Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
And the next big scary thing to the world economy may now be unfolding: Calculated Risk compiles articles on Dubai defaulting on its debt?and who has the highest exposure:more CR
The Abu Dhabi Investment Authority has $627B of assets as of June 2009.Entire debt of Dubai: $80BLink
Cara, regarding my decision to wait (and your comment on 11/25), I wouldn't compare my situation to yours. I'm nearly clueless as to the market conditions where you're buying, but am pretty sure that where I'm looking the prices are still way overinflated by comparison. I am narrowing my area that I'm willing to move to though, excluding now 22030 and most of Vienna which I see as too far out for a real price discovery. Am looking more particularly around 22031 and Merrifield due to career developments that are sure to keep me in this area.
Cara,Just heard on NPR that stocks are down around the world in reaction to the Dubai problem.
kevin,Likewise, I'm not familiar with those zips. But, yes, where I am buying had a goodly chunk of foreclosures in 2008/2009 such that even now prices are down 30% or more from peak prices.But I think I was accurate in the concept that you think that those places which have fallen the least have the furthest yet to go, right?
REdealSeeker,Yeah, but is less than 2% off really that menacing? Sharp, sure, but we've seen so many +/- 2% days in the past year, I'm not sure this is a big deal (yet).Robert,there are a lot more subtleties that have emerged since June.
Alright, the US markets are recovering. Sorry for the nothingburger.
Cara: "you think that those places which have fallen the least have the furthest yet to go, right?"Correct. Adjusting of course for income growth since the bubble's inception, I have no faith that these more-slowly depreciating markets have anywhere to go but down over the next few years. The area I'm focused on now is close enough to Vienna for my needs, but has a "healthy" number of foreclosures to see an actual price discovery in the future. Or, so I hope.
via CR: WaPo anecdotal reportingShe only knew that there seemed to be possibilities, even to those with little means such as herself, which is how a woman who had never paid more than $700 a month in rent and who had relied in recent years on Section 8 housing vouchers suddenly owned a house. A four-bedroom house. With 3 1/2 bathrooms. And walk-in closets, black granite countertops and a fireplace. ...
http://franklymls.com/MC6993270Here's the house that they paid $698,000 for in Dec 2006, resold out of foreclosure for $400,800 in April 2009. That's less than the previous owners had paid for it in February? 2005, given the story said they made 200k for 22 months of ownership. If there is no one left to pass the bag to, make someone up, apparently seems to be the lesson here...
From what was described in the article it appeared that Zhang et al. were Fraud Incorporated. I wonder whether anyone prosecuted them.
Cara and Kevin, you probably know much more about this than I do, but one more variable in the complexity is that "higher end" properties rose less in percentage terms during the bubble than did middle, and both rose less than did "lower end" properties. This was documented via a graph, by Redfin in a recent email. But they provided no definition for these terms.
Ace, she signed knowing she couldn't pay because she wanted to keep all the cash given to her to buy the house. Fraud, yes but they were all in on it.
This sounds like Zhang engaged in Mortgage Fraud.The buyer was a fool, perhaps even an accomplice,but Zhang had the big incentive to cheat.I suspect if you look, you will find the zhangsin other such schemes.
Arkey, if you noticed, nothing in my post suggested anything about the homeowner's responsibility. But no comments to that point had been made about how the sellers were likely engaging in fraudulent behavior. If guilty they need to be held accountable.
Ace,that's true in the C-S index here as well where they define it by thirds of the market transactions.Fraud by all parties all around. On CR the commenters are basically saying that for the most part the FBI doesn't have time to follow-up on the one-off cases of fraud, but that the WaPo article might very well launch an investigation.
In other extraneous non-news. Voice of San DiegoIn San Diego (which was amongst the earliest to boom and bust) the summer rally is now fading first in the highest tier. Low-transaction volumes are finally taking their toll. Maybe there's hope for you yet, Ace.Anyone have access to the seasonally adjusted tiered price index for DC?
