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Thursday, June 18, 2009
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102 comments:
Cara,
I glanced over your "female home owners weign more" article. We all know that the metabolism slows down as we age and most people that buy a home are not going to be very young. Most people don't turn 18 and think, "wow I have the credit and work history to buy a house!". Home owners tend to be older than renters (in general). Female home owners often times had children (which has obvious effects on the body's distribution of fats and muscle mass) and most women without children don't have houses (not all of course).
If we consider that:
1) Most home owners are older than renters.
and
2) Most women that have children would prefer to own than rent.
You come up with the same conclusion that the article has, most female home owners weigh more than female renters.
Never mind any other facts. It's as though you buy a house and suddenly gain 12 pounds. Well in that case, I heard that most lamborghini owners are very rich. If only I can buy a lamborghini then I will suddenly become extremely wealthy (and possibly Italian).
Also relating to the stress argument of owning a house. My guess is that most owners make more money, thus they probably have a higher stress job.
The article might be correct about all of its conclusions, but I doubt with 600 people they were really able to control for all of the important variables.
So although they do have some logical and possibly valid arguments, I would take the conclusions with a grain of salt
My wife owned a condo when I met her, and she is/was thin.
I think the issue is more due to having a job or not.
Women who dont have a job tend to put on a lot of weight.
To me thats got to be the biggest cause of divorce - weight gain by either member causing a lack of sexual interest. I have yet to get tired of being with my wife because even after 2 kids she is still only 125lbs at 5'9". We still have fun a couple times a week on average.
People who allow themselves to put on a lot of weight dont respect themselves or their partner enough IMO.
Jeff, the study controlled for several variables, including having children. I would imagine they would have also controlled for age.
I think the difference is whether or not the women live in walkable communities. I would assume that the average renter is more likely to live in more urban, walkable areas than the average homeowner.
I'd also be interested in seeing a study done on men.
Paka-
I have trouble believing that they can get any significant results if they adjust for(age, number of kids, working/not working, family history, and location) That is far too many variables most of which have multiple stats to get statistically significant results with only 600 people.
Courtesy patrick.net:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aXQ2MXGoSysw
JPM estimates national bottom in 2011 with "millionaire homes" bottoming in 2012.
Ivan-
I wonder if they are talking real or nominal drops with their numbers. If they think nominal drops are going to be 40% nationally they are saying we are basically only halfway through the correction. Case Schiller is down 32%, but this is metro areas that ran up much more than most of the country.
I am pretty sure nationally prices are down 20-25% for the US. So they would need to fall another 20-25% from current prices to drop 40% from peak.
Could it happen possibly, but my guess is that either they are talking real prices not nominal or they are just being overly cautions with there risk management.
Cara,
I think the study might have some merit. I rented in Arlington and now DC. While renting I've been in walkable or mass transit areas and do not commute by car. When I buy though I'm thinking SFH in the suburbs. I will probably still take Metro to work but ultimately will drive a lot more and walk a lot less. So over time I could see that causing me to gain some weight.
I do think though that the media overplays the walkability thing. Even with my daily walk to and from work I need to watch what I'm eating and use my apartment's gym to keep my weight down.
Another thing I'll throw out is that when you wear loose clothing you tend to eat more. So maybe when you are in a 2000 square foot home you don't feel as big as you might in an 800 square foot apartment. This last theory is just for fun. That being said, I have sometimes felt bigger when I've been in some NYC friends tiny bathrooms. ;)
TBW-
The apartment gym thing is an interesting idea. Once you buy your house you no longer have a free gym that is in your building I could definitely see this causing some weight gains.
Same here, TBW. I still run 3-4x per week even though I walk to work. But I also think people who are used to walking every day don't find it as difficult a leap to exercise as people who rarely walk anywhere.
I definitely utilize my building's free gym during the times of the year when it's a little too hot/cold outside for me to run comfortably.
I'd say it's the walking thing.
it's just 2000 steps a day to maintain weight.
If live in a MFDU, it's up the stairs, it's across the
parking lot, it's down to the corner store, even if
you drive to work.
But in a SFH, it's walk to the driveway, drive.....
http://www.usatoday.com/money/
2006-02-14-women-houses-usat_x.htm
A lot of interesting stats in there. Look at the "comparing single buyers" table. Single women were buying homes on average 3.38x income whereas single men were buying homes on average 2.85x income.
Also look at the three bullet points about loosening of credit for women. I wonder why this gets so little attention as compared to the gov'ts efforts to raise minority homeownership rates.
Just so it does not look like I'm attacking single women, I'll note that about 95% of the people who bought eight condos seem to be men. So I think plenty of men made this problem too.
But I suspect part of the home bubble here came from single women stretching to buy just as much as it did from Latinos moving to Woodbridge and Manassas and "buying" $500k homes on $40k of income.
Regional transportation officials say they'll start paying people to carpool.
The $2-a-day offer comes from Commuter Connections, a ride-matching service run by the Metropolitan Washington Council of Governments. It's the latest effort to reduce congestion on key corridors.
Ron Kirby, director of transportation planning with the National Capital Region Transportation Planning Board, says similar programs exist in Los Angeles and Atlanta.
