Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Friday, October 9, 2009
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
105 comments:
Hey I'll start, Please look at this listing and explain to me how this isn't crooked as a dawgs hindleg?
http://franklymls.com/PW7176761
Arkey I assume your issue is they did very little to nothing to the house and are trying to sell it for over 100K of profit. I really do find it amazing how much less expensive houses are compared to the areas where I am looking. for 500K I can either get a very nice TH or a pretty crappy and small SFH. It really would be interesting to see what would happen to housing prices if they could ever fix traffic.
Arkey -- 125K for 3 months holding time minus the cost of a kitchen & bathroom facelift. Flippers are back ehh?
Out of curiosity, for you, or anyone else who knows this market, what is this guy likely to get for this place?
Arkey,
On the market now with a list of
$549k bought back in June for $429k.
I don't know, it depends who bought it in June.
http://franklymls.com/PW7058420
(sold listing for the same house)
They had been trying to sell it for a long-ish time, and impatiently dropping the price a lot. Perhaps a relocation company bought it from them at this low price and will split the additional profits with them later after finding a real buyer? Given that the listing remained and raised its price up until August when it was supposedly transfered in June, it's gotta be something like that. Or the bank foreclosed? I can't get at the Manassas ownership info, can you?
Oh you're right it does have new appliances, granite and wood instead of tile floors... Criminy. Looks like a flip. They could win, they could lose, who knows?
Lake Manassass is popular. I'm sure they will get close to list. I just question; seriously question how this could sit for so long at those listing prices espically when the lsiting agent is the owner. I don't know if it was SS that fell out after a number of months then the realtor bought it at the trustee sale or what. I have noticed that properties that went under contract late last fall and winter are coming back on the market as forclosures with a bumped up price of 50/60 thou over the SS U/C price. Another thing I've noticed on potential SS listings, they are generally pre-foreclosure properties and they are just getting a feel for what the current market will bear for list price on a foreclosure. If it goes U/C you will see it listed at the U/C price when it hits the MLS as a foreclosure. I'm seeing lots of flips with serious mark-ups for little investment.
Arkey,
Just to be devil's advocate for a minute. Yes, it is indeed little additional investment, but it is a large risk. While they may be selling for this price now, there's no telling whether the interest rates that allow these purchases to be affordable will last another 3 months, 6 months or 2 years. And if you think about it in series, somewhere along the way these purchasers are going to be left holding the bag. So sure, they're only putting in 30k in improvements commisions and holding costs to clear 20-30k, but there's no way of knowing whether they'll get out clean, or go 1 for 2, or 2 for 3 or 7 for 8. So in order for this plan to work, the profits now have to be this big to cover the risk of future losses.
These flips take guts, and they look brilliant now, but there's a commensurate amount of risk in them too.
Oh Cara, I don't have a problem with honest fippers with a clear distance from the transaction. I just know how hard some people have been trying to buy a home via SS/foreclosure espically in certain neighborhoods/areas. If you look closely at the sold listing vs the new listing, you can see for yourself that house was in great shape and they actually changed very little. If it was an honest flip, I'm fine with that. If its a flip because the listing was manipulated so that a buyer couldn't be found, that is my question. I'm seeing to many come back as agent owner. These flippers drove down home values in a big way at the end of the year. If they were also using self serving techniques to enrich themselves I think they need to go to jail for frauding the banks.
Arkey,
Yeah, I reread your earlier comment. If SS and REO sales aren't actually providing lower prices for real buyers, but are being dominated by professionals who are extracting profits while maintaining the cost to the new owners... Yeah, that's slimey, and in some cases may indeed rise to the level of fraud.
On a totally different note:
a well reasoned article on the "morality" of strategic default:
The Big Money
I think this hits the nail on the head. But I know many others disagree.
And a sober look at the realities of the government intervention in the market:
Rich Toscano from San Diego
read the whole thing, it's all good, or here are my choice excerpts.
"Government Intervention in the Housing Market a Fact of Life
For a long time I have been discussing, with various degrees of rantiness, government intervention in the housing market. When I first touched on the subject in early 2007, before any bailouts had begun, some of the potential interventions I envisioned seemed kind of far-fetched. By late 2007, as I noted in a Manimal-referencing followup, many of these same interventions were already underway.
And now? The lengths to which the government has gone to prop up the housing market have surpassed even my own cynical expectations. By a long shot.
The most widely-discussed intervention right now is the $8,000 first-time homebuyer tax credit, but that's nothing. Far more significant is the fact that the Federal Reserve has committed to create money out of thin air in order to finance the purchase of $1.25 trillion worth of mortgage-backed securities. (Purchasing mortgage-backed securities provides funds to be lent out as individual mortgages.) The Fed is also buying $200 billion worth of bonds issued by government-backed mortgage giants Fannie and Freddie, also to presumably be lent into the mortgage market.
This amounts to intervention on an immense scale as nearly $1.5 trillion of money is directly shunted into the financing of home purchases.
...
