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Thursday, July 2, 2009
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85 comments:
Some "just for fun" listings:
http://franklymls.com/PW7015916
Architectural monstrosity. Especially note the three weird windows in one of the pictures. Bank took it over for $1,075,663 1/09. How can it be a "3rd party approval" sale when it's a foreclosure??
http://franklymls.com/MN7098749
This one's actually been for sale for three years, but somehow, today, it's showing up as a new listing. Had been asking $499K, wow, what a drop. Assessed for $295K. In a scary part of Manassas, just off Liberia. Who signed off on that design? The investor-owner lives in Vienna.
http://franklymls.com/21023643
The "one single male" is still trying to sell this house. At least he finally gave up on his almost $800K price tag this year. Most houses in his neighborhood have been selling for less than when they were purchased new in 2002-2004 since 2007.
http://franklymls.com/PW7050197
Personal satisfaction on this one. We put an offer on the house nextdoor last year, almost same model house. Asking price was $499K, foreclosure. We offered $417K, they pay closing. The realtor mocked us, the bank countered $479K + closing. I stayed firm, saying that we would be underwater in a year. Their realtor sneered at us some more. It ended up selling for $475K late in the summer, but I still held firm that $417K had actually been a high offer. Now those "estate" houses are selling in the upper $300Ks.
Hi Tabitha!
How did the move-in go? Still unpacking? We moved a year ago and still have all these boxes marked "MISC" in our attic-no clue what is in them.
The "scary part of Manassas" hood is my parents neighborhood, where I grew up. It used to be a respectable lower mid-class 'hood. Now no one will even use the elementary school. We went to the local park (Byrd Park) a few months ago and this random woman tried to steal my son's stroller! It was so bizarre.
My parents' assessment value is down to 170-something from a bubble high of 500-something (in Point of Woods) --they are understandably bummed. At least they live for free in a paid-off house, right?
Tabitha:
Is that first one a house or a hotel?
I especially like the builder-grade fixtures and appliances.
To me, this is an indication that the foreclosure tsunami is losing steam-
http://www.bloomberg.com/apps/news?pid=20601110&sid=aFGwYHbLzBX0
Global Recession
Starting in mid-2007, the most-senior classes of so-called non-agency securities began plunging with property values, helping spark more than $1.47 trillion in writedowns and losses at the world’s largest financial companies and contributing to a global recession, according to data compiled by Bloomberg.
Before the bust, the bonds typically traded at about 100 cents on the dollar. By March 19, prices for the most-senior securities backed by prime-jumbo mortgages had fallen to 63 cents, according to Barclays Capital, a unit of Barclays Plc in London. Bonds tied to riskier Alt-A loans with at least two years of fixed rates touched 35 cents.
Since then, bonds tied to the jumbo loans have risen to about 75 cents and the Alt-A securities jumping to 47 cents.
“It’s probably been the biggest run-up of my career,” said Sean Kirk, a trader at the New York securities firm Seaport Group LLC who has been in the business since 1990. Banks of all sizes bought more of the debt last quarter, he said.
NY Times
467,000 Jobs Lost in June; Unemployment Reaches 9.5%
The pace of job losses quickened in June after falling sharply just a month earlier...
Gnatman,
here was NPR's marketplace's take-away on that news.
AMY SCOTT: Mortgage-backed bonds have been blamed for kicking off the financial crisis. So you may be surprised to hear that big banks have increased their holdings of certain securities by more than 5% since April. Why would they be buying this stuff just as the government is trying to get them to sell assets? Leo Tilman has one idea.
LEO TILMAN: These securities are extremely cheap.
Tilman runs an advisory firm that specializes in risk management. Most of these bonds are still paying interest. And Tilman says some are trading at a 25% discount.
He says banks figure they can buy them cheap now, and sell them at a profit when the economy recovers.
TILMAN: Unless we go into a double-dip recession or some kind of highly adverse environment, they can probably capture significant price appreciation.
Banks may also be betting on a bump from the Treasury's public-private partnership.
The plan is meant to entice private investors to buy troubled securities. Linus Wilson teaches finance at the University of Louisiana at Lafayette. He says if the partnership creates more demand for the bonds, the banks could make a quick profit.
LINUS WILSON: It might lead to higher prices, maybe temporarily higher prices, and they could make money from that.
Wilson says the banks are taking a risk. They're likely buying the highest quality bonds. But mortgage defaults are expected to keep rising. Still, he says, by buying those risky securities banks are helping revive the mortgage market. The greater the demand for mortgage-backed bonds, the more likely lenders are to make new loans.
WILSON: That will make it easier for Americans to get homes.
The Federal Reserve says it's keeping an eye on what the banks are buying. In some cases it's even stepping in to make sure banks manage the risk properly.
