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Thursday, August 6, 2009
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80 comments:
Anon412,
At your suggestion, I took a look at 22305.
I see your point but I don't think you have the history.
1) 32 actives in the entire zipcode. This is low. A couple years ago, actives ran 70, 80, more.
2) The mid range, 400K-600K, is very sparse. Perhaps a half mill should not be mid-priced but that's mid-price in this market.
3) Greater than 15% price drops? 3820 Elbert. Click on the entry, (Tax Records & Owner Info), then (Tax History & Payments) on the right. Might be an overdone flip. 325 Beverly is just plain expensive. What else?
I expect 3107 Russell Road to languish.
4) The lower end, and to an extent this zip code, is dominated by one strange street, E. Reed. Frankly's map hides listings 13, 14, 15, 20, 21, 27, might be under 19. E. Reed is in transition. Look quickly because Frankly will reassign the numbers.
My opinion is that the bubble, such as it was, already deflated and is last years news. It was fun imagining grabbing a place at half off but it didn't happen.
I've gained insight into the thought processes of others and that has value to me.
contrarian was right, something was in the works for the GSE's:
WaPo
U.S. Considers Remaking Mortgage Giants
The proposal, which is preliminary and one of several under discussion, is scheduled to be taken up by the White House's National Economic Council on Thursday.
I heard the other day that none other than Dean Baker has decided to get back into the housing market. I heard he paid 650K -- does anyone know where he bought?
New unemployment claims drop again
"The Labor Department said that initial claims for jobless benefits dropped to a seasonally adjusted 550,000 for the week ending Aug. 1, down from an upwardly revised figure of 588,000 in the previous week.
...
Despite the improvement, weekly jobless claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007. "
(for reference the estimate last week was 584,000 so the upward revision to 588,000 is not the bulk of the story)
Job losses are still heavy and still at a net loss, but to look on the bright side, things could be much worse.
"TBW said...
Many of the schools on my recommend list have a lot of diversity. Many of them are majority-minority. In 10-20 years I suspect all or almost all will be majority-minority (at least Fairfax and points further in.)"
TBW - Interestingly, the one school system that may buck that trend may be Arlington.
http://www.novaregion.org/DocumentView.aspx?DID=1919
If you look at page 18, it looks that peak minority school enrollment in Arlington was 1998, and its trending down ever since. If that trend continues, Arlington wont be majority minority in another 10 years or so.
Alexandria (page 19) is trending this way too, but it had such a high minority population to start with, I doubt it will ever go below 50%.
Long term however, I think you are right. Arlington and Alexandria are the only areas in the DC region that are becoming increasingly white (page 14), amazing considering most population growth USA wide is 80% minority, 20% white.
Long term however, that has to stop. If the 80/20 nationwide trend continues, that will likely overwhelm the "white emigration" trend the inner areas have seen in the last decade. However, given that countervailing trend, the timing of when that "majority minority" point happens may be closer to 20 years than 10.
Tiredbubblewatcher You sound like a young man who grew up in the suburbs and then went on to a good college and I think you said one time to law school. Your background sounds fairly parochial and I think you are either bored or underemployed in your job because you have a lot of time to spend on this blog during the work day. There is nothing wrong with that. I think you do some very good research and add to the information on this blog. What I don't understand is how you can determine which schools to recommend based on conversations with friends and looking up stats on websites. You might be a volunteer or a tutor in some of the schools which would give you more insight. If so I could understand your ability to make recommendations about schools. If you are making recommendations abut schools to your peers and they have young children, are you eliminating high schools which might be very different (as someone pointed out today about the schools in Arlington) in 20 years when these people might have children in the schools. I would just like to understand what experiences and first hand knowledge of children and schools you have to recommend them.
I'm not considering buying yet but I do get Frankly alerts for most of Arlington. I've seen a lot more listings sub-500k than I used to. It seems like a lot of stuff is selling too.
I don't remember ever seeing a place in a reasonably decent location like this one selling for $410k in the last year:
North Arlington House
It's a few steps from both KFC and Taco Bell!
But really, given the location and the reasonably sized lot I wouldn't have thought this would be that low a few months ago. Maybe the Arlington market is starting to thaw out a little price-wise.
