Communications Problems

1495 EVANS FARM DR
MCLEAN VA 22101
List Price: $1,849,000
Original List Price: $2,499,000
Days on Market: 590
Prior Sale: $1,364,730 08/30/2002

ZESTIMATE®: $1,804,500
Value Range: $1,587,960 - $2,039,085
30-day change: -$33,000

"In the year and a half that Ann Page has struggled to sell her five-bedroom McLean home, she has received an array of lackluster offers that fell below her original $2.499 million price tag. None was as exasperating as when the businessman from Dubai offered $1 million less than the asking price.
. . .
'I just thought it was ridiculous. If you want to pay $1 million, then go to the neighborhood next door,' said Page, a commercial real estate agent. 'He doesn't seem to understand that I can't just give it away. This place has 10-foot ceilings, a three-car garage and an elevator.'

[but does it come with a mercedes, a sauna, and room for a pony?]
. . .
She has become frustrated and has decided to hold an auction June 5, with a minimum price of $1.5 million. She has hired Sam Solovey, an auctioneer who appeared in the first season of "The Apprentice." She hopes to get multiple offers.

[What do you all think? Will she get multiple offers? Will it sell?]

'I would think that some people would be embarrassed by what they offer, but they're not,' Page said. 'They think they should get it for nothing.'"

The attitude reminds me of this Britcom skit:



Mr Fawlty: Your sister says you've had an offer of £87,000 for your house in Brighton.

Mrs Richards: 87? Give it to me - don't be a fool Stephanie - £92,750 is what I said and I'm not taking a penny less - you tell him that ! (slaming down the phone) Why don't people listen!

Northern Virginia Weekend Bits Bucket 5/31-6/1, 2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

Survey Results

From our reader poll last week:

When will DC metro house prices rebound?

2008 2%
2009 18%
2010 33%
2011 20%
2012 10%
2013 14%

Votes: 204

Finding the Best Rhyme

Blog reader Zerodown provided a link to this Economist article, which shows a graph of changes in US house prices back to 1920. 2008's 14.1% drop in the first quarter is far below any other drop back to 1920. It's hard to make comparisons with history if one only goes back that far, so perhaps one could try the Panic of 1837:

Suggesting that banks were carelessly lending and creating a credit boom would imply a large drop in reserve rates. During the early 1830s the average reserve rates of banks were not decreasing, but remained relatively stable. During this time, the money supply was increasing (approx. 200%) despite the stable reserve rates of banks. This increase in the supply of money did not come from within the United States, but resulted from a positive specie inflow from foreign investors. British investors found it increasingly attractive to lend to the state governments in the United States in the 1830s.

THE PANIC OF 1837 BY: EDWARD M. SHEPARD from Shepard, Life of Martin Van Buren (Boston: Houghton, Mifflin Company. 1888), copyright expired):

The American people with one consent gave themselves to an amazing extravagance of land speculation. The Eden which Martin Chuzzlewit saw in later material decay was to be found in the new country on almost every stream to the east of the Mississippi, and on many streams west of it, where flatboats could be floated. Frauds there doubtless were; but they were incidental to the honest delusion of intelligent men inspired by the most extraordinary growth the world had seen. The often quoted illustration of Mobile, the valuation of whose real estate rose from $1,294,810 in 1831, to $27,482,961, in 1837, to sink again in 1846 to $8,638,250, not unfairly tells the story. In Pensacola, lots which to-day are worth $50 each, were sold for as much as lots on Fifth Avenue, in New York, which to-day are worth $100,000 apiece. Real estate in the latter city was assessed in 1836 at more than it was in the greatly larger and richer city of fifteen years later.

Northern Virginia Bits Bucket 5/30/2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

Northern Virginia Bits Bucket 5/29/2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

Note: I'll schedule these Bits Buckets daily now that Blogger has that option.

Going Up?

Divot said...

Anyone else notice how much mortgage rates have been sky rocketing lately? 30 year fixed rates went up 18 basis points last week because of lenders fear over increased gas and food prices. I was personally pre-approved 4 weeks ago at 5.58%, today I put a contract on a house at 6.13%. I would like to hear what you guys think but I cant imagine this is going to help out with the recovery of the housing market if mortgage rates continue to trend upward like this. What do you guys think?

GDP news today has some still asking, "Dude, where's my recession?"

"The new GDP reading, released Thursday by the Commerce Department, was an improvement from the government's initial first-quarter estimate as well as the economy's performance in the final quarter of last year. Both periods were pegged at a 0.6 percent growth rate.

However, economists still consider the 0.9 percent growth rate subpar. More normal growth would be along the lines of a 2.5 percent to 3 percent pace, they said. GDP measures the value of all goods and services produced within the United States and is considered the best barometer of the country's economic health.

'The economy is scraping along close to the bottom but it is still afloat,' said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group".

