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.
Va_Investor said: "It's interesting to hear the talk of Warwick. I had an opportunity in the early '90's to buy of package of 6 units that were headed to foreclosure. They were all owned by the same woman and the loans held by the same bank. The price was about 60K each."$60K? Dear sweet mother of God! That was probably Lois Neebe, the witch of Warwick. Those are $400K each today. That's over $2 million clear. Figure $50K to spruce them up for sale.
Calculated Risk: Bank of America to get out of TARPI take this as a sign that BofA is sick of the bad press around the HAMP modifications and wants to get on with conducting their business in the most profitable manner. The REO faucet may be getting turned higher than drip drip drip, soon.And also in CR one of the Fed chairs claims that the MBS purchases brought mortgage rates down a full percentage point. And in CR as well, the new FHA regulations should take effect in January.You may get your chance for a cheaper house soon. Get your ducks in order and be ready, before any further government response can whisk it away....
Cara-From a capital structure plan it also makes no sense for them to have TARP money. They are paying over 7.5% for this money. Right now they can issue 5 year bonds for less than half of that. In an industry where spreads are measured in basis points, it makes not sense for them to be paying ~4% more than they need to on $45 Billion.
housebuyer,Yes, that's what they point out as the top priority in their press release, ditching the huge government interest and dividend payments. But the conspiracy theorist in me thinks they also want to stop the bad "optics" on the countrywide loan mods that are never going to go through given the percentage of liar loans in the bunch.
Northern VA Unemployment improves"Arlington County, Loudoun County, Fairfax County and Alexandria all had jobless rates below 5 percent, compared to the national unemployment rate of 10.2 percent in October."
Cara-I think it is probably both. BofA tried to get rid of the TARP money several months ago but the government said they still needed it. I am sure they also think it will help them recruit better talent and stop with the bad press related to them having government money and doing XXX action.
The bubble is being discussed now 10:30 AM on the Diane Rehm show on WAMU 88.5 FM.
Dean Baker is one of the guests.
Unemployment Graph by county.Falls Church City > 7%. Wonder if that's counting all the stay @ home moms.Yesterday, @J@ said "It never started, except for MaNascar and a few places way out there."Don't even know how to respond to this.
thanks novahog,They do all seem to be heading in the downward direction, with a similar amount of rattiness to the general series. They're not down much from the highs of earlier this year, but I'll take it.I love google...
Cara,A couple buckets ago you said Jeff sent you a list of 15 or so homes that're coming on to the market but not on MLS yet, including some bank-owneds. I'm curious if it's common for agents to get their hands on such list. IOW, is it something I can expect from agents I work with? Do you know?
Here's an interesting, thought provoking article that raises a new point I dont think I have ever seen before:http://seekingalpha.com/article/176163-does-a-new-normal-include-millions-of-homes-forever-in-foreclosureIt goes to the question of the backlog of foreclosures and what it will look like when we are at bottom. Like everyone, I just assumed the rate and # of foreclosures would get down to some pre-bubble historical levels. However, the author is pointing out that the rate and # of foreclosures has been basically rising since 1979!So it begs the question -- if its been rising since 1979, what rate and nunmber will be the "new normal" when everything is said and done. I agree with his overall point -- where we are now is too high. It almost certainly has to come down. However, come down to what? I could easily see the rate getting to 1% and going no lower, never breaching levels seen earlier in the decade.Either way, interesting article.
I doubt it's common, in fact it wouldn't surprise me if Jeff Royce is the first agent in the DC area to hand such information off to a owner-occupant buyer, but I'm certain it's something you can ask them to do for you. After getting the full 60+ listings for an entire zip code I don't reccommend doing that, but if there's a discreet neighborhood or property you're serious about, having a real look at how many potential REO sales there will be in the future goes a long way in informing how much you're willing to pay now. It set a pretty hard upper limit for us, at almost 10% under the recent high comps, and the seller agreed to it...OTOH, if you see zero bank-owned or preforeclosures, then that's informative too.The reason you only want to know about one neighborhood at a time is that you need to take the list, and double check it against the county records because some of them will already have been resold, or put in bank hands.The reason why it's worthwhile to the agent to subscribe to the service is because it lets them know about REO deals that might be coming available for their clients. Given how quickly well-priced REOs sell, this is important... So they probably already have a subscription.
