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Friday, December 18, 2009
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83 comments:
I know this is the NoVa housing blog, not the Las Vegas blog, but this was just too funny:
Olick's Realty Check
Vegas cabbie's real estate cycle...
There's a great City Paper article
about the end of punk houses in Arlington that talks about a house I used to live in that's set to be bulldozed. I think it does a good job of illustrating how much Arlington has changed in terms of affordability and housing stock. The only house that wasn't turned into a McMansion was the one a tenant (Ian MacKaye) managed to purchase in the mid-90s before the bubble.
Cara-
If the banks will let the cabbie buy another house he may as well. It is cheaper then renting and if the price goes down a lot more he can always just stop paying and get a free years rent :) I can't imagine that two foreclosures looks that much worse than one on your credit record.
housebuyer,
And if his goal is to move back to France, I don't see why he didn't do that after the foreclosure... Credit records don't cross borders, generally.
I was talking to a lender on FHA 203 loans and he told a horrid story of a client of his who bough a REO a year ago. there's mold in the house, they tried to get rid of it but it's so bad that they had to strip the whole house to the bones and redo everything, but then credit became so tight they couldn't get a loan to continue the work. so, one year later, still no house.
another story is someone applied for the loan early Sept, BOA said it'd take 45-60 days, but three months later money's still not there, and was told it'd be weeks away.
two very depressing stories if true. i guess that's why 'end-users' pay more for move-in ready homes.
Another good point. I do find it a little strange that they could afford paying the mortgage, but yet after not paying it for a year they hadn't saved enough to move to France.
Re: the vegas cabbie. I guess that's what happens when you reward bad behavior. Makes me want to puke.
Re: dual incomes, Cara said "Anyone who thought it was somehow going to get them ahead was not thinking through the consequences of the entire herd acting in the same way."
I think many dual income families with kids are doing it because they have to keep up, not get ahead.
"And who under the age of 40 had stay at home parents anyway? Good grief."
Lots of people. I'm still under 40 (barely). Most of my friends growing up had mom at home. I was raised by a single mother, so she worked a lot. I was never in daycare...always had uncles, aunts, grandparents, or neighborhood moms watching me.
My wife is a stay-at-home mom. My kids' schools are loaded with stay-at-home moms.
I know the percentages have gone down over the last 30 years or so, but there's still 5.3 million stay-at-home moms as of 2008. Personally, i think we would be much better off as a country if there were more.
From the link above: Among mothers 15 to 50 with infants in 2006, the percentage in the labor force: 57%. A cluster of states in the Midwest and also Rhode Island, Maryland, Virginia and Connecticut had rates higher than the national average.
novahog,
That's nice. And this is why I don't generally enter this discussion. I can't enter it without feeling attacked. And no one is actually attacking me. They are just politely stating their own opinions that the world would be a better place without such a reliance on daycare.
See, with the same facts, I'd flip it exactly around and say that _I think_ that most families with one parent at home are doing so because daycare options are so few and so expensive. And our work-culture has required people to move far from their network of extended families to look after the kids. But the truth lies in between. Everyone makes choices within the constraints of the real world both as it is and as they percieve it.
Last time we brought this up, I believe the main conclusion was that the majority of "stay-at-home" parents were (A) only at home for the first 5 years at most, and (B) were home because any job they would get wouldn't cover the cost of daycare by enough of a margin to make sense. And when I say conclusion, I don't mean here, I mean in the research articles we found.
Foreclosures Jump to 1.7 Million
"The number, up from 1.1 million a year earlier, is likely to keep rising through the middle of next year or later, said Mark Fleming, chief economist of First American CoreLogic, the real estate research firm that released the study."
"We're going to be dealing with high levels of distressed (sales) in the marketplace for at least a couple of years," Fleming said. "It's not just all going to disappear."
"Other reports have come up with larger estimates. But FirstAmerican assumes that fewer delinquent borrowers — only about one-third — will wind up losing their homes. It also estimates that nearly 30 percent of bank-owned properties have already been listed for sale."
Cara said
What has changed? A number of things actually.
1) My whole outlook on THs. A month ago I could still look at them and say, "ooo that's a cute one, someone's going to be so happy there!!!" Now I can't muster anything beyond, "wow, I am so glad I'm not buying a TH". When it seemed like the only option, it seemed like a perfectly good one, but now that we found a house, and have realized, yes, we really can afford this, I'm incredibly thankful that I didn't buy any sooner.
Didn't you subtly (or expressly) call me a snob for thinking SFH were so much better than TH? :)
Roger K. Lewis in the Washington Post may disagree and say THs are the logical development pattern. I think, however, ever since the 1940s when the gov't made it possible for the middle class to buy SFH and not just the wealthy that it was the logical style of home for most non-renters. The only time people are willing to put up with a TH IMHO is when the land is so gosh darn valuable like cities. And now probably a lot of Arlington and Alexandria.
