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Wednesday, October 7, 2009
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66 comments:
This morning on CNN American morning, Christine Romer was grouping together a bunch of ideas as a next "let's not call it a stimulus".
1) tax credits for new hires:
NY Times tax credit for hiring...
2) unemployment extensions
3) loans to states
4) extending the $8k
Now, I can't find hide nor hair about this as a group thing anywhere on the internet. However, if CNN American morning is talking about the $8k extension as likely... suddenly it has become far more real.
Think about it, some legislators want a better extended safety net, some legislators are recognizing that the huge state tax revenue drops are going to be big trouble for employment next year if they aren't backstopped, some legislators like any stimulus as long as it's called a tax cut, and some legislators are either in the pocket of NAR, think that the $8k is wildly popular so will provide enough cover for passing the other things, or actually think that giving $8k to people who are in a good enough financial position to buy a house is the most stimulative kind of spending towards boosting consumer spending you could get.
The $8k extension may very well be the hook that gets the other back-stop measures passed.
I know, back in say August I was probably the person who was most confident the $8k would get extended, but I was really starting to believe tbw's argument that there's just not enough time to make it happen and that all the op-ed's saying how expensive it was would have some effect.
Worst case scenario for me personally. They don't extend it, but rather come February they re-instate it with a gap of December and January closers who get nothing, which ends up being when we close. That would just be evil. (unless we also manage to get a lower house price because of the gap, in which case it'd be golden)
And in home hunt "news".
I ran across a listing in redfin that wasn't in frankly.
Turns out that's because it's a FSBO that as far as I can tell is only in zillow:
$385k Wye Oak Commons
They're asking to be made whole on their 2006 purchase price (and avoid paying the agent fees...)
which is $50k over the recent sales and current pendings.
This made me go look at zillow, which brought up the "make me move". Now most of these are at WTF prices, but some are not any worse than current elevated lists:
5539 Kendrick Ln thoroughly updated for $335k? Right now? that'd be a great deal.
For those who don't think the $8k is going to be extended and want to buy now, or just want to get in on a "listing" that's not getting as many eyeballs, perhaps now's the time to take a peak over at zillow, and see if there are any reasonable folks who would be willing to sell, but just don't want the hassle of listing.
There's also 111 foreclosures listed... That's compared to 113 MLS listings... If these are for real, the REO wave is already here... it's just not hitting the MLS.
zillow's free, check it out, is this just Burke? Or is this the shadow inventory right here in front of our eyes, easy for us to see? How many of them can Capital LLC and other flipper's really buy at auction? (mmmm, if they think they'll make a profit probably all of them.)
When looking at local real estate statistics (http://www.pgcar.com/stats/default.htm for example) would the inventory:settlements ratio be more indicative of the market than inventory:contracts? Perusal of the stats shows many more contracts than settlements; am I correct that these primarily are people who fail to get financing? It's a big effect in PG county Maryland, right now.
anonymous,
I've been using new listings to solds as my personal metric for a while. Are seller's joining the market at the same rate as houses are being sold?
There are many reasons contracts is not a reliable metric right now, things not getting appraised for high enough, or short sales sitting under contract for 4-8 months rather than the usual 1-2. Take your pick. Different impediments will apply to different localities.
But if new lists are replacing the solds then inventory will remain steady indicating a balance between how many buyers are willing to pay current prices, and how many sellers are willing to sell at current prices. All other metrics are too distorted by the unusual nature of the transactions right now.
Hi All- We have been negotiating with a couple who was planning on putting their home on the market in the spring. As we already have our home under contract, we were pushing for a shorter timeframe.
Now looks like we are very close to an agreement and there are no realtors involved at this point..and it's going to stay that way.
So, was wondering if anyone has any advice on the following:
1. should we retain a real-estate lawyer to handle the contract, contingencies etc?
2. If yes, does anybody recommend anyone in the reston/herndon area?
3. Are the Virginia contracts, disclosures, contingency forms available online if we don't need a lawyer?
No3Putts,
Hopefully Tabitha can weigh in, she arranged a similar no-realtors involved transaction. You're asking the right questions...
No3 Putts-
Get an RE Attorney!!!!!!!
