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Friday, January 2, 2009
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28 comments:
14231 CAROLINE ST
WOODBRIDGE, VA 22191
List Price: $75,000
2005 sold price: $380,000
-80.3%
(2008 Tax Assessment: $297,800)
Hi. My family just moved to the area this summer and are currently renting. We have been looking to buy and are considering purchasing a TH in the centreville/clifton area. I just stumbled onto this webpage and curious what some of you think of buying now in that area? I've read many reports lately about the overall housing market which concern me with estimate of another 15 to 20% drop in 2009. The posters here seem very educated on the local housing market and I would appreciate any feedback you can provide. Thanks!
Hi DGG-
Welcome to the big city.
I used to live (own) in Clifton, sold in '06 & now rent in C'Ville, so I have a bit of experience in this area.
I would tell you to shoot for Clifton, but lowball the heck out of them. It's also a bit closer into Fairfax as well, thus should help hold up the RE value as well
C'ville *seems* to be getting rougher all the time. We had a woman raped last Month in our TH 'hood. It seems lots of MS-13 is jumping over Bull Run from Manassas. I would predict atha in a year or two parts of Centreville will be undesirable, thus killing the RE value here.
Hopefully we will be out of here by the time it gets much worse.
Just my observation...
For Harriet:
9848 MAURY Ln
MANASSAS, VA 20110
List Price: $45,000
2006 sold price: $249,900
-82%
2008 assessed value: $192,200
9819 MAURY Ln
MANASSAS, VA 20110
Price: $54,500
2005 sold price: $260,000
-80%
2008 assessed value: $199,200
9748 BRAGG Ln
MANASSAS, VA 20110
Price: $56,900
2006 sold price: $281,000
-80%
2008 assessed value: $196,200
All of their 2007 assessed values were around $250,000.
dgg:
This is a quote from an article in the Post a couple days ago that was posted here:
"'Around the country, residential has been hit so bad. We took a big beating last year. We're going to take a real hard beating next year,' said Prince William Board of County Supervisors Chairman Corey A. Stewart (R-At Large). Home values fell about 30 percent this year and are expected to fall an additional 15 percent next year before leveling off, he said."
Also, George Mason University's public policy center has been tracking foreclosure rates in Northern Virginia, and they have identified Centreville as a likely FUTURE hot spot.
There is lots of excellent info to be found on this blog--you're in a good place!
Harriet, Tabitha,
Wow. Those are stunning "discounts". How close do you think these are to "realistic" prices now?
Dgg,
I don't know anything about that particular 'hood, but my general advice which you could probably have gleaned from my plethora of comments, is that if you can stand renting for a another year or even two, you won't regret it. From the price stagnation in the DC area after the last bubble to everything I've read on calculated risk or the irvine housing blog, prices are not going to skyrocket back up once we hit bottom. You should have a good 1-3 year window to buy at the least expensive prices once the bottom has clearly arrived.
That said, I myself may very well jump in and by a TH near the Franconia Springfield station sometime in 2009, though it's looking like next fall, rather than the summer. Partially my worry is that reduced turn-over after the bottom has been reached will limit my choices (which I've already severely limited by owning only 1 car for 2 people).
Good signs of the bottom for the lower rungs of the market in a given area? Seasonality returns to prices and inventory in PWC. Prices would be cash-flow positive for a landlord at 7% interest. Foreclosure activity goes down by half year-over-year. Prices reach 1999 + 3% inflation levels. If a few of these have been reached, then you can probably feel safe that your downpayment won't evaporate in your first year or two of ownership.
Check out Harriet's links to property assessment sites, those often have previous sales prices that may be searchable by neighborhood to help you find what the "normal" prices were back in 1999-2001.
I wouldn't buy in that area right now, not unless (1) you can get a place for a reasonable price, and (2) you know what a reasonable price is.
Personally, I wouldn't pay more than the 2002 price for those areas. You can find the price of past sales by googling "fairfax property tax".
