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Monday, November 9, 2009
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51 comments:
My mom was in town visiting this weekend, so I haven't had a chance to follow through with the 60 bank listings yet.
But I have identified a list of 9 SFHs in our target school districts (all with sufficient square footage) that are within spitting distance of TH prices, such that we need to very seriously consider buying a non-updated house before we contemplate buying a fully updated TH for a similar price.
Now we could very well walk into these and go, oh my gosh no, money pit!!! And go screaming back to THs. But I think we need the perspective nonetheless.
Cara,
If you want a place that you can live in for 20+ yrs, go for a house instead of a TH. Don't get bogged down in cosmetics, you'll have years to paint and update.
Your inspector can advise on "material" issues that can cost big bucks and have zero return (HVAC, plumbing, elect., structural, roof, etc). You, yourself, can estimate kitchen and baths, install or refinish hardwood, new carpet and paint, appliances. Remember, usually nothing has to be done immediately (from a cosmetic standpoint). A nice kitchen can be done for 10K (including cabs, appliances, counter and floor).
I only mention cosmetics because of a remark you made about water damage to the kitchen hardwoods. This sounds like an icemaker line leak. I had the same happen (twice!) at a flip. It didn't cost much to refinish the floor.
Va_investor,
That's basically the idea.
What's your opinion on things like "smells old"? I assume ripping up the carpet will go a long way, how about refinishing hardwoods, will that generally fix that? Does new paint, undo walls that smell old?
This was also probably an ice-maker line leak. In this case all the nearby wood had warped badly, so I think you would have needed to pull it up and replace it. But it was a really common recent wood, so shouldn't have been that expensive ($3k-$5k tops?), even though it wasn't just a sand and re-finish job. It was more a matter of, one of many projects that could rapidly add up that cumulatively say, walk away, this is not any cheaper than buying one where the work's already done.
Cara,
FYI. my friend had the carpet pulled and put in new hardwood floors for the 800sq+ upper level for $6K+. this was in McLean just a few weeks ago. so your $3K-$5K sounds about right.
MM,
yeah we priced out putting in hardwoods throughout the 1360 of Woodwalk, $8k-$12k depending on who did the labor and what we bought (not including the least expensive options). So the main reason this one might have been as high as $5k was because I don't feel qualified to do it myself, and that interior wall might have needed work, too.
Cara,
"Smells old" sounds like all you need is new paint, carpet and refinished floors. Be somewhat wary of animal urine. I once had to replace subflooring (in addition to carpet and paint). Also check moisture in the basement. One place I bought was pretty bad (standing water after heavy rain). It took about 10K to take care of it, but the house was a steal. Mold is definitely to be taken seriously.
As I've said before, I love bright pastel walls, shag carpet (esp. over hardwoods), avacodo or coppertone appliances and basically any cosmetic disaster!
You'd love one of these, ORANGE carpet in the basement. and wallpaper up the stairs...
Cara, yes you might see more appreciation in a SFH instead of a TH. But I like the latter. Here is why. With a TH you are more likely to get something only 7-10 years old. This newness factor is extremely important versus a 20-30 year old house -- where in the possible future bubble market, might get cut down. Important in regards to smell, mold, dust, unseen disrepair (inspectors are one man teams--cant do it all in only 3 hours!!)
People can update a SFH all they want, but nothing will ever change the fact that its old. My point is, the "oldness" factor should be important in your detailed, almost fanatically analytical house search :)
Madcap
Where I'm looking the THs are almost equally old (70s,early early 80s) compared to (60s early 70s), and generally of lesser construction quality.
(with a very few exceptions on the age thing)
For commutes we're willing to commit to the last 10 years construction is almost entirely out of our price range or in really incurable, nastily bad locations (like try to make a left on FFX county parkway in the mornings around a blind curve with no light kind of bad).
Does anyone have experience with sagging floors? There's a 100+ year old house in a great neighborhood I looked at, but the floors had really extensive slopes and sagging. I'm thinking of having a contractor or inspector check it out, but I'm not sure if it's something worth pursuing. The hardwood floors look like they could be refinished easily only if they laid flat.
