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Monday, June 15, 2009
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105 comments:
Razzi pulls off the gloves, plus some quotes from Frank Llosa:
Handling Brokers' Boosterism: If a Realtor is going to offer an opinion about the market, there had better be data to back it up.
anielarke-
thanks for your neighborhood gossip in the other thread. We are a stones-throw from that N Harrison house and I thought 799k seemed awfully high-it is tiny! [(OTOH, if that brand new house right across the street was reduced about a million dollars I would be all over it :) ]
I always thought that columnist was bright, but if he thought someone would pay a mill for that place, I might have to revise my opinion of his opinions!
Trivia Insignificada Time!
Normally I dont post individual houses but this one in my hood has always been one of the more unique ones.
http://franklymls.com/AX7042915
Extra credit goes to who can tell me why there are 2 front doors. Your hint is the "historically significant" blurb in the realtors comments.
I will accept the most accurate answer by the end of the day. GOOD LUCK!!!
Okay, I know this is the NoVa housing blog, but I am about to put forward a hypothesis to explain a phenonmenon, that I haven't checked yet whether it's true recently.
Here's the thing, last summer, we were all saying that MD and DC were getting a delayed impact because their foreclosure process takes longer.
What if it's more subtle than that? What if banks, knowing that it would be harder and more expensive to foreclose, and that the loans were non-recourse, (I think that's true of MD and DC, I could be wrong) such that they wouldn't be able to persue the borrower. Maybe, just maybe, this increased their due diligence ahead of time. (at least until the last gasps of the boom). The original stated purpose of non-recourse laws was to force banks to be more cautious in their appraisals. The purpose of slowing the foreclosure process down was to protect the rights of homeowners against banks ruthlessly giving out products that were unlikely to be paid back. Maybe, just maybe, thes things worked. Maybe Rockville is more like Arlington than it is like Fairfax, and the increase in property values has a greater basis in fundamental income shifts. I mean it does have its own separate jobs corridor of NIH, NIST, and whatever all is in Gaithersburg.
I know we've all been thrilled that prices have crashed here so quickly such that we can all think about buying nowish. And some of us should be thrilled at the cash they amassed by selling in 2007ish. But maybe, just maybe the bubble in NoVa could have been ameliorated by banks being forced to do better due diligence by having greater fear over losing thier money.
Because really, in NoVa, the banks felt they were making a no risk bet. Buyer manages to keep paying, make a killing on an inflated value, buyer fails to keep paying, make a mint selling it to the greater fool quickly, where's the downside? Property losses value? Pursue the borrower. Risk-free? Right? What does the promise of free money do? Can we say, inflate a bubble.
Heresy I know. And unsubstantiated, does anyone want to go see how MoCo is doing?
CRT: Wow! That's some house!
Cara,
I agree with you premise that MD and VA are really not much different in terms of their stage in the process (though I'm not sure about the underlying reasons). I rent in Va and just closed on a place in MoCo last week. In looking at places on both sides of the river, they are not much different in terms of price for a given house, given neighborhood. Though not exact, I think you can nearly imagine the river as a mirror. Bethesda, CC have acted like Arlington, McLean. Rockville=FC, Vienna etc. Clarksburg, Olney etc have been pretty severely affected already. Part of the problem in the stats is the difference in boundaries. Bethesda is not it's own county, like Arlington, but gets lumped in with areas nearly as far out as Manassas.
Anyway, I don't think that the two areas have behaved very differently so far, and I would expect them to probably continue to track relatively closely. So if high-end, close in on one side of the river gets hurt, likely the same on the other. The only difference would be if there is some fundamental economic reason. MD has most of the biotech, medical, pharma jobs. NoVa has a lot more of the IT, Defense jobs. Seeing how things are going, one might imagine more money will be pumped into the former than the later in upcoming years.
CRT, is this it?
415 Prince Street
Private Residence
This Federal-style building was built in 1804-1807 as the Bank of Potomac. The door surrounds and window lintels are made of beautifully carved sandstone from the Acquia Creek, south of Alexandria. During 1863-1865, the building served as the headquarters of the restored government of Virginia.
Architecture Walking Tour. See #9.
Hit 8 open houses yesterday. Nothing that I would consider buying at the list prices, but some ok places. Saw two "flips".
http://franklymls.com/FX7020901
Disaster for the flippers. $425k in June '07. Listed for $675k in Oct. '07. Has been sitting since and is now at $499k. Ridiculously huge master suite, which may be appropriate for McLean/Great Falls, but is way out-of-place in northern Annandale. Overall, just way too specific taste-wise for a general "audience".
http://franklymls.com/FX7082157
Much more recent, and realistic flip. Closed for $320k in April. Everything seems fresh and new, though I don't have a clue what was actually changed. This might actually get not too far below the $455k ask.
Is this it?
One door was a formal enterence opening to a formal area to accept guests.
Second door leading to a less formal area for the family and domestic help/slaves.
CRT, novahog,
Given that novahog has done the hard work to show that it was once a bank, I'm going to guess colored and white entrances to the same services.
Gorgeous find btw.
"Handling Brokers' Boosterism"
An excellent article. Reminds me of another story involving a market change that beneficially affected consumers.
Ever hear of eBay? Before eBay, your prized possessions were either junk or riches. Very hard to figure out which was which. If Grandma had bequeathed you an antique tea set that was worth thousands and thousands of dollars, you were at the mercy of the local market and the local antique dealer. Finding out the real value of that tea set was overly burdensome. So, by controlling access to information, a smaller number of folks (the antique dealers) benefited from the controlled data.
Along comes eBay. Your market is now the world. A quick search of sold listings establishes the selling or market value of that tea set based on auction activity. You’re now wiser and list the set at a realistic opening price, with a knowledgeable reserve price. The dynamic has changed, every seller on eBay has the power to access the same historical data and come to their own assumptions regarding value.
Let me repeat that. Every seller or buyer, in {blank} market, given the access to the historical information, can arrive at their own assumptions regarding value.
Anyone else see the change that access to information benefited both buyers and sellers? Real Estate is currently under the same market influences and change. Change is either good or bad, depending on your point of view. The key point in that article is the power of information and the shift in power from one group to another.
