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Friday, October 30, 2009
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71 comments:
Bloomberg's latest vote on home buyer tax credit delayed until next week.
I won't cut and paste the whole thing here, there are many interesting procedural details, but for fun here's an entertaining quote from our senatorial realtor in chief:
“The American people should understand this -- and the affected industries -- this is the last extension,” said Senator Johnny Isakson, a Georgia Republican who cosponsored the plan. “Tax credits like this only work by creating the sense of urgency to take advantage of them.”
There are going to be some really unhappy sellers who try and sell after the credit expires. Pulling forward future demand is not a very good practice. Hopefully the banks are smart enough to use this next credit as a way to push through as many REOs as possible, before the euphoria goes away and they are stuck with houses with significant damage and no first time buyers left to fix them up.
Sorry if this has already been posted.
Stimulus jobs overstated by thousands
My company still hasn't received a stimulus check. I must be doing something wrong.
Can't wait to send in my 4th quarter tax payment.
We're going to two more TH's tonight. I'm getting less and less hopeful with each outing. Which is probably a good thing, because by "hopeful" I really mean "expectant".
These could be good, they could be terrible, No way to know until we get there. I like both neighborhoods and locations though, and have checked the comps, the sex-offender registry, the previous ownership history and the square footages.
When we started this process in earnest this spring. I really thought we'd be able to get something "just right for us" for around $275k or less. It'd be an overpriced* townhouse, sure, but
it would still be a good value.
*by which I just mean one where you are paying the DC area premium.
But I didn't realize that some of those cheap listings look like crap in person, some of them aren't really townhomes in that they don't have basements, and some of them are unliveably tiny.
And now we're staring down no less than $325k for something small or that needs work, $350-375k for something that's been well-maintained or possibly upgraded at all.
That's a heck of a lot of money. And I look at the SFH listings and see stuff around $400k, but from the few we've been in, I'm guessing there's nothing we'd like under $475k at the most optimistic.
Sure, fine, we can "afford" it. But does no one else step back and say over $2000/month is insane for a young family (using both young and family loosely here) to be paying towards housing?
Makes my stomach churn. It's really really difficult to part with $70k of hard earned, hard saved cash. I think if everyone had to save 20% down, we'd all be a heck of a lot pickier.
Cara-
2K on housing is not that bad at all. I am pretty sure that you take home ~150K combined(after 401K) so $2K a month is 16% of your income, which is off the chart low.
http://www.project.org/images/graphs/Percentage_of_Income_for_housing.jpg
If you want to talk about the average family making 100K. Than 2K is 24% of income, which is still a very reasonable figure.
housebuyer,
Everywhere I've ever rented until I moved to the DC area, only required ~$1000/month for a nice livable place. (and I'm talking about NJ and Boston here fer crying out loud) $2000 is twice that. My brother-in-law bought a house, a whole house for $115k (in TN).
We're not even looking at houses. There is nothing fancy or truly spacious about what we might buy, nothing extravagant. Not even anything of high building quality really.
Daycare costs are fully the price of another mortgage. And if you don't go that route, well you've just cut your income in half.
We'll do it. Up to $2000 we'll do, but we're going to need 2/3rd of the amount that had been going towards downpayment savings to go towards child-related expenses, so it's a lot tighter than you think.
Maybe we're just still too close in time to when our HH income was $45k. Maybe I'm still too close to grad school when mine was $22k. But for $300k or higher, I want a home that I'll love.
Cara said:
"I think if everyone had to save 20% down, we'd all be a heck of a lot pickier."
And we also wouldn't have had a bubble.
It seems like loose lending and easy money have distorted general views of money. For some reason I find it interesting when one stops referring to prices as $470k, $495, etc and instead says half a million dollars. How did that become an acceptable price to pay for shelter? It used to be that a million dollars was a lot of money, but its all to common to see between half and well over 1MM spent on housing around here.
housebuyer,
good graph. Can I just say, collective insanity?
randy,
I often say "half a million dollars" (at least in person), it does have a much stronger impact, emotionally anyway.
