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Monday, November 2, 2009
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119 comments:
If you believe housing prices will stabilize to reflect income, here are some new toys to play with:
http://www.melissadata.com/Lookups/TaxZip.asp?Zip=22181
http://www.incometaxlist.com/income-tax-zip-code.htm
Just plug a zip code into the search box for, relatively, current income data by zip code. It's fun to check the income against median house prices in the MRIS. The data has limits and is certainly open to interpretation. But it's an entertaining way to pass some slow time on a Monday.
that's really cool. Its very helpful to me in selecting areas out of state to buy into. Thanks
Atlast
Great info. One thing you have to look at is the mix of housing in a zip code. For example the 22181 zip code in Vienna you showed has a 2007 income of $148,000. There probably more houses in that area than condos and townhouses. In my 22209 zip code the 2007 income was $99,000 but there are many condos in that zip. In Arlington's most expensive zip code, 22207, the 2007 income was $164,000, but in McLean's 22101 zip code, the 2007 income was $275,000. The difference is that there are lower priced condos, townhouses and houses in the 22207 zip as well as very expensive houses. In the 22101 zip in McLean, most homes are single family houses.
atlast,
Hm. Those seem lower than other measures we've been using. $82k median as opposed to the $110k people had been throwing around for my neck of the woods. Given that students and teenagers often file from their parents address, I'm guessing their separate returns may be making up the difference. It's just a guess. But if true, most people try not to lean on their kids incomes as much as possible.
I love the second one, because it gives a distribution, not just a median. That's awesome. For around here it'd be even better if the 100-200k bracket were split up, but it's still a way better tool than most.
For the curious, neither of the ones we saw Friday were our dream house. One of them we're not buying at any price, because of the extremely awkward layout with an open staircase smack-dab in the middle of the TH, the other might be a possibility if we felt like putting in a lot of cash to fix it up, but it would need to be priced at least $30k lower for that math to work out right.
Does anyone know where I can check median housing price by zip?
housebuyer,
The MRIS that Harriet uses for the counties, it's linked to on the bottom of each of her 10th of the month posts.
Clearly wealth of a region is not the only factor causing housing prices to fall. My parents live in 22039 where the median income is over 170K, and houses in their neighborhood have fallen ~30% from low 800Ks to 600K. So their income is higher than most of the Vienna zip codes yet they have seen a much larger price fall. This kind of debunk's the rich people can hold out longer argument.
Ohh yeah I would assume that few in 22039 have crazy loans also, seeing that most of the neighborhoods are 20+ years old and have fairly low turnover.
Thanks, atlast, very cool.
Sorry, Cara, that neither place is going to work out.
I think the housing inventory is looking pretty "picked over" these days. Except for a few new listings, most on the market right now are still grossly overpriced relative to the house's flaws. I'm hoping once things are sorted out with the credit (ugh) and after the new year begins, we'll see more interesting new choices. But I'm still keeping an eye out, in case the sitter-sellers get more reasonable between now and then.
Ace,
yeah, these were both new listings last week. If they had been worth their list prices, they would have been great deals, but both were what I'd call "ambitiously" priced. Priced 10k above the latest comp in the neighborhood whether or not they were in as prime of a location or truly similar condition. One of them I'm pretty certain is going to become a short unless someone's foolish enough to pay close to list soon. The other looked like a LL, so they might have more equity in it, and thus more leeway.
Hey all,
I'd like to hear any comments on my last post on the prior thread.
I would also like to discuss the topic of current, past and future demand.
When I hear talk of "the credit" stealing future demand, I remember that that is something I was concerned about. I think differently now. While "cash for clunkers" absolutely stole 3 or 4 yrs demand, the housing credit served to erase pent-up demand. People that should have been renter's have been returned to that status.
It's interesting to note, also, the recent WAPO article about smaller/single households in this region. Will this trend have an effect on housing demand vs. supply?
Cara: "an open staircase smack-dab in the middle of the TH"
That sounds... inefficient.
VA_Investor:
"While "cash for clunkers" absolutely stole 3 or 4 yrs demand, the housing credit served to erase pent-up demand."
Maybe, maybe not. Personally almost all of my friends bought during the housing bubble. Know one couple that bought basically because of the tax credit. Were going to keep renting because financially it wasn't right for them to buy, but they saw green and some dirtbag realtor convinced them it was time to buy. Anecdotal evidence, but of the people I know, I'm the only one that I know who could be considered "pent up demand".
Check my response to your question in the other thread.
reecon said...
...in McLean's 22101 zip code, the 2007 income was $275,000...
$275,000! Holy Guacamole. my friend just bought a home in that zip and i seriously doubt he makes half of that!
Kevin,
If most of your friends bought during the "bubble" and you sold - how do you explain that?
From the standpoint of demograghics, I would say that you are perhaps the exception. I don't know your age, but I was telling everyone and their cousin not to buy post 2004. I'm older than you and have "been there and done that", but I was thinking things were wrong in 2002 or 2003.
p.s. did you really say why Vienna "has" to go much lower?
Va_investor,
Vienna and Oakton are not good commutes for me, so I'm going to stay out of that one.
Cash-for-clunkers stealing 3-4 years of demand? Really? I mean I can see how that's possible in that people can easily choose when is the right time to replace their car, but given that dealers were consistently charging list price, and many clunkers were worth $1000 anyway, I'd put it at at most 2 years of demand. And it only increased sales by 30%, and not up to pre-recession levels. But this isn't an auto blog, so I don't think it's a big deal if we disagree on the extent of the "gap" for cars.
(my comments below are obviously dependent on the specific price declines for a given area, what I'm writing is decently true in Burke, but probably doesn't apply to Vienna, and definitely doesn't apply well to Arlington).
In terms of pent-up housing wants, I look at it this way. Some buyers have been waiting since as long ago as 2004/2005 (I know the Anonymous has been waiting since 2003? but I think she/he is an outlier). Where as for sellers/move-up buyers some people have been waiting since they mis-priced their home or were otherwise unlucky in 2006/2007. So there are roughly 2 more years worth of pent up buyers than there are sellers.
For the truly move-up seller/buyers, some are now in a better position because the lower prices on their move-up home more than compensate for the lower price on their current home. But that's really specific to say TH/condo dwellers close-in that want to move to PWC/Loudoun and buy a big newish house.
Other than that, time has favored renters, who've been saving up money in the interim, but disfavored owners who may also have been saving but not enough to make up for the loss of bubble equity. Thus, pent-up demand is being released as people have built up more cash, but pent-up supply will be slow, because paying off a mortgage is slow and most people don't want to realize any loss whatsoever.
So around here, I'd say we don't need $8k or 700k limits for FHA. We have plenty of real buyers ready to buy the right house at the right price.