Er and people put up with TH when that's all they can afford.
Cara said
Which is really quite hurtful. It's fine if you have expensive taste and are willing to pay for it. It's another when you're saying that the stuff that you could easily buy is beneath you.
If spider, Jeremy, kevin, and I (and whoever else makes this list) thought $400k was going to be the bottom for 1960s ramblers then we would not imply it's cheap housing.
We think, however, there are more corrections coming and those houses will not bottom at $400k.
Also, maybe you are listening to Robert or I'm not "accepting reality" according to Va_Investor but I think you and your husband are above average in income and wealth for Northern Virginia. So is it wrong for me to think you can do better?
Also, on a side note, I don't think I ever saw what your house looks like. I don't remember saying anything negative. If you are buying a rambler I suppose I think you could have gotten a colonial instead. But I'm certainly very happy for you that you got a SFH in the Lake Braddock HS district. I'm glad you are not compromising as much as you were when I first started posting here.
TBW-
I think a lot of people who never intend on having kids often like the condo or TH lifestyle. They don't see any reason to deal with the yard work, or housing repairs. At least a very high percentage of my gay friends like the condo city lifestyle and wouldn't trade it for a SFH, even though most of them are fairly wealthy.
I am quite a bit surprised with the price differences I see in very similar properties. Following is way out of range for what I am looking for. But, I see similar pattern with other properties I am interested in. I am just posting this an example to get insight from experts who can point to the reason for this:
FX7223215 - Sold for 594 in 2004.
FX7177690 - Sold for over 800k in 2005. Under contract at 700k listing.
I can't seem to understand the difference in original prices they paid (800k vs 594k) for seemingly similar properties. Also given that market was at a peak in 2004/2005, I am trying to understand how this could have happened?
housebuyer,
Yes yes true very true. I didn't mean to imply otherwise.
But note you said "in the city." I do not think many wealthy gay men live in condos in Burke.
I know there are plans to urbanize parts of Fairfax County. But the fact of the matter is it's almost impossible to live in Fairfax without a car. Not true for parts of Arlington and DC. Also there's a lot of nightlife in both places and not so much in Burke.
There may come a day when living in a condo above Reston Town Center has as much (or almost as much) cache as Clarendon or Dupont Circle but we are not there yet.
Also, given the market is supposed to have at least come down to 2004/2005 valuations, shouldn't the properties mentioned above valued around 600-650k range given their entry points in that community? What am I missing?
Jason said
There's a great City Paper article
about the end of punk houses in Arlington that talks about a house I used to live in that's set to be bulldozed. I think it does a good job of illustrating how much Arlington has changed in terms of affordability and housing stock.
Agreed. I know the Anonymous thinks some of us are stubborn but I'll readily admit I was wrong about Orange Line Arlington. I still think there's more corrections to be had but it's definitely going to hold onto more of its bubble gains than Fairfax County.
I know some (Robert, housebuyer) believe or suspect similar demographic changes may have come to communities surrounding Tysons. I remain open to that possibility. But until I see hard data I'll remain skeptical. I mean, George HW Bush's Chief of Staff John Sununu moved to Oakton back in the early 1990s. He was not an urban pioneer. He was representative of the type of person who lived in the fanciest neighborhoods along Hunter Mill Road.
TBW-
I agree I wasn't necessarily thinking exactly about Cara's situation but condos in a more general sense. It appears we basically agree though.
Cara,
I hope you didn't feel I was attacking you regarding stay at home parents. I think everyone can make their own decision and it's their choice. I just think you were wrong that people under 40 are unlikely to have had a SAHM.
I wonder if we would really debate the issue if 50% of stay at home parents were dads and 50% were moms. My hunch is that it's only controversial to say a stay at home parent is better than day care because 98% of the time it ends up being the mom. So if we went back to the old ways it would negate most of the gender equality gains of the past four decades.
I don't think the current system really challenges old societal norms though. Moms are still doing the vast majority of housework and parenting. They are doing that on top of full time jobs. Sounds like the worst of both worlds to me. Particularly if the two income families are living the same lifestyle their 1 or 1.5 income parents lived.
Can't we all be respectful of each other's choices, even if it wouldn't be right for us? It seems to me that most folks here (even those people with whom I disagree, which of course means that they are wrong :-)) are smarter than the average bears and value more information. Each of us has a different personal situation and is in the best position to judge what makes sense for him/herself.
