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Friday, October 2, 2009
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59 comments:
I check in this AM to see huge swaths of yesterdays thread deleted and assume TBW must have been at work.
TBW -- no offense, but for late readers, it really disrupts the flow of the conversation when you do this. Instead of writing something only to take it down, perhaps you can just temper your comments. Just a suggestion.
Hayfield grad pulled some of hers too. Really though, you didn't miss anything.
In Columbia Heights news. So... it wasn't this one that was 2000 sq feet but another that they saw. The actual one they're buying is 1400 sq feet. (which makes me feel validated, since that's only 40 sq feet larger than what I'm trying so hard to buy in a short). They offered $445k, got a verbal counter at $485k, offered $485k but with $5k subsidy, got another $485k, no really we meant it, and accepted it. Too many of these were verbal for everyone's taste, and it's not written up yet, but I see no reason why it won't be a done deal today. Close Oct 28th.
So that's $348/sq ft. (comes with a parking space which is currently rented out to someone else for $250/month). For a penthouse with a parking space in NW DC, that's still a decent deal I'd say. Not a stumble over yourself on the way to the fax machine kind of way, but not bad deal by any means.
Plenty of other things I could quibble or worry about, but it's their life, and their decision, and she seems so happy, I can't help myself but to wish them well.
What was everyone arguing about?
Yeah, $348/sqft in downtown near a metro, new building and good PH views, I'd say it was a good deal. What was the list price though--hopefully they did get some off the list price.
Doug,
Take a wild guess.
Bingo! You're right! it was again:
Schools and what size house is reasonable for the middle class.
The only revelation of this conversation that is not better forgotten was that hayfieldgrad is a she.
Scott,
List was $519k. So, $34k off list (and that had been dropped over time too, although I can't find any listing...) And their contract price is the list price of things way lower down in the building.
Speaking of TBW - it looks like his/her "show your cards on where Arlington will go" house has sold
http://franklymls.com/AR7104132
It sold at the peak of 2006 at 650K 3 years later it now sells at 645K -- approximately 99% of peak prices.
The market has spoken.
The Anonymous,
He picked one particular townhouse for this? I don't remember that.
Good thing google has a better memory than me:
29 July 2009 NVHBF
CRT,
I think this property would make a good "show your cards" on where one thinks Arlington will go.
http://franklymls.com/AR7104132
Walking distance to Ballston Metro. Tax records show sold in 2002 for $428,000. Sold in 2006 for $650,000.
They are asking $674,900.
The home went for $230,000 in 1991. Meaning market value in 1998 was probably $250-275k (covers probably a little more of the mini-bubble in 1991-92 followed by stagnation 1993-98).
So $250-275k to $650k between 1998 to 2006. That's a Prince William style bubble and why I don't understand why you and others keep saying "it didn't go up as much in the inner areas." Not the case near the Orange Line.
In fairness I think this just proves that it's a bad idea to pick a particular house to judge the market with. Or perhaps, that tbw should stop prognosticating about houses he doesn't want anyway. Of course he thinks it should have gone for less, because he thinks townhouses are stupid.
There is a market for these things, especially amongst dinks. Who, oddly enough, have more money than singles or families with kids. Go figure.
Re: Arlington townhouse. I'm in the market for exactly that type of property.
We are DINKS, both professionals, both want walking distance to the metro (under a mile) and walking distance to lots of other stuff--we prefer a more urban feel. No desire for a big yard (no use for it--no kids, no dogs), but we don't want a condo either (too much like the apartments we've lived in for the last 10+ years).
3/2 townhouses within walking distance of the Orange Line are commanding a premium. Anecdotally, I haven't seen too many go for their 2006 prices, like that one, but most go for more than their 2004 prices, and they go fast, unless they are majorly overpriced.
There is a ton of demand, which has made this process really frustrating. We could actually get more for our money in parts of upper NW DC--walking distance to Tenley & very good elementary schools--which shocks me.
