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Thursday, November 12, 2009
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57 comments:
Two important calculated risk posts:
mortgage insurers being replaced by FHA
FHA doubles down on condos
as CR says, "That will probably end well ..."
waiting too,
I thought that I would bring your question regarding other areas to search forward to this thread.
I number of years ago (25?) we lived in West Falls Church. I believe the zip was 22043. It's often advertised as McLean/Falls Church.
This is a nice, very convenient area and has the added benefit of being in the McLean School district. We lived within an easy walk of the WFC metro stop.
We lived in the neighborhood bordered by Haycock Road and Great Falls Street. I think that the elementary school is Haycock, which is some sort of magnet school.
Va_investor,
Yes, a lot of people may not have been reading yesterday so thanks for bringing this back up. Basically waiting too has decided that he/she doesn't like the TH developments that they'd have to pay over $500k for anyway, and that for a SFH they'd be willing to go to $700k. So she's found a cool neighborhood in N. Arlington she likes, but is looking for suggestions for more.
This is a nice happy topic, I think we should focus on it rather than my doom and gloom and bizarro-land stories:
Atlantic Monthly
America’s mainstream religious denominations used to teach the faithful that they would be rewarded in the afterlife. But over the past generation, a different strain of Christian faith has proliferated—one that promises to make believers rich in the here and now. Known as the prosperity gospel, and claiming tens of millions of adherents, it fosters risk-taking and intense material optimism. It pumped air into the housing bubble. And one year into the worst downturn since the Depression, it’s still going strong.
I couldn't make it past the first paragraph, this is not just 180 degrees from my Catholic roots, it's as if it's from the 11th dimension. (or whichever dimension that was that the John's all came from in Buckaroo Bonzai).
Materialism is one thing, capitalistic entrepenuerialism is one thing, incorporating them into religion? Is another.
MM, a contemporary that you had some interest in sold for $5K over asking:
http://www.sawbuck.com/property/DC_Metro/Arlington,VA/Madison_Manor/1586844-1116-Rockingham-Street-North
Cara, minor point, the neighborhood I thought waiting too was referring to is Arlington Ridge/Aurora Hills (and a few neighborhoods nearby). It's actually in "South Arlington" (I put this in quotes because it has little in common with what people think of when they think of South Arlington - it's much more like 22201 than 22204 or 22206.)
Ace,
Thanks! I was willing to go as high as $533K so I'm only $40K away from reality.
Ace, housebuyer,
Thanks for the kind words from a few days ago. It's indeed a bumpy road back to home ownership. No official words yet but was told it's coming.
Robert,
The unemployment number is king. It matters more because if those people stay unemployed for too long they foreclose. Also as people are being laid off there usually are salary freezes, salary cuts, smaller or no bonuses, people worried about being laid off. These all remove people from the home purchasing market or lower how much they are willing to pay.
Also unemployment usually is higher among the 22-35 range than 35-50 range. And the 22-35 range are most key in the housing market because without jobs they do not form new households. Some will stay with mom and dad lowering rental demand. Some will get a roommate lowering rental demand. And some will delay buying a house creating less demand for first time housebuyer homes which harms the move-up market which usually depends on buyers who can sell their current homes.
Very few comments lately. Perhaps representing how few people think about housing during the colder months.
Cara -- do you run into other buyers when you attend open houses? How is it comparing to earlier this year (although I guess you were in limbo this summer and probably not looking at homes then).
Regionwide, the Northern Virginia unemployment rate stood at 4.9 percent in September, up from 4.7 percent a month before. A total of 1.38 million Northern Virginians were employed in the civilian workforce, with 71,400 looking for work.
I guess we'll have to watch these 71,400 people like a hawk to see what happens to the housing market. Gimme a break.
tbw,
activity is way way down from late September early October. Those houses that didn't find a buyer, are now sitting longer, and I'm starting to sense desperation in the "remarks" sections.