If we're dreaming about what would make for a better society, I'd be inclined to think we'd be better off if every household had enough money to be able make choices about children and whether either parent stayed home with them, if no one had a health problem that seriously hurt their ability to have a nice house or a nice life; if men in general felt just as capable and just as responsible for the care of children as did women in general (including staying home with them) and if they were respected by everyone else for doing so; if employers didn't penalize workers so much (of either gender) for taking extended time away from careers to care for children or others; if people without children were seen as being as beneficial to society and as mentally healthy as those who have children and take good care of them; if we didn't have to choose between moving away from family and friends vs. jeopardizing career or income opportunities; if each of us who wanted a great relationship with a spouse or partner could have one...I could go on and on.
Do I think these things will happen? Not in my lifetime. And you may not agree with many things I wish for. In any case, we all have to make tough tradeoffs and choices. I hope we don't make each other feel attacked as we struggle to make the right decisions.
(someone else can have the soapbox now)
maggi,
Both homes appear to have been bought from the developer. I suspect between 2004 and 2005 the developer raised prices substantially (since comps were rising substantially). Also, since they bought from the developer I suspect there might be some interior furnishes that added an additional five digits to the price.
For example, for the one we can see the interior the kitchen counters are plain. Maybe the more expensive short sale one went nuts with granite? Or something else. My guess is the price differential was from buying later + higher end features.
Maggi-
for the 779K house they bought in 2004 for ~600K. The house was new so they easily may have gone under contract on the house in late 2003 or early 2004. Either way the market peaked in mid 2006 and in the Vienna area most places are only down to 2005 prices. So the difference between 2003 & 2005 prices could easily be the 180K difference. I actually think the place is a little expensive for not having a garage...
As for the difference in value between the two houses I would say there are two main things. First the more expensive house is about 10% larger, you can see this in the tax records. It is also a short sale, which means it often takes 6+ months to close and the bank may not agree on the price in which case you just wasted 6 months.
I hope this helps if not do you have any additional questions?
Jason, that article is really interesting. Thanks.
Ace,
I agree 100%.
I don't know how much these generalizations hold true but they say that male Gen Y'ers (of which I think I am one or pretty close) are much, much more interested in being active parents than baby boomer dads ever were.
IMHO, I think Gen Y (and probably a lot of Gen X) would be willing to make broad societal changes but we are young. We don't run the companies.
The people Roberts age or older (and mostly men) running the companies see everything we saw as laziness and not being a team player. They are not even crazy about (at least in the legal field) letting moms take more than a month or two off if they want to make partner or get some other promotion.
----
I only brought this up initially because I just think it's such a shame given how much the topic stresses everyone out if Cara is right (and Konstantin and I are wrong) that two incomes no longer provides a fancier lifestyle.
This is getting really off topic but here is what Jack Welch said (former CEO of General Electric) which was discussed in the legal profession (and I'm sure many places) about the sad state of work-life balance:
"There's no such thing as work-life balance," Mr. Welch [said]. "There are work-life choices, and you make them, and they have consequences."
Mr. Welch said those who take time off for family could be passed over for promotions if "you're not there in the clutch."
"The women who have reached the top of Archer Daniels, of DuPont, I know these women. They've had pretty straight careers," he said in an interview with journalist Claire Shipman, before thousands of HR specialists.
"We'd love to have more women moving up faster," Mr. Welch said. "But they've got to make the tough choices and know the consequences of each one."
Article
This (side note) is another reason why I'm skeptical that there are tons of two professional income families anyway outside of DINKs. Insert a baby and I suspect nine times out of 10 the father's salary grows more than the mother's does because she starts getting passed over for promotions. And if that father interacts with his kid he might also get passed over.
Robert,
Looking forward to your commentary on this Bloomberg article. To be fair, I think you have been open about there still being trouble in the $1M+ sector but I'm not sure you have ever been as gloomy as this article.
Dec. 17 (Bloomberg) -- Homeowners with mortgages of more than $1 million are defaulting at almost twice the U.S. rate and some are turning to so-called short sales to unload properties as stock-market losses and pay cuts squeeze wealthy borrowers.
“The rich aren’t as rich as they used to be,” said Alex Rodriguez, a Miami real estate agent with JM Group USA Inc., whose listings include a $2.9 million property marketed as a short sale because the price is less than the mortgage, leaving the bank with a loss. “People have reached the point where they can’t afford the carrying expenses of a $2 million home.”
Payments on about 12 percent of mortgages exceeding $1 million were 90 days or more overdue in September, compared with 6.3 percent on loans less than $250,000 and 7.4 percent on all U.S. mortgages, according to data from First American CoreLogic Inc., a Santa Ana, California-based research firm. The rate for mortgages above $1 million was 4.7 percent a year earlier.
