Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Thursday, November 19, 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
82 comments:
We're buying a house. Close the first week of January.
Sorry to be an obnoxious tease, but I'll tell you all more once it's a done deal. There's nothing juicy or out of the ordinary to tell anyway. It's just a house that suits us perfectly now with some room to grow, (and the land to grow more if need be later) and they accepted a price that we are content with (couldn't actually go any higher with our current cash on hand, but we did move up our time-frame for this price point by 2-3 months for this house).
Yes, there are more REOs coming, in our very neighborhood. But as far as I'm concerned that'll just keep our tax bill down for a few years. :) After the beat-up houses with deferred maintainance issues are gone from the system, I'm completely confident that the price we are paying will rapidly return to being the norm (if it even goes down much from here). And even if it doesn't? I really won't care. We can afford this on just my salary, we will be fine. This is a 20 year home, if not longer. It's a home, not stocks. And it's not going to drop 20% from where it is now, barring house-aggedon in D.C.
Oh my word..I'm so friggin happy for you! You have worked so hard at this finding the right place, the right price and suitable/acceptable to hubby. Its hard balancing all those needs..my son (college access, young people stuff)hubby (land/hunting) was a balancing act for me, also. Don't be sorry, you aren't being a tease and have shared enough info for us to cheer your success without jepordizing the deal.
Thanks Arkey,
Yeah our moms have both looked at the pictures and are both gushing over the place. (which did not really help my sanity earlier this week). My mom is beside herself she's so happy for us. (we have to pick out which room is going to be the cat-free room for her). My mother-in-law has already volunteered to take a week or two of vacation to help us move (she's really really good at organizing a truck and directing people) and/or paint.
Cara- that is awesome congrats.
Arkey- Those views are incredible.
Cara -
I'm glad this is working out! I'm really liking the sense of permanence in a non move-up house. I think it will make your life so much easier in the long run.
When we first bought, we looked at SFH and went with a townhouse. I would give anything to go back and get the SFH with the yard right from the start.
Cara,
You know I'm just teasing you by saying this, but I hereby declare Nova has hit bottom because Cara just bought a house.
I also hereby declare that condo and TH markets are in the dumpster for the foreseeable future.
Congrats!
Cara and Arkey, ditto what everyone else has said. All your patience paid off!
Cara -- Noooooooooooo! Like MM, you have long been an informal indicator for me :)
In all seriousness, congrats!
Wow. You did it. Sincerely happy for you. I remember when we bought our first home, it was absolutely thrilling.
Harriet, I agree with you on the SF.I think that is the very best decision she made. Once you have a little one, you like to plant their gardens, hide their easter eggs and such and they always want a pet whether its a cat or a dog..
Arkey,
And sometimes a loud piano.
A tip 'o the hat to you Cara.
Well done.
Can't go wrong with a SFH or your reasoning.
Cara, Congratulations! I am so happy for you, and I hope that I can be in your shoes one day (as our official house hunt passes the 5 month mark).
Your patience and rational behavior is truly inspiring. :)
Thanks all!!
We already "have" a piano, it just needs to be shipped up from Tennessee.
I've already picked out the south-facing flat side yard for the herb garden this spring.
I actually vaguely agree that me buying a SFH is an indicator that condo's and townhouses are in the dumps and not going up anytime in the next 5-10 years. Because if interest rates stay under 5.5% for long enough and prices of SFHs don't rise faster than inflation such that SFHs like ours continue to be obtainable as people's first purchase, people like us will stretch for them. (not that we're stretching by normal people standards, but you know what I mean).
Yes, where we are buying is one of only a handful of neighborhoods in WSHS, LBHS or Robinson where houses at this price point are not dumps or fixer uppers or tiny, but that's not the point.
For reference, my best guess is that bears on this blog would say this house "should" be worth $325k in this location at the bottom, and we're paying $75k over that. And with at least 5 years of an L-shaped bottom ahead of us, it will get there on a real basis. And for all the reasons housebuyer and I have stated. I don't care.