So it's no wonder that we've seen improvement in the housing market in the form of an unusually strong summer rally, increasing sales, lower inventory, and a rapid improvement in the year-over-year rate of change in home prices. But when I write about these improving conditions, I get a lot of pushback from readers arguing that the improvements are not "real" because things would be a lot worse without all the government efforts to support the market.
These readers are absolutely right in the sense that the housing market owes much of its quasi-recovery to artificial and, in the long-term, unsustainable factors.
Where I part ways with them lies in their belief that this distinction matters all that much in terms of forecasting near-term outcomes. The fact is that the government is massively intervening in the housing market. That's the world we live in today. And to the extent that we are trying to figure out what's going to happen in the housing market over the next year or two, it's just not all that useful to put a lot of thought into what would be happening in that non-existent world where the government isn't going to such lengths to prop up housing.
"
Cara, I couldn't bring myself to finish reading the walkaway article. Anybody that's encouraging people to renege on their fiscal obligations and punish the taxpayers just turns me off.
I like that intervention article though, good stuff. It's so obvious that the govt is doing everything it can to reinflate the bubble, pushing our problems down the road. I wonder why so many people can't see this?
cara, good article. That's pretty much how I think about it too. It's not that a mortgage is a promise to pay back the bank no matter what, but it's a deal where if I stop paying my mortgage, I have to give the house back to the bank. If that collateral turns out to be much less than the money you lent me, then tough, the bank shouldn't have made that loan.
Which all works out fine until it's all the banks are doing the same thing and taxpayers have to get involved...
Anon, exactly! If these people were just screwing the banks, I'd be cheering them from the sidelines. Since the burden is now the taxpayers', I regard them derisively as bums and deadbeats. They gambled with someone else's money and don't want to repay it. Screw them.
I think this last line misses the point, though:
"The lesson of watching debtors walk away is a harsh one (not least for the taxpayers, who now effectively guarantee most mortgages), but the more bankers pay attention to it now, the better their chances of steering clear of the next bubble."
He points out that it's the taxpayers who've been left holding the bag, but thinks that banks still might have had the opportunity to learn "harsh lessons" and should be on the lookout to avoid the next bubble.
I just don't see how that works -- seems to me banks have learned that when their gambles don't pan out, Uncle Sam will come to the rescue. Privatized gains, socialized losses. We can't count on banks to be "smarter" and avoid the next bubble; taxpayers / government has to do that since we're the ones who will get burned.
Kevin, I think you and I see it similarly but I have more anger to the banks who moved away from the idea that loans are supposed to be made with the idea that your borrower will pay them off and you'll profit from the interest, not that you'll sell off the loans to investment banks and when the borrower defaults it'll be someone else's problem.
People who bought houses they knew they couldn't afford, hoping to cash in on 10-20% YoY appreciation, I do have disdain for them but I don't think they're the real villains.
Anon412,
Yeah I had that same reaction to the last line. How much of the MBS are banks still holding? They're primarily the loan servicers. The failing banks have lots of MBS on their books, but what lesson will the banks that survive take away? Underwrite better? Or hold as little debt as possible on your books?
On a COMPLETELY unrelated note, did you just see that Obama won the Nobel Peace Prize?!
As one of my favorite bloggers wrote:
"Well, here’s hoping Obama snags himself a second Peace Prize after he delivers on an Israeli-Arab peace deal, and international climate agreement, and a path to normalization of relations with Cuba.
http://yglesias.thinkprogress.org/
Sorry if I opened up a can of off-topic volatile worms...
This should open your eyes, TBW.
Democrats are working on a growing list of relief efforts, leaving for later how to pay for them, or whether even to bother.
paygo...please.
The payments would cost about $14 billion and would be paid for by applying the Social Security payroll tax to incomes between $250,000 and $359,000 in 2010. Currently, payroll taxes apply only to the first $106,800 of a worker's income.
This is a baby step towards lifting the cap on FICA on all income.
Anon412,
I think this says more about the Nobel Peace Prize committee than it does about Obama.
My comment this morning was, "aw, some europeans got their chance to vote for Obama, that's so sweet, they really really wanted to, and now some of them got their chance."
(I know one could say more, but I wanted to keep my comment as apolitical as possible)
Robert,
They're putting in a donut hole in order to avoid saying they raised taxes on those making less than a quarter million? Goodness gracious.
Bush should have gotten the peace prize for keeping us safe after 9-11, and putting terrorists around the world on the defensive. Obama has done zero.
Good article Cara -- I agree with Rich's thoughts -- and conclusion -- the govt manipulation will continue as long as it takes.
I was recently at the LOC and came across 1930s house/senate testimony from congressmen railing against the new deal (and the resulting govt debt). They were decrying the market "manipulation" -- and the "kicking the can down the road". All noted "the govt cant do this forever" and many thought the scemes would fail in their lifetime.
That was 70 years ago. All those people are dead -- yet here we are still kicking that can...
Long term they are right, it WILL fail -- but when? 1 year, 2 years 10, 100? 1,000?
