Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Attention: Haggerty and Razzi up at 1:00 for the Washington Post's "Real Estate Live". I just thought I'd mention it 'cause it's Friday the 13th, not to mention a slow news day.
Friday, June 13, 2008
Northern Virginia Bits Bucket 6/13/2008
Posted by Harriet at 12:49 PM
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20 comments:
From a previous discussion about 3507 N. Pershing Drive in Clarendon (which sold for $860k in 2005 and was listed by the bank for $712.5k):
John Fontain previously said: “I'd guess the fair value of that property is the low 500's, primarily due to the land value.” -- 5/21/08 11:25 AM
narl previously said: “I have to laugh at the low 500s. I would put a lowball bid in myself of 650 or so except that it is bank owned and those take forever and are frustrating as hell. It will eventually sell for a teardown at around 625-675, like most other lots around there in the same size.” -- 5/21/08 11:32 AM
Update as of today:
3507 PERSHING DR
Arlington, VA 22201
List Price: $570,000
Prior Sale: $860,000 8/29/2005
Listing Date: 03/25/08
-33.7%, $-290,000
Do the 500's still look "laughable?" And what effect might this have on the asking prices of other properties in the neighborhood?
I like FranklyMLS's new List/Tax A. feature:
Ashton Heights
Hello,
I am looking to buy a townhome in Woodbridge, VA. Street name is Ogilvie Ct. How is this area?
Prices are pretty down at the moment and we are looking for a home in the very near future.
Appreciate all help.
The kitchen is pretty tiny. Who would want a house without pergraniteel?
Re: tear down vs. other alternative for 3507 N. Pershing
I think builders are wising up to the fact that many buyers avoid busy streets like Pershing, particularly those with the means to buy a big new house. While some buyers settled for busy streets during the bubble, even the most beautiful houses on busy streets (or other undesirable locations) have languished on the market more recently. So this will greatly decreased the land value compared to a location on a nearby side street, IMHO.
kalyan:
That's my area, but I'm well known to be pessimistic about all of this, so take my words with a grain of salt and always do your due dilligence.
That development is new(ish). There's one across the street more condo-y that I've been paying more attention to for personal reasons, but the whole area is obviously coming down in price hard, since it's PWC. I don't think the area itself is bad at all, and the development is in a good age range. Not too old as to be seriously out-dated; not so new as to risk poor construction issues.
That said, there are issues that I think any buyer has to be aware of in this area, but particularly in PWC.
1) Price is widely varient. Banks through foreclosures and short sales are at the bottom of the market. Many of these homes are also in poor condition; while home owners who are not stuck with short sales are higher to much much higher up the price range. If you buy from a bank, either short sale or foreclosure: expect the run around, the 9th degree, and all the worst. They'll take your offer at the listed price and then counter at 10% higher. They'll take your offer and sit on it for three weeks. It's bad. If you have the time and patience to do this, you can get the deal done. But buying from the owner with equity to take the price hit gets the deal done faster; but not at the price point. As a result, you will almost certainly be buying a depreciating asset for the next few years.
2) Be aware of the traffic patterns around there. Old Bridge is the Route 50 of Prince William County. In the mornings and afternoons it gets clogged with rush hour traffic. The PW Parkway is a little better and you can use that as well, but it's something you have to be aware of.
3) Local amenities will be used to try and boost the price. You're in walking distance a nice chain grocery store, a library, the county gym, etc. If these things aren't worth paying a premium for; wait.
My personal recomendation is to wait it out and rent anyway. The price discrepency between REO/Short sales and regular sales has to be addressed, and until it is, it's safer on the sideline. If you really want to buy in this area, I recommend going into the 22191 zip code because the price reductions there are more substantial. Generally you'll be closer to I-95 as well, and that's a plus.
Not trying to repost but... i would love to know who this person was.... something smells fishy...
_
Things that make you go hmmmm.....
http://www.washingtonpost.com/wp-dyn/content/discussion/2008/05/30/DI2008053001888.html
______________________
Fairfax, Va.: Good afternoon, love the chat.
I finally closed last week on my house after 2 1/2 months and am glad to get in to the property and start making it mine. However, the County updated the records today and the sales price (not the assessed value-although they are the same number) they have listed is 125,000 above what I paid! Who would I contact about this? This makes me wonder about the sales prices listed for other properties I have looked up in Fairfax County.