(oh and the rule of thumb is Cara is buying the bottom is either 1 year behind us or 1 year ahead of us....)
But does it have space for azaleas?
Ace,
azaleas like shade, right? Then plenty of space... The front landscaping is fine for now (simple not too much stuff) but will take some thought. Good thing one of my best friends took two courses in landscape design...
Yes, they like shade and protection from wind.
The nice thing about your landscaping is that you can do a little at a time, as you want to do it, rather than have to make major, expensive changes immediately.
I am really happy for you. It's a very good sign when moms are excited about the house too (aside from the grandchildren potential the house may signal to them :-)). It must be a lovely place. Usually with a first house (especially around here) everyone tries to make the best of all the compromises you have to settle for.
AOL offers buyouts to 2,500, a third of work force
The company is based in New York but also has major operations in Northern Virginia.
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111901080.html?hpid=moreheadlines
Cara, for whats it worth, I think you got in just under the wire of getting a good deal for this area. I had really thought you were going to miss the chance to buy. There are just to many buyers out there that think current pricing is a deal/steal. I doubt you will see a loss, maybe not gigantic appreciation but enough to pay realtor fees with a profit in 5 years for sure.
Ace,
Yeah, actually I think that's one of the reasons my mom is all emotional, we haven't told her explicitly yet that we'll be trying soon.
This is like the goldilocks house for us actually. Just the things we really wanted, none of the things that weren't a big deal for us. And the "issues" it has are all ones that we have no problem living with for now and will only take money to fix in due course. Hence why we moved up our time frame to bid on it.
In fact I think some of the front bushes probably are azaleas, I'm not good at identifying them in winter...
MM, I'm not accepting that the Arl. SFH market is at the bottom until YOU buy! :-)
Cara,
I found some "hardy" gardenias last year that I just love. That scent is awesome. Meadow's Farms used to be a favorite destination. Nothing like the look (and smell) of fresh mulch.
Congratulations, Cara. Does that mean you won't be posting here anymore?
kevin,
definitely less so. Probably taper off like most.
Cara, congratulations!
Also, azaleas are the green leafy bushes that turn vibrant reds correct? If so, I'm stoked that they are good with shade. I too recently took the plunge into home ownership and there are a few huge oak trees near my place creating shady spots. I've always wanted to put azaleas in so this is good to know!
My $0.02
PS - Thanks CRT for providing some rational thinking to get me into a house. Don't worry, I won't blame you if DC House'aggedon hits. :)
PPS - As a long time housing bear I've always figured that my purchase date would signify a local maximum... ;)
Va_Investor,
Seriously, you like the mulch smell? This is one thing in US that I was never able to understand. Well, except for the cinnamon-scented firewood at Whole Foods.
mytwocents,
you can get azaleas in white, deep red, purple, pink, salmon, google image it. They're my favorite spring flowering plant.
Does anyone know a good time of year to plant azaleas?
I suppose I could just google it but dicussion is more fun.
My $0.02
mytwocents,
Azaleas and rhododendrons need SOME light (filtered light) rather than complete shade. They do poorly in full sun and wind. Part of this is because their roots are very shallow and they dry out if they are not watered properly (a Goldilocks amount - not too much, not too little, and you have to do this frequently - most other plants prefer deep watering, infrequently).
They also like acidic soil, so using a ph tester is helpful. It's easy to find fertilizer that helps provide this.
Best time to plant is in the early spring, 2nd best time is early fall so the plant can get its roots established before it gets too cold. But don't prune them until after they bloom in April or May, or you will be cutting off the blooms for the following year.
There are many varieties and some are more tolerant of our cold and hot temperatures than are others, so it's always good to check in the store or online which varieties do best.
If you get a chance to go to the Botanical Gardens near the Norfolk Airport in April, take it. The azaleas and other plants are big and beautiful there.
Can you tell these are in my top 5 favorite plants????
Konstantin, I like the smell of some fresh mulches too - nearly as much as freshly cut grass.
