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Saturday, June 13, 2009
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53 comments:
HB, CRT, TBW, etc,
Interesting comments this week. Thank you.
My opinion though is that you-all may be missing the facts for the joy of the analysis and discussion.
There was a bubble thing outside the beltway. It's played out sorta like the 1990's after the S&L crisis hit specific sectors of the country. Texas and California come to mind.
This time it included Florida, Nevada, Michigan, and many other places.
For whatever reason, it stopped at the beltway, very roughly. It definitely did not bubble 'n bust in Arlington, Alexandria, and DC.
I'm not saying it won't get worse here. I'm watching the economy, jobs, and even though I am doing OK, I can imagine scenarios that may affect my job. Those are reasons I've been shifting cash around, signed the liquidation papers for a RE investment, read and appreciate your thoughts, and offer my feedback.
You-all are welcome to ignore (PLONK) me. I don't claim to be able to see the future however, so far, like VA_Invest, I've threaded the needle.
My small SFH in 22305 is holding value just fine, as is my entire neighborhood.
Frankly put a lot of work into that display, please take a few minutes to tour my area.
Those places might not be your cup of tea. You might not like the school options. You might not like living in a beautiful, semi-urban, tree lined area, 1, 2, 3 miles from tens of thousands of high pay jobs in Crystal City, Pentagon City, the Pentagon, the Skyline business complex, the PTO, etc.
This 'hood is 1 to 2 miles from two metro stops via quiet streets. Just about every place else in Northern Virginia is a reverse commute, Tysons, Reston, I drove to jobs out there for a while.
This area might not be for you but it suits me and apparently enough other people that prices are holding up, as I hoped.
Thank you.
I get that you are just going to keep going on and on with your "my house is special" routine...
...but why did you change your name?
You know it is generally considered somewhat "rude" to disappear, only to reappear with a new name without even making it clear who you are don't you?
PLONK
Did you think somehow nobody would recognize you?
I mean lets be honest... the showing up and going on and on and on about the wonderful zip-code of 22305 where all is well and where Beverly Hills(VA) is located is pretty much a dead giveaway, as if your overall posting style weren't.
That and telling the exact same stories over and over again...
"Several of my neighbors have paid off their houses. They bought 10, 20, 30 years ago. The fact that they could sell their 3/2 for $750K is meaningless. "Where would I go?" and "I like it here."" - KH/@J@ 11 June 2009
http://tinyurl.com/l6wg8v
"Many here miss that point. My neighbors say similar things,
"They'll carry me out feet first."
"Yes, I could sell and walk away with 3/4 million but I'd owe taxes, and where would I go?"" - KH/@J@ 24 Jan 08
http://tinyurl.com/nmr9r6
... and while we are playing the quote game I still remember some nice ones from back when you were pretending to be a ordinary homeowner concerned about rising taxes.
"I'm getting worried.
You renters can always rent somewhere, I don't have a choice about paying my real estate tax.
Maybe you can cough up an extra $2,000, no problem." -kh/@J@ 10/10/07
"I'm guessing that they got something close to $1.5M. If they did, then the city can crank all our assessments up.
This area should not be pricey like Lance's 20009 or your Old Town. The houses are small and old. Most people work "regular" jobs and do not drag down the bucks.
What's funny is that when prices went up, my neighbors said, so what, I can't sell, where would I go?
These are people who saw 40K, 80K added to their assessments every year.
All it means that we pay more tax."- kh/@J@ 10/9/07
Of course later KH started claiming to be a successful real-estate investor/landlord. Kinda makes it hard to know which version of the story to believe.
yes indeed it does feel like 2005. The housing pimpers are back. The housing naysayers are cripping, and many have capitulated.
In stocks, you know the market is going to fall hard when the bears throw in the towel.