The consequences however, are similar. Whether you're burning through pent-up demand, or stealing from future demand, the result is the same. It will run out eventually. The timing is different though. Under VA_investor's concept, and mine too, the demand will remain strong for a while regardless of the $8k. I would say pent-up demand can keep the market humming through about 2010, maybe 2011. (that's based off my 14k additional $150k earning renters in 2007 than 1997 in FFX Cnty compared to the number of yearly sales). By then many more sellers will have built up the savings and equity and raises to be ready to sell at market prices. But they'll only have the "normal" number of buyers who are moving to the area or reached that time of their life, to sell to.
Long slow flat period...
(barring a foreclosure tsunami)
btw i went over to his new house where new hardwood floor was just installed throughout the upper level. there're three bed rooms and at least 800 sf by my guesstimate. he said it cost him just over 6K for the non-pre-finished oak wood floors. that's an awesome deal he got, i think.
oh the fun of home ownership... i'm envy as hell...
Va_Investor said...
"If most of your friends bought during the "bubble" and you sold - how do you explain that?"
I bought a few years before they did. Some that bought when I first did sold and bought again, and are now underwater. What is there that needs to be explained?
Va_Investor:
I was telling my friends the same thing in 2004, and they didn't listen. I just don't know anybody that's on the sidelines able to buy other than myself. That's purely anecdotal, but practically all bought in during the bubble. At least you saw this coming in 02/03. I was pleading with people in 06 to NOT do this, but their trusty realtor convinced them they'll be priced out forever if they don't. And after all, they work in that industry and I don't, so what do I know?
Yes, Vienna has to go lower. Read our postings from (I believe) last Friday. Houses listed for 2006 prices. You don't see 70% drops 15 miles away (Manassas) and rationally expect Vienna to not tank too. Probably not as significant, but certainly nowhere near where they are now.
VA_Investor:
You are right. If the circumstances over the last 12 months failed to knock down housing prices in Vienna, Oakton, and Farifax, they are very unlikely to fall unless there is another shock to the financial system.
And you're right that wealthy people are much less likely to borrow to the extreme of their ability and almost always have outside assets. Let your house go into foreclosure and have a bank hound you for the money and destroy your credit or take $10k out of your 401k? Easy decision.
Also, Arlington with the lowest unemployment is less affected by job losses, and I would bet you would find similar unemployment rates in McLean, Vienna, and Oakton, if they could be broken out that way.
Inventory continues to contract.
Robert,
about 1/3 of those graphs are flat (notably Arlington) in the most recent 3-4 bars, 1/3 are down slightly, 1/3 are down similarly to the extent they've been going down in the past 6 months (notably FFX County and PWC).
I would agree that there isn't significant pent-up demand locally. What I would argue is that money and people from outside the region will supply robust demand over the next three to five years.
I've posted about commercial real estate investors looking to buy in WDC, so too would small time residential investors. However, more importantly is people coming to the region for jobs. These newly-minted Washingtonians will create demand for rental as well as residential housing, driving up prices for both.
Cara,
I find the graphs meaningless. Maybe you can shed some light?
It's the raw numbers - that are down, again - that provide the best indicator of home prices going forward.
Robert,
Heh? The graphs are of the numbers.... And they help mightily in being able to distinguish between drops or gains that are in the noise and drops/gains that are parts of continuing trends.
Yes the numbers are more concrete and more precise, so, how much was the contraction in Arlington compared to the total inventory such that you deem it worthy of calling it a continuing contraction?
funny.
friend called for handyman referral after my last post - gas leak in the new house. they haven't moved in yet.
the 'un-joy' of home ownership...
gas-leak is not funny. hope they're okay, and got the insurance properly lined up....
For places like McLean and the higher end parts of 22207, the stock market is a big factor. The last 6 months have been pretty good (except for the last week). But we're still nowhere close to recovering to the point of mid-2007, and the 7 years before that were nowhere close to the 8%-10% annual gains traditionally seen in the stock market. So investments for the wealthy (I distinguish wealth from income - wealth refers to holdings not to annual $ received), who probably make up a significant part of the owners and would-be buyers in those fancy zips, continue to be pretty crummy. People saving for retirement who might have hoped to buy a nicer house while also seeing good compounding for retirement have to make tough choices after riding out a bad market (averaged over the years) for nearly a decade now.
Further, Roubini and some others who were right before are issuing strong cautions (fears?) that this cannot continue. They argue that the fundamentals aren't strong enough (yet?) and that buyers are a bit buoyed now by results fueled largely by the increased money supply, bailout $, etc.
I can't claim to have any ability whatsoever to predict the market but I do think a lot of people are still reeling from savings losses and worried about what the future may hold (for the wealth AND their health, which can wipe out that wealth). It's a different type of worry from that of the $40K/yr. income earner with little in savings who may lose his/her job at any time, but it's a worry that is keeping a LOT of buyers on the sidelines, IMHO.
could $2 buy you a gallon of milk back in 1996?
Date Sold Price Subsidy Net Price
8/10/1996 $247,000 -$2 $246,998
home for Ace
home for MM
:)
Cara, didn't mean gas leak is funny. poor choice of words.
MM, thanks, I'm not sure I like the choices that first owner made! :-)
That stone house is very pretty from the outside.
Cara,
Sorry, there are two graphs. Well, one set of graphs (inventory) and one separate graph (available/uc listings) I thought this was the one you were referring to:
Graph
Robert,
Oh yeah, I have no idea how to interpret that graph either. Indeed.
I'm not sure where this Vienna/Oakton theme came from. Insert pretty much any neighborhood in Fairfax County where SFH go for more than $450k or so and you'll still see people asking 105-120% of '09 assessments. This is not just in Vienna and Oakton but also Burke, Reston, Great Falls, McLean, Annandale, Falls Church, Springfield, and the Alexandria portion of Fairfax County.
Insert 22307 into FranklyMLS. That's in the Alexandria section of Fairfax County. Some may refer to that area as Belle Haven. Look at the SFH listings -- almost everythign is asking well over '09 prices. Only when you get to the cheaper housing (i.e. things that were more likely to have been foreclosed or near foreclosures) do you see the major discounts. And in Vienna, for example, you'll see similar discounts for those condos near the Vienna Metro station.
Here's a home http://franklymls.com/FX7167587 asking 140% of '09 assessment in the zip. There's a lot of insanity all over the county in every school district in every mailing address if you are dealing with SFH.
I think that graph is very useful. Shows what percentage of homes are listed as active and available in MLS. Seems to say that a big chunk of the MLS inventory is already spoken for (Pending Settlement) by looking at this.
*Fairfax also needs corrections
The only parts of Fairfax County I have seen major corrections to SFH are Chantilly, Centreville, and Herndon (and even there you can still find many WTF prices). These three areas were still being built out this decade (and even now there are still some new home communities there). Thus, they have a much higher percentage of 2004-07 homes and thus foreclosures.
