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Wednesday, April 1, 2009
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55 comments:
Just wanted to pick up on the comment in yesterday's thread re schools (ie Edison and Hayfield). My point the other day was I wouldn't rule out Kingstowne as an option *solely* on the basis of schools when there are other considerations (ie proximity to Metro, commute, etc.). While my husband and I didn't have kids yet when we first lived there 10 years ago, the more we got to know families with young children, we became less concerned -- at least on the elementary school level -- that the schools there would provide a good education in a safe and friendly environment. Test scores tell just part of the story, and I think it's important to also talk to parents with children there, visit the schools in question and make your own judgements. The folks I know with kids at Franconia, Lane, Island Creek, etc., are all highly educated professionals and it's hard for me to imagine that they would stand idly by if their kids were receiving substandard educations. I know less first-hand about the high schools, but it's my understanding that Hayfield has improved as overcrowding eased with the opening of South County, and the students I have met from Edison have been well-rounded, nice kids. Overall, I have to say after experiencing schools in other parts of the country, there are very few truly "bad" schools in FFX Cty and I definitely wouldn't lump the Kingstowne schools into that category.
Notes from the field--
We have been actively looking to purchase in the Bethesda, Chevy Chase, Kensington area this spring. (I know this is a VA blog, I live in McLean, moving to Md). I know that the stats look like there is some inventory around, All I can say is, there is really nothing out there. Prices are minimally off of peak. Open houses are much more busy than they had been. Properties that had languished on the market for ~9mo suddenly went under contract without any real price decline (I'm waiting for sold prices to become available). We've put offers on 2 places. One was a renovate and flip, on the market ~6mo. Offered ~90%- he hardly budged. The other was an estate on the market almost a year. I agreed to list price and asked for some closing costs, they replied that they just signed another contract (That one hurt). I hope this is just a temporary spring blip, but it feels like 2005 out there.
some might remember i posted these two new Arts & Crafts THs in Arlington (22207) a few weeks back. well, after sitting on the market for 451 days, they finally went short-sale.
last sold
8/18/2003 $400,000 (tear down?)
original listing
1/2/2008 $1,150,000
current listing
3/30/2009 $899,000
anyone think they will sell before the banks take them back?
crt
april fool's?
eponymous, MD is at least 9 months behind VA in its progress through this mess due to the style of foreclosure process there. You may not see any price movement for a while in the extremely desirable areas you're looking at. If Arlington and Alexandria start to see movement this spring then I would hold off on a MD purchase for another year to let things work themselves through. If they don't see much moevement, then it's likely that Chevy Chase won't either.
Yep - im an idiot. I didnt read much past the headline but it says at the bottom its an april fools joke. Normally im a bit more cognizant of the date - Sorry!
Note too, I have just deleted my prior post in a very feeble attempt of damage control. Still cant believe I fell for that!
Cara,
Except Rockville has shown significant decline, but also lots of activities. This four-year-old SFH sold for $800K new went on the market last week at $625K, and is now under contract. I don't think I've seen such dynamics in Alex/Arl yet (or forever).
Cara -- one other thing I meant to ask -- have you considered Metrobus to the Springfield Metro? A number of the neighborhoods that Ralph mentioned the other day are serviced by Metrobus. It's not a bad trip to metro via bus from that area and there are some nice neighborhoods worth investigating. (We currently live in that area and are very happy here.)
Here's an example of a place I'm pretty sure is walking distance to Metrobus:
franklymls.com/fx7001050
It's a short sale and it's under contract, but the price is comparable to a TH in Kingstowne.
Gigi - I think you need to differentiate between Kingstowne and Lorton. Kingstowne yes, Lorton no. That was what my research showed and my contacts told me. A lot has changed in the 10 years since you have lived there, that is all I can say.
The concerns you mention about Hayfield as if they were in the past, are not. They are still very much a concern and I know from a personal relationship w/ prior school board members who have a lot of communication with people of all districts within the county, and there are many parents who actively complain to this very day about Hayfield.
You may be right, compared to other schools throughout the nation, FFXCTY is definitely better. But within FFXCTY, give me Lake Braddock or Robinson any day of the week over Hayfield.