And congrats to you too, mytwocents, on your new house!
Yeah fer2cents..Nothing like buying a home .. Robert mentioned last night about the feeling when you buy your first home, Oh yeah, I remember...sweet...
Ace,
Thanks for the info. My commute often time takes me along Washington Blvd through 22205 between East Falls Church and Ballston. I've always loved the way the azaleas looked against the mostly brick homes along that route.
I'm not the type to be huge into landscaping - I often quip all bushes and plants do is provide a home for mosquitoes - but I have always wanted a home with azaleas.
It's good to know I can plant sometime in late March. Right now I'm busy with my modest fixer upper. Needs an updated circuit breaker box (currently it's a fusebox), the hardwoods throughout need to be refinished, and the main bathroom will likely be redone within the next 60 days.
Of course painting is also on the agenda after removing some wall paper.
A lot of stuff to do but I think it will all be worth it.
Oh, and in case anyone recalls, I found an asbestos test company. Good news though, it was negative for asbestos!
My $0.02
mytwocents,
You've just described my first three months of homeownership. ;) (and my commute when my wife isn't along for the HOV on 66, creepy)
We updated the main panel from this terrible 45 year old push fuse contraption. Holding off on refinishing the hardwoods and updating the main bath, but have removed all of the wallpaper and painted 75% of the place.
Can I ask where you were worried about asbestos? We have floor tiles in the basement that are almost certainly asbestos based. We are removing the old carpet that is over them and putting down hardwood laminate, but removing the wood carpet spikes is distrubing some of the tiles. Not good, I know.
ps. congrats Cara!
Arkey, Robert,
We were are a complete nervous wreck come closing day. Stopped at a bar prior to closing and could hardly choke down a beer (and we were 22!).
Fred,
The place I bought had brown acoustic tiles on the ceiling in the basement that were about 9 inches square. The inspector pointed them out as potentially asbestos containing. The tiling on the floor, as you say is also most assuredly asbestos based. The difference is, the ceiling tiles were "friable" material meaning that with simple hand pressure you could crumble the material. Since I wanted to be able to drill or cut into the ceiling to put in new light fixtures, I wanted to be sure.
With the floor tiles, those are considered "non-friable" materials. In other words, the asbestos fibers are locked in and can only be disturbed if you significantly destroy the material - like with a circular saw or sand paper or something.
I wouldn't worry about the floor tiles myself and simly cover it. Nonfriable material can be considered properly contained if you put a new surface over it.
Of course, I'm no expert but that's what I learned in my research.
My personal take is that asbestos is only scary after serious prolonged exposure. It's only our litigious society that has everyone so wound up.
As always,
My $0.02.
Va-Investor, I was around 21 or so..stayed awake all night wondering what I had done and "decorating"..
Fred,
Would you mind sharing the price or price range you were quoted to swap out the fuse box for a circuit breaker?
I'm about to start getting quotes on that.
I have close to 2 months of overlap between my current place and the new one so I was focused on getting the floors done before I had to worry about moving furniture from room to room. Plus, the living room had definite, uh, pet stains, that I really wanted removed. :)
So floors sort of happened first.
My $0.02
Thanks, mytwocents. That is the plan, cover it and never think of it again. :)
For those first-time homebuyers out there, how long did it take to get the $8k tax credit? We're at 11-12 weeks now, and no word yet. I did a google search and came across a board where some people said they got it in a few weeks, and others were waiting 16 weeks +. We aren't hurting without it, but still, if I have money coming to me I'd rather have it sooner than later.
mytwocents,
I grew up in a big old house (c.1900 - we even had an outdated coal shute) with a monster-size furnace covered with asbestos. My darkroom was in the same room and I used to hang my film to dry off that nice warm furnace. I'm alive and kicking (so far). How many of our parents and grandparents died due to asbestos in the basement?
mytwocents,
The main panel install was around $2k. We probably could have had it done cheaper through an independent electrician, but we had a recommendation for the company and wanted to form a relationship with them in case we needed other work done.