Like all bets, it's a bet. Not all bets work out well, and if delinquencies rise and they're still holding these, it won't be pretty. I personally, think they're betting that government manipulation will raise the price of these assets and then they'll sell them for a profit. Seems like speculation to me. Which seems like the opposite of stabilization.
How can that first place only have 4 bedrooms? What is in all that space?
Meshell,
Thanks to my husband taking lots of leave, we are just about, almost done, which amazes me, because for a while, our garage looked like that scene at the end of Raiders of the Lost Ark, when the Ark is getting stored in the warehouse. And while it feels like home, I still pinch myself every morning. The big projects now are sanding and sealing the deck and getting the puppy to stop chewing on the cats and the rabbits.
Point of Woods is slowly clearing out, but I only go to Byrd Park when there is strength in numbers. Even then, there is usually at least one creepy guy staring at my kids vacantly...or not so vacantly.
I'm sorry about your parents' house. Our old house in Cavalry Run was just as significantly gutted in value.
But I am still wishing vengeance on my last landlord, who hasn't given us our security deposit back--hasn't talked to us at all. But here's the plan: we're going to send him a thank-you card, saying we really enjoyed living in the house, and giving him our new address again. Because it's been more than 45 days since we moved, and the best we can tell, a Virginia landlord has 45 days to inform his tenants that he is keeping their deposit, and why. If he doesn't, he can't keep the deposit, and if we need to fight him for it and he loses, he pays attorney fees on top of that.
But I'll wish him luck selling his house next year, "when the market turns around."
Ugh. I worked at a landlord-tenant legal clinic during law school and VA law is so landlord-friendly. I have heard so many VA landlord horror stories. I honestly think a solid chunk of VA landlords assume they can get away with keeping the security deposit. I bet he already spent it on the assumption that he could ding you for *something* and get away with it.
Those are hilarious Tabitha.
Monstrosities all. I've seen the "third party approval" on REO's before, perhaps it's the second lien holder who still has some say? Or maybe they just mean the bank itself, and that the management will take a while to sign off on any deal.
Good call on not budging on that previously $475k place.
Michele Singletary is hosting a discussion at noon today with that NY Times reporter who wrote a book about getting in way way way over his head on a house in MD if you want to pipe in.
I don't know if it is just a matter of how long I've been looking now, but I am starting to see more and more flips. Here's one that was up earlier in the year and had a mold problem. Sold for $237k, now up for $398k.
http://franklymls.com/FX7099108
Speaking of architectural gems, here is one in Arlington:
http://franklymls.com/AR7095330
It's described as "newly renovated," but the lack of trim around the upper left window says otherwise. Notice the contrasting styles of the main house and the enclosed porch. What a masterpiece!
Fred,
Is the "addition" actually new? It doesn't appear on the tax records.
I love that they did all this work but didn't take any pictures.
Cara-
I'm sure she will exercise editorial control over any critics. Blech.
JohnF-You found my dream home! Chain link fencing just adds that certain special something. The listing says it was sold in early June for 232k--a flip? Can't see where any work was done to the outside...
Meshell,
Yeah, I tried to word my comment as delicately as possible. But I just asked, areyou still in the home, have you heard from the bank yet?
And then went on to describe the "shadow inventory" question, and said something like, "since your house is amongst those that should have been available for others' to purchase long ago, I'm curious as to how long it's really taking". Hopefully that's subtle enough. It's honest. I mean, he knows he could never afford that mortgage, or even any reasonable house in the near-in DC suburbs with the alimony he's paying.
I saw this comment on bubblemeter and laughed.
"The real rich live in small houses and drive 10 year old american built cars. Go read the "millionaire nextdoor.""
Does a U.S. built 10 year old Corolla count?
I'm not rich; I'm just a poser.
Cara,
You are too polite. Raised in the midwest, right? :)
I want to know about his wife declaring bankruptcy after they were living together to get out of paying back her own sister as well as other creditors, and how he feels that info is not relevant to their tale of financial woe-is-us-big-bad-banks.
100 year C-S chart
long way yet to go for the nation's housing...
Meshell,
yup. raised in the Midwest of north-east stock.
Cara, I'm glad you asked that question. That's what makes me mad about the situation -- I'm pretty sure if I stopped paying my rent I would hear from my landlord a lot sooner than 8 months. And his home should be available for someone who can afford it. His case isn't just one of bad timing of buying at the peak -- I don't think he could afford his house at its 2009, either. So there's no reason for the bank to delay with him -- he's not a candidate for a loan modification.
Anon412,
you should submit the question too. If a lot of people ask it, I'm sure they'll pick one version to get answered.
Cara,
Nope. Check out the prior listing (it actually has pictures): http://franklymls.com/FX6943479
Two things strike me - one is that they are using the exact same main picture. Two is that the place looks like it could probably clean up fairly nicely. There is room for profit for people with the cash on hand and ability to flip. Of course the big question with this one is whether the mold remediation was done correctly.
