Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Monday, December 8, 2008
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
68 comments:
Some interesting articles in the real estate section of the WaPo today.
Including one just for me and Ace. Rock Creek Woods contemporary design, inexpensive, in a wooded setting. With _no_ photos!!! Grrr.
Names Hollin Hills in Alexandria as the more well known example of Goodman architecture. That has 4 for sale, one under contract right now: Frankly search Hollin Hills
Darn, we're going to have to buy a second car... and they're still a ways out of our comfort-zone price level.
Of course a search for "Rock Creek Woods" only pulls up one under contract house. But you don't want to live in Silver Spring anyway.
ps. by "you" I meant Ace. I'm not dissing Silver Spring.
Thanks, Cara, I saw this in my Saturday print edition. Very nice neighborhood and cool houses - there was one photo - mid century modern style.
Maybe in 2009 the price might enter your comfort zone!
A friend who grew up near Hollin Hills said she remembers babysitting there many years ago when it was seen as a starter home kind of a neighborhood and she finds it interesting that now so many have been added onto and are considered chic and upscale!
Update on Clarendon sale. On 11/18 I posted this:
"In addition, just down the block a super skinny new in-fill house just went under contract with a list price of $1.425m. By my estimation, this is about $500k greater than the builder's cost to build. Why the hell would someone overpay by $500k, or 50%?"
The house, which is located at 3111 N. 7th St., Arlington, VA 22201, sold for $1.4 million.
This is about $50k less than two far superior in-fill houses sold for recently (907 N. Irving and 812 N. Highland, both of which are about twice the size of the 7th Street house).
I can't believe someone overpaid for that property by so much. The developer, Russell Arkin, must have literally fell out of his chair laughing when the deal closed.
MANY BORROWERS REDEFAULT
http://www.cnbc.com/id/28112901
buhahahahaha
Ace,
I wish. They would need to come down to $350k (from ~$550k) for us to even consider it right now.
Which begs the question, if we've found a neighborhhood we really like, and houses we'd love, does it make more sense to attempt to hold off buying another 3-4 years, seeing if we earn more by then, and when we'll have saved up a sizable downpayment (large enough to make the payments affordable semi-regardless), and avoid the transaction costs?
Hmmm, something to ponder. Though, not buying a starter home until you're almost 40 is kinda painful, and says something about the prices...
It looks like the duplex that the blogger Joanna said "had 4 offers on it" on 12/3 did go under contract.
http://franklymls.com/AR6927527
JF - its as you and I discussed. "1 other offer" is standard realtor BS, "2 offers" means maybe they are lying maybe not. However when the realtor says "4 offers"(i.e. going straight to the triple-dog dare) it probably best to assume there is something to it.
John -- I don't think the house on 7th is really 1/2 the size of the Irving and Highland houses; it's close to the same size. It has 4 stories and is exceptionally long (I've seen all three).
But I agree with your basic point. Paying $1.4m for the skinny house when the house on Irving could have been had for $1.455m strikes me as crazy. In fact, if I lived at 812 Highland, I'd be very disturbed that 907 Irving sold for $20k less than I paid. Both are very nice, but the Irving house has a bigger lot, is larger, and maybe even a little nicer.
Now, when do we find out what the POS house on 7th sold for? The tiny, run down one that went under contract in less than a week? I have a feeling, though with no real basis, that we may see that house back on the market soon.
Cory
"The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend."
"Regulators speaking at an OTS -housing forum did not provide any explanations for the causes behind the data."
I know why.
Because they can't afford it. Average home buyers cannot afford 500K dollar houses. Period.
We are in a global economy, competing with smart people across the world that have a cost of living that is a fraction of what it is here. We can't compete with them when the price of houses are still so high.
Either prices fall more or we, in the long term, price ourselves out of jobs.
hi all-
what do you all think of this 3/2/0 UPDATED RAMBLER in 22207 Listed @ $549,500 ? the obvious issue is it's on a busy street - Williamsburg Blvd. but what else do you see?
not ready to put an offer in yet ($$$) but have been following quite a while now. i'm hoping it'll stay active for a few more months...
Tom in arlington
Good point. Very nicely put. I often think about how the lack of externalizing health care costs has hurt US Companies (which is related in my mind to your point), and I have often felt that the Bay Area and Boston were pricing themselves out of jobs by having housing prices too high relative to say, Charlotte or something, but I had not gone the step further in terms of globalization.
MM,
I like the updates they've chosen, especially the counter color and the tiled basement, however, I just can't swallow the idea of post-war boxes being half a million dollars, regardless of the location or the lipstick. You have to be the judge of how much that land is worth, because the house to me looks like no more than $150k at best (having not checked the tax assessment).
mm,
actually I think that's linoleum. I have no objections to lino, especially patterns that I like and particularly in basements, but it does mean it doesn't count as something that would increase the value.
MM - Where is that linoleum floor, in an upstairs bedroom? The rec room in the basement looks like it's carpeted. Kind of an odd choice for a bedroom.
I like the house though, it's a nice interior. I guess the downsides would be the location on a busy road and possibly the bland exterior design.
