Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Wednesday, September 9, 2009
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
91 comments:
Calculated Risk has more on option-ARMs and I/O loans today.
NY Times I/O
(haven't read it yet)
August numbers should come out tomorrow, right? Anyone for predictions?
Ace-
Going back to your comment yesterday about modest deflation not being bad.
The main two reasons I don't want to see deflation it that it hurts corporate profits and makes it harder to pay off the national debt. With a little bit of deflation you buy inputs for some amount and spend time creating your goods. During this time your goods because worth slightly less, which means you either don't have enough money to pay for your inputs or at least make less money. I care about corporate profits, because companies will not start hiring significantly until they see their profitability increasing.
As for the national debt. If there is deflation people will make less nominal money so the government will take in fewer tax dollars which makes it harder to pay off the debt. In addition if there is modest inflation the government gets free reign to print some money which also helps them pay off the debt.
From the article Cara posted:
A decade ago, interest-only loans were rare. But as the boom heated up and desperate buyers sought any leverage they could, these loans became ubiquitous. They were especially popular in Florida, Nevada and above all California. In 2004, nearly half of all buyers in the state got one.
Nearly half? I guess that could be anywhere 40%+ but that's an amazing number considering how many loans were being taken out during that time frame.
Jason,
Yeah, California is... how shall I say this, in for it?
I agree that close to half would be anything over 40%.
A fun breakdown would be how many I/O loans were cash-out refinances... In California it's not just the peak buyers, it's the peak borrowers.
I mean find a chart of mortgage applications, refi's were always a huge percentage, even when mortgage rates were coming up off their post-9/11 lows. Why? Do you really think all those people were converting to 15 year loans to pay down the house faster?
Why Prices are Almost Certain to Rise this Fall- By an Arlington realtor.
Hi,
Many of his other posts are more informed than that one. But his prediction on Arlington condos when the months of supply is still over 6 months, is nuts. Contracts are up! from terrible lows, sure. Inventory is down! From highs that exceeded 12 months of supply, big whoop-de-do.
Hi-
I agree with Cara. Most of his information was not Arlington exclusive. My guess is that we continue to see a a rebound through October with most of it coming from the hardest hit areas. I think after that we will stagnate through the entire winter and we will have to see how the economy/interest rates are doing next summer to see where we are headed after that.
The generation under 30 is bigger than the boomer generation. It was the boomers coming into the housing market that started prices thru the roof..right along with high interest rates. Prices and interest should see saw each other but with that demand, it didn't. If I was an investor, I'd be investing. Condos are a popular first choice espically since the avearge age to buy is 30 and most are selecting to stay single. Its just my opinion and uneducated at that, just life experience.
Priced out everything we want to do to our new home if the short sale goes through. The total tab was basically what I thought it would be.
I'm getting a better understanding of why people chose move in ready. I love that I'm going to get what I want, not what someone else chose, but paying out of pocket is so painful.
Why is it so much more painful to contemplate direct cash outlays of money than it is to foot the downpayment? The magic of leverage. when every $10,000 goes allows $50,000 more "worth", it just seems like a better use of money.
We've talked a lot about the return on renovations here. I'd like to posit there is an upper and a lower bound. Lower bound is the 70% return found in typical home-owner advice columns. Potential return is a factor of 5, if buyers choose to put that renovation money towards a downpayment instead.
Now the factor of 5 is never going to happen, because at some point it becomes implausible, and buyers will demand that they also get a better base product for their down-payment.
But the trade I'm making is kind of wierd. In order to be able to not overpay for improvements while also getting to chose what I want, I'm trading way down in property type because the renovation money is coming from the same pool of cash as the downpayment.
Now the smart solution to this would be to save longer. And wait until we've amassed enough downpayment to max out our purchase price with respect to cash-flow, and then still have money left over for renovations.
But really, who's willing to be that "smart"? When I could have an inexpensive house to make all our own "now"?
Jason -
For all the angst over IO loans here is the percent of interest on a 30 year fixed rate loan for Year 1, 2, and 3.
Year #1 = 87% interest
Year #2 = 86% interest
Year #3 = 85% interest
"August numbers should come out tomorrow, right? Anyone for predictions?"
In the zip codes I watch in LoCo & Nothern PWC, VERY few homes have gone "Under Contract" in August
Now, what actually "Closed" maybe another thing, since July was busy.
Please note - I watch the > 400K to 1 Mill. Market only
Robert-
What interest rate did you put to get 87% interest. At the current average interest rate of 5.2% only 78% of money is going towards interest. Most people got interest only loans because they could afford a standard loan. So increasing their mortgage by over 20% could be fairly painful. Particularly, because none of that 20% is deductible.
I don't think its going to be a huge deal but its not as insignificant as you make it out to be.