Done. :) I kept it short and sweet:
Hi Mr. Andrews,
In your article you stated that you hadn't made a payment on your mortgage in 8 months, and that you had yet to hear from the bank. I'm curious as to whether you've heard from the bank since then. If I stopped paying my rent, I'm pretty sure it would be less than 8 months before I heard from my landlord.
I was going to go on, but then I figured that that was good enough to get my point across.
Fred,
hmmm.
There's no question that flipping can work if you buy low enough and keep costs down, because the move-in ready premium is big.
My guess is that it's still a work-in progress. If they're taking out the extra kitchen downstairs, and putting in anything nicer than the faux-granite upstairs... Hard to say.
Anon412,
nice. perfectly to the point.
One thing I always find striking about the 1890 C-S graph is that houses appear flat after adjusting for inflation.
I would have expected houses to move more with wages than inflation. If for no other reason than the fact that as wages go up people buy much fancier houses. I am pretty sure that he is using the average house for each time period.
NY Times
bar entrant barred for student loan debt... bizarre tale, read the whole thing.
housebuyer,
Case (or Schiller) himself says that houses appreciate with wage-growth. And it's an "index" so is distilling the full distribution down to one number. My guess is either this graph is indexed to wages not inflation, or that minor trend you can see underlying all the bumps since the late 40's is the wage growth after inflation.
Cara-- every time I look at that 100 year Case-Schiller chart I see that 20 year drop in values-- way below long-term averages-- and thing, "Hmm..."
Anybody have any speculations about what could have caused that? My guess it was sparked by the huge spike in the death-rate caused by WWI followed by the great flu epidemic. Then it tried to return to long-term averages in the 20's and got caught in the Florida land bubble-- followed by the Depression and WWII.
Makes you think about long spells above or below the average and what it might do to people's expectations-- and behavior.
Cara-
I think that it is Shiller that does most of the talking. The graph says that it removes inflation to see how housing would have done as an investment. I have a hard time believing he could be taking out wage growth with the comments on the graph.
You are probably right that since the 1940s the slight upward trend is due to wage growth. If this is true their final point looks a little pessimistic, but probably only by 10 points or so.
It would be interesting to see what moving the minimum down payment from 20% to ~3.5% has done. I would imagine this could cause a structural change in housing prices where (for better or worse) they move to a slightly higher average, because people can afford higher payments, but don't want to wait years to save 20%.
I think most of us on this board are good savers so we would rather you need 20% down, but the fact is it is unlikely the government will change FHA rules for a very long time.
Sarah-
I don't know if it is true or not, but Shiller claims that they fell due to learning how to mass produce houses and they came back up because of the post war demand. I would trust he has done enough research that his guesses are at least as good as anything we could guess at
housebuyer,
You would think it would cause an upwards shift, but I'm not sure by how much. Reason being, except in instances of price run-ups, low down payments mean low move-up equity. Which may translate into longer hold-times but also less demand for move-up houses and less price support for them as well. Also in normal times less than a third of buyers are first timers (from memory, that could be quite a bit off), and still only some of them use FHA...
So, yes, I do expect a secular shift up from the greater widespread knowledge of the availability of low-downpayment loans, but not more than say 5-10%.
Cara-
I agree I wouldn't expect more than ~5% increase due to this. However if you look at the long term graph and take trend we said was due to wages and add 5% of that you could easily see the "fair value" of the index as ~125. With the 8K buyers bribe(about 5% of the median national house), and low interest rates you might even say houses are fairly valued.
I definitely do not think they are undervalued, but the case they are clearly overvalued is not that strong anymore(particularly if you can get a good deal). Although during busts things tends to overshoot fair value and go to undervalued so I would not be surprised to see prices fall another 10-15% nationally.
Housebuyer-- Thanks, that makes a certain amount of sense. I suppose this is in the cities, where you would expect that to apply. Of course back then the vast majority of people were living on farms, often in houses they or their predecessors built themselves, so it wouldn't be easy to capture 'house price' from the whole land and farm price.
As for prices tracking wages-- they probably have tended to, but I don't know if it necessarily is so. In that depressed period, for example, surely people would have been spending much less of their income on housing, and of course we know in the bubbles they often spend much more than average-- or even more than they can sensibly afford.
Elizabeth Warren in her Berkeley lecture makes a very strong case for the idea that the current generation is spending far more of its income on necessities than the previous generation and that, rather than any lack of frugality, is what was driving the precipitous decline in savings.
Following the chat now, my head is about to explode with the questions they've selected. Also Mr. Andrews admitted he took 5 months off from his job without pay to write his book. Words fail me.
WHY DO THEY KEEP TALKING ABOUT SHOES?!?!
But, okay, at least we find out what's going on with his mortgage:
Edmund L. Andrews: I agree. I am in discussions right now with JP Morgan Chase, my primary lender. They have made an offer to refinance my loan at a rate that would top out at 5.5 percent.