I heard a great quote -- everyone knows the saying "the market can stay irrational longer than you can stay solvent". The corrolary for govt manipulation should be "the govt can manipulate longer than you can stay alive"!
Calculated Risk grabs the very choicest of quotes from a NY Times article on the state of the FHA
“I don’t think it’s a bad thing that the bad loans occurred. It was an effort to keep prices from falling too fast. That’s a policy.”
Barney Frank, chairman of the House Financial Services Committee on recent FHA lending.
Wow. I don't think I can stomach reading the whole thing, but you should at least check out CR.
Robert said...
"Bush should have gotten the peace prize for keeping us safe after 9-11, and putting terrorists around the world on the defensive."
Oh please. Make me vomit.
I guess this is a preemptive Peace Prize for Obama. Better he got it than say Vladmir Putin or Benjamin Netanyahu.
Cara, that's quite a quote right there from Barney. If that just doesn't say it all, I can't think of what would. Just disgusting.
Kevin,
Did you read the rest of it to see the, OMG they gave a loan to who? Who's this doing anyone any favors????
Yeah, I've already forwarded it to two friends and received outrage. It's like we're living in 2005. Somebody has to stop this ASAP. Where's VA_Investor to tell us how this is great, and anything to temporarily jack up housing prices is a good policy?
What really bogs my mind is the composite of this lady's circumstances. Everything the article says tells us she should be renting: low income, past foreclosure, bankruptcy, trivial savings, etc. Then the writer has the balls to say that without this policy, "Ms. Shimon would still be a renter…"
I am sick and tired of renting being a stigma. Nothing could be further from the truth, particularly at this exact time in our economy. I wear my rentership like a badge of honor.
Chaz Fullenkamp, an automotive technician in Columbus, Ohio, got an F.H.A. loan even though he was living on the financial edge. “If I got unemployed, I’d be wiped out in a month or two,” he says. Thanks to the F.H.A., however, he is better off than he used to be.
Mr. Fullenkamp used F.H.A. insurance to buy a house this spring for $179,000. The eager seller paid the closing costs and also gave Mr. Fullenkamp $2,500 in cash. He immediately applied for the $8,000 tax rebate. Even taking his down payment into account, he came out ahead.
“I knew in my heart I could not really afford the house, but they gave it to me anyway,” said Mr. Fullenkamp, 22. “I thought, ‘Wow, I’m surprised I pulled that off.’ ”
Welcome back to the housing bubble. Those who have been clamoring for prices to go back up, here is how you're going to get it, at least for a little while. I hope these temporary gains are enough to numb the unabashed stupidity we're now awash in. It's like they took the whole housing bubble and lending fiasco and rather than make it a lessons-learned way of not effing up in the future, have made it official U.S. policy. I'm going to go weep for my country now.
Kevin, you give the term "ignorance is bliss" a whole new meaning.
Arkey, how's that?
Kevin,
Could you provide a neighborhood where you want to buy that has increased 2 or 300% since 2001 or 2002?
Also, having benefited by purchasing reo's and SS (even flipping some), how do you reconcile your statements about my wishes vis-a-vis housing prices? I am far more interested in the economy as a whole and housing is a huge part of that. In your myopic desire for a further crash in house prices, you miss the forest for the trees.
Again, please show me these neighborhoods where you want to buy that went up 2 or 300%.
Kevin, I confessed already to having anger management issues with this 8,000 bribe, this really info really has tipping power into full blown rage. I guess because I know its cureent homeowners and renters that will have to pay for this massive give away to people that don't bat an eye at having a foreclosure and signing up again for another free run at the government till. Gripes people, call me anything you want but the bottom line few or the "majority" do not pay federal income taxes, they get friggin rebates, Christmas in April. They could care less how this stuff is paid for because they don't pay for stuff.
VA_Investor, I have already shown you several circumstantial examples in my old neighborhood. Why don't you man-up and show me an example where it DIDN'T happen? Show me one single place in this area that didn't at least double in value in six years, from 2000 to 2006.
You're asking for all kinds of evidence to back up my claims (which, by the way, are status quo knowledge for anybody that hasn't been asleep for the past decade). How is it that someone so demanding of proof can have the gall to not offer any of his own?
So no, I'm not going to bother crawling the tax assessment site and throwing up more examples which you'll ignore anyway, then ask for more. You're delusional, lazy, and ignorant. Go do your own research, I've given you enough.
Arkey, I'm with you. My outrage at this point is uncontrollable. I feel like it's just me and 50 other people in the world that have functioning brains and can see exactly what's going on here. Retards like our VA_Investor friend simply do not care what it takes to bring back bubble prices, the temporary ends justify the means. I don't know how our society has gotten to be so rotten, but it is just shameful. I don't mean that in a political sense necessarily, but really it comes down to "what will the govt give me right now?" That is the way third world despots can control the ignorant masses, and we're seeing it here. The difference of course is the orchestrated mass incidences of financial disregard and the set-up for a disaster I can't even imagine.
