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.
It's different here until it's notJust to continue from the last thread, here is the WaPo article about the proposed contracting cuts. In a nutshell, Gates wants to cut contracting by 1/3rd:http://tinyurl.com/c4fy8y
But they're planning on rehiring them as feds... I'm not seeing job-loss here just possible current and future income loss... Is that enough to tip the tide?
Cara,Just because they're planning on replacing the contractor slot with government employee billets doesn't mean person A continues on as is, albeit with a new employee and possibly lower future income...As with anything around here politics (though now of an office-kind) will play an integral role.
xpovos,as with any structural change, this will be used as a way to get rid of employees that management doesn't like and retain only the ones it gets along with and feel loyalty to. But what percentage is that? How toxic is the office politics in the pentagon? If contractors really have been paid almost twice what the Feds are, then concievably it could be quite toxic, and the conversion rate (of contractors to feds) could be under 50%, but my guess is that the push will be to keep the experience and loose the expense such that the conversion rate is over 80%. Would 20% of a subset of workers at one employer really impact the housing market? It could... If so, it will hit the prime areas hardest as these were amongst the high wage earners (not the G-11 patent examiners out in Burke and Manassas).
Contractors dont get paid 2x federal, more like 40% more. You can make low six figures as a federal employee around here fairly easily - with 15-20 years experience.
Cara, Xpovos,I think the biggest impact is apt to be felt by the giant contracting firms (ie the Booz Allens and SAICs) that provide many of the contractors to the government. You have to consider that for every x number of contractors out there, there is someone at the management firm paid to place them, manage them, etc. Also, I would think those firms stand to lose a great deal of income with the cut-back on contractors. While each contracted position may cost the government more than a regular position, it's my understanding that the contractor himself is not earning that pay (in fact, he or she may be earning less than a GS would). The difference is going to the firm that placed the contractor. There is a huge industry around here that is built on just that.
Cara,I did my stint in contracting. It's toxic.Gigi is right on. This will affect a number of individuals as they get politicked out. But it has the potential to crush the contracting companies.I showed the article to my wife yesterday (full disclosure: she works for LM). Her comment was basically the same as everyone else's, "Well, the [beltway] bandits will get new jobs". And they will. They're very educated, with experience. However, the bandit's pimp just lost his commission. I'll be watching this one for a while. Things move slowly in government, so even if this is a priority, it's likely going to take years to enact.
Cara and others who think Townhomes/condos/duplexs are a good idea.Personally, I have always felt that these structures have their place at the right price, but in general those who buy them at typical selling prices are rather developmentally challenged in terms of mathematics. Lets work some REAL numbers:That listing in Burk for your ‘dream’ place. http://franklymls.com/FX7023769Land area .11 acre, assessed value of land: 2009: 97000, price per acre: $881, 818.18Wow mama, that there is some valuable land, it gets worse for that sold Townhome with the land at over 1 Mil/acre.Just for your reference I had to turn down a 5 acre (great level lot close to Potomac) lot in Great Falls for 450k (great price, but I could not swing the financing in time)….Burke is a Ghetto compared to Great Falls. Price Per Square food construction cost is a closely guarded secret for builders. But, since I am a little wiser than the average bear, today’s cost to build an attached structure with PREMIUM materials and inclusive of labor and incidentals but no fixins (appliances, door knobs, etc.) is 40-50$/sqft above grade, this is down about 50% from 2005. So a BRAND new duplex of that size, 1722 would be 1722*50 = $86,100. I think a land value of 50k an acre in burke is very generous (at builder buy price). So .11*50 = $5,500. So for that BRAND NEW duplex the builders cost = 86100 + 5500 = 91600 + permitting costs (which vary greatly, in Herndon they can cost 30-40k!!!)…..Keep in mind this is for new, old building materials don’t appreciate and labor is much cheaper than in 2005.Now every thirty years or so a house needs to be gutted and redone, I see they remodeled a lot, but is it just a cosmetic covering? Did they look at electric, plumbing, insulation, structural integrity, mold?I would think 200-250k would be a more than fair price. Kingmer
hehe,Thanks KingMer, you rock!I think the entire townhome/duplex/condo model is built around the concept that the only land of any value on a lot is the footprint of the house itself. If you're buying a sfh, then you get your very own private park along with your house, if you're buying a condo/th/duplex then it had better have good access to local parks and/or good playground areas within the development. What you're paying for location-wise is not the land itself but how close it is to the VRE/metro. Still, this subtlety does not quantitatively change your calculation by much. And the fact that there are a number of TH's in Burke still within walking distance of the VRE that are indeed closing for $140-180k is a good rough verification of your final numbers. (i.e. these are junkier places than the one in question, such that $200-250k for it makes relative sense).TH's are a good way to get a family-sized place in a good school district for cheap. That's their primary purpose. (other's may just not want the hassle of a larger lot for maintenance.
PPIP to be insured through the FDICThis is the most frightening thing I've seen yet in the entire debacle. OMG. (1) They're circumventing congress (2) they're putting the FDIC on the hook for the losses in the TARP program for this stupid government loans to speculators on toxic assets (3) the FDIC has signed off on this at a zero, yes ZERO loss expectation.FDIC. The one institution standing between us and bank-runs. The one thing protecting our hard earned, hard-saved cash. Is going to be online for the toxic assets. Shit. The only possible conspiracy theory upside I can see is if this also means the FDIC will be nationalizing the banks who fail the stress tests soon, and that the FDIC ownership of the PPIP loans will be used as a justification thereof.... this is not good, this is not good at all.
Re: contractorsIt sounds as if the fed. govt. is going to cut out the middleperson and save some $. Also, if Gates' plans play out, it appears to me that they aren't necessarily going to hire the same people who worked for the contractors because the new programs may have different skill etc. needs than did the terminated ones. There may also be current fed. employees who can do some of the new project work.