CYA!!
No3Putts, we did what you did in the past and IMHO the lawyer is worth every penny (and most don't charge much for this - some view it as a "loss leader" so that you'll come back to them for addressing other legal needs in the future.) Unfortunately, that was in another city so I can't give a name.
No3putts,
Congrats on your successful negotiations!
As Cara said, we bought our house this spring without realtors, from someone who intended to put their home back on the market in the near future. We did not hire an attorney, but we used our title company's in-house attorney, my husband IS an attorney, and our contract was very straightforward, nothing special. So I would say that if this is a simple transaction and you have an excellent title and settlement company with a staff attorney, you would probably be fine, but prudence would still probably dictate you retain your own real estate attorney to look things over. Unfortunately, I don't have any rec's for you.
I would love to hear your story, if you care to share it.
To comment on CRTs post from yesterday about Arlington having a lower percentage of houses listed than most other areas. I would promise this is always the case and that inventory did get out of control over the last couple of years. I think months of inventory is the most fair comparison and Arlington is no better than other areas in this category.
In addition to having more rental properties that are not listed, I would think it has more new condos that are not listed, and there are more higher end homes. I would guess that people are older when they move to Arlington, and older people move less often than people who are starting families. So for all of these reasons Arlington will always have a low percentage of its housing stock for sale, but that does not mean its housing market is in a better position than neighboring housing markets.
No3putts,
Yes, definitely use an attorney. Be aware that Title Company in-house attorneys do not represent either side. Many title companies are owned by law firms and you can hire one of those lawyers.
There are plenty of good title companies in Reston. Call a couple and ask for the name of an attorney who can help you out. I'm reluctant to put any names out there.
I am not aware that the proper forms are available on line. You may get something too generic.
Virginia sales contract:
http://www.virginiamls.com/Forms/salescontract.pdf
Interest rates are moving quickly. For those interested, here is a pie chart of the number of rates sheets offered per day from a survey of lenders.
For all of the hand-wringing about mortgage applications flattening out, well, I guess they haven't: Link
Robert,
The pie chart shows that they are changing a lot, but not which direction, or if there is a coherent direction.... on zillow it still looks as if rates are flat or going mildly down.
yup, looks like last week was just a blip down in purchases.
NY Times on the unique strengths of the Orange Line corridor:
http://tinyurl.com/yceyzr7
Cara, I could stomach the tax credit for new hires thing. That's probably because I haven't thought long and hard about it, or am so utterly enraged and beaten by the home buyer tax credit that anything in comparison sounds brilliant.
Please keep us updated on the buyer's credit thing. You seem to know where to look and listen.
Robert,
That's great if the rates start rising. Let's hope they can climb and stay high.
Kevin-
Rates are still going down. The ten year treasury is at a 5 month low today. All Roberts article is saying is that the market is very volatile right now, so the rate you get in the morning will likely not be the rate at the end of the day. He is not saying it is going up just that it will likely change, and for the past couple months that change has been down more than up.
The rate is tied to the ten year treasury, which as you can see has been falling for a while. http://finance.yahoo.com/echarts?s=^TNX#symbol=^TNX;range=3m
fd,
Just in case no one acknowledges this, that was a good article. Makes me even happier that I'm not trying to buy there.
kevin,
Even Calculated Risk is okay with the tax credit for new hires, so you're in good company.
FD said: "NY Times on the unique strengths of the Orange Line corridor:
http://tinyurl.com/yceyzr7"
Interesting article. As I've noted previously, SFH in N. Arlington within walking distance of Orange Line Metrorail are doing just fine. Purchase prices for homes in my neighborhood remain excellent.
Tom
"remain excellent"
That's a matter of taste, now isn't it? If I may translate "excellent" to hideously outrageously expensive beyond all comprehension then sure. What drops Arlington near the metro has experienced have not moved prices out of this realm.
As I said, I thank my lucky stars that Arlington and the Orange line are both useless to me. There's perks to working somewhere that's not in the major job centers.
Cara, care to justify your hyperbole? How are houses in Lyon Village "hideously outrageously expensive beyond all comprehension" given what they provide to the high earners who live there? Do you actually know any of these folks?
