Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Profile of IB Math Teacher at JEB Stuart HSSince I'm usually pretty negative on these area schools I thought I would share this nice column in today's Washington Post. This tidbit was pretty interesting:To get a taste of this stealth reform, step into Room 252 at J.E.B. Stuart High School in Fairfax County. That's where Bill Horkan works. The 44-year-old math teacher is a busy man. He is married, with three children ages 6, 8 and 9. His school has the largest portion of disadvantaged students in the county -- 58 percent are low-income. ...When Horkan arrived at Stuart 11 years ago, the math department chair was Stu Singer. He urged his teachers to be creative. Three years ago, the Stuart math team did so well that its students' scores on the state Standards of Learning tests were higher than any other Fairfax school except the supermagnet, Jefferson, and the super-affluent Langley, where just 1 percent of the students were low-income. That gave Horkan and his colleagues confidence. What next? Makes you wonder how strong these schools could be with more teachers like the one profiled.
tbw,It is nice to have some good news once in a while.
How interesting--I actually know another math teacher at that school who teaches classes of non-IB students, and the stories from this person about the state of education and students today would depress you.This story is very inspiring, and I'm impressed that he was able to increase IB enrollment and help those children do so well, but soooo many students at that school cannot even do basic algebra.
TBW-Wow that interesting. I find it amazing when you can change how student perform particularly by high-school. By high school so many people already have their attitudes set about education and they have/ don't have the skills needed to succeed. So when student's prevail this late in the school system it really is incredible.
I haven't taught at Stuart or Marshall since they instituted the IB program at both schools, but I am not surprised by the results from Stuart. They had a lot of kids from Africa, particularly Eritrea and Ethiopia, who were very strong in math. Most of their fathers had been engineers who had been trained in Germany or Italy and had good math backgrounds. Stuart also draws students from Lake Barcroft and Sleepy Hollow which has a highly educated population. I suspect these are the students in the IB program. The kids who can't do algebra have parents who had little schooling and see no value in education except to relieve a childcare and feeding burden from them during the day. But the teachers who are teaching at Stuart were very good and although no one wants to hear this, the teachers were doing a good job with poorly-equipped students.
I can't remember who was interested in the price of the "green" house in Westover, but a friend who lives near there told me the new people moved in and paid $1,175,000 for the house.
Wow...I liked the green house but I can't begin to fathom paying 1.2 mil for a lot that small in that location.
i'm kinda sorta interested in the schools discussion, but much of the conversation here lately seems to be directed at Northern Virginia High School Fallout. i originally suggested the daily bits bucket here, how about a schools bucket?i believe everyone here is either 60 with grown kids and grew up around here, dinks, or a sprinkle of tabitha or me with young kids, so i fail to see high school talk relevance. let's see more frankly listings..sorry, rant off. Oh and what happened to Robert?
good spotting homeowner, indeed:http://franklymls.com/AR7023985 found a buyer for 1.175 million bucks.gt,haven't seen hide nor hair of Robert, maybe he got bored?
I think Robert was spooked by the deluge of personal information about him that appeared when he posted his old house. Those were his last posts.
GT,Given that the quality of school districts can mean a difference of $50-100k between neighborhoods I find it very relevant. In fact, one could argue 20190 and 20191 are much more convenient to job centers and yet for the most part you spend much more for 20194 for the schools. (These are Reston zips)As for Robert, I agree that he may have been spooked by the fact that he gave out too much information. I never posted his name and in fact was the one who first told him to take that info down.
tbw,Re: RestonIt's kind of a chicken and egg question. 20191 has a lot of lower end property compared to 20194.Just drive around both areas. For some reason (it appears to me) that much of the low-income apartments, etc. were located on the other side of the Toll Road. It's very congested over there and poorly planned.
Va_Investor,Well actually it was purposely planned that way. The founder of Reston was hoping for a walkable, more urban-like community. Hence higher density. The big question is whether it was just too ahead of its time or the same thing will happen elsewhere in the county where they are upzoning. Because few people wanted smaller homes back then it became mostly affordable housing. Also almost every HOA that could make a plausible case against being in the South Lakes HS district did so and won and South Lakes was about 1,000 students underenrolled until they redistricted last year. I think Fairfax feels it can happen now (with Tysons and Reston Town Center area) because Ballston-Rosslyn has been so successful.In any event, when I say $50-100k difference I'm comparing similar homes. For example, that Freddie Mac CFO who committed suicide lived in a very nice, large SFH neighborhood in an area near the intersection of Hunter Mill and Sunrise Valley. I can guarantee you that if you found a home of similar square footage in one of the neighboring school districts it would go for much, much more.
Here.But, the same old stuff from me...inventory down, prices up, economy recovering, housing bottom in, government spending...and taxing, people relocating here, new home construction underway, interest rates still low, prices still undervalued in NoVA, greed starting to replace fear, multiple bids, DC area best of this and best of that, still waiting for foreclosure moratorium; stimulus, energy, health care, and education spending still on the way.
tbw,I thought that neighborhood went to Oakton? Were they redistricted or always SLH?Our area was thrown into the mix initially, but fairly quickly got out of the redistricting pool of candidates. People in S. Reston who were moved from Oakton to SLH wents nuts. It is at least a 100K difference (depending on house size, etc.).
Robert,Driving home this morning I saw a couple of areas where builders are breaking ground on new construction. That is an encouraging sign, but I doubt any of it is on "spec".I agree with your thoughts on the economy and the region. Perception becomes realty.
Hi Robert!!Glad to hear you're still reading.You know what cash for clunkers is doing for new car sales this week? I.e. decimating supply and driving up prices to the sticker price?That's totally what the $8k has now accomplished with the TH rung of Burke. The smallest ones are now going for more than they did this time last year. Between the free money, and the interest rates almost a full point lower? Things are flying off the shelves and for more than anyone would have paid last year. It's a nut house.And I'm sitting in a shortsale contract, hoping that insulates me somewhat. It's about 10% off what it might get if it were on the open market right now, which is only one of many reasons it may not go through.Not happy about the soon-to-become reality of paying through the nose to go month-to-month while waiting for this to happen, but it's cheaper than paying the lease-breaking fee or moving twice, and a factor of 10 or more cheaper than overpaying for a house.