MM, that's a very cute house with a yard that is huge by Arlington standards, and it appears to be well cared-for and reasonably updated for the price range.
According to the assessor, though, it is less than 1000 square feet. Will that size work for you? With a big lot, you might be able to add onto it later if you wanted to. Arlington has strict rules about lot coverage, which depend on the zoning (R-10 for this neighborhood) and other factors. You can also use the assessor's website to check neighboring residences and see how many are owner occupied, and can check recent sales in the neighborhood.
It is in a premium school district (Yorktown HS), so that is probably a major contributor to the price. Do you have/plan to have kids who would benefit from that? If not, you may be able to find a comparable but bigger house in a different zip, that might cost a little less.
Back in October, MM posted about an in-fill house that was built at N. 22nd and N. Buchanan in Arlington. This was the house that backed up to the Merchant's Tire and Auto shop.
I had a Taco Bell craving this weekend (don't laugh), so I drove by the house to take a look. Btw, it sold on 11/24 for $850,000.
I can't believe they got $850,000 for that house. The pictures make the house look OK, but in reality it's a wide house with hardly any depth and absolutely no backyard. Just from outside appearances, it looks like it was very cheaply built. For example, the windows all look like they are bowing or bending. I know window glass can't bend, but I swear it looks like they are!!
The design looks like the lowest of the entry level McMansion's that you'd buy from a mega home builder. Personally, I think it's sad to see this kind of crap being built. What's worse is that because someone stepped up and bought it, the seller will probably go ahead and repeat that build on another lot again.
Would the assessment include the finished basement? 1000 sqft seems awful small for 3 BRs, living room, kitchen, a den, and the rec room.
Jeff B., I think Arlington's general policy is to include only above-grade finished square feet in the total, except in the case of split levels, where they seem to include the lower level. So any finished basement space would be in addition. I've seen a (very) few counts that appear to be a mistake (e.g., after going to an open house, I might check the assessor records, and sometimes a finished, below grade basement on a colonial style appears to be included because the floor plans given out at the open house show that the finished above grade could not be as high as Arlington's count).
1. "The house, which is located at 3111 N. 7th St., Arlington, VA 22201, sold for $1.4 million...
I can't believe someone overpaid for that property by so much."
2. "I just can't swallow the idea of post-war boxes being half a million dollars..."
3. "Back in October, MM posted about an in-fill house that was built at N. 22nd and N. Buchanan in Arlington. I can't believe they got $850,000 for that house."
Folks: N. Arlington is still expensive and folks are still willing to pay a premium to live here.
John -
I was curious where you came up with the cost estimate for this house.
This is one I've been to for a couple open houses, and I really liked. Like most new, large houses in North Arlington, I thought it was outrageously expensive, but not more so than other houses I've seen in the same price range.
I commented on this house a few weeks ago, when another poster (if I was more of a regular here I'd probably remember who) commented on the high price, saying it had been dropped several hundred thousand dollars and raised again. I questioned whether they had the right house. Given when it had been completed and the prices at the open houses I had been to there, the timeline didn't seem to fit. I also thought they'd lose too much money at a sub million dollar price.
I'd bet the builder is making a decent return on this house at $1.4M, but I'd be very surprised if it's anywhere in the $500,000 range.
NY Times it may be time to start thinking about buying a house
Ah the NY Times is pitching in in the attempt to stimulate the economy now that a democrat has been elected. (What me cynical?) Actually it's a fairly measured article as such reporting goes.
To make manifest the plight of realtors, Refin announces layoffs:
Redfin CEO blog
"But the past few weeks have seen a major reversal. As the stock market wiped out prospective down-payments, tours and offers dropped 30%. Transactions that were done came undone. October will still be pretty good, then we’re headed for a big dip."
Very very interesting. And I've noticed more houses that are on Frankly but missing from Redfin lately. The fact that they won't touch short-sales (nor foreclosures?) on behalf of buyers
has got to be taking them out of the low-end entirely in most places, since they only opened up in the bubble metro areas.
More realtor "whisper numbers" are showing increased signs of distress
McLean had 32 Nov sales vs 50 in Nov 07
Ashburn had 47 Nov sales vs 92 in Oct 08 (last year sales increased from Oct to Nov)
Leesburg had 66 Nov sales vs 97 in Oct 08 (last year sales increased).
Note, these whisper numbers are sometimes unreliable (vs MRIS numbers due out tomorrow), plus, I suspect the outer counties will still show sales increases due to the ocean of foreclosures for sale. Still, for the non/foreclosure market, there are increasing signs that the stress level might have markedly increased throughout the DC area...
keithk said: "I was curious where you came up with the cost estimate for this house...I'd bet the builder is making a decent return on this house at $1.4M, but I'd be very surprised if it's anywhere in the $500,000 range."
