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Monday, August 31, 2009
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57 comments:
This is a really funny listing to me.
http://franklymls.com/DC7089995
"Exceptional 3BR Brick TH With Income Generating Separate Fully Furnished Completed English Basement Rental Unit. Quiet Street, Mature Trees, Fireplace, Garage, Custom Built Decks, Garage More. Its All Yours For As Little As $3367/Month with 3.5% Down Special Govt Monthly Cash Back Incentives.Rental Unit Gives You An Additional $1100/Month. Call 24 HRS 800-869-1490x152."
The language reminds me of car dealer cash-for-clunkers hucksterism. I wonder if we'll start to see a lot of this as the Dec 1 deadline approaches.
But also, with what kind of loan can you have a monthly payment of $3367 on a $900k mortgage? Not any kind of loan that's still around that I'm aware of.
And then there's the price. They're asking $900k, although they were originally asking $850k and then *raised it.* Tax assessment is $825k, which is also absurdly high. They bought in 2005 for $720k -- not sure if they did renovations. I don't know this neighborhood that well, but I'm thinking $650k tops.
My husband and I saw some houses this weekend.
http://franklymls.com/FX7146194
This house was "professionally" updated. This was a flipper who cut as many corners as possible. Cheap countertops, some new paint and carpet, they didn't provide a washer and dryer, half the basement has unusable space as you can see in the picture, they didn't even put in new tubs in the outdated bathrooms.
Also saw this one:
http://franklymls.com/FX7144308
This is bank owned and is in terrible condition. The floors are burnt; the kitchen is a mess; some bedrooms and closets have holes in the wall; they made a sunroom on top of where the deck was, virtually eliminating the backyard so the real land is in the front yard with no privacy; the walls had graffiti that had maybe one coat of paint over it; the garage was converted into a strange room.
Not to mention ... 3.5% is FHA. You can't do $900k with FHA. Maybe they're just admitting that the list price is meaningless and you'll actually be buying the house for less than $700k.
So I wasn't crazy in thinking that $650k would be about right. This is a similar house a couple blocks away lited for $679k.
http://franklymls.com/DC7127529
Anon412,
That would be an I/O at ~4.5%. On a jumbo loan for a dual occupancy property. Yeah right.
It is extremely humourous. At least they're trying to break down the costs for you.... Very car-dealer like.
MJC,
those are depressing.
They must be saying that is is 3367 a month once you count the 1100 you get in rental income. So they are probably saying the mortgage will be 4467, which still sounds low for a 900K house particularly if you count tax and all sorts of other things like that.
Cara,
Yeah, "Its All Yours For As Little As" is so cheap to me. I think I could be fine with that if it were for a < $200k foreclosure, but when you're trying to sell a nearly MILLION dollar home, you'd think they could bring a little class. :)
MJC, maybe I'm crazy but from the pictures I think the first one looks fine. I'll take your word for it that it's cheaper than it appears on the surface, though.
housebuyer,
Nah, taxes don't count, insurance neither. And heck the principal portion of your mortgage payment is your personal enforced savings account. So, $3367/month in interest payments is obviously your only real "cost" of ownership for this beauty.
(getting heavy deja-vu)
Housebuyer, yeah that occurred to me as well. But you're right, the #'s still don't work out because you'd have to have a 5.0% interest rate and interest rates are still a lot higher for jumbos I think.
Madcap's flipper special:
http://franklymls.com/PW7097431
I find it funny how an investor in Dale City bought this property for 109k (the atrocious surrounding properties nevertheless) and now has the gull to flip it for 80k more.
I did a walk-through of this and inside is spacious and clean with Bombay floors, but no where near 20k improvements much less worth 80k more!!
No garage,comp analysis provided by zillow shows the investor is either extremely patient or ignorant. Real estate agent, peppered me with pressure (he is considering offers) straight bull. And the gull exists to demand his lender--maybe "fool's property of the month"
Anyone second the nomination?
What also hurts the property is poor schools and as mentioned before horrible comps.
MJC, regarding your posting, I checked your properties. One would be high to bid on them when, comparable priced townhouses get you way more space, amenities and peace of mind.
I cant believe they didnt even update the kitchen on the last one.