Cara, precisely. Market manipulators, not hard to see this rigged machine. Don't know how others can be so blind.
For a quick graphical depiction of our stupid spring "rally":http://www.housingtracker.net/asking-prices/washington-dclink
Va_Investor,I suspect this was always South Lakes HS zoned. It's less than three miles away from the school. It's actually near the Madison HS zone and not Oakton HS. I think there was a Madison HS "island" above 267 that was put into South Lakes but this wasn't part of that.
Thanks, homeowner and Cara, I was one of the people interested in that house. Looks as if I was low on the price guess by about 6%. Good info to have.
Robert,Are you still optimistic health care will pass? I am probably wrong but at this point I see at best a bill that removes the ability to deny coverage for pre-existing conditions and maybe some expansion of Medicaid. Some interesting points from a recent Krauthammer column in the WaPo:Reforming the health-care system is dead. Cause of death? Blunt trauma administered not by Republicans, not even by Blue Dog Democrats, but by the green eyeshades at the Congressional Budget Office. Three blows: -- On June 16, the CBO determined that the Senate Finance Committee bill would cost $1.6 trillion over 10 years, delivering a sticker shock that was near fatal. -- Five weeks later, the CBO gave its verdict on the Independent Medicare Advisory Council, Dr. Obama's latest miracle cure, conjured up at the last minute to save Obamacare from fiscal ruin, and consisting of a committee of medical experts highly empowered to make Medicare cuts. The CBO said that IMAC would do nothing, trimming costs by perhaps 0.2 percent. A 0.2 percent cut is not a solution; it's a punch line. -- The final blow came last Sunday when the CBO euthanized the Obama "out years" myth. The administration's argument had been: Sure, Obamacare will initially increase costs and deficits. But it pays for itself in the long run because it bends the curve downward in coming decades. The CBO put in writing the obvious: In its second decade, Obamacare significantly bends the curve upward -- increasing deficits even more than in the first decade. This is obvious because Obama's own first-decade numbers were built on arithmetic trickery. New taxes to support the health-care plan begin in 2011, but the benefits part of the program doesn't fully kick in until 2015. That excess revenue is, of course, one time only. It makes the first decade numbers look artificially low, but once you pass 2015, the yearly deficits become larger and eternal. ColumnBy the way, the GOP candidates for governor in NJ and VA are leading in the polls right now. In NJ Does Congress really continue this level of spending if NJ elects a Republican governor? I see a lot of skittishness if that happens. Maybe they shrug off McDonnell winning in VA. [Interestingly enough right now the odds look better for the Democratic Party in VA than NJ.]
The sale of the green home reminds me of something I've been mulling over recently. What do you guys think will happen to the multitude of demographically schizophrenic neighborhoods around here that were created by the bubble? The green home area may not be the greatest example of this, I think a better one is the neighborhood I now live in near downtown Vienna.What I mean by this is that some neighborhoods that were formerly working class were partially transformed into upscale neighborhoods over the last 7-8 years. My neighborhood obviously used to consist completely of smaller 50 year old houses occupied by middle class and below owners. Recently many of those houses were bulldozed and replaced by 1+ million dollar giants. This was during the boom though - now that the market is in trouble the rapid gentrification of the area has been halted. What we're left with are streets on which houses alternate between rich and not-very-rich. It's a weird tug of war. These neighborhoods are all over NoVa from what I've seen. In the past areas seemed to improve or degenerate together but the bubble threw all that out the window.So what happens when there's a $1.3 million dollar very nice mansion on a street that may never be part of a wealthy area? It's too late to revert it to a working class size home and I can't believe it would ever drop in value enough to fit in. Do you think people that can afford a house that expensive will continue to buy homes in non-upscale neighborhoods?
Jeff BThats a very interesting question. Most of the places I'm familiar with where that's happened the neighborhood itself was already intrinsically nice in someway, well-appointed houses just small, or great school districts or ridiculously convenient to the metro in an inexpensive but not dangerous place. These places I think will continue to thrive, whether or not anyone rebuilds any more McMansions in the next few years. But this is not necessarily generically the case. One assumes that some people just bought land where it was cheap and built whatever. In which case, I'd say, there's nothing that price can't fix.The other possibility is that some of the biggest houses will get broken up into separate apartments as happened to some of the grand old victorians. Whether any of them are built well enough for that to be worthwhile is another question.
Jeff B,I think they will continue to tear down and rebuild homes there. However, I think for the most part it will not be silly stand-alone does not fit in with the neighbors spec home but instead mini-neighborhoods like the ones this developer builds:http://www.sekashomes.com/Although maybe they have just been finding the few green areas left to develop in Vienna. But I am pretty sure some of these were built by buying up old ramblers that had huge lots and subdividing it into quarter acres with large homes. Someone correct me if I'm wrong.
JeffB..in a word...NO! First rule in real estate, never buy the biggest house or the smallest house in a subdivision. I don't have a clue what will really happen, tho......I'm just along for the ride.Cara has anybody indicated how long you might have to wait to get word whether your offer has been accepted. I'm really curious about the process so would you do little updates, even a day1, 2..etc counter before you have any contact?
I think your first case is what will probably happen to our Vienna neighborhood - it does have some features that could lead to high values in the future and it was certainly never *bad* in the first place. I often think about this when I drive through other neighborhoods though that are historically cheap for a good reason but have McMansions planted in them.I actually like most of the new builds in our neighborhood and consider them to be luxury homes. It would be strange to me if they came down in price to something that even remotely compared to the adjacent homes. It's an interesting time, I think the bubble really screwed up a lot of neighborhoods in a way that will take a long time to heal.
My last response was to Cara's message. TBW I agree that they'll continue to tear down the little houses around Vienna to build newer homes. I guess my feeling is that there will be a pretty big glut of luxury homes in NoVa in the coming years. Not every neighborhood can be upscale and I'm curious what will happen to the upscale homes in neighborhoods that don't continue gentrifying.