Information is always the most valuable item in any transaction. The change in Real Estate, and the torrent of information that is now available to the average consumer, has benefited both buyers and sellers. It’s a good thing.
Geithner and Summer's WaPo Opinion Piece on regulatory reform.
Our framework for financial regulation is riddled with gaps, weaknesses and jurisdictional overlaps, and suffers from an outdated conception of financial risk. In recent years, the pace of innovation in the financial sector has outstripped the pace of regulatory modernization, leaving entire markets and market participants largely unregulated.
That is why, this week -- at the president's direction, and after months of consultation with Congress, regulators, business and consumer groups, academics and experts -- the administration will put forward a plan to modernize financial regulation and supervision. The goal is to create a more stable regulatory regime that is flexible and effective; that is able to secure the benefits of financial innovation while guarding the system against its own excess.
...
Allow me to be the first to use the translation filter:
"We are changing the rules for the financial industry."
And as most investors well know, until you understand the new rules, you don't step on the court on into the batter's box.
Re: bank
Perhaps a customer entrance and an employee entrance leading to the two sides of the banking windows.
Interesting:
JH: How old were you when you moved to 415 Prince?
Charlotte Smith: I must have been 13, 14—something like that. And the interesting thing about the houses—most of the houses on the 400 block of Prince Street are big houses—three stories. Had my father had the money, which he didn't have, he could have bought anything on that block for $10,000 or less. The house right across the street from us was … It's a great big, three-story house, with lots of rooms in it, because there was—like most of the old houses, it was square in the front, went straight up, and then it had a wing in the back that was only two stories high.
JH: Was your house the same way at 415—a two-story wing?
Charlotte Smith: Yes, but we had an apartment. That had been turned into apartments and we were on the second floor. In a six-room apartment with twelve-foot ceilings that my mother and father paid $50 a month for. Can you believe it?! If anything in the apartment broke, like plumbing or anything like that, the man who owned it would pay for it. But if wanted any painting or anything like that, we had to pay for it.
JH: Did you know your neighbors—the other families in the apartment?
Charlotte Smith: Yes. The apartment was owned by a Judge McCure that had his offices on Royal Street and his daughter and her husband and their family moved in one of the—it was a six-room apartment, but it was the back wing. The house next door—right next door—on each side, was rental property. Great big houses, but they…
JH: Were cut into apartments.
http://tinyurl.com/lwr7qy
Novawatcher - no guess on the 2 doors?
Novahog - your getting warmer!
Zerodown/Cara - good guesses, but not it. The answer has something to do with Novahog's quote.
In fact Ill give you another hint, the second door was added after its time as a bank had ended.
Anyone else?
http://franklymls.com/AX7042915
My original guess was that one door was for the residency, the other for business (i.e. perhaps a doctors or lawyers office downstairs). But, I like the zerodown's bank answer better.
One more guess:
Re: Reformed Government of Virginia
One entrance for the executive nch -- Governor Pierpont; and
One entrance for the legislative branch.
s/b Restored not Reformed.
One door for living humans and pets, another for ghosts (exit only).
No????
Oh, and just a comment on the DHS HQ potential move to Anacostia?
If/when it does happen, it would indeed benefit NoVa, if you count Mount Vernon and Huntington as NoVa. Both of these have nice some nice housing stock and significant potential for redevelopment ongoing. And Huntington is a great 2-commute opportunity with the Woodrow Wilson Bridge and the yellow line. I don't care for the area near the metro myself, but plenty of my husband's friends from work have bought there. And at least one commenter on here bought down near Mount Vernon. So, if by NoVa, you mean all of NoVa not just Tysons or Arlington, then yes, it could be a good thing.
And who in their right mind thinks the DHS HQ parking is not going to be behind armed guards? Stealing hubcaps, yeah right. People will indeed work in Anacostia, they just won't take the metro there (well or not as many of them will as to other places).
Sorry to spread conversations across multiple buckets...
Had it been the Bank of Potomac 1 year earlier I would guess it was one of the banks the US govt used to finance the Louisiana purchase (second door for the french)?
Hmm, ill go with Zerodown's answer (one door for the exec, one door for the legislative) in the Restored Govt of Virginia.
By the way, did anyone mouse over the bathroom pic (the blue one around the middle of the series)? Good lord!
The Anonymous,
Ouch! One, that's insane, and two, am I the only person who looks at marble in the bathroom and thinks blunt (or worse, edged) head trauma?
Cara, risk-averse in all things, I just neglected adding a listing to my favorites today because they had marble tiled the bathrooms.
I decided to de-lurk just to say a quick “Hi” and “Thanks” to Harriet and all you regular posters. When I found out I would be moving back to NOVA almost 2 years ago, I wanted to know what the heck was going on with the housing market. I found this blog and I've been reading it since.
Based on what I read here, I decided to rent when I moved down last year. Back then, my money would have gotten me a small TH in Centreville with limited parking. After waiting over a year, I just closed on a foreclosed SFH in South Riding with everything I wanted for even less $$. And while dealing with the bank (Fannie Mae in my case) was somewhat difficult, I knew what to expect based on all the details I read here. Since my monthly mortgage will be considerably less than my rent, it made sense to jump back in now.
Anyway, this is a great blog with lots of helpful and truthful info (not the usual “it’s a great time to buy” crap from most realtor-run blogs), and I plan to continue reading it. And while I know some of you may think that I should have waited another year or two, or at least until I could afford Arlington (which wouldn't make much sense, since my job is in Chantilly ;-) the time (and place) was right for me. So like I said in the beginning, thanks for all your insight and help.
Barb,
Congratulations!!! Sweet. Sounds like you got the right place for you, at an even better price than you had been willing to pay a year ago. Fantastic! Congrats!
One door was for Union sympathizers, one for Confederate sympathizers? So they wouldn't continue the fight?
Or perhaps it was used to decommission/outprocess soldiers of each color, Blue and Grey?
Jeff, responding late to your inquiry from yesterday--
YOU'VE GOT POLTERGEISTS. Your house was built on a cemetery or indian burial ground (as I imagine MANY houses have been in the last few years).
GET OUT NOW, before a family member is sucked into the TV or the ceiling or something. And for the love of God, resist the urge to look at your face too closely in the mirror...