Here is what I said in the original thread about the N. 7th St. skinny house:
"the builder paid 375k for the lot. the reason for the "low" price is that the lot is super skinny (thus the ridiculously skinny house)."
right off the bat you have the lot costing anywhere from $200k to $300k less than what the developers of the in-fills at 812 N. Highland and 907 N. Irving paid for their lots (550k and 660k, respectively I believe). And remember, all three of these houses sold for within $75k of one another.
and here is more of what i previously said:
"it probably cost the builer about 500k to build the house. thus, total cost basis of about 900k. a reasonable profit margin might put the sales price at $1.1m or so. and yet we have people overpaying by hundreds of thousands of dollars for skinny houses on odd shaped lots. amazing!"
and then:
"An architect I know recently told me the going rate for a high-end new build was about $180 to $200 per square foot (square footage for pricing purposes measured by all above ground levels, with that price per square foot including the basement being finished for that price). He also said that because business is so slow he wouldn't be surprised if quotes were less than that. And this is for a high quality home with very nice finishes."
"And by the way, the county tax records show the square footage for that property as 3,600. Subtract a third for the basement, multiply by $200 and the result is $480,000."
So very low cost lot and about $500k to build tops, means that the buyers of that house paid someone else about $400k to $500k to build a house for them (plus the cost of the lot and house). That isn't rational. Which means the market still isn't rational.
http://finance.yahoo.com/career-work/article/106268/Earning-More-Commuting-Farther;_ylt=Agy.7aaM_wG57WML4KyHo127YWsA
This is a change of topic but thought this analysis of positive correlation between income and commute time would be interesting to y'all. I hope the link works...
http://tinyurl.com/5lrrp6
That should work better.
More signs from the other side of the river (MO Co & DC). Also, these guys report a day earlier so these are actual numbers
http://gcaarrocks.com/toolkit_ektid2030.aspx
Taking out the low end which is flooded with foreclosures, these are high end sales vs listings (700K & above).
DC PROPER 2007 (700K + Market)
Oct 67 sales/394 listings (5.9 MOI)
Nov 79 sales/338 listings (4.3 MOI)
DC PROPER 2008 (700K + Market)
Oct 89 sales/412 listings (4.7 MOI)
Nov 47 sales/411 listings (8.7 MOI)
Notice the complete drop off in sales, resulting in the huge spike in MOI this month! Also, in 07 sales were actually up MOM, not so this year.
If you think that is bad, take a look at this
MONTGOMERY CO 2007 (700K + Market)
Oct 105 sales/1042 list (9.9 MOI)
Nov 98 sales/894 list (9.1 MOI)
MONTGOMERY CO 2007 (700K + Market)
Oct 107 sales/981 list (9.2 MOI)
Nov 63 sales/911 list (14.5 MOI)
So in 07 sales went down slightly MOM and MOI, while still high, improved slightly. This year Nov sales fell off a cliff and the already high MOI really exploded!
What does this big drop in sales suggest to me? Right now, I dont think its job loss, or any tangible item like that. Instead I think this is pure and simple fear - fear of the stock market meltdown, fear of job loss - whatever.
As has been noted many many times, one month does not make a trend, so dont read too much into this. Also, if this is indeed fear, does it subside over time (assuming widespread layoffs do not occurr)? Is this just a one month blip or does it continue for months ahead? Again, this is somehting we need to watch closely in the months ahead...
Sales always drop off this time of year. If you notice the number of homes on the market also decreased. Thats also typical.
If your theory was true, you would see an increase in inventory.
There simply isnt a significant economic downturn in this area yet, and there may never be. The shopping malls are flooded with people and I see nice new cars with 30 day tags all over the place.
Well my company laid off 20% of their workforce on friday...I think we'll see some pain in this area in the next few months.
"Doug Said...
Sales always drop off this time of year. If you notice the number of homes on the market also decreased. Thats also typical."
Correct, but look at the rate of decline in sales - its abnormally large for this early in the winter.
"If your theory was true, you would see an increase in inventory."
Not necessarily - as you noted inventory declines in the winter. It is declining this winter, but the rate of decline "may" not be as quick as it was in the past. Note, I say "may" because I havent looked carefully into this yet, I will let you know if I do...
"There simply isnt a significant economic downturn in this area yet, and there may never be. "
I agree with you. As far as I can tell this area is still gaining jobs. Sure people are being laid off left and right, but the fact of the matter is, new jobs are being created, resulting in a net positive for the area.
That said, what I am suggesting is at work here is fear, simple, banal fear among buyers - the wealth effect, but in reverse. Very few buyers are cognizant of the unemployment rate. Very few buyers read the fed beige book results. It could be, once they realize there isnt a huge economic downturn here, the buyers return and keep buying - the next few months will tell us.
"The shopping malls are flooded with people and I see nice new cars with 30 day tags all over the place."
I see the same thing personally. However, the point is, I am looking at data, not merely your and my personal perceptions of what is going on. So despite my perception that everything is A-OK, the data could be hinting that there is a problem - thats all I am pointing out here.
Thanks for the MoCo over 700k data CRT. I'm still worrying about my friend trying to sell her million dollar home in Rockville, so this was exactly the data I wanted to know, even if the 1 month news is bad. And it is dramatic.
She's thinking of moving her price up. And I just can't talk to her about the whole subject, because the last thing she wants is advice from me, and you all know how much I love to talk.
I think it may also be "wait and see" rather than "blinding fear". But a couple more months will tell if this is a trend or a 1 month blip. With such thin trading, it doesn't take much to get it going one way or the other.