Gosh darn it, if the substitution effect from large corrections on lower end foreclosurevilles cannot correct Vienna/Oakton/Fairfax/North Reston prices, then maybe some above average foreclosures in Great Falls will. If the $1M manses in Great Falls start going for $800k then the $800k home in Oakton is not being bought until it goes down in price. IMHO people will take the foreclosed Great Falls home.
spider -
Foreclosures:
Rick Sharga, senior vice president of Irvine, Calif.-based RealtyTrac.
Follow the unemployment numbers and you'll be able to track it.
So, follow the unemployment numbers in NOVA and you should be able to track it. BTW, NOVA unemployment is 4.7% and falling.
TBW-
As to your comment by Jack Welch its not just women. Men also do not make it to the top if they take lengthy periods of time off of work. Obviously far more women do this then men, but for those people who want to make it to the top of the ladder brains and hard work aren't enough. You need to have total dedication to your job, get in early stay late ... going to watch your kids soccer game can't get in the way.
I think this is personally ok, because these are the people that will be there for the company. I would much rather work hard when necessary, but enjoy time with my family than always be working just to make a couple of extra dollars.
Robert,
You might remember this comment of yours from a while back:
I don't see Korean, Indian, or other Asians, going to Texas vs. Washington DC. The same would probably apply to Middle Eastern and African immigrants.
Many grad schools pump out Asian immigrants with Master's and PhD degrees. I can see a migration pattern just based on these ethnic groups.
Any thoughts on that?
You were wrong that there were not substantial Asian, Indian, etc populations in Texas metro areas but are right (not that anyone disputed this) that they have been a substantial growth population here.
With Fewer U.S. Opportunities, Home Looks Appealing to Expats
So what about that? Okay, this is one of those "let's predict a trend" articles that might be wrong. But we both agree highly educated first generation immigrants are a lot of people in this area. What happens if we lose that growth factor or it's much smaller?
I think it's pretty damn sexist to say that a woman cannot have a career AND be a good mother. Michelle Obama seemed to have managed it as did Senator Clinton and hundreds of thousands/millions of others.
Working is not always about a paycheck. And we've all seen estimates about the dollar value of the services done by a SAHM.
My mother worked FT putting my dad thru Law School (he also worked - part time) when we were born. She continued to work into her 50's.
In my neighborhood, I would guess that the large marjority don't work. Part of it is socio-economic. But, I would never judge a woman who wants a career.
I found that having two very demanding careers and an infant required too much of a sacrifice to our quality of life. We had a live-in nanny as well as other household help, but we starting having alot of tension over who's need to work until 8pm, on occasion, took priority.
I "retired" when my son was 18mos old. All the kids in the neighborhood were in day-care. I knew of only a handful of SAHM's. Tough to arrange play-dates.
My current neighborhood is wealthier than that one was and that is why, I believe, there are so few working moms.
housebuyer,
Agreed. The Salon author who I linked to points that out that Welch's comments are just as depressing to many men as well.
" I can't enter it without feeling attacked. And no one is actually attacking me."
Not attacking you, but it sounds like you already know that.
Many couples with children still go with two incomes even if they can get by with only one. There's nothing wrong with that. But, many don't have a choice. I'm sure there are many mothers out there right now that would love to stay home with their kids...they can't.
"...the majority of "stay-at-home" parents were (A) only at home for the first 5 years at most, and (B) were home because any job they would get wouldn't cover the cost of daycare by enough of a margin to make sense."
I agree with A and B...
(A) - 5 years old is when the kid will be starting kindergarten. So, the SAHM can go back to work while the child is at school all day and not have to worry about full-time daycare.
(B) - Makes perfect sense. Still doesn't mean they would rather go to work than stay at home with their children. There is some margin where it makes sense because it benefits the family finacially. If you had $100 Million in the bank, would you still do the daily grind into DC and put your kids in day care all day? I suspect very few people would.
This may be a non-PC opinion, but i'm not the PC type. Assuming all other things being equal, i think mom is the best caregiver for the kids. Mothers have a special bond with their children that can't be matched by the father (or anyone else). That doesn't make dual incomes bad. It also doesn't mean that women shouldn't have a career because they have kids. It's just a shame that many families don't have a choice (like they used to).
Anyway, my original point was that lots of people under 40 had/have SAHMs.