Northern Virginia Bits Bucket 5/28/2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

Foreclosures and "Signs of Life"

The Washington Post writes about the snakes, rats, and mosquitoes moving on up to a new local habitat in the comfy long grass and pooled water of foreclosed yards.

And from Bloomberg today, some musings about the foreclosure market which reminds me of what we've been seeing in Prince William County:

"Karl Case, co-founder of a home-price index that bears his name, said more auctions of foreclosed properties will hasten the reduction of inventories from record levels and may lead to a faster housing recovery.

'I think we're going to see some signs of life in the next few months,' Case, an economics professor at Wellesley College in Wellesley, Massachusetts, said in an interview with Bloomberg Radio. 'The market is beginning to clear somewhat. There is some good news in this.'

Home prices in 20 U.S. metropolitan areas fell in March from a year earlier by 14.4 percent, the most on record, according to the S&P/Case-Shiller [pdf] home-price index released today. The year-on-year gauge has fallen every month since January 2007, as the U.S. housing market undergoes its worst slump in a quarter century".

Northern Virginia Weekend Bits Bucket 5/24-26, 2008

Please post your local house search updates, MLS finds, off-topic ideas, and links here.

Entitlements, Anyone?

I first published this on 5/21, but wanted to bump it to the top because of new updates:

Anybody catch this in the Capitol Weekly?

While being elevated to Congress in a 2007 special election, Richardson apparently stopped making payments on her new Sacramento home, and eventually walked away from it, leaving nearly $600,000 in unpaid loans and fees.

Update: Response

CONGRESSWOMAN LAURA RICHARDSON

May 21, 2008

The story published in the Capitol Weekly regarding residential property that I own in Sacramento requires clarification.

Within a 12-month period last year (2007-2008), I was a member of Long Beach City Council, the District Director for California Lt. Gov. Cruz Bustamante, a member of the California State Legislature, and, now a member of Congress. While the transitioning has impacted me personally, the residential property in Sacramento California is not in foreclosure and has NOT been seized by the bank.

I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement -- with no special provisions. I fully intend to fulfill all financial obligations of this property.

On two housing bills that were cited by the Capitol Weekly, the allegation is that I recused myself from these votes. I did not. I was absent from Washington, D.C., and my duties in the House of Representatives due to the untimely death of my father and his subsequent funeral in California."

Oops! Update from the LA Times: "She now says she was unaware the house was sold at auction until this week, and believes the sale was improper".

Another Update from Tanta at Calculated Risk. There's a LOT more to the story, if you can stomach it:

"Gene Maddaus of the Daily Breeze kindly forwarded today's additions to the saga. There are not two, but three homes owned by Richardson in foreclosure. And yes, she appears to have cashed out her primary residence back in 2006 to fund her campaign for State Assembly. So it looks like a pattern".

Quoting Richardson from the Daily Breeze:

"Richardson said she would advise anyone in her circumstance "to seek assistance immediately" and to maintain contact with their lenders.

She said she ultimately hopes to testify about her situation in front of the Senate, and will write to the president to urge him to sign a package of foreclosure legislation.

"We need to put a better process in place, so a person's home is not being sold up underneath them," she said. "We have to improve the way we respond to this crisis."

More from the Daily Breeze:

“One of Richardson’s first votes upon arriving in Congress last fall was on the Mortgage Forgiveness Debt Relief Act of 2007. The bill helped homeowners by preventing the federal government from charging income tax on debt forgiven in a foreclosure, such as the $200,000 forgiven in Richardson’s foreclosure.”

“Joining 385 of her colleagues, Richardson voted aye.”

Quoting Tanta:

"But what are we going to get? We're going to get Richardson all fired up in Congress about tinkering with foreclosure notice timing, which is last I knew a question of state, not federal, law, and which has as far as I can see squat to do with why this loan failed".
. . .
"I feel obligated to tell Richardson that she sounds like a real estate speculator who bought a home she obviously couldn't afford, defaulted on it, and now wants WaMu to basically subsidize her Congressional campaign by lowering her mortgage payment or forgiving debt. And that's . . . disgusting."

Arlington Co. and Alexandria City -- Price Reductions

Here is a partial list of the past week's price reductions on properties in Arlington County and Alexandria City.