I predict for FFX County the median will be up YoY by at least 5%
(July-August 2008 was flat MoM, July was up 2.X YoY in 2009) and sales will also be up a goodly chunk (YoY).
The mix of homes closing definitely went towards more move-in ready and towards more move-up homes.
This is all extrapolating from Burke to the whole of FFX, and not bothering to check all the known stats to make a real prediction.
But I predict that things were stomach-turningly good in August.
As the school has started and the $8k frenzy lives on for a little while longer, expect huge (as much as 10%) MoM drops in median because of mix in September.
Robert- I recognize the high amount of interest that is paid during the initial years, but that’s just the life of an amortization schedule. It just seems to me that people choosing to do interest only are people who are probably going beyond their current means or intend to sell a house soon after buying it. In a market like parts of CA, where prices have declined significantly, the odds of those people being able to refinance for the same amount, or sell, are pretty low today. Hopefully most of them were only 1 year IOs and they were able to refi before 2006.
It was really the % of mortgages for the entire state that amazed me. If someone told me that for a specific condo complex nearly half of the mortgages were interest only for a year, I wouldn't be that surprised. For an entire state, with the wide variety of mortgage buyers, I’m surprised the % was that high.
Hi: "Why Prices are Almost Certain to Rise this Fall- By an Arlington realtor."
Color me SHOCKED that a realtor would predict rising prices. Quoting NAR, using the past few months of data in a ridiculously manipulated market... seriously, these threads are usually quite above the fray of this kind of garbage "market warning". I'll bet that particular realtor was telling his clients two years ago that the market was near bottom.
Housebuyer -
My bad. You're right for 5.2% interest rate.
Jason, I really don't understand why anyone would get a non-IO loan. The IO loan gives you the flexibility to pay down principal whenever you want.
Arkey,
When I went to college they noted how more and more of us kids grew up with our own bedroom. Which led to more and more people wanting a single dorm rather than a roommate. While a roommate was mandatory for the first year the upperclass housing had more and more single options (no roommate or if roommates everyone had their own bedroom.)
The older generations like to say "we only brought some clothes and a toothbrush to our dorm; now the kids bring a tv, computer, their entire wardrobe, etc..."
Anyways, the point of all of this is I guess I am just skeptical that the children born between 1975-1990 or so are going to want less home than their parents. I think most of us have more stuff at age 30 than our parents did. And grew up with a lot more space than our parents did. So I guess I'm just skeptical that the average 30 year old is going to be content with an 800 sq ft 1 br condo for ages 30-35 or beyond.
Now I can see many singles and DINKs being happy with something Cara found but her home will be bigger than 800 sq ft (and I think at least two levels?)
I think most people who bought those little condos bought with a pretty short timeframe -- live there 2-3 years -- because the main reason for buying was to flip or not be "priced out forever."
In Manhattan (which has much more density and land shortage than we do) the popular pre-bubble condo was a "Classic 6": two bedrooms, two bathrooms, living room, dining room, kitchen, maid's room with tiny bathroom (the bathrooms not included in the "6").
Actually, Arkey, depending on when you set the years, if you use the same # of birth years, most sources agree that Generation Y is SMALLER than the baby boom generation.
(see Generation Y wiki entry).
"One analysis of American demographics locates the increase in births between 1979 and 1994. By this calculation there are 60 million members of the generation, more than three times the size of Generation X, and just shy of the 72 million baby boomers.[7]"
See also:
http://en.wikipedia.org/wiki/Baby_Boom_Generation
There are also some boomers interested in selling SFHs and moving into "luxury" condos. This would be a different market from the condos the Gen Y-ers are buying into.
Housebuyer, good points, but I wonder if some of those factors are offset by benefits of stability or modest deflation.
Cara, you could do an FHA loan, and free up 16.5% of the purchase price for renovations....
Robert –
If all of these people have lots of cash on hand, and have fixed interest rate interest only mortgages, where they know what their payment will be for all of the years beyond the interest period, the only issue I see is paying more interest than you need to. (Unless the IO rate is fixed lower than fixed rate traditional, and doesn’t have significant closing costs associated with it.)
If all of those conditions aren’t met, then they run risk associated with interest rates going up, potential of not being able to refinance, losing their homes, etc, basically all of the things happening in California right now.
Charlie Cook and Stu Rothenberg, the two most influential political handicappers in Washington, have both written in recent days of a shift toward Republicans in the national political environment as both parties gear up for the 2010 midterm elections.
Cook struck first with a bold -- and widely publicized -- observation in late August that "the situation this summer has slipped completely out of control for President Obama and Congressional Democrats."
Cook added that his current prediction of a six to 12 seat loss for House Democrats next fall was "far too low" and noted that the chances of Democrats losing 20 or more seats was just as good as the party losing less than 20 seats.