The three-month pilot program will start in the fall and will focus on the Capital Beltway between Bethesda, Md., and Tysons Corner, Va., and between the Baltimore/Washington Parkway and Interstate 270, as well as Interstate 395 from northern Virginia into the District of Columbia.
Officials say participants will be tracked electronically.
-----
Where is my money for walking to work? ;)
Wonder if it works the opposite for guys? I used to spend 45 minutes a week pushing a lawn mower (I actually enjoyed it), and during a few weeks in the spring and fall I'd have to mow twice a week. I threw a heart-rate monitor on me once, and it was equivalent to running 3 miles. It wasn't a ton of exercise, but it ensured that I at least got some decent exercise once a week.
Ugh, parts of that USAToday article got to me. Like this quote from a woman who bought a house with 100% financing:
Owning a home "is the biggest accomplishment I've had — I'm just elated by it. Aside from your child, just the sense of confidence and self-worth you have to say you own your home is just huge."
I don't get this. It's just a purchase. I don't get a feeling of "accomplishment" when I go out and buy a new dress. Especially if I'm putting it on my credit card.
And this:
Actually, the rising number of single women homeowners could change the dating scene completely, says Hantula of Temple University.
"Houses are a great source of wealth, and as women are buying and holding onto them, they will gain greater equity and become less dependent on male partners for material assets and protection," Hantula says.
Really? Are women really still looking for a finanical provider in a man? And this idea that women who rent are more financially vulnerable doesn't make sense to me in a market where renting is cheaper than owning, and when buying a place that's only big enough for yourself can leave you trapped if just a few years after you bought you decide you want to get a place with a partner, and you can't sell because you're underwater.
As with all similar studies, 600 people is not enough to account for the variations, and get people into enough subgroups or fair-comparison pairs in order to actual detect any healthyness trend and even if it did, we could discuss causality/correlation all day.
My point really is, that it's being reported in the media at all. That there's a new hype that maybe, just maybe being a renter could be part of healthy balanced lifestyle.
Whether the study is true or not, or the reasons behind it are a totally different thing. But a potential cultural shift emerging is another.
Here's the other thing about my choices, or anyone's choices. If DC were to become the next NYC, London, Paris, Milan, then the smart thing for me to do? Would be to be like all the other people making similar amounts as me in similar job types who live in those cities and rent. And 10-30 years from now, when retirement's all set moneywise, and job security is practically irrelevant, go buy a beach house or ski house or whatever with the money I've saved by renting not owning in a hopping city.
If it were to come to pass, that would be the appropriate and prudent financial response. Rent. Unless you're made of money, Rent. Buy a cheap "second" home somewhere else the next time we get a big housing bubble crash.
TBW,
From yesterday's discussion on foreign commercial real estate investors. I didn't mean to provide the January link. They've just completed a new survey and it came out yesterday, but I couldn't find the actual press release. Here are a couple of news articles that are about the survey results:
Article 1
Article 2
These people don't buy residential real estate, other than multi-family rental properties. Didn't mean to imply that the do. I link to it to show that these people have confidence in the DC market for office, retail, industrial, etc.
Now, how to link that to home prices in Burke. No direct link other than the multi-family properties that I suppose would be bought because they believed rents were going up.
Draw your own conclusions about what it means that these people increasing believe WDC is the best place to invest in CRE in the world. Hard to see the best place in the world for commercial property with residential in the toilet. Suppose it could happen.
Novawatcher, MOI is an excellent indicator of future price movement, but it isn't right 100% of the time. Congratulations on finding a few examples that don't follow the rule.
"Houses are a great source of wealth,
for a lot of those women (e.g. the one with 100% financing), their house will be a source of unbearable debt.
I was just going to reply to, Cara, and say, "yeah but there are still articles out there like the one TBW linked to!" but then I noticed that that USAToday article was actually from 2006.
That makes me feel a lot better, because I think what bothered me most about that article was that it seemed so bubble-mentality, the idea of "Buy a condo and be financially secure!" and I was like "Really? People are still writing this stuff?" The 100% financing should have tipped me off.
tbw,
I'm not sure I can read that USA today one any further because the cheerleading is making me gag.
But it does provide a beautiful study in contrast. 2006 an article celebrating how smart women are to buy, 2009 an article telling women they'll get fat and depressed as a home owner.
Yeah, NoVAwatcher, also I liked this line:
Asked why he thinks so few single men buy homes, Perry replies: "Men do it when we get married. Until then, we're just out running around."
Looks like they were the smart ones.
Sorry. I should've stressed it was a 2006 article. Nowadays, even Razzi and Haggerty (and their counterparts at other papers) would editorialize a little bit about someone getting 100% financing and note it's probably risky.
NoVAWatcher,
Good point about lawn mowing. You can make a home a workout if you don't pay people to do all the upkeep. In addition to lawn mowing there is leaf removal and gardening/landscaping. Also, although results vary based on where you live in Northern Virginia, most homes are in walking distance of something. Usually that something has a large, free parking lot so few walk there. But you could walk the 10-20 minutes there instead of driving as you would in the city where parking is difficult and/or costly. Of course, we are all so busy, busy, busy here it's hard to justify walking 10-20 minutes to the local shopping center than drive 2-5 minutes there.
