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.
retail-sales-slump-in-march-surprising-economistsHopes that the U.S. economy might be breaking out of its steep slide were dealt a blow Tuesday morning, as retail sales plunged unexpectedly during March. Weak consumer spending suggests that the nation’s recession is likely to have further to run, and mortgage industry participants should plan accordingly, despite surging refinance volumes as of late.The Commerce Dept. said Tuesday that retail sales decreased by 1.1% compared to the prior month, a far worse showing than the increase of 0.3% economists and analysts had expected. ...or if you look at Calculated Risk it looks like we've reached a new plataue of minimal spending under which we might not fall any further but which we also aren't recovering from yet.Or, it's just because everyone was too busy house-hunting. You decide.
My grandfather is in poor shape, probably pancreatic cancer. The family is working on selling his house (Ft. Washington, MD).As a prospective buyer in the market, and even of this house, the selling process is going to be fascinating for me to watch. The differences between MD and VA are also striking. I'll try to post short updates occasionally. No one reads a brick of text.
my condolences, xpovos.
Has anyone seen this article?http://tinyurl.com/c8pno94-10 Forward Look at Defaults, Foreclosures, Banks and HousingSaturday, April 11th, 2009 | By Mr. Mortgage
Cara,Thanks, but for here I'm focused just on the housing aspect of it. Ft. Washington has a lot of similarities with portions of PWC, which is another zone I've watched. But as has been mentioned here before MD seems to be a few months behind VA in general. And the pace of sales and asking prices seem to bear that out.
So I take it Ft Washington is not having spring this year, then?
Cara,Lots of inventory. Hard to see what's moving. Prices are sometimes dirt cheap, but the properties still aren't moving because they're not necessarily worth the ask.It's a tale of three categories. High end, ex-teardowns. New teardowns. And middle-class housing stock similar to Hylton's work in PWC. The high end isn't moving, but that's understandable. The low end isn't moving either... that's not. Unless the prices are still just too high.
The PWC comparisons arent that bad. It looks like Ft Washington got infected with flippers who bid up houses near the National Harbor project on the assumption it was the new happening place. National harbor seems to be doing okay (not great, but not a failure considering the state of the economy), but the area is really walled off (literally and culturally) from the rest of Ft. Washington. Im sure the flipper/speculators bought assuming they would get a boost from the project, but that really didnt happen. The area, & its location (bluff overlooking the river - fantastic views of DC) have potential. But so far thats all it really has - potential.
CRT,Yeah, and many of the long-time residents there had a tremendous amount of NIMBYism towards the project. Some more rational than others. If it did increase property values, then it would increase property taxes too. But as you noted, the effect was pretty minimal.The Harbor itself is a necessity at this point, which is why it's probably surviving so well. They made it out to be a 'happening' cultural and shopping venue. But the real economic value is in the Potomac shipping lanes terminating before the Wilson bridge.
Keep it and rent it out. Sell it after the dollar gets bounced from the reserve currency status and the house is worth 10s of millions ( due to hyperinflation ).
Doug,Thought about renting it already. Noone in the family wants to be a landlord, and the thought at the time was my grandfather would need more cashflow than renting would provide anyway for his elder care.If he passes, that won't be a factor, and renting might go back to being an option. But not for a year or more. My grandfather doesn't have a will. Probate court, here we come.
An Article on Helicopter Ben -- To revive the economy, the Fed has cut a key bank lending rate to a record low of near zero and has rolled out a number of radical programs to spur lending to Americans, a key ingredient to turning around the economy.On that front, the Fed recently plowed $1.2 trillion into the economy in an attempt to reduce interest rates for mortgages and other loans. The Fed, meanwhile, also is considering expanding a program to jump-start consumer lending, Bernanke said.The government is battling a three-headed monster: housing, credit and financial crises, which are the worst since the 1930s. WHAT ABOUT THE RECORD HIGH U.S. JOB LOSSES to Offshore Sites!!!! Some critics worry that the Fed's policies could spur inflation over the long run if key interest rates aren't quickly boosted and special lending programs aren't rapidly dismantled once the economy shows strong signs of turning around.
Xpovos,I've been noticing a lot of the many differences between Maryland and Virginia, having bought and sold two places in Virginia and now looking to buy something in Maryland. PG County, especially at the higher end, has absolutely no sales. I think the crime level, especially closer to the city, still scares some people. Also, the schools are not very diverse at all and, according to Great Schools.net, have lower ratings than other counties in MD.Out further in AA and Calvert Counties, for the most part, sellers still haven't caught up with reality. Many price their houses above 2005 prices. Some actually sell, so maybe I'm the one not in touch with reality. My wife and I are increasingly looking at building a house because it actually seems like it is cheaper to get what we want that way than to try and buy a similar house (that wouldn't be everything we want). As an observation, it doesn't seem like AA County has the same level of distress because of their fairly strict limitations on building. I think Calvert County is behind because they didn't see the same number of builds as PWC and it generally takes a long time to sell your home in Calvert County (or so it historically appears) no matter what the market.