The Anonymous,That's a really interesting article.I'd love to see the delinquencies plotted against the maximum DTI ratios... Irvine Renter talks ad nauseum about 28% front-end DTI being the maximum DTI for which defaults are minimized. I wonder if he's getting that from this history of delinquencies or what? Perhaps banks or mortgage holders have decided that living with a higher level of default is more profitable than minimizing foreclosures just for the paternalistic sake of saving homeowners from themselves.Given the government's huge attempts to delay the housing declines, I wouldn't expect usefully low DTI ratio regulations to be coming from them anytime soon.
Thanks Cara.Another topic - in general, are ramblers, even with basements, less desirable then capes/colonials? i've near lived in ramblers before, but have in one-level condos, and three-level colonials. i never minded one-level living but after several years in colonials i kind of like them better with 'upstairs.'
MM,Ramblers/ranches are more desirable for those older in life who feel that at some point they won't want to deal with stairs. Capes/colonials give a more private feeling to the bedrooms.Where I've been looking I have not detected a price differential between the two for units with the same square footage, so I'd say no, in aggregate there is no difference in desirability to the buying market as a whole. But you could look through sold comps in your area and see if you can detect a price difference.(says me who's buying a rambler with a basement, I love the flow of the house and the lack of wasted space devoted to hallways and stairways.)In fact I hate the look of split foyers, and yet I haven't detected any price discrimination against them either.
Mm, Cara,Where I live, colonials were built more recently and are generally more expensive. My wife doesn't like splits but bi-level was OK for her, so we bought one earlier this year--both the front and the back have walkouts facing quiet roads and from the back it looks just like a rambler because of the higher ground level in the back; but if we could easily afford it, we would have bought a colonial--in addition to more privacy upstairs as Cara says, they look taller and more imposing from the outside.
Dulles rail financing named Deal of the YearTBW, I guess no:there's a strong possibility that an emergency meeting will have to be arranged to pay for the Silver Line if Dulles Toll Road toll revenues do not meet the optimistic expectations set forth in the planning documents. Who knows what the remedy will be. Probably taxing Dulles corridor businesses even more. Or maybe something atrocious like 5.5% sales tax in Northern Virginia to pay for it.
tedk,Where I'm moving to the colonials, capes, split-levels and ramblers are all the same age, and approximately the same square footage. If the colonials are newer, then they're not really comparable. In my nieghborhood I think what saves the ramblers is that, since the basement is under almost all of the house, the useable interior square footage on a rambler is actually a heck of a lot bigger than on a cape or colonial (since by their nature, the basement is only half again the size of the above ground square footage).Which type any one person buys is going to be about their individual taste, "imposing" is not a plus for me but for you and your wife it reads as "nice solid House". The test really is whether there's a difference in days on market or price.
Cara,Agree that it is all individual taste and so many considerations go into the home purchase decision. For us, schools, proximity to work, budget limit were critical and within that we adjusted based on what was available. I haven't checked the MLS, but I do think that on average, for the same age and square feet, a colonial has a slight edge in terms of demand and resale value.
Cara,Is there a name for that list Jeff provided you with? I'm going to ask a potential agent if he could obtain one like it. Thanks!
MM,It was called the Realist Report...
tedk,A best first attempt: 22151 sold ramblers 2009 btwn 300 and 500k (40) 22151 sold colonials 2009 btwn 300 and 500k(45)The colonials include a lot of "newer" builds 1970+ whereas there are no builds past 1970 in the ramblers, so this isn't quite fair, but...by eye, excluding the 2005+ builds the median price of of the colonials is $360k, of the ramblers only $340k. So, the colonials have it by $20k in the ensemble.In Days on Market, the colonials (possibly because they are higher priced) sat a heck of a lot longer... More than half of the ramblers sold in under 14 days, the colonial median is more like 30, and has a strong tail to the 50+ days end.(click the top of any column to resort by that column, thus rapidly getting the median...)