Doug,
"Sales always drop off this time of year. If you notice the number of homes on the market also decreased. Thats also typical."
While that argument may be used to explain worsening in November relative October, how does that explain worsening relative to same months in 2007 ?
Random observations at malls can't substitute for data. That prices in the area have been in slow decline even at peak employment levels, suggests more price drops are likely even with a small rise in unemployment levels.
Traffic is still reasonably high at malls, but I wonder how much of that is browsing or looking for extreme bargains.
I watched some cash registers while Sonia went shopping for gifts and I saw very little traffic there and most of the items looked simple or highly discounted.
Many of our friends have put a screeching halt to large purchases because they are busy building up bank accounts in case they need to survive six-plus months on unemployment.
Given that many of the (bubble) house prices *required* two incomes to even begin to afford, I understand where they are coming from.
Cara, no offense intended, but your friend must be insane if she thinks a price *increase* makes sense now.
I hope she sells quickly so that you two can talk again!
Re: the debate about anecdotes vs. systematic data, The WaPo reported recently that people are still going to Starbucks. Maybe they feel they can still afford small luxuries and are entitled to them because until prices fall further, they have no hope of saving enough to afford the house they wanted. I don't necessarily agree people who think this way (I have never bought coffee at Starbucks!), but if it were supported by more than anecdotes, maybe it could explain why people are still buying little things but maybe won't be buying expensive housing soon.
Ace,
Starbucks' earnings have been taking a pounding, and they've closed a number of stores. I'm not sure where WaPo is coming from.
Credit Suisse and Calculated Risk on foreclosures shifting from subprime to Alt-A to prime:
http://tinyurl.com/683jay
Cara,
I believe that house prices will come down quite a bit more. Even $350k for a house is high (depending upon the average family incomes in the neighborhood, of course) even though it seems affordable, because last year it was $500k. I may start looking next summer, but given the expected number of defaults over the three years, there's no hurry.
As an aside, I'm 40 and have never owned a house. I was overseas for quite some time and the opportunity just never presented itself. I would liked to have bought upon returning, but that is on hold for obvious reasons.
Tom in Arlington,
I'm beginning to believe that low housing costs makes us more competitive as a nation. High housing costs, well, house prices, make the owner feel rich, but slow the market and make us less flexible.
Of course, that would make Paulson & Co a lot less money, so the pols won't let it happen. They know who they work for.
"Ah the NY Times is pitching in in the attempt to stimulate the economy now that a democrat has been elected. (What me cynical?) Actually it's a fairly measured article as such reporting goes."
Check out the comments that were made in response to that article. Perhaps the general public is finally waking up to the fact that housing prices are just too high and that "stabilizing" them is neither realistic, nor desirable.
"I'm beginning to believe that low housing costs makes us more competitive as a nation. High housing costs, well, house prices, make the owner feel rich, but slow the market and make us less flexible."
That is absolutely true, even within this country.
Affordable housing allows workers to have a higher standard of living on the same salary. That is one major reason why there has been an effort on the part of many companies to relocate out of over-priced markets and into communities that allow their workers to enjoy a higher standard of living.
Leroy,
"Affordable housing allows workers to have a higher standard of living on the same salary. That is one major reason why there has been an effort on the part of many companies to relocate out of over-priced markets and into communities that allow their workers to enjoy a higher standard of living."
Agreed. I'll also add that the notion that home ownership somehow represents a "dream realized" or "success" is also unhelpful. I've scratched my head at people who come to DC for a 2-3 tour of duty and buy a home simply because they "can't rent". [Like a snob who refuses to take the bus or subway]. More to the point: renting makes workers more geographically mobile, which is a good thing. There's no shame in renting.
a big 'thank you' to those who commented on the williamsburg blvd rambler. we have young kids so big yard and good schools are our priority, as well as potential for additions.
lets hope there'll be more modest homes like it show up in the coming months.
Leroy,
Yeah the comments were freakin hilarious. If we were worried about our forum being a bunch of tightwad bears, we've got nothing on the commenters to the NY Times article. I was very pleased to see so many voices of people being calculated and rational about home purchases.
Terminator-X, In the article one of the funny lines was essentially saying, "in those places where there's just _nothing_ to rent." Made me laugh. I'm sure they must exist, but the only math under which a total lack of good rentals could be sustained is if the cost of buying a house were incredibly low compared to incomes. And even then, individuals would buy houses to rent them out.
Ralph,
Similarly, the real reason I hadn't bought before now was due to my itinerant career choice. Where I'm looking there are so many townhouses and condos for sale that the SF starter home prices in good neighborhoods can remain slightly propped up above normal affordability levels due to people settling for a lower rung on the "property ladder". (as much as I detest that entire concept). So I'd be surprised if someplace like Hollin Hills with some uniqueness factor and desirability falls below the $350k level at the bottom, but you never know, there were a lot of overly expensive remodeling projects (for the purpose of flipping) that could potentially cause enough foreclosures to bring it down. And, let me tell you, the SFH that aren't any better than townhomes? Are indeed priced the same or below, even now, lots of them near $200k.
Hey all!
