Please post your local house search updates, MLS finds, on-topic ideas, and links here. And happy Independence Day to all!
Friday, July 4, 2008
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27 comments:
"Credit-card debt is becoming even more prominent in the struggling state of the economy. The average amount per consumer rose to $6,900 in the last year, a 21 percent increase, according to Experian, a global information services company. The average number of past-due accounts also increased to exceed more than one per consumer."
http://biz.yahoo.com/cnbc/080702/25269297.html?.&.pf=banking
I knew credit card debt was growing but I didn't realize it is growing that quickly. 21% in a single year... more evidence that consumers are trying to replace home equity borrowing with other sorts of debt.
What will happen when the US consumer finally runs out of debt?
Happy 4th, but sorry to say the housing misery is only worsening, our media says. Foreclosures in Washington are set to zoom 118 percent over the next year.
This latest gloom comes from Money Magazine, which I normally read only in the dentist's waiting room. I also have a lot of questions about this report, which comes from Fiserv Lending Services, a company offering mortgage bailout services. I haven't yet found the report Money Mag. cites on Fiserv's unhelpful Web site, so judge for yourself:
http://money.cnn.com/2008/05/06/real_estate/100_forecast.moneymag/index.htm
I have never used this tinyurl program before, but it tells me this should link to the Money Mag. article:
http://tinyurl.com/3nugq6
I haven't yet found the report Money Mag. cites on Fiserv's unhelpful Web site, so judge for yourself
The pumpers here should not have any trouble with the Fiserv Report, as Fiserv is apparently synonymous with Case-Shiller.
http://tinyurl.com/6mqm3j
zerodown, that is historical data. Fiserv is projecting the next year from now, saying a 42 percent increase in Washington foreclosures, and 118 percent for Bethesda by May 2009. No NoVa that I can see, and I still don't know how or on what basis they are making these projections.
edward allen:
I was referring to the discussion regarding Fiserv/Case-Shiller/David Stiff in that thread.
washington post article:
A Realization in Fairfax About Traffic and Housing
http://tinyurl.com/5skwlo
Free foreclosure site with addresses. Just need an email to sign up:
http://www.foreclosurepoint.com/
This site doesn't list sales, but it does show what homes are coming off the market.
http://www.movoto.com/off-market-homes/va/arlington.html
Housing Industry Ramps Up
Political Donations
http://tinyurl.com/6q9vrv
That Washington Post article is just awful.
"Enact land-use regulations, such as inclusionary zoning and density bonuses, that motivate developers to provide below-market-rate dwellings as part of larger, market-rate, mixed-use projects."
There is no such thing as a free lunch... "motivate developers to provide below market rate dwellings"... where is the money coming from?
You can't charge "above market rates" for the remaining units to make up the difference. Developers aren't going to break ground on a project that won't make them money. If you force them to provide units below market rates you are just adding extra costs to the project. In the bubble that might have worked fine, but now?
"Subsidize workforce-housing production by providing publicly owned land at a discount or even at no cost to nonprofit developers, or to public-private partnerships committed to building workforce housing. Tax abatement could be an additional form of subsidy. These subsidized developments likewise should be near transit and employment. "
Right... the goverment should just give away prime real estate for low income housing. (Because obviously there is tons of "publicly owned land" "near transit and employment" that is just sitting there doing nothing.)
...and the standard big government "solution," various tax incentives to allow the taxpayers to pick up the bill.
"Reduce housing development costs by easing or eliminating unnecessarily onerous regulatory requirements and procedures."
Huh? Didn't he just say above:
"Enact land-use regulations, such as inclusionary zoning and density bonuses, that motivate developers to provide below-market-rate dwellings as part of larger, market-rate, mixed-use projects."
What the heck is that if not "unnecessarily onerous regulatory requirements and procedures." You think you can twist developers' arms to make them provide housing at below market rates while cutting regulatory requirements?
No developer WANTS to provide "below market rate housing." The only way to force them to do it is to saddle them with a bunch of additional regulations.
etc etc
Smart zoning and good public transportation would go a long way. Fairfax has seen little of either so far but I guess they could always start.
The rest of this guys ideas are just tax payer subsidized meddling in the free market.
Leroy, I usually like Roger Lewis' columns, though he doesn't always "get" that not all of us want to live "densely", on top of our neighbors. Today's column was a miss.
My simple-minded partial solution? Expensive but would have few of the other downsides:
1) get that metro line to Tysons and Dulles done immediately
2) build another one near the Columbis Pike corridor
3) add a Potomac Yard metro stop
4) consider another NoVA metro line (MD has 6, NoVA has 3)
This will greatly increase the supply of desirable housing that many people are now sidestepping, driving up prices in a more limited # of areas. And, it will help DC start to resemble European cities of similar or even smaller size with much better transportation mgt.
That's "Columbia Pike"; sorry.
And I meant to say these lines obviously need to be extended to Fairfax (and beyond, if possible).
zerodown, thanks for the links.
New topic, sorry.
I had to share this from my daily Redfin emails.
Where is the bottom?