Donovan,
With regard to the bank owned property, the bank did not update anything which is why it was being sold as-is, and was in such bad shape. You can't get a 4 bed/4bath house in Dunn Loring for $459K, but there's a whole host of other problems with purchasing that property that would make it not even worth it.
The one that was professionally updated was just an example of a flipper doing the minimum necessary to get the most profit. Flipper bought for $308K in March and is listing it at $535K in August. He could not have put more than $40K into the house, and I'm being generous. We didn't care for the lot because the backyard slopes upward, which means when it rains, the rain drains down towards the house.
I really hate flippers. Profiting off of a downward market, beating out normal buyers, then driving up prices with their greed houses.
Donavon,
And unless the pictures were taken of the wrong property it's not "brick-front" either... Odd.
What is the "Freedom Select Homes Program"??
And American Nationwide Mortgage, has as it's first entry under Loan Center, cash-out refinancing up to $250k.
Hmmm, great business model...
I think you all should post your house reviews on the frankly website :). Save other people the gas money of driving to see them.
Are those electric blue appliances in the Woodbridge townhouse or is it my monitor?
There are some sketchy apartment complexes right near there. Not a nice neighborhood at all.
Meshell,
That's the protective blue film that comes on some sort of stainless steel appliances. (I tried to keep it on my cell phone as long as possible...).
I'm not sure if non-realtors are allowed to comment on Frankly's MLS service....
Kevin,
If you hate flippers so much, then buy a fixer. Go out there on a limb. Jeez L Pete. You probably want "move-in", right? Take the chance yourself ot shut-up.
VA_Investor,
I'm referring to investors that win over other "normal" bids because they have financial leverage-> big down payments. They do $20,000 of "improvements" and list the house for $100,000 more. I'm more than capable of doing home improvements and am not looking for anything that's necessarily "move-in" ready, nor have I ever suggested such a thing, so fuck off.
Anon412, I've seen Realtor info sheets at open houses, where they subtract the income tax savings (usually assuming that you are in the highest marginal tax bracket) from both the P&I and the RE taxes, to arrive at the monthly payment.
The taxes are not insignificant for people in higher brackets, with a large mortgage. They definitely should be factored in (along with all other expenses of ownership, when someone is making a buy or rent decision). However, this should be spelled out clearly in the language.
Value question for FFX county:
What is a 2 car garage worth, vs the same house with a carport?
Anyone know a ballpark figure for building a 2 car garage? Setbacks and lot size notwithstanding (I'm aware of the 25' limitations, height, pipe step, overall lot, etc.)
The wife and I were only looking at garage houses, but this may expand our search a bit (if we can find the right place and deal).
Thanks.
Ok Kevin,
Whatever.
StayingPut,
It depends a bit on the availablity of garages in the area you're looking in. In Burke, where they are rare for TH's but reasonably common for SFH's, I'd say a carport is worth exactly $0.
A 1 car garage on a TH is "worth" $30-$50k, for a SFH? split-foyer's, split-level's with and without 2 car garages only seem to differ by about $30k? But that's partially because the garage is instead of living space.
These two are about the same timing, but the non-garage was in better shape:
no garage:
http://franklymls.com/FX7045091
$316k close
garage:
http://franklymls.com/FX7049315
$350k close
However, to an extent those are cherry picked. (I feel their trade-offs in location make them similar...) Other split-level/split foyers in 22015 have gone for anywhere from $276k to $335k lately. While I can justify some of the differences, there's a lot more individual choice issues than I can quantify. In TH's where garages are rare (in Burke) it's a lot easier to see and track the trend.
To go out on a limb, I'd say the maximum dollar value in resale of a 2car garage in middle-income FFX County is probably $50k.
here's a 'flipper' listing in Arlington:
"SELLER DECIDED TO REFINANCE.."
what does that even mean?
"OWNER IS A LICENSED RE AGENT"
oh, ok, never mind.
Ace,
Yeah I've seen realtor sheets like that too, but there they at least tend to list all the assumptions, loan amount, APR, term, taxes, HOA, estimated insurance, etc. Those I think are fine, and kind of vaguely useful for buyers who are just starting the process of looking to get a sense of what they may want to buy eventually.
