Please post your local house search updates, MLS finds, on-topic ideas, and links here.
I appreciated receiving this real estate letter from the William and Alexandra Lohr team out in the Warrenton office of Long and Foster.
Thursday, January 22, 2009
Northern Virginia Bits Bucket 1/22/2009
Posted by Harriet at 6:00 AM
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I was scanning Redfin, further afar than normal when I spotted this beauty. I showed my wife, and we both agreed that if we had a million and a half sitting in the bank, it would be a nice use of the money to buy this property.
Then she noticed something even more peculiar. Here we were ready to throw a non-existent $1.4M at this owner, and the tax assessment is only $1.2M?
That seems highly unusual. Generally, I low ball tax estimates so badly I can see the appraisers and local government budget agencies cringe. Yet this house nearly convinced me to pay a hypothetical $200K more than assessed value!
Query:
Is that simply because it's so hypothetical (I ain't never buyin' a $1.5M house) that as a fantasy the list price is more reasonable.
Is it because the house is under-appraised, and why might that be?
Is it because of some flaw that ought to be apparent to me, but isn't (just from the listing).
Or lastly is it just that this particular house hit enough of my own emotional buttons that I was convinced to overpay.
It's an interesting mix of reality and psychology.
Sorry, wrong house.
THIS is the house I meant to link. The other one was just quite similar, including to the asking price vs. appraised price. But this one doesn't have a HOA.
Tax assessments only give you a ballpark figure, and it seems to vary by neighborhood to neighborhood, more than by house-to-house within a neighborhood.
For example, assessments for some neighborhoods seem to be spot-on when compared to recent sales. Others such as the example below, seem to be low (friend in the assessor's office?)
List: $798,500
'08 Comps: ~680-720k
08 Tax: $636,510
http://franklymls.com/FX6912282
xpovos,
I love it. I think it's mostly the inability to price things that are so far out of your realistic ability to pay. It's a gorgeous house, but if you were actually in that price range there are a bunch of little tidbits that you'd bicker with, and thus feel that it's really only a 1.1 million dollar home at most. Simply because the layout isn't perfect for how you envision your entertaining or the bedrooms are too small relative to the living spaces, with not enough light. And in this down market, you as a buyer shouldn't be put upon to assume that much downside risk, so you'd definitely be capping that lower.
But as a dream home? With all that land? And the stone, brick and wood touches? Sure, it could be worth 1.4 million dollars of fictional money.
Harriet,
A very reasoned letter for a real estate agent. I agree, I'd be very interested in a house for under $200k as well. Too bad the ones near me are totally marginal, and would never command $1500 in rent. But, that stuff does appear to only sit on the market for 23 months or less. So a bottom for the bottom may be forming.
We'll see what happens to those when the stuff that's at $450k now comes to $375k, sending the stuff at $375k down to $300k, and the stuff at $300k down to $225k...
Cara,
I agree with your rent assessment. I live in one of those town houses, and let me tell you, I don't pay $1500 in rent, and if the landlord tried to ask that, we'd be able to move (practically next door) and get a lower rent for our troubles.
Under 200K and in decent shape might make sense as a longer term investment, but no one should expect it to be cashflow positive from the start including all aspects of PITI, particularly not on an investment style loan.
The real investors I'm seeing are slowly buying the extremely run-down end as they hit the 60K mark for the town homes or ~100K for SFH and then expending the capital to refurb them to liveable before renting them out or trying to re-sell. Even those guys who are being extra cautious could get bitten again and lose their refurb money, if not more. There's still an incredible amount of supply. The letter notes that the turnover is way up which makes the Months of Supply look much better. That's good. But high turnover isn't necessarily.
I'm just surprised that the letter pointed people to this blog :) Surely that isn't in their best interests.
Jeff B,
But we provide all the information you need to show where the bottom should be, so that people can feel confident in their decisions. If not for this blog, who would ever have heard of renting, or investors, or housing prices being tied to anything? Without us to provide the voice of reason, prices could go to Detroit levels without the risk-adverse (obviously the only people left with good credit who haven't bought yet) feeling confident about buying.