Two 2004-2006 buyers listing for over $75k under their purchase prices, no short sale mentioned, all have been updating their remarks sections, presumably in response to buyer feedback, "will pay $3000 for new carpets", "don't be fooled by the fenced-in-portion of the back yard", another two have dropped price 3 times to no avail.
There are sellers out there who need to sell quick, and are willing to lose money on the deal, and not finding any takers. I'll be seeing those this weekend... Maybe they're all dumps, or un-disclosed short sales, but each of them is priced semi-under comps depending on how you view the comps. One of them is only at 80% of 2009 tax assessment, very curious.
Robert,
Some of those unemployed will probably foreclose or be delayed in when they buy a house thereby harming the housing market.
But it's not just those 71,400. Who in the 1.38 million working in the private sector is not worried about layoffs, salary freezes, salary cuts, or smaller raises? I've had a lot of friends tell me they are not getting a raise next year despite having glowing reviews.
Robert - companies don't feel much pressure on wages when they get 500 applicants for every opening. In a strong economy if you don't treat your employees well they'll go to a competitor. When your competitors are not hiring or even laying people off you know people are grateful for the job and will take a salary freeze (which is really a cut since health premiums will probably go up as well as transportation costs).
Robert,
Total housing inventory in NoVA including all listings not active is only 14,000. If 1 in 5 of those 71,000 are homeowners then I don't see how it's something to shake a stick at. If a third of those looking for work don't find a job that can keep them up in the lifestyle to which they've become accustomed, that'd increase the motivated sellers by at least 33%.
Cara,
I think some will probably be perfectly good properties. There's always motivated sellers even in a regular market.
Even in a healthy market the time period between Halloween and the Super Bowl is ripe with motivated sellers.
Robert: "I guess we'll have to watch these 71,400 people like a hawk to see what happens to the housing market. Gimme a break."
Says the guy that throws a fiesta when he hears a company is moving 3,000 jobs to the region. You're quite the goal-post mover.
http://franklymls.com/FX7000325
Anyone else a little creeped out by all the dolls?
Interesting home. I did not know who they named Burke after (historic sign marker one of the pictures here talking about Silas Burke).
I'm surprised they did not do more to hide the home from Burke Lake Road. It feels too out in the open.
Ace,
http://franklymls.com/FX7178694
Can we agree that the renovations here are definitely not worth $70k? I'm underwhelmed. This home is from 1985 and I think a lot of the touches still date from then.
Does anyone here want hardwood (or similar) in the bedrooms? I thought most people still want carpet there. I know I'm now in the minority in still being fine with carpet on the main floor. But I thought people liked carpet in bedrooms so it's not cold to the touch of your bare feet at night or when you wake up.
tbw,
That's a private residence? I always assumed it belonged to the historical society or something. That's a major major thorough-fare, yes it is high on a hill, and with a lot of land, but I doubt you'd even be able to develop it. I could be wrong.
(I guess the for sale sign that's been there since we first started driving around Burke should have clued me in)
tbw,
I want hardwoods in the bedrooms because our cat destoys carpets and I like the look, but I hate tile of any sort in the living room, (where are we Jakarta? Mexico City? somewhere in Texas?). I think that may be pergo though, hard to say. I'm not liking their taste choices, or the across from the FFX cnty parkway location.
TBW, I love that Burke house - those dolls are VA_Investor specials (i.e., a good thing if they scare off your bidding competition)! I suspect it will be a HUGE money pit for the buyer.
On the 80s house, the kitchen looks small, so the reno. cost would be relatively low; the baths look only partially updated (are the cabinets and countertops new?) but it's hard to tell from the photos. There's no description of expensive structural updates (e.g., HVAC, windows, plumbing). So it does appear that what you see is all that you get with this place. Hard for me to guess the total costs of these renos but I do tend to feel as you do, that it's under $70K. On the other hand, a trusted contractor gave me an estimate of > $40K for an even smaller kitchen and only one bath reno, when everything was included. Of course, contractors tend to perceive the loser "L" emblazoned on my forehead. (Though I haven't accepted any bids like this yet, so I'm not sure why I do!)