I don't think we can manage with that, so I am asking them to consider reducing the principle amount of the loan. Banks hate to do this, but they also want to avoid foreclosure, which can cost a lot more.
I don't know how this will work out for us. But if you're in a jam, there's nothing to lose in trying to negotiate.
housebuyer,
130 would still be above the two previous peaks. Both of which had FHA loans. (with way lower limits than today, but still). So, while maybe 120 might be supportable with continued and sustained governmental "intervention" anything higher than that is implausible, even without the expected overshoot past fundamentals (and decreased incomes from the sustained unemployment).
And if anyone's in need of entertainment there's a new housing bull over at the irvinehousingblog. She's been there the past 3-5 days. Prolific.
http://franklymls.com/FX7056925
The market has decided that the going price for a semi-move-in ready, but good boned, normal sized TH in Burke near the VRE is $270k, doesn't matter what you list it for, it will get bid up to this.
REO list $230k, multiple offers, no subsidy sold price $270k.
Note to sellers in the starter home market: Right now? List more than 20k over market price and risk sitting for months, list as much as 30k-50k under market and buyers will bid it up for you. It's impressive this is like the 4th or 5th 270-275k TH I've seen close in this neighborhood. It's just the going price.
Cara-- every time I look at that 100 year Case-Schiller chart I see that 20 year drop in values-- way below long-term averages-- and thing, "Hmm..."
Anybody have any speculations about what could have caused that?
Income taxes started in 1913. So did the Federal Reserve. I think the sinking of the Titanic in 1912 is considered to have ended an age of opulence (perhaps more in England than here?)--although I would have said the Gilded Age, but wiki says the Gilded Age ended in 1890.
The country was actually pretty poor in those years, even before the Great Depression. The New Deal and war spending/jobs, plus municipal water/sewer and better medical care brought in the large middle class more or less permanently after that.
Cara-
I was assuming that wage growth continued above inflation. The last bubble ended 20 years ago so I figured this could give 5ish points. I also figured the very low rates right now could give another 5 points. I clearly have no math supporting any of this and I do expect some overshooting. So in reality it could easily fall 15%. The question is does it do this by falling rapidly like it did during the last year or does it get there by having housing prices stay flatish for 5-10 years. If it is the second there is no reason not to buy now and get the government aid. If prices will fall another 15% you are obviously much better off waiting an extra year.
housebuyer,
FHA is a New Deal program. So it's been around a while. Also post-WW2 a huge portion of homebuyers in the suburbs were veterans using VA Loans. So we've long had a lot of buyers using loans that do not require 20% down.
Note that FHA imposes a higher interest rate than a 20% down 30 year fixed loan. So people are penalized for not having the full down payment.
Also -- correct me if I'm wrong -- but a seller has to fill out paperwork to take a FHA Loan. So it's mostly new home developers and not existing home sales.
And there's long been people who put less than 20% down but paid PMI insurance.
The problem during the bubble was (1) piggyback loans eliminating PMI and (2) use of ARM loans that did not have buyers see the effect of not putting 20% down. Indeed, instead of paying more than the 20% 30 year fixed rate they were paying less for five years.
And of course another problem was that many of these buyers could not afford the ARMs once they reset.
housebuyer,
Nationally? If you live anywhere that had a bubble? Waiting another year is prudent. Why? because national unemployment is a lot worse than here, and national foreclosures and defaults will force prices to keep falling this fall/winter.
Here, I think it's a case-by-case thing. Out in Manassas, PWC, I see no strong reason to wait if you can find a house you love for a price you can afford and that is priced appropriately for the current market.
In Burke? It's all about interest rates. Prices this summer are slightly _above_ what they were last summer (for entry level housing), and I think that's clearly all about the interest rates. If you think interest rates are going to go back to 6,6.5% within the year, and you have a large downpayment, you should wait.
But if the stock market goes sour and the economy stays in the doldrums, interest rates can stay this low for a long time.
For non-bottom of the rung housing? I think waiting a year is still prudent. Stuff over $500k is not selling very quickly anywhere (that I know of) indicating a lack of price support there, such that while inventory may still go down, so will prices.
For me? Buying a "house" now would be an emotional decision. We want to, and we can. But having one more year's savings is probably worth it, even if prices hold steady. It's funny, I feel like I say this every year. One more year's savings and we'll be fine...
TBW-
Thanks for the history. I didn't realize that a lot of these programs had been around that long. In my mind I had thought that 20+ years ago people always had 20% down and now it was only recently that people started putting very little money down.
Just as a heads up the difference between a price loan and an FHA loan right now is only .1% or .2% The main difference is that in FHA you have to pay an extra 1% to insure it an PMI does not go away once you have put 20% down.