Arkey,So, we did get a "contract" i.e. with the seller, on the Monday after submitting the offer on a Thursday. They did not counter, just signed it.We decided to do the inspection now, rather than later, and that went great, no big problems (the cost of the inspection was less than the "fee" we'll be charged to go month to month on our rent...) so we've released the inspection contingency (obviously termites are still their own inspection but that has to be within 30 days of closing and isn't a contingency, it's a requirement). We've given the bank a 45 day timeline to consider approving the short sale deal. After that time, we'll be allowed to walk away from the contract with our earnest money in hand if we don't feel like sticking around for whatever reason. This in no way actually obligates the bank however.If they approve the sale at our price then we have 30 days to close. There are of course, many other things that could happen...Don't worry, when we hear something from the bank, you'll know. :)
Jeff B,Eh. It's a mixed bag. For the most part, pre-bubble if you wanted a modern home you had to live outside the Beltway. Often as far out as the Fairfax County Parkway and points west. When you don't modernize homes you just encourage further sprawl IMHO.Unfortunately it's a goldilocks type situation. Many of the older homes are too small and many of the newer homes are too big. If there had been a middle option between exurban McMansion and inner area rambler I think those would have been the most popular.
Cara,I agree with you. My perspective on the $8k buyer incentive changed when I saw the insanity over the cash for clunkers program. I now believe it has had a 'significant' impact on the lower tier of the market in NoVA.That also leads me to believe that if a $15k across the board incentive is passed things could quickly get out of control. More likely the $8k is extended. The argument is that housing is still fragile. My guess is $15k has less than 50% chance, extend $8k, 80% chance.
Robert,that brings up an interesting point. What take-away on the $8k/$15k will law-makers have from the cash for clunkers program. The market is still fragile, and I think cash-for-clunkers should inform them at just how helpful the $8k has probably been, but it's insanity will hopefully warn them that a $15k could be disasterous. Maybe I'm being too hopeful for moderation. I'll be happy with any decision that doesn't increase the incentive, although I'd prefer a phase-out, perhaps with a cap on the number of homes per 1000 in a zip code that can be purchased with the rebate before it phases out in that zip code.
TBW,You are watching the health care debate much more closely than I am. What is obvious, is that Obama is not going to get his wish list passed. I'll defer to you that the CBO is the culprit.My focus is simply on what impact health care legislation would have on the size of the federal government in the local area.Is it an expansion of the federal government? Is it anything like the Great Society programs?Agree, Obama numbers are sliding. Governor races will be watched closely. It will impact legislation going forward.
Cara,I don't know what metric Congress will look at when deciding whether to extend, expand, or let expire the $8k credit. Since this financial crisis started and the USG stepped in to support this and that, I can't think of a single program that has been extinguished. Can you?
Re: Reston and Herndon South of the TollroadIt's interesting that South Reston was planned to be "walkable" and it seems like the houses fit well into nature. Herndon south of the tollroad is similar in its crowdedness, but not necessarily in affordability. By contrast, Herndon just south of the tollroad seems to be evidence of a nasty confluence of the tech boom and the construction craze. The area, squeezed with rows upon rows of townhouses, looks and feels overcrowded. There's far more concrete jungle, and much less nature--the disadvantage of having larger homes within a similarly small area.There was a 300k shortsale townhouse, in that overcrowded area of Herndon, that my husband looked at there last week. It wasn't a bad townhouse, except that was very dirty and unkempt inside. Nevertheless, at that price, it went under contract in a week. I looked up the schools for that property (McNair - Carson - Westfield), and was somewhat surprised by McNair's performance. Even though that neighborhood has to be saturated with highly educated technical workers, McNair Elementary's percentage of students passing the Standards of Learning Tests for English and Math does not reach 70%. It also did not make AYP (adequate yearly progress) under No Child Left Behind.While there may be plenty of apartments for lower income people, I would assume that the townhouses in that area of Herndon would have to be inhabited by people considered middle or upper class. Houses in the 600k range (e.g., Greg Roy Lane)have been jammed in there, too. Perhaps they would be even more expensive in the nice areas of Reston, but if you're buying an expensive house or townhouse, when do you agree to send your children to a school with McNair's performance rating? Of all those people living in these nice townhouses or luxury SFHs, how many are sending their children to McNair? Do most of them opt for private schools? Since there are far better elementary schools in the area, we've crossed anything districted in McNair off our list. That area is certainly less expensive than North Reston, but it's still not cheap. The other elem. schools in that area - Fox Mill and Floris - seem quite good, in terms of their test scores.
Robert,I agree if they created a public option that eventually ate up most of the private insurance market that would create a lot of new US Government jobs.However, if they just impose some new regulations like you cannot forbid to cover those with pre-existing conditions then that just raises the cost of health insurance for everyone. Similarly if they expand Medicaid funding and raise the income caps that just means more money to the states.It's impossible to predict what happens. I just meant (a) we might see very modest or no changes passed this year and (b) they could be too modest/incremental to create any notable growth in the federal government's size.
TBW, I agree with your thoughts on the health care debate (especially that huge systemic change rather than covering more people alone desperately is needed). But I would not trust Krauthammer or other people who are paid to express opinions rather than report facts and who have been the subject of a lot of mediamatters.org's findings of fact-challenged writings. I believe that this is such a complex and difficult to solve problem, and that there are many obstructionists and lobbyists with lots of money to throw at Congresspeople who are going to be the main reasons why the best plan will not move forward. I just hope the bill that ultimately is passed is not so compromised that it makes things worse. We ought to be learning from the many countries with many different types of systems which features are likely to work. We pay more per capita for health care than any nation in the world but by most measures (e.g., the UN's index) we don't even crack the top 20 in health care outcomes. With less employer and tax money for going to benefits, much of which goes for things other than top quality care at fair cost to the patient, there would be more money for other priorities (higher salaries that could be used for housing costs, for example) or less need to tax.
REdealSEEKER,School Board MeetingSee item #4.01. I suspect some of the rich parents lobbied to get their "gifted" children moved from McNair (45% free/reduced lunch) to the Oak Hill GT Center (5% free/reduced lunch). And now they are building a GT Center at McNair (which will have wildly different race-wealth demographics than the overall school population and of course cover more material.)It's interesting how out of control GT programs have gotten in elementary schools. It used to be maybe 5% max of the school's population was labeled gifted. Looking at the Fairfax County website it's now 50% at a lot of schools. Anyways, so the answer to your question is I think a lot of rich parents like Westfield HS and Carson MS and are appeased by the fact that their child would go to a GT Center during most of elementary school.Also remember that most discipline problems occur during middle school and high school so people are often most concerned about the quality of those schools.That all being said, I suspect many of those THs (like most of Fairfax County) still have a lot of room to fall.