Va_Investor said "Also, having benefited by purchasing reo's and SS (even flipping some), how do you reconcile your statements about my wishes vis-a-vis housing prices? I am far more interested in the economy as a whole and housing is a huge part of that. In your myopic desire for a further crash in house prices, you miss the forest for the trees."
You don't understand the economy. You listen to industry idiots that tell you garbage and then you repeat it, like you have any idea what you're talking about. Like, that housing is the backbone of our economy. What you don't know can fill a book.
Kevin,
Just as I thought. Nothing. Look up Wolf Trap Woods in Vienna. Look up Kingstream in Herndon Look up SFD in 20194. I could go on and on and on. Give me one neighborhood.
And since when are we going back to 2000? What was the increase from 1991 to 2000?
I bought in one of aforementioned neighborhoods in 1988 for 355K and after putting 60+K into it I sold for about 850K in 2005. Now they are going for about 700K. 200 or 300%....pffft.
If you couldn't sell a $400k real estate investment bought in 1988 for more than a million dollars in 2005 near the height of the bubble in this region, then I shudder thinking what type of horrific "upgrades" you made that could make it depreciate so much relative to other properties in the area.
Again, I gave you examples, you have nothing, so stop wasting my time. Rather, why don't you see if there is anybody on this blog that shares your sentiment that prices didn't go up 200 or 300 percent in that period? You obviously won't believe anything that I say, so query someone else if you're so self-confident in your baseless beliefs.
Well, apparently, it was the entire nabe Kev, not just me.
One neighborhood please. That is all I ask. I gave you 3.
I am really loathe to interject, but is the question actually are there neighborhoods that Kevin wants to buy in that went up 200-300% since 2001?
Or is it whether there are neighborhoods that are still up 200-300% since 2001 that Kevin wants to buy in?
Cara,
The latter. And all I want is one. So he can cherry-pick if he wants.
Btw Cara, did your neighborhood go up 200-300%? I doubt it. If so, did it stay there? Kev asked me to consult others here.
Va_investor,
"My" little Woodwalk went from 150k in 2003 to 350k in 2006, went as low as 225k last fall, but is now arguably at 230-285k depending on which comps you think are the most reliable measures...
Yikes! That's condos for you. Last to the party, first to crash.
In TH's in Burke in general things are up about 175% from 2002 at the moment. I don't know if I could find one that tripled, but more than doubled I could give you in spades. Still at a full 200%? Might be hard, although, I've seen a couple suckers lately, but in general the sales are under that. In Fairfax City he might be able to find some though. There's some garage townhomes built in 1999 that might be a good case study.
Kingstowne may be back up to 200% over 2002 prices, but Kingstowne is definitely gaining in cache, as the metro accessibility with a nice big garage gains popularity.
A cherry pick for Robert:
http://www.redfin.com/VA/Vienna/210-Pleasant-St-SW-22180/home/9455820
And a more typical example (at least in the area I'm looking:
http://www.redfin.com/VA/Vienna/2834-Hill-Rd-22181/home/9518788
http://franklymls.com/FX7111645
use just "Buckhorn" "RI" in the tax assessment page.
2000 244k, 247k
2001 260k, 297k
2005 555k, 550k high water mark
2007 475k ,485k , 410k
2008 no sales
2009 448k
so similar to Burke, up 184% since 2000, 165% since 2002. Or 7.5% per year since 2002 which is still pretty insane... Affordability may be similar though since rates were more like 7% in 2002.
For va_inv...
6604 Gordon Ave
8/26/2009: $560,000
Sales history:
04/16/2004 $400,700
07/17/2000 $250,000
Thanks Jeremy,
575K in 2001 to 799K ASK now. I'd sincerely doubt that the house had stainless and granite in 2001 and, quite possibly, other upgrades. One would have to look at the 2001 listing.
So, 225K IF they get ask. A 100% increase would equal a price of 1,150,000. 2 or 300%%%%%%%%%%%%
9 yrs gets us an increase of 30 something percent?
Cara,
84% in 9 yrs. That looks pretty healthy when you factor in the years of stagnation in the '90's.
Still waiting for the 200-300% increases. Kev?
I think I just identified the other miscommunication. Correct me if I'm wrong, but Va_investory appears to be calling a doubling in price a 100% _increase_ whereas I typically would have said that the price was 200% of what it was back in year X. These are the same thing, but when confused with each other require very different numbers...
Am I wrong? When you're talking about what has gone up 200-300% and is still at those levels you were being literal and so implyin prices that are 3 or 4 times what they were in 2001/2002?
At the heart of it, I don't see whay prices being "only" twice what they were in 2001 as a reason why that means Kevin has to buy now....
Va_investor,
Yes, well that brings us back to our old disagreement on whether the years of stagnation brought us back to where we should have been, (my opinion) or whether at some point along the way we over-corrected. (your opinion, I believe, puts that time early in the long flat period).
So, since I don't think we necessarily had that much to make up for, I still think no more than 5, maybe 6% a year can be justified as related to income inflation.