Cara-
I agree with all of your comments. I should have commented that my original comments about buying now may not be a bad time is mostly for houses under 400K. I totally agree that the McMansions are likely to see more downside going forward than 1500 sq. ft. appartments
Housebuyer...Old age tells me bubble bust depreciation is in the first 2 years..So, if your target area has already been slammed, like me, on assessments. It might dribble down 3% next year before staying flat for years or jumping 3% next year..In my house I saw 10-17% YEARLY Gains and LOSSES between 2004 and 2009..wow..can you say see-saw. If I took it as serious as some, I'd have a serious drinking problem. 20111 was slammed in 2008 (13.5%) and 2009(17%)altho we started dropping in 2007(4.3%).
housebuyer,
I've attempted to figure out what percentage of homebuyers put 20% or more down but not having much luck finding the numbers. My guess is it's lower today than say the 1980s but higher now than it was 2000-06.
Interesting tidbit: PMI was introduced in 1957
Down payment article
So if we see a bump in home prices around then that might help your theory about lower down payment requirements increasing average home prices.
the distinction then and now on FHA is the rapid expansion of the loan limit.
http://www.hsh.com/fhamax2001.html
The ceiling in 2001 was $219k for high-cost areas. Compared to over 400k now. Quite a difference.
FHA minimum loan amounts ("the floors") are limited to 38 percent of the maximum loan limits used by the Federal National Mortgage Association (FNMA, or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac). FHA maximum loan amounts ("the ceilings") are set at 75% of the FNMA/FHLMC loan limits.
Technically in our area the FHA limit is $729k, FHA limits but I here anecdotally that lenders are not abiding those limits and sticking to the old terms (presumably to avoid having homeowners who can't refinance and can't sell to others of their ilk once the limits change back).
Cara,
Interesting. Having such a high loan limit for a program aimed at moderate borrowers and first time buyers seems a bit silly.
Although still an improvement from the days that immigrant couples making $50k combined income were approved to buy $600k McMansions in Woodbridge with no money down. ;)
Cara/housebuyer,
My point in all of this is that I think some of these lower down payment programs are not really affecting home prices. Instead they just cause silly people to part with more money over the life of their mortgage than they would if they waited a few more years to buy.
I think the $8k bribe, FHA, and low interest rates are just slowing down the recovery.
To me the nonsense were loans that made absolutely no sense. People that no one could reasonably have believed could have afforded the mortgage after the ARM reset.
The other problem was expanding stated income loans from self-employed professionals (dentists, solo practitioner lawyers, small businesspeople, psychiatrists, etc) to letting anyone do a stated income loan (causing them to become "liars loans.")
Actually, I've read one problem we now have is that many reliable, well to do professionals who run their own business now cannot get a stated income loan even though they are totally creditworthy and deserving of one.
Scott-- I don't think that probably accounts for it. Though it's certainly true there were a lot of poor people in the 20's, I don't think you can argue that they were suddenly much poorer than most people in the 1890's. And I believe long-term mortgages (20 years or more, as opposed to say, 5) began to be widely available for the first time in the 20's, so if you accept the arguments of many here that monthly payment matters, you'd expect that to increase housing prices rather than depress them so suddenly and dramatically.
Certainly you are right that it was the post-WWII prosperity that brought housing prices back up-- and have kept them that way since.
Cara-- I'm sure it feels that way, but after all you aren't just sitting around waiting for prices to fall, you're actively looking. Right now it really is pretty much the bottom of the barrel that is finally priced reasonably. Of course anything can happen, but the chance of things suddenly shooting up so much that you'd kick yourself for not having bought now are, I think, pretty minimal. And even if that happens you'll probably still be better off having waited and being able to put more down.
Tab posted
http://franklymls.com/PW7015916...I live closer to my work than the front door of this prop is to its gate...
http://franklymls.com/MN7098749 $500K for this in where?? wow...remind me again that the fiscal quarter ended june 30th....looks like some company's execs may be fluffin the books to fluf their bonuses....what co owns this prop??? looks like there may be a real story here
http://franklymls.com/PW7050197...tab any gueses on if the SS prop will accept $350 for this prop (one close to where you put an offer)
tbw
"I think some of these lower down payment programs are not really affecting home prices. Instead they just cause silly people to part with more money over the life of their mortgage than they would if they waited a few more years to buy."
Ding, ding, ding!!!
"Actually, I've read one problem we now have is that many reliable, well to do professionals who run their own business now cannot get a stated income loan even though they are totally creditworthy and deserving of one."
Yeah, I'm vaguely worried that my friend up in Rockville, once she finally manages to sell her house, won't be able to buy what she wants to buy up in Boston, because of this. She didn't have a "stated income" loan, it was well documented, just not in the most simple and straightforward manner. And she absolutely refuses to let them see her tax returns, because there's lots of money on their that she doesn't want used as justification for the loan. But first, she has to find another lawyer to buy her house.
I really enjoyed this comment.
