Please post your local house search updates, MLS finds, on-topic ideas, and links here.
I thought this was an interesting example of price changes in Warrenton -- a single-family house that recently went under contract in 17 days for (I assume) close to the asking price of $400,000.
Prior Sales:
8/9/2002 (new): $363,755
3/29/2006: $567,000
4/8/2008: $411,000
3/17/2009: $400,000 (contract)
The 2008 sale was not a bank sale.
Tuesday, March 17, 2009
Northern Virginia Bits Bucket 3/17/2009
Posted by Harriet at 12:00 AM
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Interesting interview with Bill McBride (CR):
http://tinyurl.com/dn2e8e
Us: I gotta ask … When will housing bottom? Why?
Bill: There will probably be two housing bottoms. First residential investment will bottom. Residential investment is mostly investment in new construction and home improvement. This will probably bottom sometime in 2009. That also means the bottom for housing starts and probably the bottom for new home sales will be in 2009. That is the good news. The bad news is any recovery in sales will probably be sluggish because of the huge supply of existing homes, especially distressed properties (short sales and REOs). But for most homeowners, when we talk “bottom” we mean house prices. And the news for prices is still grim. Although prices might be near a bottom in some low priced areas because of the significant foreclosure activity, prices are still too high in mid-to-high priced areas. It is really too soon to try to call the price bottom for those areas. It is possible that prices might fall in some areas for a few more years.
A different take on AIG:
http://tinyurl.com/ckbwdz
My friends:
They said yes.
Tabitha,
That's great! Hope all goes well from here on out and you and your family get years og enjoyment out of the house.
Ralph
Congratulations Tabitha!!! How exciting.
Tabitha,
Congratulations! I feel like I missed part of the story though. Last I read you were soliciting opinions on how to proceed when "Mr. D" proposed 570K. I know it is none of my business, but you have been so open about all of this so far. So, what did you do? What is the offer that they accepted?
Best,
EP
Tabitha!!
Wow, congrats!!!!! I'm so happy for you!!!!!!!!!!!!! So, when's closing? Good luck with the rest of the process, it'll be a rush, but it will be worth it.
Cheers!
Cara
Nice work Tabitha. Get out the tractor and take the kids for a hayride around the property.
570K? Man thats a lot of dough for a house in PWC.
Tabitha, I hope things proceed smoothly to closing!
Great news Tabitha - that is going to make my day!
Thank you much, all, for the well-wishes. Must have been the luck of my Irish side ;)
Of course, we're instantly thinking that we're paying too much (we stood by our offer of $550K from January), but then again, we're buying a house that is not on the market, and there simply is no other 11-acre lot that close to the Manassas Park VRE. This time last year, it was for sale for $850K.
ep, all the messy details can be found in the bits buckets the past couple of days...I know this is an unstable situation, so the first order of business is to find a settlement attorney who can draw up the contract. I won't believe this until I see Mr. D's name on the paper.
Don't know about closing--as you all know, we need to be out of our rental by April 30, but we are going to try to talk to our landlord again, because the lady who still lives there said she is not sure how quickly she can get out. But these are small details ;)
And cara, please know that I appreciate your advice, and we have run the numbers over and over again. Life in the Corps is all about contingency plans, so we try to run worst case scenarios. And we are not entirely comfortable with accepting help for the downpayment, but let's say there is a cultural/ethnic angle to that help that makes it a little different from usual. But of course, family is family, and that's a risk...but one we thought worth taking, for the sake of giving our kids the kind of life they will have on those 11 acres.
Of course, it's not over until we've signed our lives away at closing, so I'll keep you apprised of the details (yawn), but just for today, I'm going to feel happy.
Blessings, all!
Tabitha,
how exciting! the entire eleven acres is all yours! wow! i have no reference point of how big eleven acre is, is it bigger than the footprint of the the Capitol? anyways, congrats!
thanks Tabitha,
I figured when you wrote that you'd made the offer that you had already done the due diligence, but it good to hear it explicitly.
Cheers!!