Maybe one was an in-door and the other an out-door?
One door for the Blue and one for the Gray?
Cara,
I was being hyperbolic about the stolen hubcaps. I agree that the new DHS HQ will be safe. It will probably be as secluded and heavily guarded as the CIA HQ. Every once in a while I wonder what will happen if I take that right off of Dolley Madison Blvd/123 into the CIA HQ but decide that's not a good idea...
Actually, does anyone know what happens? Is there a gate or something with guards and they gruffly tell you to turn around?
I've never understood why you cannot drive up to the CIA HQ (it looks like it would be a very scenic and pretty site based on pictures) but you can walk up to the FBI HQ and take Metro or drive to the Pentagon.
Anyways, my comment was that the new HQ would be bad for western suburbs if it moved jobs from Tysons to the new HQ. Who knows if that happens. I agree that it could be good for Huntington but I think Huntington's value will most rise or fall based on Route 1/Richmond Highway which has a lot of potential but currently is not doing too well.
I enjoyed Razzi's article. Did anyone find it weird that the couple (both 25 years old) was buying a home? It felt very "bubble years" to me (getting back to the "is it 2005 again?" theme).
They claim they got a place they will live in for 7-10 years but I wonder if they really have appreciated how much can happen while you are 25-35. Of course, they already are married so not as much will likely change as if they were both single. But how stable are their jobs/careers? How long have they been in the DC area? etc
The article noted the husband has a master's degree. In some professions you cannot advance after a certain point without the Ph.D. While there are plenty of great university options in the DC area but does he want to feel limited to those schools?
Anyways, there's no minimum age required to buy but in the aggregate the average 25 year old has a less settled life than the average 33 year old.
Part of my point was lost regarding the construction of the Department of Homeland Security Headquarters. I brought it up in my series of massive infrastructure projects going on in the region and the subsequent spurt of jobs.
You can check wikipedia for DHS HQ and it will tell you the entire project was proposed at $4.1B.
Here is another quote from a solicitation:
The estimated construction cost for the total development of the DHS Headquarters consolidation at St. Elizabeths is between $2.0 billion and $2.5 billion of construction work and a possible $500 million of tenant added items (telecommunications/IT, physical and electronic security, FF&E).
Considering the Woodrow Wilson bridge project was approximately $2.2B, this is a massive undertaking. It's simply impossible to spend $3B-$4B without creating thousands, more like 10 thousand jobs.
This project combined with the Silver Line to Dulles - $5.1B + the 495 HOT Lanes - $2.7B - + the Belvoir BRAC hospital, Geospatial HQ, museum, roads - $2B+.
Others: 395 HOT Lanes, I95 Widening, Telegraph Road.
TBW will tell you that this is just normal and a neutral effect on income, jobs, and real estate prices in NoVA. Perhaps.
actually, politics as usual
“(w)hen the state bank charter came before the assembly in January, 1803, it had warm Federalist endorsement, including support from two of the most prominent newspapers. The bill sailed through the lower house, with Federalist members providing almost the entire margin of victory. A hostile senate killed the bank, but even there Federalists voted three to one for it. Next year the probank forces won their battle. Obtaining with little difficulty a charter for the Bank of Virginia, which would have headquarters in Richmond and branches in Norfolk, Petersburg, and Fredericksburg.”
“…the first election of officers, in which two prominent Republican directors supported a young Federalist against one of their own party for the position of first teller.”
“within a few months, this pleasant picture suddently vanished as Republicans dropped their conciliatory attitude and injected strict partisanship into the Bank of Virginia’s affairs.” (The Southern Federalists, 1800-1816, Borussard, James H.)
when was this building a bank? sounds like not when it was first built.
Robert,
I do feel the Silver Line will be a positive for Tysons, Reston, and Loudoun County. I think we will regret not putting the Tysons stops underground and having a stop closer to Reston Town Center but I still view it as a net positive.
As for the highway projects, why would these be new jobs? Wouldn't the HOT lanes projects just employ the same people who spent ~98-06 on the new Woodrow Wilson Bridge and the Springfield Mixing Bowl?
And the time period before that had infrastructure projects like the Fairfax County Parkway (1987-2001), the Dulles Greenway (completed 1995), Prince William Parkway (90s), and so on.
We've never lacked for road or mass transit projects in this region since the area exploded in population in the postwar period.
Robert,
Oh and re DHS HQ. Wouldn't that just employ all the people who built Nationals Stadium and all the new condo buildings and office buildings in Arlington and DC?
If your point is that these projects are likely to limit unemployment, then I agree. But I don't think it's going to bring gobs of new people to the region.
Robert,
Since I always try to answer your questions I hope you answer this question. Don't you think there is a political limit to how much Obama can spend fake money? See this article from Sunday's Washington Post:
After enjoying months of towering poll numbers, legislative victories and well-received foreign policy initiatives, the White House has become increasingly concerned that President Obama's spending plans, which would require $9 trillion in government borrowing over the next decade, could become a political liability that defines the 2010 midterm elections.
http://www.washingtonpost.com/
wp-dyn/content/article/2009/06/13/
AR2009061302035.html
I especially see the potential for a political uproar if most of the nation is in a recession and the Northern Virginia suburbs are back to two percent unemployment rates (which seems to be your prediction) because of federal spending.
"Scott said...
One door was for Union sympathizers, one for Confederate sympathizers? So they wouldn't continue the fight?"
Ding! Ding! Ding! We have a winner! Kudos to Scott with an honorable mention to Novahog and Zerodown for sleuthing out the Restored Government of Virginia and Governor Pierpont, respecively.
At the start of the civil war, when the delegates in Richmond voted for Virginia to withdraw from the union, the delegates from the "western counties" who wanted to side with the union declared that because Richmond had seceded, all state offices had been vacated. Thus they stepped in under the name of the "Restored Government of Virginia" with Frances Harrison Pierpont as the Governor. Thus West Virginia was born.
http://en.wikipedia.org/wiki/Francis_Harrison_Pierpont
At the same time, Lincoln ordered union troops to invade Alexandria and a few other cities and counties in VA in order to secure the Potomac. Once Alexandria was secured, although technically never part of West Virginia, Pierpont moved the official seat of government to this house to be closer to Washington.