FD said: "NY Times on the unique strengths of the Orange Line corridor:
http://tinyurl.com/yceyzr7"
Been following this blog for months, and I felt compelled to post based on this article. (By the way, this blog entertains me on a daily basis when I am bored at work - thanks for that!)
I am a first-time buyer looking in Arlington for a SFH or townhouse. My husband works in Ballston and I work in DC, and we both value short commutes, so we are concentrating our search in North Arlington.
I hope we can find a place before the spring buying frenzy starts. At the current moment, anything decent is going under contract within a week or two, and there's not alot of inventory under $600k for anything that's not a condo.
I agree - the prices are outrageous, but location is our #1 priority, and we are willing to pay for it.
Jewel,
Have you considered this?
Husband + you drive together during HOV-2 hours on I-66 going relatively quickly because of HOV restriction. Take Exit 71, drop husband off in Ballston, take secondary road in Arlington to DC, park car at DC office. Reverse on car commute home: leave DC, pick husband up in Ballston, take HOV-2 I-66 home. You might be surprised how quick the commute is with HOV-2 lanes.
For now if you have a hybrid car you can do I-66 all the way to the TR Bridge even after dropping the husband off but I suspect at some point the hybrid exception to HOV-2 ends.
Other options include parking car at husband's office in Ballston, you take Metro from Ballston to office in DC.
And if either of you has to work late assuming you don't live superfar from the Metro they could Metro home to Vienna, Dunn Loring, etc and the spouse who got home earlier can pick them up. The few times one could not pick up the other you can pay for a taxiride home since you saved $100k+ on your home.
Not ideal if you regularly enter/exit at completely different hours. But I'd seriously consider it.
Jewel, I would look in the area east of Glebe, north of Washington Blvd, West of Quincy, south of 66. Assuming it is off one of the main roads and the noise from 66 isn't too bad, that area is significantly cheaper than Lyon Village, Lyon Park and Ashton Heights. Another place to look is the western part of Ashton Heights, i.e. south of Wilson, north of 50, west of Monroe and east of Glebe. That area is a little cheaper than the rest of Ashton Heights but with the Founders' Square project and the redevelopment of Golds it is really going to be jumping in a couple of years.
fd,
Do justify and hyperbole sound like they belong in the same sentence?
I'll take back incomprehensible but the others? I stand by my opinion. Things that are just self-evident can be amongst the most difficult to explain, and I don't know that I can do it.
We've been hashing and rehashing Arlington for years now on this blog, so I'll bring you up to date with where I stand.
1) Arlington has fallen a bit since the peak, along the lines of 5-10%
2) CRT and I maintain that the bubble gains are probably now mostly "baked in" and whatever remains after the end of the burst will be due to the fundamental changes that have occurred there over the past 10 years (as well illustrated in the article, which is why I bothered to complement you on it).
3) This trend is consistent to what has occurred in other cities as they matured, eventually the city centers (or posh parts therein) develop a barrier to entry for buying, such that rental parity is never re-achieved, and
this tends to over time drive the rents themselves up to (since there's no option of buying).
4) No I don't live there, work there, or personally know anyone who does. I do have friends who make that much money, but they don't live here.
hideous? All conspicuous consumption is hideous to me. It's just how I was raised.
outrageous? It's not Paris, there's no ocean view, there's no overwhelming intrinsic value. Instead you have people who either have too much money or make too much money competing with each other to make their lives more expensive. Land costs of $300-500k justified purely on commute and cache is collective insanity as far as I'm concerned.
Cara,
Looks like you touched a nerve with the Orange Line euthusiasts. I'm with you about avoiding the "Orange Crush".
Thanks to Ally and fd for the suggestions.
Ally - We would *consider* anything as far west as Dunn Loring. However, I'm not sure the extra expense required for the metro/parking, in addition to the additional time tacked on to our commutes would be worth it. Also, we would probably need to buy a second car.
Might I add, the commute is not our only motivation.
We've been renting in Ballston for over 3 years and also enjoy:
Walkability
Central location - short drive to DC, Tyson's, and many other places in NOVA
Good schools
Good public transportation
Relatively safe
Everyone has different priorities. We don't need a big house, yard or alot of privacy, so Arlington works for us.