(posting for a friend) please comment on the following quotes for remodeling:
- 3-piece bathroom + walk-in closet in master bedroom = $17,000
- kitchen (new everything, open walls) = $25,000
- 700-sq basement refinishing (full bath, 2 rooms, closet, egress window, utility area, W/D,) = $25,000
FWIW this is in Bethesda. thanks!
Interesting.
http://franklymls.com/DC7139300
5 bedroom modern Townhouse, $309K
Big lot
http://franklymls.com/DC7086514
4 Bedroom, in bad shape, tiny lot, funny layout.
This one was withdrawn, from the market
What do you folks think happened?
MM, I think somebody is blowing smoke up somebodies buttttttt; Unless I way over read what new kitchen and a finished basement meant. In a kitchen depending on space, the cabinets and counter tops will run close to that unless you are talking a very small counter/kitchen cabinet area. I would recommend your friends do 2 things, limit upfront payments to a third or less and refuse to get the work permits. That will force an unlicensed contractor way in a heart beat. Electricians and plummers cost a bundle.
Predictions for the 10th?
Judging by the number of solds in my inbox I think FFX County is going to up MoM to 1400+ again.
median Sept 2008 was $326k, solds was 1257 actives 7000+
so if the median doesn't drop down a ton from August, ($381k) then YoY median will be up as much as 16%!!! Yikes. I'm going to say that some seasonality and mix back towards no-kid places will have occurred and the median will drop from August, but still be up at least 5% YoY probably 8 to 10%.
Brace yourselves. Other people who care about other counties can make predictions for those.
MM, as Arkey said, it depends a great deal on the size of the areas and the quality of the cabinets, fixtures, etc., that are being selected. For what it's worth, here are estimates I have received:
$14000 PLUS vanity, sink, toilet, for a tiny full bath
$25000 *minimum* for a tiny kitchen - without moving anything around, i.e., refrig., sink, etc. stay where they are, but new mid-range cabinets, granite countertops, etc. would be installed.
$30K+ to >$50K (from two different contractors) to finish a partially finished basement that already has partial bathroom plumbing. The high one included replacing a kitchen-like room with a new kitchen-like room.
These were all from people who had done other (very good) work on my house or came highly recommended by friends.
I did not decide to do any of these projects or to get additional bids.
Arkey,
Yeah I have no experience in this but those looked like too good to be true prices. It depends strongly on the size of the kitchen though. Our counters and appliances budgets are going to be about $2k each, but we will be buying one of the world's smallest workable kitchens. It's $54/sq ft for the nice (but not the snazziest) corian, ~$100/ sq ft for new mid-level cabinets (which I can't stomach doing now), so it all depends on the size. My colleague at work just had his kitchen totally redone for $33k (in Burke) so, it is possible this is reasonable.
PS MM, I had a non-walk in closet constructed, taking space from a large room, with Elfa system installed. It was about $5000.
That seems awfully high to me for a kitchen, but I also don't know what all is involved.
MM. In my experience, kitchens are the hardest to estimate without alot more info. As others have said the size of the kitchen can be a huge factor, as is the quality of the finishes.
I know a flipper who did a med sized kitchen top to bottom for 15K
I also know someone who spent nearly 25K alone on a high end oven -- so it really is all over the place.
Thanks all. It's a small kitchen, almost as small as mine rental's (1947 Arlington Colonial)!!! I'd say, 9*9 max? Not sure if the appliances are included or not. I know they want granite but not sure what's quoted for...
Anyway, back to my own search, has anyone dealt with DEUTSCHE BANK NATIONAL (TRUST CO INDYMAC FEDERAL BANK) for their REOs?
My disgruntled contribution to the bi-weekly Real Estate chat:
Burke, Va.: Where I'm looking, the listings under $450k are completely dominated by short sales. I think there are literally 4 shorts for every 1 "organic" lister. What in the world happens to such a market?
The shorts are closing, given 4-6 months. And the real sales are commanding a 10% premium over shorts if not more. How does this end?
As you might guess, we're in a short sale contract now (past the point where we can void at any time with 3 days notice), but not seeing anything else to jump on that's not also a short.