What do you make of this news:
WASHINGTON--New U.S. housing starts unexpectedly rebounded in February, surging 22.2%, according to data on Tuesday that provided a rare dose of good news for the recession-hit economy and fractured housing market.
The Commerce Department said the jump in housing starts to a seasonally adjusted annual rate of 583,000 units was the biggest percentage rise since January 1990.
That was also the first increase since April last year, when they advanced by 1.6%. January's housing starts were revised to a rate of 477,000, the department said.
Analysts polled by Reuters had expected an annual rate of 450,000 units for February.
t,
Check out calculated risk's take on the same numbers:
1) It's seasonally adjusted.
2) It's one month.
Percentages from tiny numbers can be misleading.
But in general, I take CR's position that housing starts will be a forward-looking indicator, preceding the bottom in home prices by 3-6 months. So, if we get another month of the starts coming out of the duldrums then it will be time to start seriously considering getting back in the stock market at the bottom prices.
Woo! Congrats Tabitha! I'm very excited for you. When's the house-warming party? :-P
Good luck Tab…..and congrats. Keep to your due diligence, it aint over yet….
Oh, congratulations! I'm so excited for you guys :). I love a happy almost-ending!
xpovos, I'm already planning the bloggers bash ;) We'll have a bonfire by my pond.
Oops, wait, we haven't closed yet!! Be still, my heart!
Oh, and t,
this my be too personal or something like that, but, some of us are in the market, do you want to share your listing with us??
and all, okay here's my current logic on interest rates, down-payments and mortgage insurance.
We only have the full 20% on a purchase of 250k. (We would have the full 60k by next summer). If we find a gem that we want to buy for 250k or less, great. But we can totally afford to go to $300k. Given that interest rates are likely to rise soon anyway, 1 to 2% by next year is not out of the question, I'm currently thinking that we buy this year with or without the full 20 down, (assuming we find a place we want to buy). The logic being that, while we may pay an added fee for 4 years until we've accumulated 20% equity, next year we'd probably end up paying that total rate for the life of the mortgage anyway, so what's the point?
Am I over-rationalizing my preference for now versus later, or am I making honest sense?
Cara,
I'd say it depends on how far you think interest rates will rise, and how fast. I.e. if you're going to wait for four years to purchase, and interest rates could be 8%, 10%, maybe 12% by then...
Your downpayment will mean more with higher interest payments, and a higher interest rate gives you more flexibility for refinancing later.
Buying now with a large downpayment and low interest rates, you don't have the refi option, probably ever, but you've 'locked in' the lowest payments possible. That's a cashflow decision.
cara,
why not go FHA and keep a bunch of money in your pocket for a rainy day fund or to invest in half price equities now that the stock market is so beaten down?
the rates and fees on fha loans may be higher (???) but given that rates are so low, even the slightly higher rates won't be that high. and you'll benefit when stocks come back or should inflation take off.
Anyone know anything about Belmont Bay in Woodbridge? Price trends, atmosphere, that sort of thing?
Cara,
I think you are correct about increasing your budget a bit. Probably will get much better house for the money you pay. Rates situation is unknown, forward curvers are upwards, but this does not mean much these days. If it really goes down to this 10k difference in downpayment i would say that you generally can find some way of borrowing for it short-term, like using low-interest credit cards, etc, if it will save you money on not paying PMI.
from the point of price --- given your income you can buy now and easily withstand a short-term hit to your home price (unless you plan to live there less than 5 years say).
i would worry more about the tendencies in the neighborhoods you are looking at, what happens with incomes there, are streets getting cleaner, etc.
i want to buy in a nicer area and will not do it right now, too much downward potential for the prices.
xpovos,
3 or 4 years out requires too much guess work for me. That's what Jaime's been asking about, essentially. But in short, there are reasons why I don't expect our income to keep up with others, and I do think the nominal price bottom in my area is in the next 2 years.
John F.
I have the rainy-day fund separated off already, will be buying at a monthly cash-flow basis that will allow us to keep saving at this rate (and hence could invest that money if I wanted to) and I don't actually expect a higher return on my DP cash than I get by not having to pay interest on that amount. If I expected higher stock returns than the 5-6% interest I'll be paying then that arbitrage might make sense, but I don't. (and that's not even accounting for the difference in fees and interest rates for FHA.)