Cara, Have you looked at Gainsville? Consider this, it has the small town feel is beautiful (Wegmans Target, Haymarket beautiful country club areas)
Im not sure what your price range is, but I wake up at 515Am for work to beat 66 traffic and the Parkway.
The prices are outstanding if you want something less than 10 years old.
Springfield, Manassas, Burke and Woodbridge are all overpriced. The prices are not commensurate with what you could get with 15 minutes more going down 66.
Only caveat I have is that between Manassas exit and Gainsville 43b is a nightmare for traffic even though its only 2 DAMN miles!!!
Madcap,
I don't commute to where everyone else commutes to... So for me, from Burke I can scoot down entirely country roads for most of the way and then just cross the Wilson bridge against the bulk of traffic and hop on in. But country roads add up timewise. I don't have to do 66, I don't have to 95. That's easily worth 50k or more to me.
That's the thing, Burke/Springfield are pretty much populated by those of us for whom the commute is really easy, i.e. take the VRE to the Patent Office or the Pentagon or downtown, or snap over to Fort Belvoir, or hop over to Anacostia against traffic. So, the prices seem out of whack if you don't share these easy commutes, but actually make a lot of sense compared to Gainsville or Centerville if you don't have to go on 66 or up to Tysons anyway.
One thing to remember Cara, when updating a place, you don't have to pay for haul away for everything. The house we bought had a hot tub in the back. The thing holds water just fine but it's got a broken 700 dollar part and we had no intention of ever fixing or using the hot tub.
I called a haul away place, they said they would take it away for $350. I thought that sounded kind of high so I was going to get a sawzall (reciprocating saw) and cut it up. I would then put it out with the trash over a month or two until it was gone.
Then I got another idea. Craigslist. I put up the hot tub as a free (and broken) hot tub. I had to put the ad up a couple times. I got replies every time but the people were unreliable. Then I put the ad up again and someone came to my house with some friends and hauled it away the very next day.
So yeah, 350 for haul away? I don't think so. It was just something to keep in mind if you have some junk you want to get rid of on whatever property you buy. Your trash is their treasure. In my case, a non-working, 1995 model hot tub was someone's treasure.
MadCap,
Cara is right. Burke/Springfield/Lorton are filled with tons of military and people working in Alexandria, Crystal City, Ft Belvoir, Newington and the Pentagon. I think a lot of people, here, think the only jobs in the area are in the Dulles Corridor or Tysons. Springfield and the Kingstowne Towne Center have some government contractors too. The Fullerton/Alban road area is a large commerical area. BTW, Gainesville is 25 miles from Burke.
Jason,
It's hardly unusual to have sagging or sloping floors in a hundred year old house. Try the "marble" test or just look at the slanted doorways. Having owned (and loved) a house that was built in 1918 and grown-up in even older ones, it comes with the territory. You will need an engineer to inspect the foundation and joists. In our home, the sill plate needed to be replaced. This cost about 12K as the house had to be jacked-up. In addition several joists needed to be doubled-up. All in all, well worth it - but not a "normal" home inspection type thing.
Va_Investor,
Thanks for the insight, I guess I'll try to search out a structural engineer. If we're talking ~12k to fix the problem that would be doable, but I was just worried it might turn out to be a 20k+ plus issue. There are literally peaks and valleys in the floor, and although I've lived in 1930s bungalows with somewhat uneven floors, this took me by surprise.
Hayfield Grad,
I know exactly the area you are talking about -- Alban Belvoir area. Are you sure about the 25 miles from Burke?
I dont operate on such limited notions of work areas, but I will tell you this.
You can get a resort close to 394k
http://www.tollbrothers.com/homesearch/servlet/HomeSearch?app=model_description&plan_id=16460
and with some discipline of waking up early to beat the traffic with a gas efficient car (I find gainesville/Haymarket to be Nova's secret diamond-Im biased but also have lived Springfield/Alexandria)
Not to change the subject -- but on a related note: The Kingstowne Area in Alexandria is overrated, both for prices (See the Hamptons and an awful road system in Van Dorn/kingstowne).