MM,
humpf. I guess that's a "make me move" listing. No reason not to keep it active, because, well if anyone wanted to pay them enough, they'd be willing to sell... (even if they're unwilling to clean the lens of their camera or get it into focus).
goodness.
Anybody else noticing things slowing down? Lots of closed sales, but both fewer listings and fewer "under contract" notifications.
I think the summer frenzy is actually abating. There are 62 actives in 22015, only ~16 of them short sales (so no "shadow listings to speak of, Robert), well over half of them are over 30 days old.
Relevance to Kevin, spring/summer seems to bring out the move-in-ready demand. Fall/winter is more a fixer-upper time frame. Yes, you will always have to compete with all-cash or lots of money ready buyers, but I think there should be a lull soon, as there's not a lot of point in buying in September if it only takes 3 months to fix up a place, and January is a terrible time to try to sell.
1/3 observation, 1/3 hope, 1/3 prediction.
Not sure how reliable this website is but here is what it guesstimates for garages:
Cost of Garage
# Having a contractor build a standard garage typically runs about $35 -$45 a square foot. Contractors.com says the minimum size (enough to park a vehicle) for a single-car garage is about 240 square feet, or $8,400 -$10,800; for a two-car structure it's around 380 square feet, or $13,300 -$17,100.
# AskTheBuilder.com suggests that a "dream" garage with plenty of room for two vehicles (without having to squeeze to get into and out of them) plus adequate work space, lighting, ventilation and attic storage requires 800-850 square feet, at $29,000 -$38,000 or more.
# Upgrading the quality of materials can bump the cost to $55 a square foot, or $13,200 for a minimum single-car structure, $21,000 for a two-car garage and $47,000 or more for the dream version.
My guess is that our area tends to be on the higher side of national figures, however, you might be able to get a deal since most contractors presumably have less work to do.
The main issue I would think would be (1) is there enough lot space to build a two car garage and (2) will the house look weird with a two car garage. Many garages are built with the structure above it so if you have a two car garage off to the side it might look a little funky. Thus your two car garage project might morph into a two car garage + additional living space above project and then you are really shelling out cash.
Cara,
Makes sense. Impossible to close before the school year begins after Labor Day. So most families are done looking (and were done a while ago.)
It's also been a little rainy the past two Saturdays. Makes you want to stay in. And if you do go out the homes do not look as nice.
kevin,
Just because a flipper asks for $80k more does not mean he/she gets it. My guess is that many flippers are lucky to break even right now.
Cara,
Thanks.
Anon412: Since no one else is saying this, I'll pitch in to contend those are truly INCREDIBLE prices for that neighborhood. It is one block away from the city's largest drug dealing corner at N. Cap. and R.I. Ave., and site of some recent drug-related killings. I'm looking for very strong bars here, and I don't see them in that picture. It may have a rental, but whoever buys it is going to have a hell of a time getting anyone to rent it.
thanks for the info, tiredbubblewatcher. My parents enclosed a carport a few years back for $10k so I figured a new build would be around 20k.
We're looking at fixers, so a garage + inlaw suite or something might still be in the budget, provided that doesn't make us the nicest house on the block :)
Still looking, though. Ours goes on the market in 10 days or so.
Ahhhh....ye olde blurry photos. You'd think that by now, most amateur photographers would have learned the eBay lesson that good photos = highest selling price.
Good grief. I can't imagine someone being so lazy as to post a out of focus photo on a website listing a home for sale and think that's a professional listing.
(sigh).
Cara said: I'm not sure if non-realtors are allowed to comment on Frankly's MLS service....
Whoops. I've done that a time or two when we were looking to buy back in the Spring of this year. I commented on a few listings via Frankly MLS. AFAIK, you just needed to register to comment, unless things have changed. I haven't commented since Feb or Mar 09 but clearly remember putting a few choice comments on some listings that were...ahem...interesting.
Two hunnert and fiftay days ta sell:
http://franklymls.com/FX6904079
We looked at this one back in the Spring. I still think it's overpriced by at least 50K.
FWIW.
Texas Native,
Check out how much longer one of their neighbors had their house on the market: FX6457091. More than 500 days!