Elementary schools, I think the results show that Kingstown would be highly preferable over Lorton.
A problem is, though, if you buy a home and have a 3 year old kid. In less than 10 years, that kid will be in middle school. If you know you wouldn't want to live in that area and have your kid go to Hayfield (which I for one definitely would agree with), then you have basically determined that you must move within 10 years.
Personally, I bought in an area where I don't have to have that worry ever, as I am covered w/ great schools from K-12.
As for metro bus to the Franconia metro, it is a good option to have. I have one a couple hundred feet from my TH front door. But the round trip commute from metro bus to metro to DC is definitely longer than that of the VRE, which is a slightly further but definitely walkable (approx .65 mile) from my house.
I noticed this marker is hardly discussed here. Is it because it is too optimistic?
The housing affordability index? It continues to post record highs which is not unexpected, but does show (in my mind) what a terrific market we have right now.
NAR’s Housing Affordability Index rose 0.9 percentage points to a record high 173.5 in February from January. The HAI is a measure of housing affordability that shows the relationship between home prices, mortgage interest rates and family income, and has been tracked by NAR since 1970.
The NAR said a median-income family, earning $59,700, could afford a home costing $285,600 in February with 20% down, assuming 25% of gross income is devoted to mortgage principal and interest.
mm, looks like the "owner" of that duplex is a resident of Clarendon 1021 (i.e., bubble ground zero). Why am I not surprised.
CRT - I missed the april fool's-related link. come on now, just repost it so the rest of us can get a laugh.
t, regarding the affordability index: it's cheap money causing the result you see. some people not only want a low monthly payment, but also don't want to overpay for the house itself.
buying something because the monthly payment is affordable without regard to the absolute purchase price is a great way to set yourself up for misery in the future.
Eponymous -
You are also shopping in the "Spring Market" with lots of Press about Spring Bounce, Increased Sales and the ever famous "Is this the Bottom" that is currently the hope/fantasy of every Seller right now.
Sit back, enjoy your Summer (go on vacation!) & check back & see what hasn't sold next Fall.
I think you will find your deal then...
But keep you eye on Closing prices & Sellers Concessions in the mean time!
T,
Totally agree in terms of Kingstowne vs Lorton (that said, the ESs I mentioned primarily serve 22310 and 22315, and if you are looking for places walking distance to Metro that puts you at Lane or Franconia, both schools about which I've heard very good things from parents with kids there).
I don't claim to be an expert on high schools, but certainly Robinson and Lake Braddock are top-scoring and have well-deserved excellent reputations. I also know people with kids at West Springfield HS, and they prefer it because it is "smaller" (small being a relative term around here!), and their kids have a better chance of playing sports and such than at the megaschools.
My only point, really, is it's good to actually check out schools first hand and talk to parents/administrators as opposed to just relying on test scores (although I would definitely steer clear of totally failing schools, as that would certainly indicate something was wrong!).
Cara/MM - Mo Co likely has its own immunozone too, but since its a big county its harder to see it in stats. (i.e. we hear that parts of Ffx are pretty good too, but the county stats suggest otherwise).
It does appear that Rockville, Gaithersburg, etc are out of the Mo Co immunozone, so you probably will see different dynamics there than in Chevy Chase, Bethesda, & maybe Kensington.
That said.
Eponymous, for me its still to early in MD. I know your perception is that things are humming along and they may be - but the stats in these areas dont look good. Particularly, the number of listings has risen significantly YOY. Bethesda, CC & Kensington listings have just about DOUBLED versus Feb 2007! This is nothing like Arl & Alex where inventory is on the decline on a YOY basis.
Bottom line, its just too early to be impatient IMHO. It could be that these areas prove to be escape artists like VA core areas, but its just too soon to say. At a minimum, I would wait til you see stable or declining inventory YOY, before I jumped in.
T - its not really discussed, because I understand there is a bit of fantasy that takes place with this NAR affordability figure. Wells Fargo has one too that is more respected.
http://www.nahb.org/fileUpload_details.aspx?contentID=34325
JF - per your request. Enjoy :)
http://www.housingwire.com/2009/04/01/geithner-out-at-the-treasury-source/
CRT, checked out that link.