I personally believe fundamentally real housing prices will prob. fall 20-30% from here, this doesn't mean nominally, but in real terms. There might be a pop in prices in the next year or so. If you look back at the 90s bust prices went up a couple of percent then went back down (not that history repeats, but it does rhyme).
Just like '05 I've got co-workers buying housing w/ FHA mortgages using the 8k as the 3.5% down payment. I've got people telling me buy now, buy now ( the same people who bought in 04-05). I have co-workers buying a new place and renting out their old place. (not smart)
This market (RE and stocks) right now is all about psychology and not fundamentals. Those who weren't washed out and saw the market sky-rocket now see it down and think "geez, I can buy now and it will HAVE TO come back and I'll make a killing like all these other people" regardless of the actual fundamentals.
I saw an "investor" pick up a place in Culpepper for 180 and is trying to sell it now for 320. 180 may or may not have been a good deal . . . thinking you can turn it around and sell for 75% more is not fundamentals that's bubble-think-living in the past. They may sell it for 320, but if they do it is not b/c the place is fundamentally worth it.
When this bubble is finally over, people will be so sick of stocks and RE they will say something like buying a house is a losing proposition, you can't make money at it.
IF you are looking at living in the place for a long time and can afford the place then it shouldn't matter what the price is. Sort of like buying a car. If you can afford a 30k car, does it really matter if it drops to 20k. It sucks, but oh well. The problem is that many people are STILL stretching to buy a place . . . as evident by FHA loans. If you can afford the place, you will have at least 20% down and at least 6 months living expenses, otherwise you can't afford it period, end of discussion.
They don't call it a dead cat bounce for nothing!
Spring sizzle or spring fizzle?
By the way, you can play at home. Just pick your favorite area, and follow my methodology. A bit time-consuming, but addicting (at least for data geeks).
Good morning bulls.
Contract Awards by State
Check out Virgina and its total share. Note the increase since 2005.
Recovery Jobs Listed
I'm sure I'll get belittled on this one, but of the 63 jobs posted on this list 28 of them are in the area or 44% of the total. No, I don't think 44% of all recovery jobs will be in the region, but those who argue that the money won't be a significant financial stimulus to the area are naive.
Federal Buildings Green Projects>
Over $1B in projects in the DC area. This money is expect to be spent quickly.
Notable quote:
A nationally managed, regionally executed Program Management Office has been established to oversee all Recovery Act projects. The office will be staffed with experts in various fields to support the regional teams delivering the projects.
These are the types of jobs I expected to come from the stimulus -- management, auditing, oversight.
Robert is like the turd you just can't flush down the toilet.
Guys, Guys, Guys
1) It's not so bad now, the world is not spinning out of control as badly as it was last summer.
2) the Feds are spending like madmen, that is bouying up the local and national economy.
3) The 2008 Energy Spike and the rise in energy prices are not forgotten by the public and are dampening desires to have long enduro commutes
That Said
1) The global economy is still bleeding out
2) the banking sector is still a disaster. In fact the FIRE (Finance, Insurance, Real Estate) are just shattered. There are big losses still coming in credit cards, CRE, CMBS, CDS,
3) nationwide, there are still an amazing amount of cruddy mortgages that will play out badly.
So what way will things go? Depression, Inflation?
Geez, I don't know, it's hard to make bets when the Treasury and Fed are making cross plays at a frightening rate.
that said, there are great properties one can buy in down markets, there are lousy properties one can buy in up markets.
Me, I'm looking at a house, i can own, with my Girlfriend, have cats, maybe a kid, but, that we can own over the long term.
We'd like to put in some green features, like a solar water heater, and a PV array and you can't do that in a rental house.
I'm fairly certain Arlington as great as it is, is drowning in Condos, i drive Wilson and see that
lots of empty units are hanging around, and while a condo isn't a SFH or TH, when they drop in price, they will pull down TH's which will pull down SFH's.
i hate condos i prefer a house with a small garden where i can have a deck and a bbq.
so if anyone sees a duplex up for sale in south arlington or a nice deal on something that is accessable to bus or metro, let me know.