Another reason to wait, as spunky points out, is that an area could rapidly become undesirable. A block of townhomes occupied by tech workers in 2005, could become a block of delapidated foreclosures a year from now.
Sorry, pet peev moment:
NY Times mortgage refinance?
"Because the typical mortgage only lasts for about five or six years before the homeowner sells the home or refinances the loan, lenders collect much of the mortgage interest during those years. Once a loan gets beyond five or six years old, homeowners can start seeing the overall debt drop at a faster pace.
"
Can we have this person fired? No, no no no no. That's not "why". This is simply how the math of a fixed rate fixed payment amoritizing loan works. That's what the amoritization table is for, to determine how much the total payment has to be in order to pay the debt down in 30 years. 30 years is a wicked long time, hence your initial principle payments that start the process of paying down the debt, aren't that large.
Grrrrrr.
p.s. AND Tanta tells us that in the odlen days you didn't refinance back out to the full 30 years possible, you kept the term of the new loan down to the remaining term on the old loan. That way you can easily evaluate whether it's really the new lower interest rate that's reducing your payments.
Gah!
Cara,
I'm not familiar with the amortization table but could it be 'why' the table is structure in a way so the lenders can collect disproportionally large amount of interest payments the sooniest? Or that lenders have the world convinced the first five or so years have the highest default rate hence the bigger interest payments upfront? Same reason why Tanta's old refi rule was abandoned so they get paid more the fastest? Simply put lenders will try to *screw* you on the interests anyway and anywhere possible.
Just my .02. (sounded more like a rant, I know)
MM,
By selling us on 30 year loans as the normal buying practice? Perhaps, but it's just the math of the loan that "front loads" the interest. This is also "why" lenders like you to buy points to reduce the interest rate (those points don't generally get paid back until the 27th year of the loan). And "why" they charge pre-payment penalties on loans with starting teaser rates.
Amoritization is simply defined like this:
Amoritization Calculator
If you put in numbers it will tell you how it did the calculation:
The down payment = The price of the home multiplied by the percentage down divided by 100 (for 5% down becomes 5/100 or 0.05)
$40,000.00 = $200,000.00 X (20 / 100)
2 The interest rate = The annual interest percentage divided by 100
0.05 = 5.0% / 100
The monthly factor = The result of the following formula:
3 The monthly interest rate = The annual interest rate divided by 12 (for the 12 months in a year)
0.00416666666667 = 0.05 / 12
4 The month term of the loan in months = The number of years you've taken the loan out for times 12
360 Months = 30 Years X 12
5 The montly payment is figured out using the following formula:
Monthly Payment = 16000000 * (0.0042 / (1 - ((1 + 0.0042)^-(360))))
The amortization breaks down how much of your monthly payment goes towards the bank's interest, and how much goes into paying off the principal of your loan.
"
On the other hand you could say that we've all been snookered into thinking 30 year fixed-rate fixed payment loans were a good idea.
The reason you pay the most interest at the beginning is simply because that's when the principle balance on the loan is largest.
There are plenty of alternative payment structures out there, including ones where the monthly payment gradually increases (a common repayment plan for student loans), but there's no escaping that the reason a 30 year loan takes 30 years to pay off is because you're not paying off very much of it at a time, and thus, that most of what you're paying is interest.
I would like to know everyone's thoughts on where mortgage interest rates will be this year (for people with stellar credit and large down payment)Thanks!
Does anyone have any opinions about some of the nicer areas of PG county like Bowie or certain communities like Oak Creek or Beech Tree??
My wife and I would love to eventually purchase a home close to the beltway, but after looking at the crappy, run down houses that 450-600K buys in Alexandria or Arlington, we were really surprised with what a comparable amt. buys out there, and are now leaning toward new construction with a decent builder.
We dont have kids, so dont need to worry about schools, but we have also heard many areas of PG county are dicey because of crime. Then again, reading these boards, seems like Woodbridge and Centerville are also seeing their share...
Anyone living there or care to give their 2 cents about the location??!!