Contractors may make significantly more, but that doesn't mean the federal government will save by hiring full time employees. The federal salaries may be less, but you have to add on the cost of healthcare, federal retirement - not to mention contractors pay their own self employment tax. You can probably add at least 20 to 30% on to the salary of a federal employee to determine their true cost to employee.
Cara, The FDIC has never had enough without the backing of the government to cover even a single large bank's run. Using the FDIC provides quite a bit of political cover (so they don't have to go to Congress) which is most of the PPIC.
KingMer -You mentioned you've been pricing out construction acting as your own general contractor, or possibly hiring a non-builder / general contractor / supervisor. I was just curious if you had identified anyone in the area that you would trust as a GC?I like the idea of building custom, but it seems that in this area it is reserved for the "elite" or something. Custom builder in previous areas that I've lived meant a GC that would work with you to produce the home you want. Here it seems to mean a large builder who will charge you an absurd amount of money for one of their existing plans but with the "custom" finishes you want.
adam,True, they don't have enough to cover a "too big to fail" failure which is why they haven't done it yet.I assume you read a few weeks back about how the FDIC wasn't allowed to continue to charge premiums in the bull market because it "already had enough capital" as defined by its charter. Another brilliant plan. So what are your thoughts on this back-door method of backstopping the PPIP? The fact that it only fits within their charter if they assume that only the collateral losses are at issue and then assumes those losses are zero, seems dodgey to me. Why hasn't there been a congressional hearing on this yet?
King Mer-I work w/ Builders - NoVa average new build is $ 70.00 per sq/ftBeing your own GC is a breeze, after you pull Permits, that is..
King - I agree w/ Cara w/ regard to TH land. People buy TH for any number of reasons, several of which are:1. Cheaper than most SFH in equivalent condition and equivalent location.2. Less overall maintenance because the house/land is smaller.3. Same advantages of being located in a desirable community with amenities, schools, and shopping (as well as public transit) as the desirable SFH have for a much lower sticker price.Now, the above differs from place to place (some TH don't have desireable schools, restaurants, grocery/shopping in walking distance, VRE/metrobus in walking distance), but I am talking from personal experience of living in my TH in Burke Centre. The overall "lot size" from the tax record is pretty irrelevant when it comes to a TH. It's more the visual aspects of how the TH is oriented: is it a corner house, does it have a fenced in back yard, does it have a patio or deck? It's impossible to compare a TH to a 5 acre house. In this area, TH certainly have their place and are very good "starter" homes for young adults or homes for older married/single adults who don't want to take care of an entire SFH and yard. TH are a "step towards" a SFH from a condo/apartment and a step away from having absolutely zero private outdoor area, a neighbor above and below you in addition to on either side, a huge building with unassigned parking and the need to take an elevator with your fellow tenants or flights of stairs just to get to your front door. In my community, my neighbors consist of young married couples without kids, couples living together before they get married, married couples with 1-3 kids, middle aged widows, middle aged married couples whose kids are gone, college kids from GMU who split a rent, etc. I really loved my time spent living there. And since my TH is a end unit with a fenced in patio which abuts "common space" (thus giving me more grass/trees than others in the community) I have enjoyed the time spend outdoors and indoors. Plus the fact that Lake Barton is a mere 4 minute walk away to provide even more outdoors within walking distance.I hear your "fundamental" argument on the "price to rebuild" a TH on such a small acreage is less than what it would sell for. But such is the case for most SFH in the area. Buy a house, take out an insurance policy, and tell me what they say is the "dwelling" coverage and compare that to your tax assessed building? Add on the "land price" to the cost to rebuild the dwelling, and see if you could buy the house for that price? It is highly unlikely unless you are getting some disheveled foreclosure (in which case the dwelling technically would not be nearly as expensive to rebuild as your insurance quote) or a super-great short sale.The other fact you need to account for is that 99% of people in the TH market do not have the up front capital or the desire to buy land, hire a contractor and an architect to design & build a TH structure. These people want a TH, they can't afford a SFH (in that same area) and so they are buying the THs. I know you think they are "physically" not worth that amount, they are still being sold for higher amounts and have done so for years.
Kingmer also got the sqft totally wrong for that duplex, it's nicely sized at 2092. So at $70/sqft that's 146440 just for the building + .1144...*40k (4.58k) yields $151026 replacement costs plus permitting. Thus an absolute rock-bottom price for this place would be $200k assuming we're not losing population. This sets an upper limit on the potential loss on investment, but as T is pointing out, isn't necessarily particularly relevant for the purchase price. (Oh, and T's TH has a way better location with respect to the VRE)any nibbles yet T? I'll understand if you don't want to jinx it in a public forum.
kingmerOh, and if you're alternative is buying a SFH now? Uh, that math is way way worse. Yes, there are 2 or 3 SFHs in decent looking condition for $400k in Burke. Compare and contrast those to T's TH. (1) T: stumbling distance to the VRE, SFHs: 2 mile hike, (2) T: 4 bedrooms, SFH: 3 bedrooms, two of them tiny, (3) T: view of common area/woods, SFH: yard. (4) T: 300k, SFH 400k. So let's see, a 33% premium for a place that wins on 1 out of 3 counts. Uh, no. No thanks.Now if your point is that the TH are overvalued and we should wait another year (which was my original interpretation of the comment) then I can see where you're coming from. However, SFH's have a lot more of that bleeding to do, because in Burke the SFHs are almost all further from the VRE and yet are priced as if the land is gold (relative to THs). That is, if you attribute all of their price premium to the lot size. Now given that Great Falls has zero comparable public transportation, it's clear that not everyone values non-car options. Hence why anyone buys SFHs and we don't all live in apartments on top of the metro stations. And this diversity of values is good. It might prevent us from becoming NYC.