TBW, no problem, the "2006" in the url should have been enough to alert me, I'm just not that on the ball today :)
Originally I was going to link this 2008 article:
http://www.thestreet.com/story/
10405400/home-ownership-and-the-
single-woman.html
but I liked the USA Today better because it had more detail in the charts. However, since we are commenting on silly quotes, how about this one?
Manhattan real estate agent Jacky Teplitzky says she's been increasingly working with young, professional women.
...
"[Women] have more special needs," says Teplitzky. "We want to know where our make-up is, where our clothes are, our creams. ... Men, they can crash everywhere. They can sleep on their friends' floor sometimes."
----
Why do you need a home instead of a rental for your make-up, clothes, and creams?!?!? These realtors never make any sense.
TBW, plus in a lot of places in NoVA, while the distance might be short, the highways, traffic, big parking lots, inadequate sidewalks, etc. can make the walk unpleasant or unsafe enough that it doesn't seem worth it to bother.
OMG, that reminds me of a HGTV episode where a single woman who was selling her place on Capitol Hill used a whole small bedroom as a walk-in closet filled entirely with shoes.
"I've wondered about this for a while as I've tried to determine if there was another shoe to drop for the close-in neighborhoods that I had looked in. Are there any drivers that might have changed the fundamental desirability of one area relative to another? Some might include gas prices, worsening traffic (certainly affected my decision), and development of ammenities as CRT mentioned for Arl, Alex but might also help change the fundamentals of Reston or Rockville."
One thing that might potentially hurt some of these areas is the extension of the metro into new areas. Once someone can live in Tysons Corner or Reston and still have access to the Metro, those areas will better compete with Arlington and Alexandria among certain buyers.
Tysons Corner in particular is already one of the major job areas in the region and seems poised to continue its rapid growth, the Metro will help that process along. This won't make much difference in the short term, but I would not be surprised if in another 10-20 years Tysons Corner has become a sort of downtown for NOVA.
Robert,
To answer your question I'd have to see what commercial real estate investment was like in the 1990s. I suspect we may have had a disconnect that decade where there was no return between 1991-98 in residential real estate and probably a return between 1991-98 in commercial real estate.
I do know for a fact that commercial real estate was struggling in the Northern Virginia market after the dot com crash in the early 2000s but residential real estate was doing quite well.
Anon412,
True, inadequate sidewalks is an issue in some parts of the suburbs. I see that as a failure of the local governments and developers. Many are now addressing that.
I don't recommend walking across any roads that are eight lanes and/or have 55 MPH speed limits. But I can think of many roads in Fairfax County that are no wider (and some less wide) than Fairfax Street or Wilson Blvd in Ballston-Rosslyn. I walk across K Street all the time in DC and that is about eight lanes wide and full of traffic. But you don't feel weird because there are a ton of other people crossing as well. Also, the more pedestrians a road sees the more drivers are aware that they might need to be on the lookout for walkers.
tbw,
The median income for women was lower and the median house price was also lower than for men, so while yes, the purchase price wasn't enough lower to make the ratio stay the same, at least they were going in the right direction. Plus they waited 1 year longer. If you put it as a ratio it looks really extreme, but if you just think about the market forces and competition and the amount of disposable income rather than total income, mostly I would think this shows that women are more likely to allocate a larger portion of their "disposable" income to a house payment.
But I really think the telling thing is that back in the bubble years, everyone with a pulse who might be convinced into buying, was. Some shill somewhere tried to get them to buy and tried to tell them this was progress.
And now we're shifting back to understanding the undertaking that home-ownership is, and considering all the costs and risks and possible unseen side effects (like weight gain???). This transformation is by no means complete, universal or has it gained much momentum, but it is starting.
Cara-
I actually find it worse not better that they have a higher house/income ratio with a smaller income. I understand it might have been hard for them to find a house at 3 times there income, but fixed costs of life are basically the same. So once you take out health care, utilities, cable, phone... The ratio looks even worse for the women.
AKA if you make $1MM it easy to afford a $4MM house, because many costs don't scale with income. On the other hand if you only make $5K you can not afford any house because all of your money is going to food...
housebuyer,
most of this country is not DC. Most places in the US, the >40k incomes listed as the medians are plenty sufficient to deal with the actual necessities. So this argument hinges on where that threshold sits of below X amount you have no extra money to spend on nicer housing or playing owner or buying flat screen tv's or having cable or having both a land line and a cell phone, or whatever. If that threshold is $30k take-home, then this is just an allocation issue. If that threshold is 40k, then the median woman was working with no slack at all.
But as I said before the main point is, did you have a pulse, and anything that could be used as a credit rating. If so, someone was going to try to sell you a house and a mortgage and tell you it was owning. Whether you were a single mom, a low-paid immigrant, a financially naive fresh college graduate. Didn't matter, everyone was saying yes, and some people who had never considered it before, bought (in addition to all the people who would have hanged themselves anyway no matter how little rope you gave).
Cara-
Yeah I agree with the old practices the could get a house and they are now in one of three positions. They lost the house. They are living with no disposable income, they make more money than they used to.