Apparently Jefferson Davis in particular was furious about what the Western Virginia delegates had done and was adamant about getting West Virginia back. Thus negotiations were held in this house by the delegates from VA & WVA over the future of the rogue area.
In any event, bad blood between the VA & WVA delegates led to petty disputes about who would sit where, the order in which people would enter the parlor first, etc. Thus, Governor Pierpont knocked out the window and installed a second door on the right so the VA delegates could enter one door and the WVA delegates the other.
And to think, this little footnote in American history can be yours for a cool 5.6 Million bucks!
TBW,
Nationals Park: $611M
DHS HQ: $2.5B-$4.1B
But you already know that. Sure, some of the same workers and condo & office building workers too.
I give, I have no way to compare today's projects vs. previous eras. Just seems like a lot to me.
Is there an upper limit to what Obama can spend? I don't think there is a number that breaks the camel's back. I think gradually destroys the dollar. I think you agree with me on this. Inflation is much more likely than deflation.
Again, I don't see two percent unemployment in the region, but I do see a larger employment base. I see people flocking here from other parts of the country. The history of our country is migration to areas with jobs. You can argue with my term 'flocking', but you get the idea.
I realize this means little, but my brother-in-law came down two weeks ago to interview for jobs in Suitland and Laurel. He lives in Detroit and is employed by HP, but he said everyone is running scared. His current contract is with Johnson Controls.
An uproar if NoVA develops a bubble? That's interesting. Don't we have a history of local bubbles -- Houston 80's, Silicon Valley 90's.
Most people understand you can't spend money without oversight and management.
Robert,
I think people see a difference between strong local economy because of technological innovation/entrepreneurial spirit (Silicon Valley 90s) and local economy built on federal taxpayer money.
Every other level of government has had to cut back because of the recession. Why should the federal government not be asked to do the same many will ask.
tbw,
Not much will happen if you'll get to the CIA gate. There is a metrobus, i believe 15k or something that goes to the CIA, past that gate. At the gate some guys with M-16s get on the bus, check it out for any suspicious items, let it proceed to the building and let people with badges out. Then it leaves on it's normal route.
Thank you thank you!
But the "restored govt of Virginia" was the big helping hint. Without that, after seeing the interior picture of that room I just would have mumbled something general about "well, it looks like it was used at one time as a building for community gatherings--like those to doors entered into the lobby of a theater or weddings or dances or something, or some other type of public use."
You're right, that would be a neat bit of history to own! Sadly, I'd need a bigger down payment for it, and a WHOLE DIFFERENT style of furniture.
Come to think of it, I also just won two free show tickets from my company today, and came within one raffle ticket number of winning a free bike last week.
Usually I feel I never win anything--I better play the lottery this week!
Robert said...
talk about unsubstantiated claims, robert writes, Of course, banks have 30% of this inventory unlisted and waiting for things to “cool down”. So, for every foreclosure purchased, to some extent, there’s another one waiting to take its place.
You are correct Robert. I misquoted:
http://tinyurl.com/r5yg25
Are Banks Keeping Foreclosed Homes Off the Market?
Posted by: Chris Palmeri on May 21
Buyers looking to purchase foreclosures should still have plenty of opportunities. Only 30% of bank-owned properties are listed on the multiple listing services, says Rick Sharga, senior vice president at foreclosure listing firm RealtyTrac. He figures banks still own as many as 500,000 properties that they want to sell but haven’t put on the market.
Robert,
I'd also note we have not had an increase in federal tax rates since 1993 (and instead multiple decreases in rates (and new credits) in the late 1990s and early 2000s).
At a minimum, we are going to see most of the early 2000s tax cuts end given the sunset provisions. We are likely to see other tax increases (tax on employer provided health care, maybe higher top marginal rates, etc.)
No one cares about runaway gov't spending when your taxes are staying constant or decreased percentagewise. When you are forced to pay for it though you start to have voters and interest groups more skeptical of runaway spending.
I think you think that the American people and the federal gov't are going to agree to have massive, massive deficits. It's not going to happen.
Robert,
I would say that making bets on what feds will do long-term is not a very good idea. I agree that it is possible that US will become a highly centralized country like France, where so much of the power and money is in the nation's capital. But I would give such an a event a probability of about 1% tops. It is a little bit un-American I would say. Sounds like a commie idea to me.
If status quo holds, this area will continue growing, especially in the dulles corridor, where so many hi-tech companies are (not providing much growth to inner areas or dc proper). Federal government will probably continue to grow until they start working on the deficit reduction (they should start as soon as possible, that's the idea of the stimulus, spend it fast and stop the bleeding afterwards). I expect further gentrification in DC for a while, areas near metro improving in VA where not quite good now (yellow line/some parts of blue line), but no upside potential in currently desirable areas, they are priced too high already. People will not buy places there stretching to the end. Especially people with government jobs, that offer stability, but nothing special in terms of compensation.
South Riding Months of Inventory is not Months of Inventory, it is WEEKS of Inventory (WOI) -- currently 3.5 Weeks
robert,
You are confusing me. So, which is it: 30% are not listed (you said), or only 30% are are listed (Sharga Said)?
And, to bring it home, exactly why would a bank hold off selling in this area? Banks are not "market timers." They process foreclosures ASAP. I've provided numerous official quotes from banks saying such. I know, blah, blah, blah, all banks lie. Bloggers lie.
TBW,
I can see some griping about the DC area showing disproportionate growth out of the recession. Would something material be done about it?
Robert,
Yes. It could easily get someone elected to Congress or play a marginal role in a competitive campaign. If enough people seemed to win because of outrage over federal government spending you better believe the next Congress would at a minimum do things like no GS payscale pay raise (kinda like how local gov'ts are doing that now), RIFs, furloughs. If people really got mad then we could see removal or subagencies, lower DoD spending, etc.
I can't predict the future. But I know that the current level of spending is not sustainable. The people buying Treasuries will stop if there does not seem to be an end and the American public will put a stop to it.
I don't think we'll have any massive decreases in spending but we will have some belt tightening.