Price Reductions 5/17 - 5/24/2008 (click for entire list):

ARLINGTON

Listing: AR6700602 for $520,000 Update Type:Price
2 Bedrms 1 Full Bath 0 Half Baths Prior Price:$539,900
1021 GARFIELD ST N #732
ARLINGTON, VA

Listing: AR6629465 for $689,500 Update Type:Price
3 Bedrms 3 Full Baths 0 Half Baths Prior Price:$699,500
1134 TAYLOR ST N
ARLINGTON, VA

Listing: AR6671557 for $315,000 Update Type:Price
1 Bedrms 1 Full Bath 0 Half Baths Prior Price:$318,250
4500 FOUR MILE RUN DR #1010
ARLINGTON, VA

Listing: AR6712014 for $319,900 Update Type:Price
2 Bedrms 2 Full Baths 0 Half Baths Prior Price:$329,000
5300 COLUMBIA PIKE #511
ARLINGTON, VA

Listing: AR6748360 for $699,965 Update Type:Price
3 Bedrms 2 Full Baths 0 Half Baths Prior Price:$709,965
1021 GARFIELD ST N #905
ARLINGTON, VA
__________________________________________

Alexandria City

Listing: AX6739235 for $724,900 Update Type:Price
3 Bedrms 2 Full Baths 1 Half Bath Prior Price:$739,900
1600 CRESTWOOD DR
ALEXANDRIA CITY, VA

Listing: AX6722477 for $299,900 Update Type:Price
3 Bedrms 1 Full Bath 0 Half Baths Prior Price:$350,000
25 EARLY ST
ALEXANDRIA CITY, VA

Listing: AX6502880 for $319,900 Update Type:Price
1 Bedrms 1 Full Bath 0 Half Baths Prior Price:$345,000
1600 PRINCE ST #410
ALEXANDRIA CITY, VA

Listing: AX6730761 for $110,000 Update Type:Price
2 Bedrms 1 Full Bath 0 Half Baths Prior Price:$120,000
519 ARMISTEAD ST N #102
ALEXANDRIA CITY, VA

Listing: AX6394090 for $1,098,000 Update Type:Price
3 Bedrms 3 Full Baths 0 Half Baths Prior Price:$1,199,000
423 COLUMBUS ST
ALEXANDRIA CITY, VA

Backwards Substitution Effect?

Bay400 is looking to buy something in Warrenton. Asking prices in Fauquier seem to defy the "drive 'til you qualify" rule. Here's just one example from a new listing today:



5701 MARIGOLD LN
Warrenton, 20187
$399,900
Beds: 4 Baths: 3
Lot Size: 1 acre
Year Built: 1975
Listing Date: 05/22/08
A dated (if you ask me) style -- a split foyer.

Here's another example. Three condos, and the worst value, from appearances, seems to be in Warrenton:

641 WATERLOO RD #322
Warrenton, 20186
List Price: $149,900
Beds: 1 Baths: 1
Sq. Ft.: 699
Year Built: 1973
Listing Date: 04/11/08

vs.

22641 BLUE ELDER TER #104
Ashburn, 20148
List Price: $159,999
Beds: 1 Baths: 1
Sq. Ft.: 900
Year Built: 2005
Listing Date: 05/16/08
(Description: 9 ft ceilings, open floor plan.)

vs.

223111C CASTLE ROCK SQ #31/11C
Reston, 20191
List Price: $124,900
Beds: 3 Baths: 2
Sq. Ft.: 1,029
Year Built: 1974
Listing Date: 05/19/08

I want to tie in these examples of what's happening in Fauquier with an article in yesterday's Post that KH pointed out yesterday:

These measures are another symptom of the fallout from the subprime mortgage crisis. In many cases, sellers are struggling to compete with the record supply of foreclosed homes listed at rock-bottom prices. In Prince William County, for instance, the number of single-family houses listed for sale for less than $200,000 shot up 15,000 percent last month compared with a year earlier -- from 5 to 768. There was a 66 percent increase in listings under $500,000.

That's what the Hendricks family was up against when they tried to give away their Mustang. At the time, at least 30 homes were for sale within a mile of their house, they said. One similar to theirs was listed for $199,000. They were asking $375,000.

"It was probably an extreme fixer-upper, and our house is not," Mark Hendricks said. "But we had to do something. So we suggested the car idea to our agent. Why not try?"

The car failed to stir buyer interest, and they gave up on the idea after three weeks. Instead, they slashed their price a second time to $339,000.

So far, no offers, no foot traffic.

(Mr. Hendricks assumes the 199K house is "an extreme fixer upper" but offers no proof of what the repairs will actually cost).

There seems to be two markets -- a strong foreclosure market (multiple bids) and a second market run by these "desperate sellers". As a buyer, a natural instinct is to get the best house for the least amount of money. So perhaps we will see a return to "normal" when these two markets are less diverse in price, and when sellers, after a few years, develop amnesia about what their houses were formerly worth and go with the market as it is.

But back to the main point of this post. Do Ashburn and Fairfax still offer more value location-wise than Warrenton or has something changed? Five years ago (2003) I remember seeing small older $300K Falls Church townhouses vs. small new $300K Ashburn townhouses vs. new $300K single-family houses in Warrenton.