Frankly's got the previously sold price with the seller subsidy info now! It's not in the spreadsheet, and obviously he doesn't have it for things sold a ridiculously long time ago, but he has it for a couple I checked this morning, go check it out! It's funny how, at least on the short sales I'm seeing, there was a previous seller subsidy. Go figure. (this is not a statistical statement, just an observation of a couple places)
"Folks: N. Arlington is still expensive and folks are still willing to pay a premium to live here."
Tom, you are confusing the issue with facts.
This crowd is mostly early career, mid-income renters who are hoping to "steal" a house.
When Doug points out that someone earning several hundred thousand dollars a year can easily afford a house, they reply that average salaries are much lower.
While that's true, it doesn't match the pricing and sales reality.
N. Arlington and other premium areas have held their value because there are more high income people who want to live there than there are places available.
The majority of current owners probably could not afford to buy their homes with a 20% down payment. Some earn too little. Some have retired and have no income. Over 10, 20, and 30 years, the valuation has soared.
As long as they can have $400/month for taxes and their $300/month mortgage, they are not selling.
High income, mid to late career types are buying the few available million dollar homes.
They do this because they know that valuations have held up well in areas like N. Arlington in spite of 3 years of falling prices elsewhere.
They'd rather live close to the Metro or a 10 minute drive to the office than endure a commute.
sorry premature, a bunch of other recent builds don't have such info yet. Sigh.
John F., generally the Arlington valuations do not include basement square footage (in the figure on the right of the page). So if the square footage is listed as 3000, that's (generally) above grade square footage. If there's 1500 finished square feet in the basement, that's 4500 total.
I hope your architect friend is right about building costs. They ought to be going down considerably given lowered demand and in some cases lowered materials costs. But as I reported in a previous thread an architect I talked to gave me similar #s to those a builder had given me in 2003 (I think) - about $250 per square foot for a 1000 square foot 3-level, bedroom/kitchen/garage addition that included a basement level unfinished garage--in other words, those 300+ garage square feet were also multiplied by the $250 per square foot even though the cost would obviously be lower. This also did not include kitchen cabinets, granite, appliances, etc. So he estimated *at least* $300K for the whole project.
PS a second architect estimated it would be closer to $400K, and said "with your budget limits, we really should instead gut the entire existing space and reconfigure it. It would be more functional, bla, bla." In other words, I would end up with a house with less than 1500 square feet (just as I started with) that would cost approximately 30% over what any other comparably sized, renovated house in the neighborhood would sell for. And I would still be stuck with the unchangeable disadvantages of the lot, the fact that it still wouldn't be the modern house I might be willing to spend myself into bankruptcy to get, etc. And 2-3 years of H - - - of people walking through the house doing renovations, arguing about work not being done correctly, etc.
Needless to say, I gave up on the idea of adding on even though I love the neighborhood and location and have joined the ranks of the lookers waiting for the right time to sell and buy.
"Terminator X Said...
I'll also add that the notion that home ownership somehow represents a "dream realized" or "success" is also unhelpful."
I agree. In a way, weve all been suckered into the NAR line that its the #1 way to build wealth - thats probably true, but only because so many people are pretty lazy and dont really do much else to fund their retirement.
It also seems like a uniquely American fascination. From what I can tell, ownership rates are much lower in the large European cities, yet their citizenry seem just as, if not more happy than the average American.
When I retire, I may live overseas, and if I do, I will happily be a renter for the rest of my life.
PS in the estimates reported above, I did not include the architect's fee, which might be $60K on a project like this (depends on whether you pay a flat fee vs. a % for him/her to manage the whole project as well as to design it, how many changes you later make, etc.).
Terminator-X,
Re: Starbucks, it could be that local stores are doing better than those located in other parts of the country (some of which were located too close to one another). Or it could simply be another example of the "flat earth" problem typical of the anecdote vs. systematic data controversy - "I looked out my back yard and it was flat: therefore you're wrong when you say the earth is round."
@J@ said:
"N. Arlington and other premium areas have held their value because there are more high income people who want to live there than there are places available.
High income, mid to late career types are buying the few available million dollar homes.
They do this because they know that valuations have held up well in areas like N. Arlington in spite of 3 years of falling prices elsewhere.
They'd rather live close to the Metro or a 10 minute drive to the office than endure a commute."
@J@, on this and your other comments above: BINGO!!!
@J@ said: "This crowd is mostly early career, mid-income renters who are hoping to "steal" a house."
I hesitate to even respond to such obvious trolling, but @J@ do you care to demonstrate your proof as to any of those four claims?
"N. Arlington and other premium areas have held their value because there are more high income people who want to live there than there are places available."
Again, proof? Did you survey the incomes of those who want to live there or is this just your conjecture?
"Tom, you are confusing the issue with facts."
Funny that you would make a statement like this - an obvious dig at the "poor renters" on this blog - when your own post seems to be very lacking in facts.
"High income, mid to late career types are buying the few available million dollar homes. They do this because they know that valuations have held up well in areas like N. Arlington in spite of 3 years of falling prices elsewhere."