Michelle convert!: Hi, Michelle--
I have been a lifelong saver, but your columns and chats have helped me realize there is still so much more I can do to cut back and live with what I need (plus a few wants!). I found a way to work that take, literally, just 5 minutes more but saves me from taking the Dulles Toll Road. I had colleagues who laughed at wanting to save what amounts to $50 each month, but that goes up when tolls double in January. I am putting half of that extra $100 in my IRA, half in my daughter's 529. Every bit helps, and making choices in one area motivates me to make them elsewhere :)
Michelle Singletary: Thank you. And you are right every bit helps. You can't have a dollar without a penny!
Ridiculous that her co-workers would make fun of her. At five minutes it totally makes sense to take another route. Now, not paying the toll but having an extra 15 minutes on your commute makes no sense.
"But having one more year's savings is probably worth it, even if prices hold steady. It's funny, I feel like I say this every year. One more year's savings and we'll be fine..."
I totally agree with you Cara.
But I'm old like Arkey & went thru the Texas 80's RE Crash & know that took 10 YEARS to recover there.
Of course, DC is "different"
has all the jobs, will weather the recession better, has all the money et al.
As more foreclosures & shorts become the Comps for neighborhoods, we will continue to see a slow decline in higher end properties (especially in PWC, Loudoun,Faquier, etc)
Bottom line - there aren't that many people pulling down the 150K salaries that want to live in Aldie, Va....
spunky, all,
We are going to be such a boon to the economy when we finally do buy though.
It's gove from, we could get an FHA loan, so long as interest and PMI and Taxes are less than rent, we'll come out ahead! (2006, not seriously looking)
Well we could buy with 10% down. No reason why not. (2007, only junk with terrible commutes available at our price range)
Okay we'll wait til we have 20% down, because prices are crashing anyway (2008, looked in Kingstowne, decided we didn't like what we saw for those prices)
Hey we have 20, plus closing costs plus a little extra we could buy now if we want to (now)
To, we'll have well over 30% saved up, we'll be able to buy, replace all the flooring, all the appliances if need be, get the tankless water heater, a treadmill for me and an eliptical for my husband, all new window treatments, some new pots and pans, and stuff for the garden...
Though, I can't imagine us spending it all in one go.
TBW-
My guess is that it is actually a bad idea taking the new route for 2 main reasons.
First if it is 5 minutes longer each way it probably isn't saving much money. It is probably a couple miles longer each way and when you count gas, maintenance, and deprecation you are paying 30-50 cents a mile so you really get little savings.
Second, the least healthy thing most people do during the day is sit in traffic. The air quality is very poor even with air filters in your car. You are basically sucking in toxins from the cars in front of you. So between saving very little money and having detrimental effects your health I am not sure its worth it.
Cara, I'm sure when you buy, it will be the right time and the right place. I've actually been paying attention to trustee notices and Fairfax appears more often than PWC. I've even seen quite a few for Burke so I don't think you are taking much if any chance by waiting or I would say so even if Kevie salaviated and frothed for 3 days.
Thanks Arkey.
I'm not as sure as others here that prices in my bracket will actually go down, because they do mosly make sense with rents (even at 6% interest), and while REOs exist, as do short-sales, they aren't totally dominating the market. But I do think there will be the continual dribble of them that will keep prices at these levels for some time.
So now it's all about stubbornly saving for a little while longer, and then patiently finding the right place for us.
Homebuyer: I believe the FHA upfront mortgage insurance premium is now 1.75% and that you cannot apply to have the insurance removed until you have 22% equity in the property. Most lenders have a two tier systems for FHA loans: the better rate is for a mortgage of $417,000 or less and a higher rate for mortages between $417,000 and $729,750. Little historical note: the first FHA insurance was issued in 1940 for a house in Arlington's Lacey Forest neighborhood off Washington Blvd.
"I found a way to work that take, literally, just 5 minutes more but saves me from taking the Dulles Toll Road."
My guess is this new route involves swinging by the Dulles Airport before taking the access road (illegally) instead of paying the toll.
In news of the patently unsurprising:
WaPo Credit Card Issuers Raising Rates Ahead of New Law
Credit card companies are raising interest rates and fees seven months before new rules go into effect that will limit their ability to do so, much to the irritation of Congress and consumer advocates.
Chase, for instance, will raise the minimum payment required of some of its customers from 2 percent to 5 percent of the statement balance starting in August. Chase and Discover have increased the maximum fee charged for transferring a balance to the card to 5 percent of the amount, up from 3 and 4 percent, respectively. Bank of America last month raised the transaction fee for balance transfers and cash advances from 3 to 4 percent. Card issuers including Bank of America and Citi also continue to cut limits and hike up rates, which they have been doing with more frequency since January.
"This is a common practice and will continue to be common, because issuers can do these things for really no reason until February," said John Ulzheimer, president of consumer education for Credit.com, which tracks the industry. "It's what I call the Credit Card Trifecta -- lower limits, higher rates, higher minimum payments."
hoocodanode?
anie-
Thanks for updating my information to make it more accurate. I didn't realize that you could apply to get the insurance removed when you had 22% equity. I thought that was one of the disadvantages of FHA loans.