Loudoun County -- On the Market

514 CRESTWOOD ST SW
LEESBURG, VA 20175
List Price: $144,900
Prior Sale: $301,000 02/28/2006
Listing Date: 05/19/08
-51.9%

18 HANCOCK PL NE #235
LEESBURG, VA 20176
List Price: $119,900
Prior Sale: $242,000 12/28/2005
Listing Date: 05/14/08
-50.5%

224 AUBURN DR #73
STERLING, VA VA VA 20164
List Price: $137,900
Prior Sale: $275,000 11/02/2005
Listing Date: 05/16/08
-49.9%

1115 WILLIAMSBURG CT
STERLING, VA VA 20164
List Price: $249,000
Prior Sale: $490,000 08/12/2005
Listing Date: 05/20/08
-49.2%

146 MEADOWS LN NE
LEESBURG, VA 20176
List Price: $139,900
Prior Sale: $275,000 05/03/2005
Listing Date: 05/16/08
-49.1%

1023B MARGATE CT #1023B
STERLING, VA VA 20164
List Price: $135,000
Prior Sale: $255,000 03/30/2005
Listing Date: 05/14/08
-47.1%

See Loudoun County 5/23/2008 for more comparisons from this week's listings.

(Links by FranklyMLS.com)

Northern Virginia Bits Bucket 5/21-22/2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

Arlington County -- On the Market

836 GREENBRIER ST #111G
ARLINGTON, VA 22204
List Price: $191,900
Prior Sale: $345,000 2/16/2007
Listing Date: 05/14/08
-44.4%

5400 8TH ST S
ARLINGTON, VA 22204
List Price: $214,900
Prior Sale: $375,000 7/28/2006
Listing Date: 05/10/08
-42.7%

1311 POLLARD ST
ARLINGTON, VA 22204
List Price: $349,900
Prior Sale: $515,000 1/12/2006
Listing Date: 05/14/08
-32.1%

1903 EDISON ST
ARLINGTON, VA 22207
List Price: $394,900
Prior Sale: $550,000 4/18/2006
Listing Date: 05/14/08
-28.2%

4600 FOUR MILE RUN DR S #1118
ARLINGTON, VA 22204
List Price: $234,900
Prior Sale: $314,000 6/3/2005
Listing Date: 05/09/08
-25.2%

3354 2ND ST S #3354
ARLINGTON, VA 22204
List Price: $393,900
Prior Sale: $515,000 10/25/2007
Listing Date: 05/14/08
-23.5%

See Arlington County 5/21/2008 for more comparisons from this week's listings.

(Links by FranklyMLS.com)

Taxpayers' Silver to Buy Foreclosures

Fairfax County is now developing a program called the "Silver Lining" program to help 100 first-time home buyers to purchase foreclosed houses (via below-market prices and low-interest mortgages).

[C]ounty housing officials have proposed spending as much as $6.4 million over two years to help such middle-income professionals as teachers, police officers and firefighters afford the region's housing. With county loans, qualified buyers would be able to purchase the properties directly from participating banks at below-market prices and be eligible for low-interest mortgages.

Here's Chairman of the County Board of Supervisors, Gerald E. Connolly (D)'s rationale:

"We're stabilizing the plummeting price of homes and also helping stabilize neighborhoods."

So, let's see here. Home prices are plummeting, so part of his goal is to help prop them up and keep them unaffordable for teachers, police officers, and firefighters. BUT, those folks will get financial incentives to pick from houses the county government chooses for them, after they're fixed up with formica countertops, cheap carpet, and neutral paint (I wonder which county government employee get to pick out the colors?)

Even better, Connolly is hoping the county's program becomes a national model.

Oversupply in Region's Office Space

From the Washington Post on our region's office vacancies:

"[T]he Washington area had its slowest leasing period since the second quarter of 1995, according to data from CoStar, a real estate research firm in Bethesda.
. . .
'What I am wondering is, with supply coming online so much faster than demand, who is really going to step up and take that space?" Hartley said. 'There are still a lot of people talking about continued development, and that is a little worrisome. We really need to see a lot more activity from all sectors. We need to see more government leasing, we need to see private-sector leasing'.

The Washington area's vacancy rate at the end of the first quarter was 11 percent, up from 9.8 percent at end of the first quarter in 2007".

Vacancy Rates, Q1 2008 vs. Q1 2007:

DC: 9.1% vs. 8.5%
Reston and Herndon: 15.4% vs. 11.2%
Route 28 South: 17.9% vs. 11.9%
Prince George's County: 17.1% vs. 14.8%
Montgomery County: 9.8% vs. 8.9%

Northern Virginia Bits Bucket 5/20/2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

Reader Poll

Blog reader Steve has started a poll of other readers here, and here are the contributions so far. Feel free to use the comment section to add your own predictions and I'll keep updating the list.

Question: When will DC Metropolitan Area house prices rebound?

We'll define a rebound as 2 quarters of positive growth in the median DC Metropolitan Area single-family house price.

