Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Thank you, Harriet. Interesting to see that Arlington sales continue their trend of being the lowest for the month over the past 11 years, and that the prices continue the YOY declines for April since 2006.
5:1 jim ratio, thats bad, add all that shadow inventory and it's going to be ad
Seems to be a continuation of the same trends we have already been seeing.The outer areas appear to be nearing the bottom, although prices are still falling.The inner/pricier areas are seeing slow declines on incredibly tiny volume. The higher end of the market is particularly frozen. 22207 23 sold 199 listings20007 25 sold 262 listings22101 28 sold 289 listings22102 18 sold 210 listings22066 10 sold 229 listings
Something else that is interesting to me... look at the types of mortgages being used in different areas.In PWAR:Conventional 175FHA 323VA 92Assumption 43Cash 199Owner Fin 1All other 12unreported 0Total 845This is in comparison to Arlington:Conventional 115FHA 43VA 7Assumption 10Cash 12Owner Fin 0All other 4Unreported 0Total 191Two things jump out at me, first are the large numbers of cash purchases in PWC. Investors? It would make sense.The other thing is the huge number of FHA loans in PWC. I guess it is official at this point, FHA is the new sub-prime.Arlington also has a large percentage of FHA loans, but nothing like PWC.
Interesting, Leroy. And when you consider that a lot of that 22207 and comparable inventory in other Arl. zips, are old listings, it suggests even more strongly that more price drops will occur.Correction to my post above - "in the past TWELVE years"
Maybe I'm reading this wrong, but aren't we seeing prices move up from last month sales (March 09) - I know the YOY numbers are down, but just looking at Arlington and Fairfax, it looks like the average sales prices compared to last month have moved up nicely.
I don't get why people compare FHA to subprime so often. FHA interest rates are fixed and not extremely high like subprime was. Subprime loans often times also had balloon payments and various pre-payment penalties. FHA makes you pay an entire month's interest regardless of when in the month you refinance but that's not technically a "penalty" and even if it were, it wouldn't be much of one.
"I know the YOY numbers are down, but just looking at Arlington and Fairfax, it looks like the average sales prices compared to last month have moved up nicely."Yes, but that is seasonal. For whatever reason prices always move up this time of year.(Just as volume always moves up in the spring.)
From Yesterday. Arkey….. Your position is “I’ll be damned if I will sell my house for less than 500k in PWC”?Some questions: 1. Does it have lots of land like Taby’s purchase? (Like 10+ acres?)2. With the land is it over 3500 sqft above ground?If the answer to the above questions are NO, then I can tell you why you can’t sell your house for ‘Market’ (LOL) value.It is quite simple really. For the 500k price point YOU CAN FREAKIN LIVE ANYWHERE YOU WANT IN NOVA! Add the fact that the number of people who would choose to live in PWC (Because 90%+ percent of the Jobs are closer in than PWC) without some real added benefit like lots of LAND or direct water access to the Occoquan or something similar….your screwed at that price point – Who the hell would want a 500k+ house in PWC when you could get something really nice for the same price is say McLean or Great Falls or Oakton or 20171 Herndon or Chantilly or Centreville or Burke or Lorton…….Pretty much without enhancements like lots or land, direct water access, super mountain views, horse property, etc. etc. A ticky tacky house in FX is >>>> a ticky tacky house in PWC for the same price.Also another little hint……SELLERS DO NOT SET MARKET PRICE……-RJ
"I don't get why people compare FHA to subprime so often. FHA interest rates are fixed and not extremely high like subprime was. Subprime loans often times also had balloon payments and various pre-payment penalties. FHA makes you pay an entire month's interest regardless of when in the month you refinance but that's not technically a "penalty" and even if it were, it wouldn't be much of one."FHA is certainly not as bad as subprime. What I meant in saying that is that FHA is the new mortgage of choice for people who can't buy with a conventional mortgage. In the past FHA had low down-payments, but some pretty strict underwriting besides that which kept their losses low and allowed the program to be self funding. More recently the government has directed FHA to loosen their underwriting and in effect, intentionally lose money in an effort to prop up the housing market.
