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Saturday, June 21, 2008
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35 comments:
The news clowns are on Channel 4 this morning proclaiming that "2,379 HOMES SOLD LAST MONTH IN PRINCE WILLIAM COUNTY."
I've got a screenshot if you want it?
Post an email address and I'll send it.
Take a look at today's WP real estate section. The feature article on how Arlington's Rosslyn-Ballston corridor is a splendid example of smart urban planning using the Metrorail subway system. This is simply the latest in a cascade of media articles on how high gas prices and traffic nightmares across the country are drawing people to seek housing in city cores -- and driving up the value of homes in those cores. Just proves what I've been saying on this site for the past few months. This is a key reason why home values and sales prices in my neighborhood (within walking distance of the Ballston metro station) are doing just fine, even as other areas around the region are in deep distress!
Makes complete sense to me: spend hundreds of thousands of dollars extra on a place closer to work so that you can save $2000 a year.
I've always believed city neighborhoods near public transportation are very desirable-- Near the Twinbrook metro they've got plans to make a second 'city center'. My sister and her husband bought there in 2005 and frankly, I thought that neighborhood would be pretty safe-- not only because of the redevelopment, but because prices were considerably lower than they were in most comparable neighborhoods. Until last fall, it looked like my prediction was panning out. Not any more. You can now find a 4 bdrm. 2 ba. home there for less than $300,000-- more than $100,000 less than they were selling for at the peak.
lol novaw, so true. i guess only places within walking distance to metrorail count. my hood has fallen about 30% from peak and it has a reliable (probably more reliable than rail these days) metrobus right out front to take me to the metro a mile away.
Novawa: Makes complete sense to me: spend hundreds of thousands of dollars extra on a place closer to work so that you can save $2000 a year.
That's a snapshot of it, sure.
The other aspect is that over time, when gas goes to $5.00 gallon, the places way the heck out there will fall even more and the places close in will hold their value.
It all depends on how you think this will play out.
"The bloom is off homeownership," concludes a New York Times piece Saturday on declining rates of homeownership:
http://www.nytimes.com/2008/06/21/us/21renters.html?_r=1&hp&oref=slogin
The other aspect is that over time, when gas goes to $5.00 gallon, the places way the heck out there will fall even more and the places close in will hold their value.
Places close-in will not hold their value. And they aren't holding their value. But, I guess you don't count McLean or Adams Morgan as being close-in.
I would add to my earlier post that proximity to Metrorail, while steadily growing more valuable in terms of housing value and price, isn't a game-changer by itself. Sure, it greatly strengthens those neighborhoods in North Arlington, but those neighborhoods were already inherently desirable due to attractiveness, closeness to Washington, low crime, excellent schools, first-class local government services, etc. On the opposite end of the scale, some place like Anacostia has plenty of housing near the Metro station, but values there are a tiny fraction of N. Arlington for obvious reasons!
I just looked up crime rates for my old Arlington neighborhood near Ballston: Total crime is 90% of the national average, personal crime 40% of the national average. Pretty good compared to most DC neighborhoods. Adams Morgan, is at 95% and 198% respectively. Then I looked at the Twinbrook neighborhood within walking distance of Twinbrook metro. It has a total crime rate of 6% of the national average. The rate for personal crime is 8% of the national average.
I don't think it's going to take too long for people to start making the calculation: a condo in Arlington with condo fees-- or a single family house, a yard, in a much safer neighborhood and maybe 10 extra minutes on the metro to downtown DC for the same price?
novawa: Places close-in will not hold their value. And they aren't holding their value. But, I guess you don't count McLean or Adams Morgan as being close-in.
I don't count McLean as close-in, no.
Most folks probably do consider it close-in but it's out there. Heck, I see horses in McLean.
I'm not sure how you can be certain about the effect of $5.00/gallon gas.
Maybe folk will laugh it off, maybe not.
Sarah: no offense against Twinbrook, but it's located in a sterile strip-mallish environment. A far cry from the tony "urban village" of North Arlington.
As for those crime rates near Ballston: which neighborhood, specifically, are you talking about?
