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Monday, December 29, 2008
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23 comments:
Lots of interesting housing-related articles in the Post over the past several days. And this morning, I looked over the Center for Regional Analysis at George Mason University's recent reports, finding many good nuggets of information about foreclosure rates. No surprise here: the City of Manassas leads the entire region in foreclosure rates. But here are some other designations:
Hot Spots (besides Manassas):
Dale City
Gainesville/Bristow
Accokeek
• Others: Woodbridge, Fredericksburg, Leesburg, Upper
Marlboro, New York Avenue, Columbia Pike, West End
Impending Hot Spots:
Germantown
Centreville
Herndon
Alexandria (Fairfax County)
Potential Hot Spots
Olney
Falls Church (Fairfax County)
Vienna
Adams Morgan
Our appraisal results came in Christmas Eve. They were actually slightly lower than I expected, and almost exactly in line with Cyberhomes. So we emailed our landlord and asked if he would still consider selling to us at fair market value, keeping in mind that #1 a bank would only loan 80-95% of appraised value and #2 the appraiser we used, who was approved by our bank, stated the value may well drop again by next month. We have not heard back yet. I wish we could just find out, so we could know whether we need to move again or whether it's time to lock in an interest rate.
Good digging Tabitha, as usual.
We are currently renting in a townhouse subdivision in Centreville & I see more Foreclosures "popping" up daily in our "hood.
Not to mention increased criminal activity.
I'm also seeing more SFH foreclosures where we used to live, in spanky Clifton, just over the hill from Centreville.
So I would agree that it soon will be a hotspot as well.
Best of Luck Tabitha!
the Fairfax part of Alexandria an "impending" hotspot? How did they miss the spate of them that happened last year? Given all the short sales and wishful thinking prices, I'd have to agree that it could indeed get worse.
Tabitha, it must be awful to be on pins and needles so long. I hope it all works out!
Spunky, the Post had an article about how Clifton continues to be a Republican enclave in an increasingly blue NoVA. I wonder how to reconcile that with the SFH foreclosures you mentioned?
Wish someone would report that every house in Arlington, except mine, is losing value, so I could trade mine in :-).
Here's the article I mentioned:
http://tinyurl.com/88gpmh
"Spunky, the Post had an article about how Clifton continues to be a Republican enclave in an increasingly blue NoVA. I wonder how to reconcile that with the SFH foreclosures you mentioned?"
Hmmm, Ace, I guess I would "reconcile" this that people from all walks of life, backgrounds & Political affiliations can get bad loans, caught in a RE crash & get over their-heads financially.
Ace were you referring to the change in administration? That was what I first thought of when I read your comment though I wasn't quite sure where you were going with it. If the area has a higher than average republican percentage it may see added turbulence from people leaving town after the government changes over.
Arlington SFH for under $300,000. It's now bank owned after previously selling for $510,000 in 2005:
http://franklymls.com/AR6947668
Ace,
Out of context from the article that sounded really terrible.
In the context of the article I assume you meant, how does one reconcile the zeitgeist of long-term residents and a relative lack of high turnover tract housing written in the article with spunky's observation of foreclosures.
HELOC's. I've seen quite a few foreclosures that were bought for hundreds of thousands under the current asking prices. (though I haven't been looking at Clifton). HELOC abuse is the great equalizer of new and old neighborhoods.
Sorry to be unclear in raising a question - note that I did not make a comment.
My comment would be that data indicate that foreclosures are happening disproportionately to people in lower income and minority groups, for a variety of reasons, yet as some replies to my question suggest, it appears that they may be increasingly happening in what were considered tonier, "immune", or more stable areas.
John F - That seems like a pretty nice price for what you're getting. I don't know much about that neighborhood though. The house was listed at $635,000 on 7/14 and stayed on the market for 79 days...quite a haircut to 300k!
Ace - Thinking about it this progression might make sense. People without much in the way of savings or other cushions might default on mortgages right away. Those that were better off might make their payments for a while before finally being pulled under. I wonder if that will accelerate with so many layoffs occurring.
I still can't believe the land parcels in Clifton have to be 5 acres or more!