But I also don't think we'll necessarily go back to "where we should be" just because I would like that to happen. I think it will stop where it stops and flat-line from there until inflation does the rest of the correcting (and then probably some overcorrecting).
Cara,
I never said that Kevin has to buy now. I really don't care if he ever buys. I do care about ridiculous exagerations without example. And I do think a 100% increase is the correct usage of the term for a "double" (ie. 100K to 200K).
So, let me see if I understand this. I paid 325 in 97, so, a 100% increase would be 650,000 today and I'm listed at 549.9 so what dang percentage is that? 60% in 12 years?
Va_investor,
100% increase is correct, but people often don't read the word "increase" and so think 100% "of" not increase from. Or vice versa read 200% and not know which one means.
As soon as the percentages are over 100% this crossed-wires tends to happen. Honestly I don't even know who misread whom. I kind of zoned out on what the whole argument was about.
Wow Arkey,
Sounds like bubble territory to me! Perhaps you made the same hideous upgrades that I did!
Not sure whether I am making myself look like a fool here or not, but I just bought in a neighborhood that is still up 200% from 99/00. Would prefer general anonymity, but I'm in a good part of Falls Church (FFX co). Comps are plentiful and easy since there are plenty of houses with similar models and build years.
99/00 sales were in the $250k range, ramping up to $275 or so by the end of 2000. They shot up to the $400s by the end of 02/start of 03, and were in the $500s by 2004. The bubble blowoff resulted in at least two sales over $700k (I assume these were at least nicely updated), and others in the $600s. A couple still sold for around $600 in mid-08, but now sellers are asking for mid to upper $500s, but a couple have sold in the $530s and another around $580k. We got in for the lower $500s because it was an estate sale. Only one house of our type has gone for less in the last year, and it was a mess with an illegal addition and other problems.
Arkey
70% in 12 years or 4.48% annually compounded. Or dead on for keeping up with wage inflation.
btw Cara,
Your percentage increases fail to account for compounding...just say'n.
And I see I just missed the 100 vs 200% conversation... :)
va_investor
Check again.
I raised it the fractional change to the power of (1/years) and then multiplied by a hundred.
They're compounded alright.
Cara, thanks for clearing up his question. It's like arguing with somebody demanding not for proof that we landed on the moon, but the moon's own existence.
VA_Investor, I hope that through all the evidence presented, you're no longer clueless to the fact that prices doubled and tripled during a six to eight year period ending in 2006. In all pockets of this region, so far as I can see. If you have issue with this assertion, I recommend that you present a fact-based retort rather than hassle me like a man demanding existence of the moon. Prove the moon doesn't exist, pal.
As for areas that are still overpriced, it is in my own opinion that pretty much everything in fairfax county is. This is a matter of personal opinion, of course, but I would not pay one cent more than the 2002 selling price of any house in the area.
Fred,
In this market you got yourselves a really good deal, congrats.
Fred,
I wouldn't say that a double (100%) in 9 or 10 yrs is outrageous If it's been like my neighborhood with dumpsters in front of many homes, that is truly added value and not totally price inflation.
Thanks, Cara. I think I'd feel better about it if my wife didn't decide that she wanted the entire 2700 sq ft painted in the first couple of months. ;) I never realized quite how time-consuming the setup is. Painting is cake, its the crack-fixing, taping, priming, cleaning, outlet replacing parts that take so much time and effort. 45 years of paint buildup on outlet covers is like cement. Why don't people just remove them before painting! Argh!
Kevin,
I merely asked for a neighborhood where you want to buy. I didn't realize that this was such a burden for you. Peace.
I'd like to buy one of those townhouses on Lee Highway between Cedar and Nutley. Or one of the townhouses across from Wegmans in 22030. I would not pay more than $350k for any of them though.
is there anyway lower interests rate CAN hurt prices in a DOWN market? my line of thinking is whether lower rates could make price cuts less appealing. i tried to work up a few theories but none made much sense. so i guess the answer is no?
Kevin,
I'm not seeing any 2 or 300% increases for TH's in 22301. I saw some that went up about 50%(?). And others less.
FWIW - here are median prices for entire counties, year 2000 to peak. And to ensure no confusion in how I count, if median goes from 150K to 300K I call that an increase of 100%:
Prices 2000-Peak
Arlington +129%
Alexandria +134%
Fairfax +129%
Loudoun +132%
PWC +182%
The losses from Peak thru end of 2008 have knocked these totals down a bit. Thus, the total price increase from year 2000-2008:
Arlington +106%
Alexandria +116%
Fairfax +78%
Loudoun +67%
PWC +60%
When 2009 goes into the books, if the last few months is any indication, Arlington will be slightly positive for the year, Alexandria flat to slightly negative and the outer three counties down another 5% or so (the staggering losses from the early months of 09 are too great to push the whole year positive).
It is perfectly clear now that the disparity in price gains 2000-2009 is largely due to the disparity in income growth. We knew that from 2000-2007 income in Arlington grew at roughly twice the rate it did in Ffx, Loudoun & PWC. (Alex was close to Arlington). The 2008 ACS survey confirmed, even in the midst of this downturn, close in income gains continue to outstrip gains in the outer counties. The staggering change in demographics in the inner areas seen over the last decade continues.
