Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
I know, you're all getting sick of the saga of my buying process, so feel free to skip reading this comment.Having the one listing we felt we "had" to put an offer in on go off-market was the best thing that could have happened. As soon as it did, I felt so relieved. And slowly it dawned on me, that it was not my fears that this particular property might suffer huge paper losses if drastic drops occured in the future that was troubling me. It was simply that I was pushing us out of our comfort zone time-wise. Putting in offers starting in September is so much better for us, my husband's probationary period at work will be over, we'll have cash on hand for minimal renovations without waiting for the $8k back from the Fed, and we'll be on a 6 month lease at a non-onerous price, such that we can be more flexible with closing dates. Moving our time-line up because there existed one listing that I felt was well-priced and suites our needs was unnecessary. We can't buy every property in Burke that's well-priced, someone else will buy it when it comes back on the MLS, if it comes back soon. It's not our job.So the scouting mission served its purpose, showed us that yes, properties that are in our price range do meet our needs so going to a 6 month lease in September is the right choice.
Hey T,Thanks for helping with the price discovery process. This new listing in your complex is listed at your close price:http://franklymls.com/FX7073879It's not quite as big as yours, but they've laid the pergo, and it's deeper into the spring buying season so it seems like the right place to start.
Cara,I'm not sick of listening to you. I find myself in a similar situation except my family is already there and I need (want, must have, desire, etc.) a 4br TH or SFR. You've been a voice of sanity and I appreciate reading your comments.Ralph
Ralph,Ooo, 4 bdrms is rough. They didn't build as many of those back in the day. Patience is going to be key (as I'm sure you already know).Do you need them all on in the upstairs, or will one carved out of a finished basement work for your needs?
CaraI am very happy to hear about your activities, so I hope you continue to keep us up to date - it's useful as a case study; Also, thanks for your other comments - always good stuff.
Cara-The listing you posted about blocked the zillow data. I have seen many MLS listings not have zillow data, but I have never seen the red message that says the person blocked it. I guess zillow thinks the house is worth substantially less than the owner thinks the house is worth. Personally I am going to agree with zillow. They are asking for more per sq. ft. than the place I have a contract with and my place is walking distance to the Vienna metro. I don't really know the Burke dynamics, but my guess is this sells for ~15% less than it is listing for.
housebuyer,T's TH in the same complex sold for that price on 6/1 but it's 100 sq ft and 1 bedroom bigger.Burke is hopping right now, so nothing would surprise me, but if I had to guess this will sell for at least 10% under this initial list price. The owners are not acknowledging how much of a unique asset that 4th bedroom was. 3 brdm THs in Burke are a dime a dozen, and this one has undesireable exterior architecture, so unlike T's which had the huge distinguishing characteristic of 4bdrms walking distance to a VRE stop, this one is just one of many.That said, move in ready places this size have been selling for $300k and up, pretty quickly. This one will be a good test case for exactly how undesirable that architecture is, and how much the REO content of that complex will hurt its organic sellers. For T's, obviously many were willing to overlook the REOs. For a 3bdrm? Not so sure.Still, starting with a list price of the most recent sale of a "comparable" size unit seems like a perfectly reasonable starting point.
Cara-I agree I think the price point makes a lot more sense for a house that is large and has an extra bed. I guess the housing market can be a little irrational, due to the lack of good available data so this house may sell for its list or higher.