Cara-
Its funny how mad government officials are the the banks are giving people lower limits and making them have larger minimum payments. It might hurt in the short term, but it really is the only way to force people to not hang themselves with debts.
Also I apologize if I offend anyone with this comment, but I don't understand why people can't figure how to pay their cards on time. I know many people with money in their bank accounts, but they have bad credit because they miss payments. Why can't they figure out how to use things like auto bill pay...
housebuyer,
My husband has an auto-bill pay it's called me. It doesn't matter if he doesn't deposit the savings into the savings funds all that promptly, but it's funny, he's always prompt about that. Gee, I wonder why? Not quite so vigilant on the bills, which is why that's now my job.
Before he had me, he used to have the auto-pay set up for just a fixed amount and would end up overpaying to his cards all the time. That drove me batty too.
See JF, you don't really want the other attributes that come with my thriftiness. It takes a strong man to be as humble and open as my husband.
Buck--
The one on Crider Court could definitely sell for $350K. The last two sales on that culdesac were for $316,900 (REO that had been stripped) and $360K last November (short sale in fine shape). That whole street is going to change hands, I just know it.
housebuyer,
First if it is 5 minutes longer each way it probably isn't saving much money. It is probably a couple miles longer each way and when you count gas, maintenance, and deprecation you are paying 30-50 cents a mile so you really get little savings.
I knew someone would argue this. First of all, I doubt the difference in the commute is miles. Probably 0.25 miles max if it's really a five minute difference.
Let's say she works 21 days per month on average. If her estimate is correct that after the upcoming increase it's $100 per month that is $4.76 saved per day ($2.38 each way).
So even using the IRS mileage reimbursement rate of 55 cents per mile we get 13-14 cents for that quarter mile.
And I'm not even convinced there's a marginal maintenance/depreciation cost for that alternate route but she still comes out way ahead even if I factor that in. $2.38 - .14 = $2.24 savings each way times two = $4.48 each day times 21 work days = $94.08 per month.
Sorry if this was discussed before but have we discussed the gov't U-6 unemployment measure?
As job losses accelerated in June, the unemployment rate ticked up 0.1 percentage point to 9.5%, the highest level since August 1983.
But another more comprehensive gauge of unemployment also continued to tick up. The government’s broader measure, known as the “U-6″ for its data classification, hit 16.5% in June, 0.1 percentage point higher than March.
Broader Unemployment Rate Hits 16.5% in June
Here is a little historical data on it. Given that U-6 was bad during the 2000s (even the boom years) it helps explain why the gap between the haves and have nots expanded:
Okay, so exactly how bad is that from a historical perspective? Pretty bad. The BLS began reporting U-6 in 1994; in January 1994 the U-6 rate was 11.8% and then steadily declined before reaching an all-time low in October 2000 of 6.8%. During the ensuing recession/bear market U-6 peaked at 10.4% (Sept 2003) until the credit crisis took hold in 2008. The U-6 rate hit 10.9% in August 2009 August 2008 and has been on a rapid climb ever since; over the past year it has shot from 9.8% to today’s 16.4%. It sure makes it hard to buy into the green shoots theory just yet.
Unemployment Numbers May Be Worse Than You Think
Tabitha, 10338 Bear Creek Dr. went U/C contract today..It was another double wing like on Trappers that sold..2 men and a truck moving them out today so it looks like they are a go..it has a "lap pool"..listed for 558,500 and I'd bet it sold for close to that(old wall paper to boot)..I'm not sure what the one on Trappers (599,900)sold for. I'm a center hall not double wing.
housebuyer,
Using mapquest I ran Ashburn to Tysons Corner and the number of miles actually was lower when you ask it to avoid tolls (so Rt 7 instead of 267). I imagine 267 than Rt 7 is quicker so it's just a "how valuable is your time" thing.
Also ran some DC to Tysons and DC to Reston routes. DC to Tysons shorter mileage non-267 way (yes I picked an ending area near 267). DC to Reston Town Center (practically hugging 267) -- non-toll way is an extra 0.74 miles.
I cannot imagine that poster lives anywhere where the non-267 route is extra miles.
Arkey, I am most curious to learn what those houses settled for/sellers concessions/etc. Really, your neighborhood has held remarkably steady through it all.
Tabitha..believe me..I'm keeping my ear to the wall..it does effect me you know..those are both "healthy" sales and will impact my next year assessment..there is one more on Chinkapin .. it has the same layout, different builder, that is in better condition than 10338, also a healthy sell...both of these homes are empty and sellers not around..drats! I'm assessed lower than those houses because I paid so much less for mine. That's another thing lower ballers need to keep in mind..you set your market value when you buy and you are assessed using a formula of pertcentages based on what you paid.
