Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Notable from yesterday's Bits Bucket:
"Duh said...
Here's an update from the front lines of Eastern PWC - the market is back up and running, thanks to all of the bank-owned properties. Multiple bids on houses that sell in days or weeks. The last June numbers showed that there was a little over six months worth of inventory on the market, but that number WILL go down when the July numbers come out".
47 comments:
"thanks to all of the bank-owned properties"
Ok help me out - the Foreclosures are selling now because the prices are low enough for people to purchase. Is this a surprise??
The "real" Market turn-around happens when the re-sales & new construction start to sell again..
Its not a turn around - as in an increase in prices, but this could be a signal that the bottom of prices has been reached in that area. If they are getting multiple bids and selling within days, the banks really dont need to continue to drop prices.
I've seen several houses in 22192 (PWC->Woodbridge->Lake Ridge) pop on and off the market in the matter of one or two days. Houses are selling just about at asking price, some a little higher. (I'm only watching SFH in the $200k-$350k range, not town houses.)
I think this is because listing agents are listing those houses at below market value, thus generating lots of interest on the great deal and competing bids. The bids go up to and above the asking price.
Some of the houses I was interested enough to inquire about (but not necessarily buy...) had multiple backup offers within a day, and I have automatic notification everyday of new MLS listings!
@doug, adding to my comment above:
It could be a bottom in prices, or a plateau before further drops, but there are still dozens and dozens of foreclosed and vacant properties in my search criteria (I drive by and check as well, since it is local to me now anyway.) I think the sales are coming from what I described above, paradoxially the houses listed below the current comps are selling above asking, and the houses listed at comps either stay there for months or eventually drop asking price further. When the comps drop further, it will be the same story but with lower prices.
Days-on-market here is generally less than it was in March-April though.
I think all the short sales and foreclosed houses that banks don't necessarily want to sell are clogging up the system. Who knows though. Once the true motivated sellers are mostly gone, sales will slow again. Eventually the banks will have to get those houses off their books, but from what I've been reading here and elsewhere (I'm not an expert fyiy) banks may be holding onto those houses to prevent their books from registering the losses.
Perhaps the bank crisis will have to hit bottom before the housing crisis will. Crisis within a crisis!
Does anyone know why VirginiaMLS has not updated its inventory numbers (by county) since July 11?
http://www.virginiamls.com/charts/index.htm
Ace - Im watching that too. Its not uncommon for them to not update for at least 10 days in the middle of the month. But it is usually no longer than that. If they did not update by the first or second of july, I was going to raise this issue myself.
'Extreme Makeover' house faces foreclosure
i'm eager to hear what GTE has to say about this story...
MM,
I liked the WaPo Essay on this the best. Complete with using the word schadenfreude.
But really, whoocoodanode????
New Case Shiller numbers are out. DC is still awful for the year, but for the second straight month the rate of decline has slackened. 2 months does not make a trend, but this is certainly something worth watching.
http://calculatedrisk.blogspot.com/2008/07/case-shiller-house-prices-decline-in.html
Ace - they must have heard us. Inventory numbers were just updated... inventory is slightly down in all areas.
http://www.virginiamls.com/charts/index.htm
crt
I'm kind of waiting to see what CR has to say about the decline in the rate of decline, but to go out on a limb myself...
I would say that this wiggle looks just like the wiggles on the way up, no more no less, and thus is not yet significant enough to indicate a change in direction of prices or even the magnitude of the fall.
I also fully expect a true dead-cat bounce up in prices sometime this year stimulated in part by the first-time-buyer 0% interest loan in the grand ole housing bill. Early next spring when the $7500 can be anticipated in the extreme short-term financial future of the buyers would be the most likely timing, conveniently coinciding with the Spring run-up in new expectations for a new selling season.
I'm just hoping this doesn't interfere with eventually obtaining fundamental values in the near-long term. (i.e. next fall/ late summer when I want to buy...)
crt, thanks!
Hmmm, if I were paranoid, I'd think VirginiaMLS has a SPY among us....mwah hah hah hah.
This is why I predicted the two-quarters growth for 2009. This year is going to be bad, but I expect people to convince themselves that next year will be better.
Then the market will punish them as the next wave (Alt-A/Option) hits.
What I've been watching for is a basic change in the psychology of buyers. People *still* think they can make money in real estate. Sweeping in and trying to find "bargains". That tells me we are not near the bottom.