Housebuyer: In placing their house on the market, sellers can now opt out of having "automated valuation services" (such as Zillow) place a value on the property and show it on the MLS. Most sellers are doing this. I think not because the house is bad or good, but because these services rely too much on assessed values and market trends in a large area. When I bought properties recently, the Zillow values were no help and were almost 50% higher than what I paid in two cases. For my own home deep in the heart of Alexandria City, Zillow uses comps from along Telegraph Rd. in Fairfax County (Alexandria mailing address) to value my home. The value Zillow shows is about 30% below what a house across the street from me sold for in March. Unknown to me, my husband had the agent for the house stop by our house after an open house and she said that our house would probably sell for about 2% more than the house she was selling. I think Zillow, like tax assessments, is a good indication of value across an area, but if a seller relied on that service for pricing the home, it would be overpriced or underpriced. Just my experience, but others may have bought or sold a house at the Zillow price.
anielarke,Yeah, anywhere I've looked Zillow has been wildly inaccruate and misleading, even moreso than tax assessments. So, yup, if I were a seller, I'd take it off the listing. If you want to do a comp search, you can do a comp search. If you're trusting Zillow, you're not a serious buyer. JMO.
Cara - interesting find...Comparing to mine:1 fewer bedroom and appears likely to have the original (1980) aluminum siding and perhaps wood trim, where as mine had brand new vinyl siding and wraps (no wood to decay or paint).But it does have nice flooring downstairs (better than my carpet/tile) and the dark cabinets look nice against the floor (my opinion). All new vanities (at least is what it appears) and they match.Mine had new kitchen cabinets (I think from 06) and all new vanities too, but for some reason I do like the dark wood better. Mine had a much nicer garden w/ slate retaining walls and planting beds, and professionally done flowering plants everywhere. But their deck itself is larger than mine was.I think listing it for virtually the price I sold mine is a good starting point being the inventory has gone down substantially since I listed mine in mid March. I'd expect that they might get some lower offers than what I got on mine (percentage wise) but there may be some competition in the bids and they could get a decent sale price.I think I definitely did "help" in the price discovery, being their assessed value is $11k less than mine was, they set their list price almost $11k less than I did, which happens to be my sale price too.I wish them luck, and certainly would not mind being in their shoes right now: selling a TH in Burke in early June. Again, the only thing I occasionally think about is the fact that I listed mine in mid-March, and probably would have done better if I waited until late April or early May to list. Still, I can't complain much about selling for 96.3% of my list price for a house listed in mid March... But I think that had a lot to do w/ me setting a realistic price, the house being in perfect condition with a ton of new items, inside and out.
T,Yup, you got 96.3% of list in March, because you priced it perfectly w.r.t its attributes. It just took a little while to sell because the 4bdrm buyers weren't out in droves yet. You probably could have gotten 300 now, but given the way things were looking in January/February, and that you'd already bought your new home, this was the right timing and lack of hassle for you. Sometimes you have to leave a little money on the table, and that's just the cost of your own piece of mind. And I would say, it's money well spent. (says me, who's willing to buy this year even if this is not the absolute bottom).
Cara - I loved marketing the "4 True Upstairs Bedrooms" of our TH. I think you are dead on, it was a very unique feature, absent from many TH being built.Unfortunately, during the period I was selling, I had many people comment (I received automatic feedback) that mine was their #2, and their #1 that they were going to put an offer on was a short sale/foreclosure, 3 level TH w/ the 4th bedroom in the basement. I am positive that technically, the majority of those TH do not really have a 4th bedroom by code definition, but many people don't seem to care.You are right, this true 3 BR, 2 story TH (no bedroom in the basement that is a BR but can't technically count as one) is not going to have that "unique" appeal as mine did, and is really more a dime a dozen.Again, you are dead on w/ the fact that the market right now in Burke is going fast, especially for these starter homes in move in condition.Which further reinforces my opinion that this house, while not having quite the unique appeal mine did, is being sold in a good enough condition and at the right time to make up for it. I would guess that, like I said earlier, they may get lower offers (% wise) than mine did, but competition may drive the number higher than realistically the home should sell for. But the market now is the market now... I think the home should sell fairly quickly unless there is an underlying problem, such as w/ the alum siding condition, condition of the roof, or problem internally. But nothing stands out from the photos, and being it is above ground SOG, I doubt there should be any mold, so the home inspection might not turn up anything to scare someone off...