Contrarian wrote "Fairfax's February 2009 prices has declined back down to where we were in June 2004."Here's what baffles me: If peak was around 3rd and 4th quarter of 2005, that means it has taken almost 4 years for properties to decline in value when it only took a year to a year and a half to increase the same amount. I can understand why people who bought at peak prices are kicking themselves, but at the same time, it has been a very slow process for all responsible buyers to wait out prices to come back to an affordable, sustainable and realistic level.
MJCAnd 2004? Man that's still bubble prices! We need a lot more unwinding than that. Maybe it will pick up speed.from housingwire's coverage of the IAS report:“We have seen no indication of a positive turn in the housing markets we track, if anything the rate of decline in some areas has increased,” says Dave McCarthy, president and CEO of Integrated Asset Services.Unfortunately that's not the case for our area as far as I can tell from the report.
Cara, MJC,Nah. That is still bubbly, and it's completely natural for the prices to decline slower than they increased. Nor do I see any evidence that it will accelerate to reach equilibrium now."Prices are sticky on the downside". It's an axiom, but it's based on psychology.Prices on houses go up quickly because of leverage. Banks loan money for mortgages and don't mind doing so because that's their business model, and a boom is good for that.Prices coming down are good for almost no one's business model, and everyone is clawing at every last dime.On both sides of the equation you need intermediate buyers. We call them knifecatchers on the way down; how about parasailors on the way up? But on the way up parasailors are assisted by the up-currents of easy money. On the way down, knifecatchers are hindered by hard money, but enticed by bargains and the same mania on the way up.Bottom line: no one wants to realize a loss. On the way up, no one is.
Check out what Dean has to say about upcoming Foreclosures.www.novahomeguy.comHe's talking about NoVA, not Cali or Florida since he's an Agent here.
xpovos, mjcif we're going to have a quantitative discussion of the speed of price increases and decreases, then I move that while 2005 is a good end point for the price increases, it is not a fair start point for the price declines. Prices were only barely moving/mostly flat until when? mid 2007? It depends a bit on which counties/zip codes you want to compare. The declines, once they got going have been almost as spectacular as the increases. Buyer psychology matters too.Calculated Risk graph of Case Shiller indexThe CS-20 looks pretty darn symmetrical to me. It's just that it's a bit flat topped. Compar the curve up to mid-05 and from mid-07 to now. I'm not seeing any evidence of stickiness.
MJC-If you look at the latest Case-Shiller Home Price Index, the DC metro area home prices started to escalate far above the inflation rate since 2000, so the prices would fall a lot more than the mid-2004 level. The home preices peaked in Spring-2006.
Cara, I think you linked to the national or 20 city C-S index, but MRC had the local/regional change in mind. I couldn't find the local/regional C-S index to see how rapidly the DC prices were dropping. But even a further breakdown would be helpful (by neighborhood, or at least by county).
Ace:Pl. read my Reply (4/14/09 4:49 PM) to MJC. I have the Wash-DC Metro Area plot of the Case-Shiller Home Price Index from 1988 to 2009. My reply was based on that plot. I will post that graphical plot by tomorrow.
"Cara said...Prices were only barely moving/mostly flat until when? mid 2007? It depends a bit on which counties/zip codes you want to compare. The declines, once they got going have been almost as spectacular as the increases."Yep - Heres a good example of the extreme (2nd graph from top).http://www.recharts.com/mris/mris_11.htmlBasically, prices did nothing from June 05 to June 07. Then, from June 07 to say Oct 08, prices went on a scorching downward trip - erasing 4 years of gains (2001-2005) in a mere 16 months.Not that this is representative of the area, but as Cara said, it depends on counties/zips.
Ace, MJC, CRTyes, I did just post the national one, but CRT's was a local example. Part of my point was that the "common wisdom" that prices will be sticky on the way down because of market psychology has clearly broken down in many places in this deflation. It only really makes sense if the owners are owner-occupants with long time horizons and high equity stakes, providing the needed hysteresis. Given enough buyers on the way up who were treating Real Estate like the stock market, then the bubble can crash just as swiftly as a stock crash.
Alex, great, thanks!
Is Tabitha the one who bought a for sale by owner in Prince William County and used a mortgage broker instead of a direct lender and a title company instead of a lawyer?
$8,000 tax credit may be extendedA Colorado congressman says an $8,000 tax credit for first-time homebuyers approved by Congress in this year's stimulus package is starting to work and may be extended beyond Dec. 1.Democratic Rep. Ed Perlmutter said Tuesday he has been getting calls already from homebuilders seeking an extension to the tax credit, which Congress approved earlier this year to rouse a stalled housing market.
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