The area closest to us appears to be:
Washington-Arlington-Alexandria, DC-VA-MD-WV ^^^
Not sure why WV comes into play, but at any rate:
The data is thru 2008, so everything w/ interest rates in 2009 and prices is not factored in here.
The "Housing Opportunity Index" is at 69, which marks the highest point since 1Q 2002. (lowest point was 3Q 2006)
Rockville and Gaithersburg are very different beasts. The neighborhood that getting plummeted in Rockville is behind Twinbrook filled with itsy-bitsy 1950's tract homes with a large variety of update levels. Individual sellers are indeed adjusting their prices in the desireable areas of Rockville, but it's not widespread. Gaithersburg by contrast is starting to get hammered with REOs. However, yes if you want to buy this year, I would seriously consider Rockville TownCenter area as a good alternative to Bethesda/Chevy Chase.
But CRT's caution and mine are the same, both inventory signs and the nature of the process point to MD falling later than NoVa, but there's no reason to think it won't be as steep.
Gigi: "talk to parents/administrators as opposed to just relying on test scores"
You would have to be really lucky to blindly talk to an administrator who told you the "truth" about their school. For many people, it is hard to find a parent who can comment on a school objectively. Most everything is going to be subjective based on one person's opinion.
When I spoke with the school board members, they were telling me based on what they have seen and heard first hand from many, many parents. Sure, the squeaky wheel gets the grease, and for ever 10 parents who have a problem w/ the school, there may be 50 who do not and another 200 who don't think that there is but are not involved enough to know one way or another.
All I can say is what I heard about Hayfield did not strike me as "positive" in the least. Nor did it provide any indication that things were becoming or could soon become "better".
As for West Springfield, that is another fine school that I know well and think is a great school. I simply mentioned LB and Rob because both of those service the "Burke" area where Cara was looking.
As for online sites that show test scores and such, one I really like is: schooldatadirect.org
Also, as anyone should know, beware of the "greatschools.net" parent reviews. Many times I peruse schools that have poor test scores and poor reviews. Then there is a "student" or a "recent graduate" who seems to know all sorts of incredible information about the school and blather about how great it is. Hmmm... I wonder if it is an administrator trying to cover their butt and improve their overall "parent review score".
You are right, visit the school and talk to as many people as you can.
But in my opinion, one thing is black and white and that is the test scores. Either the kids are taught well enough to score on them or they are not. Each parent has their own "expectations" and some are realistic and some are not, which is why hearing from 3 people who love the school (or even if all 3 hate it) means little to me. If the scores are low and there are questionable reviews, I'd be leery, regardless of what 3 parents told me (good or bad).
With regard to the scores themselves, you'll find if you compare LB, Rob, WS and Hayfield, Hayfield is a the bottom by far. Interestingly, the only schools making "adequate yearly progress" are Robinson and West Springfield. Despite LB's test scores, they are not meeting the mark currently.
GiGi Ralph T et al.
Yes, if we want a SFH then we need to consider metrobus. As far as schools and moving in 10 years? I'm okay with moving up to a SFH in ten years and sacrificing a little in commute then, but I would rather not move my kids away from all their friends to travel 5 miles. That seems pretty foolish. There are a lot of young professionals in Kingstowne, and they do send their kids to the elementary schools, but I think a lot of them are figuring that if the public schools don't improve they can always send them to private school for high school. This is the exact mistake my parents made when we moved to St. Louis. They figured the elementary school was so good, how bad could the high school be? But they didn't comprehend that "everyone" sent their high school students to Catholic School. And that wasn't an option for my older sister. She graduated 3rd in a class of 20 from an 8th grade class of 80. And was admitted to exactly 1 college. So, since I don't want to count on us being able to afford private school if need be, I'd rather start in the right district.
For now, I'm willing to pay for the convenience of a walk/VRE commute for my husband. And take the smaller, less outside maintanence of a TH. But it's definitely something to discuss, because I really would like my mother to be able to stay with us when she visits and so an in-law suite where she could avoid my cat would be ideal.