Cook, Rothenberg See Political Environment Shift
Charlie Cook and others are predicting a sea-change in public mood, with support for the GOP rising because of deficits. This strikes me as an amazing thing. It makes Charlie Brown, the football and Lucy look like the model of intelligent interaction. If you believe in fiscal conservatism, the last place on earth you should look for salvation is the GOP. They have single-handedly destroyed America's finances since the 1980s, with the sole exception of George H W Bush, who was rejected by his own party precisely because of his fiscal sobriety.
The GOP vs. Fiscal Conservatism
----
The 2010 Midterm Elections are still pretty far away, nonetheless, one wonders how much federal gov't growth comes if the Republicans do well in 2010. The Democrats have a pretty large margin so even if they lost 20 House seats they'd still be in the majority. Nonetheless, they might be a little skittish about spending (which they already are) if they lost a bunch of seats in 2010 over spending.
The whole thing is sorta crazy though because as Sullivan points out (second article above) the George W Bush years were some of the worst in fiscal responsibility. In many ways, it's like whoever was elected in 2008 was doomed to fail because they were handed a pretty bad situation.
Anon412,
I know, it is tempting. I just have an aversion to paying any more interest or MI than I absolutely have to. And my husband's even worse about this than I am. If there weren't so many little things we dislike about our rental, I swear he'd prefer to save up entirely so that we can buy the home in cash.
whoever asked,
It's 1360 sq feet and two levels + attic and stairway to a 8 by 12? back patio.
RE: The Rental Market
I am not at all sure what the vacancy rate is and how many complexes are offering big incentives.
I have had four vacancies in the past 2 months and have had absolutely no problem finding tenants. As I write this, I have two prospective tenants that are upset and disappointed. I posted the ad Monday and signed the lease this morning.
I could have asked them all for "their highest and best offer", but I find this distasteful. I leased it for the advertised price. Any one of them would have been perfectly acceptable from a credit and employment standpoint.
Ace..that Gen Y fact is a fact..their average age of buying was 33 and hit in 2006, I'm talking about Echos. Gen Y one factor of the 2006 housing bust amongest many.
My complex is still offering "$100" off per month (but that's a sham, they do that every year) and first month free incentives, with a current vacancy rate of about 4%. (if you move out early you have to pay all the incentives back).
no offense Va_investor, but I'd much rather see the actual statistics for the region or for a larger operation. We could trade anecdotes all day. And haven't you said you keep your rents just a hair below the competition so you can be picky about the tenants and still have no vacancies?
A more meaningful comparison would be something like, unlike in 200X when some of my units sat vacant for Y weeks between tenants, it's now down to just painting and cleaning. If you've always been able to price just right to avoid vacancies then your experience only tells us how good you are at pricing, and nothing at all about the market.
I'm sorry Ace..here is one of the stories
http://www.jchs.harvard.edu/media/son_release_2009.html
if you google harvard echo housing you will pull up lots of reports
http://www.nbnnews.com/NBN/issues/2009-06-29/Front+Page/index.html
This one has nice easy to read charts. On the Echo Boomers
Cara,
Your predictions don't seem to jive with your "long flat period."
Earlier I said inventory might be flat MOM, but now I think it will be lower for the 14th or 15th consecutive month. Prices are obviously up for the lower end, but down in the upper end. Not sure if you can get that out of the data. Same pattern every single month since I started posting on this board.
Robert,
Sure they do. They match exactly the seasonal pattern we got each and every year of the last long flat period after the last boom.
Seasonality and an overall flat trend are not contradictory. Pretending that you can't have seasonality without also producing a trend is just disingenuous.
Harriet's numbers alone aren't enough to pick out the pattern you describe, but if you look in the MRIS data yourself, you can look at the actual distribution of homes for sale. I've only looked at that on a zip code level. But you can track whether the bumps seem to be moving into lower bins or not. Or you can track a target neighborhood's prices if that neighborhood is uniform.
Of course everyone yells at me when I use Kingstowne for high end, but darn it, they have the numbers right there for you and all the houses in a given neighborhood are totally fungible (too recent to have been upgraded) modulo garages. Glancing over http://www.kingstowne.org/propsales.htm
I'm seeing some upticks in price for THs, mostly flatness for SFHs, but mostly just a lack of sales...
But that's by eye.
Arkey/Ace,
I wonder if the discrepancy in the numbers come down to this: there were fewer Echo Boomer births than Baby Boomer births in the US. But if you add Echo Boomer births + first generation immigrants born outside the country between 1981-2000 you have slightly more "echo boomers."
Calculated Risk's graphic on population using Census Buearaue data.
The echo boom is there, but you have to look really closely.
Sorry Cara,
It clearly is anecdotal. And yes, I have mentioned that I stay slightly undermarket. It makes a heck of a lot more financial sense than having something sit vacant for a month or two.