For some places there may not be one. This "gem" came in today's Redfin mail. It's a 3 bed 3 bath townhouse equi-distant from Franconia, Van Dorn and Huntington (i.e. over 3 miles to any of them, such that you have to drive or take a bus), but close to a nice big park.
5318 Larochelle Dr
This is an REO. Bought in 2005 for $411k, apparently with 10% down given that the bank "bought" it back for $355k this May (although it may have had a piggy back loan). Check out the price history:
Mar 06, 2008 $308,000
Apr 08, 2008 $305,000
May 06, 2008 $289,900
Jun 23, 2008 $243,000
Jul 03, 2008 $230,900
A price drop every month like clockwork. Why should anyone bother to buy it now? Why not wait a few more months? I'm sure the price drops will slow, or even vacillate just so this keeps appearing in email updates, but really how low will this have to go to find a buyer? No one is going to rent some place this far from transit, so the cash-flow investor model may not apply. When these properties are as cheap as dirt (i.e. the $80k they'd be if they were in a non-inflated city) it will have to pull down the rest of prices, because for $80k for the house, I could buy a second car and park it in the Metro garage every day with the savings. (although that would defeat the work exercise into your daily commute purpose of living near a Metro stop).
For comparison this was $130k in 2000. That's sounds about right to me, or at best $164k, i.e. 3% appreciation since then.
I agree with your metro expansion plans Ace.
People here just don´t seem to realize that there is no free way out of the current mess. They SHOULD have planned better in the first place and missed their chance. The only thing they can do now is start trying to build their way out of their hole with new infrastructure.
It would cost a lot of money and it would be a challenging project to manage...especially with every NIMBY group in NOVA fighting everything every step of the way... but in the end they might actually be able to straighten out a lot of the traffic problems around here.
...or more likely every single stage would be paralyzed by local groups demanding their portion of the new metro line be built underground, or not at all, or somewhere a few miles away... all while the entire project goes overbudget and behind schedule... while local and state level politicians bicker over exactly how to misdirect the project´s funding.
Posted on Calculated Risk, an oldie but goodie: real estate predictions from December 2006. Note the two clowns who mock Peter Schiff for daring to predict a drop real estate prices due to careless lending (do the clowns sound like anyone we know?):
http://tinyurl.com/2xo246
I keep eyeing the townhouses in 20110 within walking distance of Manassas Old Town and the VRE. They're down to the point where we could easily buy one outright. Does anyone know what this neighborhood is like?
One thing I've noticed there and in other neighborhoods with a high number of foreclosures is that a lot of the early 2008 foreclosure sales seem to be back on the market at about half the price of the sale completed just a few months ago. What's up with that? People qualifying with low downpayments and then letting it go back into foreclosure as prices continue to fall?
Look at what sold in a couple weeks.
2904 SYCAMORE ST, ALEXANDRIA, VA - $450,000
At the peak, a place like this would have gone for $500K, so this is a 10% pullback.
Units that are not as nice are listed (and selling) for between $350K and $400K.
Terminator... ouch.
It is pretty funny watching these guys playing cheerleader. I wonder if they are intentionally telling people what they want to hear or if they really were that clueless.
It is one thing for our local real estate pumpers to try to live in an alternate reality, but these guys were supposed to have some clue what they are talking about.
That house is listed as under contract KH, 450k is most likely not the final sale price as most houses today are selling below their asking prices.
Even if they managed to sell for 10% off peak (something I would need to see some quality evidence of rather than rely on your historically extremely unreliable estimate)... that means your prediction of a 10% price decline in Alexandria is more or less a lost cause... the bust is clearly a long way from done.
Terminator-X
Thanks for the link. That was painful, 1 guy speaking sense, facts and causality. 2 big-mouth idiots, the long haired one talking so fast I couldn't even understand what he was saying, and 2 dweebs who didn't know a thing saying, oh it won't be too bad... I wanted to reach out and punch that guy laughing over the voice of sanity. There are reasons they don't let me on television.
Leroy & KH,
According to Alex. Co., the house on Sycamore sold 6/23/08 (pending verification) for $438,000.
http://realestate.alexandriava.gov/detail.php?accountno=15294000
Thanks Ace.
I wish I had more confidence that those numbers fully reflected things like closing cost assistance.
Ace: According to Alex. Co., the house on Sycamore sold 6/23/08 (pending verification) for $438,000.
Thanks!
5/15 to 6/23? Pretty fast sale for a higher priced TH.
I was just looking at today's picture up-blog of that million dollar assessed/half mill to buy, .9 acre place.
What a difference a couple hours of driving make!
A RE agent can find if there was a subsidy, just give them the MLS number AX6760845.
If the peak was $500K and it sold for $438K, the drop was over 12%. Fortunately, they bought it mid 2004 @ $349K, so they made a decent profit of $438K x .94 - $349K = ~$63K.
Need to subtract for inflation at ~3% a year. If I did my calcs right, it should be :
$438K x .94 - $393K = ~$19K
($393K represents what they bought the home for in 2008 dollars)
If the seller did the renovations (see MLS notes) and/or there was a subsidy, they could be sitting on a loss.
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