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Saturday, November 8, 2008
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28 comments:
2930 Timber Wood Way Herndon VA 20171
Sale History & Tax Info Sale History
07/15/2008: $355,000
07/27/2005: $543,000
03/31/2003: $285,000
Looks like a 45% REDUCTION, and not a foreclosure
I remember seeing that home on the MLS -- that place should never have sold for $543K in the first place.
Seriously, looking at the sales history of other houses on the block (this seems to be one of the cheaper units), it would have sold for no more than $225k in 2000.
Here are some finds from some areas I'm tracking. For all of the houses I include the 2006 assessment and the recent sales price as percentage of the 2006 assessment. For houses that changed hands within the last few years, I also include the most recent sales prices as a percentage of the last sales price.
3414 Hidden Meadow Dr.
Fairfax, VA 22033
2006 assessment: $614,630
Recent sale: $434,500 (9/23/08) - Foreclosure
Last Sale: $230,000 (11/16/1990)
Percent of 2006 assessment: 71%
====================
12615 Noble Victory Ln
Herndon, VA 20191
2006 assessment: $605,920
Recent sale: $430,000 (9/26/08) - Foreclosure
Last Sale: $659,900 (9/22/2005)
Percent of 2006 assessment: 71%
Percent of last sale: 65%
====================
2622 Lake Ridge CT,
Oakton, VA 22124
2006 assessment: $741,370
Recent sale: $426,598 (9/23/08) - NOT a foreclosure
Last Sale: ???
Percent of 2006 assessment: 58%
====================
10530 Miller RD,
Oakton, VA 22124
2006 assessment: $1,494,540
Recent sale: $935,100 (7/29/08) - foreclosure/short sale?
Last Sale: $1,425,000 (12/1/2005)
Percent of 2006 assessment: 63%
Percent of last sale: 66%
====================
1333 Merrie Ridge,
McLean, VA 22101
2006 assessment: $1,328,960
Recent sale: $1,075,000 (8/22/08) - NOT a foreclosure
Last Sale: $665,000 (3/28/1997)
Percent of 2006 assessment: 81%
Percent of last sale: --
====================
1446 Woodacre Dr,
McLean, VA 22101
2006 assessment: $930,790
Recent sale: $749,999 (7/29/08) - NOT a foreclosure
Last Sale: ???
Percent of 2006 assessment: 81%
Percent of last sale: --
Could this be bottom of real estate?
lowest in Lyon Village i've seen: 4/2/0 Cape Cod on 6685-sf lot @ 800K.
unfortunately i think some investor will snatch it up and renovate then sell it for 1.5MM.
mm, given the prime location, I might bet on a teardown, although with the new zoning rules, maybe it isn't possible to build a big house on that lot, and/or neighbors might have a say.
ace:
to me the house looks fine as is. but i agree the market can support a tear-down. it's Lyon Village after all.
crt:
I predict the total sales for Arlington in Oct is 130, or -25% YOY.
mm & ace
$800k for a teardown? (I agree with mm that the house is fine)
Really? What is this Lyon village that you speak of? What, does it have views of both the Atlantic and Pacific oceans?? I don't get it. For $800k at that size lot you better be able to walk to the beach as well as the metro.
Sorry, just trying to add some wider perspective.
A responsible real-estate article in the WaPo!!!
How the housing market will be effected by the change in administration. Conclusion: not at all.
Change You Won't See
Elections Don't Do Much to Local Home Market
Cara, the lot itself is valued at more than $600K. The house is only about 1300 square feet and needs a lot of updating. It's possible that someone would come in and do updating without adding to the size of the house, but even in Lyon Village, its resale value would be pretty limited by its small size, and a lot of the updating wouldn't pay off (buyers prefer to pay for shiny new kitchens over paying for new roofs, electrical systems, plumbing, sump pumps, etc.) In 2005, tear downs of this type (replacing the house with a McMansion and asking $1.5 mill at a minimum) were done all over Arlington, not just in Lyon Village, until Arlington started limiting the size of McMansions relative to the lot sizes and neighborhood conditions. Whether it would/could be done now? Don't know. Another possibility would be that an owner/occupant would buy it and add on, again subject to zoning. Adding on costs are much higher than a lot of people think, they haven't dropped much -- and what a pain it (and renovating, on this scale) is to do. The point is that the land is so valuable and the house so little and in need of so much work that it's possible that radical changes would happen.