Prices will be taken from the National Association of Realtors® website.



Also, note the poll on the right-hand column of this blog. It's not as specific (in referring to quarters) but it'll be interesting to see everyone's responses at the end of the week.

I unscientifically polled a real estate agent at an open house today (we had time to chat since I was the one and only visitor). Her prediction was that prices would rebound in June 2008. I tried to talk about Option ARMs recasting and perhaps adding a new wrinkle to the housing market, but she was sure "we were done" with foreclosures.

Also relevant to the topic of what's in store for the coming months is an article from Forbes posted in the weekend Bits Bucket by Zerodown. The lending industry is seeing a higher correlation between higher loan-to-value ratio and the likelihood of default. "[R]elatively affluent borrowers might not stick around once their equity turns negative, potentially beginning a vicious circle of home abandonments that push down prices and encourage new defaults".

Northern Virginia Weekend Bits Bucket 5/17-18, 2008

Please post your local house search updates, MLS finds, off-topic ideas, and links here.

The Quotable Toll

From Tuesday's Conference Call with Robert Toll:

"Interestingly noted, and perhaps specific to Toll Brothers, our regional presidents in a number of markets report that our customers are not concerned about the potential for declines in home prices and our communities. Rather, customers seem very concerned about selling their existing homes.
. . .
The reason we know is when we hold a special, any gag will do as long as we can work the phones, bring project managers, assistance vice presidents to make phone calls to the backlog of people to the list of people that have visited a community, we can bring them out in tremendous number and we can sell a great number of homes.

The problem as I said in the monologue is that they go home, they think about it. Our guess was that in top management, we thought most of them were electing not to go further, they cancelled the deposit and get their money back because they go to their friends and neighbors and say we just bought a new home and everybody says what are you crazy, prices are dropping.

But I’m advised by my regionals who read the release and called me and said you know, as big a problem if not a bigger problem is the fear of selling because we’re a luxury move up provider. Their fear of selling their existing home, and that’s causing them to have second thoughts and cancel.
. . .
So we did this a couple of weeks ago for instance in Maryland and DC and we had like five, six times the ordinary turnout that we would get and they deposited. And we got a tremendous number of deposits. So that’s an indication that they’re there but they’re scared for either reason, falling prices or inability to sell their old home.
. . .
In the Mid-Atlantic states, Pennsylvania, Philadelphia suburbs are now a C minus. Poconos are an F minus. Delaware is a D. Maryland shore, the beaches, still an F minus. Washington DC, Maryland, we rate now at a B plus.

Virginia at a C plus, but you need to produce apparent bargains to bring them out to make Northern Virginia work. West Virginia, just in the last four weeks has been a B minus but I wouldn’t go invest in West Virginia just yet. North Carolina, Raleigh, in the South, Raleigh is a C minus, Charlotte recently has turned into an F minus".

Rebound (in New Apartments)

(AP) --

"Construction of new homes posted the biggest increase in more than two years in April, a rare spot of good news amid the worst downturn in housing in more than two decades.

The Commerce Department reported Friday that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. Building of single-family homes continued to weaken, however. The growth came from a big jump in apartment construction".

This is good! Now some of those who were forced out of old apartments for condo conversions will have a nice shiny new apartment to live in.

"By region of the country, construction posted the largest gain in the Midwest, an increase of 24.4 percent when compared to March. Construction rose 18.5 percent in the West and was up 3.6 percent in the South. However, construction fell by 12.7 percent in the Northeast.

Even with the improvement, housing construction nationwide was 30.6 percent below the level of activity a year ago".

Also in Friday's news:

Reuters -

"Fannie Mae, the nation's largest source of home financing, said on Friday it is lowering the amount of down payments required on mortgages it purchases, even in areas where home prices are falling.

Starting on June 1, the new requirements of 3 percent or 5 percent, which replace rules set in December, will apply nationally to loans on single-family primary residences, it said".

Northern Virginia Bits Bucket 5/16/2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

"Thai Flipped Houses"

Hattip John. From the Washington Post:

Thai flipped houses. He gathered investors to buy a high-end home from a builder before ground was even broken. When the house was completed, he sold it for a hefty profit.

Thai deferred the taxes on the sale of the investment property by channeling that profit into three new homes with adjustable-rate mortgages. He rented those homes to families for about $3,000 to $3,500 a month, while the interest was at 1 percent. The rent on each house was about $200 a month less than the mortgage, but at the time, Thai said, he could afford it.

After about a year, he would sell a house and repeat the process.

At the height of his investing, as home prices continued to skyrocket, Thai owned 15 homes in Northern Virginia. He later sold four, and of the remainder, nine were valued at about $1 million.

But in 2006, homes values stopped rising. The housing bubble was deflating. When interest on Thai's adjustable-rate mortgages jumped as much as 11 percent, he took the equity out of the homes to pay the deficit and keep his investments alive.