The difference between areas with major price declines and those without is the number of foreclosures. Nothing else explains it. SFH in Vienna are not doing any better than SFH in Springfield or the Annandale. So school districts or the growth of income in Tysons is not the answer.
housebuyer,
I think the downward pressure in prices in Fairfax Station is coming somewhat from the market distress in Springfield and Lorton. The 22079 zip code has seen close to a 10% foreclosure rate and 22153 has about a 4% foreclosure rate. The homes you find in the Barrington and Crosspointe subdivisions, which are 15-20 year old subdivisions in the Lorton end of Fx Station, are comparable to homes in the newer Lorton subdivisions(22079). The homes in another FX Station subdivision, Triple Ridge, are indistinguishable from nearby South Run Forest, a Springfield(22153) subdivision. I think that part of Fairfax Station is being influenced by what is going on in other nearby zip codes so it doesn't matter how high the household income is.
Just in case someone objects the previous home was a unique looking 1930s home here is your run of the mill suburban rambler:
http://franklymls.com/FX7087158
It is asking 128% of '09 prices. It's in 22310 (Alexandria section of Fairfax County). Edison HS district.
We happen to have a lot of people looking in a few parts of Fairfax. But rest assured if we had lots of regulars looking at SFH in Springfield, Annandale, or the Alexandria section of Fairfax County (I wish they'd rename it to avoid confusion with the City of Alexandria) they would be saying WTF along with kevin and me about Vienna.
And if Cara was looking at SFH in Burke she too would be saying WTF. Run a search for 22015 (Burke) and look at the SFH and you'll see a lot of 105-120% '09 SFH just like you would in Vienna or Oakton. Again, this is not limited to Vienna or Oakton. It's pretty much county-wide at the SFH level.
lukem,
sure. but doing a frankly search tells you that same thing, just looking at the number of crossed out listings.
The reason it's un-interpretable is that there are two dominant reasons why most of the inventory would be under contract, (1) because most of the inventory is short sales which stay under contract 4-15 months rather than a normal 1-2 months, or (2) that there's such a short supply of homes that most things go under contract in less than a month. Since option 1 indicates dire unhealthiness in the market and serious potential for further price declines and option 2 is a leading indicator for price increases, the graph that shows all the counties on top of one another is pretty difficult to make heads nor tails of.
HayfieldGrad,
I run that Springfield zip and Lorton zip into FranklyMLS and see a ton of homes asking 105-120% or more of the '09 assessment.
Now, particularly in Lorton, you do see some short sales going for less. As you are I'm sure aware, there was a lot of growth in Lorton after they finally got rid of the prison (which obviously discouraged growth in the area). So like Centreville or Herndon you see a lot more foreclosures.
But really I don't see any part of the county where a non-foreclosure or non-short sale SFH is being listed for less than 105-120% of the '09 assessment. Maybe that's because in November I'm mainly seeing stale inventory of people who priced in a silly manner. But I must again reiterate that kevin and my complaints are county-wide.
tbw,
the TH's are also listing at 105%-120% of 2009 assessment. I don't know that this is the criteria anyone else is using for determining if things are overpriced.
In Burke, anyway, a switch away from crappy condition foreclosures towards more (though not anywhere near as many as I would like) well-maintained homes should change the prices by 5-15%. If the REO needs 30k of work, then the owner-occupied renovated place which is now listing at 30k higher, then there hasn't actually been a price increase, has there?
And the non-damage/condition related increase is higher amongst THs than it is amongst SFHs I would imagine... I could be wrong.
TBW: "The difference between areas with major price declines and those without is the number of foreclosures. Nothing else explains it. SFH in Vienna are not doing any better than SFH in Springfield or the Annandale. So school districts or the growth of income in Tysons is not the answer."
That's what I've concluded as well. Foreclosures are just a means of getting to the bottom sooner. "Price stickiness" as they call it. Really in the long term it means nothing. The fundamental values won't really change because of it. But I think by buying in an area with more foreclosures, you're minimizing risk by going for a house with at least some reasonable price discovery. I really look at these overpriced Vienna homes as smoke and mirrors, a big curtain blocking the view of the future which won't be good for people currently buying there. Again, if my job weren't in the area and if I didn't hate traffic so much, I would just ignore Vienna entirely. At least 22031 is slightly more reasonable, or was before the buyers bribe started.
http://www.newsweek.com/id/220080
This article discusses RealtyTrac's theories about foreclosure waves.
Wave #1 - Bad loans / mostly played out
Wave #2 - Foreclosures stemming from unemployment / current wave
Wave #3 - ARM Loans resetting in mid-2010 to 2011 / future wave
Obviously Wave #1 was almost a non-factor in Fairfax, Arlington, and Alexandria outside of pockets where most homes are from 2004 or later. The question is whether waves #2 and/or #3 will affect these areas. I guess we'll see.
PW in the over 400 range the foreclosures/SS are listing at those percentages of 09 assessments. Regular sales will always be a little higher than those.
tbw,
Yikes, over $500k for that? I have to say, I think the $409 2009 assessment is a bit ambitious as it is.
You're right. I could believe that the housing ladder will stand and support prices in desireable places like Vienna/Oakton or Reston, but greater Alexandria? You've got to be shitting me. That stuff needs to come down to $350k tops, and that's only if the reputation of Huntington and Van Dorn improve.
I know the mechanism for that portion of FFX county though. HELOCs. That stuff was just not worth that much when the vast majority of people bought. If they're still living in them, you bet your bottom dollar 1 in 3 to 1 in 5 owners pulled out cash as if they had sold at the peak, without the bother of listing it for sale. That'll be downfall. As prices erode, more HELOCs will be beached.
Heard something interesting this weekend I thought I'd share. I posted here before about the new housing at Ft. Belvoir and how (in the past), there have been high vacancy rates there. Well, I was chatting with some friends and learned right now there is an 18-month wait for housing. I don't know if that varies by service (Army may get priority and these folks are in a different service). But still, the demand is there. My friends are now looking for a rental in Kingstowne/Springfield/Burke.
GiGi,
They'll have plenty to chose from. I know my complex has at least 5-10 vacancies (and attractive armed services contracts). And there's lots on craigslist according to tbw.
Cara asked
In Burke, anyway, a switch away from crappy condition foreclosures towards more (though not anywhere near as many as I would like) well-maintained homes should change the prices by 5-15%. If the REO needs 30k of work, then the owner-occupied renovated place which is now listing at 30k higher, then there hasn't actually been a price increase, has there?
If there's been a bubble then comps are sorta irrelevant to you as a buyer. If we never had a bubble, then sure, if a foreclosure that needed $30k of work went for $270k and you see a move-in ready for $300k then buy. But if in two years that foreclosure goes for $240k (and still needs $30k of work), then your move-in ready home is now worth $270k.