Geez RJ, are you on meds? Why vent on me? I personally would not pay the taxes to live in Fairfax. To each his own I reckon and you are very wrong about people not wanting to live in PW. Of course, I think quite a few of you guys are wrong on alot of different things but I don't insult you by ranting that you are stupid. For one, prices have always been high and 2 the last bubble burst after the BRAC and Federal buyout program. I think the new president is hiring again..in a bigway..excuse me but I happen to know alot more about the number of new proposed jobs in PWC not connected to Federal service. Hey where is the FBI? and guess who is gearing up employment/hiring?..even a new hospital. No, I'm not going to sell at or below 500 and thats a fact jack. Geez, you guys think I'm Wells Fargo with a foreclosure? DUH! Oh yeah, big brain fart, why don't I list at 450,000 and get mutliple offers jusst because realtors are showing to buyers that can only afford 500. I bet I could get 475,000 in 24 hours or less. Silly pontification on your part. Its really not anything to get worked up about. I have a home I love and can well afford..you don't..and proabably never will because while you guys are ranting about things still being over priced, guess what? Buyers are buying like crazy. I think we sold another 1500 homes in the county in April. You all could very will be right with your opinions but the majority are buying and buying anything they can afford and like without a rats patoony about assessed value, market value or whatever.
RJGEMS: While you can get a pretty nice house for $500k in 20171 (Oak Hill/Herndon), It's going to cost you $650-$750k in Oakton and probably more in McLean.$500k will buy you an old split-foyer in Oakton/Vienna, but I wouldn't call that "something really nice."Nonetheless, you are right: for $500k in PWC, the place better have significant land, or water access, or something else that makes it special. Because for that price, you can buy a pretty decent place in the Oak Hill/Herndon area.
RJ/Arkey,You have both made excellent points, in your own, um, unique ways.Arkey, you do need to take into account that Clifton is just a couple miles down the road from you. Those kids get access to Fairfax County schools, instead of the dreadful schools close to here. That is somewhat balanced by the superb Catholic schools close to you, and I have many friends in your neighborhood who homeschool or use private schools. But RJ has a valid point: if you have over half a million dollars to drop on a house, why YOUR house? Why here?Taking out the sting, why not price your house below a point you think is reasonable, and let the market bring it back up to a price you would accept, if you really firmly believe the market supports your higher price? If something in the upper $400Ks would start a bidding war, as you think, wouldn't that be nice, instead of dickering back and forth with people hovering right around $500K?The fact is, you can get a 5000sqft+, practically brand new house for less than $400K in Bristow. You have an established neighborhood with a nice yard on your side, but can that really take you about $200K more? Just strategically, what is wrong with asking less than $500K in the hopes of generating multiple offers?And fundamentally, what is wrong with taking home $50,000 less? 7005 recently dropped by $50K. Since you purchased a while ago, it's not like you're underwater.
What really stood out to me in April was Loudoun County. I expected Arlington and Alexandria to have ho-hum sales, but I didn't expect Loudoun's to be down by a whopping 12.5%. I can only assume that buyers are choosing Prince William County instead -- there's obviously a huge difference in prices. Perhaps there are some Loudoun dwellers here who could offer further insight.(Also, I don't know why Google Docs decided to format these tables with extra lines in places. It does that to me sometimes).Arkey might not be impossibly off the $500K mark considering what's under contract in Warrenton:FQ6985285FQ6969498FQ6954789FQ6996156FQ7003916FQ6999957
Hi all. I'd like to tell you why buyers (like me) are very interested in living in PWC, specifically the 20111 zip code where Arkey resides, and why we might choose living there above closer in, even if we can afford closer in. Take a look at schools in Manassas Park - they rate in the top ten in the state! This may surprise folks because the search for Prince Wm. Co Schools on School Matters does not include Manassas Park schools. You'd have to enter MP City Schools to discover it. But those that do the research find out that there are some amazing things going on with that little city of 13,500. One of the nicest things is that it is a close-knit community and folks get to know each other. That feeling of community can get lost the closer in you get to D.C., I believe. That really was attractive to me. Add to that the new school buildings, new police headquarters, BRAC jobs moving to a new office park there, nearness to the VRE. Perhaps the number one reason was I think so much of the housing closer in is ugly, even the pricier, 500K homes. I wouldn't take them. Where do you find wraparound porches and the kind of community that encourages talks with neighbors and walks in the neighborhood? Manassas Park for sure does. As you can tell, I'm very excited about putting down roots in Manassas Park. We're in the Army and have lived and owned a home in Springfield and Fairfax City in the past, but chose Manassas Park as our final destination to raise our children.I enjoy reading all of your posts here, by the way. I am sure whenever you decide to buy you will make a very informed decision because of all the great information you get here. Just thought you might need a little reminder that PWC is more desireable to some folks than might otherwise appear. Have a great day!
