Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
http://money.cnn.com/2008/12/23/real_estate/home_sales_November/index.htmSummary:- Existing homes sold during November down 8.6% - Median existing home sold for $181,300 in November, down 13.2% from a year ago when the median was $208,800.- Homes unsold expanded to 4.2 million in November. That represents 11.2 months of supply, at the current rate of sales, up from 10.2 months in October
"RJ Said...- Existing homes sold during November down 8.6%"Probably not too surprising, given how bad the local decade of sales report was. The larger question now is, is the sales slowdown due more to (a) general unease about the economy (causing buyers to temporarily hesitate, but possibly return soon) or (b) actual job loss (meaning sales will not return for a while). Next months sales report will be very interesting.
Some of you will enjoy this 116 page presentation, others not so much:""An Overview of the Housing/Credit Crisis And Why There Is More Pain to Come"http://www.designs.valueinvestorinsight.com/bonus/pdf/T2_Housing_Analysis.pdfEnjoy!!
John - I am having trouble opening that report. I am assuming it is the Whitney Tilson (T2) report on Alt A, correct?
RJ, CRTYeah when I saw those as headlines, my first thought was, didn't we know this on the 11th? And then I remembered that the decade of sales is just the local MRIS, not the national monthly report. There was yet another stupid article in the WaPo by E. Razzi, with comments like "but DC is different" with support such as "here, foreclosures are selling", as if the fact that foreclosures comprise 30-40% of sales of existing homes nationwide meant that elsewhere foreclosures are sitting and rotting as opposed to selling... And she kept talking about predictions for 2008, presumably meaning 2009... Is she even trying anymore? It was such a lackluster article that I am loathe to give it a link.
Here is the tinyurl link to that report:http://tinyurl.com/3mw6am
JF,page 7 (loan originations by type) is staggering.page 13 on loss severity with home-price appreciation, also pretty darn scary. If losses due to defaults result in 60% equity loss to banks when home-price appreciation is 3%, what in the heck is happening now? Soon, there will be no point in foreclosing, because it won't get the bank back any money anyway???Page 19 shows that prime foreclosures are going up more quickly than FHA or VA loans. Gee, people who overextended are starting to feel the pinch, eh?Page 21 "more than 10% of homes built this decade are vacant today" Holy Manassas!Page 30, also a good page for a new way of looking at the CS-20 cities.
Redfin stopped showing the price listing history if a property was taken off the market, even if it was off for a short time. They have a comment saying "Per MLS rules, we cannot display prices from inactive listings."Here's an example (below the map):LO6946178 on RedfinThe same listing on franklymls shows the previous listing price history:LO6946178 on franklyMLS.comI guess Frank's an outlaw :)
JF,I think the take home message may be that even though townhomes in the area I'm looking at may have neared rental-parity, it is still definitely not "time to buy" unless I can withstand a 20-30% additional loss. In the low end, a lot of the damage has already played out around here. However, the damage to the high end (as defined by non-conforming) is only beginning and will push the low-end homes to well-under rental parity. This is something IHB discussed about a week ago more explicitly. Meh. But I want to buy a house.
LO6946178 on franklyMLS.comTyvek! Be still my heart!
If it doesn't sell for 330 days, raise the price $40k!
novawatcherAnd, the ever sought after breakfast bar that's 12 inches of counter space before the range-top. Hmm, fabulously kid-safe. I've seen plenty of kitchen islands with ranges before, but usually not with knee room underneath them. Maybe I've just never noticed.shamrockbut the "OWNER SAYS SELL!!" um, yeah sure they do. The owner says I want my darn money back on this darn house, I'd believe. Maybe the owner doesn't understand the difference between those two things, but we do.
"NoVAwatcher said... LO6946178 on franklyMLS.comTyvek! Be still my heart!"Personally, I like where in the description they say "Beautiful BRICK FRONT home on CULL DeSACK"CULL DeSACK ehh? Hmmm, I wonder if he or she related to DeForest McDuff who did the research paper on rental parity I showed you last week?
shamrock,that house was listed at $499,999 for 11 days in Sept. were these drops just a stupid trick to generate offers they'd never take?