T,The only thing hurting this listing? Is the rising mortgage rates. Even though we personally calculated that rates would need to go all the way to 7.5% for it to no longer make sense for us to buy now? Most people are not quite that rational. Some buyers will feel even more impedous to buy NOW. Others will be constantly adjusting their price point to factor in the daily interest rate changes. But if interest rates go up to 5.5% and stay there, it will definitely cool this market a bit. It'll still be a great spring, but it won't be quite as easy as last month.
P.S.Oh and a third category will say, "oh rates are rising prices MUST come down" and will wait for that to magically happen, not recognizing that the people who are buying now are the people who disagree with them on that premise.(I do think it's generically true, just that it's not necessarily a rapid process)
I, too, am hoping for some price easing in the fall. It may be wishful thinking. The properties that I am interested in are priced higher than last Nov and Dec and I don't think it's seasonal due to the fact that my competition are investors.I wish I had started before I did. In searching prior sales, I missed out on some great deals.I plan to be patient at this point and take some time to re-evaluate where I am and how much more I can/want to spend.Plus, it's summer! I've got other pursuits for the next few months.
The pick of Patrick.net today:What we can learn from the last housing crash'House prices in Britain rose last month, confirming that the slump in the south of England has levelled out, according to the Halifax,' ran the story in The Times. 'The Halifax's latest quarterly survey shows that prices in general rose by 0.5%, and the indications are of a definite bottoming-out'. The above statements were not made this week or last week. In fact, they were made in October 1990. House prices didn't bottom for another four years. It's UK based. but the "dead cat bounce" graph (which in this case was a long flat period before prices fell off another cliff) was still quite interesting.
Cara-There are some interesting charts in there. I also find it amazing that people were talking about the housing market falling when houses went from 70K to 68K. I would think that 3% move in prices, would just fall into the noise category, and would hardly impact the whole region(since there are always neighborhoods that do better/worse than average).
I seem to have a habit of being the last one to post on an old day's thread, so I thought I would repost verbatim the below post on today's, thread, regarding yesterday's condo doc discussion, since it has a useful link and some maybe-valuable hard-won insight:Before buying my condo (which was a first ever house purchase for me also) I looked at all the online articles I could find on home buying, condo buying, financing, etc. There are many articles on "you should avoid condos for these reasons:" (including non-pro management by a board, underfunded reserves, etc) and many less negative articles about "how to buy a condo" (including, the advice about looking at reserves and walking during the 3 days).When I got the condo docs, I poured over them, and also called the condo board president and asked questions until she had to (politely) get rid of me.I saw that the reserves in the bank were VERY low for a condo of that size and age (they were a fraction of a year's annual budget) AND, the delinquencies were very HIGH (they were letting some owners get way behind on their monthly condo fee, to the tune of nearly two months' monthly fees.) Also, the common areas of the building clearly needed work.I still bought the place, but with the knowledge that there might be a series of special assessments--which you typically have 30 or 60 days to pay in cash or take a loan to get the cash. And in fact, I knew a hefty special assessment was already being planned.And sure enough, in the next five years my special assessment obligation was up to $6000 EACH YEAR--that's another $500 A MONTH effective cost of ownership. I was ready for this because I made sure I was well informed, and it wasn't as hard on me as it was on all the new owners buying behind me who had no idea, and also got less of the price boom, and on the older retiree-type owners. But the condition of the building did drastically improve, the board played hardball and got nearly all caught up on the delinquencies, and by playing hardball on the budget and increasing monthly fees as well, the board also built the reserves to a more respectable level that later helped defray part of the later special assessments.If was really tough on people to try to do all three things at once: improve building, build reserves, and balance the budget/rightsize the monthly fees--I think the board only survived under the cover of the value boom those years, and the visible quality of life improvements that were happening.If you buy a condo, DO WATCH OUT for this--remember, monthly and special assessments aren't tax deductible like mortgage interest, so it's more like rent, and you might or might not be able to bump up your property's cost basis by the amount of a large special assessment for capital improvement (consult your tax advisor, I dunno, I never tried to do it.)There are lots of materials out there, info and advice for buyers but also info and advice for condo boards--including a wealth of material in the Reading Room of the Condo Association Institute -- caionline.org.