Kristen, Don’t get me wrong. I love some areas of PWC, what I am arguing is price. I am assuming you are talking Blooms Crossing in MP, one of the very best areas of MP.But I am guessing you are paying <300 for a very large house. Arkey, Really, the MARKET has spoken and YOU ARE WRONG! This was a great spring selling season. If you failed to sell your house, YOU screwed up. Not the buyers, YOU. You had 100’s of people walk through and no sale – at a time when people where looking to throw cash around!-RJ
Tabitha..7005 dropped 50,000 to 625,000 now that sheds a different light on the pricing doesn't it..2 houses down..same age and lot..only my lot is the better one, my pool is the best...3 listing all 590 to 625 listed after me..houses same age and such.I just don't think most here are very familiar with house prices in PWC..even Blooms Crossing has come up from 60% of 08 to 80%..remember at the end of the year when I listed we were down in the county 52%,,,now, its come up to around 30%..thats some kinda distance in 3 months and still rising. I know we can't sell 1500 homes this month because there isn't that many available. If I'm being so unreasonable you'd see more people listing and they are not. I'm not bothered by this and I'm comfortable not selling. I know I've had lookers from Loudon, Cliffon and Pa all with houses to list and sell..taxes! Maybe youse guys don't realize those areas pay about twice what we pay in taxes..and..for what? I listed to sell so I could retire and buy another smaller place for Sam while prices were tanking...guess what..they quit tanking. I have no incentive to sell. Geez,,even the Prez chipped in by paying for my VRE ticket till 2011. It doesn't get much better than that. Zero commuting costs.
Arkey, Pray tell then. If the outlook is so great, why has not your property sold? After all how many other properties can boast unicorns that crap candy canes? The magical land of Arkey should have sold weeks ago!-RJ
School funding is why taxes are so much lower in PWC than in Fairfax. The Commonwealth gives PWC 5k per student while Fairfax only gets 2.5k per student. If PWC had the same state funding as Fairfax, PWC would have to come up with another 180 million in tax dollars!
But, Arkey, none of those houses have sold this spring.7005 is assessed for $525K, about 2004 level, just like my house. They're still asking $100K more than that. And I'm sure your pool kicks their pool's bottom, but their house is bigger and very tricked-out.Neighborhood-wide, assessments are at 2004 levels (much, much better than Manassas City, which is at 2001, or even less). All the houses on the market in there are asking about $100K more than assessed value. And not selling.But, yes, several did sell last year in the $500Ks. One was used as a comp for our house. And Harriet demonstrated that there are plenty of gorgeous half-million dollar homes under contract all the way out in Fauqier.So why not accept $500K? Because you don't need to sell?I wish you the very best. I hope you do eventually get what you want to get for your house. And I have been very impressed the last three years with how solid your neighborhood's prices have been. But I'm just trying to understand why you really won't consider a half million dollars.