I notice also that the nice flipper house/small yard too close to 66 near Dunn Loring that someone posted a few days ago still isn't under contract. So people betting on the lower price are looking good...
Cara,
I am surprised it's a private residence. Although it might just belong to some rich family for generations as there has not been an actual sale for at least three decades according to the tax records. The tax records also say it has no water/sewer connection which might explain the relatively low price as well.
I could see someone buying it assuming it could be rezoned commercial use. Or maybe someone could develop the five acres and make the historic home a community center or something like that. It could become a pretty great private residence though if someone was willing to put a lot of money into it. It's probably livable now (I assume it gets water somehow) but probably not millionaire homeowner standards without a few upgrades.
I wonder how many of those 71,400 will be applying for positions here:
Virginia leaders will announce Monday that the Ignite Institute for Individualized Health, a new personalized medicine research institute, plans to make Fairfax County its new home, according to sources close to the deal.
...500 scientists...which will study the molecular makeup of certain neurological, cardiovascular, metabolic, cancer and pediatric diseases
The point is that what is more important is growing that 1.38 million figure, not reducing the 71,400.
Ace,
I am expecting whoever owns it to be something like Miss Havisham in Great Expectation. Little doll dressed up in a wedding dress, wedding dress hung on door of closet, picture of woman in wedding dress in sitting room.
Miss Havisham was left on the altar and wore her wedding dress the rest of her life and stopped the clocks. This looks like it could be a home where some eccentric old woman is doing the same thing. ;)
In reality, I'm sure whoever owns it just likes antiques and decorated as such. It's almost decorated like some really rich woman's toy home.
Cara,
Regarding pergo. That's what I find most frustrating about this. Almost every renovation I see is pergo. That seems to upset those who like you want hardwood ("that's not hardwood, that's pergo! *shudder*). :)
So I feel like this trend of replacing carpeting with pergo is just making everyone unhappy. Or perhaps you'd prefer pergo to carpets.
I just like carpeting. It has a shelf life. And you can change the colors or style. And at least the cats I've interacted with have never ruined carpeting. I'd rather a cat use its claws on the carpet instead of the couch (of course scratching post most ideal.) Over the course of 30 years in a home you could change the carpet a few times and that could make a big difference. With hardwood/pergo that is not cost effective. And hardwood/pergo scratches, fades, warps, etc. If you maintain it well I'm sure it's fine but does the median homeowner really do a good job with it?
I mean obviously people should do whatever they like best for flooring. But it just kills me to see a home that probably had carpeting until a month or two before they listed the home.
Does anyone here want hardwood (or similar) in the bedrooms?
Definitely. Pets destroy carpet. Sick kids throw up and don’t always make it to the bathroom. Wood/pergo makes cleanup much easier.
tbw,
I'll be okay with pergo if it's in the right house. What annoys me is the same problem you have. I get annoyed by new clean carpet or especially new tiling which is way more permanent than hard-wood or pergo in terms of riping it out. I'd much much rather the seller not have wasted their money on new carpet that I'm going to rip up anyway. So, its "renovated to sell" that I have a problem with.
"And hardwood/pergo scratches, fades, warps, etc."
Actually, pergo/laminate flooring is my first choice. Very hard to damage. I've had it on the main level of my house for the last six years. Looks brand new.
Hardwood is nice, but requires more maintenance. Still prefer it over carpet.
I've seen plenty of carpets withstand wine, vomit (cat and human vomit), soda, spaghetti sauce, and all sorts of other potential stains. I suspect they withstand it better than the fancy rugs that inevitably go over hardwood floors/pergo.
Are dogs ruining the carpets? I never had a dog so maybe that's my disconnect. And maybe the cats I grew up with were too busy clawing the sofa to ruin our carpet. We were pretty indifferent to the cats clawing the carpet. It never seemed to make a difference.
Cara (or anyone who knows),
How much would it cost for me to take up the pergo? I presume I'd need to have it removed before installing carpeting. Or could you just put carpeting over pergo?