When I see more people buying houses simply because they want a place to live where they can paint the walls and bang nails anywhere they please instead of an "investment" then I'll have more confidence.
CRT: I noticed the "decline in the rate of decline" too. I read little into it. If you look at the seasonality of CS Index for Washington, April and May are typically the hottest months of the year. I expect poorer performance in the eventual July and August numbers (and possibly June).
Do you think this is in trouble?
Should have it labeled: "PLEASE BUY ANY PROPERTY OF MINE"
property #1 severely overpriced condo at 380k... (it really is 878 sq ft) - but still - that's $432 sq/ft. OUCH.
http://www.redfin.com/VA/ALEXANDRIA/4551-STRUTFIELD-Ln-22311/unit-4301/home/11877792
From
http://realestate.alexandriava.gov/detail.php?accountno=50706150
We see the owner lives in Haymarket. Google that address.
It's for sale too!
http://realestate.yahoo.com/Virginia/Sterling/Homes_for_sale/4cd97ca5ff497a131a515eb874613979?cc=realestate&p=Sterling,%20VA&priceHigh=&priceLow=&nodeId=750007014&sortBy=price%202&radius=&bedrooms=&bathrooms=&type=classified&b=11<ype=0
That has to be 200k over real market condition for Haymarket. Can anyone verify?
Also for Sale by the same realty company.
I'm suprised nothing has been foreclosed upon yet..
With the DC area rate of decline slowing in Case-Shiller, we are now #1 in terms of CS index value at 199.23, jumping ahead of Los Angeles to take the top spot.
"Ok help me out - the Foreclosures are selling now because the prices are low enough for people to purchase. Is this a surprise??"
Yep... the problem was inflated prices. It appears PWC is nearing the point where price declines will begin to slow.
They are a long long way from some sort of "recovery" however.
"What I've been watching for is a basic change in the psychology of buyers. People *still* think they can make money in real estate. Sweeping in and trying to find "bargains". That tells me we are not near the bottom."
I agree completely. There are still far too many people who have not learned the lesson of all of this yet. We will know we are at the bottom when people give up on making a "profit" on real estate.
"Shamrock said...
With the DC area rate of decline slowing in Case-Shiller, we are now #1 in terms of CS index value at 199.23, jumping ahead of Los Angeles to take the top spot."
I noticed that too - of all the big bubble markets, it looks like DC is having the least amount of pain. The case shiller futures market also suggests that of all the bubble cities, DC will hold on to the highest percent of its gains since 2000 (we bottom out at 180% of year 2000 value).
Recall though that Leroy theorized that much of the gains up until 2003 were because DC was truly undervalued. Looks like he might be right...
5716 Caribbean Ct has a Zestimate of $531,000. Zestimates seem to be about 50-100k too high, making the 750k asking price closer to $300k too high. There are 6 other similar houses listed in the same neighborhood from 500-540k, with 1 short sale outlier listed at $380k. This guy must be on crack.
thanks for the analysis of the haymarket home shamrock!
I dunno what decline in the rate of decline you're talking about, as the YOY is accelerating:
Oct 2007 -0.070
Nov 2007 -0.078
Dec 2007 -0.094
Jan 2008 -0.109
Feb 2008 -0.127
Mar 2008 -0.147
Apr 2008 -0.148
May 2008 -0.153
bas, re: 5716 Caribbean Ct
2008 Assessment: $543K (will be much lower in 2009)
It's at least $200K over real market value. That neighborhood seemed OK (did a drive thru a few times back in '06), but i think it's been hammered by foreclosures. The back yard for 5716 Caribbean Ct sits on James Madison Hwy (rt 15).
Similar houses in that neighborhood look like they're listed between $400K-$550K. Similar sales in the last few months have been in the same range, although i don't know how many are bank repo sales.
Here's the sales history for 5712 Caribbean Ct (next door):
$380,000 6/13/2008 DARBY JAMES E
$561,400 6/13/2008 RESIDENTIAL FUNDING COMPANY LLC
$662,173 10/10/2006 MORGAN STANLEY MORTGAGE CAPITAL INC
$770,000 12/21/2005 BOAMPONG YAMOAH KWAKU
$472,775 10/24/2003 MUONG KHAN ETAL BB
$749K is insane.
hog
From my view in western PWC, I don't see any real improvement; I know contracts have picked up, but since about half "under contract" listings are contingency contracts, the houses are still for sale. The DOM for Manassas, Manassas Park, and Bristow, which I watch closely, continue to increase, even with doctored numbers...and the fiddling with the DOM has gotten ever more egregious. I almost want to be a tattle-tale, but to whom would I tattle?