Cara - I've had about 7 showings (who called ahead, more if I was not there and they showed up w/ their realtor) per weekend the past two weekends. With the occasional mid week showing.We have had one offer that did not work out and one where we are their "backup option" if they do not get a contract on the other house they are offering on. That was from not last weekend but the weekend before. I have heard we are going to be getting one in based upon the showings this past weekend. But I've not see it yet. As you know, I've been studying the 4 BR market in TH in basically the broad swath of zip codes along the Fairfax County Parkway, from Springfield thru Burke to Fairfax: 22152 and 22153 to 22015 to 22039 (none) to 22032 and 22030. The only things "closer in" to the city while being outside the beltway are 22150 (springfield mixing bowl) and 22003 (annandale).At any rate, what I've seen in the last 3 weeks (with 3 updates per week), for 4 BR TH priced below $310k:- 7 new homes have come onto the market in the last 3 weeks (all short sales)- 7 houses in this criteria have gone under contract in the last 3 weeks (3 within the last 6 days).- 25 houses currently on the market, 15 under contract, 10 available- 5 homes that were under contract during this time have sold and are no longer listed.Feel free to add your own conclusions, mine are:While houses are coming on to the market at a rate of about 2 per week, just as many are going under contract at the same rate, and the number of houses that are actually closing is just over 1.5 per week. Seems healthy to me, but my experience is limited.With an "inventory" of just 10, 4BR TH available right now in those 6 zip codes, it seems promising. But I am realistic and many people are likely opting for 3 BRs instead. Still, I have so far not seen a rash of dumping and increased inventory, or homes sitting under contract never to be ratified (the exception exists) in this search.
t,With that much activity you're obviously priced right. It may be another week or two before a solid contract, but it sounds good.From my perspective looking at the 3bdrms? Your place is looking like more and more of a good value. I can't tell you how many times I look over a $290-$320k place and go, "with T's 4 bedroom excellent location as competition? Are they kidding me?". From your analysis, it seems like the 4 bdrm TH market is just too small of a sliver to do market analysis on, even with the extended area. But it certainly doesn't look "unhealthy".
The federal salaries may be less, but you have to add on the cost of healthcare, federal retirement - not to mention contractors pay their own self employment tax. If you're talking about the typical DoD contractor, the SAIC, Lockheed, Boeing, etc., than the Government pays for healthcare, retirement plan, education benefits, etc., through overhead. Overhead can cover a lot of other things too, like offices, management not directly employed on the project, and any other (legal) expense incurred but not directly billed. The amount varied a lot from company to company, but when I used to deal with this a dozen years or so years ago, I don't think overhead around 100% was unusual.The big advantage of using contractors was that they could be easily dropped at the end of a development, or if funds were cut. It's also easier to get people with high-demand skills for a short time. One of the disadvantages is that its not a one-for-one displacement ... If you replace ten government employees with ten contractors you still need a couple government employees to provide technical oversight. You also need contracting employees on both sides, so replacing contractors with government employees, whether or not it saves money, could reduce the total number of employees. I don't think it would reduce it enough to effect housing prices, though.
The federal salaries may be less, but you have to add on the cost of healthcare, federal retirement - not to mention contractors pay their own self employment tax.Federal Salaries are definately not less.
Here's a guy who says Northern Virginia entered into a "sellers market" six months ago, with multiple bids and escalating price clauses, etc. Not sure how he square's that with the 10% drop in prices over the last six months.
shamrock.Wow, the force is strong with this one. The whole confidence and power mantra entry is, um, fascinating. I'm not sure what pouncing on him will do, but I added my two cents...
Shamrock-Mr. Carr has always been a big-time RE pumper, he even has a column on Realty Times.He's a glass of koolaid half-full kinda guy...
Cara, A couple of points, I was right on with the size, the rest in underground and most builders consider that a free-bee as once the foundation is in and the structure framed there is not much extra work in the basement unless you finish it and that is usually extra. You only get 17 something above ground! 70$/sqft is for builders with massive overhead like Toll, Ryan, Pulte, etc. Materials are DIRT cheap and Labor is as well right now. If you know where to look at finishing items like granite, they are 80% off. Agreed, most people are sheep and never really think about things. I am sure T will find a sucker, in fact for a good amount of my income I depend on the sheep, bahhh.-Kingmer
Is this not a health hazard??I wonder how much mold is behind the walls. Even more is this legal to sell it? I wonder if the person upstairs knows they have mold infestation downstairs. 300k for mold...and health issues that come with it? And it just went under contract. Seriously there is something wrong with this area. I hope they got it for less than 200k...http://picasaweb.google.com/MatthewJRyan2/5625#http://franklymls.com/FX6987366
"Cara said...Wow, the force is strong with this one. The whole confidence and power mantra entry is, um, fascinating." Punch Through Cara - Punch Through!!!!!:)http://commonsenserealestate.blogspot.com/2009/03/punch-through.html
king - "Agreed, most people are sheep and never really think about things. I am sure T will find a sucker"I guess that makes me a sheep/sucker too, since I bought and own a TH. So all TH owners are sheep? Who is not a sheep, all SFH owners? What about condo/apartment owners? What about those renting TH for the price they could buy one for? It sounds like you might think that anyone who does not build their own house w/ the economy right now is a sheep?
