Please post your local house search updates, MLS finds, off-topic ideas, and links here.
Monday, June 16, 2008
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
22 comments:
sobering thought:
"Houses in Naples, Fla., lost 18.7 percent last year, but are still up a net 61 percent over the past five years. In Riverside-San Bernadino, Calif., houses lost 13.8 percent last year, but are still up by a net 71.5 percent since 2003. In metropolitan Washington, houses lost an average 5.1 percent last year, but have gained a net 68 percent over the past five years.
http://tinyurl.com/69tbq3
Just an anecdote:
My parents bought a 4 bed SFH for $165k in Woodbridge in 1997, which in retrospect is about the price valley after the late 80's boom/bust.
At the peak, their neighbors (same street, all similar houses) could sell for $500k+, but just a week ago a neighbor (not foreclosure/short sale) sold for $275k. That house was on the market for one day. Other houses currently priced at $300k have sat for months.
They're still up in net value (about 66% over 10 years), but only because they coincidentally bought at the last absolute valley. (Prices were stagnant for a few years before, so there was little risk, plus needed more room for the family.)
Anyone who bought in the general neighborhood after around approx. 2003 would not make a profit selling today after realtor commission. So that is net 0% after 5 years.
The differences in the 5 year net in different areas probably has to do with how early an area became bubbly and also how high it went.
BTW this neighboorhood is the Harbor Drive community. It lost 35-40% in the last year.
Another anecdote: The house I'm renting (same neighborhood) was on the market vacant for over a year when we started renting it. The owner turned down an offer that was $10k below her $430k asking price around March '07. Her original asking price in March '06 was $560k, which was still about $30k above market value. I think she's glad to have us paying rent! She bought it in 1972 or something so she's net way up, but couldn't cash in on the bubble. We're wondering whether she'll be reasonable and sell it for fair-market value later.
One major problem with interpreting house price increases over a five year period is that there is no separate accounting for home improvements, may of which are costly for those who do them. Thus the overall price change in 5 years isn't a "gain" but needs to be adjusted downward to reflect additional investments in the same homes. Another implication is that the homeowner who barely maintains his/her home is deluded into thinking s/he is sitting on a gold mine as the value goes up and then tries to demand the overall price increase when selling, which s/he will not get. In contrast his/her neighbor who may have invested $150K or more in improvements to his/her fixer-upper does see some improvement in price as well but after subtracting his/her basis, but the net gain is nowhere near 68%.
Harney's article also does not report the price losses this year to date, which as we saw from the May #s as one example, are pretty substantial.
Lance,
While keeping in mind that Harney's 5%/68% numbers exclude jumbo loans above $417,000 and most subprime loans, it's sobering to me that would-be sellers are "waiting out" the 5% decline because 68% isn't good enough for them.
I've heard some potential retirees are putting off selling until "the market gets better", (they hope perhaps next year). I have a suspicion that the '05 prices they have fixed in their minds are illusory.
Although it depends on where in our metropolitan area you're talking about, too. Most sellers would jump for joy at a mere 5% loss. Also, we're halfway through a new year since that 5% statistic, and the losses will probably be shown to have been steeper this year.
NEED SOME MORTGAGE THOUGHTS....
Has anyone here gotten a mortgage in Loudoun in the past 6 months? Are all lenders requiring a minimum of 15% down for a conforming product?
I've finally finished the spread sheet I was working on comparing Alexandria, Manassas, DC, Montgomery Co., and Loudon Co. I extended the time period back to Dec. 2005 and added year over year median price changes. The other things I was tracking were number of sales, number of new listings and median price.
Adding in the year over year median price changes just confirms what I said initially: until June of 2006 all of these areas were doing well. Of course if you look at the data more closely, you find that sales volumes were down considerably, but for the average person thinking about buying a house the only thing that had changed was that the buying frenzy had ended.
Prices were still going up at a brisk clip (Manassas and Loudon, the two areas now most affected, had double digit increases in the last month of 2005 and the first few months of 2006-- with Manassas up nearly 40% in Dec. 2005!) Many families probably saw the drop off in sales volume as their last chance to get into a house.
Through the end of 2006 families who 'stretched' to get into a home with a subprime or Alt-A loan were most likely congratulating themselves. DC and Loudon were the only areas of the 5 that showed more down months, year over year, than up-- each had been down 7 of the 12 months-- and only Loudon's were down over a continuous period.