Still, it is also clear that PRICES ARE STILL TOO HIGH! We assumed at some point "stickiness" would reassert it self and the remaining portion of the downturn would be taken care of via increasing fundamentals versus stagnant prices. All areas now appear to be within striking distance of where stickiness would be reasserted. Thus, I continue to maintain that an "L" shaped recovery will be the most likely outcome for the foreseeable future.
1. Price CHANGES of 200% or 300%, increases of 100% to 200%
2.
2949 SAXON FLOWERS DR
04/28/2000 $307,975
04/13/2007 $640,000
2943 SAXON FLOWERS DR
04/21/2000 $301,525
04/15/2005 $628,000
2958 SAXON FLOWERS DR
07/01/1999 $261,475
08/22/2005 $665,000
2931 SAXON FLOWERS DR
05/16/2000 $327,775
06/22/2005 $700,000
2968 LISMORE LN
06/01/2000 $300,650
09/08/2004 $550,000
2966 LISMORE LN
05/30/2000 $361,553
03/28/2005 $750,000
8820 ROYAL DOULTON LA
05/30/2000 $289,280
08/22/2006 $595,000
8813 ROYAL DOULTON LA
11/29/1999 $288,525
05/01/2006 $620,000
2916 MAINSTONE DR
06/28/2000 $270,000
05/25/2006 $589,000
3018 MAINSTONE DR
02/25/1999 $376,350
11/09/2006 $820,000
2923 MAINSTONE DR
11/04/1997 $242,000
08/02/2006 $550,000
2932 MAINSTONE DR
04/27/1998 $234,000
2/27/2004 $520,000
2925 MAINSTONE DR
09/15/1998 $237,500
06/29/2005 $602,000
8903 ROYAL ASTOR WAY
07/13/1999 $257,000
04/28/2008 $545,000
8905 ROYAL ASTOR WY
01/12/2000 $257,900
11/17/2006 $545,000
8919 ROYAL ASTOR WY
01/29/1996 $290,490
05/02/2006 $644,000
8929 ROYAL ASTOR WY
12/07/1998 $276,000
04/13/2006 $650,000
Good info CRT. I wonder what wage growth vs price growth was since 1990. Clearly, there were no 200% increases (let alone 300%).
Kevin,
Is 2006 really relevant to this discussion?
tbw,
I guess you and your Gramma got me beat, hands down! I guess you can't hit it out of the park every time.
"TBW said...So the point of the above is you look at the 72% countywide increase and say all homes should be worth 72% more. But in reality, some homes should be worth WAY more and some homes much less than 72%."
Yep - its too bad we have nothing more granular than county by county, but this is what I expect to see too. The good thing is the 2010 official census (versus the ACS estimates) will break it down zipcode by zipcode. That will be interesting to see.
Come on Kevin,
You've produced one relevant sale (4/08). Just going on price (not knowing concessions, upgrades, etc.) you have one sale slightly over 100% in your examples going back 10 yrs. Are you saying that this is the only sale since 2005 and that those (2004-2006) values have held? It is on the Orange line you know (joke)?
http://www.recharts.com/mris/mris_3.html
I am sick of having to draw out numbers for you, Investor. You are lazy, ignorant, and antagonizing. You do not understand the magnitude of the housing bubble, where we are at now, or the fundamentals of housing. You might have a lot of experience in this field, but it takes no large concentration of brain cells to sign your name to a paper and flip houses.
FACT: Median sold price in 1999 in Fairfax County was $200,000
FACT: Median sold price in 2006 in Fairfax County was $500,000
FACT: That is an increase of 150%, or 2.5 TIMES as much as it were just seven years prior. Many circumstantial cases people paid 3x what was paid for the same house just seven years afterward.
See from that chart that the market was obviously correcting itself despite significant govt manipulation in interest rates and risky loans, just like the bubble, and we know what that will get us.
See also that this was interrupted in the spring of this year when the tax credit became available. Govt manipulation again, but in the form of massive demand creation through taxpayer bribes to get people to buy when they shouldn't, or rightfully fear they'd be catching a falling knife.
We have NOT overcorrected, despite the malarkey you're portraying without any evidence to back it up.
http://www.housingbubblebust.com/OFHEO/Major/MidAtlantic.html
That is the second time I've shown this chart to you. If you act like you still don't get it or that the evidence here isn't sufficient, you are a troll. Because nobody could be THAT dumb.
Don't quibble over dates. When you ask "show me where prices have gone up x percent" and I do exactly that, MANY TIMES, don't then throw in caveats to try and defeat my point. You have wasted so much of my fucking time the past two days that I should have spent studying. Time where I am trying to help you get it, and you continue to be a bitch and fuck with me.
"you have one sale slightly over 100% in your examples going back 10 yrs"
I showed you FIFTEEN that went up over 100%, some of which cover a span of FOUR YEARS. Your math is shittier than a two year old's.