Seriously, the congestion on Van Dorn/Kingstowne alone should drop 100k all houses in the proximity. The civil enginerring of those roads was horrendous (check it out daily 3-8pm).
Sometimes I wonder if paying so little in real estate taxes (comparitively for Virginians versus other States) results in awfully civil-engineered roads...incapable of holdign the population
Three examples:
1) Virtually all of Annadale/Little river turnpike
2)Van Dorn Alexandria
3) The whole city of Springfield: Old Keane Mill/Backlick/Amherst
MadCap,
If you have one person doing that long of a commute, it's one thing. If you have two? It's a non-issue, the prices could be $5, and I still wouldn't buy it for my primary residence. (as a get away or a rental property that's different).
Everyone chooses there own trade-offs.
Kingstowne is incredibly expensive, but it is the closest in pocket of purely new construction that I know of. So, it has the newness and some of the size you like and the commute other people like.
I drive down Van Dorn every evening to where I'm renting now. Never takes more than 5-10 minutes at 4:30-5:30 PM, the morning can be worse, but it's still not that bad. The work they've done so far around the Wilson bridge area of 495 has made a remarkable difference in the flow, even on the secondary roads.
Cara, point taken. The commute has less meaning to me -- and I still find it unbelievable what others are willing to pay to live in lesser quality simply to avoid a commute. just to avoid the drive (I dont get it--Im just different I guess)
VA investor and investor types, I was thinking of buying this 1 bedroom shortsale
but I missed the boat.
http://franklymls.com/AX6934863
I could have gotten this for 75-80k loan to rent at 1150 a month at 7% (I didnt because I blinked) .
Do you find better interest rates (I have a 780 credit score and good assets) and 7% is as low as I qualify for personal loans.
The reason I blinked was because of the condo fees, and the proximity of the condo development to Section 8 [Brent Place]. Perhaps those would have been non-factors, because of the cheap 1150 (allowing for easy rentability in Alexandria) giving me about +$200 monthly cash flow.
My condo fee analysis was that it was sorely overpriced for not even including a washer+dryer in the condo + comps.
Was I wrong to blink?
Madcap,
agreed. It's actually a darn good thing that everyone has different preferences and tolerances, otherwise we really would all be trying to live on top of one another and pricing each other out.
So, anyone daring enough to make predictions for the second to last month of the $8k (as percieved)?
I predict transactions are 30% or more over last October when people thought the sky was falling.
MadCap,
My experience has been that there is always a trade-off between cash-flow and future appreciation as well as cash-flow and headache factor. Better area (higher price/less roi) = better tenant = easier and less costly management. Lesser area = higher proportional rent and bad tenants (in general) and less appreciation.
The only money I can get today is 6.5% for 5 yrs then a new rate. Is your 7% fixed for 30?
Cara,
I won't bet against you. I expect the settlement companies and lenders to have a crushing amount of work in Nov. When the tax laws changed effective 12/31/1986, I was doing closings until midnight! I think it was tax treatment of captital gains - but can't remember exactly. We brought up a hand-truck loaded with cases of beer around 9pm (for clients and staff). Can't remember too much of that particular New Year's Eve!
Everything HayfieldGrad said about other employment areas is true but there are a decent amount of people in Burke/Springfield etc that commute to DC. The Franconia-Springfield Metro stop is popular.
Also there are plans to rapidly increase the number of bus routes that connect Tysons Corner to various suburbs. Here are a few new ones. And I think many more to come along the way.
An express bus service between the Prince William area and Tysons Corner will begin next month as local and state transportation officials look to alleviate congestion during construction on the Capital Beltway.
The bus service, operated by the Potomac and Rappahannock Transportation Commission, is scheduled to begin Nov. 9 and take riders between the Woodbridge Virginia Railway Express station and the Route 123/Interstate 95 commuter lot and 15 destinations in the Tysons Corner area.