Elizabeth Razzi: It does make one wonder, doesn't it. The first thing I would do would be to check my sales documents to make sure something isn't wrong there. Then I'd call the closing agent title company, which was supposed to file the information with the county, and ask them to get it fixed.
"The Nothing said...
Not trying to repost but... i would love to know who this person was.... something smells fishy..."
Whats your point. My parents house was listed as sold for 90K under the actual price (340K vs 430K) The data enrty clerk transcribed the numbers at land records - happens all the time.
Before they sell, Im going to draw up a confirmatory deed, and provide and affidavit of true consideration and record them in land records. Problem solved.
Until then, when they continue to get their tax assessed value every year based on the supposed "FMV". Am I going to say anything now??? Hell no...
From the WaPo discussion, an intrafamily debate involving the substitution effect between Arlington and Fairfax County:
"Leesburg, Va.: My husband and I are tired of the commute between Leesburg and D.C. and we are trying to get a bargain in this buyer's market. However, he wants to buy in Fairfax and I am insisting on Arlington (now that we can actually afford it there). His side is that 400k buys us a shack in Arlington, while 400k buys us a nice home in Fairfax. but I think that the home in Arlington will be worth more in the future because of the small commute. What do you guys think?"
WaPo discussion are fake. I think the three Real estate writers sit around with the answers and then make up the questions.
"Terminator X said...
From the WaPo discussion, an intrafamily debate involving the substitution effect between Arlington and Fairfax County"
You will note this is the reason cited in the Shiller article as to why the inner areas will not see the big price declines:
"As housing affordability improves, home buyers who were previously priced out of their preferred towns and neighborhoods will be able to purchase properties in these areas. So even as overall sales volume drops, relatively stronger demand for housing will limit price declines in neighborhoods with shoter work commutes, better schools, and easier access to parkes, recreation and retail centers"
http://www2.standardandpoors.com/spf/pdf/index/052708_Housing_bubbles_collapse.pdf
Its funny, I always was thinking of the substitution effect as dragging down the prices of close in properties. As it trns out, It may actually be holding them up.
Even the 'nice' areas are coming down: here is an analysis of McLean and Oakton (4br+ SFH) using a new norming methodology:
http://novawatch.blogspot.com/
scroll down for graphs
For all those who believe Alexandria is immune, this is a $500k haircut.
source: Redfin, http://tinyurl.com/5mtdgv
Updated MLS Listing
Price: $2,999,000
1011 WASHINGTON St #63
ALEXANDRIA, VA 22314
MLS#: AX6588086
The list price was "$3,495,000" and changed to "$2,999,000"
Good work, novawatcher. Thanks for doing the calculations.
I think the same thing is happening in most (if not all) zips in Arl.
CRT @ 10:57AM:
"Its funny, I always was thinking of the substitution effect as dragging down the prices of close in properties. As it trns out, It may actually be holding them up."
I have two brief comments:
(1) The WaPo discussion, assuming it's real, presents a potential buyer who finds more relative value in Fairfax as compared to Arlington. The buyer is substituting Fairfax for Arlington, which, if representative of a critical mass of potential buyers, will cause demand in Arlington to diminish.
(2) Turning to your quote concerning Shiller, note that it begins: "As housing affordability improves . . . ." That is, it assumes that the cost of housing in the nice area has gone down such that more potential buyers can now afford that area, whereas they couldn't before. Nobody here will disagree with that quote; there is more intrinsic demand in nice areas, near a metro, with good schools. Price decreases can only fall so far in such areas until potential buyers substitute Arlington for Fairfax and swoop in. Perhaps that's the substitution you're focusing on, but I'm looking at it from the opposite direction. But are buyers substituting Arlington for Fairfax? No, I don't think we're there, yet.
Which is where rents and rent multipliers become useful. An area with more intrinsically desirable qualities will demand higher rents than areas lacking those qualities. The rental value for comparable units in those areas will give you a rough idea of how much more intrinsic value one area has over the other. If purchase prices don't reflect that disparity, it may be time to substitute one for the other. After all, renters are often looking for the same things as owners, e.g., transportation, restaurants, shopping, etc.
1011 washington st, #63
http://realestate.alexandriava.gov/detail.php?accountno=50715650
Is it even worth 2.9 million?