Thanks for the responses. In terms of safety issues in Centreville - the area we were looking at is off of Compton Road in the North Hart Run neighborhood which is just down the road from Little Rocky Run. Any thoughts on this specific area for safety as well as real estate values. Thanks again for all the input!
Mike said: "Does anyone have any opinions about some of the nicer areas of PG county like Bowie or certain communities like Oak Creek or Beech Tree??"
Mike, stay out of PG County altogether. Crime is rampant there, the county government is corrupt and led by incompetents, the police force is, at best, undependable, and the schools are atrocious (and dangerous). Even if your commute time has to double, you're much better off living in N. Virginia.
RE: PG County.
How about College Park? There are some SFH in the $200k range a quarter mile to the Greenbelt Metro station.
KFZK said: "RE: PG County.
How about College Park? There are some SFH in the $200k range a quarter mile to the Greenbelt Metro station."
Ditto for College Park. Plenty of murders there, as well as rapes, assaults, home invasions, etc., not to mention burglaries and car thefts. I would never let my daughter go to U. Md., much less live in College Park. A sad situation, to be sure, but I deal with facts here.
Mike
Stay out of PG County! You are FAR better off buying a smaller, older house in VA than a newer, bigger, nicer house in PG. Ditto everything Tom said in his comments.
There are plenty of crime statistics available on the web, check those out rather than these impressions by people who don't even live there...
College Park, near the greenbelt metor is kind of scary. We looked to rent there and ran away as fast as we could. On the other hand, 3 friends of mine from work have all lived there for a couple of years and thought nothing of it. So, check out the real crime stats and get a feel for the neighborhoods yourself. I find it hard to believe that a brand new construction neighborhood, surrounded by other former forests and farms, would be particularly "dangerous".
Then again for me, NoVa is "dangerous" coming from Belmont MA which has 1, yes, 1 felony per year, on average. Comparatively the two murders in Springfield and Burke and the kidnapping resulting in death at the Springfield Mall are scary Plus what all happened in Tyson's Corner this year. So, it's all a matter of perspective. So yeah, compared to Attleboro and Belmont Mass this whole area feels like crime-ridden LA... But this is where my job is so this is where I'll live.
Cara
Tell me-What areas of DC metro have you lived in?
Mike,
I agree with Tom and Bay400 that PG generally has a high crime rate, etc.
But since you have said that you don't have kids and don't need to worry about schools, you might find PG will work out for you.
I know a couple of professors who have been living in Bowie for a couple of decades. They, like you, have no kids.
You need to pay close attention to the crime details, e.g., is the crime confined to some areas where there are a lot of apartments as opposed to SFH's and TH's? is it confined to certain malls? Within the broader stats, can you find pockets that are pretty low in crime?
I believe there must be some good pockets in Greenbelt and Bowie, e.g., near the NASA Goddard center, where many professionals live.
Just be sure that the area you choose is not close to high crime areas. You could check out valuations of neighboring homes on the county website (this is based on the assumption that crime-ridden areas may not have high valuations, even though PG valuations in general are lower compared to NoVA). There may be neighborhood stats available on ziprealty.com and other sites, which you can check out to see if it sounds like many professionals are in the area.
I agree with Cara-- look at the crime statistics and talk to people who actually live there. When I first moved to this area people warned me against Del Ray, saying it was high crime. But it was cheap and close to the metro, which we needed since we didn't have a car. I walked around, talked to neighbors and the landlady and decided it was fine.
We liked it so much we ended up buying the next year--and it wasn't long before the prices were sky-rocketing and the neighborhood was becoming the 'in' place for young families.
I spent about a month in Greenbelt last summer and found a lot to like there. I have family who've lived all over the county and love it.
So do your own research, talk to people who live there, spend time hanging out at neighborhood spots-- and make up your own mind. We all have our prejudices and beliefs, but the truth is none of us really knows what a neighborhood we haven't lived in is like -- and none of us can say how that neighborhood may develop-- for better or worse-- in the future.