T,Nope. I do not think everybody is a sheep/sucker. There is a place for all asset classes in the economy. Including TH/Condos/SFH. For everything there is a price. TH/Condos can be very good buys, if purchased at the right price. Great money was made flipping these to suckers in the bubble, but if you are buying now, you have to consider other things – such as what the thing is really worth and not what fake money paper will back it up. Just because someone says ‘ow’ it is close to this it is close to that, you are smart paying 1mil+/acre for your land, does not make it so. 300k for a TH in Burke (Vienna maybe) is nuts and the people paying it are class ‘A’ stupid. Lucky for you, in NOVA there is a fresh crop of stupid. -Kingmer
T, I think here things are a little bit complex. There is a lot of inefficiencies in our lifes and it seems that to get all of them fixed is impossible.Just doing the things in a universally accepted way does not mean that you are doing them the right way. I remember there was a discussion on this board about a year ago and some lady was answering a question about highrise condo construction costs and prices. She was stating that it costs about $500 per sq ft to construct a high rise, that a 20% profit margin is reasonable for builders and thus new condos should sell for about $600 per sq.ft. I can bet that at the height of the bubble most of the condo buyers were using this argument to convince themselves, that shelling $600k for 1000sq.ft condo is a good deal. Still, I wished that i could do something not harmful, but extremely unpleasant to this lady, since bullshitting has to have its limits. Even now, when people buy condos and they think they are "cheap", they are deceiving themselves most of the time, since it is still cheaper to rent them. And for condos it definitely has to be the other way around with their ever-increasing condo fees, no land and obvious depreciation of the property value with years.So yes, most of the people are sheep in the sense that they display herding behavior. And because of that fact it makes sense to be a little bit of conformist and follow the herd sometimes even if it is not very reasonable.
so KingMer I ask again, more directly, what price should a SFH be?
KingMer,I am more familiar with the 22031/22032 zip codes in Fairfax than Burke. But in Fairfax, no private land would sell for less than $450K an acre. Because of the way zoning is done, and the diminishing marginal utility of land, a half acre plot with a teardown would sell for more than $300K. I think the prices in Burke would be about 10-15% less than in 22031. There is no way a builder will get an acre of land in Burke for $50K.Try PWC for that.Even in Great Falls, what you say about getting 5 acres for $450K may be true only in the area close to Herndon where it doesn't feed into Langley HS.
"Federal Salaries are definately not less."That article doesn't compare civil servants to contractors. It isn't really meaningful to try to compare the federal workforce to the entire private sector as the author does.
Ted,Such a purchase did actually happen. A one bedroom SFH on 1/2 acre on Blake Lane sold for $312k last year. It was 1/2 mile walking distance to the Vienna metro. Given that it was in superior location, I would think that less than $300k for plots farther away from can be deduced from that purchase price. And the house was livable, and the couple that bought it actually did move in. I would think that given that price there should be 1/2 acre plots available for $200k.
shamrock, i particularly like this quote from that realtor's blog:"now may be the time to make that move up before prices start escalating out of control."The paint has barely dried and we are already hearing this kind of nonsense again? ugh.
Whisper numbers are out for March 2009:ArlingtonSales = 165MOI = 5.75 (estimate)C&C = 189Average price (-7.8%)AlexandriaSales = 150MOI = 5.4 (estimate)C&C = 166Average Price (-9.1%)FairfaxSales = 1017MOI = 5.8 (estimate)C&C = 1653Average Price (-15.6)Again, these are whisper numbers, but if they hold up, it looks like the inner areas are once again pulling back from the cliffs edge. Particularly, Arl & Alex sales are up significantly over last month. MOI in all areas look good and C&C are OK as well.Also interesting, Fairfax county average price decline is reported as -15.6%. If this (and a similar median) pan out, it will be the smallest percentage drop in 11 months. One month does not make a trend, but perhaps after a year of falling further & further behind Arl & Alex pricing, maybe now it too will start posting smaller YOY declines like they do. Bottom line is this is still a weak report. I do not see any signs of an actual "bottom" like I do in PWC. However, compared to last month when it looked like the inner areas were going to finally fall victim to "its moving in" type price declines the outer areas saw in 2008, this report paints a much much brighter picture...
Your right it's not 1/2 mile its 0.8 courtesy of google maps. The point I was trying to make though, was that Ted stated that less than $300k for a private piece of land was not possible in Fairfax. Even if you assume a teardown, this is a premium piece of private land, with no HOA, due to it's location. Therefore you can deduce that finding a 1/2 parcel in other less desirable parts of Fairfax for less than $300k is not only possible, it's probable.
CRT-Any "whisper numbers" out of Loudoun Co?Thanks!
Nothing so far spunky. I do sometimes get reports not for Lo Co, but certain areas within (Ashburn, Leesburg, etc.). If I get them, I will post them.
Has anyone seen this?www.msnbc.msn.com/id/29866757/It's a new measure of the economy by Moody's called the adversity index, and it shows that 93% of the country's metro areas are in a recession. I'm on a PDA and can't read the attached graphs, but according to the cover story even though the DC metro area is expanding, it entered a recession as of January 2009. Might be some interesting data in there.
http://www.msnbc.msn.com/id/29866676/GiGi's corrected link.It's quite housing heavy, so no new news, but it's a fun graphic. Also humourous that they're using house prices as their measure of "wealth". If I hear that garbage one more time... Please may this mantra go the way of the dodo, please.Key elementsThe four parts of the index were chosen because they offer information about major parts of the economy: jobs, investment, industrial output and wealth. Together, they can indicate the trend of economic activity in an area, and each one can be updated frequently. Employment: a measure of job growth. The U.S. Bureau of Labor Statistics releases the monthly Household Survey, which is then seasonally adjusted by Moody's Economy.com. The information is smoothed with a three-month moving average.Housing starts: a measure of investment. The U.S. Census Bureau releases monthly data on housing permits. Moody's Economy.com applies several factors to that information to estimate housings starts, including: adjustment for the lag time between a permit and the beginning of construction, adjustment for the share of permits that never move to construction, and an estimate of the share of housing starts that are not issued permits. The information is seasonally adjusted and smoothed with a three-month moving average.Industrial production: a measure of output. The U.S. Bureau of Economic Analysis releases monthly information on industrial production by type of industry, which is combined with employment estimates from Moody's Economy.com to estimate industrial production at the state and metro level. The national changes affect a metro area's industrial production in proportion to each industry's share of manufacturing jobs in that metro area. For example, if the national increase is greater in manufacturers of automobile parts, then metro areas that are more dependent on auto-part manufacturing may see an increase. The information is smoothed with a three-month moving average.House prices: a measure of wealth. This information is available quarterly, not monthly, but it is included in the index because of the importance of housing in the current recession. Information from the Federal Housing Finance Agency is converted to a monthly frequency by Moody's Economy.com by spreading the quarterly change out over three months. The result is then adjusted to add a six-month delay, because it is generally believed that households react to changes to house prices after a time lag. This represents the wealth effect: As home values increase, homeowners react by spending. So rising house prices lead to more economic activity, not immediately but after a lag of about six months.