I think what' interesting is the number of homes in the Vienna area that were bought only a few years ago (2005-2007) for $800-850k, and are now listing for the low-700s.
Even more damning is that the recent comps tended to be udpated, so these are not apples-to-apples comparisons, and suggests that even the low-700s is too high.
Case in point:
http://franklymls.com/FX7189399
This just went under contract, but otherwise the last sales price was $835k. This was relisted recently with some pictures missing. And based on the amount of updating that needs to be done, I'd say that the low 700s was a bit optimistic.
I don't know if these links will work, but here is the picture of the bathroom that was pulled:
http://www.ziprealty.com/images_mls/MRIS/F/X7/12/71/80/_P/FX7127180_P03.jpg
http://www.ziprealty.com/images_mls/MRIS/F/X7/12/71/80/_P/FX7127180_P04.jpg
tbw
If I could get move-in ready of the size and quality that I want for $300k? We would already have bought and I wouldn't care if in two years foreclosures near me were going for $240k.
But they're $350-$375k. And that may just be enough to convince us to give up and go rent a TH.
kevin said
That's what I've concluded as well. Foreclosures are just a means of getting to the bottom sooner. "Price stickiness" as they call it. Really in the long term it means nothing. The fundamental values won't really change because of it. But I think by buying in an area with more foreclosures, you're minimizing risk by going for a house with at least some reasonable price discovery.
Agree 100%. Anyone with the job or social life that supports living in the exurbs is blessed by having had so much of the price corrections come so much more quickly.
NoVAWatcher,
Oh the kitchen and bath are not great but I would call that move-in ready. Honestly, I'd rather they be like that then them try to guess what I'd prefer and then charge me 110% of the cost of updating them.
Interesting history though on the home:
10/26/2005 $835,000 BANK OF AMERICA NA TR MANEMANN ROBBY D
05/30/2002 $0 BANK OF AMERICA NA TR
07/10/1969 $57,250 BRITT GEORGE F
It looks like the man who bought the home in 1969 foreclosed? Is that the only possibility? He must have gone HELOC mad as otherwise he should have easily finished paying off that mortgage by 1999 (30 years later) with what would then be laughably low monthly PITI.
And how did it take Bank of America more than three years to sell this home in one of the biggest seller's markets ever? Were they superslow in going through inventory back then too? ;)
Maybe Bank of America figured why sell the home when it was appreciating 20% each year?
Found on politicalwire.com:
Lobbyists Quitting
A record number of lobbyists in Washington, D.C. have left the business this year, according to a new study released today.
In the months after President Obama issued an executive order creating new restrictions on former lobbyists, about 1,400 of them -- or 8% of the industry -- left during the second quarter of 2009. Typically, only a few hundred lobbyists leave the business every quarter.
This small number of jobs doesn't mean much for real estate, but it just struck me as interesting given the jobs arguments on here...
TWB: "And how did it take Bank of America more than three years to sell this home in one of the biggest seller's markets ever? "
Maybe they were trying to track down all the money he extracted from the house. It's essentially a bank robbery, but they can't do anything about it.
wouldn't the most logical explanation be a death of the owner? None of the heirs able to keep up with the taxes, or the transference of the title being heavily in question, and fighting over the estate by all remaining creditors? That would explain the long tenancy, the bank seizure at $0, and the long time before it was possible to obtain clear title and sell it.
Cara, good point. Duh, didn't even think about that.
TBW: my point was more that houses in this price range were updated (I'll include 2000+ as being updated). Yes, it is move-in ready, but will require some serious bucks if you don't want to live in a museum piece of bad taste.
Agree 100%. Anyone with the job or social life that supports living in the exurbs is blessed by having had so much of the price corrections come so much more quickly.
So, location, location, location, is upside down? Doubt it.
atlast,
the thing about the taxable incomes that atlast posted that appeals to me is that it jives really well with my observations. Anything under $300k is flying off the shelves regardless of condition or crappiness of location relative to thorough-fares. $300k is pushing the limits even at today's interest rates if you have a neglible downpayment and $80k income. Sure there are more filers in the 100k-200k bucket than in the 75k-100k and 50k-75k buckets (not quite more than them combined), but that's still not that much demand for the over $300k stuff, relatively speaking.
I know I vacillate on this constantly, but while I see no empirical evidence for higher interest rates leading to lower prices, if the pivot point for sells in a heartbeat and the median income just barely qualifies for it match as well as this... it's hard to escape the logic that prices will trend lower if interest rates are ever allowed to rise again.
Or maybe the discrepancy in HH versus filing income is how many "single" people are actually living together as a couple. In which case, I'm back to where I started in terms of my competition.
I try to think like TBW when I read an article like this. Is the source suspect or phony? Is this just the historical average and a net-zero to growth? Do I have numbers to dispute one eensy-weensy bit of data and declare the entire article trash?
Link
A couple of precautions using tax assessments to judge absolute value:
Fairfax County's assessment system has some serious flaws that might not always reflect the value of a house. While a permit is needed for additions and major remodeling, the county does not
send out a tax assessor until a final inspection has been ordered and passed. Having spent some time playing around in the County's online permit database, FIDO, I've seen more than a few major expansions never order up a final inspection. These have yet to be properly reassessed. You may remember this one from Annandale that you all wondered about. FX7092246. That puppy sold for $210K over its '09 assessment on the day it hit the MLS. One reason is that the first of the two additions failed its final inspection and was never reassessed. Savvy buyers know to ask for permits. Many do not know to check for finals. This kind of stuff happens more than you might think. If the County needs money, it might want to start sniffing those out.
Inaccuracy aside, assessments as a yardstick are brushed aside by most realtors. As you know, buyers and sellers, guided by their realtors, listen to comps...which, by the by, can be easily manipulated.
I'm not sure how many buyers really care about assessments. After holding out for a few years, I bought last April for $125K over the '09 assessment. Didn't care. Why? The house had undergone a massive interior remodel not reflected in the assessment. The house was in the right location, we liked the work that had been done, and we don't plan to leave any time soon. We'd sold our FC home in 2005 and were waiting out the bubble. Prices in our target neighborhood came down just enough for us to see a decent link between price and value. Above all a 4.75% 30YR Fixed was too good to pass up. My new neighborhood has turned over quite a bit in the last two years. I can't name a neighbor for whom the assessment was a major factor in buying.
I'm not saying don't use assessments as an evaluation tool. I would just encourage people to understand that assessments can be flawed and should be approached with a little caution.
"sure. but doing a frankly search tells you that same thing, just looking at the number of crossed out listings."
Yes, but that will only give you the view as of now, not historical. I agree that the chart is less than pretty, but I still feel it is useful. When I saw it "short sales" came immediately to mind.