Some flippers are no better than scalpers, preying on the gullible and desperate.
Take this place for example:
Before:
http://franklymls.com/FX6774271
After:
http://franklymls.com/FX7062242
The latest owner wanted a $250k premium for new paint, a new kitchen, and a new bath (the shower door can't be opened without smashing into the towel rack).
http://franklymls.com/FX7062242
Heck, they couldn't even be bothered to update the cheesy outlet plates. Oh, and the above ground square feet is 2039 sqft, not 2539 (liar, liar, pants on fire).
Anybody else noticing things slowing down?
Looks to be. Inventory may be flat for August, breaking 14 consecutive months of declines.
I'm back for a quick comment or two. I did want to apologize to Cara (sorry about earlier, didn't mean to be overly harsh). I have been perusing some houses here and there. I'm still a major bear . . . I don't think inflation adjusted housing prices will come back for a long time, but in some places I've looked it's getting closer to rent parity. Unfortunately/fortunately rents are most definitely dropping in the area where I am located.
I'm not too terribly concerned about the new breed of flippers. They will get theirs eventually. The easiest thing to do is not buy some stupidly overpriced flipped home. The worst I think is doing "repairs" on a 35+ year old house! Ummm, sure you can make it look nice, but on a lot of those places you'll prob. need to do major work to make it last another 30+ years. The lifespan on a 35 year old house is not going to be too terribly long. However . . .
I'm also amazed at how absolutely crappy just about anything built from '02-'06 compares to older homes. In some respects, I think the older homes built in the 1960s will outlast the crap homes built in '06.
I will say in the areas I'm looking I'm seeing a lot more inventory come on the market and not so many getting sold. Lot's under contract, but being sold is a different story. I wonder how many homes under contract are really "UC". Are there buyers who jumped on anything this past summer just to get in on SS, foreclosures, who are still looking, or who won't close b/c of lack of financing etc?
Finally, there is a data point which is ridiculous to me, but epitomizes this whole stupid episode. In the area, I'm looking a place recently went on the market for 219 . . . "potential short sell". Tax records show they bought in '97 for 96k. Whiskey Tango Foxtrot!!! How are you a SS 12 years later! Idiots ... you sold your house to the bank years ago, you're just now finding that out. The really scary thing is that IMO the place is prob. only worth maybe 115k.
And based upon tax records, I've looked at there are a whole lot more like that coming up. This suckers got a ways to go (don't necessarily mean a bad time to buy, depending on your circumstances).
NoVAWatcher,
This is a good example of what kevin and I have complained about. There was nothing wrong per se with the home. It was move-in ready and nicer than a lot of homes on the market. The wallpaper, carpet, and a few other items were a little too feminine for my tastes (and I presume most men and probably many women) but that is easily fixable. I expect to change carpet, walls, shutters, etc anyway.
But novawatcher, it says right there in the second listing: "Owner/Agent rehabbed this to live in so no expense was spared." No expense was spared!
But this extravagant spare-no-expenses owner/flipper lives in a neighboring house according to the tax records. I call bullshit.
And another weird thing--according to Fairfax County, the neighbor paid $450,000 for the place. The listing says the neighbor paid $625,000. ????
(Cara-bummer! I thought the appliances came in electric-blue, which would be awesome.)
"No expense was spared" my azz. A quick drive-by could tell you that they didn't do a thing to the outside. The garage still had the pink frilly curtains from the previous owners, the same chintzy (biblical? hummel? I don't remember) light-switch plate. As far as I could tell, the basement was repainted and builder-grade carpet was put in, but they kept the cheesy Brady-Bunch outlets.
Don't get me wrong -- they did make some nice choices in the kitchen. But there was plenty of evidence that a lot was done half-assed. For example, the master bath looked nice at first, but you had a choice between having a shower door or towel rack -- neither would be able to peacefully coexist for too long without breaking.
Re: FX7062242, much as I don't want to defend a flipper, it looks as if the owner is counting part of the finished basement in the square footage. Maybe that's not the practice in FX, but that is what probably 95% of Arlington owners do in their listings, although some of them do it only under the "interior features" heading, rather than in the upper right hand corner of FranklyMLS, which I think is the official MLS # -- Arlington owners often put a 0 in that spot.