Tysons Tunnel Inc. and Sierra Club -- an environmental group with deep pockets -- are planning to file a lawsuit in regard to tunneling the Dulles Metro project under Tysons Corner.
http://washington.bizjournals.com/
washington/stories/2009/06/08/
daily95.html
I also love this quote:
"It's simple — which Metro option has worked better for community prosperity and development — the Metro in Arlington (underground) or Alexandria with stretches above ground?"
I expect that Vienna resident to get some irate letters from CRT, anielarke, @J@, et al who feel Alexandria is not less prosperous than Arlington (but agreement from Tom and me that the Arlington Orange Line has developed much more upscale than Alexandria.)
2 door house
1 door was the building owners home, and
1 door was the entrance to the apartment stairs.
"Arlington Orange Line has developed much more upscale than Alexandria.)"
I don't like what happened to Courthouse, Clarendon, Ballston, too big city for me. I liked the old Clarendon, the funky shops and one-off restaurants.
I can always shop high end, gold plated, sterile.
I hope Del Ray survives gentrification.
...but that's me.
Scott - good job.
TBW - who would argue that? Its obvious that Arlington is much more prosperous than Alexandria. Have I ever suggested otherwise? Perhaps you havent been reading here long enough.
Pat - Scott had the right answer in the door question - read my post above.
CRT,
Read the comment right above yours.
Robert: your South Riding "weeks of inventory" reiterates what I saw when mining the data: MOI is uncorrelated with price direction.
TBW-
I am 25 and am buying a place. I don't see any reason that people in their mid 20s shouldn't buy. You mentioned that they are are more likely to have life changing events, but I think they also have many advantages
First, people in there 20s are less likely to be having kids than people in their 30s. Many people don't realize the cost of having a kid so they get a place then have a kid and have trouble paying for both.
Second, your wage growth tends to be higher when you are younger making payments easier.
Finally, at 25 you are less specialized, so if you lose your job you can probably find a comparable job much quicker than if you are in your 30s.
I think these at least help offset some of the facts you said
I am not @J@ but I dont think he denied that Arlington was more upscale either. He did say:
"I can always shop high end, gold plated, sterile."
and has a point there, but thats not implying it is not more upscale.
I have a developer client who builds developments like this - theyve got it down to a science. Put up some lofts, add a few chain stores and restaurants and people flock to it. They know what stores to pick, they know how many square feet per loft to maximize revenues, etc. Its remarkable - a new urbanists dream - density without any of the "icky" elements that go with it. It should be added as a chapter in that book "Stuff white people like"
http://www.youtube.com/watch?v=4T1RMuoQnKo
Its a shame that no indie restaurants or stores can compete. The rents are too high, and the developer will always take a known entity with a corporate guarantor over an unknown upstart any time.
The amazing thing is people dont seem to care much. It seems the overwhelming majority of people crave uniformity over character. To each their own I guess.
Contrarian - I was not trying to impune you - I was simply pointing out that no matter what happens, you will never never alter your view that deflation is inevitable.
You even indicated that if everyone got a check for a billion dollars from bernanke each and every month til inflation started, you said it doesnt matter - deflation cannot be stopped - houses will drop 90%.
That was a conversation stopper for me - im going to belabor the point again, because we fundamentally just cannot agree.
Basically we operate in different circles you and I. Its like a biologist and a creationist arguing over the origin of the planet. They each speak different languages. Whats the point?
housebuyer: I bought my first house (and got married) when I was 24.
NoVAwatcher: 22 and 22 (married and house).
"Because that cannot and will not ever happen, what now for you? You haven't explained that one, CRT."
Easy, I believe this can end in either inflation OR deflation. I listen to positions on each side, I judge the credibility of those who are advocating their positions, I base my opinions on facts and circumstances as they change around me.
You wont. For you this ends in deflation because the scriptures say so. End of story.
For me, if it looks like inflation, I will act accordingly. If it looks like deflation, I will act accordingly. As its stands now, I am hedging both positions because I am willing to admit, I simply dont know.
Heres a question for you, what would it take for you to believe deflation may not happen? What piece of evidence or mountain of evidence would make you change your position? If things stagnate and start to rise for the next 5, 10, 20 years, how long til you think maybe just maybe deflation wont happen?
Anyone here want to take bets on whether that question gets answered directly?
Robert said...
You are confusing me. So, which is it: 30% are not listed (you said), or only 30% are are listed (Sharga Said)?
Sorry for the confusion. Let me put it in bold for you again
Only 30% of bank-owned properties are listed on the multiple listing services
Robert said...
And, to bring it home, exactly why would a bank hold off selling in this area? Banks are not "market timers." They process foreclosures ASAP. I've provided numerous official quotes from banks saying such. I know, blah, blah, blah, all banks lie. Bloggers lie.
A home many not be listed because the bank is wrestling with title, repair or owner right of redemption issue….
…. Banks may also be holding houses off the market because selling them now would lower prices even further. Foreclosures typically sell at a 31% discount to similar homes whose owners aren’t in distress. Listing all those homes now, Sharga says, “would have a devastating impact on inventory and pricing.”
http://tinyurl.com/r5yg25
robert said...
A home many not be listed because the bank is wrestling with title, repair or owner right of redemption issue….
TRUE
…. Banks may also be holding houses off the market because selling them now would lower prices even further. Foreclosures typically sell at a 31% discount to similar homes whose owners aren’t in distress. Listing all those homes now, Sharga says, “would have a devastating impact on inventory and pricing.”
FALSE
Barb,
That's great news. I'm so happy for you!
I think people missed my last paragraph where I said there was no minimum age to buy. For some people, 25 is the right time to buy. For most people, it is not.
I'm just wondering if the 25 year old couple is really at that stage where buying makes sense or if it's bubble mentality (better buy now before we are priced out forever).
I believe it was Cara who found the first time homebuyer average age stat and it had gone down during the bubble when I asked many posts ago.
robert,
Serious question. Suppose banks are holding off inventory for fear of crashing prices. FALSE, but assume it is true.
Bank A has 30 properties in Las Vegas. Exactly under what criteria would the bank decide to list a property? Months of Inventory. Prices. Interest Rates. Spring. Woke up on the right side of the bed in the morning. It is cloudy outside. Dinner is ready and I don't feel like mucking around with this software program.