@J@ : mousing over the pictures in FranklyMLS, well, sorry to be a snob, but quite frankly, your neighborhood looks depressing. I'm glad I don't live there.
I went to visit family for the day. When I came back home, I swear things seemed "off". Nothing was stolen (that I can tell) but the TV was on and I'm pretty sure it was off. Floor lamps that are set to turn on with a switch had to be turned on at the lamp (3 of them I think). The key on the doorknob seemed strange. A visiting family member claimed his bad was "half unzipped" rather than fully zipped and that his "socks were moved". Do you think this is all paranoia or a reality? It just seems strange that so many things seemed "off" but that nothing was stolen?
"neighborhood looks depressing."
Lots too small, houses too old, prices too high, not stylish enough,or what?
Ignore the lower half of the price range. This area includes some bombed-out streets. That might change with gentrification but that's not certain.
The other problem is the so-called bubble didn't burst here. The $1M places should be and were about $400K as recently as 2000.
A $750K house was about $200K-$250K, something like that.
My opinion is the very high end, $1+M, is overpriced.
I expect that the same plays out across Alexandria and Arlington.
This is a 1000% better, interesting, and organic compared to the sterile city-scape in that Arlington-Rap video, my opinion
"Do you think this is all paranoia or a reality? "
Someone was in there.
Cat burgler, looking for something specific, maybe. Maybe a fat boi planting something?
Donno.
@J@, what would you suggest I do? Should I get some kind of home security camera? I don't understand why someone would come in and not take anything.
"Robert is like the ...... "
Tweeeet! Paging the Blogmeistress! Not my blog/call but in my forums, I've banned users for less.
Thank you.
Psychological issues. There are people who need the thrill, crave the power.
Kinda like rich people who shop-lift junk.
They probably "took" something trivial that you haven't missed.
Hate to bring this up but you might wash your toothbrushes in bleach, silverware, plates, pitch out leftovers too.
Get better locks, video can be fun, nuts abound, avoid them, don't engage.
Sorry this happened.
"Leroy, I agree with the statement above, but this is very different than what you were saying this spring. In particular during the December "decade of sales" posting.
At that time you said:
"I kind of suspect we will see a big spike in inventory again in a couple months as some of the "shadow inventory" get lists to take advantage of the "spring market.""
================================
Yeah, I was certainly wrong about that, but I think you might have been misunderstanding what I was saying.
What I was talking about there was a more pronounced seasonal inventory increase. We got a little bit of one late this winter/early this spring but it never went as high as I thought it would. I wasn't talking about a persistent surge in inventory like what we saw in Manassas from 06-08 where inventory shot up and simply stayed high regardless of season.
Going back to that original quote, my theory was that sellers would see the low interest rates and buyer bribe as their opportunity to try to list their houses at their various wishing prices again. They didn't. The simplest explanation is that most would-be sellers just aren't watching the market nearly as closely as we are. Those subjects were topics of daily discussion on this blog, but most homeowners have only a vague idea what the market is doing and hear through the grapevine what the house down the street sold for... etc.
To reiterate, we will know the correction is more or less over when we see normal levels of sales and more or less normal seasonality. An inventory spike by itself doesn't mean much. An inventory spike that is then all sold off by the end of the season would mean a lot.
"Ignore the lower half of the price range. This area includes some bombed-out streets. That might change with gentrification but that's not certain."
The area you are referring to is not that big. I know in your little fantasyland you can just ignore the presence of "bombed out" streets two blocks away, but many people consider that kind of thing a pretty major issue, undoubtedly one reason why your area has been hit harder by the bursting bubble than most "close in" areas.
"mousing over the pictures in FranklyMLS, well, sorry to be a snob, but quite frankly, your neighborhood looks depressing. I'm glad I don't live there."