Article
Loudoun County will launch a new express bus service to employment sites in Tysons Corner next fall as part of a plan to reduce vehicle congestion in Tysons during the most disruptive period of construction of the Dulles Metrorail.
tbw,
not just that, but depending on where you're going downtown the VRE line at the franconia springfield station can be even faster.
Fairfax Co also is starting a new free lunchtime bus service. I think it will be interesting to see how this goes.
They smartly understood that it had to be *free* to get middle class people to take it instead of their car. I think that cost-class paradox is now understood by urban planners.
New afternoon service
Cara,
I'm glad you ended up in short sale limbo that led to passing on that condo if you are now considering SFH.
I think you'll find as time goes by your income/wealth will go up and prices will go down even if only ever so slightly. Why not just take your time and get a home you could live in for the rest of your life rather than pay closing costs and realtor fees every 5-7 years. Obviously no one can predict everything and you might still find a reason you need to move. But why not get a house you see yourself never wanting to leave instead of one you know you'll outgrow in 3-7 years?
tbw,
The idea has indeed shifted to buying something we will be happy in over the long haul. Whether that's a TH or SFH.
But I grew up in a TH across a 4 lane highway from a commuter/freight rail set of tracks. So my expectation level for what consititutes a long term home may be different than yours, because I was perfectly happy there.
The TH's we're looking at are all over 1500 sq ft, in the best school districts, and we're holding out for backs to woods or a lake or at least across the little parking lot to enjoy the park.
The SFH's on the list are all over 1300 above ground sq feet plus basements, quarter acre lots (big for me), in nice convenient locations with no incurables, some of which back to woods, all of which are walking distance to one or another of Burke's great lake parks. All are within bidding distance of $375k or less.
With kid expenses in the future way outwieghing any income increases for a goodly amount of time, I don't see us, "outgrowing" anything in 5-7 years. It's just not my mentality at all.
So if we buy, whatever we buy has to fit our life plan over the foreseeable future.
If we actually find that we like what we see this weekend... This is the product I expect to see a lot more of hit the market due to the $6500. So, I kind of almost hope that we like the concept, but don't feel too called to bid on any of the particular houses, because I think these are going to be $350k and less this January/February.
Why won't we wait it out until we could afford a lot more? (1) as I said our expenses will soon be going up faster than our raises... (2) after we get past ~$375k purchase price, out downpayment becomes a 1-to-1 additional price point thing, not leveraged. (3) we want other things a lot more than we want a big beautiful house or a quirky beautiful little one, like kids, and sanity, and my husband being able to go to law school full time if he choses to...
As I've said before, we're much more likely to get a vacation home when we can afford one than we are to move-up our primary residence.
This is a coiled spring for the $500k+ market.
For prime residential mortgages, 25% of banks tightened and 2% eased. For nontraditional mortgages, 30% tightened and none eased.
Link
Robert,
coiled spring? really? Where others would see a continued and intensifying source of difficulty, you see a coiled spring of lose lending reading to be unleashed upon the market as soon as ... as soon as what? Bank balance sheets are repaired? Multi-year price increases are seen again? Inflation takes off?
Robert,
do you think there'll be easing of credit coming soon? i would be extremely surprised...
Area suffers housing shortage near job centers
November 9, 2009 - 7:27am
Hank Silverberg, wtop.com
WASHINGTON - The Washington region has a shortage of housing close to where jobs are located. Housing that is there is unaffordable to people making 60 percent to 100 percent of the area's median income of $102,700 for a family of four.
The Urban Land Institute (ULI) Terwilliger Center for Workforce Housing looked at housing within a 30-minute commute to D.C., Reston/Herndon, Alexandria/Crystal City/Pentagon City, Tysons Corner, Bethesda and Rockville.
The region is short about 40,000 affordable units near these employment areas, the Priced Out report finds.