TBW, I also agree with your comments about Goldilocks housing. During the bubble, some people might have taken a risk on buying a house on the high end of neighborhood values because they saw a transition occurring with lots of tear downs and expected more transition, i.e., that they were mildly pioneering. They wouldn't be stuck with "the most expensive house on the block", which Realtors tell you to avoid. But now, it is a much riskier choice, because many of the neighbors' houses will not be upgraded (renovated or replaced). So there may be more reluctance to roll the dice.
Jeff B --Cara's right, you've asked an interesting question. Here's a fresh example of a tear-down/McMansion rebuild, right next to an elementary school. After looking up the school on education.com and schoolmatters.com, it doesn't seem like the right place to buy an expensive house: http://franklymls.com/FX6900661
Ace,Agree that obviously Krauthammer is biased against Obama etc. He is one of the Post's conservative columnists. But I think he's right that the skittishness stems from the cost. I think the CBO numbers scare a lot of people. I do think it will not cost that much if there's a public option. Unfortunately it's probably not good politics to demonize doctors and the insurance industry but the fact of the matter is both are charging obscene amounts and ordering useless tests. There's no cost control in the system.
REdealSEEKER,Completely agree there. I can't see anyone wealthy buying there.Now . . . someone willing to take a risk in investing might go not too far east (other side of 95) and buy a foreclosed SFH around there (I'm assuming you can get a pretty hot deal). If the Springfield Mall redevelopment is successful and they can get more businesses to locate there it could become a fancy area in 10-15 years. That's a lot of ifs though.
I'm looking for some more data and commentary from Stephen Fuller on new home construction in Northern Virginia. To me, it is intuituve that home builders would be seeing an increase in demand as inventory shrinks. This is one of the few articles I have found.While supply is shrinking, sales activity has been increased. According to home-builders active in the Washington market, new-home contracts are up more than 25 percent compared to the same time last year.“There have been more contracts written in this region in the last four weeks than in any other month during the past four years,” Wenhold said at the conference. “Most of the activity is occurring within the more desirable core counties - Fairfax, Loudoun and Prince William - in Northern Virginia. These areas have really benefited from this surge of activity.”Fuller said he talks to 20 area home builders regularly, so I'm expecting him to confirm or deny how much activity there really is.Link
Robert,“There have been more contracts written in this region in the last four weeks than in any other month during the past four years,” Wenhold said at the conference. “Most of the activity is occurring within the more desirable core counties - Fairfax, Loudoun and Prince William - in Northern Virginia. These areas have really benefited from this surge of activity.”I love the shifting desirability claims from month to month. In 2007 to mid-2008 home market observers were saying that Arlington, Alexandria, and some parts of inner Fairfax County were immune from the housing crash because they were so desirable.Now that the outer areas prices crashed and people are going to where the bargains are and sales are much more brisk there we are now hearing that the more desirable core counties are the outer ones.Which is it?!?! ;)
I hope (but am not holding my breath) that the Washington Post, the Atlantic, etc apologize for claiming the exurbs were going to be a silly relic of the 90s and 00s and we were all moving inside the Beltway, ditching our cars, and living in condos.A lot of really, really stupid articles were written in 2007 and 2008. The environmentalists/smart growth types had an alliance with inside the Beltway-ers to imply that the outer area price drops were not a bubble bursting but instead the result of $4 gas and a desire not to drive as much. The Next Slum? This the Atlantic article was probably the most famous idiotic article I saw that confused the bubble bursting (which always burst first in outer areas) with some paradigm shift.
tbw,Many fail to account for the shift in employment centers. If you work in Tyson's or the Dulles Corridor, living further out makes alot of sense from many standpoints. Reston Town Center has exploded and the rail coming in (although, out 7-10yrs) will only add to the desirability of the these locales. I very bullish on Reston (of course, I am biased).
Arkay says:"..in a word...NO! First rule in real estate, never buy the biggest house or the smallest house in a subdivision. I "the cheaper ones tend to have the highestappreciation, why would you dislike that?
Va_Investor,I agree. This op-ed came out refuting the Atlantic article and made exactly that point:Suburbia's not dead yetAlso, many times in families where one spouse works in DC the other spouse works in the surburbs (or does not work) and many would argue it's better for the children to live in the suburbs both for the schools and getting to have a yard, lower crime, etc. So most times the DC worker sucks it up and lives further out for the remaining three to four members of the family who are better off with the suburbs.
Regarding Reston . . .The thing I never understand is why the Metro stop will be so far away from Reston Town Center. I mean it will not be a horrendous walk but it's probably going to take 10-15 minutes. Perhaps they figured RTC is already popular and they wanted to use the stop to really upzone the portion of land between Sunset Hills Road on the north and Sunrise Valley Drive on the south. There are a lot of parking lots there I suspect will be replaced by offices as that stop comes closer to reality.Particularly telling is the fact that Reston Parkway stop will be the only Silver Line stop other than Tysons stops or Dulles Airport without parking garages.
Va_Investor,So no one in Reston is concerned about the National Geospatial Agency terminating its leases at 12290-12300-12310 Sunrise Valley Drive when the agency moves to the Ft. Belvoir's Engineering Proving Ground near Springfield in 2 years? That's an awful lot of additional office space to add to the large commerical vacancy that already exists in the Dulles corridor.
TBW -Thanks for sharing about McNair. Fascinating distortion of the term "Gifted and Talented." Might as well call those GT Centers, Schools for the Economically Advantaged (even if a few token poor people make it in). I wonder how much the people who pushed for the GT center are somewhat deceptively convinced of their own child's talent, or if they truly see it as a loophole for getting their children the best education possible. Since I believe that there's a lot of talent among the poor as well (it just might not always be fully cultivated), I think that the latter understanding of their efforts might be the most honest one.In any case, regardless of whether my children are (actually) "normal" or "gifted" or "challenged", I may actually reconsider properties assigned to McNair, given the availability of a good learning environment with a more challenging curriculum.
TBW, Desirable/undesirable will shift between the inner core and the outer core based on things like traffic and the price of gas. That's what happened. It doesn't mean the folks that wrote the articles in 2008 were wrong. The facts on the ground changed and the value of the properties shifted. Not completely in one direction or the other, but marginally. If you can tell me gas will average $5/gallon over the next decade, then I will tell you Arlington/Alexandria will outperform Ashburn/Sterling and vice versa with gas averaging $1.