Tabitha......that is right. I don't need to sell. I'm not hung up on price at all. I'll set it to market when I get ready to list again, if ever. All I'm doing is adding money to my retiremnt. It does go up another 200 a month if I stay thru the end of the year and with a doctors living to my left and a doctor across the street..man..that's better than 9117005 isn't tricked out! Being my nosey self I happen to know what the buyers think in comparision to mine...hehehe..she is hard to see, tho.by appoitmnet only.
Tabitha..gezz..you really are a hardnose.one house has only been on the market 1 day, 1 (1) month and the other 70 days with a 50,000 drop on 60 days. Average list time to sell in this price range is 90-100 days. I just gave up the ghost early so I could rest up and kick back.
not to interrupt the PWC/Manssas conervsation, just one note on Arl/Alex's drop in sales numbers, Easter/Passover was in April this year and March last year, which given the less than 10 house sales difference is easily enough to call it a draw. Not that stagnant numbers of sales versus last year bodes well for these areas, just commenting.Anyway, if anyone has refinance advice on how much to expect on closing costs (when maintaining the same bank) I've posted a question in the weekend bucket.
Good point, Cara, but Arl. sales for both 2008 and 2009 April were substantially below the norm for this month over the past 12 years.
Cara,I have been catching up with several weeks worth of blogging, and so this is in regards to a discussion from a few days ago, where you referenced four similar townhouses with $100,000 price differences.I think this is related to available cash versus mortgage. If you have plenty of cash after the down-payment, you can pay for repairs and upgrades and customize them to your taste. On the other hand, a cash-poor buyer will pay more for a ready-to-move-in house and get a larger mortgage.I think the more cash one's got the better bargain one can get.Cheers,KFZF
Tabitha,Congratulations with your purchase! This is a real success story and a good lesson to many of us.Have you posted the listing number of your house? I am just curious what 11 acres look like.Cheers,KFZF
KFZF--There was no listing number, because the house was not for sale when we bought it...I mean, it was not listed on the MLS. I wish I could share a picture or two, because I am one proud first-time homebuyer. And that actually reminds me of a point I wanted to make: I learned through this experience that land is a tricky thing to price. A half acre in a neighborhood of million dollar homes is valued two and three times as much as our 11 acres, for example. And 10 acres of flat land with no trees, or 10 acres of dense woods, or 10 acres in the middle of nowhere, in western PWC are all valued by the tax assessor about as much as our land...but our land is beautifully landscaped, with fenced pastures and clearings and a pond and two creeks and woods and paths and orchards and berry patches and...basically, it seems to me that the assessed value and the appraised value have far more to do with location than the quality of the land. I hope that makes sense.
Tabitha,Thanks. I followed your story, read about your negotiations for (two) houses, and so I understand how an MLS has never been created. But seeing that a couple people here found you I was wondering if there were a way to take a peek into your nirvana. :-)Your point about land assessments is interesting. I could justify the disparities between locations but not between the quality of the land and landscaping. Perhaps, this is not in the rules that the assessors have to follow. Another guess is that if you were to sell your land to a developer who would be building, e.g., 20 McMansions, the current beautiful landscaping would be of no value to him.The good news is that with lower assessed value your taxes will be lower. And you are planning on living here forever, right?Cheers,KFZF
KFZF--Of course, land that could be subdivided or zoned commercial would fetch a much prettier penny. But yes, you'd think that extensive, incredibly expensive landscaping would show up at least a little in a valuation. Ah, well. And while our taxes will be down this year considerably, $500/month is nothing to sneeze at...then again, my family lives in New York, and their state government must be run by crazy psychos. My grandparents pay over $35,000/year in property taxes for their old house in New Rochelle, and my parents pay over $1,000/month taxes for their home upstate.And if you have been following my story, then it will not be hard to find me: our place shows up under recent sales on Redfin's map. We are very close to the Manassas Park VRE, and sold for $550K in April.I still look at the place on Google Earth sometimes myself ;)
Hi, RJJems:Your Statement: "SELLERS DO NOT SET MARKET PRICE……-RJ"Yes, THEY Were setting the price during 2003-2006. Do you remember the horror stories of many buyers lining-up in front of each home seller?In an upwardly-growing-price market, SELLER Dictates the price!In a downward price market, BUYERS set the price!.
