Northern Virginia Bits Bucket 12/1/08

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The Post had a bit about the condo market this weekend. A little excerpt:

"The average sales price of new condos fell 3.6 percent in the Washington area during the third quarter compared with the same period a year ago, according to a study by McWilliams Ballard, a condo marketing company, and Delta Associates, a research firm. The impact on existing condos has been even more dramatic: Sales prices fell 8.1 percent during the third quarter. At the current pace, it would take 8.2 years to sell the finished and almost-completed new-construction condominiums on the market, according to the study".

Delta Associates has more 3rd Quarter 2008 information available here (pdf file).On pp. 20 regarding condo sales:

"Net sales pace of 1,500 to 2,000 units per year of late will increase next year as the number of projects due to deliver diminishes to near zero, with few contract cancellations left to offset gross sales. With mortgage interest rates remaining low and job growth rates remaining on course, we expect a net sales pace of 2,500 to 3,500 units per annum over the next two years. With this, select jurisdictions will find equilibrium arriving quickly – perhaps as early as late 2009 or into 2010."

Northern Virginia Bits Bucket 11/28/2008

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The Inescapable Bailout

There are now over one million blog postings on the word "bailout," and new blogs dedicated to talking about bailouts, with names such as The Bailout Blog, Bailout Sleuth, and Bail Out Main Street.

Videos from the libertarian crowd: "Where's Sock Puppet's Bailout?" Also, "Where's My Bailout?".

For you Tolkien fans, there's even a Bailrog. (Ouch!)

The retailers are onto it, too:

Northern Virginia Bits Bucket 11/27/08

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And, Happy Thanksgiving!

From George Mason's History News Network: 10 Myths About Thanksgiving.

WSJ: A Day of Thanksgiving.

The kids might enjoy a trip to Plimoth Plantation.

Northern Virginia Bits Bucket 11/25/2008

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Update: Welcome news for house shoppers from Frank at FranklyMLS:

"Hey guys!

Just wanted to tell you about a new feature over on www.FranklyMLS.com

Previously you could sort by List Price/Tax Assessment to see homes that were way below tax assessment. Now you can do a search for those homes and get email alerts. So you can be alerted if a detached home in Reston that is 50% of the tax assessment hits the market.

Click on the advanced button near the search box for details.

Soon I will have SOLD data INCLUDING seller subsidy. No more needing to check tax records and wonder if there is a hidden $20k subsidy".

Frank
Owner FranklyMLS.com
Broker FranklyRealty.com

S&P/Case-Shiller® September Home-Price Index

The S&P/Case Shiller® composite index (graph here (pdf file)) for the month of September was released today.

"'The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals.' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. 'All three aggregate indices and 13 of the 20 metro areas are reporting new record rates of decline. Looking at the returns of the U.S. National Index, prices are back to where they were in early 2004. As of September 2008, the 10-City Composite is down 23.4% from its peak, the 20-City Composite is down 21.8% and the National Composite is down 21.0%.'”

A Novel Thought on the Citi Bailout

"Homes in foreclosure are listed on the Internet. Rich guys whose fortunes were saved should drive by foreclosed homes. If there are toys in the backyard, they should knock on the door and tell the homeowner they are going to bail them out."

Northern Virginia Bits Bucket 11/24/2008

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Northern Virginia Bits Bucket 11/21/2008

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H4H

So the $300 billion -- Hope for Homeowners program has inspired about --

100 --

applications for help.

Dana Olick explains the trouble:

"Now I realize many of these lenders are helping folks in-house, but the idea behind the H4H program was that all these lenders would flock to them in droves to get nice, clean, FHA-insured loans. The sticky point is the principal write-down. Word on the street is that the lenders either don’t see a better value in writing down principal as compared to foreclosing on the house, or the lenders can’t because they’re acting as servicers and the loans were sold off to investors, and the investors don’t allow the change."

I wonder how much this has cost the taxpayers so far (not that that matters, of course). Why does one picture some bored HUD employees at their desks in between coffee, bathroom breaks, text messaging and nail filing waiting for the phone to ring . . . but I digress. Anyway, "they" have a new plan, which includes 40-year mortgages. Sounds pleasant.

10-Year Yield at Historic Low

10-YEAR TREASURY NOTE (^TNX)

Index Value: 3.1980
Trade Time: 9:48AM ET
Change: -0.1930 (5.69%)
Prev Close: 3.391
Open: 3.255
Day's Range: 3.1260 - 3.2590
52wk Range: 3.25 - 4.324

Northern Virginia Bits Bucket 11/20/2008

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The "Rental Demand" Question

H/T The Housing Bubble Blog. This is an article from the Wall Street Journal from October 28th:

"Despite all the gloom, some people believe it isn't too early to pick up bargains. One key, they say, is a deep understanding of the local demand for rental housing.