Robert
How about the closing note:
"Thomas Lawler, an independent economist in Leesburg, Virginia, who worked for Fannie Mae for 22 years, said he already sees signs of builders bidding up land prices and building speculative homes that could lead to an inventory bulge."
And just the general observation that doing better than everywhere else is not the same thing as doing well. If builders really do see DC as the only place left where they can turn a profit, then we could start to see enough inventory to help bring prices down.
atlast.
Thanks, we've discussed the use of tax assessments to death on here, so we usually don't bring them all back up again. Short-hand like that can lead to confusion however, it's true. I think everyone's just at a loose truce of allowing everyone else to assign their own degree of skepticism about applying tax assessments to individual properties.
lukem,
Indeed. But shorts are conflated with MOI. It might be the case that Arlington and Alexandria which also have a higher percentage of under contract listings than before, that this is likewise due to shorts. But no one on here wants to argue that right now and enrage the lurking immuno-zone pumpers. If you think it's true, and you think you can disentangle what portion of the change is due to tighter real inventory and what portion is due to shorts, please do.
My point is that it's difficult to cleanly interpret that graph without additional outside information, and I'm not even sure where to start. If you have a good idea, go for it.
There are also lots of good graphs at:
http://www.recharts.com/
Here is an example of a townhouse priced at 500k, certainly, a "WTF" level for Herndon:
http://www.oodle.com/seller/14954986
Here is another one that can't be any different from the one above, same neighborhood, same builder, much more nicely priced at 375k:
http://www.redfin.com/VA/Oak-Hill/2446-Curie-Ct-20171/unit-28/home/9855275
I also want to comment on last week's discussion of using the Sex Offender registry. Now I make sure to use it. I wonder how many house buyers use it as they look for housing. I was interested in a really nice house in Leesburg (in case we don't want to do a lateral move to another TH closer in, and decide instead to buy a SFH), a short sale, recently reduced 50k, making it priced 100k lower than regularly priced homes in that neighborhood. Alas, two doors down, there lives someone listed in the registry charged with possession of child pornography. I googled the offender's name and found out that he's also a choo choo train enthusiast. Those two "interests" paint a pretty creepy picture, and I could just imagine my innocent children being invited over to see the SO's choo choo trains the one second I had my back turned. So, we won't be looking inside that property.
While the lack of pictures of the property online was the likely culprit of the price drop, I wonder if they'll have a harder time getting it under contract with the SO living two doors down. My guess is that most house buyers with children aren't thinking and planning with that much detail, but hopefully, I'm wrong.
Cara,
I think the IRS data is interesting but I'm having trouble reconciling information drawn from tax returns with income by zip code data from the last full census. Burke seems way off but the zips in Vienna seem on target. I've also checked a few of the zips by taking the 2000 census data, inflating it by 3% over a ten year period and comparing it to the IRS data. Again, 22181 and 22182 (Vienna) seems to match up but Burke?...not so much. I'm puzzled by the discrepancy. Sadly, I don't know enough about data collection to know which might be more accurate. One more tool for the puzzle.
I've been watching housing very closely since 2003 when I was walking around my neighborhood unable to understand how prices could escalate so much so quickly. I became convinced we were in a bubble and went searching for the data to support my theory. I found many answers in the online community that mushroomed after 2005.
For some time, I've been confounded by how sticky prices are. It's taken me a long time to realize that the data in which I've immersed myself gives me only a partial answer. Leaving the investor class out of it, buying and selling homes is so utterly personal and emotional. People stretch to buy for all kinds of reasons that defy what might seem like sensible dollars and cents decisions. The house in Annandale that sold for $799,000 should never have sold for that much on a pure dollars and cents basis but the buyers wanted Woodson HS, they had 30 days to find a place, and they felt handy enough to correct many of the home's flaws on their own. So, they stretched. They bought the home that seemed the best fit for their family's lifestyle.
As a financial planner, I hear a lot of stories and it still amazes me the degree to which price is only one of a myriad of factors that motivate an individual home sale. One's home is about so much more than just a number.
So prices tend to stay sticky. Like Va Investor, I've seen this before in this area. I do believe that, from a macro view, housing prices in Arl, Alex, FxCo will not see huge price drops. Zip code by Zip code? Neigborhood by Neighborhood? House by House? Your guess is as good as mine.
I do know, that after 3 years of waiting, we're delighted to have jumped back in and settled down again. I've owned 4 personal residences in this area over a twenty year period and I can tell you the hardest one was the first one.
ReDeal-
What is even more absurd is the one you said is a reasonable price is still trying to sell for 30K more than the owner bought it in late 2005. The house is only a couple of miles from Dulles so I imagine noise might be a big issue.
atlast,
Thanks for your story.
My take-away for me is, once you've taken the leap of faith to give up all that money that you've so diligently saved and "invest" it in real estate, it gets easier to keep doing so.
Coming from my perspective, that sounds an awful lot like, once you drink the kool-aid it all looks rosier. If we had been in a position to buy last spring (which we weren't because my husband wasn't ready to commit to a house while still in his probationary period at work) and could have gotten something we'd be happy in for around $300k, I'm sure I could agree with you. But not with the crap I'm seeing now, and not at today's prices.
But then again, from another aspect of your comment, we are at a significant advantage and are darn-well going to make good use of it. We're on month-to-month rent, and are getting to know the area like the back of our hand. So there's no reason we have to buy any given house whether it's the best thing available at the time in our price range or not.
So thanks for your words of support. But the only emotional basis under which I'll be buying is, I love this house, and we can afford it. If that doesn't happen I'll be sitting on the sidelines, accummulating cash a heck of a lot faster than I could in a house.
Cara,
That could be an explanation but then the heirs were penny-wise and pound-foolish. Heck, take a credit card loan if that's your only option to keep a mortgage afloat or property tax payment while you sell the home. Not going to take you long in 2002.
Didn't they essentially lose $600k by defaulting?
In any event, I have to think it was some sort of second mortgage. Original owner bought the home in 1969 so 30 year mortgage should be done by 1999. Foreclosure came in 2002.
tbw,
How do you know there were heirs? Not everyone has heirs you know.
Housebuyer -
I'm simply thinking that the price range is about right, in terms of similar townhouses in that area.
We've driven around that neighborhood, and it didn't seem like a great place to live. Too crowded, too close to busy streets, and at the edge of Herndon that touches the airport.
But, for those who'd find this location convenient, regardless of noise, someone got a much better deal on this same sized foreclosure, at $315, one year ago: http://franklymls.com/FX6880790
(Pictures don't mean a lot here, because there's not any variation in the exteriors.)
I guess that a lot of the pricing is delusional out there, only by varying degrees.
atlast,
As Cara noted we've discussed all the foibles of tax assessments before. (I'm feeling sorta like CRT now saying "we've discussed that to death before").