Robert: but if gas goes from $2 to $5 a gallon, increasing your gas prices by $1500 a year ($125 a month), who in their right mind would pay hundreds of thousands of dollars more to live in a small house in Arlington?
REdealSEEKER, tbw??How did Springfield Mall end up having anything to do with Herndon?But yes, $300k for an old TH in a questionable district in a crowded neighborhood will not stand. That's the $8k + <6% interest rates for you. As the importance of those fades (post this September/October's coming chaos) value will start being recognized again. Don't let today's prices fool you. Buyer's are getting desperate due to the Nov 30 deadline. It's cash for clunkers writ large with less rational people and for smaller relative stakes. (i.e. $4,500 back for buying a $15,000? Ford Focus is a good deal, no matter who's giving the money, whereas $8k back to sign yourself up for a $300k loan is questionable). I can't speak for various areas of Herndon/Reston in particular, but broadly I expect 1 bdrm condos in the suburbs to go to being affordable on $30-45k/year (no money down), 2 bdrm condos on $55k/year (no money down), condo-TH-lite's to be affordable with 10% down, $65k/year, old THs $75k/year and new/upgraded/large/metro accessible THs on $90k/year. Using the crude rule of thumb of 3x income this means, $135k, $165k, $195k, $225k, $270k. Obviously this is a ridiculously broad brush. But it would mean a return to "normal" desirability. Now in Burke many condos are already below these numbers, so obviously these are upper limits that only apply to desirable units, not landlord territory. In terms of TH's $225 and $270k may be too "optimistic" on the affordability side. But I think they're close. If you have more than one positive aspect, large + garage + metro accessible, obviously that will go for more than $270k in my "analysis". This is kind of what tbw has been saying. That only the high end of THs should be going for a number that's compatible with the median household income, everything else should be under that. And it's where things looked like they were headed last fall before the $8k and rates interfered. Will it still come to pass is anyone's guess. If they can sustain the low interest rates and $8k incentive for long enough these won't happen until well into the future and only through lack of appreciation compared to inflation.Robert, thanks for chiming back in, it was getting to be an echo chamber again. A week or so ago we placed odds on the $8k being continued, mine was 75% it will, which I consider to be essentially the same as your 80% chance. Housebuyer put it at 50/50 which was the lowest odds anyone gave. No matter what happens housebuyer will only be half right. :) I know, that makes no sense.
The whole "growth of cities means the death of suburbia" has always been a bit of a false dichotomy in my view. The paradigm shift was only that after a long period of decline, it appears that some people now want to live in cities. Moreover, just because some cities are experiencing profound demographic shifts, does not automatically mean the burbs are dead. To the contrary, I havent looked at other cities, but the demographics in this area indicate our burbs did quite well while the core areas were being revived. The inescapable fact of the matter is the vast majority of people still move to the burbs, and a vast majority of them, still prefer to live there. So I think the better way to put it is the growth of the one does not mean the death of the other. The better way to put it is, after a long period of overall decline, the cities are becoming "one among many" desirable places to live. Going forward, both the cities AND the suburbs are positioned to attract new inhabitants and prosper.
Cara,Really, I have to disagree with your continual characterization of "LL" properties. Any property that cash-flows with 25% down is a possible LL property - including your condo purchase.Your position that median income should be able to afford nicer than median-priced homes in crazy. Median affording median is the definition of an affordable market.LL property is not necessarily "slum" property. It depends on the cash-flow desires of the LL. There are clearly trade-offs between cash-flow and future appreciation. For me, I'd rather sacrifice some cash-flow and have nicer, better located properties. With that comes better tenants - which is really a financial issue as well for LL's.I've bought about 6 places since November (8 total; but 6 that I am keeping). I would only place one in an iffy area. Not a slum or heavy crime area by any stretch, but clearly not "nice".3 of my purchases have been in the RTC area. The prices have been at about 50-55% of peak and are highly desirable by both renters and first-time buyers.I have bought 3 more at about 70% off-peak. 2 are very cute places in well kept, newer developments. One was already tenant occupied and the other rented immediately.Your derisive attitude about LL properties reveals a lack of knowledge on your part.
VA_Investor,This is really funny, you talk about the local RE market doing great and then suddenly it appears that you are buying bunch of homes at 50-70% discount. It seems that you and @J@ always make correct bets on the market, no matter that you forecasts are always off, you actual decisions are correct, that's a beauty.
Va_investorThe median property in Burke is not a TH. It's a SFH. So my median income analysis is not a distortion. It's possible that Reston and Herndon have so many TH's that the median there is a TH. That's not the case in southern FFX County.Yes, there is more than one way to skin a cat. Not all landlords are scum. In fact, I think the condo-ness of what I'm looking at will hurt in price for lack of appreciation potential. Why? Because buying into a TH community has no restrictions on the percentage of owner-occupants. Buying into a condo does. This means that these condos are less attractive to LL's like yourself, because it will be harder to sell them for bubble profits when the next bubble comes.I did not intend to slime all landlords, I intended to slime those particular properties in Burke that have fallen below affordability levels, well-below rents. They are only attractive to those wanting to limit their monthly payments or those looking for pure cash-flow positive rentals.Burke is not a naturally rental suburb, for the rents it commands, you need to do more than put down 25% on a rental-parity property to make it cash-flow positive in the near term.In other words, stop picking fights with me. I'm not dissing you, I'm dissing the scum that have allowed some neighborhoods in Burke to fall into disrepair. And those are the LL dominated neighborhoods. If you're also considering appreciation, don't buy there.
Cara,I not picking any fight with you. It just seems that you deride the exact type of property you are buying.Konstantin,???? What forecasts are you talking about? I fail to see where my actions are anything other than what I have said or predicted. There is "collateral damage"; properties and neighborhoods that got swept into the mess, that shouldn't have taken such a hard hit. This is what I am buying. When have I said anything that contradicts?