By the way, here's a LONG and interesting fact and link-filled attitude piece on the housing market; dunno if everyone already saw it since it's not from one of the usual housing blogs… http://seekingalpha.com/article/141184-today-s-yellow-shoot-the-mba-mortgage-report?source=yahoo
Scott,As we've discussed in the charter for the Federal Reserve it clearly states their job is to push rates to a level that makes no sense so an indebted nation can continue bad behavior and we can keep home prices at incorrect levels with easy money policies. You think I am being facetious - it is right there in Article X Section 4.2 with this picture just above it. Easy to find...Me, trying desperately not to burst out laughing.
Scott-Although I do find the article interesting and agree with most of the authors points I think it is narrow minded to only consider the value of what the fed bought. The fed helped push down interest rates for the governments borrowing. On March 18th their comments made the 10 year fall 50 basis points. Seeing that the government is always borrowing trillions to roll over and increase their debt the reduction in its lending rate more than makes up for the $5 billion in losses on the feds balance sheet.Also although these programs are very expensive and we probably should not complete them, I think it was important to start them. In February and March the economy was continuing to fall, which creates a positive feed back loop so without interfere the economy would continue to deteriorate. Now that the system is recovering we could probably get away with doing less, but we did need strong intervention several months ago
WaPo on unemployment in the areaPlenty of good "news" going forward, but plenty of caution for the now and the next few quarters, so I won't cherry pick quotes, just read it.My take away was that yes, as almost all of us agree, the DC area will fare well and speed out of this recession sooner than almost anywhere else, but any green shoots that people are seeing in employment to date are illusory.
been lurking on the site for awhile and gotten some great info so i thought i share our experience so that someone else may benefit.been looking for SFH in the 20152 for about 4 months now. here's what i've seeninventory is a lot less then i hoped, and its gotten worse. Probably 50% of what it was 4 months ago. currently about half of whats available is short sales and forclosures. because of our situation (time frame/baby on the way) we weren't looking at short sales. Homes are selling for list (2002/2003) levels. the really good properties are getting multiple offers and selling over list. we've put offers on two foreclosures in the past month. both listed for less than a week, both got over 10 offers one sold 20k over list the other 50k over.these are homes in the 600k range.at least in this neck of the woods if you list at 2002/2003 price get multiple offers. not sure if this is bottom, or spring bounce but its ALOT tougher for buyers. oberservations???
dorydog,the general observations match what most of us have been seeing whereever we've been looking. But when I looked in redfin I got over 50 listings for SFHs under 650k, so while that could easily be half what was there before, it doesn't immediately seem like a lack of selection...It's spring, and those are big houses for that amount of money. So, you are getting some effect of buyers from other areas seeing South Riding as a place where they can get a lot of house for their money.But I think mostly, you've got to chalk it up to this being the first spring in 5 years that it's even vaguely made sense to buy a house. That's a lot of people. You're looking at SFHs, a lot of those people have school age kids. If you want less competition, wait til the off season, if you want more selection, just stay looking for longer and different houses will come and go.Does all this activity mean it's the bottom? Not necessarily. Does that mean you shouldn't buy a house just because this might not be the end of price drops? No. You've obviously researched your target market well given that you know what date the roll-back is, so if you can get a good value for your money and you like the house and can afford it, go for it. But this buyer activity is going to stay high until mid-July, after that it should taper off, especially in the family-oriented market, and you should be able to get some good deals as sellers who listed too high before, realize their mistake and drop price too late in the season.
dorydog-20152 is one of the areas I watch closely as wellNot many on this blog watch Loudoun Co....What neighborhood/zips are you watching the most, if you don't mind my askingSpunky
dorydog, spunkyand novahomeguy.com is a Loudoun County realtor, and he claims that this brisk buying season will fade in the summer.