Can I move that we drop the entire schools debate portion of this conversation?
It's not going anywhere productive, just more contentious.
I second that motion.
By the time I have kids I expect to be able to upload knowledge directly to their brains via a memory card I get at Best Buy. So I'm not too concerned with schools.
Jeff B.
2000 sold price 185,000 (jaw hits floor).
410k doesn't seem bad, but there's no way of knowing how much work this place needed that hasn't been done. So it's "real" price may include 40k of things to fix up.
JeffB, I can't imagine having to listen to, "Welcome to Taco Bell, may I take your order?" blaring from the drive-thru as folks stop by for their 4th meal at 1 am every night.
lol JF, I love that marketing campaign. Nothing more clearly demonstrates the problem with our eating habits as a nation. Do we really need a fourth fast-food meal per day?
Wow this is such a strange house
http://franklymls.com/fx7111799
It seems really pricey, but I guess green is really trendy...
Housebuyer, I have a friend who lives a few streets from there, so I've driven by those houses (there are 4 of them) many times. They are incredibly ugly and don't fit in with the surrounding neighborhood at all.
Even if I had a million dollars to spend on a house, I wouldn't buy one of those.
housebuyer,
We discussed this group of four wierd houses the last time one was up for sale (long long ago)
http://franklymls.com/FX6986287
It sold for 1,040,000 back in May. What's funny is these appear to be the same pictures, but like screen captured or something. Did the decorate all of them identically?? Or are these just pictures of one of the 4 houses?
Odd, odd, odd.
The picture quality really is amazingly low. You would think if they are selling a million dollar house they could splurge for a couple hundred dollar camera to take decent pictures
housebuyer,
Nah, I'm telling you they grabbed them from the other listing, or forgot to hold onto the high-res copies... Take a look at the sold one.
reecon -- I've noted before that I have much less to do at work than I used to. I've been interviewing at various places. The fact that I scored a few interviews when half a year ago there were not even job vacancies to apply to does give me some hope for the regional economy (although I'll feel better about the region's economy once I get a job offer ;)
As for growing up sheltered -- guilty as charged if you mean not seeing extreme poverty (a lot of homeless people) or drug use or teen pregnancy. And if I have children I want them to be just as sheltered. I don't feel like I am building character when a homeless person comes up to me in DC asking for money and telling me about how they just got out of jail. I don't think a little six year old needs to see that. I guess I'm a bad person for feeling that way to some of you.
CRT -- Just to be clear my point was that I don't think racial demographics or socioeconomic demographics is the end-all be-all to schools. I had been accused of attacking any school that was diverse and my point was that I like a lot of schools that are probably among the most racially mixed in the nation. Anyways, we should probably take a break on the whole schools discussion because I think people are tiring of it.
Jeff B,
I wouldn't want to buy that home precisely because those fast food joints are way too convenient. If my memory serves me correct there also is a McDonalds across Route 29 which would be easily walkable. I rarely eat at any of those places now but I bet I would go more often if I lived in walking distance.
[btw I know you were joking about that being a plus but I just wanted to note it seems a guaranteed path to weight gain]
Oh I guarantee I'd fall victim to temptation if I lived there too. I wish my company would stop giving us free sodas for the same reason!
hmm,
walking to McDonald's. It might be a wash.
Jeff- Agree that the location of that house really sucks. I wonder if all your stuff would eventually smell like Fourth Meal?
Here is a much nicer house for sale in the same neighborhood:
(I would be surprised if they got over 6 for this one)
http://franklymls.com/AR7121891
I would love to know the deal with this house. (Cough *anie* cough). We looked at it back in 2002 when we were house shopping. It seems like every time we drive by, it is for sale. Poltergeist?
http://franklymls.com/AR7104562
housebuyer: I know someone who live a block over from that (actually 'those') houses. They are even uglier and out-of-place in person.
Meshell,
I like how the first one deals with facts. One mile to Ballston. No "Walk to Ballston!" nonsense.
The second one says it's close to Ballston, Rosslyn. Close to Rosslyn??!?!?! I wouldn't even call a home in Ballston close to Rosslyn. I do walks that length all the time but I wouldn't imply it's something you would want to do a lot.
Cara - ha! 50 calories burned walking each way, vs. 1000+ consumed. I couldn't buy the fast food house either.