Does everything in it convey?
City of Alexandria is surely missing out, with an assessed value of only 1.8 million.
Terminator-X said...
"(1) The WaPo discussion, assuming it's real, presents a potential buyer who finds more relative value in Fairfax as compared to Arlington. The buyer is substituting Fairfax for Arlington, which, if representative of a critical mass of potential buyers, will cause demand in Arlington to diminish."
Not exactly, if you note the buyer currently lives in leesburg and is moving in (either to a decent place in Fairfax or a shack in Arlington) because (a) they cant stand the commute and (b) prices have fallen enough for them to deem they can afford it. Either way they are no longer willing to consider some place in Leesburg. Potentially worse for Loudon, if they are owners (and not renters) their choice will also add one more housing unit into Loudon inventory.
"Price decreases can only fall so far in such areas until potential buyers substitute Arlington for Fairfax and swoop in. Perhaps that's the substitution you're focusing on, but I'm looking at it from the opposite direction."
This is what I was noting - earlier I assumed it was people moving further out (as you suggest) as shiller and this WaPo discussion note it can move in too from Leesburg to (either to FFX or Arlington).
"But are buyers substituting Arlington for Fairfax? No, I don't think we're there, yet."
It may not be arlington over fairfax, but its arlington over somewhere. Make no mistake though - prices in close have indeed fallen - perhaps not as much as some would like - but enough to keep buyers buying. Absorbtion rates in close are at less than 5 months - indicating demand is there. If sellers put it up, buyers (amazingly) keep buying.
CRT @ 10:51
Thanks for your thoughtful reply.
The WaPo discussion concerned a potential buyer who was weighing Arlington v. Fairfax. The buyer was comparing a "shack" in Arlington with a nicer house in Fairfax. Indeed, the couple want out of Leesburg, but, given that a potential buyer is looking at both Arlington and Fairfax, there's at least one buyer willing to substitute Fairfax for Arlington. Some posters here deny that this occurs, i.e., buyers in North Arlington would NEVER consider living in Fairfax (OK, maybe McLean).
We should moinitor the relatively low absorption rates in the close in areas; what is most intriguing is that absolute sales in Arl. and Alex. are down to levels last seen in 1998. So current prices aren't enticing demand; I disagree with your assertion that buyers keep buying. Rather, potential sellers in those areas seem to have the wherewithal to not sell or not list their properties if they don't think they'll get the price they deserve. The subprime borrower in PWC never had this choice.
The X factor is the degree to which recent buyers in the "nice" areas used questionable financing, i.e., loans that may adjust to unaffordable payments. I have no data to quantify this. But as loan delinquencies move from subprime to Alt-A to Prime, we may see a bump up in the number of "desperate" sellers there. Also significant will be job losses as the economy continues to deteriorate.
terminator-x, I don't know if it's what you have in mind, but the Mr. Mortgage video on Alt-A refers to data at the New York Fed website showing the breakdown of subprime and Alt-A by state. From that I see that in DC only 64% of the Alt-A loans were for owner-occupiers (as opposed to California, for instance, where 81% were buying the home they live in), and that as of the end of 2007, when these data were collected, a little over 18% had already had at least one late payment in the past 12 months. Also, 67% were low or no documentation. That sounds like a fairly alarming profile for loans that were mostly originated in 2005, 2006 and 2007. On the other hand, this is likely to be a slow-moving train, since only 61% of these were ARMs and of those, only 4.5% are resetting in the next 12 months.
Terminator X Said...
"a potential buyer is looking at both Arlington and Fairfax, there's at least one buyer willing to substitute Fairfax for Arlington. Some posters here deny that this occurs"
OK - I see where you are going now. Yeah - I never understood why some were so steadfast against it - housing gets significantly cheaper in FFX - it brings down Arl. Why is that so hard for some to understand?
"I disagree with your assertion that buyers keep buying. Rather, potential sellers in those areas seem to have the wherewithal to not sell or not list their properties if they don't think they'll get the price they deserve. The subprime borrower in PWC never had this choice."
Perhaps you did not see my earlier comments re: some people close in have the wherewithall to not sell or not list. I disagree in that it doesnt show up in the data. See my comment below from a couple of days ago. If you can see any thing I am missing I would love to hear it. Otherwise it seems to me - that its not that the close in people are "holding out" - They are listing just as much as everywhere else is. The difference is close in people are buying it. See below:
CRT said...