For myself I'd a lot rather take a chance on a low-cost neighborhood where I like the atmosphere than buy into a high-priced neighborhood and risk having it go 'bad' on me in the future.
bay-400
Just Rockville, MD and Franconia-Springfield, VA. Both of which are low-crime and feel very safe. But no where in the whole metro area can beat the low crime statistics in Belmont, MA when I was there. I think it was amongst the 10 lowest crime "cities" in the country. So I just found it humourous that the dividing line between "safe" and "scary" was NoVa versus PG county, whereas, some people, like my mother, would be scared off by NoVa's stats (which is why I don't send them to her). It was just so arbitrary and prejudiced sounding.
What I think is really best to do is, check out the individual crime stats online, then check out the nieghborhoods in person that still interest you, and then rent in one of them, doing your real commute, seeing how you like the area, before buying. That's what I'm doing in Franconia now, what it sounds like Sarah did in Del Ray, etc.
Especially here and now. There's no rush in this market to buy, there's no where that's generically safe enough that you can just jump in based on stats alone, like you might be able to do in a smaller low-crime metropolitan area, and the commutes are nasty enough that it's worth finding out whether you can handle it or finagle around rush hour, before commiting to a purchase.
Re: Del Ray. People told you it was unsafe, because not long ago it really was. I went to middle school at GW and people would get stabbed right in front of the school on the sidewalk, and that's not even counting what happened inside the school.
You probably talked to some long term Alexandria residents, many of whom are still wary of Del Ray even though it's become yuppified.
Just trust me on the PG County thing-I have lived in DC metro for 25 years. There were parts of PG years ago that were OK-but even those areas now are bad. The entire PG gov't is corrupt-There is a reason that a lot of nice retail won't come there. The schools are horrific. Just trust me on this. I would not recommend anyone buying there for any reason.
I'm about to return to the DC area and need to buy a house. I stumbled on this blog and find it very useful. Lots of informed folks providing useful tidbits of information about the market.
However, I consistently find that most posters express a sheltered upper-middle class sensibility in their postings. "Stay away from Centreville, Woodbridge, and PG county cause they're crime-ridden." I venture to guess that none of these posters have a single friend or acquaintance in these areas. For them, these places are drive-by on their way to work, vacation, etc. Look at how the Asians destroyed Falls Church with their gaudy re-builds! And the Latinos and their gangs overrunning Woodbridge!
Most posters won't say it but it's apparent: Stay way from PG County cause it's black and poor! All them killings on the evening news are all in PG county. Even their gov't is corrupt and incompotent!
I am not black and I grew up in Oxon Hill. While it is true a few of my childhood classmates are in prison or murdered, many others have done very well for themselves. My siblings and I, and our neighborhood friends, were products of PG public schools and we have gone on to get PHDs, attend Ivy Leagues, etc. My neighbors growing up were working class folks who cared for their kids and community, very much like your neighbors in rich and white Vienna, Mclean, and the like.
If you move to PG county, you will see neighborhoods very similar to those in NoVa. You've got your sprawling acre-lot homes in Upper Marlboro, Fort Washington, and Bowie, and you have your ghetto slums in places like Chillum, Capitol Heights, Suitland, etc. Just don't expect your neighbors to be white. And their kids may have too much bling-bling for your taste. But most of them are just as hardworking and care for their community just as much as you.
PG has the added bonus of having affordable housing (probably because white folks are afraid to move there, creating a sort of 'color' discount effect). And PG, because of its 'incompotent' government, doesn't suffer from the sprawl-a-mania of NoVa.
Long,
Hear! Hear!
Thanks for the input. I think the complaint about Woodbridge is simply that no one wants the commute up 95 (or Rte 1) every morning.
But, yes someone was asking about PG (because it would be a good alternative commute for their work), and no one who actually lived there was available to respond. So thanks for taking the time to write an extended and civil response.
Hi Nice Blog .If your time is less valuable, then it is probably less worthwhile to web based timecard.
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