Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Saturday, February 7, 2009
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
33 comments:
It looks like the $15K homebuyer credit made the cut in the Senate Bill. We can only hope that this clunker gets tossed or substantially modified (e.g., subject to an AGI phase out) in conference.
Yikes, another trip to the sausage factory.
I expect Monday's market to react very strongly to this news. Just as it was reacting strongly yesterday (Friday) that it would go through.
Should be a net wash, maybe a bit more down.
Generally, people seem to realize that there's nothing the gov't can actually do to stop this/help this. But there's still that unbridled optimism that somehow things will be better.
Well I guess we'll all see who's willing to catch the falling knives this Spring.
We'll see who has the job, good credit and big bucks (and guts)to pony up to purchase a home in this Economic climate
I'm sure all the Sellers are now thinking they can get their dream prices
I won't be purchasing- as we all know - 15K is chump change in our Market!!
unbelievable! the bank-owned Harrison St house just dropped another $50K! there must be some costly fatal flaws for this house to fell through two contracts and cut $50K every month like clock work.
MM, why don't you take your Realtor out and look at it?
Yes, there is probably some type of inspection problem, but it could also be that they really, really, really, want to get rid of it.
If you like it you can make as low an offer as you're comfortable contingent on the home inspection, etc., etc.
MM,
it needs to drop another $300k at a minimum. I'm sure someone eager to get their fingers cut off will catch the falling knife though.
I've noticed in my little corner of Fairfax County that a number of properties that go under contract reappear back on the market. We're talking 30 year old townhouses for $250k are reappearing. Some townhouses for < $200k are languishing on the market.
I see some houses that go under contract and come back onto the market several times, which may indicate multiple offers. Getting credit must harder even in over-privileged NoVA.
spunky, that's what i'm saying. in my neck of the woods, the over $500K market is dead:
20111 sold-for sale
0-12 12/08
3-12 11/08
0-16 10/08
0-18 9/08
3-23 8/08
2-26 7/08
2-29 6/08
20110 sold-for sale
0-4 12/08
0-8 11/08
0-9 10/08
0-10 9/08
0-12 8/08
0-12 7/08
0-16 6/08
if you have the job, the credit, the downpayment, and the freedom to buy a more-than-half-million-dollar-house, why would you do so out here?
Term-X,
After watching Peter Schiff's "unmitigated disaster" interview yesterday, I'm burying my sorrows in bacon for Saturday breakfast. (Bacon air-freshener, anyone?)
I do foresee massive house buying, at least at first, around here. I think inventory will start to be a problem among resales and builders will be building to make up the difference. I do think it will make a difference for fence-sitters, especially here in this area of cushy stable government jobs.
I've never really said "it's different here", because it was obvious we had the same bubble issues as everywhere else, especially in the new developments which were riddled with speculators. But I don't know how you can argue that an $800 Billion payout that includes massive spending on government employees and the buildings that house them will hurt this region. And house prices have already fallen significantly, with little (cheap)inventory left in places like Prince William County. Will we lose jobs here? That's the only thing I can think of that would make prices fall more.
As for the rest of the U.S., is encouraging people to stay put and get tied to a house when they are supposedly going to lose their job a good idea? Why wouldn't it be better to encourage people to be more mobile at a time like this -- so they could travel to where the jobs are if they lose theirs? Tax credits for mobile homes with wheels might make more sense. . . .
Here are some comments from the WSJ readers on their reactions to the housing part of the "stimulus". This is my favorite:
"Can I sell my house to a family member who then sells it back to me so that I can get the $15k for 2009? -- Comment by Ryan - February 5, 2009 at 4:56 pm"
I would imagine there will be some fradulent actions taken by some to take advantage of the $15K credit. The legislation as it now stands requires that it be a purchase of a primary residence and that you have to own (and live in it as such) for at least two years or you'll have to pay the credit back. The reality is though that unless something in your tax return flags the IRS, only a very small portion of returns are audited - there will be people trying to scam the system and I suspect millions if not billions will be lost due to such abuse. I wouldn't be surprised to see changes made to the legislation regarding requirements (i.e. no sales to family members/friends etc.), but again the issue will be enforcement. I would suspect people who do apply for the credit may face a significantly higher risk of being audited by the IRS. It is always best to play things straight up, especially if you do have ambitions to be appointment to a high level position in the federal government in this or any future administration. LOL!