I find it scary though how loose lending still is if you have a good credit rating. I am finding that lenders are trying to push me in to getting pre-approved for 4-5X my income. It makes me wonder what I would have been approved for 4 years ago...
housebuyer,
I've met some ridiculously high income people. The sort of people earning $800,000+ per year (mostly lawyers). It's always sort of amazing to me how most of them live in homes that are 0.8-1.3x income.
I always wonder where the rest of their money goes. Even with private schooling for kids and daycare I would think they have plenty of money left over for housing. I guess for most people though there is a limit to how much house you want. The more house, the more utilities, the more the housecleaning bill, the more furniture, etc.
Also, to properly care for an estate, you probably need some full-time staff. And that's really a nightmare since you have to pay employment taxes, worker's comp, etc.
I suppose it works in Manhattan for a person making $1 million a year to buy a $4 million home because it's usually just a condo (although a huge one) and so the upkeep costs are lower.
TBW-
I agree most people in this range do not live in a house that large, I was just saying they could afford it. The two highest paid people at my firm(8 figure incomes) live in houses that are worth a quarter of their income. But once you get to a 12K sq.ft. house with a 10 car garage, 5 acres, a pool... there really isn't any need to spend more.
PS this buying a house thing would be a lot more fun with an income like theirs :-D
housebuyer,
I often wonder why they don't just retire after a few years. But I guess if you are the type of person who would retire once you got a few million in the bank you are not the type of person who ends up in a job like that.
TBW-
They own several companies and find them very interesting. They actually work longer hours than many of us lowly grunts. I think they would probably get bored very quickly with out the stimulation of running their businesses.
"Leroy said...
One thing that might potentially hurt some of these areas is the extension of the metro into new areas. Once someone can live in Tysons Corner or Reston and still have access to the Metro, those areas will better compete with Arlington and Alexandria among certain buyers.
Tysons Corner in particular is already one of the major job areas in the region and seems poised to continue its rapid growth, the Metro will help that process along. This won't make much difference in the short term, but I would not be surprised if in another 10-20 years Tysons Corner has become a sort of downtown for NOVA."
This is very true and is essentially Robert Shillers "they'll just build new cities to keep up with increased desirability for urban areas" answer.
The area I think most vulernable to this is probably clarendon. When they remade that area, so much of what they put in there is not very interesting architecture and majority chain stores. Presumably you could replicate this as many times as necesary til prices come down to meet the increased demand.
True, they cannot compete on the location issue, but then again, say you do continue to add jobs to that area to where the vast majority of your buyers dont need to be in DC. If you get enough jobs to where you can do everything right there in "new clarendon" then you are certainly going to pull away from current clarendon.
Likely though, if we are talking 10-20 years from now, its going to be more of a clarendon "underperforming" and not increasing as much as other areas issue than it is in terms of seeing outright price declines.
Here is a pretty good deal. What do you all think the minimum bid will really be?
http://www.redfin.com/VA/Mc-Lean/1173-Dolley-Madison-Blvd-22101/home/9406504
First I will say that I live in Ballston, but I don't understand why everyone complains that Clarendon has the most Chain Stores of anywhere in Arlington.
When I look around at Ballston virtually everything is a chain in Clarendon there are at least a bunch of local restaurants.
CRT,
What don't you like about the architecture of the new areas of Clarendon? I can see not liking the chain store feel but the Market Commons area is very pretty. Certainly much more pretty than most of Rosslyn. Certainly much prettier than the toilet bowl building at the western edge of Tysons Corner on 123. :)
I don't see any charm in the architecture of "old" Clarendon (aka those auto dealers and auto related stores.)
Now, the Bob Peck Chevrolet that used to be on Ballston was certainly fun looking:
http://dcmetrocentric.com/
2008/03/12/
bob-peck-from-cars-to-condos/
It will be interesting to see if they really do keep the retro diamond sign in the new building.
housebuyer,
There is Tutto Bene across from the Harris Teeter in Ballston. And next to that is one of those Super Pollo places.
That being said it is true that most of what is in Ballston are local or national chain restuarants.
Robert,
I know, you won't believe this anyway, but for everyone else, here's my opinion of the rich foreign RE investor meme:
Rich Toscano: Dumb money
One argument I hear a lot is that foreign demand for local real estate has grown substantially in recent years, and that such foreign demand will be supportive of prices in the future.
Unfortunately, this argument puts the cart squarely in front of the horse. Investors from other countries are well known to be the very last participants to arrive at the scene of a financial bubble. They are the last to hear about all the riches to be made, the last to buy in, and the last to realize that the party is over.
See graph therein.
Additionally, these RE investors are at best an indicator of investment opportunity, not price support on their own. If the foreign investors were usually right, they would be riding the wave of a new bubble or new fundamentals or new whatever, not creating it. (Not that you've claimed differently, Robert, I'm just clarifying).
Generally speaking they've done a piss-poor job of calling the hot market early. DC is just the best option amongst a glut of bad options. That's not saying much, and certainly doesn't indicate a directional shift as illustrated well in Rich Toscano's blog.
CRT,
You conveniently leave out that the area near the new USPTO building in the City of Alexandria is just as plastic, new, etc as the new Clarendon. I saw chain store-o-rama in the "Carlyle" area.
tbw,
yeah but if you can't walk from the PTO to the river, and you're not disabled, you should get off your ass and try it. Or take the free trolley. :p Not that I'm saying "you" in particular.