Fred,
My niece had to re-submit docs to IRS 3 times. She just got the 8K last week, after waiting since April 15.
"$00.2 said...PS - Thanks CRT for providing some rational thinking to get me into a house. Don't worry, I won't blame you if DC House'aggedon hits. :)"
I second that, and want to also thank Cara for the same. Between CRT and Cara, we had a grounding in reality that is lacking in many other blogs.
CRT is basically gone and now Cara is headed that way too. Who is going to smack us back into reality with bulletproof stats and wonderful insight when this blog verges too far into the doom pool from time to time?
To wit, I give you exhibit A:
"Contrarian said...
We're not only on the verge of the next wave of foreclosures, we are on the verge of a cataclysmic financial meltdown."
GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG!!!!!
Regarding sources of asbestos...
Don't forget that asbestos was a common additive to the mastic (glue/paste/adhesive) that was used in conjunction with asbestos based floor tiles.
Asbestos was cheap. It's a binder in a lot of other stuff...in the period it was used.
Lotta adhesive products out there with asbestos...
FWIW
And by the way...I was about to post that a main panel (200 Amp) would/should run about $2K for the swap.
150A to 200A panels *seem* to be the norm in this area.
Just the panel swap, no wire pulling or other labor.
That's about fair market value.
And since I am on a posting roll...
I was musing earlier today over Cara's happy news thinking that how different this world and this blog would be if only a *majority* of home buyers did what she did in regards to sanity checks, saving cash, due diligence, etc...
Darn good example of a someone doing their homework on one of the most important purchases we get to make in our little bubble lives....
:)
Congrats, Cara! I have been a steady follower of this blog for several months now, and I feel lucky to have been a reader while you've been blogging. Based on what you have said, and on my daily online real estate search, I have come to the conclusion that yes, 475k is crazily low for a larger, newer McMansion-type house in techie-filled Herndon (600k is the average for that type of home), and while the prices may float downward, they're not going to float all the way down to my level of affordability with so many double income families. Those are the families, with steady employment, help bake prices in.
And while we might not be headed for a full-fledged meltdown, especially since our new administration has created massive interventions, it's hard to say how things will turn out for all those in trouble. Problems are still brewing. My husband ran into our former daycare provider, who, after having bought at the height of the market in Lansdowne, has recently been threatened with foreclosure. Last week, I met someone from the single family home section of my community. We had been talking about dramatic drop-off in the use of the pool this past summer, due perhaps in part to residents' inability to pay HOA fees. She then admitted that she is participating in the affordable home mortgage program, with her monthly payments reduced by $1000 to $3,500.
Here is a house that came back onto the market today:
http://www.redfin.com/VA/Sterling/46592-Hampshire-Station-Dr-20165/home/11936789
Having come on the market a year ago as a short sale, with pricing that fluctuated between 420k and 599k, it's now a regular sale at 539k. Owner is a realtor.
If you've been in short sale mode for a year, how can you suddenly come back as a regular sale? I know that the market has rebounded strongly in Sterling, but the owner has to be underwater, I think? The person bought the place in 2005 for 759k, is it possible to have enough equity for a regular sale at 539k? Or, can the seller now pay off what's owed because no payments have been made for the past year? I'm confused. Does anyone get what's going on here?
For Waiting Too and MM and anyone else interested, here's a new graph and table from Zillow that shows prices and price trends by neighborhood in Arlington. You can select the neighborhoods you're interested in and see the trend for that neighborhood.
http://tinyurl.com/ybeo5rq
REdeal-
Based on the size of that house I would doubt that this was the persons first house. So if they bought a house in 10+ years ago and used the profit as a downpayment for this house they could easily have used 220K of equity to buy it. It is very unlikely that they could have saved hundreds of thousands of dollars buy not paying a mortgage for a year.
The house with the tree in the middle is back on the market, with some caveats:
http://franklymls.com/FX7020021#remarks
Congrats Cara.