Tom-- The Ballston zip is 22203. And no offense against Ballston-- I lived there for 2 years after we sold our place in Del Rey-- but 'tony urban village'? Maybe if they had some walk streets.
It appears to me that Twinbrook (in 22032?) is certainly a lot more than 10 minutes farther away from DC than Ballston - and that's with no traffic.
If most people saw them as interchangeable, the prices would be similar for similar houses. To each his or her own...
Also, please forgive me for being the spelling police but the locations are "Del Ray" and "Loudoun."
Sarah:
22203 -- that's the Carlin Springs Road-George Mason Blvd. area that adjoins Ballston Common Mall; it includes the area of Glebe Road between the mall and Route 50. It includes the Buckingham apartments. Much of the area is well known as a center of illegal immigrants, though that is on the decline as renovations and rebuilds price them out of the area. Indeed, except for a certain number of apartments reserved as "affordable rentals" as insisted on by the County, most of the Buckingham is being torn down and rebuilt as high-end townhouses.
I'm not surprised to hear the crime figures for 22203, given the demographics and other factors in that zip code. However, as noted above, that's changing, and I expect the crime figures to improve.
Sorry, I just realized that Sarah said "Twinbrook Metro Station" and that that is in Maryland. But it still looks (from the Metro map) as if Twinbrook's pretty far out there, compared to Ballston. Many workplaces aren't on a Metro line, and Ballston is more convenient by car to many parts of the District and obviously, VA. Even on the Metro line, it's going to take longer, becauase of the greater # of stops, to get to the Farrugut area.
Sarah, you can walk easily in Ballston - not sure what you mean by "walk streets."
If people in Ballston want more space, a yard, etc., most are probably going to look in other places in NoVA, before considering Rockville. But I agree with your main point that at some price difference level (I'm not sure how large it has to be), people will give up some of the conveniences of Ballston and consider other options.
Tom-- I just checked 22201, which is the zip Ballston metro is actually in. Prices are certainly much higher than in 22203. The crime rate, however, is at 109% of the national average for total crime and 59% for personal crime. So much for immigrants driving the crime rate up.
Ace-you can certainly walk in Ballston-- I wouldn't live anywhere you couldn't-- but except for Lubber Run and Bluemont it's hardly pleasant walking. Lots of busy streets, some of them multi-lane. For good walking you need a lot lower vehicle density. The most walkable cities and towns have fairly narrow streets and some way to limit vehicle access in the center.
I realize I'm getting far afield in talking about Maryland on a NOVA blog, but the fact is, most people working in downtown DC are fairly agnostic about which state they end up in and are more concerned with the neighborhood and the commute. From Twinbrook to Gallery Place, my metro stop when I worked in the city, is just under half an hour. From Ballston, changing at Metro center, it's takes a couple of minutes more.
Once you start talking about work that's not metro accessible you open up a whole other can of worms. If your job is in a suburb, that strips away most of the appeal of living close in-- and subjects you to the same pressures of rising gas costs as other commuters. If it's in the city, the situation is worse. My worst nightmare is driving in DC. On the other hand, riding the buses isn't much better.
And what about job mobility? Moving to be closer to work is easy when you're renting-- not so much if you've bought. Then you've pretty much locked yourself in.
WaPo on the next part of the mortgage mess.
Late payments on home-equity loans are at a record high, according to fresh data from the Federal Deposit Insurance Corp. The delinquency rates on loans for cars, small businesses and construction are spiking to levels not seen in a decade or more.
And I'm sure that related DIRECTLY to gas prices. Sigh...
Sarah: 22201 runs the gamut from high-end commercial to garden apartments. On the north end, it's more upscale; on the south end, along Route 50, you get the same demographics as in much of 22203. Check out more zips in N. Arlington which are mainly traditional SFH neighborhoods and you'll see they command higher prices and have held their value even better than 22201 -- for example, my zip (22207) leads the entire county!