Back to this idea of wealthy high end areas not listing/holding out - it seems to me that if anyone has the capacity to do that it would be wealthy counties in MD. MD didnt experience speculation like NOVA did and they have 2 counties (Montgomery & Howard that are wealthier (by HH income) than either Arlinton, Alexandria or DC. Further, neither of them seemed to have any real problem until the credit crunch hit in mid 2007. Thus it seems if ANYONE around here could "hold out" for a better day, it would be them (wealthier, little speculation, later hit) right?
Well if thats true, we should see it in sales and listing records. Now, to be fair, as Ted K pointed out, Mo Co has some marginal areas & issues with immigrants that can give it problems - fair enough. Lets exclude these areas by only looking at "high end" homes (say, priced 500K and above).
Lets look at months of inventory in all 5 markets. Again, all we are looking at here is high end stuff - the theory is people close in are holding out for a better day. Again, if that is true, we would expect wealthier Howard and Mo Co to fare better than close in Arl Alex & DC right?
Here is months of inventory in each county based on 100K price intervals (MRIS may sales)
http://www.mris.com/reports/stats/
ARLINGTON MAY SALES
Price Range - Months of Inventory
5-600K - 3.0
6-700K - 3.8
7-800K - 4.7
8-900K - 10.6
900-1MM - 14
1-2.5MM - 4
OK - maybe some weakness in the 800K to 1 MM categories. Then again last month (Arl was at 7.8 and 6.2 months in these 2 price ranges). Either way, if you say this is weakness - Ill grant that - lets move on.
ALEXANDRIA MAY SALES
Price Range - Months of Inventory
5-600K - 4.6
6-700K - 2.2
7-800K - 6.0
8-900K - 4.1
900-1MM - 5.8
1-2.5MM - 5.0
Now here we see NO weakness - yes sales are down from last year, but heres the thing, if you put it out there it sells! On to DC:
DC MAY SALES
Price Range - Months of Inventory
5-600K - 7.4
6-700K - 3.7
7-800K - 4.3
8-900K - 4.1
900-1MM - 4.5
1-2.5MM - 4.4
OK - 5-600K looks marginally weak - ill give you that, but look at the rest of the categories top to bottom no real problems. In fact, this might be the strongest of the bunch.
ON to Maryland:
MONTGOMERY CO MAY SALES
Price Range - Months of Inventory
5-600K - 8.1
6-700K - 6.2
7-800K - 5.9
8-900K - 9.9
900-1MM - 7.6
1-2.5MM - 13.5
Wait a minute, look what we have here. Now these numbers arent awful but across the board they arent as strong as either Arl Alex or DC. Again, why can the wealthy in Arl, Alex & DC "hold out" and wealthy high end homeowners in Mo Co cant? Finally lets look at Howard - the wealthiest county in MD, and #3 in the whole US:
HOWARD MAY SALES
Price Range - Months of Inventory
5-600K - 8.2
6-700K - 8.6
7-800K - 10.8
8-900K - 10.6
900-1MM - 31
1-2.5MM - 24
Again, this is THE wealthiest area of the 5, it didnt have speculation, it didnt get hit until the credit crunch last year - yet it is the WORST of all 5 by a mile. How can that be?
The answer, it seems to me is geography. Maybe its gas prices maybe not, but the point is, closer areas (none of which are as wealthy as the burbs) are doing better. Thus, it seems to me that all 5 areas have been "hit" its just that close in took it and are continuing to take it that better.
If anyone should show weakness at this point, it should be Alex, Arl & DC which had specuation, arent as wealthy, and had to deal with the substitution effect from nearby fairfax which has been falling apart. Further, the wealthiest of the 5 Howard County is doing the worst by a long shot - as it turns out it is also the farthest away from DC. Again, it seems like geography is the difference.
So again, maybe I am missing something, but it seems to me that if anyone is holding out at this point, it is wealthier, later hit Maryland.
If someone sees something I do not here, please tell me. Otherwise it seems to me, close in isnt "holding out" - its just that when their high end stuff is listed - apparently it is priced right because it is selling faster than the stuff in MD. Clearly this is just one month, and things could change on a dime, but it seems like if there is weakness and holding out, this is where we would see it. Am I missing something here?
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