In a "normal" market buyers can find a house and close in like 3 months, but it takes like 6 months for a seller to sell. In this market any buyer who cares about price has to wait indefinitely 4-6 months if they're lucky in order to buy.
And who's saving money here? The banks, by avoiding the costs of foreclosure. I don't see who else is winning.
Elizabeth Razzi: Thanks for sharing that. I really don't understand why banks aren't finding a way to unload these homes more promptly.
She has a good point, if the short sale process were less uncertain and faster, they could sell these homes for a lot more money...
Cara,
Do/did you feel 'morally obligated' to use Frankly's agents?
Mm,
No, not at all. I just wanted an agent who meshed well with me, and who I could trust. Jeff also lives like 4 minutes from where we're looking and has over 10 years of experience (if not more) in the area, so I couldn't ask for an agent with more experience and more local knowledge.
I got a really bad vibe from both Long and Fosters and Redfin.
But yes, there was definitely an element of, if my money is going to go to someone, I want it to go to a business I respect and who I think is doing a huge service to everyone searching in the area. I mean, why not have it go there?
The Anonymous,
this is what you've been waiting for - that time machine that brings Arlington back to 2003 prices (ok, not quite 2003, but it's < spring 04)
Hurry, this SS won't last!
sold: 3/3/2004 $575,000
listed 10/02/2009: $549,900
tbw,
You're not mistaken. I do think there is a housing ladder here, but it's nothing new. 2/3 of the people I work with who've owned homes in the area for more than 10 years have moved at some point during that time. Either from SFH's in undesirable areas to slightly larger SFHs in better school districts or from TH's to SFHs in the same zip code. For some of these folks that TH starter home was 20 years ago. Hardly a new paradigm.
For the monthly outlay on the two homes you pointed to as solid middle class homes yesterday, I don't think it's unreasonable to expect that you'll either need to bring cash from equity in a condo or TH, or from savings to compete with those who've fixed their housing costs low and slowly accumulated equity. $450k for those make perfect sense at $110k family income, if that family is also bringing over $150k to the table. I think this is the reality of your competition. Alloting $150k of savings to your downpayment is painful because previously it was completely liquid. Moving it from one house to another is a lot less painful.
The hope that's on your side for the mid-level market is that condos and THs will get so crushed and the current owners will be so strapped by their over-payments on bubble-year purchases, that there soon will be no equity to compete with. Given that inventory will also be drying up because these people can't move, I'm not sure it's a winning battle.
(the stupid was not in reference to your opinion of me, it was in reference to your huge number of ways that the $1 million dollar TH owner should have just bought a SFH and used kid to mow the lawn. Obviously, the buyers for these units are not you, therefore quite possibly they'd be needing to hire out for the yardwork regardless of whether it was a TH or SFH, so why pay the extra $200k for the SFH? surely that's still more expensive than the monthly condo fee, once hiring yardwork is subtracted.)
Single professionals and blue collar families have similar disposable incomes, so I would think they would often end up in housing of similar costs, and hence overlapping areas. Unless they are self-segregating. Young professionals, with student loan and car debt, high-speed internet and cable and wireless and ipod addictions, blue-collar family with 1.5 incomes and no debt and no fancy cable and extra utilities (which I know is an unrealistic level of austerity to be assuming) can afford about the same amount of housing cost.
tbw,
OMG that's priceless. Everyone must go read it.
i'm not able to think straight today - but does it make sense to use half of the DP fund to fix up a home instead of using full 20% for DP for a move-in ready property? i know it means mortgage insurance and possibly higher interests rate, but is there any other downside i'm missing?
(i know the *right* answer is i should look for something cheaper...)
In a much more depressing link than tbw's fabulous Restonian flashback, we have from Calculated Risk
The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses could slow an economic recovery.
[There are] 26 firms with more than one-fifth of their loans 90 days overdue or not accruing interest as of June 30 -- a level of distress almost five times the national average ...
