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Wednesday, October 1, 2008
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9 comments:
Hi all,
I was looking at the side bar of this blog that lists all the top discounts right now. It is amazing the sales differences between the sales prices in 2005 versus what the houses are being offered for now.
My question is how does one find the bigger history of the sales history on these houses. I am curious to know what the sales prices were in 1997-1998 era. Is there anywhere on line that provides that search ability?
e. floyd:
Sure -- check under the "County Assessment Websites" heading down on the right-hand column of this blog. For any house, counties like Fairfax, Prince William, and Fauquier will show dates and prior sales.
Thanks, that was easy!
Don't know if anyone saw this from the front page of the Post on Sunday, but the title of the article was "How Fannie--and You--Bought a Hapless House." It presents a fascinating case study of a townhouse in PWC. An excellent bit of info from the story:
PWC Foreclosures, by year:
2005: 52
2006: 282
2007: 3,344
2008: 5,485 as of August
I have a question, a man-on-the-street one, about the "bailout." I have watched so many talking heads say that part of the reason government intervention is necessary is to prevent further decline in housing prices.
But shouldn't we want housing prices to decline to proper levels?
I am going to expose my lack of understanding of all things economic, but bear with me:
Those "mortgage-backed securities," those "toxic assets" that the government is supposed to buy...we are told that someday they may not be as worthless as they are now. But wouldn't that require houses to soar back up in value to the bubble days?
For example, in my neighborhood in Manassas, houses were selling in the upper $500s in 2005/2006. Now they are selling in the lower $200s, with several more foreclosures still needing to come on the market (they're just sitting vacant and untended right now). The securities that have these mortgages in them, to be worth what they supposedly once were, would need to sell in the upper $500s again someday, right?
Again, please forgive my ignorance as to all things financial. And my postpartum, sleep-deprived brain is even less adept at grasping economic theories than before.
Hi Tabitha,
You are correct, it would be better for the housing prices to deflate and get to reasonable prices (pre housing bubble). But that would be political suicide for the politicians who rely on rosy pictures and increased housing prices to increase the tax coffers without having to truly raise tax rates.
(this is just my opinion) I think the reason politicians love the high prices of real estate is because of the increased tax revenue that is charged to the citizens without having to deal with the public dissent of tax rate hikes.
Ron Paul has a piece on CNN where he says that we should allow home prices to fall:
http://tinyurl.com/4g98c8
tabitha - the homes underlying the securities wouldn't have to go back up to $500k (as per your example), but the owners of those homes would have to continue to make full and timely payments for the remainder of the loan period for the securities to worth their full original amounts. that is highly unlikely to happen given the disincentive inherent in a market where mortgages balances are double current home prices in many cases.
and yes, we should want house prices to fall back to affordable levels rather than be reinflated. the less we as a society pay for shelter (a non productive asset) the more we'll have to spend on consumption and savings (things that help the economy) and charity, etc. it's plain old common sense that most of the "experts" don't seem to have.
"I have a question, a man-on-the-street one, about the "bailout." I have watched so many talking heads say that part of the reason government intervention is necessary is to prevent further decline in housing prices."
Tabitha, that may be a secondary characteristic of the plan, but it really underestimates what this is all about. This plan is about first and foremost, limiting the inevitable downturn to housing and possibly finance. The idea is to prevent it from spreading too heavily into businesses far removed from housing (see my rants from recent days on how/why this is a risk).
That said - I see it as being next to impossible that the govt is able (or wants to) re-ignite bubble pricing. Once the govt buys up the toxic assets, depending upon how they choose to modify them, they may slow the rate of price decline, and they may (highly unlikely) keep the prices from going down even further.
It is possible that they are putting more money into the system in an effort to inflate their way out of the problem. But long term housing prices will fall to where they want to fall, and absent the govt bulldozing them, there is little I see that they can really do about that.
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Fairfax foreclosures jump 392 percent in one year
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