As for urban walking: the Champs d'Elysee, Piccadilly, the Ginza -- even our own Georgetown -- all feature "lots of busy streets, some of them multi-lane." That's a feature of built-up urban cores, which people are attracted to by their many attractive features, not the least of which are restaurants and shopping, all within easy walking distance of one another (something Rockville definitely does not have). I think your idea of "good walking" is a country lane!
Dopes,
I found the article at
NBC4.
Foreclosures Down, Home Sales Up In Prince William Co.
POSTED: 4:57 pm EDT June 17, 2008
PRINCE WILLIAM COUNTY, Va. -- Fewer home foreclosures were reported last month and home sales were up in Prince William County.
More than 2,300 homes were sold in May, compared with about 2,200 a year ago.
This may have something to do falling home prices.
A local group of real estate agents reported that prices fell 36 percent for town homes and 33 percent for single-family homes.
The MRIS has 828 sales recorded. Does this mean that 2/3 of total sales occured outside the MRIS system? I can understand that new home sales and FSBO's wouldn't be there, but that seems high. It would be nice if NBC4 would cite its source.
The Prince William County database is also lagging on reporting -- I started compiling the May sales to see how many were bank-sales, and so far the system only has 283 recorded up to $1Mil.
"The MRIS has 828 sales recorded. Does this mean that 2/3 of total sales occured outside the MRIS system? I can understand that new home sales and FSBO's wouldn't be there, but that seems high. It would be nice if NBC4 would cite its source."
I think someone either fed them some bad data to report or they fed themselves some bad data to report.
I also think they are citing year end sales data instead of monthly.
They should have to do a retraction/correction on that story
From Wiki: "In a recent survey, the Brookings Institution ranked Arlington as the most walkable city in the U.S.[4]"
http://en.wikipedia.org/wiki/Arlington_County%2C_Virginia
Tedk, I agree - it seems to depend on people's definition of what a good walk is or what they want a walk to accomplish.
It's important to remember that everyone who works in DC does not work downtown and the majority do not live with a spouse and two kids. Many work in Georgetown (metro access requires taking shuttle buses, greatly increasing the commute time and hassle), some work on Capitol Hill, etc. Friends may be as important as family and not having to drive/metro too far to meet with them may matter. So parts of Arlington work much better for many people than would Twinbrook, and vice versa. As I said earlier, to each his/her own...
Tom-- Just checked out out 22207. It looks like the northern part shades into McLean. Some nice mansions there, but even the southern end of it didn't look like it was in easy metro walking distance.
A country lane? No, more like old European cities. True, traffic is getting bad in Prague-- and God knows it's horrible in Rome-- but still you can walk for long distances through the neighborhoods or along the river without having to dodge cars or dash across multi-lane highways.
Ace-- I agree that not everyone working in DC is downtown and that where your friends and family live is a big consideration. For people whose work, friends and family are concentrated around Arlington, I agree that this area is likely to remain their top choice. But lots of people, like me, have friends and family scattered all around the metro area. For that matter, couples may work in far different areas. For people like us, being close to any metro is likely to be more convenient than not.
Tom said... "Take a look at today's WP real estate section. This is simply the latest in a cascade of media articles on how high gas prices and traffic nightmares across the country are drawing people to seek housing in city cores -- and driving up the value of homes in those cores."
Sorry Tom, but you are seeing things in that article that don't exist. The article doesn't say anything about high gas prices and traffic nightmares drawing people to city cores and it doesn't talk about home values being driven up in that area.
I understand the points you are making, but they aren't contained in that article.
3x sales data could mean quarterly rather than monthly. That would be a reasonable way to get that kind of an error. Still definitely a bit misleading.
"John Fountain said...
Sorry Tom, but you are seeing things in that article that don't exist. The article doesn't say anything about high gas prices and traffic nightmares drawing people to city cores and it doesn't talk about home values being driven up in that area."
The articles he was referring to are these:
http://www.msnbc.msn.com/id/25248247/
http://online.wsj.com/public/article/SB121366811790479767-5usAm6MfQy8mRM482P_N_z_VZQw_20090617.html?mod=rss_free
CNNmoney.com says Lance is right.
Er, not exactly but close.