I am glad you moved away from the "housing ladder" philosophy and have picked a house you can see yourself living in for 20 years or even indefinitely.
Have you locked in a below 5% mortgage rate? I hear they are back down there. Or do you get whatever the prevailing rate is in January? I suspect not much will change between now and then but if you can lock in the 4.9% or whatever it is now I'd try to do that.
Va_Investor,
Are you familiar with the Hallowed Ground National Heritage Area? I looked at what 45 miles west of the Beltway would be and it looks like maybe your land might be in this area.
Part of me figures suburbanization will continue westward and the Route 15 dividing line is going to come down eventually. Not for a while but probably within my lifetime. Another part of me thinks preservationists might keep a good part of this area undeveloped. There are a lot of rich people in this area (either part-time homes or full time homes) who raise a big stink anytime there's development.
I don't know how much designating it a National Heritage Site limits development (if at all). Here's some info which you are probably already familiar with.
Map
http://www.hallowedground.org/index.php
NoVAwatcher,
Love, love, love that house. I'd buy it in a heartbeat if I didn't have other priorities.
Mold in a one-level home with new kitchen? Must be in one of the baths.
I'll be in the market for properties like it in about 15 years. With luck it could still be had for $500K :)
Oh this reminds me of something poking around in my head. It seems like the U.S. Government is willing to put massive resources into protecting the values of suburban single family homes. One argument people have made (particularly recently) as to why these areas will become less valued and perhaps even blighted is soaring energy costs.
Which raises the question to me as to whether the U.S. Government would ever allow $7/gallon gas. Or whatever amount cripples suburbia. It seems like if global forces ever actually raise the gas that high that the U.S. Government would just start subsidizing gas.
It's hard for me to imagine (in light of the events of the past year) that the U.S. Government would just let suburban and exurban homes lose massive value because of explosive gas prices. We could barely handle $4/gallon gas without falling apart. I don't think that's happening again until $4/gallon is equivalent to $2.50/gallon or so in inflation adjusted terms.
maybe i should buy it and rent it out and move in 15 years later or whenever i'm ready.
not bad, not bad, wish they built more of those. they do not make much sense without a lot of land though, cannot put a house with so many windows on a .25 acre lot in arlington...
TBW-
I think the government would just create a strong push for people to use natural gas. We have tons of natural gas that we can get at cheaply. So if gasoline ever got that expensive people would pretty quickly switch the fuel they are using.
I wonder why Capital LLC took so long to sell that place. They bought is in late 2005 and sold in early 2007. Normally they try and get rid of places in just a couple of months.
That's too bad about mold in that house. Obviously if it could be easily remedied, that would have been done previously. I can't imagine that anyone will buy it for anything close to the asking price now. It's not much of a bargain short sale price -- it's too close to assessed value of a house in average condition, and if they can't get a mortgage on it, that cuts out a big portion of the buying pool.
Flipper flopped, and IIRC, they also own the house next door, which they failed to sell the past two summers:
http://franklymls.com/FX7206773
Next door. This Frankly listing is a little weird, because it is the 2004 listing but the picts are from the summer. Listed for $969k in 2008 and this summer for the low $700s and never sold:
http://franklymls.com/FX6956336
So much for no foreclosures or short sales in Oakton (zip code isn't Oakton, but I consider it Oakton).
tbw,
locked at 5.0 with zero points. Could have gotten 4.75 with 1 point, but that takes over 5 years to break even, and cash is what we're short on.
NoVAWatcher,
Good finds.
Va_Investor -- those are good examples of homes on two acre lots that are not far from other people. Maybe now you can see what I'm getting at about that home yesterday which was much more distant from things. These two NoVAWatcher found are in walking distance of a decent number of homes. AND you get the two acres.
The listing for FX7206773 shocks me. They gutted the kitchen and bathrooms? I somehow doubt they are doing much with the oven, fridge, toilets, and sinks! Talk about being jerks.