I need a drink. The stupid is killing me.
Not to beat a dead horse, CRT, but another factor that may account for some of the price stickiness in the inner vs. outer counties, has to do with upgrades and updates, and in some cases, additions, to homes. Based on a variety of anecdotal evidence (including the fact that we've put an amount = to > 70% of the original purchase price in our modest abode, and my next door neighbor has done the same if you count the value of his labor as well as the materials), I would bet that the average investment beyond purchase price during the "bubble" years in the typically older house in the inner suburbs is much greater than that put into the typically newer houses in the outer suburbs. Owners won't want to take any greater loss on their total investment than that taken by an owner of a new house on his/her purchase price, as long as buyers are willing and able to pay.
The point is that what might be bubbly in the prices of outer counties might reflect real improvements in value to a greater extent in other counties.
My standard caveat before misinterpretation begins: I am NOT saying this is the only factor. However, it is a significant factor and shouldn't be ignored.
TBW - yes. And Fairfax will be the most interesting of them all because we have hints that some areas (vienna et al) may have experienced some of this robust growth the inner areas did.
The problem is these areas are tiny, so even if the gains were spectacular, it wont show up in countywide stats the way it did in Arl/Alex where large swaths improved. However, zip by zip data should be enough to suss it out.
Too bad that data wont be available til 2011 or so. By then I suspect this will be "all over but the shoutin". Thus, if there was NOT any great growth (but still high prices) we are left with unsatisfying answers like "magic" to explain why the prices held :)
Just to provide a simple example, if a house is purchased in 1998 for $300K and the owner invests $150K on top of that, the basis is $450K, but the price increases shown in most public records will be based on difference between the current price and the $300K. If the house is now worth $600K, what is reported or appears to be a 100% increase is really only 50%.
Thanks Cara I appreciate your doing my math.
50% if you use the $300K as the base; even less than (33%) that if you use the actual basis of $450.
Ace - I agree and if the data was segregated by rehabs (county by county) I think you would be right.
On the other hand, thanks to their lack of being built out the outer counties experienced a greater percentage of bigger and bigger "McMansions" which naturally sell at a greater price. I assumed this alone would offset the increased rehab percentage inside the beltway.
Even more so, given that a much greater percentage of new builds inside the beltway were condos, I assumed that this would be a significant downward skewing of prices in Arl, Alex and DC.
Obviously this was not the case.
By the way - I was obviously thinking about this on a basis of median prices. In terms of individual houses, (as per your example) you are totally right.
"I am open to the notion that Vienna improved more than the countywide average but I'm not sure why it would have. I think it's reputation has been constant the past 30 years."
Yeah - vienna really hasnt changed the only thing that could have changed was the people (or specifically the incomes of the people) inhabiting it. Say in FFX as a whole incomes went up 45% 2000-2010. If the Census shows vienna residents income went up 80%, or so, that looks like alot of "pricing out" competition that cara and I discuss.
"I really think a major cause of exurban growth/sprawl has just been a distaste for the 1950s-70s homes in the inner suburbs."
Very well could be true. I remember a research paper I read a few years ago - many inner suburbs (often in the rust belt) where the majority of housing stock is 1950s 1970s era, they are experiencing some outright decay.
That same paper also noted an exception for areas with a lot of "pre 1940's" housing stock where it has apparently aged enough to develop a patina that people appreciate.
What the paper left open was if the new appreciation for pre WWII stuff was due to the styles or the ages. I.e. with enough passage of time will the 50s to 70s stuff become appreciated too?
Extending that even further, in 2070, will people wax nostalgic for the "McMansion era" of 1995-2006? :)
data.
Fairfax County strong.
Arlington down.
VA_Investor: Where I lived, townhouse prices went from $180k in 2000 to $450k in 2006.
Heck, here are at least 4 neighborhoods containing SFHs (Vienna is one of them) that at least doubled since 2001:
http://4.bp.blogspot.com/_XW8fXMvPkSY/SCNWXjSwR3I/AAAAAAAAAAU/wpT5XrpwkdQ/s1600-h/2-25kPeak.png
What's your point?
NovaWatcher,
2006??????
What is your point?
New York Times reporting problems at FHA.
"Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout."
"Many of the loans the F.H.A. insured in 2007 and last year are now turning delinquent, agency officials acknowledge. The loans made in those two years are performing “far worse” than newer loans, dragging down the whole portfolio, Mr. Stevens of the F.H.A. said in an interview."
Oh well.
2006?
Well, my point (having only gotten half way down the list) was that you were jumping all over Kevin without being precise.
You asked which places had doubled. I replied with several places that had doubled.
House Extends Homebuyer Tax Credit for Service Members
The House of Representatives unanimously passed a bill that calls for a one-year extension of the first time homebuyer tax credit for service members serving overseas.
The bill passed 416-0, and is now in the Senate for consideration.