CRT,
I guess I am just confused by your stance. You keep claiming that the market likes "real" places. But I think it's the total opposite. If there's anything that will sustain higher prices in Arlington, it will be that it's so yuppie as satirized in the "Arlington rap" video.
Cara,
I don't follow why that matters. People in Clarendon can walk to Georgetown. I've walked from Clarendon to Georgetown. Doesn't change whether or not Clarendon has a lot of chain stores.
The fact of the matter is a lot of what is around the new USPTO complex is new and chain stores. It didn't feel "real" when I passed by the Whole Foods on Duke Street.
Anyways, what CRT and some others are leaving out is that the growth of Arlington is tied to the growth of DC. While there are some people who live and work in Arlington, the fact of the matter is a huge, huge percentage of the people who live in Ballston-Rosslyn take the Metro to their job in DC.
DC's economy has exploded this past decade. Living in DC either is too expensive (nice areas) or too dangerous (bad areas) for many people so they end up in Metro accessible Arlington or Alexandria.
Rents/condo prices would go down if the lobbying and lawyer shops on K Street have trouble. Some signs point to that happening currently.
I'm not familiar with Arlington/Clarendon, but I think it takes longer than over one block and down five blocks to get into Old Town proper from the "unreal" brand-spanking new area around the PTO, than it does to walk to Georgetown. I could be wrong.
Arlington would love to turn the upper Columbia Pike corridor into something like Clarendon. There are already changes at Walter Reed and Columbia Pike though it won't get to a Clarendon level for a long time. They have torn down the seedy Safeway and Giant grocery stores that used to be there. I welcome the changes since I live in that neighborhood. If things do improve there I'm sure there will be nostalgia for the "old" Penrose. Granted Clarendon wasn't in need of much gentrification before all that development whereas Penrose could use a little.
I actually don't think Georgetown is much better in terms of looking "real" / not like the Arlington of the Arlington rap video. I mean, there's charming old Victorians, but it feels so Disney-fied to me.
Just saying...
Cara,
Using mapquest, it's about 1.6 miles from USPTO to the waterfront area. Clarendon to Georgetown is about 2 miles.
Now if you are just talking about getting to where it's Old Town that is not as long but you said walk from PTO to the river.
Anyways, the point was just that there are brand new areas of Alexandria too.
If the options are being able to walk to Old Town versus being able to walk to Georgetown, the Lincoln Memorial, Arlington National Cemetery, and the Iwo Jima Memorial, then I know which wins in my mind. :)
Anon412,
At some level, what has not been Disneyfied? I mean, for Pete's sake, if you go to Times Square you have an M&M waving at you, the Olive Garden, Red Lobster, etc.
Anyways, I'm sick and tired of CRT et al romanticizing the past. Here is an excellent article that points out the obvious. It was NOT great to live in NYC in the 1970s. Stop romanticizing it! (Same with old Arlington or old DC. I remember when you couldn't even go to the National Mall or nearby museums without feeling overrun with the homeless.)
http://www.slate.com/blogs/blogs/
browbeat/archive/2009/06/12/
new-york-in-the-70s-the-grit-
wasn-t-so-spendid.aspx
TBW to respond to your 3 comments:
#1. The architecture sucks in that there is none. Notice how nearly everything is mauve or yellowish "maintenance free brick"? After a while, it just all blends into monotony. Further, could you imagine them building a place with cornice or dentil work like the old buildings in DC? Not a chance. To be sure, there are a few builders who care about architecture and as you proplerly noted, there were no real architectural losses in what they took down in that area. Bottom line though, is its all about cost per square foot. Every time I suggest to a client the add some "flourish" or "detail" to make their place stand out from the monotony, they look at me like im from mars.
#2. Yes, that area in Alexandria is a chain-o-rama big time. And same thing with the maintenance free brick and the like. Its pretty awful. They do get one little point for the USPTO building itself. Like it or hate it, the one thing I give them is that its unique. Something to break up the maintenance free brick experience.
#3. Yes, im saying theres plenty of support for it now in large part because there is a current shortage. In some ways, it is now unique, it offers urban lite - living in an urban area which yes its a bit fabricated, but lacks the ickiness associated with "real" urban areas as it were.
The problem is, if something is in high demand, the developer's answer is to build it again and again over and over, til you have satisfied all of it. In the sense that its unique now, what happens when they build another 500 centers just like it all across the USA? All have the same or similar anchor stores, all have the same tie ins with the same chain restaurants. Excluding jobs for a second, how is clarendon in any way "the" place to live when there are countless others nearly identical to it, oftentimes much cheaper? So currently, theres plenty (really more than plenty) of support for it. Long term, if they keep building those things, maybe not as much.
TBW, good point. I wasn't really trying to make any larger point, just pointing out that the type of neighborhood parodied in the Arlington rap video isn't only found in the suburbs.
CRT,
Based on your comment it sounds like you are an architect or in a similar field. I don't think the average resident of this area really notices how much mauve is in the structures.