A while back when HayfieldGrad and I were having one of our not fun school arguments she pulled her trump card. No school in Fairfax County is as bad as some of the ones she went to elsewhere in the country. She cited things that are definitely true -- no school in our area has outdated books for example. But I believe one thing she cited was she went to a school where people set fire to the lockers.
Well, I was reading Restonian...
Finally, a couple of Langston Hughes students were charged after setting fires in the middle school's locker room.
Two juveniles are charged with setting multiple fires in the boy's locker room at Langston Hughes Middle School.
Fairfax County Fire and Rescue Department investigators say they are charged with burning or destroying personal property less than $200, which is a Class 1 Misdemeanor.
To be fair HayfieldGrad brought this up while we were discussing places like Falls Church, Lee, etc. And to be fair I've never heard of fires at any of the schools in those pyramids. So Langston (which is South Lakes's main middle school) has definitely taken the cake when it comes to locker arson.
Therefore, I hereby declare South Lakes THE WORST SCHOOL PYRAMID IN FAIRFAX COUNTY!!! [Said in over the top manner like when Keith Olbermann declares the worst person in the world on his show.]
Robert,
You'll like the article linked to in this blog post. They quote Stephen Fuller a lot. Guess how positive it is about Northern Virginia's economy. ;)
Fuller claims there are 2.5 Northern Virginia jobs created for everyone 1 in Maryland. However, I suspect that is all of Maryland which is comparing apples and oranges. The more interesting fact would be how Northern Virginia job creation compares to Montgomery-PG County job creation. I suspect Northern Virginia is still ahead but not be 2.5 to 1.
The Anon and $0.02...Thanks for the accolades - and $0.02 im glad to hear things worked out for you.
Cara - Congrats! Id offer you reassurance that you did the right thing, but if there is anyone here who knows what they are doing, it is you!
contrarian -
Where are you? The article says essentially to buy gold, sell dollars, and purchase long-term sovereign debt of other nations.
Yet, you hold short-term US treasuries.
Thanks CRT.
I still think tbw is right that in another 2-3 years we could buy a nicer/bigger house or one with a higher cachet to it's location. (mostly because we would have saved up for longer and probably gotten another raise or two). And that's what tbw will be able to do, but this is the right home for us and our extremely modest lifestyle.
And man, the way stuff under $330k is selling right now (purely THs) if this neighborhood ever dips that low, holy macarel will it ever whip back up to $400k fast enough to make your head spin. That's the thing about falling prices, there's more buyers there.
TBW,
RE: Article
Interesting that the Park Authority is making land purchases. I only imagined commercial and residential duking it out over the remaining undeveloped land.
TBW -
Interesting article about the Hallowed Ground National Heritage Area. Within that area, there is a mile wide swath of land down the Rte 15 corridor, from the Northernmost part of the county, stretching just south of Leesburg, which is geologically not appropriate for wells. Since most of the area is still rural, the homes rely on well water. The land is limestone (karst). Limestone is not stable, sinkholes and an unreliable well water supply can be products of limestone geology; limestone's porosity also allows easy and rapid contamination of ground water. (http://www.loudoun.gov/Default.aspx?tabid=2353)
There have been articles in local Leesburg papers about children who live in Raspberry Falls being poisoned by water on the ground while they are outside playing.
This article does not talk about the hospitalizations, but it does explain the problem: http://www.loudouni.com/news/2009-08-04/residents-raspberry-falls-question-response-water-quality-concerns
The county wants to place restrictions on that area of land, making the residents angry that it will decrease property values. I would personally rather let everyone be in the know about the problem, because of the harm it could do. (http://leesburgtoday.com/articles/2009/09/25/news/loudoun_county/8594input091509.txt)
I recently saw some deeply discounted McMansion short sales just off 15; because of the karst issue, I decided not to bother with them.
While having a public water system installed up there might solve the contamination issues, aren't there still ramifications for waste water? Would a public sewer system also solve that problem? Any engineers to answer this question?
Raspberry Falls, BTW, is located just north of Leesburg, off Rte 15.