As, apparently, I am the only one trading anecdotes - I'll try to restrain myself.
Now, please tell me some more about prices of TH's in Burke...
Va-Investor...I am ancedota as I'm the only avowed seller here. So, let me be a typical Arkey and tell a Texas joke, there is a reason they chase us around with a broom all the time...and..No its not an Aggie joke. But one you will enjoy.
Half Wit
A man owned a small ranch near San Angelo , TX . The Texas Dept of Labor claimed he was not paying proper wages to his help and sent an agent out to interview him.
"I need a list of your employees and how much you pay them," demanded the agent.
"Well," replied the rancher, "there's my farm hand who's been with me for 3 years. I pay him $200 a week plus free room and board. The cook has been here for 18 months, and I pay her $150 per week plus free room and board. Then there's the half-wit. He works about 18 hours every day and does about 90% of all the work around here. He makes about $10 per week, pays his own room and board, and I buy him a bottle of bourbon every other Saturday night. He also sleeps with my wife occasionally."
"That's the guy I want to talk to, the half-wit," says the agent.
"That would be me," replied the rancher...
If we had a blog filled with landlords then we could make a complete picture of the market from anecdotes. We don't, we have you, and anielarke who seems to be mostly flipping lately.
If we had monthly reports on rental vacancies then we could usefully supplement that with your anecodotes, just like we do with purchases. But we don't.
There's one other important difference that I can think of. My "anecdotal" level data? Is verifiable and on the MLS. And covers a lot more than 10? properties or whatever it is that you own. Verifiable anecdotes that can be judged easily by all commenters, and allow all readers to reach their own conclusions.
Cara,
For obvious reasons, I am not giving out adresses. Thinking about it, I've had 3 rentals in Reston, 2 in Sterling, 1 in King George and 1 in Naples,FL since summer began.
I have also closed on 2 shorts and 3 reo's in the past 6 months.
If you don't want my personal observations (an investor of 26 yrs) that is fine. I've bought and/or sold well over 50 properties, but...heck what do I know?
I am sure Burke is a microcosm for our entire region.
Wrong side of the bed? Burnt toast?
Arkey,
I enjoy hearing about your house sale. In fact, I enjoy the anecdotes more than the articles and stats. But I guess I'm in the minority (or alone) in that regard.
I learn more from actual, real situations than the contradictory crap that is put out daily by different economists and the Media.
Arkey,
From that same article you linked with the charts,
Housing analysts at the Joint Center were less optimistic about the near-term outlook for housing, with “withered” housing demand struggling to get out from under the weight of crushing job losses, house price deflation and tighter credit standards.
“The best that can be said of the market is that house price corrections and steep cuts in housing production are creating the conditions that will lead to an eventual recovery,” said Eric Belsky, executive director of the Joint Center. “For now, markets remain under considerable stress.”
Since Generation Y was born from 1980-94 they won't be turning the average homebuyer age of 33 until 2013 at the earliest and peaking after that.
va_investor,
That's fine that you don't want to give out addresses. It just that as a consequence it makes the information less useful.
I did address your anecdote. I said that it says more about your strategy than it does the market. There's not really much more that can be said about your observation. Unless you want people to slam you with all their competing anecdotes about rental concessions and move-in incentives.
But yes, wrong side of the bed. Waiting to hear anything back from the seller's bank. Detesting the lack of control and total "up in the air" ness of the whole thing. But not seeing a thing for sale that I like better that's not also a short.
What happens if the entire market of lists are shorts? How long can that last? It's as bad as the WTF prices. The inventory consisting of homes that exist, and that you could buy, if only the banks would let you.
I'd like to move in before Christmas, not because of the $8k, I've intentionally written that out of my calculations. Just because I'd like to move in before Christmas. But there's no way I'm going to pay a $20-30k premium for an "organic" sale, or buy something that I don't want to live in. So here I am, in housing pergatory, paying a premium for month-to-month rent on the hope that our contract will be accepted by the bank. Feeling like I'm being punished for everyone else's financial indiscretions because I'm getting dragged through their short-sale process.
How are you Va_investor, any particular reason you're extra-snipyy today?
Cara,
Yes, and sorry. I am totally pissed about a couple of things unrelated to this forum.
I, too, am waiting on a (two, actually) short. I don't have the emotions invested that you do.
On the ones I closed on, the Bank did not come back with a higher price (Jeez, here I go again with the anecdotes!).
I've heard alot of stuff here about rents dropping, so I thought I would add my two cents. I've also revealed the new Fannie preference for owner-occupants. I think I was the first to talk about "stealing" future demand. In fact, there are many things that I read here that sound very familiar.
I find it highly ironic to be called out over anecdotes.