Those 4 Poplar houses looked beautiful on the inside, but as we noted earlier are really unattractive on the exterior. Also, if you are paying > 1 mill. for a house, I think most people don't want the house to look exactly like the one next door. The kitchen seemed very closed off from the rest of the house, just the opposite of what you want in a house that otherwise looks designed for entertaining. I hope the architect learned something from the 2 or 3 years his/her houses went unsold, but I'm afraid s/he will chalk it up solely to the "bad market."
Can anyone explain the back of AR7104562? Was that at one time common to have a door on the top floor and a long staircase? Was it some really strict fire code? Did this home used to be a duplex or something like that?
Yep, I agree. And a 1 mile walk through a nice neighborhood on a beautiful day in October is much shorter than a 1 mile walk on a highway shoulder sucking exhaust fumes in July.
Meshell, tbw
Yeah that first one's pretty. It's only been listed since the end of July, so it will be interesting to see what it goes for and how quickly.
It doesn't seem like a half a million dollar home to me, but I'm not who'd be buying it anyway. It's well staged, though the orange/peach living room may be a bit strong for some people, so that should help move it.
Ace,
Yeah, the math doesn't work out too well. It was just the irony of walking to get fast food that made me laugh. (or yuppies walking to get fast food) I shouldn't talk though, my husband and I walk to IHOP pretty often, and Chilli's occasionally, we've also walked to the movies a mile away so...
JeffB LOL about that Taco Bell on Lee Hwy which is near our house. My brother is doing at internship this summer and staying with us. He complains all the time that the TB is not open late enough. Not sure what time it closes, but it might be 10 p.m.
One of my friends from the mother's group is buying her mother's house in Aurora HIlls and moving from Arlington Forest. AF has houses in the $550K to $850K range but mostly in the $600K range. Her real estate agent told her that from Jan through June 2009 just 7 houses settled in Arlington Forest, but in July 2009 8 houses settled in Arlington Forest. They are putting their house on the market this weekend and their agent advertised it and she said that there has been a steady stream of cars by her house. I don't know if this helps where you are looking.
Jeff B., we've discussed Highview Park before. There are some great houses there, but also some that are very run down, sometimes right next door to one another. Values tend to be lower there than in nearby neighborhoods.
The other disadvantage is that it is perilously close to Heidelberg bakery, as tempting as that Taco Bell.
Oh I've heard great things about Heidelberg bakery. I didn't realize I had driven by it so many times.
Since we are discussing the area . . . anyone ever try the Metro 29 Diner? Any good? It would be something else walkable from there.
Can someone explain this to me?
http://franklymls.com/AR7125010
Oddly enough the list price is $30k under assessment so I wouldn't call this a crazy price per se.
This is one mile from the East Falls Church Metro so I am pretty annoyed that the listing implies it's "near metro."
Are these homes assessed for a lot because they have no HOA or similar such that a tear down/rebuild is easily done? Looking at the satellite map it (and a few other ramblers) are surrounded by some very large homes.
I would think though a developer would only pay so much for the land.
Oops sorry it's slightly above assessment.
The county tax records note the current owner got it by will in April 2009. They live in Aptos-Seascape, CA. The mother probably owned it outright free of mortgage. Any amount is pure profit. I wonder if they'll really sit on the house or price aggressively after a while. I imagine the latter.
TBW, tiny house (1000 sq ft) AND no basement -- very hard to sell a house in Arl. w/o a usable basement, even if the house is good-sized. But it's on a big lot for Arl. (8000 sq ft). That (along with the lack of updates and as/is designation) screams "tear down special." But the lot isn't big enough for the developers to subdivide and put a McMansion on each.
Lately developers have paid less than assessed value for tear downs, from what I've seen. So this may go for a lot less.
http://blog.brianblock.com/
Ok..its a blog; and a realtor blog at that..but according to him all youse guys are living and looking in a HOT market so you are ALL correct except for those expecting further declines.
tbw,
yeah. the assessor's think the land is worth $465k. It'll be interesting to see if someone buys it to live in for more than that, or if it goes for somewhere under $500k for the land-value. I don't like the drainage on the lot if you use too much more of it...