I have been in that area a fair bit, it looks more or less identical to many parts of Falls Church/South Arlington/Vienna/Fairfax, but some of the houses are slightly older.
Lots of small cheaply built houses on tiny lots. Some are very well maintained and cute, others are rather run down and just don't have much potential in the first place.
Thanks for putting that data up where we can see it Novawatcher. That isn't an area of interest for me but it is still a good read.
So the wife and I have managed to sell the house in Ballston and we're going to be renting in Bethesda for the next year or two to see how things shake out there; anybody know of any real estate blogs that cover Montgomery county area?
"NoVAwatcher said...
@J@ : mousing over the pictures in FranklyMLS, well, sorry to be a snob, but quite frankly, your neighborhood looks depressing. I'm glad I don't live there."
Part of it is different tastes. I recall having a realtor drive me around high end homes in Vienna & Oakton and I wanted to vomit. Completly uninspiring architecture. Even a few hulking McMansions designed by builders who would "combine" styles from different eras. Great wooded lots, but otherwise? Ugh.
Then again, thinking perhaps you were being hypercritical, I looked over the 22305 list and I have to agree. @J@, did you even really look at that list? Ive been to that neighborhood before and generally like it. However, that
list didnt do much for me either. There is usually better stuff available. That inventory you showed us looked awfully picked over.
"that list didnt do much for me either."
I understand. I can't "make up" nicer, better homes at more affordable prices. It is what it is.
Of course, if it is true that they are holding the good stuff off the market, then perhaps the selection will improve.
It is kind of funny. I've been in Arlington for almost 5 years now, and I had never heard of Beverly Hills until @J@ started bringing it up. I just went to Frankly to see where the heck it is. Looked at the map and moused over some of the pictures. Landed on this one which attracted me with the windows and front walk:
http://franklymls.com/AX6861139
Bought for $949k in Oct. '05.
Listed for $975k in Sept '08, and has been sitting at $859k since Feb. Lets be generous and give them $825k for this place. That is a 13% drop from the last sale - $125k. No, this place isn't reverting to 02/03 prices, but to say that there is no popping seems to be disproved by just one simple listing.
Even better, there have been 3 sales this year in Beverly Hills, and all three were below the 1/2005 tax assessments, which of course are (admittedly loosely) based on '04ish comps. So, would @J@ rather describe BH as bursting, or just a slow bleed.
KH/@J@ used to shower this blog with reports of rising tax assessments in that area, but stopped when the city started lowering them of course.
It is kind of funny to me that KH/@J@ loves to try to portray that neighborhood as one of the "prime" areas utterly immune to the bubble... but that isn't the story the data tells.
"Bought for $949k in Oct. '05.
... give them $825k ... No, this place isn't reverting to 02/03 prices,"
About 02/03 for 813 CHALFONTE DR
03 - $523K
02 - $454K
I agree. It's not reverting.
But, WTF is in the 3rd picture at Frankly? Anyone?
Well, I'll be the deviant here and say I have friends in and really like the Beverley Hills area. But as for prices, the numbers don't lie; prices are falling, not as precipitously as some other areas, but they are falling.
@J@ : You mean the tilted television above the fireplace? (the fireplace is hidden by the stereo)
"fireplace?"
Fireplace?
Hey, sharp eyes, the clue is the raised floor section.
What were they thinking?
Oh yeah, check out the bathroom too.
All those pictures of the outside and only one of the edge of a vanity.
Remember I paid for a new bath. These places mostly have, er, ah, cr@p bathrooms.
It is what it is.
Jeff said..."I went to visit family for the day..."
Jeff,
Sounds fishy. Do you rent? If so, maybe your landlord is a freak? Anyone else have a key to your place?
Since i'm the paranoid type, here's a few suggestions for you:
Alarm.com. You can get a self-install kit. All wireless, including the monitoring, so you can easily take it all with you if/when you move. Text/e-mail alerts (if you want them) whenever a sensor is triggered. Web access too. I use it...very cool system.