For banks with 20 percent of loans overdue, “either they’ve got a massive amount of capital, or the FDIC just hasn’t gotten around to them,” said Jeff Davis, an analyst with FTN Equity Capital Markets in Nashville.
At what point does it become politically okay for the FDIC to borrow from the Treasury? Don't we the tax-payer want to protect our own savings? Yes it's great when the deposit insurance can happen just through tiny unnoticeable premiums. But gosh darn it this is our savings at risk. If anything in this financial system deserves to be fully backstopped by the tax payer its the FDIC.
(just because it's a huge snake eating its tail ponzi scheme method for backstopping our savings is not the point).
MM,
That's math I haven't run, but it seems sound to me.
We have two price points, a move-in ready price point where all we need is 23% for DP and closing and moving. And a fixer-up price point where we have 23% down + 15k for flooring, counters, appliances, and whatever small things need doing.
In your scenario, if what you're then buying is better bones of a house or better location, then definitely keep 10% back to do the renovations in cash, just add in the cost of the PMI and higher interest rate (if applicable) when comparing those two options. PMI has got to be cheaper than the interest you'd pay on a consumer loan if that's how you funded the remodeling, and heloc's are hard to come by now.
PMI is not evil, it's just paying money to borrow money, or in this case to keep cash on hand for immediate use.
(just because there's no way I could sell my husband on this plan doesn't mean you shouldn't do it)
tbw,
The ACS data breaks down first time buyers versus non-first time buyers, but it doesn't do a good break down of from what price-point to what price-point move-up buyers are moving, so it's hard to say how many move out of TH's.
Maybe someone's done a study on it.
I grew up in an idyllic SFH in flyover country, and then a large but totally lame TH in the posh areas of the North Shore in what was at the time one of the top 5 public high schools in the country, but we were only 3 kids. What I'm trying to buy is a lot smaller than what I grew up in. But I'll trade that over the summertime, "honey, which card still has room on it? The Sunoco, I paid off the Sunoco" anyday. And my kids may get to be on a crew team, in high school! I mean how can you beat that?
tbw,
Families that have low to moderate income qualify to purchase homes under FX County's Affordable Homeownership program. The upper income limit for a family of 4 is 71k and for a family of 6 it is 83k. The minimum income is 25k. The County also owns thousands of apartments that it rents out to low to moderate income families. These properties look like they are rented out to households with incomes in 23-90k range. I pretty sure families making less than 23k are eligible for public housing or Section 8. There are also other privately owned apartment buildings that rent apartments to people who receive county housing assistance in exchange for tax credits. Do these programs provide enough affordable housing? Probably not, but I don't think Cara and her husband are making people of moderate means homeless.
That being said, there are also a lot of townhouses that have sold over the last several months in both Springfield and Lorton for 160-220k that could be have been purchased by families with incomes of 60-90k.
Here are some examples:
FX7131573 is a 3bdr/2ba th that was sold for 192k.
FX7070756 is a 3bdr/2.5ba that was sold for 160k.
FX6954119 is a 3bdr/1.5 ba that was sold for 160k.
FX7057270 is a 3bdr/2.5ba that sold for 200k.
hayfieldgrad,
I could add a bunch of ones in Old Keene Mill Woods in Burke as well. And that's not the scary tiny Greenfield Farms or the dumps out near Braddock road either. Heck there are two move-in ready ones by our friends at Capital LLC for "only" 230k ish on the market right now that are still up for grabs.
Maybe what tbw really needs to do if he doesn't care about driving to work or the metro, and wants schools with prestige he should start looking in West Springfield. There's got to be something he'd like there for way cheaper than Kingstowne or Vienna. I love the houses in the neighborhood of our friend's TH. I don't think any are for sale right now though...