Thanks for the link fix, Cara! Toggling between screens with my thumbs does not always produce the desired results :-)!
JF - whenever this guy talks about prices "escalating out of control", he should be reminded of his prior statements back in 05 where he vigorously denied there was a bubble -- especially one in DC.http://commonsenserealestate.blogspot.com/2005/11/real-estate-bubble-theorists-no-more.html"Those who keep whining about the coming "burst" of the "real estate bubble" remind of these squealers. Sometimes I feel like the lone voice of reason crying out in the wilderness."Lone voice of reason ehh? How about lone voice of idocy. And what about DC?"To put it bluntly folks, we're going to have a housing problem in the future -- but it's not the bursting kind. It's the "How can I make $60,000 a year and have to live out of the trunk of my car" kind."Sounds alot like buy now or be priced out forever. Man this guy is a classic. Are we sure this isnt lance???
Now, now, The Anonymous, you must give credit where it's due."It's the 'How can I make $60,000 a year and have to live out of the trunk of my car" kind.'"He was technically right about this - even though, at the time, he might not have been thinking about the people who would be going through foreclosure.
Ace, Anon, allHe was also technically correct that demand was exceeding the supply of houses, hence why so many were being built in west-bumble. What he didn't know/say was that the demand was by speculators not owner-occupants. And that the demand was for free money not for houses. There's always more demand for free money than there is free money to be had. Duh!
TedK,You numbers are WAY WAY out dated. I’d like to think that you just haven’t kept up, instead of trying to deceive. Here are the numbers from a hunter (me) out in the bush looking to bag a trophy. 1 acre lot off of downs drive (which is off of 50) in Chantilly with a tear down, under 200k. I was not fast enough to get this, I tried.1+ acre lot in 20171 in Herndon, house was recoverable but required mold remediation, ~280, I tried to get this too….again not fast enough.Currently looking at a .59 acre lot with a very livable but smallish (in fact renovated to the hilt ~2000 sqft on 2 levels) 60’s all brick rambler off in Chantilly for ~325.Empty half acre lot near 29 in Chantilly with utilities all set-up ready to go - asking 229k, As for PWC, there is a nice ~11.5 acre parcel north of the Occoquan and easy access to 234 or a short run down Yates ford road into Fairfax that could be had for about ~198k, that is what 17k an acre and it percs for a 6 bedroom and the potential for multiple parcels. Nowhere near your 50k figure, you are just out O the loop. -KingmerCaraThe ideal range for a SFH in Fairfax excluding Vienna, Great Falls and McLean in 300-350$. This presumes decent lot, 2-2.5K sqft, 2Car attached garage and if it is 30years or older recorded evidence of a complete renovation including important things like electrical, plumbing, structure (roof and so forth), insect damage and mold – extra useful items like more space add more to the price; a 4k sqft house would add value and so forth – ‘upgraded’ kitchens do not add value, they maintain them. 2 Smallish ( 1200-2000 sqft) all brick 60’s ramblers in good condition are available (last time I checked) in Vienna for 300-350 1/3-.5 acre lots (NOT RIGHT CLOSE TO 66) – These would be A HELL OF A LOT better than ANY TH in BURKE at ANY PRICE on the market right now, better local, better neighbors, better schools…remember the rule; least expensive house in the very best neighborhood. -Kingmer
I think this realtor has some skills if he himself is not living out of his trunk. Probably hypnotises his poor clients and forces them to accept the inevitable, the EVER-INCREASING RE PRICES.By the way, as an anecdotal evidence i can give you an example of people's thinking that i believe is quite representative of a general buyer . Several friends of mine, who are slightly younger, mostly couples without kids with family incomes around 150-250k are buying right now. They are going for 1/2 bedroom apartments in Arlington (near the area where they rented), since it seems to them, that it is cheaper to buy than to rent. Nothing extravagant, 1 bedroom condos for 250k, two-bedrooms for 350k, so it is not in the rosslyn-ballston corridor. They plan to stay there for 3-4 years, pay off most of the mortgage in that time and then rent out the place when they move to a larger place when they have kids. They believe that rates are very low right now (absolutely true), that prices dropped considerably (also true) and that they are around rental parity now (almost true). They refuse to price the risks of job loss, price drop, etc. in the buying decision.Will go for an fha loans i believe, since all their savings are parked in some business enterprise, so they do not believe in large down payment. For some reason they believe in paying off mortgage fast. That seems a little bit strange to me, but whatever.So i have a feeling that lower-priced tier will have some support right now if the economy does not worsen significantly. But people with quite significant incomes do not seem to burden themselves with extraordinary amount of debt, even though they are ready to pay rather large amounts of money for the medium-quality homes in the locations that do not look very desirable to me.
Good find Anonymous. You would think after being so horrifically wrong on the "there is no bubble" call some humility would be in order.