Almost half the homes in the region are priced at more than $400,000 -- well outside the affordable range for about 23 percent of the metro area's two million households. Those households encompass many professions, including public service, professional, scientific or technical services, health care and social services, construction, retail, administrative support, finance and insurance services and education.
The report says problem is most severe among "family households" -- those with at least three people living together. Households with three or more people living together make up 40 percent of the workforce.
While there is more rental housing near job centers, the rents people can afford are not high enough to support new high-rise or mid-rise construction. Because of that, the report says high-quality rental housing for working families will continue to decline.
"In high-cost markets, workers are being pushed far away from employment centers in search of housing they can afford, and which adequately meets the needs of their families. This is adding to traffic congestion and sprawl, cutting into family time, and straining the economic and environmental well-being of our urban areas," says ULI Chairman J. Ronald Terwillliger, chairman and chief executive officer of Trammell Crow Residential.
The report concludes that the problem will worsen as the economy improves.
Tom,
I wonder what your thoughts are on this Willet Heights REO rambler that sold on 7/11/2005 for $765,000 but now listed at $580,000. I know you're not in Willet Heights but not too far either I don't think? I guess my question is, was $765,000 justifiable even back in mid-05?
Other N Arl observers please chime in as well.
Thanks!
I think 765K was way too high for that place in 2005. 580K is the right ballpark figure and it should sell for that, perhaps a bit higher. Weighing against it is the fact that it's ugly and the neighborhood around it is rather plain. Go one block over and it's much prettier and charming.
"MM Said...
I guess my question is, was $765,000 justifiable even back in mid-05?"
Not if it sold for 465K in 2004 as the records indicate. Back then, 20% a year was seen often, but up 64% to 765K in one year?
Sounds like this was a fraudulent transaction of some sort. My guess is it has a more realistic shot of selling at 540-550K.
tbw,
Sure, lots of people do commute along the Blue Line from Franconia/Springfield to D.C. I didn't mean to overlook them.
I also saw the stuff about the new Woodbridge-Tysons bus service and the Tysons Circulator. I think they are both excellent ideas. The Woodbridge bus is only going to be $2.40 using SmartTrip! WoW, that's cheap and those are nicer buses than Fairfax Connector. I read some stuff on Fx Co transportation page about starting Bus Rapid Transit(BRT) lines from southern Fairfax Co to Tysons and the Dulles corridor over the next decade. I think connecting Southern Fairfax and PWC to these job centers are important because it gives people greater housing flexibility and affordability.
TBW,
Excellent point, except we cannot overlook all the POS's in Woodbridge with (Hylton architecture), no amount of transportation fixes can effectuate poor schools (cara *alert*)and trashed short sales and foreclosures.
Only Lakebridge is the exception and even then, all have to deal with the hell that is Old Bridge Rd.
Tom,
How does this affordable housing issue relates to house prices? It is obvious to any local, that it is not easy for low-to-medium income households to pay market rent in your beloved arlington. So they get into affordable housing supported by county or have to move further out.
There is demand for CHEAP housing and if/when it becomes available it will be immediately occupied. But how it relates to price support? These people cannot buy anything in the expensive areas, so they are off the market.
I also kinda wonder how they calculated that 50% of local homes at 400k+ are non-affordable to only 23% of households when median household makes only 100k. It is a stretch to buy a 400k property on 100k income. I would say it is more that 50% of the households that are screwed housingwise.
Cara,
Doomsday house:
rentable basement - separate entrance, above grade window, bathroom.
p.s. you'll want a rec room down the road anyway.
Konstantin/Cara -
Of course I don't know what is going to happen to credit, but the trend suggests we may be near the end of the tightening cycle.
Really, what percentage of the workforce can be on the road at 5:15 a.m.? I think very few people! Anyone with small children and a working spouse is out. Anyone expected to have face time in the office (law firms etc)--no point in getting to work that early when you are expected to stay late. Medical offices don't open until 8 at the earliest. And even then I worked at a government agency, you couldn't officially start your day until 7:30. There can't be that many people left with such amazingly flexible work schedules.