"This is really funny, you talk about the local RE market doing great and then suddenly it appears that you are buying bunch of homes at 50-70% discount. It seems that you and @J@ always make correct bets on the market, no matter that you forecasts are always off, you actual decisions are correct, that's a beauty."Indeed... ...and back in 2005-2006 she went on and on about how there wasn't a bubble... but also insists she didn't buy anything during that particular "not bubble" period. Now she makes references to "collateral damage."I wonder from what... the not-bursting of her not-bubble?More than anything she seems to be here to try to convince everyone what a great success she is.
Va_investor,"It just seems that you deride the exact type of property you are buying."I'm a pessimist it's true. The distinguishing characteristic of what I'm buying is that it's not in one of the TH developments that's crowded and run-down. These are nice, well-maintained, manicured condos near the VRE. Almost all the occupants have small children. The Condo board has sprung for high quality choices when replacing the siding, roof and windows, all the trees are kept trimmed such that they pose no danger to the buildings. In between what will hopefully be our condo, and the next rung of things we'd be interested in is a $120-150k gap. Which is populated by TH's with varying degrees of problems. Total lack of parking, cramped crowded feeling, not particularly walkable, in the wrong school district, tiny, run-down, LL dominated in the bad sense. To get something that's a TH with a basement that has none of these problems you need to be paying at least $350k right now in Burke. If not more.So, there's hope that other buyers will see the same thing in "our" development that we do. Quality. A great value for the money. Tons of parking, trees everywhere. The perfect circles for learning to ride a bike. One of the best elementary districts in the best nearby high school. Great storage space for the size. Simple, utilitarian layouts, with no 9x9 bedroom craziness. If enough other buyers see that as value, like I do, then, yeah, it won't go down in price any further.Who I'm dissing are the TH's in between, and the really old ugly condos below ours in price. My vague fear is that once the TH's drop to what I think of as their real value, then the demand for "our" condo will evaporate, and it will go down to prices that can be afforded on either one decent/small income, or two starter incomes.
Cara,Also, the stuff I've seen that has fallen into disrepair is not LL owned. It's owner occupied and has been trashed by owners. LL's are going in and rehabbing these properties. Is this the demise you refer to? Frankly, I think the current neighbors (owners) are happy to see this activity. There are many people being foreclosed upon that I certainly would never have even rented to. You seem to have a "chip", I don't know where it comes from. Perhaps you don't want to compete with investors for the best deals?
Leroy,I called for a 25-40% correction; the same that I had seen in the early '90's. No, I didn't foresee the breadth of subprime, etc. And yes, except for 1031's, I bought nothing after early 2002 until late last fall/early winter.So far, my overall projection has been correct. Your demand that I should have ascribed to the term "bubble" back in 2005-2006 is absurd. 25-40% down is what I said and stand behind. I never professed to having a crystal ball.And, as of late, I did do some buying. Whether this turns out to have been a good move or not remains to be seen.I really enjoy talking about real estate and like to give first-hand examples. If this is construed as "bragging" that is not my intention.What I really fail to understand about most on this board is the 1,000's of hour spent worrying about minutia (charts, graphs, varying "expert" predictions, etc.).Now that the "end of the world" scenario seems off the table, there appears to be some anger that prices won't fall off a cliff.Well, as I have stated, some did fall off a cliff. Whether it was deserved or not is something that I try to determine. Then, I act accordingly.
Va_investor,Yes, there is that going on too. I have high hopes for Keene Mill Woods on that basis. The new LL's are a big improvement from the over-extended owner-occupants. But the thing about that is, LL's used to own those, and sold them at huge profits to these people who couldn't afford them, and are now coming in and profiting from picking up the pieces. This does not sit well with me.The chip is from my experience growing up in a TH community outside of Chicago that slowly went to LLs, and who then refused to do maintanence, and got the cheapest bid on the new roof such that it leaked into all the windows which then needed replacing, etc... It's from having lived for 8 year personally, my parents another 10 after I went away for college, in what had been great affordable THs in the best school district and turned into 1-3 month leases only for people while they house shopped. With LL who were totally strapped because of the turnover and lack of long-term tenants, but who refused to sell given they'd only get what they paid for them and no more.
va_investor,but you have hit upon exactly my issue with many of the places between what I'm looking at and what I consider to be the next rung up. The stuff in between has a ton of over-stretched owner-occupants who can't afford the upkeep. And I feel that those neighborhoods will keep dropping in price until they make sense for LL's to rehab them, but they're not at that price now. Keene Mill Woods is at $190-230k, where being a LL makes sense. But there's tons of stuff that's in just as bad of shape or worse, that's still priced at $270-320k. And selling for that. Investors are not my competition, investors are my friends for providing the floor. The scary stuff it's what's dangling in between.
Ah... here we go again with the revisionist history..."The most interesting Article was on page one of the Business Section. A poll, conducted last month, of 54 top economists revealed that NOT ONE expects a recession in the next year. The clear consensus is that the Economy is on sure footing with strong employment numbers and increases in manufacturing.The FDIC study that I referenced last week examined the history of Housing Booms and Busts and concluded that, absent some shock to a local economy, busts do not follow booms as a matter of course. In fact, if I recall correctly, busts occurred in only 17% of the instances cited and ONLY when local economic problems existed. It is ironic that BH's dismiss this study by saying "it's different this time" - the same language that HH's are ridiculed for using.What we are witnessing is a normal RE cycle and, according to sources referenced above, the worst may be over. I see no evidence suggesting a bursting of any bubble."- VA_Investor Jan 7 2007"I think that it is quite possible that prices will drift lower in 2007, but I have no crystal ball and won't pretend to be any sort of "fortune teller". This spring season should be very interesting.If I wanted a house and could afford a fixed-rate mortgage, I would buy. I certainly wouldn't count on being able to sell unscathed in less than 3 to 5 yrs. The fact is that it is just as foolish to expect major price declines as it is to expect substantial appreciation.Past cycles would suggest that we are in for a few years of relatively flat prices. That said, I would be wary of condo's. There is a huge glut that will take some time to be absorbed. It could be that we have already seen most of the discounting that is going to happen, but I don't like condo's as an investment anyway.As far as interest rates, I agree with Harney. It is a great time to lock-in a rate. Everything I have read indicates that rates will only be up slightly in 2007, but I would be more concerned about rates than falling prices. When rates went through the roof in the early 80's, prices did not tumble. The market simply ground to a halt. This is my memory, at least." VA_Investor Jan 8 2007Worst already over in Jan 2007?"possible that prices will drift lower in 2007""The fact is that it is just as foolish to expect major price declines as it is to expect substantial appreciation."Sure, sounds like you were predicting 25-40% off to me....and here is the link so nobody will think your predictions are somehow being taken out of context.http://tinyurl.com/d2upyu
Leroy,Thanks for the memories. Did you also search 25-40% off? See CL or Bubblemeter for my exact words. I, as I said over and over, am not a soothsayer. I never claimed a crystal ball - like some that stated 40-60% off by 2007 or 2008 was a done deal.So, what is your basic problem with me? Do you think that I intentionally mislead people? Or did I give my honest opinion - backed by my own actions?