Again, how do you know this supposed reason for their purchases is a fact? Did you complete an extensive survey? And it's funny that what you are saying, in essence, is that rich people are buying the expensive properties because they are still expensive. What's the logic behind that? Wouldn't these super smart rich folks want deals instead?
Your post is such obvious trolling, but I couldn't help but to respond and point out the humor in it.
ace, a few thoughts:
-additions and new builds may have incomparable pricing. adding on to something often requires more work than starting from scratch.
-you mention a 1,000 square foot house. in construction, the higher the square feet the higher the total cost, but the lower the square feet the higher the cost per square foot.
-were you talking with design/build firms or were these competitive bids on a plan from an independent architect? i think you'll quite often pay a much higher cost when a design/build firm knows the project isn't going out for competitive bid.
-there is always the risk of "baseball player" pricing, wherein a contractor quotes a higher price based on the quality of the neighborhood/area you live in because they think you've got more loot.
JF,
House is about 1500 square feet, not 1000. Addition would have been 1000. Neither architect said it would have been unusually difficult. Neither was a design/build firm. They would design the addition and then estimates would be solicited from builders. The 2003 estimate was from a design/builder, but the architects thought that $250-300 was realistic for the quality of work/materials we were talking about (with the additional costs noted in my prior post).
Both (especially the first) wanted the business as this was recent enough to have been in the downturn for them. So it wouldn't have been smart to overestimate the price greatly.
Sad but true.
But as I said, I hope that there have been some recent (downward) changes.
"Your post is such obvious trolling, but I couldn't help but to respond and point out the humor in it."
Indeed... this blog has largely been without any serious trolls since lance and KH ran off.
John Fontain, some comments.
"early career, mid-income renters" does not equal "poor renters".
FYI, I consider mid-income $80,000/year. Is that what you consider a "poor renter"?
"N. Arlington and other premium areas have held their value because there are more high income people who want to live there than there are places available."
What proof are you looking for?
1. N. Arlington has held value.
2. It holds value because people are willing to pay a high price.
3. People who can pay a high price have a high income.
4. They pay a high price because the lower priced homes do not please them.
5. People who choose to buy do so because they want to live there.
Consider the belief in this blog that "sellers refuse to list their homes because they know that they can't get a high price."
The equally unsubstantiated statement, such as "prices in N. Arlington will fall next year" gets a free pass.
I am not making a prediction that N. Arlington prices will or will not fall. However, if liquidity is restored and interest rates fall, N. Arlington prices could increase.
Right on, @J@.
@j@, nice work. as expected, you failed to answer any of my questions and instead tried, unsuccessfully, to dodge every one of them. if you care to take another stab at it and give real answers to the questions i asked, you may be able to convince people that you aren't an out and out troll. otherwise, you won't.
@J@,
overall good analysis. just a couple of comments on
"3. People who can pay a high price have a high income."
if we're talking about high prices in Arlington, high income (80K*2?) alone won't be enough. equity plays a big role.
and,
"5. People who choose to buy do so because they want to live there."
true, but don't forget the investors.
JF,
Sorry, I'm a little slow to respond to your cost estimate post.
I'll admit that I'm not able to come up with a good estimate of the cost of the 3111 7th Street house, but I have good reason to believe your estimate is a bit low.
I'm working with the same architect that designed that house on designing my own (tear down). My goal is to keep it at about 2500 sq.ft. and under $500K to build (probably competitive bid). I was told by the architect that I could probably get it designed for around $200K per square foot to build plus appliances, plumbing fixtues and kitchen cabinets. That doesn't include design cost or permits. The 3111 house seems to use materials at least as good as what I plan on using, and is definitely larger.
A few extras can add up fast when it comes to cost per square foot. The thicker walls, accommodating better insulation adds to the cost per square feet. I haven't priced elevators, but I'm betting a good quality four story elevator adds a lot to the cost. Whether you like it or hate it, the reclaimed pine flooring doesn't come cheap either. The detached garage with living space above it adds to building cost, but I don't think it counts towards square feet. Even when you confine yourself to high-end materials and fixtures, the costs for different choices can easily vary by a factor of two or more. These choices contribute a lot to the cost per square foot.
Even for high-end houses, the cost per square foot can vary greatly. The architect you mention designs high-end houses at $180 to $200 a square foot. Peabody Associates in Alexandria (not my architect) estimates costs of $300 square foot for a house built in the mode of Sarah Susanka's The Not So Big House . A $600,000 house by your architect could be 50% bigger than one designed by Peabody. Whether it's better is a matter of preference. Either one is a $600,000 house. Other than the lot, I liked the 3111 7th street house much more than the Highland Street house. From the comments here, I'd guess that I'm in the minority. The buyer must have been part of the same minority.
Take the high per square foot cost, add architect fees ($60K or so), civil engineer fees, permit fees, landscaping costs and the cost of the lot. Remember that material costs had not really fallen that much yet last winter when construction began. I'd guess that the cost to build was well over $800,000. Note that this is a guess rather than an estimate.
What I do know is that I had already begun the design on my house, which I'd like to keep under $500K but probably won't be able to, when I went to the open houses at 7th Street to get design ideas. It was clear to me then that this was much more house than I'd be building.