Peaches Stevens used to rent an old farm house in southern Indiana. She loved the setting, but her job as a high school science teacher was 62 miles to the north.
Coaching golf after school made carpooling difficult, and even though her Dodge Neon got an impressive 30 miles a gallon, she was still spending upwards of $400 a month on gas.
So she moved. Now Stevens, 49, rents a place eight miles away from school. Plus, she bough a Honda scooter that gets 80 miles a gallon. Now she can get to work and back for about $16 a month.
OK, maybe an extreme case. CNN continues:
Stevens is part of a national trend of high gas prices playing a major role in where people choose to live. Factors like distance from work, access to public transportation, and proximity to shopping are gaining ground on square footage and whether or not the home has a yard and pushing people into more densely packed areas.
Square footage to mow?
"I went from a beautiful home with a big back yard to an itty-bitty studio apartment," said Erinn Thomas, who moved from a suburb of Reno, NV, to the downtown area to save on gas. "But it's what I had to do to eat."
So 25-year old Thomas now rents a place just a mile from work.
This isn't the solution for everyone and those who pick well or are lucky can minimize their trade-offs.
the anonymous-- That WSJ link doesn't appear to be working. I must say the MSNBC article is an especially lame piece of reporting. One of the examples they give is Davis, California for chrissake! It's been held up as an example of a walkable (or bikeable) town since the 70's! Another example was someone who worked at Tyson's Corner moving to Great Falls to be closer to work! Aside from these rather poorly chosen anecdotes they don't offer anything except a small survey by realtors of their clients' preferences (not their actual behavior) and a vague reference to 'demographic trends'. Would it really have killed them to at least give us a reference to the data on these supposed trends? The census? An academic study? Or some more NAR 'research'?
Sorry for the rant, but I just get so sick of the US news media's puffery.
Man, that CNN piece is even lamer than the MSNBC article. Not even any attempt to find any supporting data -- and three examples given. Oh, yeah, and a RE exec. saying they've seen a 'boom in downtown living all over the country'. And one of those examples? A couple moving to Orwigsburg, PA, population a little over 3,000, from a town 25 miles away.
Of course they don't have to really defend the theory that people are moving in droves from the suburbs to buy in the centers of major cities-- because they don't actually, you know, like make that argument -- they just leave the RE exec. to strongly imply it. What they actually say is that people may be moving closer to their work to save on gas prices.
This is a logical assumption that most of us would agree is likely to be true, though, of course, it would be interesting to find out if there's any evidence that it is.
As for proving Lance is right-- sorry, no. A handful of reports of people moving from one suburb to another, from the countryside into a small city, or from one small town to another small town is hardly evidence of a massive shift from the suburbs back into major city centers. And it's going to be mighty hard to push those RE estate prices in the city centers even further into the stratosphere, considering that most of the people in these articles are renting.
Latest article on the back-to-the-core real estate trend? Check out TODAY'S Washington Post (June 23), pg. A15, entitled "End of the Open Road." A recent study figures that $4700 is added to a house's price for each minute of commuting time it saves the buyer.
Those of us who live within walking distance of Metrorail in N. Arlington have always known our houses command a location premium, but now the analysts are starting to get specific in determining the (average) premium. Interesting!
Tom, it will be interesting to see how things play out in 22207 as time goes by. According to MRIS, May 2008 sales were >40% below those in May 2007. If you check out:
http://franklymls.com/default.aspx?m=R&h=ALL&s=Arlington+22207
you'll see very few homes under contract now, and quite a few that have been sitting, overpriced and unsold, for a very long time. What will the YOY price change be once these homes have sold (taking into account that many of these are huge new homes, which might mean a different mix of houses between 2007 and 2008)?
What the franklymls like can't show is other indicators of the state of the market, such as the number of homes pulled from the market after not selling, as well as the number of houses that sellers might like to sell but haven't put on the market due to perceived weak selling conditions. It would be interesting to see at least the # of pulled-unsolds is.
The above comments are particularly true re: higher end SFHs, per the franklyMLS #s. For example, only 2 of the 40 highest priced detached 22207 homes are under contract.
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