It'd also be so much easier to not care about ripping up five year old pergo versus two month old pergo the previous owners just put in.
I know I seem crazy to so many people. I just have visited a lot of houses with 10 year old pergo and don't like what I see. These are people who have maids clean the houses bimonthly and still the pergo has aged.
tbw,
every cat is different, my cat only damages furniture by making a running leap onto and off of it... One issue is owning after another cat owner, if their cat ever, ever, ever, pee'd anywhere other than the litter box, you'll need to rip up the subflooring to prevent your cat from attempting to cover up the old cat smell with their own. This may very well be just as much of a problem with wood floors as it is with carpet.
pergo/laminate is indeed the most practical option, it's just so frowned on that I hesitate to put it in. And the pergo I like is just as expensive as hardwood.
"One issue is owning after another cat owner, if their cat ever, ever, ever, pee'd anywhere other than the litter box, you'll need to rip up the subflooring to prevent your cat from attempting to cover up the old cat smell with their own."
Same with dogs and this can be a major problem re: owning carpets. Even if a carpet cleans up well, if the offending substance ever soaks thru to the padding -- youre doomed.
tbw, Cara,
I thought I remember reading something about the Silas Burke house being for sale this summer. Here's a Burke Connection article from June about the house.
The Anonymous,
I've been looking at various discussions. People seem to have some horror stories about cat/dog pee and hardwood floors. Apparently tile is best for that.
I think regardless of flooring the longer pee is left untreated the worse the consequences. These people seem unhappy with pergo/hardwood + pets.
----
Also I'm reminded of the noise issue without carpets.
HayfieldGrad,
Thanks for the article. Since the owner is noted as living in Chantilly with her husband, it does seem like she might just use this home for storage of her toys. She's probably kicking herself for not selling this 3-4 years ago.
TBW, good one about Miss Haversham. Other people just collect things (dolls for some) and love to display their collections everywhere (unless a stager from HGTV is let into the house).
My 2 cents re: floors: these are easy and don't have to be terribly expensive to change if you don't like what is there. I prefer carpet in the bedrooms for the reasons others have stated and see little difference between them and a room with hardwoods covered largely by area rugs.
As for laminates - if you can tell it's fake, I don't like it. But then, I don't like my dark furniture, but when you have kids/pets sometimes practicality takes precedence over aesthetics. It's not that you would leave something dirty just because it's dark, but all it takes to permanently ruin an expensive light colored sofa is one human or pet stain that you can't get out. Even Salvation Army won't take light colored furniture unless it is in perfect, no-stain condition.
Tbw, you could pull up the pergo yourself. The boards just snap together. Not sure if glue was used 10 years ago. Ours is “floating”. Pull the trim off, then start lifting it out. Don’t know how much it would cost to have someone do it for you, but it can’t be much.
I know you can clean carpet, but no thanks. I’ve had to clean up one too many pet and kid “accidents”. PITA.
Cara, don’t worry about what other people think. I’ve never seen anyone look at my floor and frown :) When you go to refinish those hardwoods, you’ll wish you had pergo.
tbw,
unless the pergo is warped, just carpet over it just like you would hardwoods. In fact our inspector suggested we hardwood over the pergo at Woodwalk.
Ripping up pergo is easy, especially if it's click and lock. Find the nails in the baseboard, and pry the baseboards off (usually those chinsy quarter circle baseboards everyone uses for new floors, the cheap lazy bastards), then pry the first line of pergo up, and then you should be able to slide the rest of it out pretty easily. It just takes having/borrowing or renting a few good plying tools and maybe a few hours of work.
Ace/novahog/Cara,
Thanks. Sounds like it's not a big deal and the cost/effort is not dramatically different regardless of whether it's carpeted or pergo.
National figures but worth noting nonetheless:
Article
So this news from the weekly home purchase applications survey conducted by the Mortgage Banker's Association (MBA) surprised me:
The seasonally adjusted Purchase Index is at its lowest level since December 2000.
It decreased a whopping 12% last week, compared to a week earlier.