Jeff B, good point.
this 'easy walk (1.2-mi!) to Ballston metro' 10-yr old N Arl 5/3/1 home sold for 900K+ in 05, now a short sale at $650K. that's at least a $250K hair-cut for the bank, unless, of course it sells for above asking. another older 3/2/0 colonial five houses up the street went under contract recently with the same asking price.
On a totally unrelated note...
I'm looking into buying in Southeast Culpeper County (area called Lignum or Richardsville).
I've looked around to find out what the community is like and have been unable to find any blog, forum or group associated with this area.
Anyone know any websites that might have some good information and/or discussions about the area?
Thanks,
David
I read this article and said WTF. How does 3% go from 2370 to 3850 a month mortgage. DOES NOT COMPUTE. Lots of details left out.. like perhaps he took out a huge HELOC or that's his payment with FEES for missing payments or something.
--------------------------
www.cnbc.com/id/28416601
At first, the interest rate was 6.5 percent and the monthly payment was $2,370. After two years, it rose to 9.5 percent and suddenly the payment of $3,850 was beyond the means of a family living off Patrick Goldrick's salary as a cable guy.
Hi, David, you might try starting a thread here:
http://www.city-data.com/forum/northern-virginia/
BAS: apparently news outlets can't be bothered with fact-checking these days.
At first, the interest rate was 6.5 percent and the monthly payment was $2,370. After two years, it rose to 9.5 percent and suddenly the payment of $3,850
For a 30-yr fixed:
6.5% -> $632.08 per 100k
9.5% -> $840.85 per 100k
To have a payment of $2370 for the first two years, that means that the loan was for $375k. It reset to $3850, which at 9.5%, translates roughly to $457k. WTF?
Ah, now I figured it out! This guy took out an interest only loan, and was only paying the interest for the first two years. These numbers are a little off, so these are guesstimates:
$450k loan
interest only for first two years:
payment ranges from $2437.50 the first month to $2383.68 the 24th month (i.e. pretty darned close to his $2,370). Note that the fully amortizing payment would have been $2844.31.
Now, in the 25th month it resets. No principle has been payed down, so it is now like a 9.5% fixed loan for $450k over 28 years, which yields a fully amortizing payment of $3833.47.
...wait! He claims that he only took out a $375k loan. Something does not compute -- he must have taken out a heloc or perhaps got 20% cash back during the refinance.
Option ARM video with David Faber (CNBC) http://www.cnbc.com/id/15840232?video=975806528&play=1
bas,
"Most of the medical bills are paid by insurance and a fund established from the settlement of a malpractice suit over Erin's treatment as a baby. "
"most"??? wow, that's informative.
The rest of "most" could easily be the missing 100k, or "most" could mean "everything but $1000/year, in 100 ten dollar co-pays"
she has "hydrocephalus, a Chiari malformation and spina bifida." and she's lived to be 10?? I didn't think this was possible...
In any case, I'm guessing even the $375k refinance in 2005 was a cash-out refinance, because there's no way a cable guy with 2 kids and a wife could afford that beautiful home (if that picture actually was related to the story). This family can't get a new loan (rather than a mod) not because they're underwater yet, but because their income doesn't support that mortgage at any terms. I'm not looking to buy a $375k house, and we have two incomes which both have to be more than a cable installer.
But yes, they are up shit-creek, but they still have a paddle. They need to undercut their neighbors and sell the house now and move into something more modest and affordable, maybe even, heaven forfend, rent.
GREATER ALEXANDRIA CASH-FLOW POSITIVE!!
Frankly Beverly Park
To heck with rental parity, this neighborhood is chasing each other down to cash-flow positive.