As for Clarendon and nearby areas, clearly at least 75% of the appeal is the location. I'd say the remaining 25% is that there are a lot of really attractive people living there of both genders and if you are a single person in your 20s and 30s the local scene there is very appealing. I've never understood why middle aged people would want to live there but some Washington Post article claimed the divorcees like it too. I could see them hanging out at a bar at Reston Town Center but I'm not sure how many eligible divorcees you meet at a bar in Clarendon. ;)
Cara-- "Investors from other countries are well known to be the very last participants to arrive at the scene of a financial bubble. They are the last to hear about all the riches to be made, the last to buy in, and the last to realize that the party is over."
:) Funny you should quote that-- that's exactly what struck me when I looked over the list of former 'hot spots' for these investors in Robert's link-- "Looks like an almanac of the international bubble bursting!"
I think about this every time I see an ad in a European paper for Florida land (which is often, these days)... My European friends say, "Surely it's not possible to get something in Florida so cheaply!" I say, "Well it is... but you have no way of knowing if it's some place you would even want to visit!"
When I tell them about the kind of of things that happened in my pleasant-looking California neighborhood 8 blocks from the beach they think I'm pulling their leg.
"TBW Said...
Based on your comment it sounds like you are an architect or in a similar field. I don't think the average resident of this area really notices how much mauve is in the structures."
Not an architect, but I work with builders alot (transactional attorney), and yes a majority of people do not notice the structures, thats why they can get away with what they do.
Heres the rub though, since its so easy (relatively speaking) to replicate you run into problems with oversaturation. A good example is the McMansions that are all over Loudoun & PWC. The fact of the matter is, as "featureless" as they may be, they are popular to a large segment of the population, no doubt about it.
That popularity though has helped lead to their really feeling it more than areas out there like Middleburg or Upperville who are in no way superior in location, but are in terms of being unique.
Many times, you have the same 5 or 6 builders working an area making the same or largely similar product. In this case, when there is a huge quantity of undifferentiated inventory, you can only compete in one category - price.
Its very difficult to command a premium for your neighborhood when there are nearly identical neighborhoods all around you, all competing on price.
So long term, that is a potential problem for Clarendon, the PTO complex and really reston town cener. As I said in the beginning location will help them carry the day, but for those that just like that sort of lifestyle, given that there are relatively few barriers to entry, over the long term, they may not increase as fast when that product is continually being added to the market.
I like architecture of the FDIC building in Virginia Square. For some reason I really like companies that have campuses. Back when I lived in Tysons I was right across from the Freddie Mac campus, it was hard not to work there. It just looked so peaceful with the nicely manicured grass the pretty trees... Ohh well it probably worked out for the best that I never decided to work there, I can't imagine it has been a fun couple of years.
What Northern Virginia Needs Now is New Homes?
Stephen Fuller, director of the Center for Regional Analysis at George Mason University, had a surprising message during a presentation to the Northern Virginia Association of Realtors recently: Builders need to start producing new homes again in the Old Dominion.
Fuller said he receives a monthly report from 20 home builders that work in the area, and since February each month has shown higher sales. "They have very little inventory," Fuller said, "and in some cases, inventory is so small they're raising prices, even in Prince William County." Fuller pointed out that even though there have been job losses in the Washington area, our employment picture is far rosier than elsewhere in the country. And the worst of the recession is past, though unemployment numbers will continue to rise for months, even after we're in recovery. Meanwhile, a housing shortage could be developing.
"It takes nine months to build a house. They'd better get busy, because the inventory is getting pretty low," Fuller said.
CRT,
Sorry, I don't buy it. I think in terms of architecture if anywhere is suffering it's close-in older neighborhoods in Arlington, Alexandria, Falls Church, Vienna, and so on. People just do not want those small, older homes. Frankly, people do not want old homes.
I can't tell you how many times people tell me they wish they could get a modern home in one of those areas. That's why the new homes built in Arlington go for such a premium.
The Letter from the Editor for the "New Homes Guide" once started with, "They sure don't make homes like they used to. And that's a good thing!" Now we all know his obvious bias, but I suspect the median reader agrees with him that old homes are dangerous with wiring not up to snuff, poorly insulated windows, and so on.
Ignoring that though, I just don't find the old homes appealing. They are just too small frankly. Not enough square footage. I'll grant you the McMansions are too big but the 1960s ramblers are too small. Maybe I'm just Goldilocks.
housebuyer,
I love that FDIC campus as well. It's too bad in the area's zeal for upzoning we are losing many of those sorts of buildings. Nowadays everyone feels a need to have the building go up to the sidewalk and not waste a single square foot of land.
Robert,
A quick look at Toll Brothers and Stanley Martin websites shows they have tons of new home communities in Northern Virginia currently available and in the pipeline. Add in the remaining large builders around here and I think you'll see no lack of new homes on the market.
"Sorry, I don't buy it. I think in terms of architecture if anywhere is suffering it's close-in older neighborhoods in Arlington, Alexandria, Falls Church, Vienna, and so on."
It doesnt matter if YOU dont buy it. It just matters if enough people "buy it" sufficient to meet the very limited supply that is out there? Given that the areas you describe are by and large the best performing ones out there to date, the answer so far is an absolute and affirmative yes.
Its kinda like antiques roadshow, theyll put up some sioux indian cradle from the 1860s and you think, ehh maybe 50 bucks. Then it goes for like 18,000 and you are like WTF - I could buy one at costco for $30 far more practical, far more useful. This guy is an idiot!