But I am starting to see some true low prices from bank-owned properties, such as:
10939 A P HILL Ct
BRISTOW, VA 20136
Price: $386,900
last sale: Jun 27, 2005 $662,741
5BR/4.5BA 4500sqft
The sales on this culdesac have followed a clear downward trend as 2008 progressed, all foreclosures resold: $530K, $515K, then $435K, and now this new one. The first two were truly loaded houses, seven bedrooms, on a culdesac that backs to Virginia countryside, half acre lots...the last two have unfinished basements, but are still huge houses.
Most other homes for sale in New Bristow Village are short sales, such as this Cont/K/O:
12005 GENERAL COOKE Dr
BRISTOW, VA 20136
Price: $399,000
last sale: Jun 03, 2005 $644,990
7BR/5.5BA
short sale:
12027 BRISTOW VILLAGE Blvd
BRISTOW, VA 20136
Price: $330,000
last sale: Jun 30, 2006 $610,430
Foreclosure:
11883 GENERAL COOKE Dr
BRISTOW, VA 20136
Price: $379,900
last sale: Apr 28, 2006 $660,270
4BR/3.5BA
Foreclosure:
10860 CATLETTS STATION Ct
BRISTOW, VA 20136
Price: $399,000
last sale: Feb 22, 2006 $641,675
4BR/3.5BA
Here's some land for a decent price:
6991 SCENIC POINTE Pl
MANASSAS, VA 20112
Price: $329,900
last sale: Feb 24, 2005 $479,900
price history:
Nov 28, 2007 $524,900
Dec 14, 2007 $519,900
Dec 21, 2007 $499,990
Jan 09, 2008 $464,900
Jan 22, 2008 $374,900
May 20, 2008 $349,990
Jun 06, 2008 $329,900
almost two acres...
Then there's Blooms Crossing, the neighborhood right next to the Manassas Park VRE stop:
9302 JOSHUA Ct
MANASSAS PARK, VA 20111
Price: $294,500
last sale: Mar 16, 2006 $544,500
9312 JOSHUA Ct
MANASSAS PARK, VA 20111
Price: $319,000
last sale: Jun 22, 2007 $530,000
9309 JOSHUA Ct
MANASSAS PARK, VA 20111
Price: $252,900
So maybe pockets of PWC are doing better, but not in my neck of the woods...
BTW: I grabbed the Case-Shiller history for DC since 1988, and on average, the MOM increase is slower from April-to-May compared to March-to-April. In other words, your "slowing" decline nothing more than a seasonal effect.
Nothing to see. Move along, folks.
MOM percentage increase:
Jan 0.0004
Feb 0.0014
Mar 0.0041
Apr 0.0085 \
May 0.0091 /
Jun 0.0103
Jul 0.0078
Aug 0.0052
Sept 0.0034
Oct 0.0014
Nov 0.0006
Dec 0.0008
I just helped somebody buy a bank owned property in Triangle.
It took us putting in offers on SIX properties before "winning" one.
I don't think the listing agents have much say. I think the banks want to unload the properties quickly. And they know that even 5% below market will sell it fast.
But of course, that makes the market go down.
THe place we bought was originally $800k. We got it for $400k. And yes the email alerts is key.
Frank- Broker FranklyRealty.com
Novawatcher, I think you answered your own question, but the slowing decline we are talking about is month to month, not yoy. Because of seasonality it's tough to say that the real decline is slowing or not, as you say.
Bubbleboy/Novawatcher. I bring this up because there are some who track the derivative, and they focus on the MOM numbers.
Regarding the seasonal effect, correct me if I am wrong but I assumed that would be negated since Case Shiller only compares same house sales. Otherwise, it would imply a single house could fetch a much larger price if it were only sold in the peak season versus the off season.
Frank-
"THe place we bought was originally $800k. We got it for $400k. And yes the email alerts is key."
What price did the Bank have it at - if I may ask?
I just had a Bank refuse my lowball so I'm wondering
I tried tracking the derivative using the data from HousingTracker, but it soon became apparent that there were huge seasonal effects that were swamping the data. Heck, you can see huge cyclical variations in the CS data. Unless you use a method to partially cancel out those effects, I wouldn't bother using MOM numbers. Even then, I'd be more comfortable using 3-month numbers, but only if cyclical component is partially cancelled out.