That said, using a 3.5% DP as a comparison point for a fair rent-to-own ratio is what I do all the time.
Cara - its being advertised everywhere, so I can share it w/ you too, nothing is "private" when you've got pictures of the inside of your house on the internet!
http://franklymls.com/FX7006298
Running a search on all 4 BDR homes in 22015, mine is the least expensive non-foreclosure, non-short sale:
http://franklymls.com/default.aspx?m=R&l=0&h=600K&s=-3bdr,+-2bdr,+-1bdr+(22015)
Running a search on all 4 BDR townhomes in the surrounding zips: 22015, 22153, 22152 and 22032, mine is the (again) the least expensive, non-foreclosure, non-short sale:
http://franklymls.com/default.aspx?m=R&l=0&h=600K&s=TOWNHOUSE,+-3bdr,+-2bdr,+(22032,22152,22015,22153)
t,
Looks great. Bet it'll be gone before we get our act together. :)
One random thing, the 2nd bathroom, the green rug around the base of the toilet (a) looks funny in the picture) and (b) is detracting from what looks like a nice choice of linoleum or tile. It probably doesn't matter, any interested parties will come in person.
And the other question is, is there a path connecting Oak Bluff Ct and Premier Ct where the VRE is?
I'm guessing yes, since your listing states under 1 mile...
Cara - thanks for the feedback. Yes, there is a nice trail/path that goes over the small creek and connects the two roads - if you look at the "aerial" view or birds eye on the map at the bottom right and zoom in to the area, you will see it. It's actually more like 1km (.62 mi) from the house to the VRE, "as the crow flies" and the walk is perhaps .75 miles.
That rug should have been lifted for the picture in the bathroom, that is a good suggestion.
Once the flowers begin to bloom, I will have my realtor add more photos - we have a large amount of flowering shrubs and bushes in the planting beds and in the back patio. They will look great in another couple of weeks.
Contrarian,
Good link. Thanks!
This is from Wikipedia on Joe Kennedy: "It has been noted that during the Depression Kennedy vastly increased his financial fortune by investing most of his fortune in real estate. In 1929 Kennedy's fortune was estimated to be $4 million. By 1935, his wealth had increased to $180 million."
Tabitha,
I just got back to the computer after my usual long Tuesday tutoring --
This is great long-awaited news! I do hope all the details work themselves out. I am amazed at the whole story.
Per Contrarian's Link:
"Dent, Prechter and Others Warn that the Worst is Yet to Engulf Us"
FYI, The aforementioned "Dent" is Harry Dent Jr. the same man who told us the dow would hit 40,000 by the end of 2008.
http://www.businessweek.com/2000/00_13/b3674175.htm
Also, "Prechter" is Robert (Dow 400) Precther, the same man who can be seen here arguing with a fellow elliot waver as to whether the depression would start in 1990 or maybe a year or two later.
http://query.nytimes.com/gst/fullpage.html?res=950DE0D61E39F935A35751C0A96F948260
False prophets?
Congrats Tabitha!!!
The divorce houses are *usually* the best deal.
Going from 850K to 550K IS a deal and there are 11 acres to boot!
"Land is the only thing that lasts, Katie-Scarlett" from a famous movie :)
Try to keep Mr. D is a tight box...
MM--
11 acres is about 10 (american) football fields--without the endzones.
It's just about 5.5 soccer fields.
(Keep in mind sports fields don't have trees, streams, boulders, houses, tractors...)
The National Mall is 146 acres. The pentagon sits on about a half an acre (I think.)
Konstanin
Borrowing for your down payment without disclosure (and if you disclose it it won't count for your downpayment) is fraud. It's a very common fraud, but it's still fraud.
Tabitha,
Congratulations!
Wow, 11 acres!
Congratulations Tabitha!
Scott:
http://pentagon.afis.osd.mil/facts-area.html
Scott,
Per wikipedia, the central open plaza of the Pentagon is 5 acres, so the whole structure is quite a bit bigger than that. It really is impressive from the inside.