The fact of the matter is, as long as there is a very limited supply, and a minority, but sufficient demand, it doesnt matter if you "buy" it or not. That market goes on without you and the larger market altogether.
Sarah and Cara: Whenever I hear about the 'saavy' international investors 'swooping' in to save the day, I have flashbacks to the late-80s and all of the realestate the Japanese bought over hear (and lost their shirts on):
http://www.nytimes.com/1989/10/31/business/japanese-buy-new-york-cachet-with-deal-for-rockefeller-center.html
http://www.nytimes.com/1995/09/12/business/japanese-scrap-2-billion-stake-in-rockefeller.html
By the way, TBW, I think one of the major takeaways from this discussion is its a fallacy to think "I dont like it, no one I know likes it, therefore no one likes it"
Fact of the matter is, as much as people talk about arlington & alexandria, there is a sizeable minority, perhaps even a majority who doesnt give a rats ass about either Alexandria OR Arlington.
To them, the idea of living in either of these areas is utterly repugnant, crowded, congested, whatever. To them the idea of paying more than say $50,000 tops for anything is just stupid.
Likewise, there are alot of areas that I wouldnt ever live, and none of my friends would ever live, but the fact of the matter is, there are plenty of people who do want to live there - and thats what makes a market a market.
Just something to keep in mind. Just because you and those you know think a certain way doesnt mean others do. Had this been realized early on in this blog, about 1/3 of the arguments we ever had here never would have happened.
CRT, TBW,
Yes, my reaction to the "but I could walk to Arlington cemetery", was, I can walk to all the lakes in Burke and go fishing there. Doesn't mean anyone else shares my idea of a nice walk.
(well obviously some people do, just not those buying in Clarendon)
On the one hand we have Stephen Fuller saying...
Fuller said he receives a monthly report from 20 home builders that work in the area, and since February each month has shown higher sales. "They have very little inventory,"
On the other hand we have have a very tired bubble watcher saying...
A quick look at Toll Brothers and Stanley Martin websites shows they have tons of new home communities in Northern Virginia currently available and in the pipeline. Add in the remaining large builders around here and I think you'll see no lack of new homes on the market.
You can bet that builders listen to Stephen Fuller. Most don't have their own research departments. What this means is that builders are going to take his advice and build on spec. What does that mean? Jobs and income.
As little as a month or two ago, if you had told me that residential construction would be a significant contributor to the metropolitan growth rate, I would have laughed.
Not looking so funny anymore.
Northern Virginia housing inventory is down 4.3% from June 1 to June 18. So much for those higher rates stifling buyers.
It is truly stunning. Each time I look I figure inventory is going to level out, but it continues to drop and drop and drop.
Today's Inventory
Cara-
That is one thing I really like about the Burke area. I love Burke lake, I try and get out there once every couple of weeks. It is gorgeous and peaceful(as long as your not going on a sunny weekend afternoon).
Stephen Fuller is paid by the builders and NVAR, in fact NVAR gave one of their grad students a scholarship.
housebuyer,
Burke Lake is in Fairfax Station.
Not only does Steve Fuller do work for NAR and NVAR, he is routinely a guest speaker at NVAR meetings. But the most horrible thing is that Steve Fuller lives in an old townhouse in Old Town Alexandria and his children actually went to crappy T.C. Williams High School (and survived the knife fights and drugs deals in the corridors and the fights over free lunches in the cafeteria)
CRT,
Did you even read what I wrote? I said people buy it. But many hold their noses at the house and are essentially buying the land/short commute to DC.
When people tear down and rebuild homes in North Arlington they can get triple the price for double (or less) the square footage because people are so excited that it's a 2007-09 home instead of a 1945 home.
I like some older homes. Some of the (what I believe are termed) colonials in the area from the 1970s and 1980s are nice. They generally have three floors and so are modern in that sense. I just don't like a little one story rambler or one story with crawl space basement. Not for me and I don't think I'm the only who feels that way.
Robert,
I am pretty sure most of the major home builders in the country have research departments. I doubt they are making major decisions that could make or break their company based on one person's opinion.
anielarke,
http://www.forbes.com/2007/07/05/
schools-taxes-education-
biz-beltway_cz_cs_0705schools.html
Among the nation's "Worst Schools for the Buck"? The City of Alexandria (along with Washington, DC).
Here is an op-ed from a veteran TC Williams teacher in the Washington Post saying the school system wastes a lot of money on technology:
http://www.washingtonpost.com/
wp-dyn/content/article/2008/
02/08/AR2008020803271.html
anielarke:
Re: TC Williams
One can find good students and good teachers at any high school.
The challenge at a school like T.C. Williams is to keep your child out of the bad crowds and focused on school. There are so many students there that just don’t care.
You also have to wonder why there are so many private high schools in such a relatively small city: St. Stephens/St. Agnes, Bishop Ireton, Episcopal, Alexandria Friends, Commonwealth Academy.
Further, I’m sure the City of Alexandria is well represented at the private schools in DC.
Another interesting thing about TC Williams – they absolutely forbid their students to attend Thomas Jefferson, even if their parents are willing to pay the tuition. How come?