MM-
You are not missing much. You can often get a much better deal on a house that is not move in ready, because many people just don't have the cash to fix them, or they have kids and don't want to deal with the renovations. So if once you put the cost of the renovations into the house if it is still cheaper once you account for the PMI and that your interest rate may be 1/8th of a percent higher I would go for the house that needs work
TBW-
I agree that I think Vienna will get closer to Springfield prices, but I would expect a 40-50% difference not a 26% difference. Since 2000 the Tysons/Reston corridor has created significantly more and higher paying jobs than Springfield. Vienna has also won several awards for being one of the best towns in the country to live in. It has always been a good place, but I think it has made some impressive strides over the past decade so it may keep some of those bubbles.
TBW-
I agree that all of those are good schools and you will get good educations. I don't like that Lake Braddock and Robinson have 7th-12th grade. I like the having a separate middle school, but obviously that's not a huge problem
TBW-
You may go 0-2, but there is almost no chance the FOMC raises interest rates. SO I think you are safe on that one
housebuyer,
Several thousand jobs with the National Geospatial Intelligence Agency are moving from Reston to Ft. Belvoir Engineering Proving Ground in the Newington area of Sprinfield in 2011. Also Ft. Belvoir is one of the largest employers in Fx County which is an easy commute from Lorton, Springfield, Burke. A lot of people in these areas commute to Alexandria or to Arlington as there are several park and ride lots with very active slug lines and commuter bus routes.
I wish I had a dollar for every prediction of higher interest rates posted on this blog.
Employment Stats
NOVA: 4.7%
Arlington: 4.1%
Alexandria: 4.7%
Fairfax: 4.5%
Loudoun: 4.6%
PWC: 5.1%
Total people unemployed:
NOVA: 58,185
Arlington: 5516
Alexandria: 4392
Fairfax: 26,895
Loudoun: 7776
PWC: 10614
It is possible that unemployment in NOVA has hit an inflection point. Of course, more data points would be nice.
Real-time mortgage quotes on Zillow
Obama is reigning in spending:
At the same time, the continuing stresses on the economy have, in effect, increased the size of the stimulus package because the government will have to spend more in unemployment insurance and food stamps, Orszag said. He said the cost of the stimulus package -- which spends most of its money in fiscal year 2010 -- will grow by tens of billions of dollars above the original $787 billion.
......
I think in '10 the stimulus money will start flowing through the region in a big wave. The Stimulus wave.
Predictions:
$8k is dead, Case-Shiller and 4.8% thirty-year rates should be enough to kill it.
No way Fed touches interest rates, but they will marginally reduce some of the facilities - treasuries, MBS, TALF.
Dow 10,000 - bounces around there for the next 6 months.
Agree the difference between Vienna and Springfield will be wide.
Went to Lake Braddock 7-12. Much better to have middle school as 7-8 or even better 7-9.
Cara,
The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses could slow an economic recovery.
I think this quote intentionally leaves out important data to make it sound scary. Theoretically, a bank could have 5 loans and 1 delinquent and make the list.
You need the total assets at risk, otherwise this statement is impossible to put in perspective.
Predictions for the 10th?
16% YOY Yikes!!!
Cara, remember 33% down is the same as 50% up, so up numbers look more dramatic than down numbers.
Where is the damn inventory data???
tbw,
The townhouses I provided were selling for the 350k+ price range back in 2004-2006. The Springfield townhomes are actually in communities with SFH too, but both were hit fairly hard with foreclosures. The Vienna townhomes might likely maintain a price differential greater than that 26% because I doubt their price increases were fueled by as many junky loans as they were in Springfield and Lorton.
Wanted to give you an update on our house sale and purchase which occurred in late Sept. I learned of this blog because a friend of mine sold her house last year and has been renting while waiting for house prices to fall significantly in Arlington. It did seem in the spring that housing prices were not very good in Arlington but our agent told us about a house coming on the market in one of the 3 neighborhoods in Arlington we really wanted. If we could find a buyer for our house, we could buy the other house before it came on the market. We took the plunge and did a quick fix-up of our house, including adding a second full bathroom in the basement. We put the house on the market in August at a price that I was afraid was too high, but our agent convinced us that the house was in the right range. As Robert predicted we had 3 offers. One was at the asking price with 20% down; one was $10,000 above the asking price, but asking us to pay $15,000 in closing costs and with a 20% down payment, and one was for $7,000 below the asking price and a 25% down payment. We took the first offer. We were able to stay in the house for 2 weeks after closing so that we could paint and refinish the floors in the new house. Knowing that we had a house we could buy if we sold our house reduced a good deal of the stress I saw my other friends experience. We had paid down our mortgage quite a bit, so we were able to make a large down payment on the new house. We could have held out more money for the renovations, but we decided to wait for renovating the kitchen and baths as they are very liveable and we can pay for the work as we can afford it.