$699K for this? you have got to be kidding me.i'm beginning to think a lot of N Arl sellers out there are marketing to developers. nothing wrong with that though.
mm,Quick, you too could buy a weird-ass corner lot for 700 thousand dollars! Perfect for that triangular architectural challenge you've always dreamed of!
cara,thanks for the laugh. it's been a tough long day today.cheers and happy holidays!
MM & Cara, thanks for the replies. They haven't done anything to the house which would indicate a price jump from $499k to $579k in two steps. The only thing I can think of is maybe they've gotten offers 15% below asking price no matter what they are asking and now they think they can generate a high $400's offer by pricing it at $579. I don't know, it would certainly be fun to hear the reasoning behind all the price moves.
This is as a compelling analysis of what has gone wrong with everything that I have ever read. It's from a NYT's piece on Madoff. http://tinyurl.com/7g7he3“The Talmud teaches that a person who only looks out for himself and his own interests will eventually be brought to poverty,” Rabbi Krause added. “Unfortunately, this is the metadrama of what’s happening in our country right now. When you have too many people who are only looking out for themselves and they forget the other piece, which is to look out for others, we’re brought to poverty.”
wow, originally listed at $790K, final listing $699K, tax assess is $711K, but sold for $600K! i gotta find out who the buyer's agent was! there is hope!
Hi, I'm new to this blog but am moving to VA in February. Holy Moley, there are some crazy rich house prices in some places. I wonder where a good place would be to live for a empty nest couple in their 50's with one working at the Washington Navy Yard. Where does reasonable price come in line with not being an unsavory neighborhood? I'm looking at Burke and the Fairfax area, but wonder if I'm off base. Y'all seem really savvy on the area, so I am all ears...I have learned some already just reading a few posts.
Well Tom, avoid the area between Mannassas and Dumfries, they are all Dumassas around there. Some of them end up postin here.
Happy holidays to all!Tom, welcome, if you aren't one of the two Toms who have posted here previously, you might want to augment or change your posting name, so that you won't be confused with another Tom. We have people from all over, including several people interested in the Manassas area, so you are sure to get some good advice.You might also try this site:http://www.city-data.com/forum/northern-virginia/
Hi Tom,The "bad" areas in NoVA are heaven compared to many parts of the country, so it all depends on what you consider unsavory.If you're looking in Burke or Fairfax, you should be fine.The washington post has LocalExplorer . Click on the Crime tab and enter an address, city, or zip code. You can click the balloons on the results map to see details of the crimes reported. Check out some of the areas in NoVa and then search the area Anacostia for a comparison. After that, i'm sure you'll agree most of the NoVA areas are pretty tame.Also, before you decide on a location, check for sex offenders at FamilyWatchDog .I hope this helps. Good luck and Merry Christmas.
Hey Tom,My husband works at the Washington Navy Yard, and we live in Manassas. He takes the VRE to L'Enfant, then jumps on the Metro for less than five minutes.You may want to live closer in (it's an hour on the train from here), but check out areas close to VRE stops. The VRE does not run as frequently as the Metro, but it is far more comfortable. There are two VRE lines to choose from.If you're looking for areas with the greatest price drops, PWC has the steepest, but Faifax is classier and more urban-suburban.When we moved here in 2006 from North Carolina, the sticker shock was even greater! Your chances of finding a reasonably priced home are much improved. Enjoy the Navy Yard. I love seeing the squared-away Marines from 8th & I wandering around there.
OK,I changed my name to Tom C to not be confused with other Toms. Thanks for all your responses and suggestions. Not sure about Manassas, but like the VRE idea. I had read other posts that suggest it is more comfortable to ride. I would like to live closer in though, and maybe a Van Pool would be an option too? What about Lorton and Woodbridge? Too far?Anyway, I will be in here watching and learning. I have my Househunting trip coming up in January so I will keep you folks posted as things progress.Thanks all!