At that point Manassas had only been down 3 out of the previous 12 months and only one of those had been in the double digits. Alexandria was looking weaker: it had been down for 4 months straight between August and November. The best off seemed to be Montgomery Co., which had been down only twice -- and each time by less than 3%.
Manassas doesn't begin to follow Loudon in a steady descent until March of 2007. That's the month the median price goes below $300,000 for the first time. At that point Alexandria looks like it's recovering, DC has just posted an almost double digit gain after a series of 5 down months, and Montgomery Co. still looks golden.
It's not until September of last year that Montgomery Co. finally begins to falter, with the first of what is now 9 months of negative numbers. By then, Alexandria seems to have fully recovered.
Finally, in January of this year, Alexandria, too, starts to head down.
I've published my spread sheet here and will work on doing some charts to go with it.
Great stuff from the NY fed - you can drill down to see subprime and alt-a data by state, county and even zip code - percentage of loans, default rates, late payment rates, etc.
http://newyorkfed.org/mortgagemaps/
It will surprise few of the folks here that Prince William Co. looks most troubled among NoVa jurisdictions.
Ace: personally, the only things I count as improvements are new additions to a house. For example, someone who encloses a porch, or adds a bedroom over the garage.
Things like updating the appliances, flooring, fixtures, etc -- I count that as normal maintenance. Especially these days, where so many houses have been updated. Updated houses no longer stand-out and command a premium -- it's expected these days (an ironic side-effect of all of the heloc-home improvements shows). In other words, houses need to be updated just to maintain their value. To me the houses that stand out are the ones that have worn-out and dated interiors. Those places command a discount.
The only time I could see an updating commanding any sort of premium is if the updating is exceptionally nice. Even then, I've seen places where the owners have updated so much that the house no longer fits the neighborhood.
On the other hand, I've seen a few places with 30+ year-old interiors that were so nice, that they still look great today.
Looks pretty good Sarah. You might want to double check Alexandria Feb 2007 as I think you recorded Average instead of Median prices. Otherwise, your records look the same as mine.
I've heard some potential retirees are putting off selling until "the market gets better", (they hope perhaps next year). I have a suspicion that the '05 prices they have fixed in their minds are illusory.
I cannot speak for DC, but we're seeing that mindset break here in California. Suddenly retirees are realizing that this is as good as it gets and its time to stop carrying 2+ homes.
Sarah,
Thank you. I'll have to grab your spreadsheet later (I'm not on my computer right now.) It should be interesting.
Got Popcorn?
Neil
Builders' confidence matches record low
A survey of homebuilders' assessment of the housing market shows the industry's sentiment tied the mark set in December.
"David Seiders, NAHB chief economist believes sales volume will only continue to erode in months ahead."
hog
Well, novawatcher, obviously everyone is entitled to his/her own opinion, but you and the IRS disagree, as do many other people, and I would argue, the market in general, to some degree. I'm not talking simply about a new appliance or paint job. But there are many things besides adding square footage that constitute capital improvements, including replacement windows, a completely redone kitchen or bath (a recent WaPo article said the minimum reno cost on a SMALL bath is $16K), adding central air, replacement systems, etc. High quality (i.e., not laminate or builder grade) flooring also is not cheap. When buyers enter a house that has had nothing done to it since 1950 or even 1970 (or later), you had better believe that they start adding up the costs of reno and offer much less for those houses than for a completely redone (if done well) house.
Maybe you are a person who has had the benefit of always living in new homes where you haven't paid these expenses, but they are considerable, and buyers do factor them in. According to studies the real estate industry has done, these improvements usually do not return 100%, but most return quite a bit more than 0%.
You may live in a part of NoVA where most houses have been updated, and so there is relatively little variation in price. But in Arlington, Alexandria, etc., you will see a great deal of variation.
Here's a link to IRS pub 523, which spells out what they count as capital improvements vs. normal maintenance.
http://tinyurl.com/6kto7u
Of course. it doesn't map perfectly onto buyers' and sellers' opinions, but they wouldn't be giving you the opportunity to reduce a taxable gain without (if you'll pardon the pun) a good basis.