But I also remember when a loaf of french bread was a dollar not 4 or 5 so, inflation (even normal non-bubble inflation) messes with your emotional sense of money.
Cara-
I think that will always be an issue with the DC area. That housing will be more expensive than Boston and places like that. In Boston there is as much super wealth as there is here, but there is also far more poverty. So to housing needs to be cheaper or a large percentage of people wouldn't be able to afford everything. Because the average person here has a high paying government job, there is far less poverty and everyone competes to push housing to what the median can afford. I don't disagree that it is collective insanity, I just don't see it going away anytime soon.
from yesterday: Cara said:TN,
I was going to ask, what's your opinion on concrete block foundation walls as opposed to poured concrete? I was under the impression that poured concrete is "better" so long as there are no cracks, (or the cracks were properly repaired) but since we have an expert around...
Thank you for the tag, but I am not an expert. I refer to myself as a reasonably knowledgeable individual or "RKI". With that disclosure in place I will offer my opinion:
Go with whichever is less expensive for your particular application. A properly set mason wall using blocks is as good a dollar value as a formed steel reinforced concrete wall. It really depends on each circumstance.
Short answer:
If you're asking me: "Which method of construction should I assign a higher value?" then my answer is: For the purposes of evaluating a home that was built more than x years ago, as long as the formed and poured walls are free from structural cracks and significant foundation shifts, assign the same value to a formed block wall built to the same standards.
Long Answer:
There is an online study of the relative strengths of different methods of home construction available from Texas A&M University that was created from the guys in the tornado lab. As I recall, the formed block walls held a statistically significant edge over all other forms of construction (but this was how to "tornado proof your home". So how relevant this is to a question of static load bearing may not be an apples to apples comparison).
If I had a personal preference it would be for formed & poured concrete slurry walls in this geographic area because of the availability of solid foundations for it to rest upon vs. alluvial soils like we had in Texas. Formed masonry walls are *usually* much cheaper to make since its a linear construction method (one row at a time or one block at a time) vs. all at once with poured and formed walls. Renting or building the forms is big $$$$.
Novahog,
I'm shocked, shocked, that your firsthand report shows your company's not getting anything.
The AP story was a good read because they appeared to do some actual investigation -- but now they'll have to tackle a new one on this new 650,000 jobs claim.
Pessimism is striking me today.
housebuyer said...
http://franklymls.com/FX7193633
Yeah that's what I'm talking about. There is a certain stickiness in that area that I just don't get. Part of it is psychology on the part of the sellers, part of it is the buyers who think that an area that hasn't fallen much is protected from a further decline. All other things (fundamentals) being the same, I think the opposite will be true. Venus Fly Trap.
housebuyer: there is something seriously wrong with that graph, as I've owned homes in several of those states, and at no time would the lender let us spend more than 28% on our PITI.
housebuyer: there is something seriously wrong with that graph, as I've owned homes in several of those states, and at no time would the lender let us spend more than 28% on our PITI.
Fast forward and 10 years, and after some raises that 28% might now be closer to 20%. To get the average of 38.7% (e.g. Illinois), you'd need to mix in a siginificant chunk of folks that pay way, way, way more than 28%. On top of that, isn't it something like 1/3rd of homeowners have their mortgages paid off? With property tax and maintenance, they can't be paying more than 5% a year.
I smell funky methodology or mislabeled graphs.
Fast forward and 10 years, and after some raises that 28% might now be closer to 20%. To get the average of 38.7% (e.g. Illinois), you'd need to mix in a siginificant
housebuyer,
That's a very bold statement, you need some data to go with that.
(Massachusetts is at >40% income, VA "only" 35%, DC 39%)
I don't see the collective insanity being cured anytime in my lifetime either. And the graph reminds me for the umpteenth time why I'm glad I don't live in California.
The real take-away, is that if you want your standard of living to "feel" high, you need to be able to price everyone else out. A collective arms race of pain.
Craa-
What statement is bold? That the median salary in FX is higher than Boston? I didn't think this was a debate if you want I can look, but I am pretty sure FX is higher than almost anywhere and this is without that many extremely high earners.