VA_Investor,My problem is with general credibility. Let's say you're an investor and with a long history of investments. Then I obviously can learn a lot from you, since I do not have much knowledge of the market and, most importantly am too young to experience previous bubbles firsthand. So when somebody like you starts to make comments on how property management works, or how historically certain neighborhoods fared, I tend to listen, it can be valuable info to me.At the same time I have a little bit of bad vibe when it comes to anything related to macro factors when you talk (and macro factors I know pretty well, trust me). Then I have a problem --- a person seems credible in the area that I do not know anything about, but not so much in the area that I am familiar with, but speaks with the same level of confidence about both. In general, when I interview somebody for a job and such a thing happens it is a red flag.At least we heard about some properties in Florida that were not doing that great and it removes a "superhuman" aura from you. I certainly have some hopes about the direction of housing prices but I'm happy where I am and there is no pressure for me to buy, since I'm bound to lose something anyway (get more space, lose a lot of comfort, that's for sure) whatever I buy. I totally support people buying homes when they basically get more space and better payment that they have when they rent or ivnestors, that get the cashflow properties. The only thing I cannot understand right now is the fear that some folks got from a momentary change in the housing prices direction --- I would say that this change or stabilization in prices will have a great positive impact on the economy and may save us all from bigger problems in the future --- but how this stabilization makes people think that prices will bubble again --- I do not understand.
Konstantin,I was an Econ major in college and did quite well - not that I remember anything 30yrs out. And you are correct, no one hits it out of the park everytime. I thought I had talked alot about the mistakes I made in the late '80's - buying 8 or 9 properties at peak and having to wait ten years to get even. This gave me the experience to be ultra-careful post 2001.Examples of great deals are more meant to educate than to brag - although I am not unknown to do the latter.I've never attempted to steer anyone in the wrong direction and I would feel bad if I did that.I truly believe the things I say; for example, there are great deals in any market. Perhaps I am a more "the glass is half-full" type than most here. But none of it is anything other than what I personally believe.
"So, what is your basic problem with me? Do you think that I intentionally mislead people? Or did I give my honest opinion - backed by my own actions?"As Konstantine said, my basic problem with you is credibility. You have changed your story too many times and too dramatically without any explanation along the way.You insist today that you predicted big drops, yet at points you were most certainly arguing the exact opposite. Your comments in the past have also been generally mean spirited and derogatory towards "renters," "bubbleheads" etc... You spent years along with lance telling people that they were indecisive and afraid of commitment because they didn't want to buy into the bubble you denied existed...Almost the only thing you have been consistent about is telling everyone what a huge success you are...
Wow Leroy,Tell me how you really feel. I don't think I made "fun" of renters because I like my renters and am actually quite dependent on their being content.Did I make fun of, or question, the "world is ending" predictions? Yes. Did I point out that the predictions (hopes?) of housing dropping to 10 cents on the dollar would mean such economic devastation that not one renter would have a job or a stock portfolio? Yes. In other words - be careful what you wish for? Certainly.For some reason BH's seemed to think that owners would be ruined, yet they would be unscathed.As far as I can remember, the only one I made fun of was the Clarendon day-trader.
lolThis quote must be some of your "only intended to help" advice:"I think you are on to something. The bitter renters have spent years saving like mad so that they can now pay cash for that first home!The only problem is that the home, had they bought it in 2000 would have cost 100's of thousands less than today. And that the $500 per month savings (assuming it was "saved") now totals only 30k. Oh, dear." -VA_Investor http://tinyurl.com/ms353g"For some reason BH's seemed to think that owners would be ruined, yet they would be unscathed.As far as I can remember, the only one I made fun of was the Clarendon day-trader."What is it with you and the strawman arguments?BH's think this...BH's think that...I have read these blogs long enough to know that such predictions were not typical and I think you know that too.
Leroy,I guess we were reading different blogs. There was no bitterness, no wishing for the big crash, no hoping all "homedebtor's" would be living in a tent city....Talk about revisionist...And do you really contend there was no talk of buying houses for cash at 10 cents on the dollar? And absolutly no recognition of what would become of the economy (and renter's jobs and stocks) had their dire predictions/wishes come true?
"And yes, except for 1031's, I bought nothing after early 2002 until late last fall/early winter." -VA_Investor 4 Aug 2009"I bought a property in 2004, two in 2005, and two in 2006. If I wanted more I would buy now. As I've mentioned, I am looking for a substantial commercial property in S. Florida. I don't wait for opportunity to fall in my lap." - VA_Investor 29 Dec 2006How is that for consistency?Don't worry though, nobody will think it odd that at one point you claimed you were buying and that later, in retrospect, you decided that in fact you hadn't been buying, instead you were just swapping land around.... As always, here is the link:http://tinyurl.com/kudwfvThis link has the added bonus of featuring... myself!In retrospect I feel pretty good about my predictions, but I was clearly off on just how quickly things would unfold.