1 mile is walking distance but they claimed "close walking distance" so I call foul as well.
Ace,
Yeah there are some nearby 2009 built homes languishing on the market. They are listed for $1.3-1.6M. If a developer could get $1.3-1.6M then paying $500k for the land is a no brainer. I have to imagine a large home only costs so much to make so that's a lot of profit.
However there appear to be TONS of homes in North Arlington in that price range that were recently built. I think the market clearing price for those will be lower. How much lower? I have no idea. It's a segment of the market that was much smaller to non-existent so I don't know what the pre-bubble price was.
tbw,
Regarding this house, yeah it mentions in the description that it's a two family home. So I'm guessing the top floor is separated from the middle floor and the back stairs are the only way in? Seems like a pretty strange place.
Heidelberg bakery is a tasty place. We sampled their wedding cakes for our wedding last year and the sugar content almost put me through the roof. Good but intense!
I've only been to the Metro 29 diner twice I think. The food was ok but I thought the prices were kinda high for a diner. Personally I wouldn't go out of my way to recommend it.
Arkey,
He only counted the actives not the lists, so I'm not sure that's a fair metric. (The ones that sold presumably were at one time in the "under contract" category).
It's very hard to use these metrics with so many short sales sitting so long, and banks so swamped with refi's... But yes, he's showing the same data that Harriet points out to us monthly.
Arkey,
Definitely some parts of our market are hot. But some are ice cold (aforementioned 2007-09 McMansions in North Arlington). Home prices are interdependent. It's possible the lower end gets red hot enough that it thaws out some of the ice cold upper end. But the ice cold upper end could make the hot lower end cold again.
housebuyer has found so many attempted flipper homes owned by people who are buying 4-5 foreclosed homes each between 2007-09 that I wonder how much of our hot market are these wannabe real estate investors.
Cara -- as the homes in Burke you saw bid up start to be noted in the tax records it might be interesting to see how many are people living there and how many are investors (running their name in the Washington Post recent sales database can give a feel since it shows when people bought a bunch of homes.) Obviously some people buying homes to live in but I wonder what percentage of recent sales are to investors.
Metro 29 is okay. Nothing special.
tbw,
Hmm, that's too much work for me. For the most part, the ones that are getting bid up are move-in ready. I don't see how those would be attractive to flippers on the basis of price or potential. I'd bet those ones out near Braddock Road that have been "bid up" to $220k are investors for the most part, even at that price they make a lot of sense to rent out (not necessarily to flip. I think based on price, that I'm not alone in having great disdain for the architecture and location).
Oh OK TBW and Cara. I did see a SS go UC last week..and..get this..it had been on the market since Nov 07. I'm scratching my head and my.a&&...wondering just how it could be a real short sale after almost 3 years and who bought it? This market "be crazy"
Arkey,
Yeah in this market you've really gotta go by how long does it take a well-priced house to go under contract. Problem being I have no rule of thumb for this.
So as a starting point I would guess, 2 weeks for entry-level starter home prices, 1 month for move-up houses, 4 months for luxury homes, would be "typical" for a brisk spring-summer selling season. These would be the, "at what point should I consider lowering my list price or accepting an offer more than 5% off list?" Not being a realtor, I am pulling these out of my butt.
I would say in Burke right now, the market is at about this pace for homes that are priced within 2% of recent comps and have no un-fixable defects (like backing to train tracks or WalMart, oh wait that one sold in a week).
The short-sales which can stay listed both as active and under contract way longer than normal distort the normal inventory metrics too much.
It's also possible that the pace I've described is actually ridiculously hot, and I just have no basis for comparison.
Cara, I don't have any insights either..when I was on the market at the first of the year it was taking approximately 100 days or more to sell. I think the old rule of thumb was 90 days but it was such a slow market in my price range it was bumped to 120 days. Now, I'm not sure. Its August the market is suppose to be deader than a door knob..it aint..I think in the lower price points they are selling within the first 21 days or so..average..lots go on day 1 or 0.
Arkey,
I don't know. Given your house, I would just ignore what's happening in the under $250 range near you. A lot of those buyers will qualify for the $8k incentive. In the upper ranges, I do think there's a lot of pent up demand that has decided to get in the game, and go ahead and buy that house.
