Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Holy moley. The steepest discounts list has reached greater Alexandria. Two bank-owned TH's near Mount Vernon for ~$70k each. http://www.franklymls.com/FX6932561http://franklymls.com/FX6728267It's spreading in. You can't contain it. TH's you can buy for the cash you've saved up for your downpayment are coming. (Okay so they both look really really awful, and the location leaves a lot to be desired commute-wise, but still, this is significant.)
Cara, that sounds like a movie trailer! :-)
I think we'll see this trend expand. More listings from Fairfax County and inside the beltway. Even though PW County houses shot up the most during the bubble, they didn't exceed the bubble power of Fairfax, Arlington, and Alexandria markets by very much. Something like a 300% increase versus 250% or 200%. What goes up will absolutely come back down. Arlington is a little slow on the curve, but it'll get there one way or another.And yes, it is like an apocalyptic movie: it cannot be contained, no homeowner is safe.
kevin,When ACE said that I immediately pictured house number one getting up on it's garage struts and lumbering into YOUR neighborhood. As if it's the junky cheap houses themselves that are moving in.
Cara,You asked yesterday if a seller can reject any offer, even if it's an offer for list price, no seller subsidy, financing in place, etc. I understand a seller listing their home is not an offer to sell in legal terms. It's kind of an advertisement to show around what price the seller would be willing to sell. The buyer then places the official offer legally. An offer is not binding until is it accepted, so the seller would then have the ability to accept or reject an offer. If the seller counteroffers, then the seller's counteroffer is binding only once the buyer accepts.
MJC,That was my understanding as well, thanks for the clarification. I think shamrock is probably right that what that phrase in the listing implies is that they don't want you to show the place. You know, something like "my ex-wife's lawyer is forcing me to list this house so she can get 'her' money out of it, but I have no intention of selling and giving her a dime". Or some other nasty situation.
cara,could be. but if i remember correctly from few years back most DC properties had that phrase in the listing descriptions and my agent said it didn't really mean anything. it could be just that people are following suit without thinking much about it.
We have our first inventory update in 2009 (updated to todays date):http://www.virginiamls.com/From Jan 1, 2009 to today, inventory changed in each county as follows:Arl -0.4%Alex +0.6%Ffx -7%Lou -7%PWC -7%In early 2007 & 2008, all 5 counties were basically flat (1/01 to 1/22). Arl & Alex look to continue that trend while the outer counties are clearly down.Incidentally, back in Jan 2006 (the year when inventory exploded) it was evident it was going to be a big year pretty early on.In the first 22 days of 2006 inventory went up as follows:Arl +15%Alex +9%Ffx +14%Lou +17%PWC +19%So far, we see no sign of that returning.
Hmmmm, $50/sqft?If you paid cash and if cash could earn 2% today (doubtful) this place would cost about $100 a month--about 8 cents a sqft ft per month.My Public Storage space costs about $3 a sqft per month!So, buy this place for STORAGE! (IF you have the cash and need the junk space...)
getting up on it's garage struts and lumbering into YOUR neighborhood.Well, it does look like a CREEPY house, LOL!
CRT,thanks for the numbers.It's possible that the inventory numbers in the outer counties are artificially low right now due to foreclosures being stayed, and completed foreclosures not being brought to market in a timely fashion until spring. So it will be interesting to watch this as spring progresses.
crt,but I would also say that the current down numbers for the inventory in FFX reflect well with what I'm seeing in the prices of individual properties. They really have reached the point of rental parity so long as the buyer is not discounting for future loss risk, and the current (in my opinion exorbinant) rental prices are used for the calculation.Which is my round about way of saying that at least the bottom segment of the market should start to clear, and thus the median sale price may skew lower until the higher tranches also reach clearing prices.
"Cara said...Which is my round about way of saying that at least the bottom segment of the market should start to clear, and thus the median sale price may skew lower until the higher tranches also reach clearing prices."Could be Cara - We'll just have to wait til the MRIS report is out and track the low end total inventory count and see if there is any firming going on. Spring is so exciting isnt it!!!
Has anybody heard anything more about the alleged bulk of assets that banks have been keeping from the markets, supposedly to dump in the near future? I have heard whispers in the past several months that the number of properties going on the market are far fewer than the number of houses being foreclosed, and that there was going to be a massive dump at some point. Any thoughts?
crt,Spring is exciting. I think my enjoyment has been greatly improved by our decision not to buy until August at the soonest. Makes the watching much less stressful.