Anyways, yes, if there's been a major renovation or addition or whatever it is not always reflected in the assessment. Some assessments do reflect it, some do not. I'm shocked that counties are not getting better at keeping up to date on this since it's probably millions of lost property tax revenue. And is unfair to tax those keeping the county up to date on their structure size at a higher tax than those who fail to file all the permits.
Anyways, I can assure you that all the homes asking 105-120% of '09 assessment are not ones with additions. Many of the tear down and rebuilds or major renovations/additions are asking 150-300% of assessments. So that's another category.
Cara,
Hmmm, okay. Maybe his heir was so far removed that the state's "laughing relative" law kicked in. But if he had paid off the mortgage in 1999, then the Commonwealth of Virginia would have inherited the home under the laughing heir statute. That did not happen.
I also am skeptical that someone who presumably did well enough to buy such a fancy home in 1969 would die intestate. But crazier things have happened.
Actually, I think Virginia might allow "laughing heirs" to inherit and not cut it off.
So maybe he died without a will and it took forever to find a relative and in the mean time the estate went into foreclosure or something. Or the relative was so distant they refused to deal with the home.
Everyone has heirs if the state law does not cut off "laughing heirs." You can just go back and back and back in the family tree until you find some fourth cousin living or something insane like that. Most states have cut it off but now that I think about it Virginia might not have. Virginia often is stubborn about modernizing its laws.
tbw,
If he didn't have any nearby relatives, it's also likely that with that much equity he would have taken out a reverse mortgage to afford the best long term care.
Cara,
Reverse mortgage. That definitely could be it.
Do reverse mortgages show up in a home's tax records as a bank buying your home for $0?
tbw,
Your guess is as good as mine. But it would make sense in that upon the owner's death the bank owns a share of the house, so depending on how the contract was written it could look like a $0 transfer. And then it would have to find the heirs to dispurse the proceeds of the sale properly before it could go about selling it and liquidating its share.
Gigi,
Over the summer Ft. Belvoir moved a lot of families from the old Woodlawn Village housing into newer homes on another part of post. Fairfax Co. decided to re-district Woodlawn Village out of Ft. Belvoir Elementary to Woodlawn Elementary and bunch of the families were upset. There may be openings in that part of post housing, but I wouldn't live there. My brother-in-law, whose Dad is a retired E-8, lived in that housing in the early 90s and it was okay housing then. I think your friends would be smarter to run with their BAH to off-post housing than to live in the crappy old housing.
I recall a few of you noted Dean Baker bought a home in upper 16th Street. I happened to stumble onto his blog (it was linked from something else I was reading) and he still seems to be pretty heavily in the housing bear category IMHO
Dean Baker's Blog
He continuously criticizes the media for having missed the housing bubble. He's critical of the $8k housing credit. He's noting large rental vacancies. Arguing that rents might go down. etc etc etc. I suspect if you ask him he might have just been optimistic about that area of DC and not optimistic about the region as a whole. Or his family just was tired of renting.
And note he keeps criticizing the Post especially and I don't think he'd criticize the Washington Post about the bubble if he thought the nation had a bubble but DC did not.
A quote from Baker:
It is almost bizarre that Leonhardt would seize on this $250 check as an item to attack when there are so many larger, more pointless boondoggles. (I got an $8,000 check because I bought a home -- that didn't help anyone but my wife and me and our two dogs.)
So he is DINK. My guess is he really wanted to live in the city but have a decent sized home and this is the way to make it more affordable. And/or he's really bullish on more and more DC neighborhoods becoming in higher demand.
http://franklymls.com/DC7001251
I'm seeing lots of new listings in the high-end/move-up ($800K+) market. What about you guys?
This is what I got from FranklyMLS:
Active $800K-$1.5M listings DOM 30/60/90 (active + UC) [sold in Aug, Sep, Oct]
Arlington: 50/77/88 (73/109/122) [21/21/27]
22101, 22101 (McLean):29/54/70 (47/81/101) [6/19/28]
22314 (mostly Old Town): 12/19/28 (17/25/38) [6/9/3]
Interesting numbers? One thing I know for sure is that $8K tax credit should have limited effect in this price range.
cara, no open houses attended yesterday? i attempted to go to a fsbo open house out in south riding (never been out there) for a TH for 299k. werent able to view inside, i guess they either sold it or nobody showed prior to 3:45. wow, i was depressed just driving around out there, cant imagine living there every.day.
as for assessments, i thought the consensus was they were pointless, so i don't get why the '09 assessment is often referred to now. a remodeled kitchen shouldnt have any effect on an assessment anyway. if you're not adding sqfootage and thus using more resources and runoff, etc, it doesnt make sense to tax it.
Sorry that I don't know how to link it, but Bloomberg.com has an article touting the DC housing market.
"Washington Beats U.S. Housing Slump on Obama Budget"
GT,
State law requires property be taxed at fair market value. Presumably the fair market value is what the market values the home. It's not a tax based on square footage, lot size, or anything like that. There's no attempt to tie it to amount of county services needed. Otherwise, you'd have a schools tax based on the number of kids you have.
Tax fairness would mean that everyone should be taxed at the FMV. If the county was pretty much 5% below everyone's real value then that's lost revenue for the county but fair for homeowners.
If some people are being taxed 10% below FMV and some 1% below FMV because of how much the county knows about their renovations/improvements, that's lost revenue and unfair to the homeowner paying 1% below FMV.
Obviously as the year goes on the assessment becomes more outdated. They mailed the last batch Feb 2009. So we are getting closer to the 2010 assessments. And most/all of those will be lower than 2009 (barring major improvements to the home.)
I've never argued home prices are 1:1 with assessments. In a strong housing market you'll see sales prices go on average *above* assessments. In a declining market like the one we are in you'll see sales prices go on average *below* assessments. When 2010 assessments come out they'll be lower than 2009 assessments because the value of home is based on comps. Not what people listing their home for 180+ days without buyers (aka the 105-120% of '09 assessment without any major additions/improvements justifying the price) price the homes at.
Considering Arlington County is projecting a 5% decline in residential real estate assessments and Arlington has been the most resistant to declines, I don't see why anyone would think 100% of the 09 assessment is the current FMV. What is selling is usually below the '09 assessment if it's not been majorly rehabbed.
GT,
There was one promising listing, but given it's awkward and unappealing location (nothing bad, just nothing good) we decided to let it age rather than go. There was also one SFH at $399k, but since we're not in the market for a $399k listing I saw no point. Wasn't particularly fond of it's location either, too close to major powerlines and a particular TH/condo neighborhood that's, mmm questionable.
But in honesty, the real reason we didn't go was because I was getting my "not white" painting fix. Helped our best friends paint all of a 1000 sq foot (wall area) basement and stairway, molding ceiling and all. Man am I sore. But I love not-white. It's my favorite color.