Given that land value is the residual value after accounting for the structure, that land is only worth $600k because it's obvious the house is worth no more than $200k, and the land value must be used to account for the high sales price.
Thus land values will see the greatest decline. (the house is still worth $200k, thus if the price went down to $600k, the land would now be worth only $400k, i.e. lost 50% of its value)
Combine that with the loss of the expectation of 10% yearly appreciation (or more), and I think it's safe to say that tear-down building will become more conservative in this down-turn than it was in the boom, when owners felt that their investment now (in the costs of tearing a house down and buying over-priced land) would be well-worth it in the near future because they were able to build a new house in an established neighborhood.
More realistic cost assessments will need to be factored in, if such projects are financed (as opposed to done by people with money to burn).
No, Cara, that's not how it works in Arlington (Fairfax I think tried to move to the Arlington approach but met too much resistance). In Arl., the assessors look at what empty lots and teardowns sold for and the house is the residual, in one sense. So if your house sold for $600K and was moved into, but my empty lot or tear down sold for $500K (usually bought by developers) (and this pattern were repeated across many houses statistically), then your house is only "worth" $100K. This of course leads to some very strange results, such as where condo land is worth next to nothing and a 1000 square foot condo is worth twice as much as the house value of a detached house one street over, or an updated house is worth far less (house alone) than it would cost to replace it, even with some depreciation.
Ace,
That's bizarre. No where I've ever heard of did it that way, not north of Chicago, not Cape Cod MA, or near Boston suburbs, not SF bay area...
The accounting differences doesn't change the total costs argument though. Bizarro-world fact though, thanks. Do you know when Arlington set up that system? Does that method reflect an abnormally high percentage of tear-downs compared to the area, other near-suburbs in other cities...)? Or is it just a fluke of history?
I think that what they are trying to do is quantify the location, location, location mantra. The same size lot in Lyon Village is worth much more than in some 22204 neighborhoods, for example. But it does lead to some very strange results.
It's not that characteristics of the house don't factor in as well. Some do (square footage, for example).
Sorry - forgot to say, I'm not sure when they went to this. I remember that during an early year of the bubble (when we were hearing about 18% increases in overall value), my house value as assessed actually went down when the land value went way up. That could have been when they moved more toward that system. So it makes you wonder that as builders started snapping up large lots then subdividing them to build McMansions, for example, if the assessors tried to make changes then.
Ace,
Wild. So what you're saying is that this change was recent, i.e. post 2000.
In trying to make sense out of the nonsensical (irrational exuberance of the bubble market), they ended up with a lot of nonsense. Hmm, imagine that. It's an interesting form of post-facto justification. By even attempting to change the system to "reflect" the current market values, they were implicitly assuming that the current market values were non-speculatory and sustainable. And then they tried to entrench them into the system by quantifying them. Good luck with that. Given that their tax revenues depended on these inflated valuations, I can see why they'd wishfully believe in them. Doesn't make the system any less kooky or cooked.
Cara, you might be interested in this story (from last March) re: Fairfax Co.'s experience.
http://www.fairfaxtimes.com/news/2008/mar/04/county-re-examine-2008-assessments/
thanks for finding that for me Ace.
ah, the wisdom of the tax assessors office...
cara,
the 800K 4/2/0 Cape Cod walking distance to the beach in Lyon Village went under contract in one day.
maybe ace picked it up??? :)
Gotta watch out with that sold data. Oftentimes the sold data is WAYYYY off on the county records.