Ace,
Here, here!!! Again I have a perverse persepctive because I snagged one of the Gen Y'ers (or X, I can't remember which I am) that believes strongly in housework equality, and acts on it. We also say thank you to each other all the time, which greases wheels quite a bit. I do have to keep in perspective sometimes though, that I am the luckiest woman on the planet.
tbw,
Indeed I did say you were a snob. Or implied it. And you were right. In truth, I was just being impatient with the savings thing. Yes, my husband and I do make over the median income, but not by that much. I actually feel a lot more comfortable in the neighborhood we're moving into than the ones with the $600k houses. There are indeed a couple of $500k subdivisions that are probably closer to where we "belong" but they don't have the immediate access to Lake Accotink.
It's a rambler, and no I haven't shown the pictures. It is a darn cute rambler though, with an L-shape not just the box-shape, and very well sited on the lot, so a lot of the anti-rambler comments don't really apply.
Konstantin,
If I had a hundred million in the bank I would be an artist. (pronounced art-eeeeeest)
(for a living, as opposed to on the side)
You should see my husband around kids though. If I were a kid, I'd pick him anyday over me. Hands down. I'm the mean nasty worry-wort.
TBW, you may well be right about the younger generations, but (going back to anecdotes which are admittedly not as good as the macro #s) I can tell you I am surrounded at work by "traditional" dads of all ages, with wives at home and little kids (for the younger dads) and older kids (for the older dads) or emancipated kids but the wives in jobs seen as clearly secondary to the husband's. The extent to which this is a true choice (for the younger guys) they have made versus the best choice given that it is very difficult (at least in my profession) for both spouses to have a demanding professional career and small kids is hard to determine. But it doesn't look like much change to me from when I was in that age group, even though there are a few more "family friendly benefits" than there were 20 years ago.
Cara,
Thanks.
I would just add that I've been to many ramblers where they fit the adage (sometimes put on realtor signs) "I'm beautiful on the inside."
To me, it's mostly "curb appeal." Ramblers just do not have it for me. No matter how much the interior is modernized or an addition is made increasing the size, I just am not wowed when I look at them from the front yard.
So much of home buying is emotional. I can't explain why I don't like the look of them. Maybe a lot of clever marketing on behalf of NAHB has made me feel this way. For example, I would say that the shots of the exteriors of homes has grown over the years. You rarely see anything like the Brady Bunch home anymore.
*on TV
TBW,
Interesting article. Makes sense given (a) our employment situation and (b) availability of opportunities abroad. Just speculating, but I would imagine it is a stronger trend out in California.
However, since ALL of the people in the article had NO job, how much difference could it make?
What would be the economic impact on NOVA housing if one graduate student that didn't have a job went back to India?
I still think Korean and Indian immigrants feel more comfortable in this city. Nah, I KNOW from personal experience.
tbw,
Oh I know!
I was watching Glengarry Glenross the other night (which is now an old movie) and cracked up when they were calling the potential land-buyers "deadbeats" with no real money, when they lived in these beautiful 3 story craftsman/victorian style homes.
And have you seen V? That house that the single-mother FBI agent owns? Totally unrealistic.
Though I do think the living room/kitchen layout of a two-story house is easier to fit on a sound stage than a flowing open rambler. Think the cosby show, and all those sitcoms with some lame comedian married to a hottie wife.
This may seem counter-intuitive but there are more SAHM's in Great Falls than there were where we lived in Clifton.
Robert,
Not to me. It's a combination of self-selection of multiple kinds.
One high-powered job can easily make more than two good jobs that both accomodate some work-life balance.
It's all about what you want in life. Some people want a sugar daddy. Some people want to be a sugar daddy. Some people's work is so stressful that they absolutely need a spouse who can take care of everything else while fully supporting their career. Some people just like that arrangement.
Other people, think that sounds awful and totally unappealing.
But I do think there is some truth to the idea that extreme monetary success, is a heck of a lot easier if two people are working towards one goal.
spider -
If your economic interest is to purchase a property in NOVA at a lower price, I'm not sure you should be cheerleading for housing problems elsewhere in the country. No stimulus is needed here and further government measures will be like throwing gasoline on the already scorching hot NOVA housing market.
Speaking of selection bias, there's a reason why the Indians and Koreans that Robert meets prefer DC to Texas. They live here! Obviously people who live and settle in a place on average prefer it. You can't sample just Indians and Koreans in the DC Metro area to get a feel for how Indians and Koreans generally feel about DC vs. Texas.
Anyone looked at the inventory charts lately? I can't see how prices can drop much with these inventory levels.
"Robert said - government measures will be like throwing gasoline on the already scorching hot NOVA housing market."
Wow - I can't believe you said that. That's even beyond what I exptected from you. "Scorching hot" - you got to be kidding me!!!
Robert,
Recovery seems to be much more widespread than you have been predicting for the past half-year. Even Michigan and California are doing okay. I don't think we'll have as many people move to our area from other states as you were projecting.