Cara said...
"We're going to two more TH's tonight. I'm getting less and less hopeful with each outing."
Unless you're gaining some kind of lessons learned from seeing these houses or you really have to move in the next couple of months, you're probably wasting your time. The fallout from this tax credit will be spectacular, but it could take a while to make its mark.
housebuyer,
yeah, actually, that is my question. Arlington and Loudoun got rated at around the wealthiest, that I know. FFX? Is up there, to be sure, but to justify a rental price differential of two times, you'd need it to be twice Boston, and that's pretty darn implausible.
It could be true, but it's definitely at the level of you need to look it up. I mean NJ and Boston are both widely considered to be really expensive places to live...
kevin,
If we love one of them, and can get it for what I consider to be a fair price? Then we'll buy one of them, if not, we'll keep waiting. But if our dream house happens to come on the market at not the perfect market timing, I'm not going to pass it up.
Cara-
The median income for Boston-Cambridge-Quincy is $71,361
http://www.city-data.com/forum/city-vs-city/770838-metro-areas-median-household-income-2008-a.html
So Fairfax is ~50% higher. I assume the $1,000 places were not necessarily as nice as the $2K house you were talking about so it may not be that unreasonable. In general I have heard Boston housing is older and less updated, which could also have an impact. ( I have never lived there so I don't know if this is true)
Cara, I don't disagree with that strategy, I just know that the possibility of that happening now instead of in say four months is really small. Good luck!
housebuyer,
$1100 got us an extremely well maintained builder-owner 1300 sq ft Townhouse, with power bills in winter of under $80/month for a 40 minute commute on the commuter rail. Or an adorable victorian bottom level of a duplex or triplex in Belmont (close in), with possibly the world's lowest crime rate (1 or 2 misdemeanors a year).
So, no. when we moved down here we had to take a major, major step down in quality and size to stay within a reasonable rent (1600 at the time) for a similar commute-time.
So, 1100 to 1600 (in MD) is about right for the median incomes, but it involves a major step-down in quality and size. To get similar size/quality you need to double the rent.
But some cities are just more expensive than other cities. Every area has it's own "normal" and it's own housing stock it has to deal with. That part's just reality.
It doesn't change the fact that $300,000 is a heck of a lot of money. That's reality too. It's a big-ass commitment.
kevin,
Yeah, I have higher hopes for January/February than I do for now. In fact, I'd kind of be relieved if there were no houses I wanted to go see for the next two months. It'd be a nice breather. (until I started getting anxious that there would never be a home I liked...)
If today is bang on Vienna day, here is my contribution:
FX7170087
That's how you find homes in Vienna. Either the wife or the husband is the sole surviving spouse, and the kids create a Trust and mom or dad head off to the old folks home. Home is sold to the trust. A RE management firm takes over the home and in a week or two it will be listed for rent.
Odds are it will be a rental, rented in this market at a substantial 2006 discount. For sale anytime soon? Never. Not until we see 2006/07 prices again.
I've personally watched over a dozen homes like this one (DOM <1) occur since Jan 09 without a single resale later.
People are sitting on Mom and Dad's home until they can get bubble prices.
Don't know what to think about it, but I know the effect. Less inventory.
Ah Vienna. At least the Halloween parade was fun....:)
TN, that house was purchased in 1987 for $134,500. Of COURSE it should be worth three times that in 20 years! (extreme sarcasm)
Still, not as ridiculous as:
http://franklymls.com/FX7160862
List: $665,000
Previous Sale History
09/13/2006 $670,000
05/09/2005 $644,500
09/19/2000 $325,000
http://franklymls.com/FX7176897
List: $675,000
Previous Sale History
08/02/2007 $592,000
04/13/1998 $213,000
They want more than triple the 1998 price. THIS is what I'm talking about when I say sellers are selfish idiots. They are asking for way more than the 2007 price.
http://franklymls.com/FX7190980
List: $599,999
Previous Sale History
10/19/2005 $599,900
11/29/1993 $186,000
Yeah, I'll be as likely to pay these people bubble prices now as I was when the bubble was going on: not at all.