Also, the National Mall proper is 146 acres (from 1st street on the east to 14th street on the west). If you also include the area from the Washington Monument to the Lincoln Memorial, it's more than double that area.
http://usparks.about.com/library/miniplanner/blnationalmall.htm
Fred--
Okay, I knew my pentagon figure didn't sound right--and I got it from a suspect source--I think it was a hypothetical geometry question about a pentagon plot, not THE Pentagon.
I think I've heard that 5 acre figure before too.
Pentagon (from the link above):
Total Land Area (acres) 583
Government Owned (acres) 296
Purchased or Condemned (acres) 287
Total Land Cost $2,245,000
Area Covered by Pentagon Building (acres) 29 (34 including courtyard)
Area of Center Courtyard (acres) 5
zerodown--
Why should I include the section called West Potomac Park? I said NATIONAL MALL--as defined by the National Park Service--not "all park land in DC."
And since the National Mall (to 14th St) is already 146 acres, I abandoned the comparison at that point.
And since West Potomac Park has a lot of water in it, including the tidal basin, the usefulness of that comparison is even weaker.
I suppose I COULD compare 11 acres to the total area of the U.S.--but that doesn't provide a very good answer to the wished-for "reference point", does it?
In any case, I only looked at National Mall because the original poster asked about the U.S. Capitol plot.
Adam,
It is very difficult to define what is fraud and what is not when you deal with mortgages. Fraud is usually in intent, which is difficult to judge. Another thing is lying on the application, but I never would advise anybody to do so.
If the bank knows that you have a 10k balance on the credit card it definitely will affect your risk profile and they have a way to check it. If you put 20% down in cash, and your DTI still looks decent --- i believe you will get a better deal than if you put less than 20% down (because dti is more of a continuous scale, while this 20% is a discrete cut-off). Not all of the banks subtract all of your other debt from downpayment dollar for dollar.
"What you don't understand is that Dent and Prechter are simply interpreting Elliott and Kondratieff. It appears, unfortunately, at that time they misinterpreted it by either time or price."
And therein lies the problem - you continue to quote sources that have been terribly wrong in the past - so why should we believe them now. They misinterpreted the scriptures (excuse me elliot/kondratief waves) before, why cant they again be wrong now?
"And,if I am so wrong, explain why I, as a contrarian, knew to sell during the bubble when others, who are foreclosing or are underwater today, were buying?...I did it by following Elliott wave and Kondratieff wave."
So unlinke the false prophets of Dent and Precther, it sounds like you have a good understanding of how this all works - divine providence if you will. As such, heres a challenge for you. Why dont you lay it all out for us like Dent did with dates and prices for the Dow:
Dow - Dent says it will rise from 10-13K in the next 6 months, then start to crash back down in late 2009 to 3800-4500 range. Agreed? If not, where did he interpret the prophecies wrong?
So heres your chance to silence all your critics by using your superior elliot/kondratieff wave knowledge by making some near term predictions.
Also, I am guessing that you will not make any dow prediction at all, or if you do, it will be very vague or uninspired. If so, why dont you dazzle us by giving us some other bold near term prediction about commodities, forex, interest rates, etc. Show myeslf, Harriet, KedK, Sarah, John F, all us many doubting Thomases who have questioned the legitimacy of the wave theorists why you have this all figured out.
is this 40-yr-old rambler one of the most over-piced homes in Arlington? location is decent, and a nice, big lot @ 16K sf... but for $1,180,000? last sold on 9/7/2007 for $799,000 and it doesn't sound like there's any update done since then. can the market still support a 45% appreciation over 1.5 years?
Cara,
I know you are/were interested in the Alexandria side of the Franconia-Springfield side and was wondering if you were noticing all the buying activity in that area of late. I was just looking on the map on Sawbuck Realty and it seems like a number of townhomes in the $300K - $450K range are going under contract in less than a week and selling for full asking price. I'm wondering what explains this flurry of buying activity because I've been monitoring that area for the last year and haven't seen anything like it until now. Do you have any thoughts? Is this what is causing you to think about jumping in?