Tom, If you are commuting to the Navy Yard and don't have children, consider living on the Maryland side in PG County. Bowie or Upper Marlboro might work for you and are outside of the high crime areas. The commute is probably longer in miles, but there isn't as much traffic coming in on Suitland Parkway. You could also live further out in Anne Arundel or Calvert Counties, both offer doable commutes into the city -- although I don't know if there is a bus straight to the Navy Yard so you might be forced to drive to metro or drive in completely.
Tom,Burke Station/Burke has townhomes/single family homes for moderate rent and both of them has VRE stations closeby (Burke Center and Rolling Road). Takes about 30 minutes to L'Enfant metro and can ride the metro to Navy Yard. These places also has buses to Pentagon metro.
Here's an interesting article about (a) months of inventory outside Manhattan and (b) demand shifting to close-in areas:http://www.nytimes.com/2008/12/28/realestate/28zone.html?_r=1&ref=realestate"Mr. Otteau says the shift was partly because of higher energy prices. But the dominant reason is that the number of households with children living at home is on a persistent decline.“In 1985,” he said, “50 percent of households had children at home. In 2000, that was down to 33 percent. Today it is 29 percent, headed to 25 percent.“That means that 75 percent of home buyers over the next 15 years will have childless households — and within that group are empty-nester baby-boomers, or couples or singles buying a first house. And that means that three out of four home buyers will have no interest in a house in the suburbs with a good school system, which is pretty much what we’ve created over the last 50 years.”Mr. Otteau cited a new study from Virginia Tech projecting that a nationwide surplus of 22 million suburban homes on lots larger than a sixth of an acre will be languishing on the market by 2025."
Tom C,I know this is the NoVa blog, but if you're commuting to Navy Yard, may I put in a word for Eastern Market or the Navy Memorial? Eastern Market is nice neighborhood within DC that has recently gentrified, has the virtue of "eastern market" itself, with the best grocers and cheese shops and butchers in walking distance and would be a zip of a commute. If you're thinking of renting for a year or two, consider the building at the Navy Memorial, friends of mine from work are renting a place there, the view is incredible, and it can't be that expensive, they're 1 scientist and 1 journalist. It would be a great place to rent with fabulous access to 4 metro stops, and a bunch of the best restaurants. So you could rent someplace fabulous while getting to know the areas around DC better, before jumping in to a falling market. Just store your stuff, even prices on storage places are going down (counter-intuitive I know). As for the suburbs, the pickings are getting slim for anything actually well-priced, I'm assuming that spring will bring new stuff back onto the market, but about 80% of the priced-to-sell stuff that I was watching has sold or gone under contract, so won't appear anymore which distorts prices upwards (unless you actually ask for the comparable sales data).
Tom C,Oh and 295 North north of the Naval Research Lab (exit 1?2?) is a parking lot every morning as early as 7:30, so keep that in mind route-wise if you're considering driving. I live in Franconia Springfield (husband commutes by metro into Alexandria) and I drive, but only as far as that first exit on 295 N.
Ace,I don't think the trend that Mr. Otteau talks about--percentage of households having children gets progressively smaller--is irreversible. Changes in society's attitudes that come from an economic depression as well as continuing immigration will reverse such trends sooner or later. Immigrant households from Latin America and Asia have many children.Besides, their argument is undercut by the fact the housing bubble in outer suburbs occurred even as this trend was in full swing through the 2000;s.I recall a paper by Gregory Mankiw, the MIT economics professor who was an advisor to Bush early on, that argued that housing prices would fall through the late 90's and in the new millennium because the baby boomer generation was becoming empty-nesters and starting to retire.We all know how that turned out. I still think the baby boomer effect will be felt at some point; he current decimation of their retirement assets may well be the catalyst for that, but we have to be wary of taking such claims based on some observed trend too seriously. Such analysis often leaves out the impact of -- or makes the wrong assumptions about--many other factors.