Unemployment Down In 36 States in November
The Bureau of Labor Statistics released its monthly state-by-state unemployment data (.pdf) for November today. You might recall that the national unemployment rate declined slightly from 10.2% in October to 10.0% in November. As a result, it shouldn't be surprising that most states also fared well in November, compared to October. Here are some highlights from the report.
The worst state for employment remains Michigan at 14.7% unemployment. That's better than it has been over the past few months however, as unemployment there was 15.3% in September and 15.1% in October. Rhode Island takes the second spot with 12.7% unemployment. South Carolina, Florida and Nevada are all next in line, tied with 12.3%
From October to November, the number of unemployed dropped the most for California, with 45,000 fewer unemployed. That was followed by New York and Texas with 37,000 and 30,000 fewer unemployed.
A whopping 36 states and the District of Columbia saw their unemployment rate decline in November. States who experienced the largest decline by rate included Kentucky and Louisiana where unemployment declined by 0.7%. Connecticut and Nevada saw a 0.6% decline. Seven others' unemployment rate decreased by 0.4%
Article
How about a poll on 2010 tax assessment in FX county?
I begin with my prediction ~10% down....
Recovery seems to be much more widespread than you have been predicting for the past half-year.
Look at the numbers. What? 13 million unemployed and NOVA will probably fill 25-35k jobs next year. I don't see the shortage?
spider, I thought blistering-hot would be taken as hyperbole.
My prediction of Fairfax County assessments is that they will be.....meaningless.
Cara,
The Cross-County trail runs right by Accotink. I have some fond memories of canoeing and pedal-boating in Lake Accotink.
I know others, our age, who purchased 1950s ramblers over in the Rose Hill area behind Edison. Those are smaller than the 1960s ramblers in N. Springfield and they don't have basemants. The Navy housing I lived in from age 11-15 was a rambler duplex built in the 1960s. In fact, all the Naval Officer housing at that base was detached ramblers or rambler duplexes.
spider,
I think the assessments depend on the location. I think parts of Springfield could see flat assessments, but I think Lorton might be down 10%. That would actually be a huge improvement for Lorton as I think last year their YOY assessments were down ~20%.
spider,
Isn't it funny how every negative piece of information is meaningless to Robert? He is sorta the polar opposite of patrick.net
As for assessments, I've long been on record here saying that on the aggregate assessments will be down next year. I'm not sure how much. I'm sure here and there a neighborhood might be flat or even up but those will be exceptions to the rule.
I just think it's hilarious that some people think governments are going to underestimate the FMV of homes. As if county boards just love imposing tax increases, furloughs, and budget cuts thereby increasing their chances of being voted out. Give me a break. Sure assessments are never perfect but they are based on SALES, not WTF prices some would believe are still applicable.
Anyone looked at the inventory charts lately? I can't see how prices can drop much with these inventory levels.
Inventory goes down every week. These are updated weekly.
Year ago totals were 12,000+, now 6,000. There has to be more supply for prices to drop. Cara is right that increasing prices will bring increasing inventory, but I don't think we'll ever see something like what happened between March and July 2006. That's when inventory went up 10,000 units. Amazing. I believe most of that was people that saw the bubble and knew it was over or at minimum wasn't going any higher.
With Fairfax County around 2400 and 50% of that overpriced and 10-15% of that short sales, there is slim pickings. I think a lot of buyers have moved to the sidelines waiting for a Spring uptick. I think they will be disappointed and eventually capitulate and dive in. The rush in April should be something to watch!
Maybe a lot of buyers are waiting to see if "shadow inventory" is a myth or reality:
Dec. 17 (Bloomberg) -- The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic.
The “shadow inventory” rose from 1.1 million a year earlier. Such properties include those taken over by banks and mortgage companies and those where the loans are at least 90 days delinquent, the Santa Ana, California-based research firm said in a report today. The number of unsold homes listed for sale was 3.8 million in September, down from 4.7 million a year earlier, First American said.
Isn't it funny how every negative piece of information is meaningless to Robert? He is sorta the polar opposite of patrick.net
So, what worries me?
Interest rates. Impossible to predict.
Contracting credit.
Stock market crash. Dollar collapse.
Weak economic recovery or relapse into recession.
I know the levels of debt are unprecedented. These are scary times.
Be scared when others are greedy and greedy when others are scared.
I don't worry about foreclosures or government spending. Or assessments.
Robert,
Is that your way of telling us that your house is going back on the market in the Spring?
Americans are smarter than I realize:
WASHINGTON, DC -- 12/18/09 -- According to the most recent Realtors® Confidence Index, 39 percent of recent buyers purchased a home with a Federal Housing Administration-insured loan. Realtors® who took part in the November survey also reported that the number of first-time home buyers continued to climb to 51 percent.