TN,
I'm seeing similar things, even in Woodbridge. I don't know if your scenario is accurate, but houses are going under contract and staying there for oddly long periods of time before ending up as rentals, or listing as 'sold' at prices that make no sense relative to the list price.
On a related note, my grandfather passed away earlier this year, we've still not been able to sell his house in Oxon Hill, MD despite numerous (large) price decreases. Too much inventory of old beaten down houses, too few qualified home buyers who want to live in that area at any price. Investors have been strangely absent.
If your ugly little house doesn't sell in 180 days, the key is to increase the price by 7% and hold an open house:
http://franklymls.com/FX7157432
Meanwhile, one block over, I can get this for a lot less (82%):
http://www.franklymls.com/FX7105291
Or, one block in the other direction, for a little bit more, I could get this (110%):
http://franklymls.com/FX7189399
FX7157432
I am so going to that open house just to play foosball and Glaxxon. Just as soon as I can find my old blue velour shirt and Girbeaud jeans.
]:->
LOL, NoVAw and TN! I have seen that price increase tactic tried many times but haven't ever seen it work. Look at this one, for example:
http://franklymls.com/AR6927226
Might have sold for a higher price if it hadn't been overpriced originally.
Ace,
I quite like some of the taste choices on that one Ace, but it just needs more recessed lighting. Just didn't take that far enough. There could be, somewhere in that house, a shadow. Somewhere.
Texas Native,
That's the same house that was vacant in 1994 when we asked about buying it.
I wonder if it's been vacant this long.
It was in bad shape then and we laughed at the price they were asking. I think it was $190K then. But it wasn't a serious asking price - it was just a vacant house with an unmotivated absent owner.
Cara-
That would suck when all of the recessed light bulbs start failing. Seeing that they were probably all put in at the same time the would probably mostly fail at a similar time. Nothing like having to change 100s of light bulbs that you need a ladder to get too.
housebuyer,
Guess when that happened to a friend of mine? Yup, right as she was in the middle of trying to sell her house.
The thing was, she bought new flourescent bulbs which come on with a delay, which means it looks really strange if you don't change all the bulbs in a given room... So we played musical bulbs, such that any given room had the same type. fun fun fun.
NoVAwatcher, Ace,
When I was selling my last house I tried that 'tactic' too and surely it didn't work. I don't know what I was thinking about back then but I also didn't know trying to sell a house in Oct was a bad move. Oh well live and learn.
Cara,
I feel you, girl. I think 2k for just housing is a lot. Especially with $1600/month after tax (daycare for one baby) stacked on top. I suck at math but that is what, 44k a year after tax?? (no idea how to figure the pre-tax actual salary) before you even pay the light bill or buy anything to feed the baby.
Meshell,
Yup, just those two combined (which are indeed the two largest expenses) are my full take home monthly salary. (after taxes, 401k, and health insurance)
I know, I know this leaves my husband's salary to cover everything else, (like food, gas, utilities, insurance, car payment or new-to-us car fund). But still, setting up your finances such that your expenses CAN'T be covered under one income is a recipe for disaster, Fed or not.
Cara, that was one of my favorite houses too. However, several factors worked against it. It's bigger and higher priced than the neighborhood. It has no basement. The "basement" is only the area under the right part of the split level, and includes only a small finished bedroom and bath and the garage. There is no basement under the rest of the house, and no usable attic, at least not when I toured it. So there is little storage space, especially for a house that size. A lot of people do not want guests to look right into their kitchen when they enter the front door. It is across from a nice park - so if you like not having neighbors across the street, that's good, but parks can be noisy and you never know who might hang out there at night. And it's fairly close to 66 and you can hear road noise.
Those are the kind of defects that people can't tolerate when you ask them to spend $1.24 mill., but they are much more tolerable at the price for which the house sold.
Cara-
While I agree that it is a good idea to make it so one salary can cover the essential expenses I would not put daycare on this list. If you lost one of your incomes then that person could stay at home and watch the kid. So your salary probably does cover housing, car payment, electricity, and food.