KingMer,$300k for a nice SFH? That's what my mom got for her (gorgeous, I loved that house so much, built in 2000 but quite modest in size) home in Athens Ohio!! Yes, complete bumble (other than the university). You're dreaming. And no. Vienna only trumps Burke if the commute from Vienna to my work beats the commute from Burke. Which it doesn't. In fact it's a heck of a lot worse. Nor does the metro from Vienna, on the longest most crowded route, beat the 3 stops on the VRE for my husband.People live in different areas of Fairfax because they commute to different places. This is as it should be.You can get those kinds of "deals" in Burke too, they're just not near public transit. Which, obviously you have no clue about the value of if you're looking at Great Falls. The current going prices for 3 bedroom TH's near the VRE are 220-260 in Burke. The going prices for further away SFH's? Are 500k and on up. So, let's see, which makes more sense to buy now? Hmmm, downside risk to TH, 50-100k, or 25-50%, downside risk to SFH, 250k and up or a minimum of 50%. So who's the sheeple? So, no, I'm sorry, you're on just as much koolaid as the housing bulls were, just a different flavor.But thanks for answering my question.
konstantin,Very interesting. Sounds to me (based on the income range) that they're already compensating for the downside risks of job loss and price declines by buying well under their "ability" to pay, and only paying for what their using, which is 1 bedroom a place to park and a little forced savings account known as the principle. Yes, it's a strange method. And a little over-confident on the personal side (no liquid downpayment, no obvious facility with rainy-day saving), but it sounds like a reasonable option.I get fliers weekly from realtards telling me to "stop throwing my money away", it sounds as if these folks have swallowed that line whole, but are otherwise sensible.
Ace - this bubble has produced a long history of comments about people living in cars. One of my favorite all time posts is Leroy's respone to KH about what life would be like outside the immunozone... "Of course by that point only professional athletes, senior corporate executives and lottery winners will be able to buy an average starter home inside the Beltway. All houses will be occupied by people who bought them within ten years of 2000. Everyone else will live in tent cities and hondas... or join nomadic biker tribes raiding the fortified cities along the South Virginia border for food.10/11/07 12:17 PM" I still laugh when I see this (and cry given how its not too far from the truth :) I kinda miss the olden days when this bubble was still young and we had lively debates like this!
Cara - just to follow up on your comment from the last week that you will be commuting to Anacostia from Burke:I can tell you this. You know where I live. I commute to/from DC daily. From last January thru May, I worked for a client in Annapolis, MD. I commuted to there from Burke each day. Sounds brutal? Not actually. Taking Old Keene Mill into the Mixing Bowl, jumping onto 495 East towards the Wilson Bridge was a piece of cake as long as I left prior to 6:20/6:25am. After cossing the bridge it was a breeze and then I got onto 50, took 50 all the way to Annapolis. From door to door it was exactly 1 hr on average, but yes, that was with me doing 76-80 mph for a large majority of the trip on 495 (after the bridge) and 50. Coming home was a similar story. Left at 5:30pm, home by 6:30pm. 1 hr door to door. Yes, sometimes it took me 1:15. The longest in those 5 months was a 2 hr commute once. But it was only once. And it never was shorter than 1 hr, but it was maybe longer than 1:15 on 5% of the trips. Most of the time since I was going against traffic on 50, it was a very predictable 1 hr commute exactly.Now, leaving my TH to work going up 395 to work in DC? I leave at 6:00/6:15am, get to work around 6:45/7am. Coming home? Leave the office at 5:40pm, home by 6:20/6:25pm. You have to time them just right, that is the biggest factor, but it is very doable.
"Good find Anonymous. You would think after being so horrifically wrong on the "there is no bubble" call some humility would be in order."Yeah, you might think... but then it doesn't seem to have worked that way for most of the real estate pumpers.
t,yeah it shouldn't be bad. There's a crew here that car-shares from Burke, and they arrive only 20 minutes before me with no issues, so with only going as far as Anacostia, Burke really is pretty ideal. I'll have to decide on the FFX Pkwy to Van Dorn, versus Old Keene Mill to the mixing bowl, but that gives me options, which is good. I've gone up the outer loop through MD a couple times to BWI and been pleasantly surprised at how empty it easy compared to the NoVa Bethesda side. Funny what few local jobs will do to traffic...
Ben,My experience is within the Woodson HS district...that actually has a better Middle School (Frost vs Luther Jackson) than the area close to Vienna Metro, so the Metro premium may not be much higher than the school premium. I still can't find any 0.5 acre land for less than $300K in that area. KingMer,By Fairfax, I didn't mean the county, but the more desirable parts of Fairfax in 22031 and 22032,in particular the area feeding into Woodson HS.I know prices are softer in Centreville, Chantilly and Herndon.Even in Vienna, areas are somewhat uneven.NovaWatcher can confirm it for you. Aside from the quality of neighborhoods, some areas feed into Falls Church HS, others into Madison, Oakton and Marshall, each with varying levels of quality.You till haven't shown me that there is in fact cheap land in Burke. If an acre can be had for $50K within 6--8 miles of my job (Burke qualifies), I would have bought. At that level, even if it is in an area where the public schools may not be highly rated, I would have enough money left to send my kids to private school.
Oh, and on the Mr. Carr topic. Grrr, now I'm getting the notifications, but he hasn't approved my comment. Good way to keep out discussion. All I was saying was a repeat of what I said when Harriet posted the same metric here, that closings are slower to happen and less likely to occur at all than in a normal market, hence the metric is invalid unless you correct for this factor. It wasn't obnoxious or anything.Grr. What a fraud. Can't handle dissent.