"FHA helps provide affordable mortgage financing to homeowners, particularly first-time home buyers who are so important in drawing down inventory to help stabilize the current housing market," said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. "These recent survey results reaffirm that, despite its current challenges, FHA is a critical part of the American housing fabric."
The RCI results also indicated that distressed sales increased to 33 percent of all home sales last month, and that both investors and first-time home buyers are competing for these properties. The preponderance of distressed properties on the market has also influenced buyers' perceptions of other homes for sale. Realtors® report that many buyers have pricing expectations that treat every property as if it were in foreclosure.
The 30-year fixed-rate mortgage averaged 4.94% for the week ended Thursday, up from last week's 4.81% average but down from 5.19% a year ago. Fifteen-year fixed-rate mortgages were 4.38%, up from 4.32% but lower than 4.92% a year earlier.
Wow. Up 0.13% this week. That seems a lot. Let's hope this continues. :)
tbw,
I looked at the VA Dept. of Ed's website for FRL information and during the 2001-02 school year the FRL% at Mt Vernon was 50%. That was a tick-up from the 35-37% range Mt Vernon FRL had in the late 1990s. Perhaps, the uptick was related to the last recession. MT Vernon's FRL has hovered between 38-42% over the last 3 year school years indicates to me that middle-class families are not running from Mt Vernon neighborhoods as that is basically the same rate they had in the 1990s.
"Robert said - Be scared when others are greedy and greedy when others are scared."
If you follow that, you should be scared now as all asset classes suggest that greediness is back to the highest in years...
FHA is another disaster looming on the horizon. Hope you don't believe FHA has unlimited finances to prop up this rigged housing market. I just hope the coming crash isn't that bad to drive our country in to depression..pray!!
Agreed. The Salon author who I linked to points that out that Welch's comments are just as depressing to many men as well.
I never worked directly for Mr. Welch, but two of my former CEO's and one of my current C levels are outputs of the Jack Welch School of Management.
In short, there is little disagreement among those peers that Jack Welch was a pure Son of a B*itch whose contribution to modern management practices will hopefully be buried in the same hole that he's poured into one day.
That's the current consensus of those who worked for him, and the culture he created.
Cara: We went from thinking that we would be better off in a townhouse with two young children to buying a rambler in a neighborhood full of much more charming houses. However, I am dreaming of that rambler after spending the last few years running up and down stairs with groceries, babies and all their stuff. I cannot wait to move in and use the steps to the basement only occasionally as the laundry is on the main level and there is a sunporch we are going to use as a playroom just off the dining room. I hope you like living in your rambler as much as I think I will. Also I met the floor refinisher at the house today and he said that the floors have been protected by wall to wall carpeting for all these years so we don't have to refinish them. We just have to add molding around the baseboards and have the floors cleaned and buffed to get rid of the marks from the carpet pad. This is going to save us about $5,000. So we are going to use that money to buy some new windows for the sunporch to make it more airtight.
http://franklymls.com/DC7091078
sold a few years ago for 275K
went for 180K with the neighborhood improving.
I'd call this real estate deflation
TBW,
re: "There's no such thing as work-life balance," Mr. Welch [said]. "There are work-life choices, and you make them, and they have consequences."
You might have fun investigating Jack Welch's 2nd divorce. One would think that, since Jack doesn't believe in work-life balance, he would have been more than happy to split his wealth evenly with his 2nd wife, who gave up her career to enable him to be totally career focused for many years -- and also did a lot of the unpaid hosting etc. stuff CEO wives sometimes do. Instead - and even though he was caught red-handed (so to speak) in an affair with his now 3rd wife - he fought wife #2 tooth and nail. But she was a former attorney IIRC and made sure she was lawyered up.
I actually think *some* of his management practices and ideas are very sound and have known some people who enjoyed working for him. But very clearly it's a mixed picture. I don't think I personally would have enjoyed it.
FX County has 2.5 months of inventory. Absent something disasterous happening to the economy, the spring market will be on fire.
The only question is demand. I'll go on record to say that the psychology is changing. There is alot of pent-up demand just waiting for a little reassurance that prices won't tank going forward.
Signs of leveling is all it takes. I'd hate to be looking for something under 400K come March.
We've already seen flips starting to bring up the comps. The earlier comment trumpeting the fact that buyers expect reo pricing is really not any "victory" in my mind. It just means that they will continue to "wait it out" or, simply, lose every bid they make.
Has no one here noticed all the shorts and reo's that have fallen out and come back "active" at significantly higher prices?
Cara,
We are renting a rambler right now and the floor plan is so convenient with little kids. The only downside is the noise carrying and waking 'em up.