Also, to be generous, the owner didn't just paint, if I'm not confused about which house is which. Taking down old wallpaper is a ROYAL PAIN and takes a lot of your time (or $ to a painter). Looks as if the whole house was covered in it and it looked really old, as in "we put this in the year we bought it" old. So if he really did buy it for $625 and is selling for less than $700, I'd say with transaction costs, he's barely breaking even, if that.
The latest owner wanted a $250k premium for new paint, a new kitchen, and a new bath (the shower door can't be opened without smashing into the towel rack)
Hard to tell for sure but for some weird reason (could it be the crappy out of focus photos?) the towel rack also appears to be inside the shower out of the swing arc of the door. If so, it won't get smashed, but you're going to have a dandy time keeping your bath towel dry while you shower.
I have to wonder what type of crack code inspectors smoke here in VA. That toilet looks to be 6 inches too close to the shower door.
A young lady I work with is looking to buy a town house in Bristow-She said her ealtor told her that there are over 6,000 bank-owned homes in that area but they were not putting them for sale right now for fear of flooding the market-Pretty scary if that is really true.
Welcome back gte.
Whatever fight we had I've long since forgotten it. Heck, I've had at least three with tbw recently and we agree on almost everything.
Yeah, 1 out of 5 SS's I've seen was bought for less than half the current market price. That's what happens when loans for the whole neighborhood are based on "market price" when only 2 or 3 houses ever actually went on the market.
I think there are some changes that need to happen to make it more obvious that Heloc'ing is just digging yourself a deeper grave...
TN: It may be hard to tell from the photos, but the towel rack is directly inline with the swing line of the shower door. There is no way it can be opened without smashing into the towel rack. And, IIRC, there is no good place to reposition the towel rack.
edward
I'm with you on that DC property. That area is tough.
We've been looking south of there, and we don't want to look in trinidad or eckington
So I talked to a mortgage broker today about preapproval and he was more than happy to approve us for a loan up to the 729k limit even though our income is only ~175k. What happened to tighter lending standards? At least now I see first hand the stupidity that is keeping the housing prices inflated. It can't go on forever.
At least there is some hint of reason if you don't want to pay PMI. They no longer do 10% down / 10% 2nd trust loans to get out of PMI, but will do 15% / 5%. That may be the route we take if we find a place before we get the rest of our 20% saved up. I still refuse to borrow more than 3x our income though.
Jeremy, Novawatcher thanks for the scoop.
4x income, goodness.
45% DTI so long as you have plenty of skin in the game such that you feel obligated to yourself to keep paying more than half your after tax takehome. Great.... What a deal! We'll let you (out of the kindness of our hearts) pay the lion's share of your income to us in interest so that you can bid up the overpriced home of your dreams. (subsidized of course by the tax write-off) Gee, thanks.
Sigh. When does it end?
Cara,
A lot of people can easily handle 45% DTI.
Robert,
Sure, as income goes up the percentage of that income that is "disposable" goes up too. Indeed.
I still don't think the bank is doing anyone any favors by so generously offering to take that money off your hands, thereby making your purchase multiple times more expensive than it would be otherwise.
Those same people want vacation homes by the ocean, or the ski slopes, and sailboats, and jets and fabulous cars. And if prices go down not up, they may end up owning that home a lot longer than they planned, such that downsizing when their mother needs a retirement condo, or when the kiddies go to law school and 45% DTI isn't as attractive as it first sounded, may not work out as well as they had planned.
Besides which, how many people do you know who make over $200k/year where their income is pure salary? Most of these people have variable incomes.
Although, if you're arguing that those same people are qualifying on 45% DTI where only the salary portion is counted as income, then I guess for some instances that actually makes some sense.
Still, one would think it would need to be the exception not the rule. Interest only loans were a good product too, when they were available only to those with a high but not steady stream of income.
Robert
Or more succintly, define "a lot".
>10?
Hey Anon412, funny that you equated the Tax Credit for the cash for clunkers. I just wrote about that. I suspect in VA there will be a big pull back after the tax credit expires.
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