:p
I have massive spreadsheets for several neighborhoods in PWC, and I included 2008, 2007, 2004, and 2001 assessed values along with sale or asking price, prev. sale/date, BR/BA/SQFT, acreage, finished basement SQFT, and so on. It's fascinating to track the assessment values in relation to the time passing and to similar houses, especially houses I know well.
With the exception of the insanity of the height of the bubble, I have been impressed with the assessements' accuracy, in general. It's also funny when I find houses that never managed to tell the county about their finished basements, decks, porches, new garages, etc. How does that work, I wonder? By requesting permits?
And when I say the assessments' accuracy, I mean as a gauge. For example, during 2008, you could presume the sale price to be 30-50% off the 2008 assessed value, depending on how nice of a neighborhood it was, and how bad of a condition the house was when it sold.
PS I have been in serious negotiations this week for my dream house. It's not on the market right now. It's a long story. Please, whatever your creed, please say a little prayer that this works out. I love this house, have loved it since I first laid eyes on it. I want this to work out so badly. My children's children could come back to this house for years and years...sigh. And if the (divorcing) couple could just agree on this one thing, it could happen...
Ah Tabitha, the Classic Divorcing Couple House!
You have hit RE paydirt, if you can get them to quit fighting to "get 'er done"
Maybe their parents (of the divocing couple) will knock some reality into their heads to get the lovenest sold so they can all move on & find new happiness !!
Congrats! I am saying my prayers for you & yours !!
Thats hilarious when a buyer buys at the peak and then tries to sell it for more!
Get a grip - that house is in FAIRFAX, not on the Potomac with views of DC.
Good luck Tabitha! How did you find out that the house might be coming on the market?
tabitha
fingers crossed!! At least this time you are dealing with a situation with potential sellers who actually would want to sell. Of course if this is their major shared asset they may also want way more out of it than you or anyone else is willing to pay, but here's hoping they're in a position and mind-set to be realisitic.
"Overall, we are positive on the future of the local real estate. It is a terrific time to buy an investment or trade up to a new home.
Please send us your referrals."
^-- haven't heard that a million times. I wonder if they were saying the exact same thing a year ago, or the year before that.
someonecool,
Sounds like propaganda straight from the NAR's Psy-Ops Division.
When you think about it, there ought to be hundreds of people visiting this site regularly, given how many people are thinking about buying or selling in NoVA. There is so much useful info on this site (as well as interesting opinions) people ought to take advantage of it.
Toll offers 3.99% (aka 4%) on 30-year fixed.
A buyer taking a Toll Brothers mortgage, as opposed to the 30-year rate quoted by Bankrate, could lower their monthly mortgage payments to $1,988 from $2,391, a savings of $403 a month on a $417,000 loan
The catch:
The Toll Brothers offer is only in effect through Sunday, so buyers will have to act quickly.
Translation: You have three days to decide whether or not to pay too much for one of our houses.
With current rates, the Toll Brothers offer of 4% is approximately equivalent to paying 4 discount points, or a $20k subsidy for a $500,000 mortgage. I think I'd rather have them drop the price 10% and find my own mortgage.
Thanks for the well wishes.
Jeff B, the house had been for sale last spring, and when I realized it hadn't sold, I simply wrote a letter addressed to the owner and asked if s/he were planning to put it back on the market this spring. She responded yes, and we've been talking since.
I'll let you know what happens.
This house is down the street from me in the Alexandria City "immunozone." The place sold in 2004 for $526K and then in Dec. 2006 for $599K, after being listed at $699K and sitting. Now it's up for sale for a third time in five years.
For $715K. Best of luck in finding that magic buyer to appear from the sky.
http://tinyurl.com/by3chc
I love this one. Asking price: $950,000. Tax Assessment: $769,900. Yet, even with that inflated asking price, the first thing the listing informs me is "Seller reserves right to reject any offer." lol
shamrock,
plus the sign in the 1 and only photo says "rent" not "for sale".