Also, I know it is out of your price range but I do think if you could get this house (FX6782078) for under $350K it might be a fairly good deal. It is VERY close to metro/VRE and I watched whoever was living there remodel the place for a couple years (new deck, dug out the back yard, reshingling a garage and it looked like they were doing renovations on the inside. Granted, it probably still needs some work -- and some extensive landscaping -- but it could be a good buy and it has been on the market bank owned for almost a year.
MM-
That is crazy! There's something odd going on with that...the last sale was to a "relative" but the relative is a corporation? Maybe I'm not reading the records correctly...
Contrarian,
Show me a person who has consistently made money and got rich by following wave theories.
The scientific invalidity of these theories has been shown by many people, e.g., Mandelbrot, Taleb.
That you followed that theory and got out of the market at certain times and made a profit, hardly proves the theory is valid. It is laughable for "technical analysts" to quote Buffett, the ultimate buy-and-hold guy.
Ted K - Contrarian may be on to something...from the wikipedia article he sent us:
"However if the termination of the current Grand Supercycle coincides with the termination of an Elliott Wave of greater degree, then the economic recession should be of a significantly greater magnitude than the previous Grand Supercycle collapse. This would be the case if the current Grand Supercycle is the 5th wave of the so called X-Wave or Millennium wave beginning in around 1000 A.D. with the end of the Dark ages."
Makes perfect sense to me!
Better yet, what if this is not just the end of an X wave, or even a Y wave but a Z wave:
"The authors learned when they examined human development from the end of the last Ice Age in about 10,000BC through to 2000AD, that there was evidence of several large Elliott Waves. These larger waves have been designated as follows: an X Wave that lasts 800 to 1,000 years and is composed of five complete Grand Super Cycle Waves; a Y Wave that lasts from 2,500 to 3,000 years and is composed of five complete X Waves; and a Z Wave that lasts from 8,000 to 10,000 years and is composed of five complete Y Waves."
http://www.gold-eagle.com/editorials_99/mbutler120299a.html
Honestly, I cant imagine why we doubted any of this!
"This also implies that the coming correction is not simply going to be a GSC correction wave, such as at the time of the Plague or after the Mississippi and South Sea bubbles; it will be more substantial and of longer duration."
Yikes - worse than the Plague! Sounds like I should invest in some body bags and corner the market!
"One item that needs mentioning (But by no means the only one) is the Year 2000 Computer Date Problem, and how that can perhaps initiate or exacerbate the bear market to come. This impact of the Y2K problem may overshadow all of the other preceding problems in order of magnitude."
Ahh that explains why there was that huge run on the canned goods and sundial markets back in 1999!
"In our considered opinion, Y2K will most likely turn out to be one of the biggest problems civilization has faced since the beginning of recorded history on a global scale. It will likely be the trigger, if another is needed, that could propel the world into a chaotic and violent bear market worthy of the previous Grand Super Cycle (1776-1998) and X-Wave (1000-2000) bull market it will correct."
Obviously...
"For example, the episode anticipated in the Elliott model could begin with a collapse in the US equity market with or without a real Y2K global crisis. Such events would trigger a lasting depression, which would be exacerbated by any reductions in food production as a result of changed weather patterns.
If oil supplies begin to dwindle during or even subsequent to these developments, the extent and duration of the depression would be magnified. The automobile market and the private transport system are likely to feel the effects early on as oil and oil derivatives become scarce and ever more expensive."
So thats why GM stock is in the crapper!
"Please observe that the events postulated here are in the domain of the real world – they either have a significant probability of occurrence, or conceivably could even already be beginning to affect our lives. We have avoided other possible causes of global doom and gloom favored by some of the more extreme doomsayers and catastrophe prophets."
So apparently, these guys are the "sunshine and buttercups" part of the elliot wave crowd.