"I hang on and I say, 'Okay, bad time. When it's over I can sell it back,' " he said.

The market never improved. Builders lowered the prices on new homes, making it impossible to sell back his investments to break even. In just six months, Thai spent his entire savings. The bank barred all his short sale attempts.

As the mortgage crisis unraveled, so did his marriage. Today, Thai is homeless and nearly bankrupt. For the past three months, he's been staying with friends and applying for engineering jobs. So far, no luck.

"This time last year," Thai said, "I was happy."

An interesting quote from the same article:

Real estate agents said this was only the beginning for luxury home foreclosures.

"'We're going to be back to the prices we were at 15 years ago,' said Bill Milletary, an agent with Century 21 Redwood Realty".

Housing "Crisis" is Welcome

Someone else rooting for lower housing prices -- George Will:

"One symptom of the 'crisis' is that housing prices have fallen. How far is unclear. Estimates range from 3 percent to 13 percent. Questions arise.

Do young couples struggling to purchase their first homes concur with the sudden consensus that the decline in prices is a national misfortune? The Economist reports: "Monthly payments on a typical house with a 30-year mortgage and 20 percent downpayment were 18.5 percent of the median family's income in February, down from almost 26 percent at the peak -- and close to the historical average.

By this measure of housing affordability, the 'crisis' is welcome.
. . .
"[S]tabilizing" -- i.e., putting an artificial floor under -- housing prices may be necessary to fuel consumption by a public that in the 1980s saved almost 10 cents of every dollar it earned, and in the 1990s saved a nickel, but recently has had a negative savings rate. This will, however, injure some innocent people, such as those young couples waiting to become homeowners. And it will benefit others who have earned an injury, such as speculators and others who bet that the prices of houses would never decline".

Northern Virginia Bits Bucket 5/15/2008

Please post your local house search updates, MLS finds, on-topic ideas, and links here.

Fairfax County -- On the Market

1124 SHANNON PL
HERNDON, VA 20170
List Price: $124,900
Prior Sale: $340,000 08/24/2005
Listing Date: 05/05/08
-63.3%

14439 SAINT GERMAIN DR
CENTREVILLE, VA 20121
List Price: $139,900
Prior Sale: $315,000 06/10/2005
Listing Date: 05/01/08
-55.6%

1022 CHARLES ST
HERNDON, VA 20170
List Price: $143,000
Prior Sale: $308,000 05/06/2005
Listing Date: 05/05/08
-53.6%

1283 SPRINGTIDE PL
HERNDON, VA 20170
List Price: $134,000
Prior Sale: $275,000 01/18/2005
Listing Date: 05/06/08
-51.3%

13276 POENER PL
HERNDON, VA 20170
List Price: $142,900
Prior Sale: $284,900 08/01/2006
Listing Date: 05/06/08
-49.8%

4115 HORSESHOE DR
ANNANDALE, VA 22003
List Price: $244,900
Prior Sale: $480,000 07/24/2006
Listing Date: 05/01/08
-49.0%

See Fairfax County 5/14/2008 for more comparisons from this week's listings. (This is a work in progress over the next few days, so the list will get longer).

(Links by FranklyMLS.com)

Toll Reports

"May 13 (Bloomberg) -- Toll Brothers Inc., the largest U.S. luxury homebuilder, reported its eighth consecutive quarterly decline in revenue as demand for new homes tumbled."

"TOL said home-building revenue in the quarter ended April 30 slipped 30% from the year-earlier period to $817.9 million. Net contracts for new homes, after cancellations, dropped 44% to 929 homes.

'The just-completed spring selling season was quite weak in most markets as buyers remained on the sidelines,' said Robert Toll, chief executive, in a statement. He said buyers are afraid to buy a home, only to see it fall in value."

Northern Virginia Bits Bucket 5/12/2008

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A Decade of April Sales

Source: MRIS

Northern Virginia Weekend Bits Bucket 5/10-11, 2008

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Hot Potato

653 STUART CT HERNDON, VA 20170 List Price: $289,900 Listing Date: 05/05/08

Prior Sales:

04/04/2008 $323,000 to JP Morgan Chase Bank
12/08/2005 $510,000
02/15/2005 $450,000
08/13/2004 $389,000
01/23/2004 $330,000
08/02/2001 $257,000
10/29/1998 $190,000
09/08/1986 $117,000

Northern Virginia Bits Bucket 5/8/2008

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Northern Virginia Bits Bucket 5/7/2008

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Waiting for April

Yesterday's "Bits Bucket" is a good read. Tom posted an opinion piece from the Wall Street Journal calling the housing crisis over, and Zerodown noted Calculated Risk's response.