Jeremy, like Ace says..its when you set the clock, approximately 30 years ago..we didn't produce very many babies..1970's..and its been reflected in older and smaller numbers of buyers entering the housing market or that is what I understand the statistics to mean. Gen Y and Gen X and Echo Boomers and overlapping time frames depending on which research you are reading. I linked or C&P the link so everybody could have access to the whole article since I don't like doing snipets which can be taken out of context.
Geez, here I am a seller thinking I was taking it in the shorts and low and behold a buyer and an investor feel the same way. I reckon the market has balanced! Peace!
Va_investor,
Thanks for the hopeful anecdotal evidence on bank's responses to shorts, pricewise.
Given your own mood, I think you're reading more vitriol into my comments than is actually there. I was trying to stem off a wave of people fighting your anecdote with their own anecdotes as I find such fights to be pretty useless.
Most of the things you just took credit for I recall learning from either Calculated Risk or the Irvine Housing Blog. But, as you don't read those, you could easily have found independently.
Arkey,
LOL. Peace!
Yup buyers and sellers are all totally unhappy.
Cara,
I understand the idea of seasonality, but does it really extend to August?
I know, I've talked about this before, but this is a big project and there are some job projections here:
DHS HQ
Robert,
For closed sales quite possibly yes.
What I saw happening was a lot of extra caution by move-up buyers who in past years would have bought and sold at the same time, or bought before selling. This year many felt that was too risky, such that move-up purchases were after starter home purchases.
Now, I could be wrong, and the slowing in the second half of August could offset the high-days of the beginning of August, or what seemed true in Burke may not have been widespread across the county.
Cara,
For this year at least, I think seasonality is really secondary to the $8k tax credit. Since we've never had a tax credit like this and expiring on a certain date, it would seem almost impossible to compare data from this year to past years.
Robert,
The ballpark created more than 4,400 temporary construction jobs and more than
360 full-time-equivalent permanent jobs.
Nationals Stadium
Anecdotally, I had a pro bono client who got one of those temporary construction jobs for Nationals Park. It lasted a month and was temporary.
I suspect the vast majority of the 38,000 jobs the GSA HQ will get are temporary.
Anyways, I'm somewhat confused by your fascination with the project. You have admitted the high end of the housing market is suffering. Surely you don't think construction workers can afford homes in Great Falls.
TBW-
Last week we learned that crane operators can make $150/hr. That should be 300K a year plus overtime :)
OK, this is going to sound silly, but enough with the crane operator jokes already! Why are some so obssessed with how much he's making? I'm sure there're people in $700K homes in NoVa making less than $100K but are not distressed. All that matters is if the crane operator and the hair stylist could afford the monthly PITI payment with their combined income. For all I know they could have put down $500K.
rant off.
MM, I agree espically after reading the Post article on what people make. Did you see the 25 year old pulling down 57,000 a year in Fairfax...animal control..geez.
Cara...glad I made you smile
Va-Investor you are one of my favorite posters because I put more stock in reports from the front line than analysis of data, espically MlS data, not local (Cara) but national(CS)statistics. The media is always a day late and a dollar short on any reporting and generally have an agenda.
TBW,
You're probably right...a bunch of $12/hour thugs. Lucky if they can buy a condo in Stafford.
http://franklymls.com/LO7155254
Are dogs buying homes now? The main photo really beckons, if you are a beagle who doesn't get out of the house often.
Arkey,
I appreciate your comment. I, pretty much, only care about the local market and am more interested in general local issues.
I enjoy the anecdotes because I believe they are more useful to the people buying and selling here.
Macro issues are beyond my control - as are most of what goes on with Obama and congress. I care about my situation and I believe most here feel the same; whether they admit it or not.
I wish you the best of luck regarding your home sale.
Cara,
Do you really believe your posts are not anecdotal? Were/are Tabitha's or many of the others?
Yes, I am not putting out mls #'s and adresses. Did you put out your short? If so, I missed it.
I suppose I could put out places that I didn't buy, but does anyone really care what I didn't get? I think that the number of contracts is more relevant; as is the inventory.
I didn't have to read about the Fannie Mae restrictions because I was smacked in the head with it - well before it filtered thru the masses. Did I read about stealing future demand? No, I think about these things because I am always thinking about things that may affect my interests. Do I think about rental demand? Yes, it's not rocket science.
If you want to rely on stats and the MSM that change daily; I don't.
I care about me, myself and I. This means the local market not Burke and not California, Nevada. etc. I do,to some extent care about Florida and Cape Cod - but I've got 20 yrs or so until those really matter.
"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 7 Jan 2007
I thought everyone here would like the benefit of some of your keen insight developed over your 20 years of real estate experience...
:-p
Some good data in PWC insert of Post today:
http://tinyurl.com/pwcrecovery
Va_investor,
If there are topics on here that don't interest you, don't read them. I'm sure everyone here has posts that they skim or skip over entirely.