Yes Cara, I know about that website tooThere's an Agent that has a blog for ONLY South Riding & I'm trying to find it now & post it - it's pretty good info as well
I know I've mentioned it before, but I've been tracking median prices and inventories in select towns around the area for a year and a half. So when there is a general shift in home prices, I have my finger on the market's pulse to generally know what's happening. I can provide anecdotal or by-town examples if anyone requests, but the trend I'm seeing now would be shocking were it not for its predictability with all this market manipulation occurring. Prices are skyrocketing and lower-end inventory is plummeting.
Robert,I looked at your link. Click through for the Alexandria-Arlington-Falls Church openings. Look at how many have a closing date of *2010*. Many agencies do not review resumes until the closing date has passed. Some may hire before the closing date but I don't think that's the norm.The federal government is slow, slow, slow in hiring. Look at the average vacancy announcement. Many require KSA essays. Think about how long it takes them to go through each of those. Eventually many of these positions will be filled. But this year? Doubt it. I do think increased federal hiring should help somewhat. But the full effects probably will not be felt for at least another year.
dorydog, if you think you've missed the bottom and are willing to move to Maryland then I'd wait until fall or spring next year. They're basically 6 months to a year behind us in VA.
Cara,Thanks for the link to the unemployment article in the Post. When even regional cheerleader Stephen Fuller is pessimistic about unemployment, that is reason to worry.
TBW..a closing date in 2010 is ususally a continous opening..meaning employers pull from the list of HQ anytime during the open period. Usually used for hard to fill vacancies in the tech field. A federal position to be filled immediately is never open longer than 30 days. A 30 day position annoucememnt is usually nationwide and open to all sources..the rest are posted with 2 weeks to apply and for people already in civil service.
kevin: maybe it's the limited nature of the areas I've been monitoring closely and perhaps it's also the price range I've been monitoring, but I haven't seen prices skyrocket at all.Also, I haven't been analyzing medians, instead I use 2006 assessments as a quality normalizer. It's not perfect, but it makes it easier to compare apples-to-apples.The two trends I've noticed is that a few months ago, there was a buying frenzy, but the sales prices sent to me by Frankly haven't really gone up. The second trend i've noticed is that there have been quite a few 'WTF?' listings this past month. You know, the 3br rambler listed for $900k when a 5br built in 1990 two blocks over is listed for $750k.
My Impression on housesThe above comments on houses reflects what I'm seeing in my part of Alexandria. Inventory is down. Asking prices for SFHs and larger/newer THs are very roughly at the peak or perhaps 10% below the peak. I'm not tracking the actual sales.Lower priced TH and garden apartments are softer. You can get 20% or more off a TH that you would not want to live in.Jobs? If you have all three legs of the stool, a good attitude/skills/work history, tickets punched, and a relevant degree from a good school, you can get a job at top dollar. If you've been skating, weak skills, no or low DoD papers, soft or no degree, forget it. It is rough, even around here. Don't expect that fumbling with Excel/Powerpoint, a collateral, and a BA-History will get you much today.Jobs, income, houses, they flow together. If you're on top of your game, you'll do fine.
Contrarian, the question now becomes, how much of this actually affects the DC Metro area? I'm guessing the next areas to see major foreclosures will be southern states like South Carolina which has very high unemployment right now and the rust belt states like Ohio which is seeing major manufacturing closures. My understanding is that the DC area has it's share of ARMS (of various types) but my question for you is this: Historically, what percent of ARMS result in foreclosures?
Contrarian, I'm a little confused. Home prices have gone down far more than one tenth of the highest value sold. A lot of houses are down 50% in PWC and at least 10-20 in the rest of Nova. Even Maryland and DC have seen 10% price declines.