I'm seeing a lot of houses that were listed last year coming back on the market at a lower price, including my favorite house with the tree growing in the middle:
http://franklymls.com/FX7020021
novawatcher
and now it's a short sale, which explains why they kept asking above their 2005 (PEAK) purchase price.
It's a flip, I love that they first listed it for $100 shy of $900k back in 2007.
(I still love the house though)
T,
calculated risk discusses the NAR report here.
The interesting part is pending home sales. I.e. contracts.
Cara,
I think it says completely remodeled --- so most likely they bought it relatively cheap, invested 100k in it, tried to flip, failed and now owe more than original purchase price on it due to HEL used to finance renovations.
Looks nice, an acre of land. Not bad.
Konstantin,
They may have, it's a pretty pretty house. And the others that are in the same style are totally blah on the inside, there was a truly awful one last year. So, yes, the reason for the short may have been additional HELOC money to renovate it before flipping it.
This is a fabulous house and a style I love, the closest thing near me is Hollin Hills, but that's in a truly crappy school district.
I think the stinker was that it didn't have a basement. But, I guess that's the trade-off for having a tree growing in the middle.
Cara, I guess I disagree with his comment of:
"Ignore all the affordability nonsense. That just tells you interest rates are low."
I believe it means the prices AND interest rates are quite low, while the average income has not decreased proportionately.
While many people in my line of work have not received huge raises this past year, we still are making at least the same as we made last year.
Yet housing prices in NoVA have dropped substantially since April last year, and the year before that.
Now that interest rates are also at significant lows, I can see why the "affordability" is out there for those who were not laid off.
For people who took a "pay cut" or were fired, affordability means nothing to them. For everyone else who is making at least what they made last year, and who probably got a raise in 2008 vs. 2007, affordability means you can purchase more house while dedicating the same amount of your monthly paycheck to housing. Combine interest rates, and it is even more affordable.
None of this is "ground breaking" news to you guys who are pros on the market, nor is it ground breaking to people in the business. It should be a "wake up" call to those not in the game. This is not to say that affordability will decrease and if you don't get in now, you are screwed. But housing in NoVA (in general) is definitely more affordable than any time in the recent past, and that is a simple fact of life.
I think it is far fetched to say that this being a record time for "affordability" (whether since 1970 or 2002) just means that "interest rates are low". To me, it is much more than that, but I guess I can see why there is not much "to do" about it, because it is pretty much common sense.
T,
indeed he's being cavalier at this point because he's talked about it many other times.
Yes, prices are down to 2003 and earlier levels, depending on where you are. But if this were the lowest price to income ratio ever, then they would just report that, because it would be news. However to reach these "affordability" ratios you have to conflate the interest rates into the calculation.
Everyone at my work who have all owned homes for 10 years or more are all like "when you buying?? You're so lucky!!" etc. There's no lack of general knowledge that "now is a great time to buy". But it's all about what you compare it to. Now's fantastic for anytime in the past 6 years. And that is a long window. But my boss (who's not pushing me btw) bought a truly uniquely perfect time to buy. 1999. End of the long flat period, when incomes had caught up with house prices. And was able to then refinance down to under 4.5% during the post 9/11 low-rate period. So of course, he thinks I should wait until I can buy the SFH I "deserve".
AND it's incredibly important to understand "your future buyers loan terms". Such that, yes the low interest rates mean you're locking in a low payment. But if your buyer has your same job, then they won't be able to buy your house going forward because they won't get those rates, so you'll have to take a loss to sell it.
For many, that's unimportant, for others life happens, and they may have thought it didn't matter until it suddenly does matter. So price is still the bottom line.
"Cara said...
But CRT's caution and mine are the same, both inventory signs and the nature of the process point to MD falling later than NoVa, but there's no reason to think it won't be as steep."
Eponymous - just to be clear, to me steep means "Fairfax steep" not "PWC steep". I think Cara would agree.
CRT, eponymous,
Yes, I mean FFX steep for Rockville, and Arlington/Alexandria declines for Bethesda/Chevy Chase.
Gaithersburg could easily hit PWC levels though. (IMO)
"Gaithersburg could easily hit PWC levels though. (IMO)"
Cara's been watching that market more than me. I defer to her judgment on Gaithersburg.