Hi, HayfieldGrad:"You said... School funding is why taxes are so much lower in PWC than in Fairfax. The Commonwealth gives PWC 5k per student while Fairfax only gets 2.5k per student. If PWC had the same state funding as Fairfax, PWC would have to come up with another 180 million in tax dollars!"Pl. tell as to WHY the VA Commonwealth pays $5K per student in PWC and only $2.5K per student in Fairfax county... why is this unfair treatment going on and why the Fairfax county residents with school-age children ask the commonwealth to be more fair, equitable in this regard??Thanks!.
Alex, Even in the upward market the buyers set the price. They choose to line up, THEY accepted ever increasing prices. All buyers have to do to lower prices is say NO. No buyer EVER has to buy…sellers however eventually ALL have to sell….even properties that have been in the family for 200 years are sold…The power is in the buyers hands to tell the seller to pound sand…As they did to Arkey..I fully hope the days of the smarmy entitlement crowd end soon…but somehow I think not….well not at least until the baby boomers are gone. You see, he needs that 500k+ for his retirement, no problem burdening the next generation with that debt, they will never get to retire like he did. But so what right? He earned it, he deserves it, never mind that income levels can’t sustain it, again not his problem….well that is not his problem until fake lending programs dry up and those who can afford it choose to spend their money elsewhere, should have sold in 05-06!-RJ
Arkey, RJ, Ace,You're all correct. The reason is that every deal is different and that's the power of the marketplace.While it is true that a buyer can always walk, and that's certainly true of RE in Manassas, property seems to always sell at "the right price"."should have sold in 05-06!" or perhaps, should wait until 2010 or 2011 when the prices are rocketing up after "resting" for a couple years.
RJGEMS,Your objections are kind of 2005, when $500K bought a much more modest house in Manassas, if you could even find one.I really think Arkey's property is a luxury property. It's somewhat gigantic. Young families aren't going to suffer because they can't afford a 5,500 square foot house for $550K. The $ per square feet is not bad.A doctor, lawyer, etc., or even someone bringing 200K to the table from a move-up property is going to find the property affordable.The drawbacks I see are the pools (they can be a non-selling point) and the age. I think buyers are somewhat concerned about repairs on a 20-year-old house. In pictures the kitchens have original ovens and formica countertops, for example. One house had a new kitchen but ghastly wallpaper everywhere. There are newer properties available in that price range, I think.
@j@,Much as I like hearing I'm correct :-), I think you meant Alex.Wish there were some good new open houses today.
Tabitha,I think I found it. Just to confirm - does the number of square feet have a number "7" in it?Thanks,KFZF
"I think you meant Alex."oh, ah, right! -slaps head-As "bullish" as I am on RE, I wonder if there isn't another dip ahead because of weakness in the overall economy.
kfzf--yessir!but i don't know how accurate that # is--the tax assessor, two appraisers, and redfin have all come up with different #s. all i know is our family of seven kids, six cats (the house came with four of the six), two bunnies, one gerbil, one hermit crab, one fish, and one brand-new Shiloh Shepherd puppy all fit quite nicely. my favorite room is the girls' room, which is a dormer over the garage that's 28 by 18. it looks like a barracks room with their beds lined up.come on by for the petting zoo! (i include the kids in the attractions)
Tabitha,The property is fantastic! As I was looking at it on Redfin it reminded me of Jane Austen's novels. I am very happy for you,KFZF
I must agree that the market, the buyers, determine the price of a house. The value of a house (or anything else) is whatever someone is willing to pay for it. If no one will pay $500,000 for your house, then it's not worth that much, by definition.