It's a trendy dark tan color, but it does look stunning.
tbw,
Yeah, there are some sfhs listed in Springfield above there 2009 assessments, but some are below. I do agree with what some of the others are saying that assessments are really not that reliable.
These two house in the Terra Grande subdivision in Springfield are listed way above their 2009 assessments even though they are listed well below peak pricing. FX7172865 is listed at 565k and assessed for 428k.
FX7085923 is listed at 479k and assessed for 433k. The first house was purchased in 2004 for 479k and the second in 1999 for 233k. It looks like in 2006, comparable homes sold for 639-659k.
However, these two houses are way out of whack based on one active comp and one recently sold in their neighborhood. This house FX7133792 is listed for 399k, is under contract, and assessed for 429k. FX6929771 is listed at 450k, assessed for 429k and sold in September for 420k. It previously sold for 639k in
2005.
Maybe, the 1999 owners are holding out to someone meets their price. The owners who purchased in 2004 and made improvements would likely have to take a massive loss even if they could sell for what they purchased it for.
That listing for 399K closed last month at 445K per FX County Tax records. Maybe that 429K assessment will hold.
Just an update on one of the houses that I liked, that I thought was over priced. The assessment was 398K, but all the comps were in the upper 400s. I was willing to go as high at 485K which at the time was 40K under asking. It staid on the market another 60 days and the guy ended up getting 500K. So I guess he ended up doing a good job waiting. I still think the other person overpaid, but we shall see.
http://franklymls.com/FX7099675
Cara,
I wish my friends would come over and paint, but I think we are all about 20yrs past that stage of life!
I used to do alot of painting. I spent my summers painting my mother's apartments from about age ten. I did all my own painting (my shoes were all speckled with paint - that horrible off white) until I was 30 or so.
Our house is currently being completely repainted. Today was day one of a 3 week job. I think I'll leave town for awhile. It won't be off-white anymore! I had a decorator select all the colors.
Va_Investor,
Thanks, I missed that one. That 565k house is definitely off the mark, but maybe the 479k house is within 10% of what it would sell for.
tbw,
Based on the current assessment, my purchase price, and the numerous comps in the neighborhood, I have little doubt that my '10 assessment will be higher than '09. (Falls Church, FFx Co.)
Fred,
I am hoping all of mine drop! I have some places in a Va County that only re-assesses every 5yrs. As luck would have it, the last round was in 2005. I am expecting some big drops there.
VA_Investor -
RE: Bloomberg: I posted that link earlier.
The guy/gal did his research to put that piece together. It really drives a stake through the hearts of the housing bears.
Robert,
Sorry I missed your link. I certainly thought of you as I read the article!
VA_Investor -
I hope you mean "thought of me" as in Robert has been right in his analysis, particularly wrt new home construction being a huge economic driver going forward. I predicted this many months ago on this board several times. Of course, it doesn't take a genius to see inventory collapsing and infer that the only way to meet demand is to build more homes.
Robert,
Yes it confirms what you have been saying all along. I, too, think that inventory is the key indicator. I saw the increases starting in the summer of 2005 and knew the party was ending. This years inventory declines have been remarkable and a clear signal, imo, that the tide has turned in terms of declines (within 5 or so percent).
Fred,
Here is the results of the 2009 assessments by mailing address in Fairfax County.
I expect all areas to still say -x% but have no idea what amount it will be. Are you predicting unincorporated Falls Church to have a positive percentage change in 2010? Or just your particular house?
I guess in four months or so when the new assessments are online you can provide us on your honor with whether your home is assessed for more, less, or the same for 2010 as compared to 2009.
My only prediction is that unincorporated Falls Church (just like everything else on there) will have further drops although I make no predictions what those drops will be. It might be much more modest drops than 2008 in light of all the gov't programs. I can only make a prediction on your home if you told me what it is but I don't think you should share that on the internet.
Robert/Va_Investor,
What are you two predicting? That in this map we will see smaller percentage drops? Or flat or increasing assessments?
If you are just arguing, for example, that Great Falls will drop 3% b/w 2009 and 2010 versus drop 7.3% b/w 2008 and 2009 then that seems possible in light of the effect of the $8k credit and low interest rates. If you are arguing we'll see Great Falls go up 2% then I respectfully disagree.
TBW, thanks for the map. Why do you predict that Falls Church will fall further?
Residential construction will only be one pillar of growth for the region. Infrastructure spending is another. CRE, outside of office buildings in the suburbs, is a third. Retail and Tourism will catch up later. But, these all pale in comparison to the money gushing out of Washington over the next decade. Add in low interest rates and you have the perfect storm.
Ace,
I'm not predicting Falls Church specifically will fall further. I'm predicting all of Fairfax County will fall further. Fred brought up his place in Falls Church so I mentioned Falls Church.
I have not seen any evidence that the middle and upper range in Fairfax County has stabilized, let alone gone up in price. Maybe they'll find some condo buildings or small THs stabilized or went up in value b/c of the $8k. Maybe. But I have never seen any evidence that the middle and upper range is doing well. So I suspect in the aggregate to see further declines.
I don't expect Lorton to go down another 20%. I'm just predicting we'll still see -x% for each. I might be wrong. The nice thing about this is we will have something concrete to look at.
Also, I know some of you hate assessments but when actual prices are going up they tend to go up and vice versa. So even if it's not 1:1 with prices it still says something if they are still going down.
Thanks, TBW. Also, NoVAWatcher may want to remind people about his analysis of the data demonstrating a lagged relationship between assessments and sales prices. There is very definitely a relationship; no one claims it's perfect.
[btw if anyone quotes this months from now I'm talking about the Falls Church in Fairfax County; not City of Falls Church. I don't follow that market closely.]
Robert,
You didn't answer my question (but maybe that's forthcoming). I looked up your address again (don't worry I'm not posting it; I was the one who stressed you should never have shared so much in the first place.) Anyways, in Feb-Mar 2010, whenever the new values are online, what do you predict I will see when I look at your county assessment? A higher number, a lower number, or roughly the same number as 2009?
btw my heart is doing okay despite the alleged stake you saw in that Bloomberg article. I think I might be able to beat your 5k time. Since I think the housing market still (unfortunately) has a long time to go before bottoming maybe I'll try to focus more on beating your 5k time. :) I keep meaning to enter a 5k but have not yet.
I don't hate assessments, but there are lagging indicators and laaaaaaaagging indicators, assessments is one of the latter.
TBW,
What do I have to do to get you to stop with your obsession of my personal information? Seems like every time I knock you back on your heels, you start blabbering about it. Nobody cares.
Robert, assessments have a built-in lag, since counties such as Arlington specifically indicate the time period from which they draw sales. For example, Arl.'s Jan. 2009 assessments were based on sales completed July 1, 2007-June 30, 2008, with some adjustments for some fall 2008 sales. It's not an accident. Maybe I'm missing your point.