Our friend thinks we should have waited for prices to fall more, but we decided if we were selling low in 2009 and buying low in 2009, we could well low in 2010 and buy low in 2010. Plus we simply needed more space. The process went pretty well with a little bit of trouble with home inspections on both sides, but we resolved everything. Our agent and the two other agents involved in selling our house and buying the new one were great to work with. I called my agent every day to let off stress (it was either this or eat too much chocolate), and she always calmed me down and re-focused me on what we would ultimately have. I know many people don't like agents and maybe we were just lucky, but our agent made more money for us and got us a house that we may not have gotten had it gone on the open market. We move next Friday and I have tons of packing left to do, but I wanted to let you know of our good experience in buying and selling in Arlington. Thank you all for your market info and buying and selling tips. I will especially miss Cara who I think goes above and beyond to gather all sorts of interesting data and Tabitha who made her big move earlier this year. I hope all of you find the homes of your dreams.
homeowner,
Congrats and good luck!!!
JK moving was recommended by multiple folks if you haven't lined up a mover yet!
housebuyer - great post. This blog is alway better with personal anecdotes.
It is waaaay better than TBW and I arguing about whether 3% or 5% if full employment.
I know that the townhouses that I posted yesterday were in neighborhoods that are part of the Lee, South County, and Hayfield pyramids. I am aware that nearly everyone here does not approve of these high schools and that a lot you think they provide an education that is subpar. However, I know several college educated singles or couples with professional jobs that have rented or bought townhomes in these neighborhoods or other nearby neighborhoods. Not ever college educated person has a budget of 500k. College educated professionals are sending their children to these schools despite what the majority of you think. Their children do go to college including the Ivy League, UVA, and VA Tech.
Congrats, homeowner!
I hope I can post a similar story one day (just as a first-time homebuyer instead).
HayfieldGrad -
Here's an excerpt from an article on TJHSST in the October 2009 issue of Washingtonian.
I read the whole article last week in a doctor's office. I recommend it.
Robert,
Yes, I realize that TJ is the ideal high school. I realize that in comparison schools like Hayfield and Lee look horrifying to most of the people here. I happen to disagree and I realize that amongst a very small minority in the world. So sorry.
"Several thousand jobs with the National Geospatial Intelligence Agency are moving from Reston to Ft. Belvoir Engineering Proving Ground in the Newington area of Sprinfield in 2011."
While not a horrible commute from most of NOVA, Ft. Belvoir is a short reverse commute from Alexandria, South Arlington, and DC. Looks to be 4 miles from parts of Alexandria.
Outbound on I395 or Route 1 in the Morning, inbound in the evening.
Some may choose to cross the newly widened Wilson Bridge to Howard County.
Yeah, from my house they could use Yates Ford and be there in 20/25 minutes. Of course my home is really located nicely for commuting. I'm 10 minutes bewteen Manassas and M.P. VRE stations with easy access to the PWParkway, 66 by-pass,downtown clifton and Manassas Old Town. I really like avoiding stop light alley. Heck I can use Moore drive and get to Walmart in 10 minutes, life doesn't get any better than that.
HayFG, I agree with you. I always used public schools for my son altho I had intense presure to use private schools. I'm a product of public schools as is my husband. Any student can thrive and learn if they are self motivated in most school systems. I said most because I would never have used public education in the District or New Orleans due to "food" safety, bathrooms, infrastructure plus personal safety issues not because I believe the teachers or curriculm are subpar.
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