We're all anticipating April sales numbers from MRIS and some of those are leaking out now. Narl reports that April sales in Arlington totalled 182, which would be a 10-year low. The pendings (listings under contract in April) are reported at 287. Likely some of those won't go to closing in May, and could also be a 10-year low, depending on how many close. Here's a decade of May sales.

The April sales story will be out in a few days, but the more interesting story seems to be upcoming in June when the May sales are reported. I've heard reports of a rapidly increasing absorption rate in Prince William County (Tabitha reported 5 months of inventory from her agent, and another real estate agent told me the same thing).

CRT noticed what I think is the most interesting development, and that's the "spring bounce" that didn't occur with inventory numbers in Northern Virginia. It seems they're "dancing on a plateau" (to paraphrase Robert Toll's "dancing on the bottom"). I've been keeping track of these for this year and Zerodown posted a few:



Source: Virginia MLS

National pending home sales will be reported at 10:00 a.m. today. They're forecasted to fall 1.8%

Update: From CNNMoney: "The number of homes under contract for sale fell in March, hitting a record low for the second consecutive month, according to a report released Wednesday. The National Association of Realtors' (NAR) Pending Home Sales Index fell to 83 in March, down 1% from a downwardly revised reading of 83.8 in February."

Northern Virginia Bits Bucket 5/6/2008

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Northern Virginia Bits Bucket 5/5/2008

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"An Offer I Couldn't Pass Up"

The Post noticed the uptick in March sales in Prince William County:

"After he had browsed more than 30 houses in Northern Virginia, the price and location of the single-family house off Liberia Lane made the first-time home buyer move to Manassas.

'There were a lot more options in Manassas than in other areas,' said the 24-year-old, who looked in Leesburg, Centreville, Ashburn and Alexandria before buying the $305,000 house. 'This was a bank-owned property at a good price. It was an offer I couldn't pass up.'
. . .
Because of the number of foreclosures in Prince William, Manassas and Manassas Park -- 659 in March -- a lot more affordable houses are on the market, real estate agents said.

Garvey, who moved from Tallahassee, said he was attracted to Manassas because real estate taxes are lower, the neighborhood is nice and it's close to his government job. Although Garvey said he didn't expect to buy a house at age 24, the prices here vs. in Florida made it a better option."

Trapped

The Washington Post: Condo owners who can't stay, sell, or rent:

"Susannah Moss's trendy one-bedroom Adams Morgan condo, in a converted warehouse, has become a potential money drain.

Since Moss contracted to buy the unit in early 2005, she has married, had a child and outgrown the space. She is trying to sell the condo but has been hampered by the housing slump. Three months after putting it on the market, she has yet to receive an offer.

Now Moss, 33, wants to find a tenant for her condo while she waits out the economy. But the condominium association allows only 20 percent of the units to be leased at once, so Moss is on a waiting list. If she tries to rent the unit without permission, she could face a $500-a-month fine.
. .
In 2005, George Gozen jumped into the condo craze, buying several units that he planned to sell quickly. When the market turned sluggish, he decided to rent out his two remaining Washington area condos. He is looking for tenants but is facing a 20 percent cap on rentals in both buildings.

At one of them, a luxury building near the Walter E. Washington Convention Center, the condo board has said it could evict unapproved renters, said Gozen, a mortgage loan officer. "My idea was not to be a landlord. My idea was to flip them, but here I am. I am stuck with them," he said.

Gozen is applying for hardship exemptions from both condo boards, arguing that without a renter he will not be able to keep the properties and will be forced into foreclosure or will have to sell at a particularly low price -- either of which would drag down values for the entire building".

Northern Virginia Weekend Bits Bucket 5/3-4, 2008

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Prince William County -- On the Market

9519 DAMASCUS DR
MANASSAS, VA 20109
List Price: $133,500
Prior Sale: $430,000 6/23/2006
Listing Date: 04/27/08
-69.0%

7515 BOSBURY CT
MANASSAS, VA 20111
List Price: $90,900
Prior Sale: $290,000 10/4/2005
Listing Date: 04/26/08
-68.7%

7895 MEADOW CT
MANASSAS, VA 20109
List Price: $88,500
Prior Sale: $270,000 11/9/2005
Listing Date: 04/24/08
-67.2%

7939 COMMUNITY DR
MANASSAS, VA 20109
List Price: $99,900
Prior Sale: $290,000 8/1/2005
Listing Date: 04/24/08
-65.6%

13605 CHARLES CT
WOODBRIDGE, VA 22191
List Price: $131,900
Prior Sale: $370,000 1/5/2006
Listing Date: 04/30/08
-64.4%

14310 FERNDALE RD
WOODBRIDGE, VA 22193
List Price: $124,900
Prior Sale: $350,000 2/17/2006
Listing Date: 04/28/08
-64.3%

See Prince William County 5/3/2008 for more comparisons from this week's listings.