Did I say they weren't anecdotes? No, I said that there were enough varied anecdotes from multiple commenters to create a fuller picture that supplements and informs our understanding and interpretation of the hard solid data.
Kinda like with the short sales. You gave two examples of shorts where the bank hued to the price of the contract, inkstain and dgg each provided one where the bank's offer was within spitting distance of the contract, and vanka provided 2 where the bank came back with a number they felt they'd get from the current owner if a mod were done. And plenty of others have been in shorts that didn't work out. From this we can conclude that so long as a loan mod is out of the question, I've got about a 2/3rds chance that the bank's offer will be at or close to our contract price. 6 data points is weak, but it's better than nothing, and better than 2.
There's also a difference between people sharing their difficult personal experiences looking for insight, advice and encouragement and just throwing in a one sentence observation. While one can try to learn something about the state of the market from individual in depth stories, that's not their main purpose.
I've stated the neighborhood, Woodwalk, and that it's a short, and you know it's under contract, that leaves only one listing. But my one short tells nothing about the market as a whole, and I'm not claiming it does, I'm looking for feedback on my own decision process. Whether it's things I disagree with or agree with it's all useful for figuring out, what do I really want, what do I really think, and what really matters to me.
Rental info if still needed: While I was away 2 of my tenants in Arlington orange line condos gave notices that they had bought houses and were moving at end of September. I listed both condos with my agent about a week ago rather than putting on Craigslist as I usually do because I have been overly busy. Both were rented within days. One 2 bedroom 1 bath had been rented at $1,800/month to a DOJ lawyer for 3 years. New rent is $2,095 per month to a couple who are moving within the building because their landlord sold the unit they were renting. They both work for Nature Conservancy and are nearing retirement and have a house in Shenandoah Valley they go to on weekends. Second studio had been rented for 27 months to a woman who is a recruiter for a law firm and is getting married. She paid $1,100 per month. New rent is $1,295 per month and couple renting it are renovating a house in Arlington and could not live in it during the work because she has many allergies.
anielarke-
Out of curiosity is there parking at the 2 bedroom 1 bath? I am just trying to figure how that compares to my old rent at the meridian at Ballston. Do you do what VA does about going slightly under market rents, because if it has parking I would have expected the rent to be ~$100-$200 higher.
Both condos included garage parking - 1 for the studio and 2 for the 2 bedroom. Both are in an older building which does not have washers and dryers in the unit but they are very large so tenants seem to prefer space to having to go to a laundry room -- there are two on each floor. They are very different from the Meridian places.
Leroy,
I am not seeing the sources to which I referred or the context of the discussion. And yes, RE is cyclical. Thanks for the cherry-picking.
I (unlike you?) have no crystal ball and did not know that the world would fall apart in the fall of 2008. My post was January 1, 2007.
I am sure that you bailed out of the stock market at the perfect time.
Tabitha,
I can't get this to link
http://tinyurl.com/pwcrecovery
can you give me a brief overview?
Arkey,
Here is the regular link:
http://www.washingtonpost.com/wp-dyn/content/article/2009/09/08/AR2009090804053.html
(someday, but not today, I will figure out how to insert hyperlinks)
anie-
Gotcha it sounds like you are right that your places are not easy to compare to the big apartment companies. I only know the comps for the meridian and archstone...
Ok Cara,
Point taken. Some anecdotes are insightful and mine aren't.
How about we bury the hatchet and move on?
Leroy,
Just curious, but in all fairness, could we know your craigs list handle? Or bubblemeter?
Here is the link to VA_Investor's comment for those who don't know how to use google effectively. The entire post is a real gem, actually. No recession, rents aren't dropping, and no housing bust coming. 0 for 3.
Thanks Tabitha..that tracks with Cory Stewarts July 30 newsletter. I appreciate it. I can't link, either.
http://www.coreystewart.com/blog/prince-william-county-housing-values-surge-after-cut-taxes
Anie,
Thanks for the info re: rentals. I believe that I am small time compared to you. I started buying again in November. I flipped about 20 foreclosures (bought at the Courthouse) in 2000 and 2001, but backed-off when 50 or 80 people started showing up.
I, too, have been very busy. I am about done. I can't even count the properties I own. Well, I could if I really thought about it.
It's nice to have another investor here.
Have you done many 1031's?
Va_investor, I read the link, you are vindicated. Geez, you clearly state someone could find themselves underwater in 07 but not as bad as if they bought in 05 and you were in most part quoating back the experts. Lets play blog pocketbook. Behind door 1,2 and 3 are the checkbooks for Va-Investor, Annie or Leroy..which one do you pick? Geez, for me, a real toss up between you and Annie.