Click on the link to see charts going from 2000 to the present. Very interesting figures.
Meshell: Thank you for your suggestion for the Alcova Heights & Arlington Heights neighborhoods. We actually saw a really good cape cod on Sunday in Alcova Heights for $615K but it already has a contract. We are going to watch those two neighborhoods too as well as Addison Heights near Crystal City. For Va Investor, we saw some townhouses near that Falls Church/McLean area when we were looking for our rental. The area is nice but seemed a little too suburban. That should have been our clue that we should have looked for a rental in Arlington rather than ending up in Fairfax. We found an agent we think is very good and responsive, so we will be going out this Saturday to see a very few houses and then hoping some new houses come on for open houses on Sunday.
I was looking at a property in Arlington and realized how noisy airplanes are there. I read articles that planes can be flying as early as 6 a.m. and past 11 p.m. Noise got worst after 9/11.
Neighborhoods closer to the Potomac are the worst when it comes to noise but even those to the west or Military Rd can be noisy. Those of you who live or plan to buy in Arlington, have you ever considered this?
re: floors
I prefer hardwoods everywhere, except in kitchens and bathrooms: tiles are more appropriate there.
FHA Audit
For the first time since 1994, the Federal Housing Administration's cash reserves have shrunk to a point far below what is required by law and could turn negative if worst-case scenarios are factored in, according to an independent audit designed to measure the agency's financial soundness.
The reserve fund, which holds excess cash beyond what the agency needs to cover future losses on its outstanding loans, had an estimated value of $3.6 billion as of Sept. 30, an sharp drop from the $15.82 billion that last year's audit projected it would have by this time.
The $3.6 billion value represents 0.53 percent of the mortgages insured by FHA, well below the 2 percent ratio required by law and the 3 percent ratio maintained by the fund at the same time last year.
If FHA's reserves drop below zero, FHA taxpayer money would automatically flow into that fund from the U.S. Treasury.
Under more pessimistic scenarios, FHA would lose so much in premiums that it would run out of capital in fiscal year 2011, requiring $1.6 billion in borrowing from the Treasury in fiscal year 2012, according to the report submitted to Congress.
waiting too Penrose is next to Arlington Heights and my family still has 3 houses there that are rented out to Pentagon people. There's a nice park in the middle of the area, and I've been watching the new Giant grocery store with the retail space being built by Columbia Pike, so you might like that area. The area up the hill from Crystal City over by Oakridge school is pretty. I have friends who live in the big condo in that neighborhood and there seem to be many nice little bungalow type houses near there. I don't know if you like football, but there is a big sports bar on 23rd St. which has every game you want to see every Sunday. I've been there and the people seem to be from the neighborhood and are all nice. good luck.
Mortgage applications to purchase homes in the U.S. plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit.
But the agency's complex funding mechanisms -- little understood in Washington, including on Capitol Hill -- do not require the FHA to turn to Congress if the agency cannot cover losses on its outstanding loans. The agency, which collects premiums from borrowers who take out FHA-insured mortgages, has been automatically drawing down on money it deposited with the Treasury Department when the FHA was flush with cash. Those funds have dwindled as the FHA's losses grew. If the losses continue unabated, the FHA would still receive money from Treasury.
"It is absolutely a myth that they would have to go to Congress for money," said Marvin Phaup, a former budget analyst at the Congressional Budget Office and now a budget expert at Pew Charitable Trusts. "The FHA has permanent authority to get money from the Treasury because it is backed by the full faith and credit of the federal government."
---
The bottom line: FHA is going to keep doing what it's been doing.
Jobs:
Virginia Tech plans to build a major research center in Ballston, part of an effort to expand the university's offerings and influence in the Washington area.
The center will bring 150 researchers, faculty and staff members to the area, but that is just the beginning, said Bobbie Kilberg, president and chief executive of the Northern Virginia Technology Council.