"What proof are you looking for?
1. N. Arlington has held value."
What data are you looking at exactly?
Because the MRIS tells a completely different story...
Even if that weren't the case, your entire argument is based on bad reasoning. Take that same argument, and imagine yourself plugging in any area in the region in the area... in 2005.
=======================
1. [ ] has gone up 100% over the last 5 years!
2. It has shot up because people are willing to pay a high price.
3. People who can pay a high price have a high income.
4. They pay a high price because the lower priced homes do not please them.
5. People who choose to buy do so because they want to live there.
=======================
Voila! There is no bubble, it is a new paradigm!
John Fontain,
I'm not interested in debating the inverse of every belief held in this blog.
N. Arlington and a few other close in communities have performed better than other areas.
The reasons are obvious to Tom, Doug, and the few who think things through.
Others are here to reinforce their beliefs and make unsubstantiated but blog-aligned statements. I cite:
1) that N. Arlington sellers are holding property off the market en mass. While this may be, why didn't sellers in PWC engage the same tactic? How did dozens or hundreds of N. Arlington sellers manage to conspire?
2) N. Arlington is about to plunge in value as falling prices work their way in. Again, that may happen but given the government policy to increase liquidity and lower interest rates, that's an extraordinary claim. In addition, some Bloggers here have taken the plunge and bought. The commentary about the merits of specific homes suggests a counter force at work.
MM,
$80K was my estimate for "mid income".
I agree with you, the buyer of a hypothetical N. Arlington $800K - $1.2 M home has more income and substantial equity.
I do not think there's swarm of such buyers but it doesn't take that many when there are so few places for sale.
@J@
I think contrarion's link to a picture of the sinking Titanic says it best. Yes, Arlington is the upper decks, and hasn't fallen much, but that doesn't mean the economic fallout from the area and nationwide problems won't pull it down with the rest of the ship. At best Arlington will jump into the life boats and remain floating at the same prices for a long time stranded at sea and slowly freezing to death.
(Okay I may, may have taken the imagery too far)
@j@ said: "I'm not interested in debating the inverse of every belief held in this blog."
No, you're just not interested in backing up your claims with proof. I've now read two responses from you and neither one attempted to respond to requests for proof to your claims. That says something.
keithk said: "I'd guess that the cost to build was well over $800,000."
I think many who live in Arlington and have seen the high prices paid for new in-fill homes have lost perspective on the true underlying cost of the property that has been built (and the builders love this).
For example, the largest Mickey Simpson model that is now being offered at $2.1 million on N. Hartford St. sold for only $1.2 million in 2003 (608 N. Highland). At the time, people thought that $1.2 million price tag was outrageously high for the neighborhood.
With each successive sale, Clark Simpson, the Normile's, Showman, and others have raised the sales price with little or no resistance. But did their actual cost to build rise accordingly? I don't think so. If anything, it's a lot easier to find subs these days than it was a few years ago. They have much less work and are pricing their quotes very aggressively just to cover their overhead. The "input costs" should be on the decline.
John Fontain, you are not the blog-meister, nor do you define what anyone owes you. Please, ignore me.
My statements as to why I think N. Arlington has held value, do not require "proof". They stand on their own merit.
Again,
"High income, mid to late career types are buying the few available million dollar homes. They do this because they know that valuations have held up well in areas like N. Arlington in spite of 3 years of falling prices elsewhere."
does not equal
"And it's funny that what you are saying, in essence, is that rich people are buying the expensive properties because they are still expensive."
You are trolling or have a reading comprehension problem. That is not what I wrote.
1) High income (or as MM points out, high asset) buyers have the where-with-all to purchase million dollar N. Arlington property. If they did not have the where-with-all, they could not buy.
2) They choose to buy because they perceive value in those properties. If they did not perceive value, they would not buy.
3) Contributing to that perception is that N. Arlington properties have held value while other areas have lost value, relatively speaking. N. Arlington has held value, that is a major conundrum of this blog, "Why has N. Arlington stubbornly held value."
Cara, that might be a nice picture but thus far, it's not true.
I'm not saying that N. Arlington will soar in value. They might, then again, they might not.
N. Arlington prices could plunge. I don't think they will but it is possible.
What is true is that valuations have held up in N. Arlington and very likely for the reasons that Tom and Doug have stated.
There might be other reasons that they have not thought of but I suspect that they are close.
The counter argument, "just wait, N. Arlington WILL fall" is predictive. Such statements do require careful review.
It would be fair to request proof or clarification of such future-looking statements.
The cognitive dissonance of this blog precludes such requests so discussion is limited to demands for proof of statements, "Rich people can buy expensive property."
@J@
The Titanic could be in shallow water, though such that Arl/Alex only barely go underwater when it sinks. (well and it needs to elastically stretch so that the bottom of it sinks deeper while keeping the top closer to the surface, but anyway)
In this bucket we already brought up the relevant numbers for what percentage of Arl has the means (at least as measured by income) to buy the 1-2 million dollar homes. And it is indeed sizable, possibly 12% of the residents(depending on assets). Thus the number of >200k earners is at least 10? times the number of million dollar homes on the market at any given time. (One would have to look up the pop stats to get the real figure). But this has been true for a long time. The question that needs answering is are there enough of them that are willing buyers to continue to support these prices, since only some small percentage of them are moving at any given time. This can best be judged by the lists and sales in given price brackets.