Question for Frank: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, (re shadow foreclosure inventory)CRT and Tabitha (or perhaps Sarah) were discussing actual numbers on that recently.(not that I could find it)and Calculated Risk has just cited a CNN money story including Maryland on the topic. CNN Money Ghost inventory
Re "shadow inventory". check out this graph about 1/2 way through the presentation regarding REO inventoryhttp://novabubblefallout.blogspot.com/My guess is this is likely a rough count of what the banks are holding back. The 6,000+ units in PWC is more than the entire MLS in the county combined.
As far as how it is released, my guess is it wont be like it is being "dumped". The banks realize doing so would depress market prices even further. My guess is they will ease it onto the market over time, and probably have been doing so for quite a while now. However, as you can see from the chart on the entry above, theres ALOT of it they have to get through.
CRT, the link you provided was for this blog, think you intended for something else.Yes, "shadow inventory" is what I meant, but I am using this term less these days as some people are using it to describe the inventory of houses that people have intended to put on the market, but instead are "waiting out the storm" (yeah, good luck with that, reality will catch up in 20 years). Ghost/shadow inventory... they must be planning a dump or accelerated asset liquidation. The property taxes on those homes is just another black hole on their balance sheets they'd want to get rid of. It's like water building up behind a dam: either it's going to start pouring over the top, or burst. If they flooded the market with affordable homes, that would be wonderful. I have heard rumors second-hand that the banks are waiting for something, probably the terms of a bailout, and they'll just toss the assets as junk, not caring if they're bought at 20 cents on the dollar. I heard that this would happen by this March, but I take it with as much skepticism as anything else I hear these days.I'm not looking for a "steal" or profit, I just don't want to be deeply underwater like everyone else. Nor do I want to pay five times my salary for a house and be house-poor for the next thirty years.
"Either lenders are overwhelmed and can't get these properties back on sale quickly" said RealtyTrac spokesman Rick Sharga, "or they're deliberately slowing down."When I first started researching this shadow inventory myth, I asked a friend of mine about it who worked in NYC at a large bank that Secretary Paulson decided to let fail a few months ago. I concluded it was either a resource restraint (which can be fixed in a few months with a temp agency), or it was intentional. Her explanation: they're putting them out slowly to get the most they can out of them, and with the hopes that the market will rebound." I couldn't believe that these uber-rich bank executives could be so stupid. There wasn't going to be any rebound, obvious to anybody that understands the market and the bubble. Also, each bank is in it all on their own. So what's to say that BoA will continue to release the inventory slowly, trusting Lehman to do the same? I guess the whole "good for the goose/gander" played into effect, since those jackals only really exist for the next moment.Regardless, they can continue to build up their assets and pay the property taxes on those houses, and I'll continue to rent and wait patiently.
Check this out- almost $1 million asking price for a 1 br condo See also Frankly
Sorry about that Kevin. I think this is it.http://www.nvar.com/Portals/1/marketstats/2008yearendpressconference.pdfunfortunately, I cant see it myself as it keeps locking up my computer - however there is one slide that shows REO by county.In the case of PWC, there are over 6000 units Oct 2008, also showing those added that month. Since that number is more than the entire MLS inventory for PWC, I have to conclude this is the "shadow inventory" or pocket listings the banks have yet to try to sell.Like you, I think the build up is a mix of ineptitude (inability to process them quick enough), and the realization that if they all list, it will depress prices further (good for the goose, good for the gander as you said).The most curious thing is the dramatic drop in stated inventory in very hard hit places like PWC (about 1/2 the available listings of last year). You would think the banks would realize this, and keep cranking out REOs such that inventory doesnt decline, but just stays flat.I wish we knew how many shadow listings the bank had say, 1 year ago. If it was 12,000 in PWC but now only 6,000, you could conclude the stated inventory decline is probably going to continue. THat said however, my guess is that shadow inventory has been increasing the whole time - it really is a conundrum...
CRT, interesting stuff, thanks. Interestingly, NVAR is calling 2000 "pre-bubble", which isn't entirely true. I'm of the belief that it started in about 1998, but I have heard people say it started anywhere from then until 2006. I think somebody of authority needs to identify the exact moment the bubble started. His name is Robert Shiller.
Kevin, I think according to the Case-Schiller index prices were pretty flat in real terms until 2000, and the bubble started around then. But I think it was a little slower in the beginning -- change between 2000 and 2003 was much less than change between 2003 and 2006 (like maybe half). This is also what the Zillow graphs show. I'm not dismissing the possibility that the bubble actually started earlier, like 1998, but I've never heard that before.Either way, I don't expect prices to fall below 2000 levels in inflation-adjusted terms overall (and maybe around 2002 in some areas), but I could end up being wrong about that.
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