What is going with the assessments on this place. in 2000 it was 120K, since then the building has been deemed a tear down and even with the building value at 1K the assessment is 400K...
http://franklymls.com/FX7146193
HayfieldGrad said
I read some stuff on Fx Co transportation page about starting Bus Rapid Transit(BRT) lines from southern Fairfax Co to Tysons and the Dulles corridor over the next decade. I think connecting Southern Fairfax and PWC to these job centers are important because it gives people greater housing flexibility and affordability.
100% agree. I would add that Burke and Springfield already are pretty connected to Tysons and Reston via 495, 123, and the Ffx Co Parkway (depending on where you are coming from). And adding express bus service only helps lower congestion on those various roads.
If I thought my career was going to be in Tysons Corner instead of DC I would be seriously considering Burke and Springfield and Centreville and Chantilly and so on.
Cara,
I was only reacting to what you said. It sounded like your tastes were going toward SFH over TH now. Maybe I misread.
housebuyer,
I think it might have been deemed a blighted property. The owners live in TX and may have just abandoned the property and never keep it nice.
Raising the property tax is a common (and less intrusive way) to get owners to sell the house already. Some localities charge a higher property tax rate -- maybe they just upped the land valuation. As you can see from the neighbors assessments the land value is not $400k.
My guess is some developers will give them what the land is really worth and either the owners accept it or the county takes it by eminent domain via the blight program and then sells to one of the developers. I would be shocked if any developer pays $400k because I don't think they'll have trouble getting it for much less from the county. And they can't pay $400k for the land if they expect to make a decent profit off of the rebuild.
On a side note if you look at the satelite there's a house a little to the east which appears to have (or had) about 15 cars in its yard. This is a good example of why you want to live in an HOA so you can stop people from doing things like that. (The county gov't is generally too busy to deal with it so a fourth level of gov't usually helps.)
tbw,
If your career was in Tyson's, why would you consider those other far-flung areas? Stick within a 5 mile radius of work. It's easily doable if you work in Tyson's.
tbw,
I'm considering them. Given that these are now at a similar price point, you have to consider them. (partially because I think they have the potential to crush the TH market if they come down even 25k more) And despite my husband's protestations that he doesn't want to do yard-work, and that we need the larger space we can get for the same price in a TH, you should have seen his face and heard his voice when looking at pictures of a cute little cape in King's Park. I think he just doesn't want to admit that he really wants a house, but will be much much more comfortable about parting with (every last dime of) our hard-saved DP if it's going towards a house. And since I'm more okay with spending more moeny than he is, this may be the route to go. He wants a house, he just doesn't want to admit that he's not as much of a cheapskate as me (since I'd be perfectly happy to live in some of the less expensive THs we've already seen).
Va_investor,
Doomsday? For the bunker aspect, or the low on funds aspect?
Cara,
Low funds. I read somewhere that you have to be outside a 50 mile radius of DC to survive "the big one".
Low funds. I read somewhere that you have to be outside a 50 mile radius of DC to survive "the big one".
For pure risk mitigation strategy you need to have a mountain between you and the D.C. metro area. Anything less and you would have been toast (or carbon).
Remember, our stuff had a circular error of probability (CEP) of one home address (50 Meters or better). You want that W-87 delivered to 501 or 503 Glasnost Avenue in Moscow? We can do it. 30 minutes or its free.
Their CEP was Georgetown or Alexandria.
Just to be sure...you'd need at least a small reinforced concrete bunker at least 10 feet below grade. Not many around. There are some cute 1950's shelters in a few of the homes around this area, but not as many as you'd of thought.
:)
TN,
That would be quite a commute unless one worked from home. You'd have to be home when an event happened (either that or have a helicopter). Can you imagine what a parking lot all the roads would be?
Perhaps a boat downtown somewhere?
Carp diem!
For what it's worth, we looked at a rental in Oakton off of Hunter Mill that had a bomb shelter.
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