We can talk all we want about prices declining once interest rates rise, and how that's a more sensical time to buy, but psychologically, people just hate paying interest on debt. They'd rather it go to "principal" whether that was an inflated amount or not. The 5.5% and lower rates make people feel a whole lot better about signing up for half a million dollars in debt. If it's your dream home and you're going to live there 20 or more years paying a low interest rate is really attractive, and a lot more attractive than postponing the purchase another couple of years under the assumption that more declines are yet to come. Why not live in the house now?
The people buying now think now is the bottom, or close enough to it. And there are a lot of them. Whether they're right, only time will tell.
Arkey,
We will probably see one of the hottest Aug-Nov real estate markets ever because of the $8k credit. However because of the AGI limits the more expensive homes will continue to not share in this gov't funded boost (also $8k is a much smaller incentive on a $700k home than a $200k home.)
They have managed to convince a lot of people that the $8k credit will not be renewed. I wouldn't be shocked if Congress waits until the last week or so to renew if if they do renew it.
TBW, I strongly believe they will renew it and also include the 15,000 program for move-up housing. I heard this am that 60% plus are going to be unwater on their mortages. To me as a potential seller and buyer that gives me chills. I know most here think that will drive down prices. I don't. I see 60% of re-sell sitting out if they can afford the payments and a housing whiplash where rents and housing sky rocket. If I don't sell this go around,I'm sitting on it for at least 5 years. I know you guys try to anticipate what Federal retired people are gonna do..well, this is what I'm thinking about. Those new lending rules have given me second thoughts, too. Man, I could be out alot of money if I don't close because of the loan approval not being done in time. Scarey stuff for a seller right now and I'm getting cold feet. Seriously didn't see this law coming or I would have stayed off the market. Its just to hard and risky to sell right now.
Arkey,
60% where did you hear that? even Deutche Bank says like 40+% and that was under the assumption that price declines continue through 2011.
I wouldn't worry about the new loan requirements. All they do is allow buyers to shop for mortgages more easily by having the costs more uniformly stated and stated upfront before anything can be charged to the applicant aside from the credit-check fee. I think it will blow over. And I haven't heard of any appraisal shenanigans around here, yeah some things end up appraising below the contract price, but usually an agreement can be reached.
Seriously, I think now is an absolutely excellent time to sell if you have the equity. Yours is an upper-end home, it takes a little longer.
Cara..now when the rate changes and other stuffs..they have to give the buyer 3 days notice and they can walk. It's already creating problems because generally the keys turn over at closing but if they get a notice the day of closing..you push back 3 days and if they walk..well as a homeowner I've already "moved" and cleaned the home for turnover and secured other housing. Realtors and mortage brokers are flocking to training on this new law. I knew about the apprisal or HVCC change and that is one of the reasons I came off the market May 3to let the dust settle. I've been around to long. I know when you change stuff there are always unintended consequences that mostly HURT like heck.
Cara, I forgot to answer your ?. It had to be WTOP that's all I listen to in the am.
Arkey,
I agree with Cara that now is a great time to sell a home. There are enough knife catchers out there that they will snap up your home if it's priced competitively. Most of these people are not knife catchers (who are thinking about investment) but desperate mom and dads who don't want to raise junior in a 2 BR apartment and have the stability and other intangibles that come with owning a home.
Arkey you say you are willing to wait more than five years from here. Really? Even if your assessments come like this?
2006 X (peak price)
2007 X-6%
2008 X-9%
2009 X-12%
2010 X-15%
2011 X-18%
2012 X-21%
2013 X-21%
2014 X-21%
2015 X-21%
2016 X-15%
2017 X-7%
2018 X-3%
2019 X
Sell now.
Don't get too fixated on the percentages I used. I'm just describing what many of us see happening -- years of price declines, flat/no growth, prices start going back up. A few people here would view the booming prices I put between 2016-19 as too optimistic. And a few think the above is too pessimistic.
Arkey,
don't accept a contract that doesn't include the wording that it's default if the reason the buyer backs out is due to a rate change. It's in my contract. You can't just walk because you didn't get the rate you like, _even_ if the rate change causes you to no longer qualify for the loan. So, I guess the other caveat there is only take an offer from a well-qualified buyer, but I'm sure you know that already.