This is even worse than the WaPo story makes it sound. The home had been reduced in price to 599k and still did not sell,while listed with another agent(not one of the owners).Then along came Ms. White. Listing was withdrawn,reappeared a day or so later at 699k(this gave the crooked appraiser something to work with).Then was put temp off a day later and withdrawn several weeks after that. House was worth ,it seems,maybe 550-570k.So, by "giving" Ms. White 40k(including the before settlement deposits so that the file could show 2 months"reserves" in a bank account-the sellers STILL netted at least 90k more AND there were no other agents to pay. I cannot absolve the buyer of responsibility here-but the Realtors/loan officers actions were clearly felonius. The loss here to the banks was close to 400k counting costs of resale and lost interest. No sympathy for the banks, but if someone stole 400k in any other way AND were state licensees...wouldnt something adverse happen to them?
Put me in the camp that thinks the sellers were criminal, but the stupid buyer was a near-accomplice. I mean, cashing out $40k at the closing table on a house that she couldn't possibly have kept. If she were smarter, she wouldn't have made any payments, kept that change, and enjoyed the rent-free living in the home while seeking a rental alternative.
Cara, I am willing to consider houses outside my preferred neighborhoods, but do I really have to move all the way to San Diego to get a deal? :-)Goldenruler, agreed, and, Cara, I hope the FBI doesn't decide they're too busy to pursue someone who "only" murders one person, at some point. Like Pat, I wouldn't be surprised if Zhang were involved in other schemes as well.
There are so many things wrong with that article I don't even know where to start.It said she made <$15k a year and relied on food stamps. But it also said she had run a "successful" home daycare business. Huh?It said she "thought" she could afford $2000 a month but that at $2800 a month she would "struggle."On <$15k a year with a $2,800 a month mortgage payment "struggle" is one way to put it...She also made her last (partial) mortgage payment in June 2007, but wasn't actually evicted until Dec 2008. ~18 months...She lived for free for 18 months but wasn't able to even find herself an apartment before her stuff was literally put out on the front lawn? The happy ending for the story was that she was given an apartment she loved with an $1100 monthly rent payment "all of it subsidized." WTF? She can't afford that either. The clock is running on her being out on the street again and the article makes it sound like she is on her way to becoming a productive member of society. Finally, best of all:"As the recession shows signs of easing and the economy begins to recover, the families most affected by it, such as Daverena White's, are starting to recover, too. "Recession? What the heck does the recession have to do with this? She "bought" a house that even by her ridiculous estimation she had no prayer of paying for and followed that stupid decision up with an unbroken succession of equally stupid decisions.People like this would have starved to death during most of human history.
Cara, I pulled up the Redfin email I mentioned re: the tiers and it included the C-S graph for DC. I don't know how to download it and upload it here, unfortunately. Part of what it shows is that the "low tier" was up (from a 2000 base set = 100) to about 290 at peak in early 2007 and now is "W-ing" at about 165 times base. The "middle tier" was up to about 260 times base at its peak in early 2006, troughed around 163 in early 2009 and is trending upward at 175 now. The "high tier" peaked at 225 in early 2006, troughed at about 170 in mid 2009, and is now up to about 175.
ps I should have said that graph was described as depicting "seasonally-adjusted price tier data."
Ace -I think this is it.
Robert, that's it, thanks so much.
Leroy,Don't ask too many questions. The Post does the best they can with the talent they've got. I've been dwelling on this story for a while today. It did have me sympathetic and wanting things to work out for this family, just because it's my nature when I hear about children. I thought hard about a no-doc buying a house working out for this lady, if she'd (1) stayed within a remote possibility of making a payment (2) moved in with another family (3) actually been able to start right in on the daycare thing. But perhaps that was my wishful thinking side.The strange part of the story is that it rings so familiar with the Veronica Peterson tale. If one makes minor changes to the amount of the house sale, etc., the stories are identical. I suppose the tax records are different and verifiable. . .
Housing Bubble Hall of Shame has the details.Sheesh.(BTW, the taxes on the property are painful too, in Montgomery County).
Leroy,Actually, you can run a successful home daycare and show no paper profit, because there are tons of legit deductions you can take. So she could have no profit on paper but plenty of profit in actuality. Of course no one ever gets rich running a home daycare.I think if we ever buy another house, and everyone starts speaking to each other in a foreign language at the closing table, that will be my cue to read the documents very, very carefully.
Post a Comment
Subscribe in a reader