Actually, I should say I think Bethesda & CC could do a bit worse than ARL & ALX. I just dont like that inventory build - not one bit.
OK maybe FFX steep is a bit too much, how about -15%...
Cara, CRT,
Thanks for your insight. At this point 10-15% I could live with. It is just the right time for my family to own a home. Been married for 15yr, 3 kids, 40yo and due to my job and moves we've never owned. Now with some stability (not job stability, that's iron clad, but location stability) we just need to own something. 10% wouldn't hurt too much since we plan to never move. But along with never moving, I'd like to get something that we'll like for the long haul. That is why I keep hoping that inventory will pick up in our price range. Just not seeing it.
EP
Is there any way to tell how many times a particular house has gone under contract only to become active again?
This house: http://franklymls.com/FX6860894
Has gone under contract 3 different times in the last month (if my memory serves correct) only to return to market each time.
Obviously the appearance is terrible, and the amount that would have to go into it to make it look "nice" is much more than someone should pay. However, there must be something wrong that comes up on a home inspection (like mold). Otherwise, I'm not sure why so many people would put it under contract and then get out of it.
Unless it is a tactic used by the realtor, and he/she puts changes the listing from "active" to " under contract" and then takes it off to make it seem like people are interested in it?
T,
email Frankly, see if he can add it as a feature.
It may be against MLS rules.
This one's definitely overpriced for how much cosmetic work it needs. But, if they've gotten inspections showing that there's a known problem like mold, then the sellers have to disclose that (legally, whether they will or not is another question). What's the timing on disclosures, do you know?
There are a number that have gone in and out of contract and it's hard to say the reasons for any individual property. It may be the bank is taking too long with ratifying the contract, it may be the buyers financing fell through, it may be the buyer got cold feet and wiggled out of it, it may be that it just didn't appraise for the needed price. (This one's not in the best of the TH neighborhoods in the area, so shouldn't command that price anyway). In some cases having already fallen through once is a good sign for the next buyer because it means that one inspection has already been done that you should be able to demand a free copy of, or that the bank has already had to start the process of considering a bid, etc. So, its not always a bad thing.
T,
Perhaps that listing is an undisclosed short sale. It looks like it's been refinanced a bunch of times. Maybe the seller's lender won't play ball with whatever the offers have been, even though the seller has "accepted" the contract. Just a thought.
MM, Even during bubblemania, I can't understand why anyone would think s/he could sell half a duplex, right on busy Lee Highway, with ugly surroundings, for more than $1.1 million.
In today's post-bubble period, I predict they won't even get the $900K they now want.
Prospective sellers of houses that have serious incurable defects need to ask themselves: If I had $1.1 million to spend on a house, would I be willing to settle for no back yard and/or looking out at this (busy street, gas station, run down apartment complex next door, etc.) every day? After all, it's not Paris or Manhattan.
Cara, sellers are supposed to disclose a known mold problem at the time they put the house up for sale - i.e., before an offer is received.
PS Cara, I should have also added: if the owner didn't know there was a problem and buyer #1's inspector found a problem that couldn't be remedied (many mold problems are not toxic and CAN be remedied; almost every house has some mold, so I am excluding these run of the mill problems), buyer #1 could back out. If owner does not now add a disclosure document along with the other disclosures when the house goes back to active listing, then any future buyer could potentially sue the owner if the mold is discovered after purchase, because there would be evidence (the first inspector's report) that the owner did know of the problem.
ace,
So, it would be on, like, the info sheet when you walk through the house.
I think GiGi hit this one. I had assumed it was listed as a short, but it's not. This is just one of those, waste everyone's time listings.
Now if only T could find out the emails of the buyers foolish enough to put an offer down on this place and get them to come to his place... They're both 4 bedrooms, T's has the _way_ better location (once you know about the path through the woods) and T's is actually for sale, for real, AND at the same great price. (give or take <$1000.)
T, maybe you should see if your agent can contact their agent for the bidder's contact info...
Ace - I know one for sure that did a "cover up" job to hide the mold.