You might see a $600,000 place that "sells" for $400,000. What they don't tell you is the buyer also had to pay $100,000 to the second trust. So the real price is $500,000.
Again, don't trust close priced on the tax records!! (also they don't show seller subsidies)
"According to this “fair value” calculator, one suburban neighborhood outside Washington, D.C. that I checked (Alexandria, Va., where I lived in the mid-1990s) is now 47% overvalued:"
I think this guy is talking about KH old hood in Alexandria. Ive hated these things for urban areas where the population is non homogenous. Something tells me the nearby, enoumous public housing ghetto filled with renters is skewing medians down in that zip
Also, had this dude read the caveats to the calculator, there are two things which the calculator itself said can cause values to skew too low:
1. "houses in unique, high demand, short supply areas"
2. "neighborhoods where the demographic is rapidly changing"
This Alex zip fits both those criteria to a T. The dude should try a suburban, homogenous neighborhood where these skewing factors arent present.
anon,
In 22315 "Kingstowne" which is beyond homogenoeus (townhomes and condos only need apply, only 3 or 4 complexes you can rent from, all of which are upwards of $1600/month for a 2 bedroom, i.e. expensive) the prediction is that 2005 was 42% overvalued. Quite similar to his 47%.
Cara - I get that, but "kingstowne" is not what I am talking about.
Kingstowne has your 80K a year households, and your 40K a year households. Perhaps your median income is 60K In my book thats still pretty homogenous.
What I am talking about is places like Ledroit park - here you can have a big population making 20-25K a year (public assistance), and a small population making 200K a year. The median may work out to 60K again.
These are just hypos, I havent run the numbers. However, I do know that Old Town Alexandria (zip 22314) has a lesser median income than Huntington, the very next stop on the yellow line where all the hi rise condos are located...so someone going on a strict median income to median price calculation would conclude median prices in old town will end up cheaper than the condos in huntington - thats absurd.
To be fair, the calculator tries to account for this by having a bigger historical price times income metric in Old Town, but this isnt going far enough. Old town is filled with very wealthy or the very poor. Very few of the median income types. Also, the very poor are often renters in the public housing tracts, or if they do own, they can afford to live there only because they have owned their homes free and clear forever.
Its this sort of heterogeneity that I dont think calculators like this can capture - judging from their caveat list - I dont think they can accurately capture this either.
Sorry - that should be I dont think THEY THINK they can accurately capture this either.
Cara - sorry I found two more caveats in the guide:
"This calculator is relevant for John Q. Public suburbia where housing supply is plentful and similar"
Plentiful and similar may describe kingstowne where stuff is selling from 200K to 700K. It doesnt really describe old town where stuff is selling from between under 200K and over 13 Million.
Also the calculator is (their words)
"Most relevant for prices below the median in below average areas. The reason is, a rapidly shrinking pool of potential buyers. A higher concentration of sub prime borrowers propelled prices up, but today they are unable to qualify and are returning to their renter status."
This may or may not describe kingstowne (you know it better than I do), but it certainly doesnt describe old town.
Anon,
I picked Kingstowne because (a) I do know it and (b) it does fit their description of where the metric should work to a T. The borrowers may or may not have been subprime persay, but it seems as if we've had more than our fair share of foreclosures. The housing stock is both plentiful and absurdly homogenenous (and boring!!!). Whether it's 42% predicted decline says anything about what should happen to Alexandria proper, is another question. But you jumped in under the assumption that contrarion had picked a zip code where the calculator wouldn't work, so I held up an example of one in near-in NoVAwhere it should. (and whose postal address is also Alexandria, despite the absurdity of that designation)
That's all I'm saying.
Cara - I see what you are saying now. Also, I misread your first posting. I thought you were saying Kingstowne was non/homogenous when you were saying it was pretty homogenous. Sorry about that.
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