Hope for the best, plan for the worst. You'll be fine.
housebuyer commented yesterday on the craziness going on in the stock market. I wonder if it had anything do with the upcoming end to flashed orders:
Reuters
I wonder if traders heard that this was coming and turned their computers up to 11.
tbw,
you asked about flipping? Well, Capital Investments LLC is making a pretty penny rehabing properties it bought at auction:
Two solds today, each with $100k gross profit. (Net unknown, you tell me):
http://franklymls.com/FX7073597
http://franklymls.com/FX7083667
I dislike the bowl-sinks, and am starting to really dislike the extra-dark wood, but so long as you don't know how many other houses look exactly like yours on the inside, it's all good. I'm not a fan of the marble bathroom either, most accidental deaths happen in the home... I've banged my head on marble before, it hurts!
bought 263,200 sold 379k at list
bought 218,100 sold 319k at list
Further proof of shadow inventory, at least in Orange County, CA:
http://i30.tinypic.com/24fi4h0.jpg
Link
Increase in delinquency, increase in foreclosures, DECREASE in REO rate.
http://mortgage.freedomblogging.com/2009/08/06/foreclosure-wave-gets-bigger/15037/
Cara,
I HATE bowl sinks.
What is with the camera they use? It makes it look like a fun house with windy walls.
Cara-
Yeah they have a ton of houses all over the place and they tend to sell very quickly basically list price. I am pretty sure they also do not list a decent number of their properties, they just sell them to people who contact them.
They are doing pretty well for themselves, but if you like their style(and don't mind every house of theirs looks identical) you are actually getting a decent deal. My guess is if you got all of the work they do professionally done it would cost you most of the 100K they make. Not too mention they also can buy houses for less then you because they are paying cash for foreclosures and banks really like cash offers.
So if you are ok with a cookie cutter house and like their style they price well(so their houses don't sit on the market). If you want to choose your style, don't want a cookie cutter house, or don't trust their work than stay away.
There work scares me a little they get houses turned around very quickly and the quality can be bad. I went to a house of theirs were two cabinets overlapped so you couldn't open one without opening the other...
That camera lens is giving me vertigo!
Cara, what are the fatal flaws with that Oak Apple house? That seems really cheap for a SFH in Burke...isn't that more like the "upgraded TH" price for that area?
Metro 29 diner is kind of gross and greasy IMO. The Harrison St shopping center up Lee Hway has some good and reasonably-priced places--Elevation Burger, Pie Tanza, that Chinese place that delivers, and Taqueria has a fun and cheap brunch if you are looking for a Sun morning option. All much better than metro 29.1
Wondering more about Burke pricing, because I just clicked on other Burke Center listings...what makes this house worth 625 and that other house only 379? It doesn't look THAT much better to me. I'm totally mystified. Same schools, even, for the school-obsessed on here ;).
http://franklymls.com/FX7097256
TBW..My 09 assessment is already 34% off my 06..(I think, I would have to add it up but its close)..using your figures and I would be paying o taxes in 3 years..worthless dang ol' house. My concern is right the opposite..wildly inflated prices due to shortages in re-sell and rentals. I'm only going to retire if we sell because I aint spending 24 hours with the better half. I can work about 7 more years before I max out retirement benifits. It goes up 2% a year till I hit 41 years and I'm 55/35 in good health. I'd liked to sell for sure and move home to Ark. to go fishing with my sis. I have a pretty good thing going here. Moving and selling a home costs a bundle of money and is a lot of work. Heck houses in WB and Dumfires are priced higher than me. I'm just not gonna do it below a certain price point, to risky, to exspensive, to hard and not enough in it for me. I say risky because why give up a very nice home that is completely affordable to be hanging out a trailer door with my cigarrett dangling hollering for the county mounty to arrest me for being stupid. Because I will stay drunk...and..mad..if a trailer is the only thing I can afford for my retirement home.
Cara: Wow! The first one sold unupdated in 2006 for $500k. In 2009 it was updated and sold for $380k. That more than a 25% haircut -- probably closer to 37% if you factor in the cost of the rehab ($50k).
Another vote against bowl sinks. I thought they looked kinda cool, until I used them at the BMW dealership. They make a complete mess and there is no way to brush things into the sink when cleaning up.