$300k for a house in Athens, Ohio? Did Athens have a bubble? The reason I'm asking is that I sold a 1998-built 2400 sqft (excluding basement) house in 2002 for $195k in Illinois.
a mini one yes.But this house was truly one of a kind. If you were looking in the 250k-400k range there were no others. Literally, none. Everything else new was massive and asking over 450k. (and mostly sitting) And it was my mother's dream house for a reason. It cost $260k to build in 2000. So, yes actually getting 300k 7 years later was pretty lucky given the usual premium on a custom built home for the first owner. The lot was the highest ridgeline in the area, they scoped that out for a year, the architecture was open, full of windows that all looked out on trees, the layout was simple and manageable, the kitchen not high end but very well-thought out. It really is my standard for, "I don't want to pay that, are you kidding? My mother's dream house only cost 300k." But the squarefootage was probably under 2500, maybe 3000 tops, depends on what counts as above-ground on a hillside...
Cara, I have watched fantastic SFH go for ~300-350k in FFX County; those are real and there, I know I tried to get them. Just because you are not in on the action you should not be telling others they are dreaming, it is not my fault you are not exposed to such things. 300k for a normal home in Ohio is an anomaly in this day and age and should not be used as a base line for anything. Quality of life trumps convenience of travel to me as long as the commute is reasonable. Some people lump them together, I don’t. Great falls is a wonderful place, the meanest place there is better than the best of Burke, yea so you have to drive to a metro or drive into work *shrug*, you don’t have to live crushed in with other people – I value public transit very low – I don’t like the public part of it, the press of people, the crowd, the wait, etc. etc. >>Hmmm, downside risk to TH, 50-100k, or 25-50%, downside risk to SFH, 250k and up or a minimum of 50%. So who's the sheeple?<<<The sheeple would be you if you are buying into a 25-50% loss, TH or SFH. Don’t care if you accepting a smaller loss on a TH, still a loss and one that you foresaw – that is full sheeple qualification.Look, it looks like I touched a nerve - I understand Condos/TH and such serve a purpose and some value travel convince over all else, to each their own –You don’t need to justify to me why you want to buy a TH, if that is what you want get it– but current pricing is inflated by any conventional scale (you even accept it is inflated by 25-50%!!!) - stick the 1998 price into an excel spread sheet and add 2.5-3.5% inflation – The true building cost, which I provided to you from experience – the affordability based on income, and so on….Tedk,I did not get the impression that you were solely talking about 2 zip codes. Nice back out. Investigating crime stats indicates that the worst area in Vienna is overall better than most all of Burke. I haven’t really looking in Burke because of the undesirable nature of the area to me; so if I can get better elsewhere for less, why would I ever look? I rank Burke slightly above 20170 south of Drainsville road. But again you did not specify those areas of FFX. For you: .5 acre with a somewhat better than tear down – the guy started a complete renovation but ran out of time and money, so you would have to pick up where he left off – so not really near to a tear down just continue:http://franklymls.com/FX7021991Under 300k and in 22031…..Any questions?Look at that, put 100k in and have, for 400k a house in the *most* desirable areas of Fairfax. Jeez and 300-350k in lesser areas isn’t reasonable? Hah. How does that compare with the 300k Burke TH? Umm, 100k more for *The Best* + .5 acre? Makes the TH look way overpriced to me.I don’t care where you work; there are more desirable areas and less desirable areas. Great Falls, Vienna, McLean, Parts of Herndon, Reston, Chantilly and Fairfax and if you want to throw North Alexandria in are all >>>>> Burke for school, crime, long term land values and in many cases better access to public transit if that is your thing. -Kingmer
KingMer,You've obviously never even considered Burke or its neighboring competition, so please just stop talking out of thin air. Crime? What?? Robinson High School? IB, great scores... It's by far and away the best option for things within a 30 minute drive from my work. (well, excluding high priced areas with crappy schools)I've done longer commutes, never again. It's that simple. Yes I am conflating them.You're right on one thing, there are SFH's under 300k, plenty in fact. They just require a car, or rather one car per adult. That's a considerable ongoing expense, not to mention hassle. Hence the discount. You're confusing another thing. the 25-50% off was using your numbers for the bottom prices. And then you seem to be making the assumption that I am buying a TH for 300k. No, T's selling one, but I'm not buying this year unless I can get everything I want in a home for under $250k. So, yeah, I might lose as much as 50k. With prices cheaper than rent, I can absorb that loss, and still win out over renting.
KingmerOh, and every place you listed other than North Alexandria would be a terrible commute for me. so yes it does matter where I work. Not all jobs are on the orange line. People at both my work and my husband's work chose Burke. For a reason. (If they can't afford Capital Hill or Eastern Market or don't like that esthetic). They are indeed more desireable to a wider market, but they're pretty darn useless to me other than as comparison points.
Kingmer, what's "desirable" is in the eye of the beholder, but south of Rte 50 near Pickett Rd. is definitely not in a desirable area as I define it.And if the Realtor says it will cost "100K+" (note the +), you had better believe it will cost more than that to make that a pretty, functional home unless you are capable of doing ALL the work yourself - and in that case, add in the value of your labor as well. In looking at the photos, and having reno'd several houses, I can tell you a buyer had better budget far more - and that is presuming that there aren't a lot of structural, mold, etc., problems in addition to the obvious things that need to be changed.Cara (and others on this board) have been watching certain zips and housing types pretty closely for a long time so I would certainly respect her views about value.
I forgot to add: As you know FX7021991 is a "short sale" with the price not yet approved by the lender, so that asking price may be total fiction as a predictor of the final selling price.