CRT,
Last I checked there were plenty of independent and local chain restaurants on the Ballston-Rosslyn strip. It's a false stereotype that everything is now chain restaurants. Whitlow's on Wilson is still there. There are still places like El Pollo Rico or whatever it's called.
And it's not like the Ballston-Rosslyn of 1980s-90s was all individuality. I mean, you had the Ballston Common mall. And I don't think the Ballston IHOP or Clarendon Silver Diner really screamed "edgy, hip."
CRT,
and for that matter, I'll add there are plenty of independent restaurants in Fairfax County, Prince William County, and Loudoun County.
Not saying you said that but many people (who don't bother to actually investigate this) seem to think the suburbs are all Cheesecake Factories and Olive Gardens and have this false impression you have to live in a city to have non-chain restaurant options.
Novawatcher said...Robert: your South Riding "weeks of inventory" reiterates what I saw when mining the data: MOI is uncorrelated with price direction.
You are saying that my chances of losing money on a home purchase are the same whether there is 1 month of supply or 12 months?
UNCORRELATED. Does anyone else on the board believe that MOI and prices have NO relationship?
Robert: Numbers don't lie:
http://novawatch.blogspot.com/
Robert said...
…. Banks may also be holding houses off the market because selling them now would lower prices even further. Foreclosures typically sell at a 31% discount to similar homes whose owners aren’t in distress. Listing all those homes now, Sharga says, “would have a devastating impact on inventory and pricing.”
FALSE
So, adding “distressed” homes on the market has a favorable impact on inventory and pricing?
Reading this blog made me wonder what life would be like today if there weren’t so many political subdivisions in Northern Virginia, and how we got to this point anyway.
I mean we were all part of Fairfax County at one time (Alexandria, Arlington, Loudoun, Falls Church, Fairfax City), and prior to 1742 Fairfax County was part of Prince William County.
So, in 1742 Fairfax County broke off from Prince William County and Fairfax County built its first courthouse at a place called Spring Fields, which was very close to present day Tyson’s Corner. We still have streets there called Courthouse and Gallows Road.
But Alexandria was growing and the townspeople found the courthouse location more than a little burdensome, so they arranged to have it moved to Alexandria in 1752 by providing the land and the buildings for the new Fairfax County Courthouse and jail. The gallows apparently stayed at the Gallows Road location. The new Fairfax County Courthouse was located on Fairfax Street between Cameron and King Street on Market Square.
Of course, the courthouse proved very inconvenient for the western part of the Fairfax County, so Loudoun County eventually broke off in 1757 and built their courthouse in Leesburg.
But then George Washington wanted to include Alexandria as part of the new federal district, so Fairfax County ceded the land which includes present day Arlington and much of Alexandria to the Federal Government in 1789.
But there was this little problem – Virginia law requires county courthouses to be physically located in their county. The Fairfax County Courthouse wasn’t even in Virginia any longer. So they moved it to a more central location within the county – close to its present location. The new Fairfax County Courthouse opened in 1800.
The District of Columbia had two counties: Washington County north of the river, and Alexandria County south of the river.
Well the people of Alexandria County didn’t see the big financial boom they expected. Alexandria’s port was losing out to Baltimore and Georgetown (close to the C&O Canal); the federal government would not build buildings in Alexandria County; and DC was talking about abolishing slavery (Alexandria’s port had a big slave trade). Some in the Virginia General Assembly wanted more representatives who supported slavery to help defeat the abolitionist movement. The stars aligned and the federal government granted Virginia’s petition to retrocede the land to Virginia in 1846.
How different it might have been had the land came back to Fairfax County, but it didn’t. Virginia got a new county: Alexandria County.
Yhe City of Alexandria incorporated in 1852 and became independent of Alexandria County in 1870.
Alexandria County and the City of Alexandria next door to each other proved more than a little confusing, so in 1920, Alexandria County changed its name to Arlington County. The name came from Arlington House at Arlington Cemetery.
In 1948, the City of Falls Church became an independent city.
In 1961, the City of Fairfax became an independent city. But, a familiar problem arose. The Fairfax County Courthouse was within the planned boundaries of the new independent city. This time they tried something different. The City of Fairfax did not incorporate the courthouse area which remains in Fairfax County; however, the Fairfax County Courthouse is now completely surrounded by the City of Fairfax.
"Last I checked there were plenty of independent and local chain restaurants on the Ballston-Rosslyn strip. It's a false stereotype that everything is now chain restaurants. Whitlow's on Wilson is still there. There are still places like El Pollo Rico or whatever it's called.
And it's not like the Ballston-Rosslyn of 1980s-90s was all individuality. I mean, you had the Ballston Common mall. And I don't think the Ballston IHOP or Clarendon Silver Diner really screamed "edgy, hip."
TBW I agree. Its never an "all" or "nothing" proposition. There are chains everywhere, and you know what, some chains are good!
It is however, a critical mass issue, and arlington has clearly passed that critical mass.
To be fair, as you noted, Arlington was not in great shakes before the renewal started. Its not like they had to displace some cultural icon to develop the area. On the whole, Im much happier with the options there now than they were back in say 1998. Still, while it is now "good", it could have been so much better...
"and for that matter, I'll add there are plenty of independent restaurants in Fairfax County, Prince William County, and Loudoun County."
You know, one of the consequences of rising rents in cities is that it causes immigrants to skip the city and go straight to the burbs, taking their food with them.
There is a local economist, Tyler Cowen who describes this, and has an "ethnic dining guide" that I follow religiously. Most of the best places are in suburban strip malls, or in sketchy areas in Arl/Alex & DC.
Robert said...
robert,
Serious question. Suppose banks are holding off inventory for fear of crashing prices. FALSE, but assume it is true.
Bank A has 30 properties in Las Vegas. Exactly under what criteria would the bank decide to list a property? Months of Inventory. Prices. Interest Rates. Spring. Woke up on the right side of the bed in the morning. It is cloudy outside. Dinner is ready and I don't feel like mucking around with this software program.