I find it absurd that day care for one child is basically the same as your house payments..
Cara and Meshell, totally agree. What burns me too is that from the standpoint of the tax planners, Cara is in such a high income category that they often want to hit her harder, as if she were living like a queen. If her family income were in Milwaukee, that may be justified. But people with that income have to forgo LOTS of luxuries in this area just to have the basics that are far cheaper elsewhere. And the salaries are NOT higher enough here to offset that increased expense. It's simply unfair for the federal tax code to not take fully into account how much more it costs to live in some areas than in others.
I think our daycare is closer to $1300-$1400 a month for our infant, and we're pretty happy with it so far. It's a step up from Kindercare, and the two 18-month-olds I met could count to 10 in English and Spanish. The ones that were closer to $1600 a month had immersive Spanish and Chinese, suzuki piano, etc.
housebuyer,
That's in the plan. If one job were lost, you'd still want daycare at least part time to look for work, but the loosening up of the day care expenses allows for one salary to cover everything else. Hence the $2k is the limit statement.
I mean, our car payment only has another 1.5 years in it, and my student loan payment (husband's is already paid off) is next to nothing, but there's always car repairs and other intermittant expenses that you need to cover.
But yeah, daycare (especially for under 12 months) is a rent payment sized expense, it's just the way it is right now.
Ace, yeah, we'll see how much adding a kid and a mortgage helps our taxes...
novawatcher,
Good to know!!
(there's always the what if we have twins, or a kid with special needs, or want to have more than one child before I'm 40...)
Whose idea was it to put a "dramatic spiral staircase" in a 40 year old town house. They should have put in a normal staircase and with the saved money put a couple of those recessed lights in so you can actually see something inside the house... These are some of the darkest pictures I have seen.
http://franklymls.com/FX7194372
Ace,
I'm interested to know more about the noise issue along 66. Most homes in my price range are near 66 but I've never lived in one. I once 'staked out' in my car in front of a house I was interested in and rolled down the windows but really couldn't hear much. That's about 100 yards from 66. I often jogged along the 66 on the trials on Sat mornings and didn't mind/hear much either.
just wanted to add that the 'stake out' happened at around 9pm so that's probably not the best time to do it...
Cara: Thank you for the info on the Burke & Springfield townhouses. We spent yesterday and this morning looking at what is available and have decided to move on to Fairfax and Vienna. The houses were cheaply built to begin with and just haven't aged well. Even if people tried to renovate them, they still feel shabby. We would rather spend more for a townhouse which is better built. If anyone has any ideas for townhouses around $500K in Vienna/Fairfax, let me know. Thanks.
housebuyer,
I think you are comparing apples and oranges. You are comparing the entire Boston area to Fairfax County. Shouldn't you be comparing the median income for a nice suburb of Boston to Fairfax? Or compare the Boston MSA income to the DC MSA income?
As for more poverty in Boston. What are you comparing? Boston the city to Fairfax the suburb? How about Boston the city vs DC the city?
Cara,
Thanks for the article. I saw on the Senate calendar no roll call votes are scheduled for today and was curious what was going on.
I thought this was pretty interesting and worth highlighting:
Isakson estimated the new plan would cost $10.2 billion. Senate Banking Committee Chairman Christopher Dodd said the plan wouldn’t add to the government’s budget deficit because lawmakers plan to finance it by delaying a tax break for multinational companies scheduled to take effect next year.
Assuming that is true I'm less outraged. I still think the credit is silly but at least I'm not paying for it (sorta). And at least they are doing pay-go.
TBW-
I agree describing Boston to Fairfax isn't the best comparison, but this is what Cara was doing so I was just pulling up the numbers for these areas. If she had given a county in Boston I could have done more. But all she said was she used to live for $1K, guess what that is really easy to do in the DCA MSA. In west Virginia you can get anything you want for that price. You can also live in a lot of Marylands suburbs for only a little over $1K.
Texas Native,
FX7170087 *did* sell for the 2006/07 price. Look at the tax records. Even if the 2006 assessment was under actual sale price by 5-10% this sale was pretty darn close.