I'm not sure if they will tell you they "removed it" or not, but I know that their definition of "removing" it is not consistent with industry standards for treating and removing mold properly. The home is still on the market.
Cara - actually that one is just $1 less than ours (299,999 vs 300 even).
Great idea though, I sent my realtor the listing agent's name and phone number. I'm not sure if he would be willing to play ball and give us that info (the potential buyers name/number/email) but it never hurts to ask! I'll let you know what she says.
T, if I were interested in the house I would get a competent inspector who specializes in mold to test it and remedy it correctly. If the inspector said it could not be remedied at this stage, I would walk away.
Ace - I had an offer on the house I mentioned. I saw the mold, and the bank told me they were in the process of "removing it". Once they said they were done, I paid $500 out of my own pocket to have MoldAid test and inspect. It came back full of stachy and about 2-3 other toxic molds and another handful of non-toxic molds. Their price for the repairs was going to be $8000, but then we would have to put back up drywall in the basement (they don't do that).
Considering I knew the basement was not up to code requirements anyway (based on the home inspection I paid to have done) and the toxic nature of the mold, I walked.
I know the bank did not plan to do anything else about the mold. All they did was paint over it, wash/scrape it off the baseboards, and nail them back up. The toxic mold is still present in the studs and insulation. It no longer smelled like mold after the repair, but the particles were definitely airborne and everywhere, because the air tests showed it. The bank's contractor is not a mold specialty firm, they did not use containment and negative air flow. That mold is on all 3 levels now, and still behind the basement walls.
I pity the person who has no idea and buys that house....
Cara, if not on the info sheet, on a separate disclosure form, like a lead paint disclosure.
T, what a nightmare. You did the right thing. I wonder if there is an office that you should inform to ensure that other prospective buyers are aware of it.
I will definitely share the inspection report and the photos with whoever wants them. I don't want to see anyone get stuck purchasing something like that without knowledge of it. That stuff can make someone very sick. It is not right what they did, but the sad part is, I'm sure it happens frequently. Like you said, mold is natural and is all around. But toxic mold is bad news and needs to be removed prior to someone living there.
T -
You might consider adding a note using the wiki portion of franklymls if the mold house is still on the market, although you could shoot an email off to Frank to make sure its ok to post information like that.
Something along the lines of "Private mold test performed by a licensed mold specialist company on date xxx returned positive results for xxxx type of mold, despite bank's assurances the mold problem had been resolved. Prospective buyers may want to consider their own mold test."
Could I be liable should the bank attempt to sue me? What if they have since "properly" eradicated the problem (though I am 99% sure they did not and would not)?
T: I supposed they could, but if those are the facts (and you keep it factual and have the paperwork to back it up), your ass is covered.
I think Randy's advice about checking with Franklymls is a great idea.
To reduce the chance of a legal problem (maybe?) (I am NOT a lawyer or a Realtor, just a homeowner who loves this blog for the great info here), maybe you could provide a bit less information - even just to say that prospective buyers might want to consider having their own independent mold tests. This would not be as helpful to buyers, but might be less traceable to you (since anyone who looked at the house before the "clean up" might say the same thing). Even if you have all the facts in a row and would eventually win a legal case, no one needs the hassle of a frivolous suit, especially if you are an individual and the bank has more (taxpayer assisted?) assets to pay lawyers.
Of course any buyer with any brains (and/or who has an agent with some) should know to get an independent inspection but it doesn't hurt to have a reminder.
Strictly a lay opinion...
T - By scraping it and slapping paint over it, what they have done is tatamount to fraudulent concealment. Any buyer who was not aware of this prior to purchase, and suffered damages likely would have quite the suit against them!
Regarding your liability - keep in mind anyone can sue you for anything. Even if they have no chance of winning, they still could file or threaten to file just to get you to back down.
However, an absolute defense is the truth. If you are truthful, and if a judge believed you, you would have no liability.
Bottom line - if it were me, yes I would report it on the wiki site - just be completely truthful.
Washington City Paper has an interesting, brief report, on house flipping, part of series. Big profit. flipping is alive and well
From Nov. 2008 to Feb., flipper made $185K on one property.
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