Is there any circumstance under which a seller is _not_ allowed to reject an offer? I mean I know there's anti-discrimination laws, but when do those kick in? If the buyer is approved for a mortgage, not asking for any subsidies and offering the list price, and a reasonable closing date, does the seller have to accept it? I believe not, given that 2 years ago my parents put an offer on a waterfront condo for the full asking price and the sellers promptly decided that they wanted to keep it for themselves afterall and took it off the market...
Cara, I took a closer look and it looks like it was listed for rent for $3,300 5 months before being listed for sale for $950,000. Also, if there are any circumstances where it would be illegal to reject an offer, putting 'I reserve the right to reject any offer' in the listing wouldn't exempt you from those laws. To me, the listing just screams 'Dont bother coming here to check it out'.
I love the delusional sellers. There have been a few times that I've been *very* tempted to call their agent and tell them what idiots their clients are, and to wake them up. But I'm sure they're doing all they can to just keep them as clients and see if there is a buyer stupid enough to buy at peak bubble prices.
Also amusing is the "not here" mentality with the declining market. For instance, the false notion that Arlington won't suffer like the outer areas, because it's Arlington. Well if Prince William houses shot up 300% in a decade, then fall by one-third, I'm pretty sure that Arlington houses that shot up 250% in that time period are going to fall by at least one half. People cannot get it through their heads that there is nothing that makes your house, street, neighborhood, town, or city special or decline-proof if it just precipitously shot up in value with no other fundamental changes occurring. No substantial GDP growth, no new metro stop down the street, just *boom* prices double. And so they will fall as well.
Kevin, I signed up for alerts from franklymls. In the $1m - $2m range, I am getting a notice of a price drop almost every third day. As these drop enough to sell, prices of lower-priced homes will also fall, so it's somewhat of a good sign.
However, IMHO the drops aren't big enough, and they are from extremely delusional prices (i.e., above bubble pricing), so the listings are almost never followed up a few weeks later showing them in contract. Further, the few new listings seem to be delusionally priced (e.g., 10-20% above last year's assessments, when we know prices have dropped further from those, and without discernible improvements justifying a price premium).
It's no surprise to go to MRIS and check each zip code in Arl. for Dec. 2008 and find that only a handful of detached houses in this price range sold TOTAL across all of Arlington. So why a Realtor wouldn't show these data to a prospective seller, explain the current credit and economic situation, and then refuse to waste time and money on the listing, if the seller continues to insist on listing at a ridiculous price?
Kevin, I should have added that the price alerts I've requested are for Arlington.
Ace, it's really amazing some of the listings that exist. Some are overpriced, some are delusional (asking peak bubble prices), and some are asking even higher (because of course the values ONLY go up!). It was kind of sad seeing them a year or two ago, knowing that the seller is just some clueless dolt that thinks their wood floors justify their $800k asking price over their neighbor's identical house going for $600k. It was sad because every week that passed was another chunk of bubble equity they were losing. But at least back then people had the excuse of not knowing what was going on.
Quick question: I use franklymls sometimes, but it seems hard to do a quick search on my blackberry for exactly what I'm searching for: 3BR+, 2BA+ townhouse in 22030 with a 2-car garage. Do you know if there is a good way to query the simple interface with those parameters?
Kevin, you might post your q on the other thread for today, because Frank has posted on it himself, and maybe he will see your q and give you the best answer.
I find that it can only handle simple inquiries (e.g., put in "gar" for garage, but even some houses with garages don't appear in the search results) and you have to match actual script that is entered on the listing. So, for example, if the agent hasn't typed "3 bedroom" exactly as you have, I don't think the program can match it in a search.
ace, kev
try gar* that will give you all listings with words that start with gar, (sadly including garbage)
also things like bedrooms are in the header information and are accessed with special keywords, I think bedroom is "bdr".
I don't know if there's anything different about your blackberry interface than the normal web query, though.
Ace, Cara, thanks!
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