I know I'm a snob but am I the only one who finds these one story rambler homes depressing?
TMI territory but many years ago when I was taking a behind the wheel class one of my high school classmates was in the car and we dropped her home. When I dropped her off I felt very, very sorry for her that she lived in a home like that. It also was a windy, rainy day and I remember thinking it looked like that home would just fall apart with enough wind. I remember she seemed a little ashamed of the home and had tried to get us to just drop her off a little bit away. Her parents also had recently divorced and she had taken her mother's name. So I guess I just view these as affordable housing in Vienna. Not $462k homes.
[Her rambler did not have an all brick exterior like FX7170087 but was mostly vinyl. I wouldn't worry about FX7170087 falling apart in the wind. Not that I *actually* thought her home would fall apart in the wind.]
housebuyer,
I have friends renting basement apartments in DC for $1k. Or in older buildings. These are in nice neighborhoods like Dupont Circe, Adams Morgan. Friends in Columbia Heights who rent group houses are in the $600-700 range. So you can find cheap rentals even in the city core. Depends on what you are willing to negotiate (W/D in unit, modernness of kitchen, etc).
kevin said
They want more than triple the 1998 price. THIS is what I'm talking about when I say sellers are selfish idiots. They are asking for way more than the 2007 price.
We are in total agreement that these are silly prices. Nonetheless I would not call the sellers "selfish." "Idiots"? Yes. It's idiotic to set a price too high, get too many days on the market, and become a house that never sells or possibly sells after you cut it more than you would've had to if it was competitively priced from the get go.
But there's nothing selfish with sellers trying to get the highest price they can. Buyers are the ones being silly paying those prices. And banks were/are (and now the gov't via FHA is) being silly making these loans that are 50% of monthly income or little to no down payment.
Didn't you sell your condo for the most it could have gone for? I certainly encouraged my grandmother to get every penny she could. We laughed all the way to the bank that anyone was stupid enough to pay the bubble price in 2007. Little did we know idiots would still be doing this in 2009 in Vienna when even people living under a rock knew there was a housing crisis and these home prices were built on loose loans.
Cara,
On craigslist all the Burke TH for rent are going for much less than $2000/month. When's the last time you looked at Burke TH for rent? Why not schedule a few visits to the rentals in addition to the open houses?
tiredbubblewatcher said...
"I know I'm a snob but am I the only one who finds these one story rambler homes depressing?"
No. And at $700k, that's enough to cry one's self to sleep every night.
TBW: "Didn't you sell your condo for the most it could have gone for?"
Probably not. The market was at free-fall though, and I wasn't about to take any chances to save $10k here or there betting on what I knew was inevitable. I was priced very competitively at the time, and made certain concessions to the seller to just get out before things got too bad. I definitely didn't make out like the genius bandit some would think. Would have had to sell a year earlier for that. Definitely learned a lot though.
I do think it's both stupid and selfish for a seller to say "I'm not going to sell below x amount" when x amount is 20% more than the competition and there's no justification for that price. I don't mean "selfish" in the sense that they are inherently a selfish person, but that they want way more profit than they're entitled to. But yes, ultimately, it's the idiot buyer that vindicates them. They're certainly going to pay the price for it too.
For Robert:
Bloomberg reports on some poll results I find a little surprising: global financial professionals still pick New York City as the best place for financial services in the near-term.
New York City Still Financial Capital of World
Remember all those idiotic ramblings by the DC Chamber of Commerce and others (like Robert) who said DC was going to dethrone NYC? DC does not even rank on this list (see the chart).
TBW: for what it's worth, I've generally found assessments to lag transaction prices by 18 months. For example, that $453k assessment in 2006 for FX7170087 would have resembled mid-2004 transactions.
See here:
http://novawatch.blogspot.com/
scroll about half way down.
Hi MM,
I would be more worried about the air pollution than the noise. Studies like this make me not want to live so close to a major road.