(Links by FranklyMLS.com)

Arlington Co. and Alexandria City -- Price Reductions

Here is a partial list of the past week's price reductions on properties in Arlington County and Alexandria City.

Price Reductions 4/26 - 5/2/2008 (Click on link for entire list):

ARLINGTON 5/2/2008

Listing: AR6615049 for $549,900 Update Type:Price
3 Bedrms 2 Full Baths 1 Half Bath Prior Price:$559,900
4031 COLUMBIA PIKE PIKE. ARLINGTON, VA

Listing: AR6700525 for $585,000 Update Type:Price
5 Bedrms 3 Full Baths 0 Half Baths Prior Price:$595,000
3012 16TH ST S, ARLINGTON, VA

Listing: AR6673841 for $495,000 Update Type:Price
2 Bedrms 2 Full Baths 1 Half Bath Prior Price:$525,000
1234 QUINN ST #1234, ARLINGTON, VA

Listing: AR6692386 for $379,000 Update Type:Price
2 Bedrms 1 Full Bath 2 Half Baths Prior Price:$389,000
1609 10TH ST S, ARLINGTON, VA

Listing: AR6564067 for $897,500 Update Type:Price
3 Bedrms 3 Full Baths 1 Half Bath Prior Price:$924,000
4203 38TH RD N, ARLINGTON, VA

ALEXANDRIA 5/2/2008

Listing: AX6722055 for $729,000 Update Type:Price
3 Bedrms 2 Full Baths 0 Half Baths Prior Price:$769,000
609 OVERLOOK DR N, ALEXANDRIA CITY, VA

Listing: AX6679975 for $750,000 Update Type:Price
2 Bedrms 2 Full Baths 0 Half Baths Prior Price:$799,000
400 MADISON ST #2104, ALEXANDRIA CITY, VA

Listing: AX6705707 for $254,900 Update Type:Price
2 Bedrms 2 Full Baths 0 Half Baths Prior Price:$269,000
3307 WYNDHAM CL #2157, ALEXANDRIA CITY, VA

Listing: AX6739894 for $949,900 Update Type:Price
4 Bedrms 2 Full Baths 1 Half Bath Prior Price:$979,900
104 ALEXANDRIA AVE W, ALEXANDRIA CITY, VA

Listing: AX6740080 for $1,285,000 Update Type:Price
3 Bedrms 4 Full Baths 1 Half Bath Prior Price:$1,499,000
649 FIRST ST #61, ALEXANDRIA CITY, VA

Listing: AX6729366 for $279,000 Update Type:Price
2 Bedrms 2 Full Baths 0 Half Baths Prior Price:$285,000
205 YOAKUM PKWY #209, ALEXANDRIA CITY, VA

Northern Virginia Bits Bucket 5/2/2008

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Angry Renters Take Action

Angry Renter isn't sponsored by any independent bloggers, but by FreedomWorks, a "grassroots advocacy organization" headed up by former U.S. House Majority Leader Dick Armey.

The Good Old Days

In 1983,

The Washington Redskins defeated the Miami Dolphins 27-17 in Super Bowl XVII;
IBM released the IBM PC XT;
Michael Jackson performed the moonwalk in public for the first time;
Margaret Thatcher won the general election in the UK in a landslide;
Tom Brokaw became the lead anchor for NBC Nightly News;

and

this townhouse, which has seen better days, sold for $10,000 less than it's listed for today:



7526 CAMPBELL CT
MANASSAS VA 20109
List Price: $72,500
Prior Sale: $62,500 8/1/1983

How Not to Chase the Market Down

I like this real estate agent's approach:

"If both the sellers and agents operated like they had to find a buyer in 30 days, they wouldn't be so casual about price, about inquiries, and about offers & repairs.

Extend the listing beyond the one month if you have to, but only under these terms:

A price reduction of 5% if there had been offers, or a price reduction of 10% if there were no offers tendered during the first 30 days.

Because of the internet, the listings are distributed to all waiting buyers within seconds, and literally by the next day everyone knows your house is for sale. After a home is one the market for two weeks, the traffic dies down considerably - don't think it is going to get better after 2-4 more months, it isn't."

- Jim Klinge

That's advice that might help avoid these situations:

10555 BEARS DEN RD
Marshall, VA 20115
MLS #: FQ6349005
Listing Date: 03/22/07
On Market: 406 days
(Listing expired yesterday)

Price Reduced: 05/05/07 -- $559,900 to $549,000
Price Increased: 05/05/07 -- $549,000 to $549,900
Price Reduced: 05/23/07 -- $549,900 to $539,900
Price Reduced: 08/03/07 -- $539,900 to $529,900
Price Reduced: 02/29/08 -- $529,900 to $489,900
Price Reduced: 03/11/08 -- $489,900 to $459,000
Price Reduced: 03/20/08 -- $459,000 to $439,000
Price Reduced: 04/03/08 -- $439,000 to $399,900