Contrarian, in order for us to get a more balanced picture of where home prices are headed per the Elliott wave, do you have anything from the "extreme doomsayers and catastrophe prophets" you can send us?
zmonet,
I am a symptom not an effect of the activity in Kingstowne. I mean seriously these are the most affordable nice THs near any metro station in this sector of the DC metro area, of course it's hopping now that prices have dropped so "unbelievably" far. And seriously, if you do a little bit of funny math you can pretend that rental parity has already been reached. The one's moving within a week? are priced 25k to 75k under "comps" and are all Short-sales or REOS. and I profiled the shorts that have gotten 100k or 50k underbids and are getting relisted to solicit better offers. No, it's hopping here, which is one reason for me to hold off, really... (let everyone else fight the good fight to bring comps down)
Thanks for the tip on that one, it's such a dog from the outside (as you noted in the complete and utter lack of landscaping) that I had assumed it was equally crap on the inside. It's an absurdly premo-location. So, if you did make it into either a tear down or do some totally amazing curb-appeal changes it would hold its value nicely.
tedk said: "It is laughable for "technical analysts" to quote Buffett, the ultimate buy-and-hold guy."
I would modify this statement to say "...to quote Buffett, the ultimate fundamental investor." But I agree completely with the point you were making.
The anon - This elliot wave stuff sounds like the Scientology of the financial world.
"This impact of the Y2K problem may overshadow all of the other preceding problems in order of magnitude."
Maybe this was another case of "price or time misinterpretation." The wave prediction of the Y2K blowup was right, just the timing was off. It will probably blow up in Y2K12.
;-)
I've been following this blog for a few months and want to thank everyone for the great information and the free education. I've learned so much. Validating my ignorance has kept me from posting comments but today I feel compelled to emerge from the shadows. Congratulations, Tabitha! I'm so glad it worked out for you! Enjoy your new home.
MM, I saw that listing previously and had exactly the same reaction as you -- whuhhh??? There is NO way the seller will get anywhere close to that amount, even if the lot can be divided. The asking price is even out of line with what are IMHO mostly delusional prices in that range.
Selbo, I am truly honored to have pulled you out of lurking ;) Just keep your fingers crossed, keep praying to St. Joseph, whatever it is that you do, because it ain't over til I'm sitting on that front porch with the key in my hand and the autopay set up for my biweekly mortgage payment.
Speaking of which, St. Joseph has been very, very good to our family. I highly recommend him.
Contrarian,
The "prophets" was just a flippant remark on my part -- sorry. It would be silly to hold economists
to such a standard.
"John F. Said...
Maybe this was another case of "price or time misinterpretation." The wave prediction of the Y2K blowup was right, just the timing was off. It will probably blow up in Y2K12."
Actually, theve got it all wrong. Ive looked into this extensively. The Z wave is one of 5 waves in the 750,000 year Alpha wave, of which is one of 5 in the 65 million year Gamma wave.
As far as I can tell, we just ended the second Gamma wave a period starting with the Cretaceous–Tertiary extinction event (the comet wiping out all the dinosaurs), and ending with the invention of the Unicycle.
That second wave was marked with tremendous dinosaur/humankind suffering, but that is now over. The third wave of immense prosperity has now started!
This clearly suggests we should invest in tadpoles and cold fusion technology - along with housing in Arlington, Alexandria, parts of Fairfax and DC - these investments will hold their value til the next wave starts in 65 million more years.
See that proves it - you bought at the absolute best time ever!
The Anon,
LOL x 10 !!!
Contrarian,
I never said that the economy doesn't have serious problems. Housing can indeed fall another 40%from current levels in many locations as unemployment rises. I have said many times that another 20--25% drop in the DC area is possible; many of us can agree that under current conditions, the market has further to fall, but no one can say by how much with certainty. There is a great deal of randomness with these things. I can only say that people who buy now should be willing to ride it out.
That still won't bring it down by 90% from the peak for most of the DC area, as you claimed before.
I see no validity in the wave theory, and any conclusions and dire predictions based on that theory. But I have no problem with the views of Roubini, Shiller, Taleb, Pimco's Bill Gross, et al., who all say that there is a lot still to come, but their views are not as dire as your wave theorists have it.
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