Arkey,
I had to question one thing Stewart said:
"*Home sale value up nearly 20% from the valleys in the first few months of 2009 (19.996% average for townhomes, 17.407% average for single family homes)"
Quick look at MRIS: for PWC/Manassas, July median sale price was $200K, while January median sale price was $165K. I guess he's right, then...but could some of that be seasonality?
Tabitha, we didn't have any season this year except buy, buy, buy..in the 400,000 and less market the over 500,000 started kicking alive June, we had 5 in BC go UC, 3 have closed, in order 535,545,550, one that is a 3bd on the cornor of Bruin/BC Drive and it should be closing soon, it was listed for 539,???, it sold real close from what I hear and the poor baby foreclosure that was a SS and dragged thru the MLS for over 2 years. It hasn't closed yet. That's what happened at the end of June thru July..and..why I went back on the market. I think what I find amazing is Blooms C. I think those that bought there late last year and 1st 09 are sitting on equity already. Our 07 and 08 foreclosures have equity in 09 but It will be real close on the recent 09 forclosure to have equity next year but it will in 2011.
"quoting back the experts" is not a defense as to why you are wrong. There are so many "experts" on both sides of every issue and you can always find one to support whatever you want to say.
As for blog pocketbook, I'd much rather be young with potential than old and well off. It's what happens the process of going from one to the other that is the interesting part of life, right?
Va_investor,
Sure. I hope you appreciate that I actually do make an effort not to set you off. I fail, periodically, but I do try though.
So, when I don't respond again, please recognize, that's me giving you the last word.
Jeremy,
We bought our first house at 22. I fully admit that RE is the basis of our retirement plan. I know that you may find many of my comments "discusting". And yes, I am much older than you.
I don't find this environment any worse than when we were looking at 14-17 percent rates. I trust you read the entire thread(?).
I don't wish anyone ill will. I have stated that there is a certain sense of entitlement with your generation. I believe that I have given my honest opinions- right or wrong.
I won't go in to the time and effort that went into our first few purchases.
I am sorry that you, and others, feel cheated in some manner. I think we all have at some point in life felt the same. A very smart man (my Dad) often told me that "life isn't fair".
With regard to all these wrong calls, is there anyone here that got it right?
I for one thought that the increase in sales in PWC (spring 08) may mean price drops were moderating - wrong.
In that bubblemeter thread Neil (prices will be 40% down in arlington) thought DC was lagging in the downturn - wrong.
Leroy (and many others) thought that sellers were holding out in Arlington. Even as late as spring 09, they described Arlington "capitulation" as some sort of upcoming event marked with a "spike in sales and a sharp drop in prices". Wrong wrong wrong.
Imperfect information leads to imperfect predictions. Once you gather more information you should be able to revise earlier calls as you see fit.
Thus, for example, if VA investor was not aware that inventory and MOI were spiking when she made that call, I wouldnt give her as much grief as I would if she just dismissed it.
Likewise, when Kevin came this spring and thought Arlington was a PWC in waiting, yet changed his tune dramatically once he became aware of the strong demographics and leading indicators, I dont blame him as much as I would if he continued to insist, Arlington was still in for huge pain.
On the other hand, the one distinction I would make were those that saw the same evidence we all did (either that there would be pain in DC in general, or far less pain close in), and how they responded to it. Those that dismissed it, didnt respond, cooked up new theories for why it wasnt important, etc - those deserve far more criticism than those who accepted it and adjusted their theories accordingly.
"Just curious, but in all fairness, could we know your craigs list handle? Or bubblemeter?"
"Leroy" was my name on bubblemeter.
I have at time linked to my own posts from back when though you seem to be incapable of following links.
I never posted on craigslist.
CRT,
I'm quite sure (well, pretty sure) that I made a distiction between the higher income/asset areas vs. the maids and day labor's paying 3 times the previous prices. Those prices have crashed.
I've also mentioned that my home went up 15-25% max over the same time frame. I don't generally follow Woodbridge, Manassas and other lower end areas. Those are the one's that exploded and are getting crushed.
So, if you think I am a know nothing - that is fine.
""quoting back the experts" is not a defense as to why you are wrong. There are so many "experts" on both sides of every issue and you can always find one to support whatever you want to say."
Indeed... and completely missing the biggest real estate bubble in living history even as its end was front page news doesn't exactly speak to her expertise she so frequently refers to an an attempt to bolster ill considered statements.
She spent years trying to berate and belittle "bitter renters" into buying into a badly overpriced market. Now that her advice has been exposed for what it was... she tries to spin and rewrite history.
Typical I suppose, but less than admirable behavior...
Ok Leroy,
You posted a few sentences out of a 90 post thread. If you think that is reasonable, all power.
I reviewed the entire thread and don't believe I was misleading in any way. Which "anonymous" were you?
VA investor, maybe my last post was not clear, but I was attempting to give you the benefit of the doubt in that no one got everything right.