Cara, Zmonet, and others,Thanks for all the great information; I am really happy I found this blog. I am planning to buy but will be renting for a minimum of 2-4 months. The district idea that Cara came up with sounds great, my boss actually mentioned some DC areas that sound similar. I will look at those options too. I am not sure about MD, I have heard a lot of negatives and the long commute to the better areas don't sound so great to me, I will check those areas out too though. I have two years to complete a new home purchase while the govt will still pick up my costs, so that may be my option for now given the market situation.On another note, I have a question on some things I see in the listings. I find some listings that are foreclosures or short sales, but are priced just above a last sale that happened just a month or two ago...too recent to make this foreclosure real and very suspicious. The prices don't seem competitive and look like there is some manipulations in the facts. So, what gives?Thanks again all of you!
Tom C,On the front page of this blog Harriet has links to all the various county assessors websites, there you can find out to whom things were sold. Often it is indeed a bank, in a foreclosure sale to itself. Frank from frankly realty will say not to trust the county's sale price numbers, but that's just because they don't include information like seller subsidies, which he's trying to include in all his sales listings on franklymls.com (which is a totally great search engine especially once you know which zip codes or even discrete neighborhoods you're looking for).I've found that foreclosure sales are usually a month or two, no more than 4 away from when they turn the property around and market it.
Thanks contrarion,I hadn't looked back at Patrick.net for a while, but it's link to the NYTimes rent versus own calculator definitely made it worth looking:http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1&ref=patrick.net#This is way superior! It allows you to put in depreciation!!! The sad thing is this puts my sane rent versus buy price point at $180k. Yup, well under $200k for it to make sense to buy, unless I was certain we were at the bottom of the market. Which I'm pretty sure we're not. Showed my husband what's on the market at $200k listings at the moment, he was way less enthusiastic about living in those places than I've been. I guess looking has made me lower my expectations for what we can get. So it's good to have a counter-balance of someone who's expectations haven't been warped by the market. But it bodes poorly for buying this year unless the bottom really falls out. Also made the mistake of including up to $400k properties in my search which brings up all the greedy jerks trying to make a killing selling their houses. It's not surprising that those are who are still on the market in December, but it was frustrating as my usual search parameters inherently avoid most of them by restricting the search to under $300k.
"Contrarian said...On a positive note, CRT tells us that we have nothing to worry about here in NoVa, because NoVa is immune to economic downturns, including foreclosures, right CRT?"Thanks for the lovely unprovoked jab at me, and picture of Alfred E. Neuman - Nice. You will excuse me if I have a tendency to take broad articles like this one about the 8million foreclosures, and ask about the relevance here. You will excuse me for taking the LOCAL data we have and making educated guessess as to the impact locally - especially when they run counter to some of the trends seen nationally. Let me make my position as to NOVA cristal clear:1. This has been/will continue to be a historic bust in home prices.2. There are/will be more foreclosures seen in this area than any time in living memory.3. It will be years before home prices rise again.4. Places like Arlington that have thus far avoided severe price drops could still see them. The chances of that happening now are (IMHO) much much higher than they have been at any time in the last 10 months. 5. There are many many many reasons why places like Arlington could see severe price drops - Option Arm loans is not one of them.
Contrarian, I hope your winking icon indicated that you were just kidding about CRT's positions on the issues. I've always found CRT's posts to be thoughtful and thought-provoking. And though Alfred E. Neuman is undoubtedly a good-looking guy, I think it's fair to say that none of us resemble him (well, maybe a few do) -- nearly all who post here are, if not worried about the difficulty of predicting the NoVA housing market in the next year or so, at least appreciative of the complexity.I will be very interested in what comes on the market in January and to see the Decade of Sales data for December.
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