Cara,“No, T's selling one, but I'm not buying this year unless I can get everything I want in a home for under $250k”On this I feel kind of foolish. I thought you were buying for 300k. Less than 250k as I said before for a nice townhome with everything YOU want IS reasonable, 300k is not. School: last time I checked: Robinson was 46th. Crime: In a sense you are correct, I am comparing many areas with inherently very low crime, but .1% is still less than .2%. I do tons of DD research. I am familiar with Burke, it does not appeal to me. For me commutes of less than 45-60 minutes are A-OK. Question: If you worked in a Ghetto would you live in the Ghetto just to be close to work, or have access to public transit?-Kingmer
Ace, I was going by what TedK was saying as “Desirable” I do not hunt in those two zips he posted.-Kingmer
KingMer,The listing you provided is a short sale (as Ace also pointed out), which means it is bogus. The banks will take forever to approve it, and it will not close for at least 6 months. Ace, that area is usually considered desirable from a school perspective because it is in Mantua; that property is close to the elementary school, which has a gifted/talented program that attracts affluent parents. But I just don't think this property will close at even $400K plus $100K in upgrades. It is a rambler and has oil heat. So a buyer may end up spending $200K.
Thanks for the additional info, KingMer and TedK.
Maybe I'm just young (29 count?) and dumb, but having to leave by 6:20am to get to work in under an hour is not my idea of an "easy" commute! It's actually about the harshest commute I can think of. And leaving at 5:30pm is going to make the worst trip home possible. Maybe after I've lived in NoVA another 10 years or so I'll change my tune - but I'm content to rent until my (non-existant yet) kids can play outside to save and buy something, anything where I don't have to be out the door by 6:20am every morning just to get to work on time.
I'm with Jeremy: life is too short to spend your time commuting at 6:20am and getting home at 6:30.And as for that house in Mantua: I've heard it's a desirable area, but when I drive through it to go to the art theatre at Fair City mall, it gives me a bad impression. And based on those photos, that house is not in a desirable neighborhood (unless your standards are pretty low).
Cara,You posted a link yesterday that showed some data/a chart relating to interest rates and housing prices. For some reason I can't access the article today, which looks to be on a San Diego focused web site. I did some search on the web site itself and the author doesn't seem to have any articles listed for the date that was embedded in the URL you provided. As you know, I'd be very interested to see what it said. Any thoughts? Can anybody else access it?Per the Federal Employee discussion, I can add some insight as a Fed who manages a few non-DOD contracts. If you were to look at the average billable rate across 4 contractors I am familiar with, they charge the US Govt about $123 hour, which includes their negotiated overhead. For the Agency I work for, the vast majority of professional employees are either GS 13 or 14 level, which commands $45 per hour average pay rate, not including benefits. I think doubling the Federal pay rate in order to account for Fed benefits would be considered realistic by the Department of Labor standards. So my view is that my colleagues in the contracting world get paid about the same. I may have job security, but they have stock options and bonuses etc...
Jaime: doubling is awfully generous. I know that when I add up my medical, retirement, etc., and throw in payroll and other taxes that I don't normally see, it's far less than double. My guess is that an individual's overhead is closer to 25-50%.I maybe wrong, as I don't have all of the accounting numbers, but intuitively that range seem more realistic to me than 100% overhead.
KingMerI think I figured out the root of the problem with our discussion. It was the phrase, "any SFH for 300k in Vienna is better than a TH in Burke at any price". This is what set me off. But what it reflects is that we're answering different questions. Mine is, where does it make sense for me to live. Yours is where provides the greatest potential for future capital gains. Under your question, my guess is, you're probably right. When the next bubble rises, (which I'm thinking won't be for another 10 years) then even the least desireable house in one of the best neighborhoods will have way more upside potential than the interchangeable THs in Burke. That's true. And from your more recent answers I think you've figured out what my question is, so it's all sorted.Jaime,Yes that is a San Diego based blog/newspaper, I'll try the link again...:4th post down the pagedirect link: 4th graph within the post
novawatcherIt depends on the agency and how they charge overhead. Where I work (as I write grants I know) my personal overhead is 110%. That's including overhead, medical, FERS, etc. However, since most of those are fixed costs that don't rise with pay-grade, my boss's overhead is only 60%. It's preverse and makes us young folks look really expensive to people evaluating the grants. But, not all agencies organize the overhead costs in that manner. It also depends on which things they consider to be contracts and which they consider to be overhead costs... I.e. certain pools of money aren't charged overhead when paying out salaries, thus spreading the overhead costs over fewer other pools.
KingMer,And in answer to your question, I do work in (practically) a ghetto, hence why I'm not choosing to live right next to work. For my commute? The desireable areas are Eastern Market, Capital Hill, Adams Morgan, Navy Memorial, Old Town Alexandria. The problem is that all of these places I could chose to rent in, but are either way out of my price range to buy, have questionable public schools, or higher crime rates than I'm comfortable with or some combination thereof. Now if you can locate a nice safe area of Northern Alexandria where the schools are good or rapidly improving, the crime is low and/or dropping, within 1.5 miles of a blue line stop and good houses or THs can be had for under 300 (or 250k) then I'd be in your debt. I check periodically, i.e. every 6 months or so, but haven't been keeping a close eye on it.
psst, HarrietMr. Carr answered your question. (and allowed my comment). That was awesome, way to get him talking...I feel I should not quote his words here. I don't know why I feel that...
Ben said: "Therefore you can deduce that finding a 1/2 parcel in other less desirable parts of Fairfax for less than $300k is not only possible, it's probable."This is a pretty weak deduction. One sale does not make a market. You have no information regarding that sale, if it was under duress, how much of a hurry they were to sell, etc. The same way there are, as some call on this blog, "sheep" among uneducated buyers, there are "sheep" among uneducated sellers who are happy to sell for whatever price (not necessarily the highest price they could get.) Keep in mind I no nothing about the sale you mentioned, but that is the point. Unless you were the seller you do not know what were the circumstances and one sale does not a market make. 1/2 acres in Vienna sell for around $500K. Those are pretty stable comps.
Cara, If you read this thanks for the updated links. Very interesting. Food for thought.
t,if you're around or still getting emails from this bucket, congrats on the "under contract"!!!Let us know how it all went, once it's over?
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