Tabitha..Bear Creek has been considered the best place to live since it was built. I'm serious. There have been quiet a bit built since Bear Creek was developed but this isn't a track neighborhood or a one builder development. It's private and parklike and I believe it to be unique place to live. The kids here get the best teachers, too..and..trust me, you call a council member and you get THEM calling you back. I did one message complaint on snow removal..and gosh darn..was it fixed..boy was it fixed even the state called me to see if it was fixed..thats the kind of neighborhood it is.
Arkey,
If Bear Creek is universally known and beloved, why did you have to yell in the comments to get it noted in this profile of the area?
Spring Hill VA Community Profile
My 3 year old loves that toddler waterpark in the Signal Hill area, but I have to say the clientele there is pretty down-market. I think I was the only mom there without a tattoo, and there were so many very young parents. Strange to see when we are used to the demographics at our Arlington parks--which skew way the other way into the "Is that your dad or grandpa?" category.
At the Signal Hill park, I saw a woman take a tiny newborn (could not have been more than 2 weeks old) into the toddler pool. Oh god, the germs. And the chemicals on newborn skin. Ugh. And there was this other woman feeding her little baby (very young, like maybe 5 months) those potato chips shaped like French Fries and chocolate pudding. And when we were leaving, there was a car pulling in full of kids and not one carseat. I thought I was on candid camera, the parenting edition.
I guess no one from Bear Creek goes to this pool ;) .
Meshell--
I have yet to try out Signal Hill, because I hear my fellow water-lovers are not the most elegant folk. Your stories had me laughing and crying at the same time.
We have done Splashdown, and I never cease to be amazed at the percentage of people who A) Wear their clothes as bathing suits and B) Wear bathing suits that are not compatible with their body type at ALL. I end up needing to have long discussions with my kids, due to their questions about other folks' clothes/language/behavior.
But y'know, the challenges of such outings pale in comparison to those when we mingle with the Arlington-type crowds. I must confess we probably fit in a little better with the chaotic and the coarse.
TBW, I don't yell. I just asked because why in the world would they mention EP and not Bear Creek unless they or that particular realtor just isn't that familiar with this areas housing options. A good realtor knows the area they are selling in. But most here don't think realtors have much value and I do. We bought here coming in from out of state. We had a realtor out of Arlington BUT he had 30 years of expereince. This is a hugh area and impossible to be familar with everything.
Meshell, I go to the pool everyday. Since I maintain it. Its right off my deck and you are right I haven't ever been to Signal Hill Park. Now, what is up with the slams on tatoos? I would understand it if it was me saying it. I complain all the time about these young girls getting tatoos and big ones to boot. It certainly isn't limited to PWC that's for sure or the coarse behavior. Working for the Gov is great in that I get to keep a running snap shot of young people from across the US here on field trips. They eat in our cafeteria and believe it or not I have actually seen better dress, hair, attitude in the last couple of years. The absolute BEST kids are from the Baptist Schools.
Cara, ok, I just can't resist adding this unsolicited advice when you mentioned buying new appliances if need be.
I can't imagine you would do this, given your careful money management, but I'm just reacting to the young couples I see on HGTV who go in and replace probably perfectly functional white appliances with cooler-looking stainless steel ones.
What a waste of money for questionable aesthetic improvement, #1.
#2, newer appliances are much less reliable than the older ones (much less expensive in real terms too but maybe that's the cause-effect relationship). I have had one problem after another with several appliances in the past few years, for example, have been through 3 dishwashers (old GE, a $900 Kitchenaid requiring 7 repairs, now a GE again) in this house in less than 10 years.
In contrast, in a prior house, I had a dishwasher and refrigerator-freezer that eventually died after nearly 20 years each and needed no repairs during the 8 years I had lived there.
Meshell: You should report those Signal Hill park mothers to MONA. They would be there as quickly as possible slathering the kids with sunscreen from Whole Foods, threatening to sue Prince William County if they did not provide car seats and coming up with homeopathic remedies for tattoo removal. Tabitha: if you lived in Arlington, you would run screaming in the opposite direction from the MONA moms and their highly hands-on parenting.
Anielarke...thank you and that was funny, too. Nothing like Arlington residents using PWC facilities and being snooty about the patrons that pay the taxes to support it.I lived on Arlington Ridge Rd and when we came back to the area I knew Arlington wasn't for me or where I would want my son to live or go to school.
Ace, I bought a Bosch a few years back. I highly reoommend them. I wasn't familiar with them when I bought but man oh man..you talk about a great dishwasher and quiet, too.
Ace, Arkey
Good advice. A Bosch is definitely up there in the short term on the list of things I want. And we'll need to replace the stove if they've put in a flat-top, because we use cast-iron all the time.
There was this one place last year that made me go, I want it, I want it! Just because it still had the original avocado appliances!
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