do. Listings have always been somewhat scarce in Warrenton because the building of tract homes hasn't been massive, but there's still been plenty of residential development and massive speculation and flipping.
Still, even in Old Town Warrenton there are properties from the historic to the simply dilapidated that nobody seems to want at present. And land prices have been going down -- small farms have definitely been selling for less than peak, and there have been a number of foreclosures in that area, too.
But there are suburban tract homes in small enclaves all over Fauquier. I was comparing those with similar properties in Fairfax and Loudoun. What raises my eyebrows are the asking prices of new listings compared with lower prices on what's selling "closer in".
I have a few thoughts but have no idea if they ring true:
(1) Is Fauquier somehow more desirable for families than congested suburbs?
(2) Risky populations didn't buy into Warrenton in droves from '03-'06 -- perhaps demographics are more stable?
(3) Are there early boomer retirees (from NoVA) in Fauquier who are comfortable and don't need to sell?
(4) Did Fauquier see the massive price increases last, and were thus more stubborn about lowering asking prices?
(5) Is there something in the water that makes Fauquier sellers more stubborn?
At any rate, the "days on the market" really show that Fauquier isn't selling as fast as its neighbors, and it might just be a matter of time before prices follow suit.
Also, there are still big developments planned for Warrenton. Ryan just opened a 900-acre development around Lake Brittle. The houses are smaller single-families and start in the 300's. So they're trying to be competitive, and it's a nice relief from McMansions.
Harriet,
I agree with your observations re: Warrenton .. 'cept for the perhaps the one about the water. Like I said, I don't know how much development occured there in the last 10 yrs or so ... and that would of course affect the stability factor ... Just like that building in the middle of Falls Church affects Falls Church ... but not really. (I.e., that building is affected ... but the surrounding "established" places aren't.)
John: I was going to start at 417,000, claiming jumbo loan limitations.
You don't owe them an explanation.
If 417 is your number, it's your number.
Seems that with all the news of a "bad" economy, eminent move, that they would have taken the 440, if it were solid and not loaded with clauses.
As for Warrenton, I've worked with two people who have taken jobs there. There is a technology park somewhere in that area. Here's a news article about the area
From the link:
The System Command Center relocation will double the number of FAA employees at Vint Hill to 600, with estimated average salaries in excess of $130,000.
Not as good as some ex-secretaries earn in Crystal City but still, 130 is 130 and is decent money.
The bubble has hit Warrenton like everywhere else for the McMansions purchased during the peak and for lower-priced houses. But trust me, for unique/country/fine properties, not only have prices not budged much, but there is little on the market, especially in the 800K to 1.2M range. The year over year statistics show a big home price drop-true-but again this is largely for the McMansions, not for "fine" properties"
And yes, Warrenton is a superior place to live for many reasons, and yes there is a lot of old money here.
I apologize for the personal attacks to lance. I stand-down on that aspect.
However, to claim that Warrenton is like Arlington and/or Alexandria is just asinine.
In my opinion the ONLY thing they may have in common is "old money".
Sure a lot of people there maybe old money . . . however when you have a median income of 52k (2005), it cannot justify the housing prices regardless of "old money".
To my knowledge the only thing that is governmental in the area is WTC, so maybe in-town would be slightly higher then out . . . but not that much. Bealton-only 15 min. away (which is not bad in this area) has only one bad drawback to my knowledge-the water sucks. Regardless of that you are seeing nice 2 story semi-brick homes on the market for under 325k. You can only get a shack in Warrenton for under 325k. Furthermore as the MRIS stats show Warrenton is going down, hard. The statement that Warrenton will be stable is just plain moronic (note, I called the statement, not the person moronic :-) ).
I've seen a 1 story brick rambler going for 350k (it was bought circa 2000 for 175k) ~9% annual increase. I had a co-worker list a 2-story spec house at 500k (she bought 2000 for ~230k)-it's now down to ~430k. If she dropped it to 330k, she'd sell, otherwise she'll just ride the market down. The only thing warrenton has going for it is a 30% increase in pop. since 2000. It would be nice to know how many homes have been built since 2000, to soak up that 30%.
No, Warrenton is just like every other town in this area, it was massive speculation and low-teaser rates. Is and will continue to fall.
gte: I apologize for the personal attacks to lance. I stand-down on that aspect.
commendable.