Spunky: Keep low-balling. We made 5 low-ball offers and the 6th was accepted. Granted, none were bank-owned but we found that magic situation where buyer and seller agree on a very low price and you will too!
Amy-
Thanks for the support!
I guess my question is - what's a lowball-??
We offered 350K on a foreclosure listed for 599K.
Yes, the house is a time warp (early 80's) that will take some bucks to bring it to this Century
The Bank countered at 597K.
NOT!!!
CRT: It was the time derivative that I was referring to. I have that in my spreadsheet, and within a given calendar year the max of the monthly price change for the CS Index is typically biggest in April/May/June.
Bubbleboy/Novawatcher. Thats very interesting. I always assumed that the seasonality we see in median prices had to do with the inventory available, and buyers looking at that time, but nothing to do with the individual houses, per se.
However, since case shiller tracks the same house over time, this seasonality clearly suggests that a single house is worth more in the spring and less in the winter.
That said, I do see an element of seasonality in the data so I think you are right.
Amy/Spunky: For a while I have been considering a possible solution to what you are discussing, so bear with me here.
In the market explosion from 2002 to 2005, it was common to have multiple offers on a single house. Buyers put in escalation clauses and did other things to make their offers more attractive relative to others (removed appraisal contingencies, inspection, etc.)
Now that this is a buyer's market, why can't buyers do the same thing? Rather than put in 6 or 7 or 8 offers in sequence, which is a royal pain, why not pick X number of homes you are interested in. Inform all those sellers that at such and such a time at such and such a place, if they are interested, you will present them with a prelim offer.
Assuming they show up to the auction, sellers can either accept your prelim offer, reject, or counter. Based on the info you get from the sellers, you then can accept the best counter-offer on the table, make your own counter-offer, or walk. The process continues until you sign with at least one seller, or all parties on at least one side walk away.
The benefit to the buyer is two-fold: first, you can (hopefully) get the process done quicker. Second, with competition among sellers, you may actually get prices that are better than your initial offers. The problem with this, of course, is that it would cause the average buyer's agent's head to explode.
mm,
I'm not exactly sure what I'm supposed to be commenting on. Se la vie, signs of the absolute insanity. I may quibble about the "cost 450k to build"- maybe that's what it would have sold for at the time, but without seeing the place I would have no idea.
And as we are seeing right now, costs has absolutely nothing to do with price. Price is all determined by supply and demand, not costs.
I guess the biggest comment I have on this is that you generally can't give people things and tell them to be responsible. They have to generally work for it and learn how to be responsible.
bubbleboy
Dude! That's awesome. Find me a real estate agent willing to write those up!!
(too bad there are only like 3 properties within spitting range of my price range right now that I'd actually even think about putting on offer on)
Regarding PWC:
Those sub-200K PWC prices are probably less than the cost of rent at a 30-year fixed without any tax benefit. You can wait for another 10%-to-1000% percent decline, but if the numbers work in the home budget calculator, why not buy, especially considering the interest rate trend? And the end of year tax benefit may put you well ahead of a rental.
There is an argument to be made that once prices in any given area crash below the cost of a rent, it's time to buy. I really doubt rents are going to decline all that much.
kob,
Why not buy? Because even at those prices they are unaffordable for most people living here, including myself.
Not related to Nova . .. but . . . it looks like the BS about housing prices being sticky downward, just blew up.
http://tinyurl.com/5s5mzc
and
http://tinyurl.com/6hp343
RE takes much longer to adjust, but it can still adjust quite rapidly. And let's not forget that it takes 100% appreciate to mitigate a 50% loss!
Based on some of those #s I wonder if it's actually cheaper to live in parts of Cali vs. DC . . . wow!
kob - I tend to agree with you that buying is an acceptable option when cost to own is lesser than or equal to the rent on a comparable home.
Unfortunately though, cost to own in my target areas (mostly FFX county close to the beltway) is still pretty above rents.
I think this is because listing agents are listing those houses at below market value, thus generating lots of interest on the great deal and competing bids. The bids go up to and above the asking price.
A smart tactic in a down market.
Novawatcher said:
In other words, your "slowing" decline nothing more than a seasonal effect.