Ralph, $329900 for a 2000 square foot house with a 13000 square foot lot in the "Country Club" neighborhood of Arlington??? That neighborhood commands a considerable premium. That particular house and land has been valued above the value you think would be fair since 2002, and the tear down value of the land today, even with the bubble bursting, etc., etc., would be substantially more than $320K, and prices in Arlington haven't dropped to 2002, particularly not in that neighborhood. Bear in mind that Arlington assessments lagged/were lower than the market pretty significantly until the last year or two.
http://www.co.arlington.va.us/Departments/RealEstate/reassessments/scripts/Inquiry.asp?action=view&lrsn=3350
Look at the assessed values of the houses near it, if you don't believe me.
So unless the land contains toxic waste (which it might, you never know!), the entire metro area housing market would have to collapse considerably more than it has to date before it will get down to $329000.
Ace,
Forgive me for I'm a bear among bears. I believe 2002 will be grouped in with the bubble years before this all plays out. I've been told that Arlington's demographics have changed and that its population is more affluent than before. The stock market valuations and easy access to credit have made us all feel rich in recent years. The coming years will separate those who thought they were wealthy from those who are. Then we'll all know how overpriced that house may be.
Ralph
dgg, I agree this will be abused. I was talking about it with my coworkers yesterday. Scheming, if you will. But I came to the realization that because of all the transactional costs associated with buying and selling, it wouldn't reward them with very much. Nothing close to $15k at least.
2002 was part of the first bubble (I consider DC Metro -- and the coasts -- to have had two bubbles, the first which would have fizzled in 2003 if it weren't for the credit-bubble coming in and turbocharging everything).
Harriet,
CR has more details about the (truly awful) proposed $15K tax credit. It is not means-tested, i.e., you get the credit regardless of how much you make. I fully expect the conference members to impose an AGI phase out if any credit is enacted.
Moreover, the proposed credit is modeled on a similar credit enacted in 1975. But the credit in 1975 applied only to new homes -- the type of homes sales that involve the creation of construction work. I expect that conference will place a similar provision into the proposed legislation, perhaps also extended to REOs or short sales.
In terms of the impact of the tax credit and stimulus legislation upon the local economy, I have no clue. The devil is in the details. As it stands now, the economy is bleeding jobs, and the large law firms are laying off in droves. Water does not flow uphill; when the client base for law and lobbying firms is hurting, so too will be the law and lobbying firms, eventually. The stimulus notwithstanding, the market in the "nice" areas will continue to deteriorate, albeit slowly.
NoVAWatcher,
Just curious, what are the two bubbles? I usually think of the .Bomb Bubble and the Housing Bubble. Is that how you see it too?
One of the benefits of a recession is that the inefficiencies are cleaned out. That never had a chance to happen after the tech bubble, because bubble #2 with excessive real estate valuations was already underway.
I'm under the impression that our fearless leaders on the other side of the Potomac are more interested in reinflating the housing bubble than creating an environment for individuals and business to succeed. Inflated real estate values/prices take capital away from productive enterprises & individuals. Maybe they don't believe Americans are capable of being productive anymore.
Ralph
OK, Ralph, as someone who is looking for a move-up house, I hope you are right, and that it will happen soon. I'll gladly take a hit on my current place to get a bigger reduction on the prospective new place.