In Arkey's defense, it's not that simple. As I said before, it's not just what people are willing to pay for his house, it's what they expect to get from the sale of their own. Until owners in the entry level housing can sell their houses, they can't buy his. As an older established neighborhood the only imploding loans he should have to contend with are HELOCs. The number of these should be well under the number of potential Alt-A's in the new developments his house is competing with. Some buyers will view this stability of price point as a virtue and a sign of future stability. Thus, first the low-end REOs need to dry up such that owners in the bottom rung can wring out just a little more moeny for their homes, then those people will be able to look for new homes.So, I'm not so sure that the market dynamics don't dictate that in fact next year, Arkey may be able to get much more for his home than he can now, because more buyers will be around having been freed from their own houses.The risk is yes, that someone in his neighborhood has to sell, and pulls the prices down. But usually, just one low sale doesn't do it. The other risk is that the new stuff starts to seriously undercut his price such that his mature neighborhood can't compete. I, personally, really doubt that. Why? Because out in PWC the stagnation has been obvious since 2006. Given the 2,3,5 year teaser time frames, that doesn't leave a lot more buyers who are facing recasts. Other areas that people still saw as strong all the way into 2008, will continue to face more REOs. PWC may be reaching the end of them. (I know, you're not in PWC proper, it's all vaguely one to me, I'll get it even more wrong if I try to be more accurate).
Thanks Harriet. I've updated my kitchen and baths..not granite, tho. I hate granite. I redid the pool in 07, new plaster and tiles. I do have some empathy for these young people. I remember my mouth dropping when I first came up here on prices. I've been delisted from the MLS since 5/3...this weekend I had 10 people stop to get fliers and we had a realtor texting last night requesting a showing. I'm seriously priced to sell but fiancing isn't what it used to be for move up buyers. The upper mid-range housing is struggling in PW the upper end..800+ is selling like hotcakes. Of course, I wouldn't want a little lot on Lake Manassas for 1 1/2++ million such as quiet few here wouldn't buy my place, either. I would just like to warn these young people that plan on waiting that you have already missed PWC bottom except for Woodbridge/Gainsville not to get caught flat footed in Fairfax because once these deals are gone, they are gone.Very few people get to buy their ideal home the first time out.
Very late entry here but I wanted to respond to the comments on sales. Again, im not surprised that sales are at decade plus lows because it gets harder and harder to beat YOY sales records when there is less and less inventory from which to sell!Best example is Loudoun in which sales are down YOY. Ive been suggesting for a long time that once all the foreclosures (which are disproportionately located in the outer counties) are removed from the system, outer counties sales will drop YOY, and it looks like this is finally happening in Loudoun. Next will be Fairfax, and then PWC. At that point, the outer counties will have caught back up to the inner counties in terms of all having YOY sales declines. In the 1990s downturn - NVAR suggests price declines halted in 1992, (went flat for 4 years) but sales did not bottom til 1996 when they were at 20 year lows! Thus, even though (low end) prices are bottoming now, I would not be surprised if sales in NOVA are even less in 2010, and again in 2011.
arkey,your data is mostly impeccable, and i'm really not trying to pick on you, but the april #s do not bear out your assertion that >$800K is selling like crazy:PWC April sales/active listings:$450-$500K 9/119 13.2 MOI$500K-$600K 12/144 12 MOI$600K-$700K 6/70 11.6 MOI$700K-$800K 3/43 14.3 MOI$800K-$900K 1/37 37 MOI$900K-$1mil 1/24 24 MOI$1mil&up 1/48 48 MOIIn fact, MOI seems similar to the start of spring:PWC February MOI2.56 <$100K5.14 $100K-$200K4.36 $200K-$300K7.73 $300K-$400K10.32 $400K-$500K12.60 $500K-$600K26.33 $600K-$700K39.00 $700K-$800K48.00 $800K-$900Ki wish i could expound further, but my husband will kill me if he sees me crunching #s rather than unpacking...
kfzf--I don't know if you are still out there, but thank you kindly for your sweet compliments and well-wishes.I kind of think of the land as something out of a Lucy Maud Montgomery novel (think Anne of Green Gables). I've already started naming the trees ;)
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