FX6910468 $184,900 $208,900 $366,150 50% '08 $350,000(05) 61 7106 ITTE LN SPRINGFIELD 22150 BEVERLY PARK 3/2 0 1973 0.07 11
♥ FX6946311 $200,000 * $200,000 $393,110 51% '08 7 7111 ITTE LN SPRINGFIELD 22150 BEVERLY PARK 3/3 0 1973 0.07 1
♥ FX6761332 $225,000 $349,900 $425,090 53% '07 $252,000(02) 94 7225 BELINGER CT SPRINGFIELD 22150 BEVERLY PARK 4/3 0 1977 0.07 1
♥ FX6898631 $219,900 $230,000 $408,920 54% '08 $369,050(05) 22(167) 7240 BEVERLY PARK DR SPRINGFIELD 22150 BEVERLY PARK 3/2 0 1977 0.07 1
♥ FX6900056 $207,900 $207,900 $384,980 54% '08 25(195) 7217 BELINGER CT SPRINGFIELD 22150 BEVERLY PARK 3/3 0 1978 0.08 1
♥ FX6874965 $224,900 $275,900 $411,170 55% '08 $440,000(05) 80(228) 7203 BELINGER CT SPRINGFIELD 22150 BEVERLY PARK 4/3 0 1978 0.07 5
♥ FX6908139 $250,000 $278,900 $422,360 59% '08 $485,000(05) 64 7213 BEVERLY PARK DR SPRINGFIELD 22150 BEVERLY PARK 5/3 0 1976 0.09 15
♥ FX6911243 $269,900 $269,900 $452,720 60% '08 60 7213 SUMPTER LN SPRINGFIELD 22150 BEVERLY PARK 3/3 0 1977 0.07 1
♥ FX6872538 $259,900 * $259,900 $424,140 61% '08 $168,780(99) 16 7210 BELINGER CT SPRINGFIELD 22150 BEVERLY PARK 4/3 0 1978 0.07 1
♥ FX6936740 $260,000 * $260,000 $425,350 61% '08 24 7204 BELINGER CT SPRINGFIELD 22150 BEVERLY PARK 4/3 0 1977 0.07 0
♥ FX6939093 $265,000 * $265,000 $408,680 65% '08 20 7205 BEVERLY PARK DR SPRINGFIELD 22150 BEVERLY PARK 3/3 0 1976 0.09 9
Which makes sense as this neighborhood has obviously generally been a SFH rental area for the base. And now a lot of those new renters will have the benefit of flippers upgrades. Which is a good thing all around really.
The second one on the list came up at $200k last week, and now the one across the street has cut its price down to $185k. They're both odd ugly rental houses, but I must say seeing prices that could actually cash-flow positive as rentals is heart-warming.
What's next, rents declining and further drops in this neighborhood? Or will their sensible pricing actually infect the surrounding neighborhoods with affordability? I'm thinking a little bit of both.
Of course, now that I showed my husband the nytimes calculator that includes the costs of selling in the rent versus buy calculation, he wants us to do the math that way, meaning $180k as our upper limit. Sigh. That's asking a bit much from the market if you ask me. It's funny how our upper limit keeps going down every few months. It started at $275k when I was just comparing rent with interest and taxes and allowing 2 years to get to parity. That was before I knew about the bubble. But still for many months it was $250k, only recently $225k, and now it's $180k. Our upper limit is going down basically at pace with the market or faster.
David,
I recommend reading the local paper (Culpeper Star Exponent) for ideas.
The area is a mixed bag. It truly is mostly rural for now, but it is gaining in higher-tech jobs and in shopping and dining amenities. Mount Pony, where the Library of Congress has its video archives, is pretty cool. They have showings most evenings of old movies in the archives.
The community college (Germanna) seems nice, too. On the way out to Fredericksburg, a lot of retirement communities exist like Lake of the Woods.
I do think there is a propensity for crime in some areas, though. A lady was murdered in rural Culpeper County by the same guys who murdered the family in Richmond a few years ago. If I lived in the woods, I would take precautions with dogs, security systems, and of course a gun.
Mr Mortgage strikes again:
Low Mortgage Rates to Spur New Wave of Defaults
My take on the low rates was that it would allow a segment of borrowers who might otherwise default to stay in their houses due to lower monthly payments, which would help the 2002/2003 books not to sour as much and home-owners in the non-bubbly areas to withstand the recession. Mr. Mortgage has a totally different perspective on this. Basically that if 80% of refi's are being turned down over the assessment then suddenly the reality of house prices will be thrust upon a huge chunk of un-suspecting owners, many of whom must be under some financial duress given that they were looking to refinance.
Could capitulation be coming?
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