Yep. During the 1990's downturn, LA real estate would appreciate during the best sales months... and then continue declining. In four years 40%. (Bulks was 18%, the nice areas dropped the most!)
There is an argument to be made that once prices in any given area crash below the cost of a rent,
Nope. Tied up obligation. When the cost of owning on a 15-year mortgage is 7% below rent, then you argue its time to buy.
For that is what a landlord should invest in. If you're buying to escape rent, you also need to consider the costs of moving (much higher than renting). Hence the above 'rule of thumb.'
Very few nice areas have dropped to rents... yet. That's what 2009 is for. Remember, October through February is when most of the anual price drop has historically occured.
Got Popcorn?
Neil
Hey Spunky,
Sometimes I don't sign up for comments via email. So email me directly if I dont reply.
I wouldn't apply my deal to your deal. Every area and each home is different.
This is what we did after missing out on 5 other homes that sold in 3 days.
We ended up offering $1k above list. We were NOT the highest price.
Low Balls don't work. I did a video blog on it. I know they sound sexy, but there are a TON of buyers when this stuff is priced right.
Don't believe me? Have your agent pull up the last 400 sales. And have them tell you the largest price drops achieved by the 400 listings. You will be shocked, and you will agree that lowballing doesn't work.
Read my blog on FranklyCRA where your agent can do a background check on the listing agent and see their last 20 deals. That way you can tell what was the BIGGEST drop they ever accepted. And then try and break that record by $5k.
It is normally for newcomers to lose a few deals before getting serious.
What is really sad though is I have this one client. They like a place in Arlington that just dropped 15%. This is unheard of (not once out of 400 homes). And of course, they think this is normal, and they will dilly dally. I show them a crapload of data and try to tell them that the bank properties in this area only come up once every 6 months.
They will kick themselves when they lose it, and then end up overpaying 2 months later when they get exhausted.
And I look like a cheesy car salesmen trying to tell them that this is rare. But only losing a deal will they learn.
Also I found a great property. So great that I am going to write on it. Put my money where my mouth is. Buy it, stage it, properly market it, and sell it for 10% more in 2 months. I'll tell you how it goes. (and even if I mess up)
Subscribe over at my blog.FranklyRealty.com
Frank
bubbleboy said...
Now that this is a buyer's market, why can't buyers do the same thing? Rather than put in 6 or 7 or 8 offers in sequence, which is a royal pain, why not pick X number of homes you are interested in. Inform all those sellers that at such and such a time at such and such a place, if they are interested, you will present them with a prelim offer.
How about this:
- Multiple offer letter.-
This offer is tendered as part of a Multiple Purchase Offer. The buyers named above are making simultaneous offers on one or more additional properties. This offer and all of the other offers tendered are conditioned upon and subject to the final approval of the buyers, which will be delivered in writing within three days of sellers’ acceptance of this Purchase Offer, unless deadlines are extended by written agreement of the affected parties. Immediately upon transmittal of the buyers’ final approval of one of the sellers’ acceptance of the offer tendered to those sellers, all other offers in this Multiple Purchase Offer will be unilaterally withdrawn by the buyers.-
Sure, the realtors will tell you that you can’t do that, “it’s again the rules”. I see no problem with it. It specifically states that the buyer is making “simultaneous offers on one or more additional properties” and that “This offer and all of the other offers tendered are conditioned upon and subject to the final approval of the buyers”. They have been sufficiently informed.
FRANK LL0SA Va Broker- BLOG.FranklyRealty.com said...
They will kick themselves when they lose it, and then end up overpaying 2 months later when they get exhausted.
Lose it? At what point did they have it to lose it?
Re: Low-balling.
With all respect Frank, low-balling does work. Our purchase price was 28% off original list and 7% off list price at offer PLUS closing costs. Granted, we made a total of 6 offers and this one was the only one that was accepted, or even countered so many buyers are listening to realtors like you. As for the question, “what is low-ball”, we regularly made offers -10% off list. WE determined what the market value was of each recognizing that we were purchasing during the deflation of a bubble. Since the list-price changed, it will not show up as a 28% drop but this sale WILL show up as WAY MORE than -5K off. Closing costs were more than that! This is a SFH in Arlington walking distance to metro. And finally, as fabulously smart as my deal-making was, and as fabulously wonderful as our house is, we have owned it for more than 2 months and alas, cannot sell it for 10% more (though we wouldn’t lose money IMHO).
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