FWIW, we were at Madison Manor park yesterday (that park right next to the 924k house) and the road noise wasn't bad at all. The park was pretty noisy though! I really like that neighborhood in general but the proximity to 66 is a huge issue to me.
http://www.sciencedaily.com/releases/2007/01/070125185843.htm
Daycare costs go down the farther away from DC you go. In Arlington, home daycare is about $300/week for an infant. My friend has a baby in a Bright Horizons center in Arlington and it is $1600/month. I know there is a daycare downtown that is $1800/month for babies (Covington Kids).
Forgot to mention that if you lost your job, you might still have to pay daycare to hold your spot (the closer in/more desirable the center, the longer the waiting lists).
I think how bad road noise is in the ears of the beholder, to some extent. What's not an issue for some is annoying to others - at least when a seller is asking that much for a house, without something very positive to offset that. And definitely if the road poses health risks, some buyers are going to balk.
NoVAWatcher,
Ah sorry I meant the 2007 assessment. I usually think of the x year assessment as being the x-1 year price. Interesting if it's x-18 months price. If so, that would explain why 2000 assessments seem so low (mid-1998 prices).
On the flip side though, doesn't that mean the 2009 assessment is the mid-2007 price? :)
I wonder if over time the lag is decreasing. It's so, so, so much easier to find out the assessment now that it's online. In 1991 when someone bought a home how easy was it to find? Did realtors have access to a database? Or did everyone have to go to the county records? If the latter, then I suspect few factored assessment into the bid price. Nowadays you look at a listing and the '09 assessment is right there or it's a few clicks away.
TBW -
DC vs NY
No, DC will not dethrone NY, but there will be a significant power shift that will benefit DC Metro, bring money and jobs and drive up house prices in Vienna, Oakton, and Fairfax.
For those interested, another analysis of DC vs. NY
TBW: I get the feeling that these last two years they've been trying to extrapolate to the upcoming year rather just reporting assessments based on last year's comps.
In the past, basing assessments on the past year's comps wasn't a bad method, as the deviation from current prices wouldn't have been that much. But, when prices were going up 20% a year, it means that assessments were lagging current selling prices by quite a bit.
NoVAWatcher,
I doubt they are trying to get ahead of the losses. That would mean lower property tax revenue which means more layoffs, salary freezes, and so on. They will err on the side of overvaluing because they know few will fight them on it.
Robert,
The Washington Times article is about 2010-30. I predict housing in Northern Virginia will cost a lot more in 2030 as well. That's not really the debate here.
We are focused on the next few years.
I predict in 2010-2030 we will all have monorails and flying cars.
TBW I don't know about other local counties, but I can tell you that Arlington Co. is increasing fees for every service it offers to offset current and anticipated losses from property tax revenue. Ask any builder how much building permits have gone up and the new fees created and you will get an earfull. If you want to install a double bowl vanity in a bathroom the cost to add a second bowl is over $1,000 in newly imposed sewer and water hookup fees. Also, don't think few people appeal their property tax assessments. In 2009, 73 of the owners in my condo got together to appeal our assessments, and we had to wait a long time to get before the board of equalization. The day just 3 of us went to the board, we could not sit down for almost an hour because there were so many people scheduled. Maybe Arl. is the exception because there are more retired people who are willing to go through the process.
reecon,
I did not mean no one appeals their asssessment, just very few. If 1% of homeowners appealed that would create a standing room only crowd but that does not change the fact that the remaining 99% pay the assessed value.
waiting_too,
Good luck, it's the same builders....
You do have to be really judicious about which subdivisions to chose. Some builders are a lot better than others. If you're trying to buy in a shorter time frame, you can't do what we're doing of going to each subdivision as it comes up and evaluating the quality.
If you do identify a well-made townhouse subdivision please share.
Because indeed, we've seen a lot of crap. And sadly it's meant writing off some of the prettiest locations...
tbw,
Right now if we rent, we're going to rent the TH next door to our best friends once the LL is done renovating it (22 years with one tenant). If we're going to keep renting might as well be exactly where we want to be.
But for now, we haven't given up yet on the search. We may. Just not yet.
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