I think there are a lot of items in the stimulus package that will the employment fate of many in this area. Whether they will remain in the final package, and whether they will be more than offset by the other factors now operating in the economy, remains to be seen.
oops, that should have been:
"will benefit the"
Term-X
I wouldn't be surprised to see some type of income limitation put in place on the credit in conference committee - although if one is put in place, I would expect it to be much higher than the phase outs on the $7500 credit from last year (perhaps double those). I also wouldn't be surprised to see them remove the condition that the credit would have to offset actual federal tax liabilities because as it stands now, your lower income to lower middle income people will not be able to claim the entire credit (even in the two years provide to claim it). I disagree that they will change the credit to appy to only new homes built. I think they will leave it as is and apply to all purchases. The last thing the housing market needs now is incentives to build new homes UNTIL the inventory of all homes on the market is greatly reduced. IMHO, this would be a serious error that would compound the problem in housing. Again, the last thing needed is more supply. I don't see this credit as an attempt to create jobs as much as it is to restore some stability and help to put in a bottom for the housing market by encouraging potential buyers to take the plunge. It is debatable as to whether this will work obviously. In my opinion, the entire bill is a mess and we'd probably be better off in the long run doing nothing than passing this bill (as the non-partisan Congressional Budget Office has said).
Kevin -
Great point on how it might not be advantageous for people to try to work the system given the costs associated with selling a house. Even if you for sale by owner, the settlement/closing costs are still significant enough that such a "fraud" would probably not be pursued by many.
Redfin reports the zipcodes with the biggest and least discounts from asking price (sold in the last 2 months):
http://blog.redfin.com/washingtondc/2009/02/biggest_discounts_february_update.html#comments
In NoVA, Great Falls & McLean zips are the biggest discounters.
dgg:
"Again, the last thing needed is more supply. I don't see this credit as an attempt to create jobs as much as it is to restore some stability and help to put in a bottom for the housing market by encouraging potential buyers to take the plunge."
The last thing needed is this tax credit. The underlying problem is that housing is overvalued relative to incomes and rents; hence, the correction. The tax credit will merely be a speedbump on the way down. This won't provide stability nor will a one year tax credit "put in a bottom." Once it expires, we're back to square one.
And the ostensible purpose of the provision is to create jobs, if you listen to Sen. Isacson, the sponsor of the amendment. He said that the problem with our economy started with housing, and this is his attempt to address it. But this is disingenuous, and I agree with you that the proposal has nothing to do with job creation. Isacson is a former realtor and all this really is is a giveaway to the NAR. Nevertheless, in order for the conference committee to approve of the proposal, they must tweak it to make it appear that it is target at job creation.
Ralph: The two bubbles affected housing.
The first was the 10-15 year cycle you see on the coasts. For example, the place I bought in 2002 for $245k was built and sold in 2000 for $180k. Houses don't increase by 1/3rd in value in two years. That was unsustainable, and undoubtedly would have petered out by 2003.
The second bubble was fueled by funky credit. This is the one that trickled in in 2003, then went full throttle in 2004-2006. Call it the 'credit bubble', if you like.
This credit-fueled bubble can be seen hitting Phoenix and Las Vegas in this graph. San Diego is hit first by the coastal bubble, then after the first stage is exhausted, the second stage kicks in (credit bubble), shooting San Diego to the moon:
http://www.housingbubblebust.com/CaseShiller/West.html
This is a little messy, but you can see the full bubble (or back-to-back bubbles) for DC here:
http://www.housingbubblebust.com/OFHEO/Major/MidAtlantic.html
Ace: Speaking of McLean, here are a couple of short sales/foreclosures
Bought: $2,290k in 2005
Asking: $1,449k
Percent: 67%
http://franklymls.com/FX6871384
Bought: $1,230k in 2005
Asking: $960k
Percent: 78%
http://franklymls.com/FX6732885
Bought: $1,599k in 2006
Asking: $1,299
Percent: 81%
http://franklymls.com/FX6956348
http://franklymls.com/default.aspx?m=R&h=ALL&l=400K&s=mclean+active&sort=sold
It is odd that Mclean isn't discussed as one of the "immune" areas along with Arlington and Alexandria, etc.