Cara, you may be surprised to know that I agree 100% with you in theory, i.e. living in an overpriced $1.6MM bungalow 3 blocks from teeming overaged frat boys is not exactly my idea of luxury. Give me something more rural and calm any day of the week. But that doesn't change the simple reality that for a large cross-section of DC overachievers, a close-in location (at least until the kids get too old) is worth the trade-offs. Analyzing the housing market through a prism of dismissiveness and without recognizing objective realities just leads to frustration, which I see a lot of on this blog.
And actually, Jewel's suggestion has merit. I would not want to go out past the Beltway (a life dependent on 66 is just too difficult, in my opinion) but living in somewhere like Madison Manor, Bonair or Arlington Forest will get you a significantly cheaper house, equivalent schools and you can take the bus down Wilson to the Ballston metro. If you don't mind a multi-modal commute, it is worth strong consideration. However, there's the rub--urban planners and transport folks will tell you that a multi-modal is a major turnoff, and a general rule of thumb is that people would accept up to a 50% longer commute in a single mode.
Ally's suggestion, sorry.
Cara,
We all realize that your needs and desires are quite minimal and that you have no intention to spend even an amount for which you are well qualified.
Not everyone here shares your priorities. Frankly, I would never want to start or raise a family in a condo or TH. But to each his own.
Rather than make social commentary on how people live their lives, why not tell us some more about the wonderful attributes of Burke. I'd be depressed as hell driving home to my Burke TH every night - but do I say it's disgusting? Where, exactly, do you get off?
For all you know, the poster (Jewell) could have an income of 3 or 400K and growing - not that that should be of any concern to you.
Kevin,
If you want the economy to collapse, just come out and say so. Why would you think that you will be one of the survivors? Perhaps you and TBW should have a pity party OR find a way to increase your earnings.
And yes; wrong side of the bed today, but enough already.
Jewel,
If you also are valuing the urban-suburban model Arlington provides then I understand. I thought if a short commute was the main concern then carpooling was something to consider.
The yard (and cul-de-sac) is an interesting issue. When I was a kid we would play in our yards and in our friend's yards, play in some cul-de-sacs since cars came infrequently (particularly in the afterschool hours before the evening rush hour), and ride bikes everywhere.
I don't think there is anywhere near as much outdoor activity among kids although I have not formally studied it. Can anyone comment how active the kids appear to be in their neighborhood (for those that live in the suburbs)?
It could but that maybe there is less unplanned physical activity (running around in someone's backyard or riding bikes/skateboards) and more planned physical activity (Little League, Pee Wee Football, junior tennis, and so on). Or maybe because fewer stay at home moms/part-time moms equals more afterschool programs and/or latchkey kids instructed to stay inside?
fd,
What is the redevelopment of Golds? I am guessing you mean they are going to do something with the Gold's Gym in Virginia Square? It does seem inevitable that something would happen there. You could easily have that be most of the ground level of an office building. However they are very, very successful at that location (always packed as far as I can tell) and I would not have guessed they would allow years of disruption at that site.
I suppose a developer might make them an offer that makes up for the lost revenue.
Ally,
Where outside the beltway would you suggest? What would the commute time be? I am sincerely curious--I have no sense of how long it would take you to leave your house in Vienna, drive to Ballston, park in Ballston, walk to the Metro, take the Metro, then walk to your office.
Right, the Golds in VA. The bike lot is zoned for 6 stories I believe and the Golds for 4. They just tore down, and are replacing by-right (insane, if you ask me)--the middle class apartment complex right next to the Golds. I know that at a minimum Shooshan is very interested in the project but they have to finish Founders' Square first. Plus the county has to figure out if they want to tackle that area next or figure out what they should do about the mall. In the alternative, the county may upzone the site once Founders' Square is done, though the neighborhood civic associations will scream.
fd,
Did you not notice that my analysis part was based on reality? Fyi, the incomes themselves in Arlington are not sufficient to sustain the prices there. This has been amongst the puzzles we've been debating here. I've been coming to the conclusion that it has to be wealth, not just income. Whether that's move-up equity or inherited wealth, saved wealth, or willingness to allot a much larger percentage of income to housing than is the norm. One or more of those is required for anyone to buy along the Orange line.