Q-See video monitoring. You can set it up to record all events on all cameras, or when motion is detected. The user interface is a little clunky, but it does the job. Also, you can set it up on your home network and view live feeds or recorded events from anywhere.
Don't want to freak you out, but i would be searching the place for hidden cameras.
"Leroy Said...Yeah, I was certainly wrong about that, but I think you might have been misunderstanding what I was saying. What I was talking about there was a more pronounced seasonal inventory increase."
I think I understood that, but thats what I fundamentally disagreed with. About this time last year when Arl/Alex inventory started going down YOY, the general idea was the holdouts couldnt refuse to list forever - inventory will eventually show back up (in a pronounced seasonal increase like you said). I disagreed in that the holdouts (while they most certainly exist) will never return in sufficient simultaneous volume to cause it to rise (YOY) again.
In all honesty, now that I read your whole post of the other day, I think we are much closer in agreement now than we were in January. Back then, it seemed like there was this expectation that the big "it" that had ravaged the exurbs was moving in to get Arl/Alex. When the big "it" hit, inner county capitulation would be some sort of discernable event (kinda like it was outside the beltway).
In that same January thread, Terminator X said "But everything is in place for the correction to finally take hold in the immunozones"..."Finally" take hold? How bout its been taking hold for years, but because its been a slow bleed, some werent appreciating it for what it was.
Likewise, as a follow up in that very same thread you noted: "We will know the close in sellers are capitulating when we see volume spike back up again along with a sharp drop in prices"...Again, the concept of capitulation as an event with "spiking" volume and "sharp" price drops was just didnt seem possible given we were now in early 2009.
In any event, it looks like we are now on the same page. Contrary to what you said then, you now note:
"I suspect what we will get is a situation where inventory remains slightly to moderately elevated, by the standards of the areas in question, and prices continue to drift lower. Little by little volume will return as value is restored. This is much as you would expect to see in a normal cyclical downturn. The inner counties are getting a millstone treatment rather than a chainsaw. As we are all rather hypersensitive observers and examining each new set of data as it comes out, it is easy to lose sight of the forest because we are scrutinizing the trees."
If I am reading you correctly, here, I think, we could not agree more. The remainder of the downturn will play out in very unspectacular fashion - ultra low sales, slowly ejecting problem inventory, and unsatisfyingly small price declines. Likewise the recovery, whenever that may be will likely also be very subtle. As I see it there will be no "sharp" this or "spiking" that to be seen.
As an aside, I very much appreciate your unusually candid response. To this day, the prevailing response for many on this blog is to either deny what was said, ignore the issue, run away, or perhaps even reincarnate under another name - anything other than to (gasp) admit you are human and prone to make mistakes from time to time.
I think you have made blog history with your candor here. Its a shame that few others think this is an acceptable way to conduct themselves.
Cara,
5040 Harford Lane
This is the remarks section on the above listing:
CONTRACT SUBMISSION PERIOD NOW OVER, ENDED ON 6/10*32 OFFERS RECEIVED*BANK OWNED*END UNIT BACKING TO WOODS IN SOUGHT AFTER LAKE BRADDOCK COMMUNITY*OVERSIZE BACK YARD IS FULLY FENCED W/SHED*ENORMOUS REC RM IN WALK-OUT BSMNT*FORMAL DINING RM*ALL KITCHEN & LAUNDRY RM APPLIANCES INTACT*3 BDRMS UPSTAIRS*SELLER TO PAY UP TO 2% TOWARDS BUYER CLOSING COSTS*SOLD AS-IS*BANK ADDENDUMS REQUIRED W/OFFER
Maybe the 32 offers is a typo. Can't know for sure.
I think Beverly Hills is quite nice (although Rosemont is nicer). ;)
For us, though, the Alexandria City schools are a deal-breaker. For a SFH neighborhood, iffy schools (or even the perception of iffyness) are problematic--your biggest market is young families and most are not interested. Why pay those prices when you could live in Arlington or Falls Church City or some of the good Fairfax districts, kwim?