It fits the general description in that it hasn't seen huge price drops because buyers and sellers are still at a standoff.
NoVAWatcher,
thanks for the clarification. I've seen the Case-Shiller data plotted out like that, but it didn't show the pre-2003 bubble distinctly. I like that the graph shows inflation--a useful addition would be median income. I suspect that plot would be much flatter and would demonstrate that while housing prices were exploding (shown explicitly o the graph) and cost for goods and services was increasing (implied by rising inflation), the ability to pay wasn't there. Then, each and every politician and appointee who is trying to reinflate this Hindeburg of a bubble would see that they're relentless series of bailouts only serves to continue impoverishing their constituents.
Ralph
Ace,
I'm actually thinking of working with the listing agent of the Harrison St house directly. I don't know yet if I want to get my agent involved.
"Again, the last thing needed is more supply. I don't see this credit as an attempt to create jobs as much as it is to restore some stability and help to put in a bottom for the housing market by encouraging potential buyers to take the plunge."
Yeah, but how stupid and futile is that when houses are so overpriced to begin with? I mean, it's not like we're anywhere close to pre-bubble-plus-inflation levels. So I fail to see how oversupply is a bad thing. God forbid people can start buying houses with 20% down and not seeing their entire paychecks go to their mortgages every month for thirty years. Here's to hoping that houses lose another 50% of their "value".
So what happened here?
North Arlington --
2008 tax assessment: 738,000
2009 tax assessment: 706,700
Sale 12/23/2008: 538,000
Here is one of the best bargains in N. Arlington, i.e., what happens when the seller wants to sell and is willing to end the stare down.
http://www.co.arlington.va.us/Departments/RealEstate/reassessments/scripts/Inquiry.asp?action=view&lrsn=18885
bought 7/05 for $1.325 mill; sold 12/08 for $1.0 mill. 3400 sq. ft., 2 car garage. Very nice, well-built house.
Kevin,
My comments on the stimulus are not a commentary as to the merits of it. I have stated several times I believe we would be better of it nothing past and things were allowed to play out as they will in our economy. I don't believe the intentions of the credit are to increase housing supply (by encouraging a surge in new building), but to help bring down the amount of available supply and reduce the inventory out there - with the goal of putting in some type of floor. Do I think this is the wise course? The whole plan outside of a few things are a waste IMO and not in our best interest long-term. When it comes to housing, I don't think we need more supply. Even without this credit, I think there is plenty of inventory out there with more to come that would more than be enough to continue to spur the decrease in housing prices in markets like in NOVA. If they are bound and determined to try to use government intervention to create jobs - look somewhere other than the housing market and new building if you ask me. Waste money on something we might actually need in this country like a new electrical grid, etc.
zerodown,
the seller and buyer have the same last name for the CCH house. so my guess is the son bought it from his old man and stuffed $500K in his savings account before sending him to Florida.
MM:
Could be, but it should have been coded as:
2 Sale or gift to relative
zerodown,
thanks. didn't know it'd be recorded differently.
do you remember what the listing price was by any chance? i googled that address but no hit.
Claire McCaskill said something hilarious on Meet the Press this weekend. Basically that the idea behind the credit was to get all this inventory moving, so that the process is not slow and drawn out but instead that we can get it over with quickly.
In other words she admits that the 15k won't do a thing to prop up prices, rather that by moving inventory we'll get to a clearing price sooner.
I think, market dynamic-wise, she may have a point. Once seller's put their house on the market in anticipation of this as a buyer stimulus, and then see that even 15k of free money doesn't get them their wishful thinking prices, then capitulation may begin. Plus, every comp helps bring down prices. I think the 15k should count as a buyer rebate and be discounted from the sale price for the sake of comps.
Post a Comment