As has been his habit, CRT has broken down the MRIS numbers into price categories, and you can find these numbers in the next bits bucket under Harriets year of sales post. November, while not a trend, is very very interesting. Sales have fallen by about half, with lists mostly constant, in both Arl and Alex (see CRT's later comment on 14 more sales coming in on Dec 1st in Alex that must have been from Nov (because who wants to pay a whole month of interest up front at the holidays)). We will have to watch a few more months and see if this was a (widespread but) random blip, or if this has an impact.
In that bucket as well CRT has the numbers for the low end. And those suggest we may be reaching bottom soon on the low end. Why? Because PWC price declines have slowed, and because FFX Cnty low-end sales and inventory are both way up (sales X 4, inventory X 2). For FFX county it appears as if sellers have actually moved their houses to the next couple brackets lower and are now finding sellers, which meshes well with my personal observation that the ones I'm looking at are now within 10% of rental parity. Thus, based on this month's numbers, I now think the bottom is coming soon. If so, and if the economic fallout (that everyone else has pointed out about the plight of the poor rich lawyers) does not materialize or worsen, then Arl and Alex could potentially stabilize at or near where they are now.
However, those November numbers for the high end are frightening. And suggest that at least in November and starting this whole autumn, the confidence level of the high end buyers is being shaken or that they are now waiting in the expectation of bargains themselves. And don't underestimate the effect of the conforming limits moving back down. That's a swath of houses that suddenly will have a much harder time being financed. Even if they kept it elevated for longer, a rational buyer (which for the moment we'll assume people who can afford million dollar homes are) will know that their future buyer will have much higher interest rates, and thus not be able to pay what they did. A burst of worry appeared in the numbers in November. Will it fade?
NEW HOMES, ADDITIONS, RENOVATIONS, COMPLETE HOME CONSTRUCTION
CONTRACTOR SPECIALIZING IN ALL PHASES OF PROJECTS, BUILT TO CODE.
Call Mario today Cell: (301) 300-1917 for a FREE no-obligation
estimate. We are licensed and fully insured! ALL work is fully
guaranteed with a contract!! Reasonable and fair rates. We won't burn
your pockets. Quality, professional work!! I have solid references
from satisfied customers in ALL Counties.
1st & 2nd story additions
When lack of space becomes a big problem there are two options: buy a
new home or add an addition. An addition can be the extra space you
need for a variety of things: family room, home office, extra bedroom,
master bedroom & bathroom, kitchen, …whatever you can imagine.
Although the idea of a major remodeling project, such as building an
addition, may feel overwhelming, in most cases it is far more cost
effective than moving and maintains stability in the family life.
That being said, building an addition is a large undertaking and
involves a lot of planning. Even if it is a small addition, it will
still involve all the same processes and skill as any major
construction project.If you love where your home is situated but are
looking for more space, going up may be exactly the solution you've
been searching for. Upper floor additions are a great option for
homeowners who have a great house in a neighborhood they love — but
don't want to lose space in the backyard for a main level extension.
Adding a new floor adds significant value to your home and is usually
a lot more economical than moving to a new home. It's also a fantastic
way put yourself in the design chair as you map out how best to use
the extra space: extra bedrooms or a master suite, a home office or
media centre. But adding a new floor will also be very disruptive to
the household, so careful planning is in order to ensure everything
goes as smoothly as possible.
WE DO THE FOLLOWING TYPES OF WORK:
**KITCHEN DESIGN AND REMODELING
**BATHROOM DESIGN AND REMODELING
**BASEMENT DESIGN AND REMODELING
**CONVERTING SINGLE FAMILY TO MULTI-FAMILY
**COMPLETE RENOVATION
**TILE WORK/MARBLE/GRANITE
**LEGALIZING BASEMENT
**ELECTRICAL & WIRING
**CUSTOM WOOD-WORK
**ROOM ADDITIONS
**OFFICE REMODELING
**EXTENSION
**PLUMBING
**ROOFING
**DORMER
**ATTIC
**MOLDINGS
**SIDING
**PAINTING
**SKIM COATING
**DRYWALL
**CLOSETS
**WINDOWS
**DOORS
**DEMOLITION
**NEW WOOD FLOOR INSTALLATION
**WOOD FLOOR REFINISHING
**LIGHTING DESIGN AND INSTALLATIONS
**AND MUCH MORE...
CLEAN AND NEAT, HIGHLY PROFFESSIONAL, ALWAYS ON TIME AND IN BUDGET!
You may reach me 24 hours a day, 7 days per week. Most work finished
within 2-5 days with my highly skilled crew. We clean up after every
job at no additional cost to you!!
Call for your free initial consultation, rates and to make an appointment
Builders & Finishers
"ask us for our references"
http://cbf-construction.blogspot.com/
2ndflooradditions@gmail.com
Call Mario @ 301-300-1917 for more details
Post a Comment