The way stuff under $330k is selling right now (purely THs) if this neighborhood ever dips that low, holy macarel will it ever whip back up to $400k fast enough to make your head spin.
I wouldn't count on it. This is what caused the bubble in the first place. People seem to forget that home prices only see modest yearly increases in general - if even that. In this case, we are dealing with major bubble that still needs to burst and the flat prices to remain for few years after that...
Lot of sales are currently being driven by helping hands of FHA, government and investors - they do not represent the realities.
It is becoming clear that economy is destined for the double dip - when that happens, all bets are off for housing - and this area is NOT immune.
spider,
look at PWC. look at Arkey's place. look at the true costs involved in fixing up the REOs and shorts that might have prices that low. $330k to $360k is immediate, and in fact never goes away as the minimum REO to real quality sale differential. Once the REO's dry up, which given our falling unemployment rate around here, they will, getting back to $400k isn't going to take long.
NoVa unemployment peaked in June, typically foreclosures peak 6 months later, we'll call it 10 to account for the HAMP program delays.
In this neighborhood there were 2-3 REOs sold each month in late 2008, early 2009, and priced dipped to $330k. REO's started drying up, for an almost total drought by June, and real sellers were getting between $380k and $440k by August-October.
Given that interest rates are going to be determined by national economic characteristics, not our local ones, I'm pretty darn confident they'll still be under 5.5% by the time the REO's have dried up for good (or gone down to a normal permanent trickle at perhaps a higher nominal value than before).
This fall, they bounced back above $400k on the backs purely of first time buyers and investors. What happens when Fort Belvoir expands? What happens when people in other parts of the country can sell their homes again and move here for better jobs? Those people will have down-payments, and won't need interest rates of 5% to afford $400k, instead 5.5% or 6% will be okay.
What Robert's been getting at is that right now, in this area you only have local competition. And primarily other non-owner competition. Just wait until the economy turns around a bit, and people here get more confident about their jobs, and others start moving here for work.
Now, to be sure, I am still of the L-shaped camp. I don't expect appreciation over the $400k level, because people from other places aren't bringing that much equity, but a dip of a nieghborhood down into the deep end where the buyers are, will be quickly self-correcting.
This winter is going to be a particularly good time to buy if you get a good deal. (we are however, likely to be jumping the gun ourselves)
Cara - I think you made a very good choice for your own situation. You said you liked the place and plan to live there for many years to come.
My point is - even if you believe economy is getting better and there is no double dip - there will be a move towards less spending and deficits in the time to come. This means under performance by this region compared to the nation. As you know, Washington is broke and currently at an ultimate spending spree that it won't afford in years to come.
On a similar note - some people I know are even considering moving to other "affordable" regions once the economy improves. Cost of living comparison doesn't sound that good for NoVA given how affordable the housing has become in other major metro areas.
spider,
Thanks for clarifying. I was really just speculating in my original comment myself.
I still think we disagree on what is going to happen in this area, though.
"there will be a move towards less spending and deficits in the time to come. "
I think that's wishful thinking.
"As you know, Washington is broke and currently at an ultimate spending spree that it won't afford in years to come."
Depends on your definition of broke. Washington is always called "broke" by someone. I follow Krugman, so in "my" opinion, Washington is not broke yet. The stimulus I do indeed think/hope will be short-lived, but I'd be curious to know when's the last time the government payroll actually decreased? I'd have to look it up. It most definitely can and does stagnate, such that growth-wise we might indeed be surpassed by the rest of the nation. That would be fantastic news though for our economy as a whole.
spider,
yes, the unafforability of the DC area will eventually be a limiting factor on any continued house price growth. Once the economy as a whole recovers, more people who can move away from here for jobs will do so. There's always a flux, both in and out, it's hard to say now which will be larger. Only time will tell that.
tbw,
I don't know too much about areas west. Our place is south and slightly east of 495/95. Famous civil war site (just like everything around here!). Water-oriented. Everyone knows that I love the water.
Post a Comment