Not down 1/10th (90%), but to 1/10th (10%).
What sort of deflationary situation could you be imagining to expect home prices to fall 90%. Nationally home prices were around 5X the median income at the peak, so we should wait until they are 0.5X the median. That would be pretty sweet buying a nice place in Mclean for 50-75K, but for some reason I don't think that is going to happen
Housebuyer..if things got that bleak who would be wasting time from hunting/scouring for food and protecting there hovel to buy a house? Geez..with all our shoes and underwear coming from China, we might have to hunt those aszela eating deer just to cloth ourselves and wrap our feet.
"Housebuyer said...What sort of deflationary situation could you be imagining to expect home prices to fall 90%. Nationally home prices were around 5X the median income at the peak, so we should wait until they are 0.5X the median. That would be pretty sweet buying a nice place in Mclean for 50-75K, but for some reason I don't think that is going to happen"Housebuyer -- this has been asked many times and usually met with silence. Remember Contrarian is a Elliott wave theorist. Things like fundamentals dont seem to matter -- these guys have been predicting that the upcoming downturn will be worse (economically & socially) than the Bubonic Plague that wiped out europe a few centuries ago. Thus, dont expect a specific answer.
"this is a 30's style depression"No, it isn't. I just finished reading Galbraith's book on the Crash of 29, and things are very different.For one thing, we didn't have an FDIC back then. Ya, I know, not funded well enough. But as we've seen from GM, Bank of American, Citigroup, etc, if banks really started failing, it WOULD be funded well enough, and that would be INFLATIONARY, not DEFLATIONARY.For another thing, before things got really bad in the 30's the government was trying to balance the budget and rein in stimulus, not push as much stimulus as possible out there. Ya, I know, some say we need a lot more than we've had, and it's too slow in coming. I'm more worried about the Fed not HIKING rates soon enough, and having to race to catch up, like the last three times. That would ALSO be inflationary, not deflationary.For another thing, we're an importing, debtor nation now, not an exporting, surplus, creditor nation as we were after WW I. Again, inflationary, not deflationary. What manufacturing we do have will not shut down due to surpluses, thereby slowing the velocity of money to near zero like in the 30's. Ya I suppose SOMEHOW the WORLD economy could cause a global surplus and slowdown, but China for example, is still growing at >5%, building their infrastructure, AND they are even applying stimulus to raise their growth rate!I'd like to see houses go down 75% and DOW go to 2000 as much as the next guy who's all in gold and cash, but I don't think the worst case scenario will happen. Best case and worst case scenarios rarely do.Unless there's a terrorist nuclear detonation or dirty bomb, in which case the LAST thing you'll be thinking about is house prices.China and other countries could crash the dollar, accidentally or on purpose--once again, that would be inflationary, not deflationary.We're not done with house prices slumping, I hope, and we may not have seen the last of the stock market bottoming, I hope, but, sorry, I just don't see the soup lines forming. I don't see a dust bowl famine. I don't the all the rich ruling class suddenly destitute, especially in this city.
The price of almost every commodity except Aluminum and Natural Gas is at least TWICE what it was within 10 years ago.Food of all types is at least twice as costly--or haven't you noticed that in your grocery bill? I have.Gold is four times as high.This is deflation? LOL No.When oil was at $150 was that "inflation"? Inflation, suddenly reversed on a per-commodity-specific basis? LOL NO.Housing when up at least 200% in 10 years, and it's STILL not back to 1998 levels. Deflation? LOL No.These are called PRICE SHOCKS. Imbalances in the respective markets. House prices are CORRECTING, not deflating.Deflation REQUIRES a stronger dollar. Did the dollar strengthen in a 10 year time frame? LOL NO.Learn the difference between PRICE SHOCKS and INFLATION/DEFLATION, and LEARN IT FAST, my friend.You might want to learn about the velocity of money, the VIX, the TED spread, the current account deficit, the money supply figures, and a few other things too while you are at it.
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