(if you click on built, it looks at least to me as if the colonials still have an edge)My cutoff at 300k and 500k was designed to crudely group by square footage... It may or may not have succeeded.
splits seem to be doing about on par with colonials. I should check the square footages to make sure that's not the difference, but that requires clicking through to the FFX cnty tax records on each of them.... blah.
Ah, okay there's the difference, a bunch of the ramblers are one bathroom. (whereas many of the colonials have more bedrooms and all have at least two baths) If you only count the ramblers with 2 or more baths the difference goes away.That's enough work for me. Someone else can feel free to disprove it, but for homes in 22151 in the 300-500k starter range, with at least 2 baths, ramblers and colonials have a similar distribution in prices. Good enough for me.
aw bother. the colonial list had "colonial" TH's sprinkled in.try these colonial (2ba,3ba) detached rambler (2ba,3ba) and you'll see it's still true, for 2 to 3 bathroom places the prices are about the same distribution. One would need to bucket them and graph them and stuff to check more closely but now the sample size is getting too small (20ish).So the lesson is, buy what you want, not what you think other people want.
MM,I'm currently renting a 1954 rambler during teardown of my 1952 colonial and construction of the replacement. I never like the look of ramblers, but I have to say, I like living in this one. The colonials in this area are basically 20' by 30' three level (counting basement) with a screened porch, and the ramblers tend to have more square feet.I was talking to the neighborhood realtor (I know realtors don't always have the best reputation on this blog, but this one is very knowledgeable about the local market), who was walking by as I was watching the demolition, and he asked where I was living. When I told him, he said that he always tells people looking in the area that you get more for your price with the ramblers, but most people he deals with are looking for colonials. (He lives in a hybrid - a bumped up rambler).The bedrooms are on the main living level in the rambler, but there is some sense of isolation - coming from the living room of kitchen you only go by a bedroom on the way to another bedroom. You do have the issue of half your space being in the basement, but part of this is the garage, and in this case it's a walk-out basement in the back, and has windows at about shoulder height in the main room in the front.Between the colonial I was living in and the rambler I'm in now, which I believe would be similarly priced, I like the rambler. Given a rambler and colonial of the same square footage and quality, rather than same price, I think I'd go with the colonial.Of course this comparison doesn't necessarily apply to colonials and ramblers of different eras and construction or in other areas. One big advantage of the old Arlington ramblers is the ease of expansion. Typically you can build up, and not have to change the footprint to get more space. They were built solid and can easily be designed to handle the load of the additional floor.
Neither here, nor there....But it's always been my understanding that this region prefers colonials.Just back from a closing on a short (it took 8 months). I can't believe this was purchased by an "investor". For IRS purposes, he claimed it was his primary residence. Unbelievable. Risk tax fraud felony - not on my life!
va_investor,Pretty clearly the builders agree with that assessment. There are very few ramblers that have been built since the 1970s from what I can tell. Perhaps the difference in post 1970 builds has managed to compensate appropriately for the lower demand for ramblers such that they no longer need a lower price to find a buyer who prefers them. But what KeithK said definitely holds too, it's much less awkward to expand many of the ramblers than it is to expand some of the cape's or colonials (once you've already done the pop-up roof). So in buying a rambler you are buying a house that can grow with you if need be. (though that's true of all SFHs to some extent)
Robert's article regarding the Bond Buyer Deal of the Year had this to say:This deal deserved recognition for its creativity in deciding how to capture the revenue generated by an existing toll highway and use it to pay for an expansion of transit at a time when funding for such projects is harder and harder to identifyI think creativity was just screwing over people who live in the 267 corridor. The DTR was supposed to be toll-free by now (as the tolls were supposed to pay off the initial bonuds). Instead, it's being used as a cash cow which is not surprising.If they fail to get the toll revenues (which I suspect may happen) then I hope they tax Dulles corridor businesses more. How is it fair to make Cara in Burke and others in the southern part of the county who do not use it or indirectly benefit from it via an additional 0.5% on the sales tax?