"VA investor, maybe my last post was not clear, but I was attempting to give you the benefit of the doubt in that no one got everything right."
Such a sentiment is no consolation to someone who refuses to acknowledge that she was ever wrong no matter how obvious it becomes.
"You posted a few sentences out of a 90 post thread. If you think that is reasonable, all power."
It is impractical to quote entire conversations. That is why smaller segments are commonly used when citing individuals. You may recall having seen this convention observed in various books, magazines, etc...
I have on numerous occasions provided links to the discussion in its entirety and on all occasions provided the date of your statement, itself sufficient for an interested party to find it in its proper context.
"I reviewed the entire thread and don't believe I was misleading in any way. Which "anonymous" were you?"
Of course you don't.
That is the beauty of how these exchanges always seem to play out. You made what was even at the time an obviously ridiculous statement. Now, years later when all doubt as to the merits of your prediction have been removed, you all the more stubbornly cling to it and by doing so show your unwillingness to acknowledge what all other observers perceive as readily apparent, that you were wrong.
What does it say when a self professed expert can not bring herself to acknowledge her own failings even when they have been demonstrated to her?
CRT said...
With regard to all these wrong calls, is there anyone here that got it right?
CRT brings up a fair point. None of us are always right, and if we were we wouldn't be giving that information away for free on a blog. I think the reason VA_Investor is getting so much flak right now is because she is backing up her claims by citing all her experience instead of with data. Many feel it is only prudent to bring up the track record of her experience for those of us that weren't around in 2007. I prefer Cara's data-driven analysis any day, even if it is very Burke specific as of late.
"I think the reason VA_Investor is getting so much flak right now is because she is backing up her claims by citing all her experience instead of with data. Many feel it is only prudent to bring up the track record of her experience for those of us that weren't around in 2007."
Exactly... she cited her claimed expertise in support of her now laughable predictions during the bubble years just as she does now.
A casual observer might mistake her for what she claims to be, but if you read her statements long enough you can see how her stories have changed over time. For instance she claimed at points that she had not made any purchases during the bubble years. At other points she stated that she had. The only thing she is consistent about is pretending she was never wrong and insisting that she is a great real estate investing expert even when her own claimed investments are wildly inconsistent.
I think the bottom line is; who is buying today and making money with their real life expereinces vs. those that are sitting back pounding data still looking to buy.There is a difference between doing and thinking about doing. I can't say those of you still waiting to buy because you think there is more to drop are wrong. You could be right but I don't think you'll ever be able to determine that mining data and in the mean while those that bought in late 08 have a home while those waiting in late 08 are still waiting, still expecting or wanting an 08 price in 09. I think they will be also looking in 2010 for an 09 price but thats just me.
We bought our first house at 22.
If only this were possible today. Even with a full scholarship I graduated college with no down payment and a clunker of a car on its last legs. I don't see how anyone could buy a place at 22 in today's market. Maybe in 2006 with a funny money loan - but we know how those people ended up.
I don't find this environment any worse than when we were looking at 14-17 percent rates.
I've said before that I'd much rather buy at a higher interest rate with a lower price. I'm pretty sure you would too.
Ok,
Last comment on the subject. Yes, absent a few vacant lots in an area where sewer is coming in, I have put NO new money in the Market since 2002. I have done some 1031's to get out of underperformers into some great deals.
If you think that there was nothing good to buy in 2004 and 2005, so be it. So yes, I bought some stuff (via 1031) at what you guys would call the peak. I also sold at the peak.
Please read the entire thread cited if you want a true picture of me.
Ignore me, hate me...whatever.
Jeremy-
If you take a corporate recruiting path you may be able to pull off buying a house at 22 if you are buying with someone else. My company gives 10K signing bonus and the starting salary is 70K so if two people at similar companies were together they would have enough to buy a small place with an FHA loan almost immediately
I should obviously say that this is a very rare group that both people have a very high paying job and want to spend their entire signing bonuses right away on a downpayment. So it is unlikely, but I just wanted to say it is possible even without parental help
Yeah sorry folks, I haven't stumbled upon any new great sources for data in a long time. I mined the ACS as much as I could, found out just how many fence sitters there were who make more than me... Enough to convince me that indeed, prices may never reach what I think of as "fair" or reasonable, such that it's okay for me to compromise on size/space and buy this year.
Unfortunately I did not forsee the duration of the low interest rates, or the extent of the $8k frenzy, such that all that would be available at 2008 prices (in my area, at my price point) would be short sales.
The most relevant data now is really Harriet's postings of the MRIS, and Tabitha and CRT accumulating the selling/inventory stats on the high end of the various counties. Because I think most of the rest of the "waiters" want more house than me, and are willing and able to pay for it when they choose to.
Post a Comment