Dinesh and Rima Kumar, who live in Ashburn, Va., last month bought a town house in Sterling, Va., a suburb of Washington, D.C., for $154,000. The same home sold in June 2005 for $375,000 to a buyer who used subprime loans to finance 100% of the price. It went into foreclosure late last year. Mr. Kumar says he has found a renter at $1,500 a month. The Kumars, who paid cash for the home, calculate their monthly expenses -- including taxes, insurance, maintenance and fees -- at $491 a month.

The couple made the plunge partly because Ms. Kumar, a real-estate agent for Realty Direct, noticed that homes in the area priced at $250,000 or less were attracting multiple offers. Home sales in the northern Virginia suburbs of Washington totaled 3,360 in September, up 92% from a year earlier, according to the Northern Virginia Association of Realtors. The average price: about $333,000, down 32% from a year earlier.

"This could be the bottom," Mr. Kumar says, and even if it isn't, "the down side on a $150,000 property is pretty low." Moreover, he has been burned in the past by stock-market investments and thinks rental income will far exceed the meager interest rates offered on bank deposits."

I've been watching rental asking prices stay fairly flat in the Northern Virginia suburbs, with plenty of inventory. I've been wondering if the recent buying spree will lead to a large amount of rental supply, pushing rent prices down, or if the inability of people to purchase (foreclosure on record, etc.) will make renting more competitive. Does anyone see early signs if either? It's somewhat difficult to see trends during this cold season, of course.

Opportunism Abounds

I love the American attitude -- we always look for creative ways to survive and prosper during difficult circumstances, economic or otherwise.

Consider:

$6,500 for a four-day "Inaugural Rental" in Warrenton.

And then this:

"The sheer number of entrepreneurial tricksters that abound on Craiglist hoping to rip off inaugural visitors is shameful.

If you've clicked on my ad among the throngs of other ridiculous listings and are in need of a place to stay that TRULY allows you to view the events without being stuck in traffic and/or forces you to shack up in a potentially life threatening neighborhood, you should contact me.

My 2 bedroom apartment is safe, comfortable and 1 block to the Capitol. It's on New Jersey And D SE. I have parking, room to sleep 6 comfortably, high speed internet and cable and plenty of historic character - something you won't find in a gawdy mcmansion in Annandale, Virginia, Darnestown, Maryland or Culpeper, VA (or some other such nonsense rental in a provincial, irrelevent cookie cutter community), the difference with my place is that you'll actually experience the inauguration in person rather than watch it on a big screen at an Appleby's on Route 211 in Warrenton, Virginia.

$1,000 a night or best offer (Jan 17-22 dates negotiable) - email for details and pictures."

Lance, is that you? :-)

Northern Virginia Bits Bucket 11/19/2008

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Northern Virginia Bits Bucket 11/18/2008

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"What Artificial Lending Standards?"

Peter Schiff's prior economic "doom and gloom" predictions don't seem as far-fetched these days. It always irritated me to hear grown-ups actually laugh at him (probably because I agreed with him on the probability of a housing correction). I saw this video posted on a few blogs today (including Althouse), and some of you housing bears might appreciate that it's getting around. (I'm not sure how Schiff's Euro-Pacific fund is working out, though).

His 80-year-old dad, by the way, is the notorious Irwin Schiff (recent news) of PayNoIncomeTax fame, who's serving a federal prison sentence for tax evasion (and other tax-related charges).

Northern Virginia Weekend Bits Bucket 11/15-11/16 2008

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Northern Virginia Bits Bucket 11/14/08

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Northern Virginia Bits Bucket 11/12/08

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Fauquier County is projecting an $8 million shortfall, up from the previous estimate of $500,000. The county will lay off 13 county workers to cut costs. I thought it was also notable that Fauquier will cut $450K out of the budget that pays rural landowners for their development rights. (The Fauquier Times calls this a "successful land conservation program").

A Decade of October Sales

October sales were up year-over-year in every county we follow here with the exception of Arlington County, which was at a decade low with 156 sales.

Standouts from October: Prince William County YOY sales up 180% and near a 10-year October record (October 2004 was 7% higher), median price down 46%, inventory still under 5 months; Fairfax County sales up 44%, median price down 19%. Culpeper County's sales were up 115% and managed to knock down inventory to about 11 months from 30 months a year ago.



Source: MRIS

Northern Virginia Weekend Bits Bucket 11/8-11/9, 2008

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Northern Virginia Bits Bucket 11/7/2008

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Spunky said...

"Harriet-

Why don't you tell us all about your recent experience purchasing a home. Did you find it hard to get financing, as is being reported? Any other issues / ordeals in the process?

Thanks from those of us still holding off for Winter pricing :)"

I'll be happy to answer this, and I do congratulate those who are holding off for winter pricing. The summer/early fall fervor has died down and there are still a number of properties lingering.

We had a seasoned and knowledgeable agent from Long and Foster and an actively-involved loan officer from Virginia Heritage Bank (who promptly sold the loan to Countrywide). The financing was straightforward and the process timely. We went with FHA (3% down) to preserve cash. The rate was 6.0% fixed, and the seller paid the closing costs.