"And do you really contend there was no talk of buying houses for cash at 10 cents on the dollar? And absolutly no recognition of what would become of the economy (and renter's jobs and stocks) had their dire predictions/wishes come true?"Since you mention it... I pointed out that tired old strawman argument back in 2006... "Your entire post is nothing but a ridiculous straw-man argument. Where on earth did you get the idea that everyone who believes there is a bubble is expecting anything like a 50% price drop?Newsflash... a 10% drop is a LARGE drop in the RE world. The 25-35% drop that I expect would be the worst in the area's history." -Leroy 28 Dec 2006"I wouldn't be surprised if some regional markets or even specific market segments in the area hit 50% declines, but as for the DC/NOVA market overall? I am very skeptical.If it turns out my projections are wrong... well then I will gladly admit it.My main point from the post above was that there is a huge range of opinions among those who have recognized the bubble conditions and that most don't expect the 50-70% drop that va_investor claimed were a commonly held belief.VA_investor and Lance have continually tried to marginalize the readers of this blog by making similar ridiculous claims and then pointing out that they haven't been fullfilled." - Leroy 28 Dec 2006(the link above includes these quotes)Naturally nothing has changed. Here you are years later with a revised version of the predictions you claimed you had always made, a revised version of history where you were not in fact "buying" but rather "trading" land... the only thing that hasn't changed is that you are still a huge huge investing success and "bubbleheads" were wrong for always claiming housing would drop 99.9999%In fact, just so no context is lost...my2cents said:"Leroy,VA_Investor is being a little disingenuous with her comments. She has proudly proclaimed that while she has wanted to buy over the past 3 years, she has not found any reasonable deals. But then, she's a savy real estate investor who knows her way around distressed property sales, foreclosures, investment properties, and positive cash flow."And you promptly responded by saying:"mytwocents - I bought a property in 2004, two in 2005, and two in 2006. If I wanted more I would buy now. As I've mentioned, I am looking for a substantial commercial property in S. Florida. I don't wait for opportunity to fall in my lap.As far as the local residential market, there are some tremendous bargains available to those willing to put some effort into it. Most here, seem more than happy to simply await a crash" - Va_InvestorOf course today you will tell a different story...
Leroy,When you figure out what a 1031 is, please let me know.Yes, the two best buys of my life were in 2004 and 2005 - but it wasn't "new" money. You do understand the distinction? So, ahem, yes. there are bargains in any market.Continue to cherry-pick all you want. I still see no reference to my 25-40% off prediction. And there was and is alot of bitterness - reference the recent response to the terrible tragedy of the suicide in Hunter Mill; people actually cheered and said it was the only honorable thing for him to do. Disgusting behavior and Hariett chose to delete my response to it.So keep up with the selective postings. Knock yourself out.
Va Investor: you are getting off pretty easy. I was accused of being a bad mother because I would not move from Alexandria although I could afford to do so. As a result my children (the Ph.D. candidate in econ at Univ. of Chicago, and the Ph.D. from Cal Tech in electrical engineering) were forced to attend T.C. Williams High School. Having been a substitute teacher in Arlington, Alexandria and Fairfax Co. high schools for the last 10 years after retiring from the Fed, also does not qualify me to comment on any of the high schools. I just tune in to watch the delicious naivete unfold and to keep my great real estate agent amused by digging up info on listings.
anielarke,Well, the deck is pretty much stacked on this board.
"When you figure out what a 1031 is, please let me know."Right, because that is what the story became after the market tanked.First(in 2006) when someone pointed out the obvious duplicity of you claiming both that it was a good time to buy while claiming that you weren't buying yourself... you promptly responded that you had been buying throughout the bubble's run-up.Then, much later and after the fact, you changed you story to say that what you actually meant to say was that you had put "no new money" into the market during those years. Seems like a distinction a big successful real estate investor might have made back in 2006 to me."Continue to cherry-pick all you want."I am not cherry picking. Anyone that was posting on bubblemeter in that time frame was more than familiar with you and your posting style, such as it was."I still see no reference to my 25-40% off prediction."Funny, neither do I. I have found plenty of examples of you going on and on about how there was no bubble and it was a good time to buy though.
"It seems that you and @J@ always make correct bets on the market, no matter that you forecasts are always off, you actual decisions are correct, that's a beauty."Say wha? Please quote the bet and the off forecast. My bet is holding onto my small SFH in the immunozone. My forecast is that valuations in my area would hold. That's zip code 22305 which includes part of Del Ray, North Ridge, and Beverly Hills. I cashed out of a RE holding when the man who managed the investment died last year. That was a surprise to me and hardly a bet. My worse-case expectation was a 10%, maybe a 15% total loss in the assessment of my SFH in 22305. That's peak to trough. Flat or slightly rising would have fit my expectations too. I have yet to see that drop. It could still happen but I doubt it.15% on a (roughly)half mill place would be $75K. The problem is catching the exact peak and trough. RE is a long term game. If I knew with absolute certainty that my place, my street, my neighborhood, my zipcode, my city would drop 15%, I still wouldn't sell. Instead of fearfully selling, I'm making small upgrades to my house.Apparently places like PWC are experiencing a soft RE market but that has not affected me. So much for the "substitution effect" and the rhetoric that "it's coming." Perhaps you've been listening to a certain revisionist who makes stuff up and then calls others liar. Best to -PLONK- those types.
I'm kinda jumping in at the end of this thread, but @J@, if you go to franklymls.com you can see a number of sellers who bought in 2004-07 in your zip code who are selling for a loss. Some of those losses are larger than 15%. If you bought in 2003 or earlier, good for you, you probably won't lose money on your house. But to say that your area wasn't affected is false.
Anon412...@J@/KH isn't the sort to be concerned with what is actually happening.These and various other "inconsistencies" have been pointed out numerous times in the past only to be completely ignored.While VA_Investor will change her story after the fact to claim she was of course right all along... @J@/KH will just deny reality and insist that nothing of the sort has happened.
Leroy,Get a life. I went back to some of 2006 Bubblemeter posts and I stand by everything I said. Sorry your 50% off didn't materialize.I'm withdrawing now from a conversation that I should have known not to get involved in.Got popcorn? I'm out.
"If you bought in 2003 or earlier,"I was here before the 1992 pullback. My peak to trough assessment drop in the 1990's, perhaps due to the S&L crisis, was about 1%. I'm sure some places lost more.My peak assessment was in 2008, the drop in 2009 was small but it was a drop. If you use your imagination or cherry pick the data, sure, you can find way over priced houses that fell, even in the immunozone.Smaller, quality SFH though, -shrug-.I'm watching a nearby place, $2.9M asking. If it finally sells for $1.9M, is that a bubble pop? Sorry, whatever it was that was supposed to happen, the infa-mouse 50% drop? That did not happen. I'm not saying a drop like that won't happen in the future. If it does, we will all have bigger problems. By the way, a 50% drop would not put me underwater. It might cut my RE taxes, which would be just fine.I'd like butter with my popcorn.
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