The floodgates are opening slowly at the Department of Homeland Security, where up to 1,000 cybersecurity experts will be hired in the next next three years. Homeland Security Secretary Janet Napolitano said last week that the department will use direct hiring authority to bring on a new brigade of talented professionals, bypassing the federal government's time-consuming and onerous hiring process.
This new army of workers will be spread across the department, working in the National Protection and Programs Directorate, which contains the department's National Cybersecurity Division (NCSD). Others will work for the Secret Service and Immigration and Customs Enforcement, both of which have cybersecurity roles.
---
Lockheed Martin Corp. and a dozen other companies have a new research and development center where they can collaborate on new ways to fight cyber-security threats.
The NexGen Cyber Innovation and Technology Center in Gaithersburg was dedicated Thursday. The 25,000-square-foot research facility will be the home base for a new alliance between Lockheed, and partners that include Cisco, Dell, HP, Intel, MacAfee and Microsoft.
---
The US government is promising a more coordinated approach to cyber attacks, with the creation of a new $9 million cyber security center.
The National Cybersecurity and Communications Integration Center in northern Virginia will integrate the US Computer Emergency Readiness Team and the National Coordinating Center for Telecommunications.
Yes, I posted this earlier, but look at the reasoning for the location of the new center.
When Dietrich Stephan plans his next career move, he plans big.
As in a $245 million research institute focused on personalized medicine in a 300,000-square-foot Northern Virginia building that would employ up to 500 top-rated scientists recruited from the far corners of the world.
Now Stephan has set his sights on the Washington area, where he says a new president has raised hopes for a transformed health care system and where he would like to launch a specialized center for personalized medicine, the act of tailoring treatments to a patient’s DNA.
There's a transformation taking place. On the other side of this crisis, not only will the public sector be a larger percentage of GDP, with the area getting its historical share, but private companies and organizations in tech, health care, energy, and finance will gravitate from elsewhere or be spawned in the region.
WTF would VaTech bring a research campus to NoVA? That's just stupid. IMO, if you aint at downstate at Tech, then it's not really Viriginia Tech.
Since The Commonwealth already has GMU here, why not invest the money there instead? Even better: GMU can have a satellite campus in Charlottesville, and UVA can have a satellite campus in Blacksburg.
NoVAWatcher,
I think this Ballston campus already exists.
There's been satellites for the state schools for a while. Anyone who has ridden the Metro may have noticed that it's "West Falls Church-VT/UVA" referencing a satellite there as well.
http://www.ncr.vt.edu/Locations/index.html They also already have locations in Leesburg, Middleburg, Manassas, and Alexandria. And mini-campuses in Richmond, Hampton Roads, and SW VA. Heck they even have some international campuses. Obviously the heart of VT is in Blacksburg.
This is non-news.
Robert,
I saw that article. You do realize that no one doubted the FHA would be bailed out. The issue is solely when/if Congress reforms FHA. They've already raised the down payment requirement from 3 to 3.5%. We might see them raise it higher.
In fact, HUD Secretary Shaun Donovan has said raising the down payment is on the table:
WASHINGTON -(Dow Jones)- U.S. Department of Housing and Urban Development Secretary Shaun Donovan said his agency is "actively looking" at raising premiums and minimum downpayments for borrowers seeking a Federal Housing Administration-backed mortgage.
This should not be shocking since basically everyone who has written on this issue points out the lack of skin in the game is part of why we are seeing massive FHA losses.
er I should note Donovan said that today. I think that's pretty big news that FHA premiums and/or the down payment requirement may be going up.
Tighten your belts...landing is going to be long and rough..
Robert said...
"The NexGen Cyber Innovation and Technology Center in Gaithersburg was dedicated Thursday. " ...
New jobs in Gaithersburg having an affect on Northern VA real estate is about the same as new jobs in Manassas affecting Maryland - not much. If anything it will reduce demand closer in since those people won't have to overpay for housing with a better commute. Location, location, location! It matters for jobs too Robert.
Reecon, thanks for the tip about where to find games that aren't on our teevees.
That isn't one of those lame satellite campuses where they get a bunch of local adjuncts to teach courses under the VT brand name?
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