You're confusing me with someone else if you think I'm amongst those frustrated by Arlington prices. They are irrelevant to me.
But purchases are based on what your underlying values are. How could they not be?
Va_investor,
I know, it's not a persuasive argument. I was raised that spending money in huge amounts is morally reprehensible. It's very difficult for me to escape that. And nothing brings it out like the self-satisfied tone of the NY Times article.
What do I gain in Burke? Lakes, lakes and more lakes? Walking trails through woods. A fabulous wooded feel. Excellent FFX Cnty schools with amazing extra curriculars like crew. And the financial freedom to travel to visit family, save for college for my kids, comfortably afford day care, change careers if we want, get a vacation home someplace that we love. It's also a very short commute for me, 20-25 minutes tops, so as I said, I'm very lucky.
And Jewel and Ally have to decide what they want to spend their income on and what matters to them. Likewise, I won't go any further than Burke, whether I could get a nice brand new SFH or not.
My original statement was just a reaction to Tom calling Arlington prices "excellent", which is indeed a matter of taste. "excellent prices" to me are out in Burke/Springfield, or PWC.
For what it's worth, Cara, in my experience you've hit it on the head with "willingness to allot a much larger percentage of income to housing than is the norm" Or, to put it in finance language, they are buying on a forward PE, not LTM. It's up to each individual to figure out their own beta.
fd,
There are a variety of options. Jewel's husband could drop her off at the Ballston Metro and then park. Remember also another option is dropping the husband off in Ballston and continuing to drive.
It would depend on a variety of factors -- where in Ballston is Jewel going, where in DC, and where they decided to live, what time in the morning do they begin the commute. I could see a Vienna to Ballston trip via I-66 carpool taking 18-20 minutes, then Ballston to DC taking 10-15 minutes by car.
There are too many factors for me to speculate. My point though is that points further west than North Arlington might not add as much time as you would think if you can carpool.
Now someone driving by themselves from Vienna to DC is probably looking at best a 45-50 minutes under the best conditions (no accidents).
Ally, that's me - sports leagues for the kids. I know I'm not normal, I'm a sports freak. But, the kids love it. My son, 12, plays football, basketball, soccer, and lacrosse. My daughter runs cross-country and plays soccer all year round. That's me out there on Saturday and Sunday driving every which way around the county clogging up the roads.
Maybe, but I can tell you from much personal experience that Ballston to DC takes more than 10-15 minutes (unless you are talking about Foggy Bottom) in anything that you would consider "rush hour" i.e. 7:30-9. You were also assuming hybrid, which as you note has a tenuous exemption. Of course, if you can leave early for the office, you can live much further out without consequence, in which case there are some amazing deals to be had in Great Falls.
I'm not saying it's not worth doing--just that there are some major tradeoffs as far as uncertainty.
fd,
What have you heard about the mall? There's already a few office buildings over it. The county put the Kettlers Iceplex over the parking garage. So what can they do? Starting from scratch I'm sure the mall would not have been put there but isn't it sorta there and there's not much one can do about it?
Now getting some nicer shops in there would make Ballston much nicer. But I think many possible companies figure a store in Ballston Commons and Pentagon City Mall (and probably Tysons Corner as well) is overkill.
The iceplex and garage are there to stay, as are the new office buildings surrounding it. But if you look at the mall itself, much of it is stand-alone (i.e. nothing above it). In the "dream" of the county planners, they would make it like Pentagon Row/Market Commons. The mall is not really that profitable so at some point the numbers will work for a tear down. But this will be some ways away, when all the infill sites are done.
Government to the rescue in the option-ARM reset wave.
But, I think this is probably the last of the government interventions. LOL!!
fd,
I am thinking Ballston to Foggy Bottom or Farragut West or Dupont Circle. Obviously add in time the further east in DC you go. As I said multiple factors.
You don't need the hybrid. I was just saying that's an option. There are many, many different ways to drive from Ballston to the TR Bridge besides I-66 or Wilson Blvd. Few roads in that area are cul-de-sacs and so there's plenty of backroads opportunities.
