The S&P/Case Shiller® composite index (graph here (pdf file)) for the month of September was released today.
"'The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals.' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. 'All three aggregate indices and 13 of the 20 metro areas are reporting new record rates of decline. Looking at the returns of the U.S. National Index, prices are back to where they were in early 2004. As of September 2008, the 10-City Composite is down 23.4% from its peak, the 20-City Composite is down 21.8% and the National Composite is down 21.0%.'”
16 comments:
Wow.
All the doubters and shills were wrong. These numbers speak for themselves.
I chose not to buy in 2004 and followed thehousingbubbleblog for years. Man were we sooo right. This thing has turned into a complete disaster.
Ok, everyone, I'm seeking your opinions?
How far does the price need to fall on this one:
http://franklymls.com/AR6876668
Two things that may not be apparent from the many photos (see also the Realtor photos added): (a) there's no garage, and only 4 Arl. houses > $1 mill. listed on franklymls. have no garage, plus no inside access to the basement; (b) the "improvements" appear to be mostly do-it-yourselfer changes -- some are unfinished and/or poorly done and/or with materials that are low quality or don't match the style of the house (e.g., the wainscoting on kitchen cabs and a bath is cottage style, not Craftsman). Note the granite tiles (not granite) and sloppy wood trim in the kitchen, for example. So you'd have to redo a lot of this, or else you should get a good discount for living with it.
Also, nearby houses are generally much smaller and the street is zoned for 2-family occupancy, meaning you have renters on the street and could have a lot more in the future.
Here's the Arlington assessment for the house I described above:
918 16th S
ace,
that's a tough one. The tile granite counters were a really bad cost-cuting device, because it makes you wonder about everything else. The rental unit in the basement is not necessarily a bad plan, but not at 1 million dollars. It has good bones, and I like some of the bathroom choices, but overall I agree that it looks cheap. I'll take a wild stab and say it needs to come down to $850k (since you said everyone). At a minimum it needs $50k off to redo the kitchen.
The added pictures make it look much more cramped both on the inside and on its lot.
Wow, As recently as 2002 it was assessed at $326k !!
Let's say they get $100k for sloppy improvements, and $50k in appreciation and price this at $500k?
I could go for that, especially if I could rent out the basement.
Ace: The funny thing is that when I often follow an MLS link to a house that someone posted, I see the image first, and often the price is covered up until I resize the window.
Your link to (AR6876668). It loaded, and I thought "what a cute place". It seems that whenever I see a place, my mind is automatically trained to guess what it costs. Then I scroll over and see the price. Jeesh, life is too short to blow on a place like that.
Don't get me wrong: when I mouse over the interior shots, I'm impressed. But, for $1.2mil, I expect a drawbridge and a moat.
P.S. I just read the rest of your post. At first glance, the place looks very nice, but I missed the sloppy craftmanship, lack of a garage, etc.
Cara, the house was once a Cape Cod like most of the others still are on the street, probably 1000-2000 square feet or so. I think it was added onto and renovated, such as it is, in 2004-5. So assessments before that time did not reflect these subsequent major changes, but later ones did.
Thanks Cara and Novawatcher for your opinions! I would be interested in other people's thoughts too.
oops, I really should learn to use "preview." I meant 1000-1200 square feet, not 1000-2000.
Well, looking at the neighborhood sales on the Arl county website, it would be the most expensive house sold (by $200k!) in that neighborhood for at least the last 2 years.
I'll say it needs to come down to below 900.
WW, thanks. Actually, according to the Arl. assessor's website linked above, 607 21st ST S sold in October for a little over a million $.
But your point is still well taken, which is that most houses in the neighborhood are much smaller and less expensive.
I'd say a few % below the 2008 assessment would move this property. I agree with Cara first price of $850k.
I was rounding, yes. :)
WW, sorry!
Cara, wish your second price were right, but since the slightly neglected little 1050 square foot rental next door was assessed at $564K last year and most houses in the neighborhood that are selling, are getting close to last year's assessed value (depending on reno's, etc.), I somehow think the sellers' heads would explode if someone were to bid that! :-)
Ace,
Yes I retract my second estimate given the new information you provided that they added an entire 'nother floor after the tax assessment date I was using.
I do think it would sell quickly at my original guess of $850k. Much higher than that and they'll have to find a sucker that is qualified for a jumbo loan and yet doesn't realize the mark-down for tiled versus solid granite and can't tell a professionally laid floor from a do-it-yourself job. If the nearby single-stories are selling for say, $450-500k, then this will command about a $200-300k premium for having twice the square footage. Double is asking too much without a garage and such a small lot relative to the house size.
Cara, the house was also built back from the original Cape Cod, and two stories and a floored attic were built up. (This is easiest to see in the satellite photos). So it's probably closer to 2.5-3 times the size of the original Cape Cods. (3200+ square feet vs. 1000-1200). However, some of the other neighboring houses have also had additions, which provides more comparison info.
The house has no formal dining room either.
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