Good point, CRT, it would depend on the proportion of houses so affected in the outer counties vs. upgraded/added onto houses in the inner counties (and there were some tear downs/McMansionization that should be factored in). Would you know where there would be data on the median house size change in Loudoun etc. during the bubble? I don't know how to account for the upgrades - I just know that comparing median prices at time 1 vs. time 2 ignores important changes that may not be similar in different locales.
In any event, to the extent that the average or median house size increased in the outer counties, then price increases during this time are not entirely "bubbly" either, and reflect real increases in house value. So the prices may not decline as much as one might think at first glance.
Va_investor, Fred and Arkey,
In case you're still reading, I agree by the way that doubling in 10 years is not a priori unreasonable. It is definitely amongst the things that can happen when an area goes through a period of growth in new construction and/or popularity without it being a "bubble".
The only caveat is that 8% annual growth is normally not sustainable indefinitely. So, there is not a lot of room for more year after year appreciation that continues to meet or exceed inflation. (because at some point wages and wealth will not keep up with any more price increases). So if you're at a ten year doubling state, there is some downside risk of losing some of those gains if the economy doesn't turn around quickly enough, but it's more likely that you just won't be able to have a short 3-4 year hold time and expect that appreciation alone will cover the realtor fees if you have to sell. So, as long as you're not counting on that you're fine.
Ace,
aside from CRT's caveat about more new builds further out changing the median, I thoroughly agree, 1940s and 50s and 60s homes in Arlington are generally night and day compared to where I'm looking. People did a lot more improvements to their homes in the inner most areas during the bubble years, whether it was to get a toehold in the right location, or because their move-up home had moved out of their price range or they couldn't stomach the transaction costs on two transactions over half a million dollars or whatnot.
Thanks Cara, well, right now I'm listed for 70% appreciation in 12 years.Its sorta like better the devil you know than the one you don't. Personally, I rather delist than go lower and just stay in my comfort zone. I'm really getting antz about selling low and buying high. With the contiued 8,000 housing bribe prices keep going up and I'm afraid I'm going to get left on the log of higher housing prices and higher interest rates if I don't sell soon, it's to risky to try. I'm talking 6 months to a year out on interest rates. It wouldn't surprise me one bit if its around 8% this time next year.
Arkey,
Hang in there. Tabitha really liked your house, the area is popular, I don't know why you've been unlucky so far in snagging a buyer, but I don't think one can really argue with the price. It sucks that its taking this long, but the bulk of buyers for your house make over $170k per year so aren't currently eligible for the handout. Maybe a number of them have faith that Isakson's $15k will pass and are waiting until after that's decided before making a move. Why buy now if there's a 40/60 chance that in another two months you might get $15k for your troubles? So hang in there. The sooner the decision has been made on the hill as to what's going to happen the better.
Best of luck as always.
Arkey,
I can't recall where it is that you want to retire to. Have you considered buying the new place (locking in a low price and mortgage rate) and leasing it out until the timing is better on your sale? I have done this both ways - leasing the old or leasing the new.
If it will be a wash, sell low - buy low, you may just want to unload altogether. I think that we may be in for a good spring, but who knows?
If you find a replacement that is truly a steal, I'd consider my options. In other words, give up 50K to make 150K.
Thanks Cara I appreciate that. I've snagged a few buyers but unfortunately fiancing is hell if you have a home with equity or unwater and want to hang onto it. I have had a run of bad luck or close calls, I dunno, maybe in hindsight of a few years it might be the luckiest thing that ever happened to me(I do believe in guardian angels.)
Va_investor, South; Ark or Al family ties. The only Southern City hit hard is/was Atlanta..NO THANKS I'm looking in rural or smaller areas, Mobile Bay has nice property but prices are going up in non-distressed areas and that 8,000 goes a heck of lot further and has much more meaning in Ft Smith vs. Manassas. Thanks for the suggestion I hadn't or haven't given that much thought. I'll kick it around, tho. I appreciate it and I agree with you on the exchange rate but where I would like to go I don't think I can get that good of a deal.
Va-Investor, another thing is in Al. owners used to have 2 years to buy their deed back on a foreclosure and In Ar. I'm lucky because I have deep roots and a good family name but you just don't buy into rural Ar. I would only buy a foreclosed Va. loan to be on the safe side. It's a different world with different attitudes than Manassas when it comes to foreclosed property.
Arkey,
I think Va_investor is right, you really should look into this. In rural areas the difficulty may be finding tenants. But definitely, start looking seriously at which towns you like, maybe find a real estate agent down there and investigate the SFH rental market as if you were going to rent yourself, and see where it's at. It will also give you a much more concrete picture of how much you need to sell this house for to meet your financial goals.
If houses can still be had for well under rental parity down there (which is often the case in rural or less growing areas) you could pay off a good chunk of the equity in the house there before even retiring here.
Ok, my neice married into a real estate company, Prudential at that.My sis says they are great people to boot altho I haven't met them, yet. My other niece sold her home FSBo after owning 2 years because her husband the weather guy for channel 40 had to relocate and they made money to boot. She did have 3 open houses in a row where nobody showed up, tho.
Post a Comment