I have a colleague who commutes from Annandale via Rte 50 and he averages 30 minutes. If you avoid arriving to work at 9 AM it works wonders. Now that does not appeal to everyone. If you want to arrive in the 9-9:15 AM time zone I suggest Metro.
I don't disagree with anything you said. As you note, the time you need to be at work is the deciding factor. More accurately, the amount over which you control that time. I know a number of law firm partners and lobbyists who live in Great Falls or McLean outside the Beltway who leave the house at 9:15 and have an easy commute. That would apply to Vienna, Oakton, or most anywhere else.
fd,
Agree. It would be great if we had more info on how long a commute from Place X to Place Y would be if you leave home at 7:30, 8, 8:30, 9, or 9:30. (And similar calculations for evening rush hour).
fd,
It's not merely a willingness to devote more, it's actually having more money. 4-6K can be a relatively low amount to many.
Cara,
Calling certain house prices "hideous" is presumptuous and insulting. Back-pedal all you want. For many people, spending a million on their home is living below their means.
You insinuated that the rentals I was buying were less than desirabe (perhaps slums?) and now you make judments on what people want to buy. So excuse me if I opine on your nabe.
Am I the only one who thinks Tired Bubble Watcher has re-incarnated himself as Ally? The postings and unsought advice on commuting, how children live now and info on development all seem similar to what TBW posted before he took his hiatus.
I leave my house in Manassas at 5:30AM and I can be on the other side of the beltway around Rt 50 MD side in an hour. Go the northern route and it's fast going. Coming back it takes 2 hours the northern route and somewhat less the southern route. I'm thinking about going to Braddock road to 28 and trying it in the future.
If you leave early enough, traffic flows. If you don't leave early enough, traffic sucks.
Va_investor,
Me, back-pedal?? Hardly.
You didn't opine about my neighborhood. Not that I caught anyway. And you're confusing me with tbw, if you think I've ever insulted your purchases in Reston.
I said hideously expensive and I meant it.
It took me a while to sort out, why did this get my goat at all, since I have no plans for living there?
There are two aspects that hit upon the morally outrage vibe. (1) The rich getting richer for what appears to be foolish wasteful spending, and (2) that those who bought into the idea and stepped onto the property ladder at the condo rung are getting hosed.
I have no problem with the rich getting richer, so long as the poor aren't getting poorer. (or in this case the middle class of a younger generation) For instance Va_investor is providing a valuable service by buying condos and renting them out at market rates in convenient areas. As is anielarke. Whereas, those who cashed in on condo purchases in 2004-2007 and liquidated that money and reinvested in SFH's and have only lost 5% thereafter, while the buyers who facilitated that transaction of money from one bank to another are sitting in their underwater condos with few good options. That rings the bell of moral indignation for me.
Wringing money on the backs of those less fortunate doesn't stir moral indignation for you?
Anyone else wondering who the heck are these three people suddenly discussing the pros and cons of orange line living? Anyone else skeptical that these aren't more shills? Why open the discussion now after the NY Times piece validating their self-worth rather than earlier asking for a balanced opinion on their options?
And really? the question isn't why not buy out in DunnLoring rather than Ballston, the question is why the heck are you interested in buying rather than continuing to rent? Whether it's interest to the bank or rent to the landlord, who cares? It's still money out of your pocket. That is unless you think by buying you can still get in on the ground floor of a permanently inflated price.
reecon,
Hehe. I was curious about Ally's dissing of the Ballston Mall. I didn't know that Arlington was rolling out the welcome map only to people who can afford to shop at Saks and the like.
I can assure you I am no shill.
I don't think Arlington is heaven on earth by the way. I'm well aware of the fact that it's far from perfect. At my old apartment in Ballston, there was an incident where a woman was sexually assaulted and kidnapped. That incident is the exception to the rule, but there have been a number of "stalker" incidents in the past few years.
And let's face it, most of the houses in Arlington are just plain ugly. Many of the homes selling for $500k+ look like nothing more than double-wide trailers dropped on a foundation.
By staying in Arlington, I am stuck with a shack on a $400k lot. I am not exactly happy about this prospect, but that's something I'm willing to live with for the foreseeable future.