Meshell: Are we looking at the same two houses? The first one is dinky, gross (albeit rehabbed), and backs up to Burke Center Pkwy, while the second one is much larger and nicer looking.
#1: 1040 above ground sq ft
http://franklymls.com/FX7073597
#2: 2570 above grounf sq ft
http://franklymls.com/FX7097256
I do believe in shadow inventory. What I don't believe in is the "waves." At any given time in the history of the housing market there is shadow inventory. Banks are always foreclosing and therefore have some properties on their books - shadow inventory. Yes, right now it is much more significant.
Houses in the DC area continue to go into foreclosure. Banks process foreclosures as they get them. I don't see any decline in delinquencies, so I expect a constant stream of REO's going forward. Can these be absorbed is the question. It is a fact that in the first six months of this year they were absorbed...and then some.
Robert, I know in PW and PG counties the foreclosures will be absorbed in some areas because they have stimulus money set aside for foreclosures and people within a certain income range. Its a sweet deal where 3.5% or 15,000 in closing costs are paid along with the 8,000 and the closing cost loan is a no interest loan that doesn't have to be paid back if you live there 10 years, in PG county certain areas the limit bumps up to 20 grand in closing costs. I heard a radio report this week that they are projecting a shortage of Condos begining next year. I thought of Cara.
Cara..I hate marble..it stains and chips and the worse for harboring bacteria. Never use it in a kitchen or bath. I agree with the bowl. Can you imaging cleaning a bathroom after a kid has been in there. I've never thought that made any sense. Its hard enough to keep the inside clean much less the outside, too. I've always seen those things as toothpaste catchers from hell. What do you think about hardwoods in the kitchen? I know they are pretty. I have alot of hardwood floors. I ask because somebody wants hardwood in the kitchen. I can't imagine how damaged they would get of course we cook every night. We cook and bake and use our kitchen. I know the newer houses have them and they are pretty with all that SS but I'm thinking finger print hell and water stains.
Yep, those were the two I was comparing, and I agree, the second one is much nicer. It just didn't seem *250k* nicer--nicer location & kitchen but the rest is blah.
Another vote against bowl sinks here!
And Cara - I'll take it a step further - I HATE the phony dark finish that builders are putting on cabinets. It masks low quality wood (on high quality wood, a natural, no stain finish produces a classically beautiful effect). (This is a Crate and Barrel trick on some pieces they sell, but they have no shame charging you as if the quality is high.) And, every time there's just a little accident, the finish scratches or chips, revealing a much lighter wood underneath, so the cabinet/furniture looks beaten up very quickly. Very impractical.
And, unlike all the HGTV stagers, I subjectively just don't like how it looks. I think these super dark finishes will look very dated, very soon.
Arkey,
I didn't understand the last portion of your sentence. Are you implying if you sold this year all you could afford is a trailer park in Arkansas? Come on, that's nonsense.
You noted before you bought a place a while ago in Arlington, sold it at a profit, bought the place in PWC. Did you buy the PWC home during the boom years? If you are underwater I can see the concern but if you are still ahead then I don't see the concern.
I would imagine there are many nice neighborhoods in Arkansas where you can buy a home for half the price of your PWC home. Maybe even for a third. Just avoid whatever ritzy neighborhood the Rockefellers who moved down to AR live(d) in.
TBW-
I am pretty sure Arkey said she wants to use his house to help pay for her retirement. If she can not make enough of a profit she will just continue to work so her retirement income is higher and she doesn't need to as much profit from the house. I think this makes sense. If there is no real reason too move you may as well just wait to get the price you want.
TBW, you missed a couple of houses. We sold for profit in Arlington, lost money in Slidell, La and lost money in Kansas City. Moved back to the area and we chose PWC over Fairfax and Arlington due in part to census data, property taxes, housing stock vs. price and the VRE. VRE was most definitely a significant impact on our decision. The trailer reference is to the 5 year wait. If we sell now we should be ok in buying and relocating but I don't expect that to be true 12 months out. We bought at the bottom in 97 pure luck of the draw. Nope not upside down and payments well within our means so thats not an issue. Well, I've been keeping an eye on things in Ar., Al., Ms and parts of OK. Prices haven't really come down. My neice and her husband bought 4 years ago and had to re-locate to Cave Springs..he is the weather guy, anyway, they sold for an 8,000profit. You look around housing stock across those areas you don't find much over 2400 sq ft, 3 bd, 2 ba, no basement(slab), no attic, approximate same age, on a 1/4 acre that run between 200 and 350,000 depending on "improvements". My home in comparision runs maybe 50,000 higher in most neighborhoods that I know are comps. but i save a bundle on real estate taxes!