Robert saidFor instance, TBW says if the stock market goes up the real estate market goes down and vice versa.I did not say that. I said it's not always the case that when the stock market goes up, housing goes up. There are four scenarios:(1) stock market up, housing up (most of the 80s, 2002-06)(2) stock market down, housing up (1987, 2001-02)(3) stock market up, housing down (1992-98)(4) stock market down, housing down (2008)They are not always correlated with one another. The stock market's performance, HOWEVER, often affects interest rates. And since I think interest rates are *the* most important factor helping the housing sector, I suspect if the Dow rally continues that we will see #3 over the next few years. BUT I am sure we will see some #1 scenarios again as well.
btw I'm not making any stock market predictions. I did predict it hitting 10,000 but I have not been sure where it's going from here. I don't claim to have any knowledge on what GDP will look like or if we'll end up at 9,000 or 11,000.Robert -- I look forward to your gnashing of teeth as we start paying for the excessive spending you have championed:The House approved Thursday a measure making the current estate tax rate permanent, overcoming the objections of an unusual coalition of liberal and conservative critics.The bill passed, 225 to 200, with 26 Democrats joining all Republicans present to vote no. It would make permanent the current estate tax rate of 45 percent, with an exemption of $3.5 million per individual. If Congress does not act, the estate tax would disappear altogether in 2010, then return in 2011 under the higher rates -- 55 percent and a $1 million exemption -- that existed before President George W. Bush took office.
I don't champion excessive spending, I just point it out.Agree, creative could be replaced by hidden or deceptive in the toll road article.Stock market goes up, housing goes up, if you pick a long enough time horizon.
I have been lurking here for several months. I am a first time home buyer looking for a SFH in the Fairfax to Alexandria area. I am looking for a starter (permanent for me) in the 200-500 range. I just want to express my thanks for all the real estate specific postings and to Cara specifically. I know that "you got yours" but I really appreciate that you still post post research here. I find your postings veryy useful, particularly your tailored Franklymls searches.
c,You're very welcome, glad my musings are useful to someone.You can make Frankly do a lot, but make sure to try out sawbuck and redfin too. Sawbuck's zip-code with map feature is great, and redfin's map searching is useful too, especiallly when you don't know all the zips. I found that once I found one house or town house I was really interested and wanted to see? Then looking over all the possibilities in all three services, generated a lot more homes to go look at. Sometimes just getting the same list in a different order or organization can make you notice a good listing you hadn't picked up on before.
Robert said... "I don't champion excessive spending, I just point it out."With glee. The other day you alluded it to being the savior of our economy after the "failure of capitalism". Probably the dumbest thing you've said so far, and that's quite the milestone.
With glee. The other day you alluded it to being the savior of our economy after the "failure of capitalism". Probably the dumbest thing you've said so far, and that's quite the milestone.This is a nuance that you probably won't understand, but I said capitalism failed, not that it was a failure.I'm not sure I can explain it in simple enough terms for you to understand, but one can fail a test and still not be a failure. Hope that makes sense, because I don't feel like wasting any more time educating you.
Oh please. If you really thought you possessed the economic fundamentals to educate me, you wouldn't be trolling every thread talking about jobs and ignoring every other facet of housing. Here's a tip: don't play the too-smart-for-you card on topics you're clueless about.
Hey Kev,How about a "chill pill"? Once you can demonstrate your superior thinking AND couple that with a certain level of business accumen, come talk to us.
Hey VA_Investor,How about you butt out?
OK, KevKinda reminds me of my dad telling me the definition of "sophmore".Something about knowing it all...
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