And who knows, maybe I'll go for a shack on a $300k lot in Falls Church instead :-)
All I meant was there are very few clothing stores at Ballston Mall as compared to other malls in the area (and across the country). I was not attacking the mall -- I have gone there many times. fd was the one who said it was not profitable.
Ally said
"All I meant was there are very few clothing stores at Ballston Mall as compared to other malls in the area (and across the country). I was not attacking the mall -- I have gone there many times. fd was the one who said it was not profitable."
I'm with you Ally. I rarely go to that mall unless I'm looking for something very specific. The food options are decent, but its not the type of place people go to for a big shopping trip.
hi tbw! bad tbw, you're supposed to take your hiatus. (see you in a few days when the September numbers come out) :)
You know the answer to the question you asked me. What I'm buying is cheaper than renting and more space.
Sorry Ally and Jewel, I figured out what was fishy, it's that fd is @J@.
fd/@J@
You do realize why the one answer you picked is the one that can't be the primary reason, right? Do I really need to spell out for you what the observable consequences would have been if buyers in Arlington really had put more of their income towards housing than other areas of NoVa? That was the wet dream of all the Arlington doomers who have long since departed this blog. If Orange Line buyers had stretched further, then some fraction of them who had guessed wrong about their future income stream would be showing up in increased foreclosures, or at a minimum increased inventory. Haven't seen it yet, I don't think we're going to see it in the future. No, it's got to be the wealth cushion.
What is the difference (other than increased wealth and income)? That they were willing to make the trade offs Ally and Jewel are speaking about between house size and location, choosing a condo rather than a TH, or a TH rather than a SFH, or no yard and 3000 sq ft rather than a mansion with acres in order to get everything else that was important to them.
It was those who just had to have the big SFH, and were willing to drive until they qualified, and didn't notice that the bank had qualified them under terms that would only last 3-5 years. It was those folks who either have been foreclosed on or will be soon.
Apparently the choice for a smaller place, willingness to accept something more frugal in order to get a location you loved, was correlated with fiscal responsibility. Evidently anyway.
"FD said...Analyzing the housing market through a prism of dismissiveness and without recognizing objective realities just leads to frustration, which I see a lot of on this blog."
FD - a LOT has changed since you used to regularly post on this blog. After being thoroughly dismantled by CRT (and later assisted by Cara), many of the Arlington reality deniers went on the defensive. With rising median and case shiller prices, most of them are now gone or in the last throws of a futile campaign to continue to deny reality.
What we have now is a kinder, gentler blog which can intelligently discuss the facts without the stupidity of accusations like "you think its immune" being bandied about. Many are not happy with what they see (hence the occasional Arlington snark) but they acknowledge reality nonetheless.
thanks the Anonymous, that summed it up pretty well. Most people who are now reading have gotten used to the fact that I am occasionaly prone to bouts of hyperbole.
(and hence would not have invited me to expand upon the roots of my true feelings... because you know, that never ends well...)
No problem Cara -- the hyperbole makes for a much more interesting read!!!
"the incomes themselves in Arlington are not sufficient to sustain the prices there. This has been amongst the puzzles we've been debating here."
I've explained this several times. It's simple.
Many of my neighbors own their homes outright. They have no debt. Their income might not "sustain" a 3/4 mill house but their homes are paid for. They live in 3/4 mill houses and "only" earn, say, a hundred grand a year.
Others bought at different times and pay $900, $1,400, $1,800 PITI depending upon how long ago they purchased.
@J@
Are you being intentionally dense?
Yes, I used the word sustain. As in "uphold" but I was clearly talking about the transaction prices.
That people are able to keep living in their own homes as long as they didn't get foolish and HELOC themselves to the hilt, is not a puzzle. Those HELOC'ers are overrepresented amongst the short sales in arlington, so in that sense, I guess it's relevant....
And in what sense is this really different than my contention of "wealth" as what is helping avoid a demise? These owners have substantial equity, whether they got it through income or moving at the right time or what, is kind of semi-immaterial.
"Are you being intentionally dense?"
Uh.
Take a look in the mirror.
I was just being polite, it was a lot nicer than the other phrases that came to mind. Do you have anything of substance to say?
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