I also agree with you that some sellers over-improve, some have horrible taste, and some 30 year old components still work or 30 year old decor can be considered tasteful. Sometimes a well-maintained, high quality 30 year window works better than a cheap new one installed poorly. At the same time, a big, cheaply built and poorly designed house can be much less appealing and command less in the marketplace than a smaller, higher quality one.
But these are exceptions, not the rule - and that's why in the Realtor ads you'll see a lot of emphasis on updates beyond simply whether square footage was added.
Thanks for the correction, crt. I've made the change and it's now available here.
I'll be pleasantly surprised if that's the only mistake I made! I copied out the data by hand and I'm expecting any moment that someone's going to say, "Oh, you didn't have to do that-- you can get all the data here!" and point me to a website with all these data plus a bunch of other counties besides... But I figured it was a little more productive than playing sudoko, and just as absorbing. ;-)
Ace: I guess it depends on how you look at it. I think you (if I read you right) consider updating as an 'addition' to the value. The way I look at it is that it prevents a subtraction.
Tabitha housing odyssey update:
We are moving into our rental today and tomorrow.
My cell phone just rang.
It was our realtor.
The short sale house we extended our offer on, waiting til we were staring homelessness in the face, just contacted him.
They accepted our offer unconditionally.
Except that the offer no longer exists.
What do you all think of that?
If we had gotten this call a month ago, we would have been dancing for joy. They wanted to close July 20, and our landlord is moving back in July 24, so we could have easily dovetailed the two moves.
Now we are moving into a house half the size.
But, you know, I feel peace about it. I like the house we're moving into, and we might be able to buy it for a decent price, keep our mortgage payment low.
But if anyone is looking for a great deal in Bristow, speak now, and I will share more info about this listing. It has 6BR/5.5BA, on a culdesac, finished third floor and basement, about 5000sqft, backs to woods, walking distance to new school, great neighborhood, mile from VRE, etc. etc.
Tabitha: They accepted our offer unconditionally.
Who is "they"?
The bank or the previous owners?
kh,
Both banks. The owners had accepted our offer back in February. There were two banks involved, and they both signed onto our offer, apparently.
Too late.
Tabitha,
If the short sale is REALLY the house you wanted AND you feel you are getting it for the price you want, why are you turning away the opportunity to buy it? You can negotiate your way out of the lease you just took. Worse case scenario you break the lease and the landlord has a legal obligation to mitigate damages. (I.e., he'll have to make reasonable efforts to re-rent the place and get someone else to pay the rent you agreed to pay.) In either case, the relatively small amount it'll cost you to get out of the lease will be nothing compared to what you will lose emotionally (if not financially) by forcing yourself into another cycle of house searching a year down the road.
I know, your first inclination will be "It's too difficult to buy it now". It'll be harder to restart your house search down the road.
Tabitha,
Keep us posted. I agree with Lance on the logistics, but I realize there must be something else going on that has you thinking it's not for you.
It reminds me of reluctantly starting a new job, and getting a call from the other dream job's HR department saying you're hired.
Navy Federal's all shut down today with a power outage of all things (17th). I wonder how that's affecting their loan department . . .
Tabitha,
I disagree w/ Lance on this one.
You told them your parameters, which were reasonable, they had plenty of time. It is now too late.
Time to move on.
This isn't about cutting off your nose to spite your face. This isn't about playing mind games.
This is about not being a victim.
It's about setting bounds on the baloney in your life.
Here and there in the world, there are people who feel that they and I have unfinished business.
Not so.
As in the case of you and that house, I told them, we negotiated, things went back and forth.
At some point, negotiations stop.
At that point, walk away and do not ever look back.
W-w-wait. C-c-come back. We're not done.
Don't even bother to tell them it's over. Silence is enough of a message.
Too late.
You did exactly right.
Wow, kh, I appreciate the endorsement.
Things like this tend to happen to us a lot, so that we are kind of the family joke. Like when we were moving from North Carolina to Virginia in 2006, and we had a lease for a house in Fairfax, and two weeks before we moved, the landlord called us and said they were not moving to Dubai after all, and could not rent to us. I was six months pregnant, we had five little ones, and we had really struggled to find a place to rent. So I went to a military housing website and lo and behold, there was a new listing in Manassas that was perfect for us, and it worked out.
We try to live like God is in charge, and He's usually right ;).
Post a Comment