Our landlord called after receiving our notice that we would go month to month starting in Jan 2010 at an increase from $2,400 per month to $2,700 per month. He offered to sell us the townhouse for $490,000. Townhouses in our community have been going for around the $535,000 range. We do not like this community and saw townhouses we like better in the Fairfax/Vienna area but they were also in the $500,000 to $550,000 range. Does it make sense to take the easy way out and just buy here and hope that more of the neighbors will move out as their kids get older? We like the townhouse and the location is very good for our commute, but we have nothing in common with most of our neighbors and feel like we are living in a hotel rather than a home. Any thoughts?
My comment was meant to convey my guess that prices will drop further, but only marginally.
The low end of the market has bounced off the bottom quite strongly. Many, if not most, of the low-end reo's have been washed out of the equation I hope that my shorts close as they would represent instant profit. I'm first back-up on 3 others.
You've all heard (ad nauseum) my theories on the upper end. I expect only slight drops, with the odd distress sale here and there. The middle market is more vunerable due to possible lack of assets to carry them through a job loss.
RE: assessments in Arlington vs. Fairfax County.
In Arlington (22207), you are more likely to see homes listed at 2009 assessments, because their assessments have not gone down over the years, but up.
In FC, for example Vienna 22180, prices of homes and assessments already went down a lot. Vienna ramblers used to sell for $550,000 in the height of the market (2005). Now, as someone pointed out, can be found for $425,000 on average. That is a 25% reduction already for those who think Vienna has not gone down.
It makes sense Arlington prices would be closer to their 09 assessments, again because those homes assessments have not decreased. I am talking about 22207.
As for Vienna, or other parts of FC, I do not know, but I do not see why the houses should be priced lower than the overall significantly decreased assessments. That is not the case for Arlington as explained above.
waiting too,
What did your LL pay? I'd want to know that.
We were in a similar situation re: neighbor demographics. We were 30 and everyone else was 45-60. Within a couple of years some younger people moved next door and across the street. I started having "happy hour" in our driveway with the other wives and we had parties where we made some good friends.
This area is very transient and it can be hard to get to know people. I certainly felt isolated when we had a baby. And no one even welcomed us to the neighborhood.
In this neighborhood, everyone is friendly but I really haven't made the effort. Our closest friends were met when our son started school.
One good thing is that you are quite familiar with your TH and your commute. Moving is a huge pain. If you are fairly satisfied and are getting a decent deal, buying may be a good option. Chances are you will move once you have school age kids.
waiting too, not liking a house is as big a deal breaker as not loving a spouse. No matter what the house's (spouse's) other good qualities, such as possible bargain price, may be, I think you'll be really unhappy if you take the easy way out and stay there. And who knows, the price may drop and you may later be underwater anyway. How would you feel then? It's not like changing your hair color, which you can always change back - or even grow it out if you have to. Costs wayyyy too much to buy a house you may come to hate.
Robert said...
VA_Investor:
You are right. If the circumstances over the last 12 months failed to knock down housing prices in Vienna, Oakton, and Farifax, they are very unlikely to fall unless there is another shock to the financial system.
Robert,
I hope you got your seat belt fastened.
Robert, VA Investor -
In the the retrospect, you will agree that we are currently at the lower peak of RE prices in this region. We have quite a way to go down and next few months will make the direction very clear to everyone.
I am just feeling bad for the folks who recently bought or are buying at this inflated prices. Lot of dreams being lost with down payments squandered, saved over several years.
Thought this was worth highlighting as it paints a more balanced view of the local economy. Anecdote yes but I think shows there's still pain.
Douglas Holtz-Eakin
If history had taken a different course, Doug Holtz-Eakin would be inside the McCain White House driving the Republican president's domestic agenda, including health-care reform. But now, one year after Sen. John McCain (R-Ariz.) lost the presidential election, the man who was by McCain's side as the campaign's top health-care guru remains unemployed -- and his COBRA health coverage is running out.
Holtz-Eakin, who is about to start shopping for insurance on the individual market, is 51.
Across the street was the U.S. Capitol and the stately committee rooms where Holtz-Eakin frequently testified as director of the Congressional Budget Office (2003-05). Sixteen blocks up Pennsylvania Avenue was the West Wing, where he briefed President George W. Bush and his aides as chief economist for the Council of Economic Advisers (2001-02).
But on this day, Holtz-Eakin was in a windowless office that he is temporarily occupying so he has someplace other than Starbucks to work on his laptop.
He stared out the window of his 23rd-floor apartment in Arlington and realized, suddenly, that he had all the free time in the world.
Sounds like a pretty stellar resume to me. And still young enough for another 14+ years of work so I don't think it's age discrimination. If the local economy were as strong as Robert claims I think this man would have a job by now.
I don't think this was noted before. Interesting proviso:
There’s also something in for move-up buyers. Previously you couldn’t claim the credit if you owned a home in the past three years. Now, if your last home was your primary residence for at lease five years, you can claim $6,500 in credit if you buy a new home. The new house can’t cost more than $800,000 though.
Article
TBW, there is something that doesn't add up in that article about Eakin. One would think that if he truly had expertise on health care (as opposed to opinions) he would be quite valuable to someone - a lobbying firm if no one else.
It makes you wonder, why--if no one wants to pay him for doing work in his area of supposed knowledge--TV show producers keep putting him on the air?
"Since then, he's kept busy offering advice, paid and pro-bono, to politicians, and writing articles, giving speeches and making appearances on cable television about health care and economic policy."
That said, employers aren't particularly rational about age, and it's entirely possible that he is facing at least some age discrimination. However, he's been active in a party that usually seems to have plenty of "consulting" jobs available for people with his demographics. So "it just don't add up..." other than for what you said.
waiting_too,
Don't pay nearly half a million dollars for a house you don't love. You're shucking our half a million dollars, that level of money merits the amount of legwork and time it takes to find something you'll really be happy with.
An extra 2-5% in order to get something you're really happy with? No contest, spend the money. (as I impersonate a realtor).
Besideswhich, I doubt your landlord will rescind his offer of selling you the place if you change your mind.
Robert,
Stake through the heart? Taking your hyperbolic cues from me now are you?
Seriously, I meant my commentary. If DC is percieved as the only place builders can make money, then we have a recipe for a new bubble. And one that once the inventory hits the market will be self-deflating. More building here is great news for everyone who's been waiting to buy. It means more inventory and more selection and more potentially high quality choices. A construction bubble is what crashed in Atlanta, Phoenix, Las Vegas, and the Inland Empire. Two of those at least have had growing economies that seemed to merit the building... and look what happened.
I don't see this giant red flag of a bear rally as inconsistent at all with an overall downward trend of prices for existing homes. It will pull demand away from the 50s,60s, 70s and 80s junk construction into the 2010's junk construction.
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