Totally forgot to mention-Jeff, it could have been kids looking for alcohol, prescription drugs, etc. You have to trust your instincts-someone was probably there. Ask the neighbors if they saw anything off, maybe? And go through your place with a fine-tooth comb.
Robert: if 32 contracts were received, why is it still on the market? What's the point in changing the listing to say "32 contracts received"?
Razzi pulls off the gloves:
Handling Brokers' Boosterism: If a Realtor is going to offer an opinion about the market, there had better be data to back it up.
Tom and Arlington followers. heard interesting story about neighborly greed at a Saturday social do in nice Arlington neighborhood off George Mason Dr. near Virginia Hospital Center. I confirmed story with sales info. House at 1729 Harrison St (AR7011905)is under contract with list of $789,000. Seller was a nearby neighbor who bought it from a little old lady in May 2005 for $900,000 with the idea that he could flip it fast for $1 million. Best part is that the seller is a former major honcho at Washington Post who thought he could time the market. Second recent sale at 5209-16th St (AR6582272). The next door neighbor bought it from another little old lady for $851,520 in May 2006. Although the neigbors said the house was a mess, the buyer thought he could flip it for more money. He could not and it went to foreclosure and sold for $615,000 in March 2008. Sounds like people who did not know what they were doing, but does show some downward movement in Arlington prices.
Nova,
Do you not realize that it may take the bank a week or two to accept one of offers?
Remarks is just telling other agents not to bother.
Sheesh.
Va_Investor: It says it ended on 6/10. I guess they need to do that because realtors can't read?
Sheesh.
clueless....
Forgot to mention: In the Razzi article, she quotes Liz Giovaniello who works for NAR. Not only does she work for NAR, she is married to Jerry Giovaniello, the chief lobbyist for NAR. If they are not both cheerleaders for real estate, their household income will decline to -- well nothing.
bite me
"$900,000 with the idea that he could flip it fast for $1 million."
That is a strawman.
There's an art to "damping" the extremes and figuring out what the real trends are.
It is an amusing story but it's on the edge, like 3107 RUSSELL RD down the street.
3107 is overpriced, my opinion. It's not in a $2+M area.
NoVA, VA_invest,
Time out.
"That is a strawman. "
That is a strawman?
Did you mean to say "anecdote" maybe?
http://www.youtube.com/watch?v=G2y8Sx4B2Sk
Robert,
(1) It's under 200k. And as someone else said, 32 offers but no sale???
An aside, a long time ago someone suggested that being closer to Braddock road was a plus. I think you'll see by the closing prices that it's clearly a minus, either that or the THs are just crappier, which this one looks pretty darn depressing from the outside.
Renting next to Braddock road is a great idea. Buying there for the long term is a whole lot less appealing.
So, Robert you interested in the swarm of price drop notices I got this weekend? You can now get a two bedroom condo for under 150k. Desperation apparently just hit a handful of those owners/banks that have been listed all spring with no nibbles. It's June, do you know where you buyer is?
Okay, Cara. Interesting take on that.
Nova, Cara,
32 offers and no sale...
The offer submission date just ended on the 10th. If, in fact, that many offers were submitted (actually, in any "multiple" situation), the Bank is going to pick the best 4 or 5 and ask for "higher and best".
For all practical purposes, it's sold.
Va_investor,
Would you agree that it was easily cash-flow positive and hence likely to attract investors? (There may not be a ton of lee-way on that if it gets bid up).
Really my reaction boils down to, ugh, not interested in that particular property, and gee, what did you think was going to happen with a TH listed for $180k in June? What, did you think everyone was going to hold out for $175k? Of course it got multiple offers, it was cheap, and easily cash-flow positive if you managed to "win" it for the list price.
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