Those are pretty limited choices Robert and given that, I’d choose number 10; “none of the above”
Further, given those choices, what is the significance of placing those 30 properties in Las Vegas? Is dinner never ready in Las Vegas? At a different time? Do you account for the time difference when dinner is supposed to be ready? If you woke up on the “wrong” side of the bed in Las Vegas, would it be the “right” side in some other part of the country? If you woke up in the afternoon in Las Vegas, would it change the side of the bed you woke up on? Is the production of clouds in Las Vegas fundamentally different than other parts of the world? Is the Software program being used in Las Vegas different for the same bank in other parts of the country? If so, what are those differences?
And lastly, “Suppose banks are holding off inventory for fear of crashing prices. FALSE, but assume it is true”. How did you deduce that this statement is correct? What data or other information do you have to indicate this?
Robert said...
A home many not be listed because the bank is wrestling with title, repair or owner right of redemption issue….
TRUE
But Robert, these homes must be listed with little or no delay because they are processing them ASAP….correct?
Robert said...
And, to bring it home, exactly why would a bank hold off selling in this area? Banks are not "market timers." They process foreclosures ASAP
robert,
Okay, that was a JOKE.
Let me make it easier...
What criteria do these banks use that are holding off inventory to list a property on the market?
They don't want the market to crash. So, when exactly do they list?
robert,
you have totally lost me. Banks process foreclosures just like they've been doing since long before the housing bubble. It does take time. I admit there are houses in the pipeline. What I dispute is that they are trying to time the market by holding inventory until some specific event or inventory level, or price change, etc. They process them as soon as possible (ASAP).
Novawatcher -
Google: months of inventory relationship to price changes.
I don't feel like cutting and pasting all of the links.
MOI and price changes are very closely correlated. Not one-to-one, but low MOI almost always leads to price increases. High MOI to price decreases.
Robert said...
Okay, that was a JOKE.
Let me make it easier...
What criteria do these banks use that are holding off inventory to list a property on the market?
They don't want the market to crash. So, when exactly do they list?
They don’t want the market to crash? Fair enough, I agree. Of course they don’t. But the market has, and they are simply trying to lessen the downturn.
I don’t feel that I can properly answer “So, when exactly do they list?”. Given that I don’t know the number of foreclosures in backlog, it’s hard to say when “exactly” However, I will say this, if you’ve got 2 foreclosures vying for buyers in a distressed market, it does not make too much sense to add a third…or fourth…or fifth….for the same buyers.
Robert said...
you have totally lost me. Banks process foreclosures just like they've been doing since long before the housing bubble. It does take time. I admit there are houses in the pipeline. What I dispute is that they are trying to time the market by holding inventory until some specific event or inventory level, or price change, etc. They process them as soon as possible (ASAP).
Timing the market hummm. Poor choice of words there. I agree, and I’m not auguring the “timing”. They are mitigating the number of products they have on the market when the number of products in backlog are around 70% if total inventory.
"Most of the best places are in suburban strip malls, or in sketchy areas in Arl/Alex & DC."
Likewise...
TBW, I'm not hard over on this. The old Clarendon had character, the new Clarendon is OK but is not better. Ballston was never anything to write home about. My opinion
I like the Del Ray strip. I used to be a regular in Georgetown.
Like I said, I'm not hard over on this, I don't mind the Olive Garden or other chains, I don't seek them out.
All things being equal, I won't live outside the beltway, it's not worth the pain, to me
Ugh. Did you ever stop to think that there was a Bank A and a Bank B and that they COMPETE with each other? This further proves your scenario is highly unlikely.
You stumbled to answer the main question I asked. Two foreclosures on the market. It doesn't make sense to add a third. You are really answering the question. There is no formula. There is not even some guy sitting around looking at the number of foreclosures that are active. He just does the paperwork and lists the property.
I know that sounds boring, but the guy is a banker, not a real estate market timer.
zerodown,
Thanks for that. I never knew that Fairfax County's courthouse was in Alexandria between the time it was in eastern Vienna and Fairfax. Extra credit -- not only is there Courthouse Road and Gallows Road but there is Lawyers Road. It's amazing to me that portions of Courthouse Road and Lawyers Road were so undeveloped into the 1990s if those roads date to pre-DC days.
Re DC: in addition to Washington County and Alexandria County there was Georgetown and the City of Washington (the downtown portion planned by L'Enfant.)
Also, the reason why the City of Falls Church formed its own city? The residents did not think Fairfax County schools were good enough. Little did they know how much demographic change would occur.
Also, Alexandria annexed parts of Fairfax County (which is why its boundaries do not fit the original DC diamond). Cities used to be able to do this but suburbanites eventually got the Va. General Assembly to put an end to that.
CRT,
I don't think it was rising rents that led Latino and Asian immigrants to skip DC. The immigrant community left DC in the 1950s and 1960s just like the whites and black middle class.
And the vast majority of the Latino and Asian immigrants in the DC area came after the Immigration and Nationality Act of 1965 was passed abolishing the racist country quotas (favoring immigrants from western Europe). They saw DC circa the MLK riots of 1968 and said no thank you.
Robert: I guess it's different here
(see time-series data below)
novawatch.blogspot.com/
TBW: I always wondered why it was called Lawyers Rd! I thought there would be some sort of historical connection, but I didn't know it was.
Does any know why we have 30 different variations of Ox road, all going in different directions...some running seemingly parallel to eachother but miles apart?
Robert,
I'm not taking a side in your debate with robert, but you exclude the possibility of collusion (either explicit agreements or each bank loudly letting each other know that they will take their time and everyone agreeing to do the same since it's in every bank's best interest.)
It's in every bank's interest to dribble out the foreclosures. If each bank put out all their foreclosures then the value of all those homes would go down.
Plenty of industries collude. In fact, realtors have been found guilty of colluding explicitly and through less explicit means to ensure a six percent commission. You have to admit it was interesting that realtors got to charge 6% when homes averaged $200k around these parts and were on the market for a long time and still charged 6% when home prices doubled and you could sell homes in a weekend.
Robert said...
You stumbled to answer the main question I asked. Two foreclosures on the market. It doesn't make sense to add a third.
So, it doesn’t make sense…but they do it anyway. Sure.
Whether they have a backlog of foreclosures due to wrestling with title, repair or owner right of redemption issue and/or not wanting to flood the market with distressed homes, matters little……
The result is still the same. 70% of foreclosed homes are not listed on the MLS. No need to hurry up and run out to purchase a foreclosure, they’ll be another one right behind it.
tiredbubblewatcher,
Alexandria also annexed the Town of Potomac, VA in 1930 which included the communities of Del Ray, St. Elmo, Mt. Ida, and Hume.