Homebuyer, we don't need to sell for retirement purposes but if we don't sell I'm going to keep working because there isn't any reason to retire. Selling the house would pay for a move and down payment on another retirement home but its not a have all, be all. If I throw in the towel my hubby is retired and will just use the time to build a house for me on the farm which is actually where we had planned on retiring to for years, 80 acres on the Otter. Those plans sounded good when we made them in our 40's, not so hot later when you have to consider the "kids" but it's still a desirable option. The little old lady in the Caboose is legend. The small planes key off our caboose when its real foggy finding the airport
Meshell,
TH and tiny SFH prices in Burke are very similar. Non-rehabbed 1000 sq ft split levels (with better locations more nestled into nicer neighborhoods) have been $300-315k this spring. So $379k for a quality rehab (which this is questionable) is a totally appropriate price in the current hot market. The rehabbed THs (like the Capital Investments one itself) are between $325-$375k and most are a heck of a lot more space than this split level.
Now $625k just cuz it has a two car garage, backs to woods and is twice the size? Mmm, well it is about twice the house of the $379k one so in that sense, sure. But I would put it closer to $600k for what the second greatest fool would pay. But still it's close to right.
Arkey, Ace, right there with you. I'm a cheapskate though, I prefer really nice vinyl for the kitchen. Because you know what? You don't damage it changing appliances, it doesn't break your dishes when you drop them, or at least not every time, and if you or someone else every wants a change, you just replace them. So you can go with a color, and not worry that it has to be "timeless". The dark wood vanities are mostly cheap junk. They're meant to be replaced when trends change. Cuz, you know, in the future everyone will want to change plumbing fixtures as often as they do cars....
housebuyer,
And I agree completely with your analysis of Capital Investments LLC. They sell that quickly and at list because they are priced below what any other move-in ready, updated comp is listed for. And they only make money because they're buying them either in bulk or at auction or something. But definitely for well under what someone would pay for an MLS listed REO
for instance:
http://franklymls.com/FX7049315
has a two car garage but is otherwise totally comparable to the Oak Apple split level in structure and location, and it went for $350k. And it's maybe not a complete wreck but it's close.
I just don't like their taste and don't trust their workmanship. Other than that I feel they are doing a service to the community by rehabbing these places and getting them back out there for people to buy, and making a pretty penny doing it. Capitalism at its best. This is in no way to imply that buying them and rehabbing them for rental would be bad, because that's just as useful. But then they might have to use more durable less flashy sutff when rehabbing and that might be more expensive, and certainly a longer term profit generator.
Cara, my parents put vinyl in their kitchen/dining room in 1983, and it is still in perfect condition. The pattern is very dated, but that stuff is indestructible and holds up amazingly over time. And it is so easy to clean!
paKa,
I know! It's just incredibly practical. You do need to take care of it and not strip off it's finish with harsh cleaners, or resurface it if you make that mistake, and I dislike the ones with what I call "bumbles" little dents all-over, because grime can get in those dents, but that's really just from one cruddy rental place in grad school.
Cara & Paka...thank you. I was beginning to think I was just an old dinosaur that likes clean, durable and easy on the feet and back. I have had quiet a few homes and vinyl is by far my choice for the rest of my life. Tile is pretty and I have had 3 houses with tile and the grout was never an issue. I always maintained my grout by re-sealing every 6 months but its cold and slippery and not child or pet or dish friendly and you don't cook with cast iron because you are afraid of dropping and chipping a tile. I always bought extra because you can seldom match but it's work to replace tile. You guys wouldn't believe how many people comment on the cleaninest of my home..so much so..that I know in the back of my mind the realtors have tagged it the clean place. It's kinda emabarrsing. I wonder if these people think I'm just anal or something?
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