The seller (Wells Fargo Bank) was competent and accomplished everything in a timely manner according to our contract. We were able to inspect the home and there was a kickout clause in the bank's addendum for the results of the inspection. With a foreclosure, you don't have to worry a lot about what you first submit to the bank -- what matters is what the addendum they will submit to you will say. At that point ours included the home inspection clause, which we were happy to see and to follow through with.

Our closing day was quiet and uneventful. We got the key, walked in, and started painting. Our house had been vacant for about 8 months, so there was a lot of landscaping overgrowth in the front, although the lawn had been maintained by the bank. The things that probably turned other buyers off were the unbelievably bad colors on the wall combined with an 18-year-old carpet complete with embedded pet hair. But after painting the whole downstairs with mostly Benjamin Moore's #247 (Consentino Chardonnay), putting new carpet everywhere, and just cleaning and cleaning with lots of generous family help, it feels respectable again. And the neighbors are delighted to have people here, so it has been a positive experience (except for the moving part, which is always the most difficult, but is over now thankfully).

Northern Virginia Bits Bucket 11/6/08

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Next Monday, October sales will be out at MRIS.

Northern Virginia Bits Bucket 11/5/08

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Northern Virginia Bits Bucket 11/03/2008

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DC-Area Employment Still Strong

Thanks to blog reader The Anonymous for the link to this article from the Washington Business Journal:

"The D.C. area has the second lowest unemployment rate (4 percent) in the country for September among areas with 1 million or more people, according to Department of Labor statistics released Wednesday. The local unemployment rate was up from 3 percent in September 2007
. . .

The D.C. area has 40,7000 more jobs than it did a year ago — the third strongest gain in the country, behind Houston and Dallas. That is an increase of 1.5 percent — putting the region in the top five when considering job growth percentages.

Nationwide, unemployment was 6 percent for September -- a year ago, it was 4.5 percent".

D.C. Proper is faring a little worse:

"The D.C. Department of Employment Services said the seasonally adjusted unemployment rate was 7 percent last month in D.C. — 1.3 percentage points higher than the rate last September."

Northern Virginia Weekend Bits Bucket 11/1-11/2/2008

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If You Could Change Virginia Tenant Laws . . .

Here's something worth discussing with Virginia renters -- how can Virginia make renting more palatable? I'll start with one wallet issue -- security deposits. I cynically told someone just a few days ago that as a renter in Virginia, you can consider your security deposit lost the minute you turn over the check -- it's just an extra expense.

In the "10/30 Bits Bucket" blog reader Tibex asked where to find a lawyer to recoup his/her security deposit. The landlady thinks she can remodel the house on the tenant's dime. Others chimed in and told their security deposit horror stories. Our last landlord also decided the house needed new siding, etc. to make the new buyers happy and "meet all of their requirements for the sale," so he kept our security deposit of $2,000. (And just like Tibex's situation, the real estate agent was in complete cahoots in order to make the sale, and did other things to make our lives miserable).

To help answer Tibex's main question, at the time I contacted a lawyer for a nominal fee and was told that my best answer for a security deposit's return was small claims court, which I didn't bother to pursue because I decided that the time and stress wasn't worth it. I was saving money on housing in other ways, and the landlord had lost $140K on the house and probably wouldn't be fun to take to court.

I think Massachusetts' laws on this issue are more tenant-friendly:

And if the landlord fails...

to deposit the security deposit into a bank account;

to return the security deposit (or balance after lawful deductions) with interest within 30 days after termination of tenancy; or

to transfer the security deposit or last month’s rent to the new landlord;

... you are entitled to the immediate return of your security deposit AND triple damages, plus court costs, and reasonable attorney’s fees. You also are entitled to triple damages, court costs, and reasonable attorney’s fees if the landlord fails to pay interest on the last month’s rent within 30 days after termination of tenancy.

In contrast, here are some of the anemic Virginia regulations, which first warn the tenant to do steps a,b, and c, and then hope they've done everything to get their deposit back. Then after that:

Deductions from the Security Deposit:

If the landlord makes any deductions from the deposit, a written, itemized accounting of how much is being charged for each item must be sent to the tenant. If the landlord fails to provide such an accounting within 30 days after the tenant moves out, the landlord may forfeit the right to withhold any part of the deposit. Furthermore, the deductions taken from the deposit must be for actual damages suffered by the landlord.

How to Dispute Deposit Deductions

If a tenant receives a list of deductions, it is possible to dispute items on that list. The deductions should be addressed by the tenant in a letter sent to the landlord. The demand letter should include a response to each of the deductions, explaining which charges are being disputed and why. The tenant should keep a copy of the letter and send the original by certified mail, return receipt requested.

If the tenant receives a partial refund along with the list of deductions and wants to dispute some or all of the deductions, the tenant may want to refrain from cashing the check. If the tenant must cash the check then the tenant should tell the landlord in the letter that even though the check has been cashed, it does not mean the tenant agrees with the amount of the check.

And that's just about it for Virginia. Certainly no triple damages here. Hey, I'd settle for double, and if attorney's fees were covered, tenants like Tibex would have their day in court.