When Alexandria County was retroceded to Virginia, the courthouse for the new county was located in the City of Alexandria.
Also, the eastern portion of what became Loudoun County in 1757 was transferred back to Fairfax County in 1798, presumably because the Fairfax County Courthouse was moving to a more acceptable location.
on the age of 1st time home-buyers question it was something like 29 to 27, so a small but detectable shift.
I think housebuyer has some good points for why in any given circumstance buying younger might actually be a better position than buying older, especially in an inflationary scenario for fixing your costs against rising wages.
(of course part of my excuse to my friends who bought in the bubble for why I "can't" pay the prices they did was because we plan on having kids soon and have budgeted that out, otherwise I'd get screams from them of why aren't I buying to help support their house price.)
It's kinda like insurance, you can't know ahead of time if you're one of the people who's going to use the insurance, but somehow everyone goes ahead and buys a house anyway, putting all the risk onto themselves....
sweet link contrarian, a relevant quote:
"Finally, the projections show that for both age groups, the renters within each wealth quintile in
2004 will have more wealth in 2009 than homeowners in all three scenarios. In the second and third
scenarios, renters will have dramatically more wealth in 2009 than homeowners who started in the
same wealth quintile. Homeownership is not everywhere and always an effective way to accumulate
wealth. For those who owned a home in the last few years, the collapse of the housing bubble led to
the destruction of much or all of their wealth."
Robert, I don't think banks are holding onto foreclosures afraid they will crash the market unless they really, really had a bad case of the azz against Prince William in 2008. IMHO. I keep hearing tons of inventory but from only RT. Does anyone know how accurate their reporting has been historically? I'm reading realtors in Ca., Nv., Fl. and Az. are asking the same question..where or why are all these foreclosures being held off the market? Just seems odd when you have muliple markets with a back-up of first time buyers and a 8,000tc that the banks wouldn't be throwing them down left and right. I know I have heard, wait till spring, wait till summer, now its Sept. It just doesn't make any sense to me.
"tiredbubblewatcher said...
CRT,
I don't think it was rising rents that led Latino and Asian immigrants to skip DC. The immigrant community left DC in the 1950s and 1960s just like the whites and black middle class. "
TBW - Im speaking of the modern 1980-2007 era when immigration really kicked in. For the first 10-15 years of that time, DC (especially) as well as Arl & Alex were the primary destinations. In fact with the majority whites leaving, were it not for the incoming immigrants, Arl & Alex would have a flat out declining poplulation the way DC did.
That all changed around 1995-97 when the immigrant numbers in Arl & Alex started to stagnate, and then reversed sometime thereafter. DC still has some positivie immigration, although that now has slowed to a crawl.
The big gainer in immigration now is Fairfax & beyond.
http://www.novaregion.org/DocumentView.aspx?DID=1919
Note too on page 13-14 the only 2 nova counties that saw a drop in minority percentage was Arlington & Alexandria. Unprecedented given 82% of growth in the DC area comes from minorities.
You personally will be interested in the school data. Minority growth has really exploded in the suburbs, but actually declined a bit in Alex and even moreso in Arl.
I agree that Arlington has lost much of its character. During the 80s and 90s Arlington was home to a lot of musicians, artists, and independent record labels. Go records, Now Fashion and Music, the Indie Rock Flea Market, etc...All that stuff is gone, North Arlington is totally yuppified for the most part. Little Saigon got priced out and moved further into the burbs. I lived in North Arlington from 2001-2008, coinciding with the boom craziness, and witnessed firsthand the changes. Recent casualties to rising rents include Murky Coffee, ModernARF, and Orpheus Records. The residents want their Barnes & Noble, Starbucks, Subway, Whole Foods etc and that's fine. The real estate bubble definitely did change the character of many neighborhoods, but whether it was for the better is subjective.
Jason,
I love Barnes and Noble and Whole Foods, Starbucks no bad as well. But I really miss Dr. Dremo's and Murky coffee closing is a shame.
It's the same as closing of the Nation club and building this useless baseball stadium in Navy Yard.
CRT (and others),
I found one of the articles I read a while back about Latinos returning to Arlington County after many left.
http://www.connectionnewspapers.com/
article.asp?article=322913&paper=
60&cat=104
Key quote:
THESE POPULATION trends may be beginning to change, however, due to the collapsing economies and anti-illegal immigrant policies of some of the outer suburbs.
"There’s been some movement back to Arlington recently," Singer said. "Arlington is a welcoming place for immigrants. I know the County government has worked hard to maintain that image. ... With housing prices and gas prices, people are starting to value living more densely but closer to the core."
Creedon also said that he has seen more Latinos at his church in the last few months. "Some are moving back again," he said. "In the last year or so there's been a renewal. I think they're coming back to live here more."
http://www.washingtonpost.com/wp-dyn/
content/article/2007/03/
07/AR2007030702280_pf.html
The anecdote at the end of this article from 2007 is pretty interesting. I wonder what happened to people like her. Is she still in that home? Did she foreclose? If she foreclosed, did she move back to Arlington?
Also . . . custodial worker? $301k home? It was a lie that these people could afford the homes even out there. I bet she had an interest only ARM or some other crazy mortgage.
http://www.washingtonpost.com/
wp-dyn/content/article/2008/
11/10/AR2008111003247_pf.html
This came up on the google search (as did an old post from this very blog!)
I'm noting the above article because it highlights Wakefield HS and TC Williams HS. My favorites!!!!! ;)
I think Tom is mostly focused on North Arlington, but I think the South Arlington and Alexandria boosters are in real denial about what a different world those two schools are from most high schools in Northern Virginia.
Maybe I was oblivious to the dropouts at my high school in Fairfax County but I can't imagine the rate was anything like those schools. It was more like what college is everyone going to, but I suppose my friends and classmates skewed strong students.
TBW: to make a long story short and skip a lot of details (very interesting details!), my wife and I found out that our housekeeper was being foreclosed on. She owned a 4000 sqft (we found it online) McMansion in Woodbridge. Her husband is a landscaper.
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