"antiques roadshow," and "there are plenty of people who do want to live there - and thats what makes a market a market. "
CRT has pointed out the exact reasons why the immunozone has defied the rural price plunge of the last 3 or 4 years.
The rent/buy ratio's, the demographics, any one person's idea of 'burb chains as a dining experience, imagining that Arlington is 100% 1960's rambler, the joys of riding the VRE, do not count.
There are so few places available similar to, say, Lyon Village, so many people who will never, ever sell, and enough who have a couple hundred grand DP and a $20K/M income that prices held up in the immunozone.
I agree, "thats what makes a market a market"
tbw,
That WAPO op-ed could easily have been about FCPS.
One of the problems with many of the older homes in NOVA is that they were simply cheaply built from the start.
There is a lot of truth to the saying "they don't build them like they used to." If you look at a relatively nice house from the turn of the last century it may have many interesting features that are simply available anymore, but that doesn't apply to most of the older homes in NOVA.
There are huge numbers of houses in Arlington, Alexandria and Falls Church that while old, are really nothing special. Tiny houses on tiny lots, built cheaply. They have all the problems all older homes have, but few of the nice features of older homes.
It is of course a totally different story when you are talking about some of the nicer old homes in the area, but there aren't that many of those.
Way to string a bunch of completely unrelated thoughts/words together there KH/@J@.
The real question is, why didn't you bold any of them?
"That's what I always thought about the homes built during the bubble. The builders really seemed to cut corners and not follow code a lot of times."
Well this certainly applies to many of the older homes "close in."
They are in large part the remnants of earlier building booms when large numbers of tiny houses were thrown together on tiny lots.
A lot of these were less than 1000sf 2-3bd 1ba houses built on lots as small as 5000sf. These were not the houses of the rich... these were houses built to put a roof over someone's head at the lowest possible cost.
There just isn't much that can be done with many of them so people just knock them down. In a way it is sad, but it isn't like the area is losing much architectural charm honestly. (again this doesn't apply to the larger/nicer homes from that era)
Hayfield,
Are you sure burke lake is in Fairfax Station. I don't know the exact borders of each area(which is sad since I grew up in Station), but at least on google maps is sure looks a lot closer to Burke than Fairfax Station.
Hayfieldgrad
Since these boundaries have ZERO governmental meaning behind them, I hardly think that's a distinction that matters.
Have I mentioned how much I hate the fact that we have no local government below the level of counties around here, aside from a few isolated towns that have chosen to incorporate? Drives me nuts. I know, it may in fact contribute to the excellent school system, and may be a good thing overall, but I am so sick of these meaningless amorphous boundaries decided upon purely by developers. Drives me up the wall. Sorry. Burke is the closest thing to a real town in that general area, so I call it all Burke. The strange part is that HOA's are actually way more restrictive than most elected local governments would ever manage to be. The whole thing's a cultural bizarro-world.
housebuyer,
Most of Burke Lake Park, including the lake part and entrance, is in zip code 22039. The part of Fairfax Station closest to Lorton attended Hayfield when I went there and boy did they let you know that they lived there. I think a lot of them were pissed because they felt since they lived in such fancy homes that they should be at Lake Braddock instead of Hayfield.
Cara,
Yes, I realize that this isn't a very significant distinct. However, I am hardly the first person here to make such a distinction.
Zero down,
I agree completely that a smart, motivated kid will excel at any school AND that the social issues are paramount.
This is particularly true, imo, at the Middle School level. This is the make or break point in teen development. Sure, there are "bad" kids/groups at any school; but why not increase the percentages. Wealthy areas tend to have very involved parents. It's not so much that other parents don't care - it's just that many never attended college and don't put the priority on school that others do (and also work so hard to get by that there is little time to keep track of junior).
While I didn't believe it necessary (being a product of public schools), our kid went to private school since first grade.
I don't think it was the best education he could have received, but the discipline and uniforms and other motivated parents did make a difference in my mind.
Actually I need to apologize in that I was not clear in my thinking before. My statement about architecture, is basically limited to the pre 1940 era where there was less "mass production" of housing.
The houses I am thinking of constitute 6-7000 places at best. Many are in Old Town, Del Ray, parts of N. Arlington, a smattering in Vienna, etc. (there may be others, I just am not aware of them).
Outside of that Leroy is right, a large majority of them are unremarkable, and TBW is right, a large majority are purchased for the ability to expand or teardown, and build new.
Also, that pre 1940 mark is not a hard and fast rule. There are some pre 1940 shoveovers (largely first generation stuff) and there are post 1940 homes that are architectural jewels. In any event I should have made clear I was thining of only a few distinct areas and not the overwhelming majority of homes that are not very unique and are quite "dated" in many respects.
zero down,
Most of the city of Alexandria's school aged population are enrolled in the public school system. The VA school census conducted in 2008, which counts all residents between 5-19 in each locality, shows that Alexandria City has 13,009 school-aged residents. There are 11,223 children enrolled in the city's public schools which is 86% of the school-aged residents.
Fairfax has 83%, Arlington has 85%, and PWC has 88% of their school-aged residents enrolled in each of their public school systems.
You can find this information on the
Virginia Department of Education Data and Reports website.
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