About Warrenton, are you talking about the jobs the FAA plans to move there?
From the reports, it looks like they have 300 jobs there now and another 300 in a few years, that's after they finish building their facility.
The construction work itself will put bucks into Warrenton. Then as they stand up their Center, the communications and computer work will be done by someone.
The end point, the 600 jobs with an average salary of $130K, is just the icing on the cake.
That probably does not include support people who are not FAA employees. The janitors might not add much to the economy but the owner of the janitorial service will.
Anyone who will be working there is certainly looking for a place now.
kh . . .
I realize I'm a little feisty . . .sometimes too feisty ( sigh character flaws . . . ugh).
I'm not sure where in Vint Hill the FAA site is going to be located . . but Vint Hill is pretty much in the middle of Warrenton, Gainesville, and Bristow, with Manassas being maybe 5 (10 at most) min. more away. Furthermore, I HIGHLY doubt the avg. salary will be 130k. 130k in the Fed. Gov. is GS 14+, more likely GS 15+, depending what grade you are. So your telling me that the avg. employee at this new facility will be > GS 14. That sounds like a load of horse manure to me.
Again Vint Hill != Warrenton. If I'm a govey at the new facily, I would look at Bristow/Manassas before Warrenton with housing prices right now. In addition if you buy in Bristow/Manassas/Gainesville you will have a much better commute if you ever decide to go to a different facility vs. Warrenton. I honestly don't see 600 jobs, located NORTH of Warrenton with at least 4 different locations that are very close to the same commute affecting Warrenton prices that much.
Warrenton went through a bubble just as much as Loudon, PWC, Fairfax and the rest of the area.
As far as where Vint Hill employees choose to live, the school districts make a big difference.
Fauquier has some new schools people seem to prefer over Prince William.
There's also a very large choice of private and home-school groups. Vint Hill itself facilitates these with the Allegro Music school which is a building friendly to student groups.
That's really interesting about the salaries, KH.
Lance,
I remarked about the Lake Brittle development because (1) New houses from the 300's would provide competition for 1975 split-foyer houses for the same price and (2) I thought it remarkable that a builder was opening up a new subdivision. Toll seems to have cleared out of its plans for Warrenton (for now, anyway).
The reason to stay at $417,000.00 or below is that you pay more for financing above this amount. The definition may have changed, but the pricing is more expensive. For example, Citibank charges 1.5% in extra points to the borrower to do this loan FHA. The Devil is still in the details.
gte: Furthermore, I HIGHLY doubt the avg. salary will be 130k. ... That sounds like a load of horse manure to me.
Donno. Check the PR blurb at the link above. (it's slow to load) All I did was clip the part about salaries.
A place like that probably will attract sales, support, marketing companies that account for more $$$$.
kh . . .
I did check the link, sorry I wasn't trying to imply that you were lying, I understand you were repeating the link info. The info. in the .pdf just doesn't really seem to pass the smell test, IMO.
gte: The info. in the .pdf just doesn't really seem to pass the smell test, IMO.
No offense taken.
I thought of it as, "hey, that's a surprisingly high number, maybe the guys would be interested."
But yeah, someone might poke around for the real story.
Taken at face value (which might not be accurate), it's saying that the FAA will dump 300 more, average 130K/year people there, in addition to the 300 that are already there.
It could be half 100K types and half 160K types.
I agree, it seems high. Maybe it includes overtime? Maybe Air Traffic Controllers earn more than the normal fed?
What about digital electronics and software types to maintain the systems?
kh said...
"gte: I apologize for the personal attacks to lance. I stand-down on that aspect.
commendable. "
I agree.
kh said...
"gte: I apologize for the personal attacks to lance. I stand-down on that aspect.
commendable. "
I agree.
JOhn said...
“They were asking 460,000 and my realitor said he knew the listing agent and would feel it out for us, because he said "No one pays list in this market."
He got back to us and said the listers got an offer for 440,000... and refused it! And they are relocating to California!”
Did you make an offer anyway? I have yet to talk to a real estate agent about a house that didn’t have “another offer coming in this afternoon”, “a lot of interest”, or “someone else coming to see it tomorrow”. Afterwards it sits on the market for another year.
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