If your place is by lake accotink, I think your new house is right near the amazing preschool my daughter attends. I also know an excellent home daycare that one of my best friends used right in that area.
"VA Investor said - Absent something disasterous happening to the economy, the spring market will be on fire."
If you really believe in this economic recovery purely propped up by short-term government spending, cash for clunkers, home buyer tax credits & everything else I left out - I think you are being naive or misinformed. I think you have many surprises waiting for you in next few years, in that case.
Economy is already a disaster & it won't get better until we clean up the real problem. Make no mistake, removal of mark to market accounting has just postponed the problem, rather than solving it.
Robert said...
NOVA unemployment is 4.7% and falling.
From that same article:
"Virginia typically sees its lowest unemployment rates during the fourth quarter because of additional jobs generated during the holiday season."
Yes the unemployment rate is 'falling', but it falls in the 4th quarter every year. These are just temporary jobs for the holidays though, and mostly low paying retail jobs.
For the people who think pent up demand (of buyers) will drive a price increase, I think there is just as much pent up demand among sellers. There are always more homes for sale in the Spring than the Winter, this year will be no different. In addition the 50% of current homes that are overpriced (Robert's estimate) will still be on the market - hopefully with more realistic expectations. It seems like only the people who have to sell and the WTF sellers are listing right now, in the Winter of the worst housing market in years.
Jeremy,
Please look at YOY and see if your opinion changes. I obviously would not compare Dec inventory to April.
Demand to sell? Distress maybe.
Spider,
My comments referred to the here and now and this Spring. I don't pretend to have a crystal ball going out years. I will say that I believe the bottom in many local areas has come and gone.
DC was a bubble market.
There are lots of reasons why things will revert to mean.
DC reverted after its last 2 bubbles, it will again
Common sense says we are nowhere near a bottom.
FRE & FNM were given $200 billion each ($400 billion total), and now they are asking for an additional $400 billion:
Fannie Mae and Freddie Mac, which buy and resell mortgages, have used $112 billion — including $15 billion for Fannie in November — of a total $400 billion pledge from the Treasury. Now, according to people close to the talks, officials are discussing the possibility of increasing that commitment, possibly to $400 billion for each company, by year-end, after which the Treasury would need Congressional approval to extend it. Company and government officials declined to comment.
Additionally, the FDIC has a $500 billion line of credit which it is considering tapping into:
At the rate it’s going, the FDIC soon may have no choice but to borrow money from taxpayers by tapping its $500 billion credit line with the Treasury Department, an option it so far has avoided.
You may want to believe the propaganda Geitner, Bernanke & Obama are spewing, but I watch what they do -- not what they say.
Their actions say the wort is yet to come.
I have some friends work at Fannie & Freddie. It's no secret that eventually they will be broken up or dissolved. But, I heard it could happen as soon as 2010. After all, there is a limit to how much loss taxpayers would be willing to take on. We have already seen the anger at the past bailouts and growing deficits. There is little reason any further taxpayer-funded corporate welfare can muster much political support.
One thing to note is the significant employment presence in this region by these two entities. The impact got to be big, I assume.
VA_Investor said...
"Please look at YOY and see if your opinion changes"
You missed the point. I'm saying YOY is so much lower because of the large drop in prices over the past year. There are many people underwater who cannot sell, and many others just hoping for a rebound before they try to sell (like Robert). Neither of these groups would be listing their homes in the Winter.
I've heard the argument so many times about there being a bottom on prices from pent up demand. I think the same is true in the upward direction because of so many people anxious to get back to even or any of the "gains" back they've lost since 2007.
about six inches here in N Arl...
Jeremy,
Just because they cannot sell, doesn't mean they need to sell or even want to sell.
Witness the wealthier areas and the dearth of distress sales. Your belief that tons of people want to bail at the earliest opportunity is just not supportable.
I would guess that the vast majority have no plans on going anywhere and are merely disappointed by the "paper" loss.
The oft heard argument that seller's have to sell eventually, has little merit. Some do, but many, many don't.
pat,
What, again, is the "mean"? You conveniently disregard wage gains (regionally) over the past 20 years and other demographic changes. We don't live in Detroit.
VA_Investor
what is the mean? 3.5X Median income.
Hayfieldgrad,
I know I just fell in love with that trail. Who cares if the house is "small", when you've got such great outdoor space. The inspector asked, so what are your plans for the basement (half of it is unfinished) and I said, "put bikes and kayaks in it?"
The Rose Hill area is actually quite nice, it has a really neighborly feel. And it's ridiculously conveniently located to the beltway and Van Dorn Metro.
There are some larger houses in there as well. Maybe they are popped up ramblers.
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