Northern Virginia Weekend Bits Bucket 2/28-3/1 2009

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Northern Virginia Bits Bucket 2/27/2009

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Northern Virginia Bits Bucket 2/26/2009

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Northern Virginia Bits Bucket 2/25/2009

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From Peter Coy at BusinessWeek on Feb. 19: While New York Bleeds, Washington Thrives.

S&P/Case-Shiller® December Home-Price Index

The S&P/Case Shiller® composite index (graph here) for the month of December was released today.

"'The broad downturn in the residential real estate market continues,' says David M. Blitzer, Chairman of the Index committee at Standard & Poor’s. 'There are very few, if any, pockets of turnaround that one can see in the data. Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight of those MSA’s now with negative rates exceeding 20%. If one looks in detail at the annual return data, it can be seen that 13 of the 20 MSA’s and the two composites have been reporting consecutive record declines since December 2007. The monthly data follows a similar trend, with all of the metro areas reporting at least four consecutive months of negative returns.'
. . .
All 20 metro areas are reporting negative monthly and annual rates of change in average home prices. Boston, Denver, Los Angeles, San Diego and Washington D.C. are reporting a relative improvement in year-over-year returns, in terms of lesser rates of decline than last month’s values".

Northern Virginia Bits Bucket 2/24/2009

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Northern Virginia Bits Bucket 2/23/2009

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Northern Virginia Weekend Bits Bucket 2/21-2/22 2009

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Disincentives

(h/t Novahog): From CNN Money:

"Take Joe Martinez of Bristow, Va., who fits the profile of the 'responsible' homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

'There's just no point to stay here,' said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. 'We don't want to give up our home, but it's never going to come back'.

. . . . Martinez isn't interested in having his interest rate lowered. He would like to see some of his principal forgiven.

'Why would it be such a big deal for them to modify my loan?' he said, noting that his tax dollars are being used to finance the program. 'Wouldn't that stabilize the economy?'"

Retread

Some of our commenters in today's "Bits Bucket" find the Post's "Real Estate Live" editors:

"impossibly smug"?
"smug and annoying"?

Nahh . . .

Friday, February 20, 2009; 1:00 PM

Re: Banking: I am not nearly as burned by the small number of bankers as I am by the massive number of people who intentionally bought houses they couldn't afford without using common sense. Now I (as a renter who was bright enough not to buy something I couldn't afford) am supposed to put my tax dollars into bailing them out of their irresponsible behavior so they can build equity. This effect me far more than whether some executive I will never meet get a couple of extra million from a 800 billion package.

Maryann Haggerty: I think back 4 or 5 years ago, to these same chats, and I don't recall a lot of people saying, "whoopee!! I'm going to irresponsibly buy a house I know I can't afford!" What I recall are a lot of people saying, "I know this house is a stretch, but I think I can make it as long as my health holds up. And with luck, my income will improve as I move along in my career."

Elizabeth Razzi: And I'm assuming you're not one of those renters who ends up getting booted from your place because the landlord lost it to foreclosure.

Oh, now I get it-- we all got sick, and our incomes didn't improve. So obviously, not our faults. Shew!

I seem to recall there wasn't a problem with prices. Oh yes, here it is:

Friday, July 20, 2007

Washington, D.C.: Short or long-term, do you think D.C. or it's suburban areas will come back down to earth with real estate prices of those seven to ten years ago?

Elizabeth Razzi: The prices of seven to ten years ago? That would be a whopping price decline, and I think we'd have to see a lot of job loss to get there. So far, that's not happening.

Maryann Haggerty: For prices to roll back seven or 10 years, we would need an economic cataclysm, I suspect. What's more common is for prices to stagnate or fall somewhat as incomes continue to grow, so things get back in line.

Northern Virginia Bits Bucket 2/20/2009

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Northern Virginia Bits Bucket 2/19/2009

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New fees from Fannie and Freddie on April 1, according to Kenneth Harney at the Post. They start April 1. (h/t Hi). These sound draconian (you only escape them if you have 30% down). Well, there's still FHA.

For commenter TheNothing, this one's for you (h/t CR):

Northern Virginia Bits Bucket 2/18/2009

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February Market Update

I appreciated receiving this February real estate letter from the William and Alexandra Lohr team of Long and Foster.

Check out the months of inventory in Northern Virginia as of February 16th.

Northern Virginia Bits Bucket 2/16/2009

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Northern Virginia Weekend Bits Bucket 2/14-2/15 2009

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Northern Virginia Bits Bucket 2/13/2009

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Happy Friday the 13th!

More fun for those of you with triskaidekaphobia:

From AP on today's $789B stimulus passage: "officials estimated it would mean about $13 a week more in people's paychecks this year" . . .

Good thing it's not a cool $1,000,000,000,000, 'cause that has 13 digits . . .

Prognosticator

From Bloomberg:

Jim Rogers, chairman of Rogers Holdings, said he renewed bets that U.S. stocks will drop as the government’s economic revival plan is a “disaster.”

Rogers is shorting U.S. equities including International Business Machines Corp., General Electric Co. and JPMorgan Chase & Co. after closing earlier bets during October’s meltdown, he said in Singapore. . . .

“I covered most of my shorts in the U.S. stock market back in October specifically, and waited for a rally and there’s been a bit of a rally, so now I’ve started shorting again,” Rogers said. The bank-rescue plan is “a big, horrible disaster.”

Northern Virginia Bits Bucket 2/12/2009

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Perpetrator or Victim?

Apparently, two reporters at the Washington Post have latched on to a perpetual victim of the Evil Mortgage Wall Street Man. Not once, but three times has her story been covered in a national newspaper since last July. She's part of an ACORN group that goes around chanting, "Save our homes!" But in the case of this ubiquitous interviewee, after signing on to a mortgage and moving in, she lived in her (half million-dollar) home scot-free for a year! She might have made one payment on the mortgage, if that. But it was "her home"!

In today's Post, staff writer Darryl Fears writes: "Foreclosure Protests at D.C. Offices Reflect Trend". He found our Wall Street victim joining ACORN in a protest in Baltimore yesterday:

"Veronica Peterson of Columbia was among the protesters yesterday. She held a sign that read, 'Foreclosure Free Zone.' In 2006, she said, she bought a $545,000 four-bedroom house with two loans at 11 percent and 8 percent, with a promise from her lender that she could refinance with a fixed rate after six months. Peterson, who is self-employed, fell three months behind on her mortgage payments and was evicted. She said no bank would allow her to restructure the loan 'because the loan agreement was fraudulent. They misrepresented my income. ACORN found all these problems. Legal Aid found problems.' 'My loan should never have made it through underwriting,' Peterson said. 'I had a 750 credit score. Now my credit is destroyed. I'm going to have to file Chapter 7 bankruptcy for the first time in my life. We're at the point where we're willing to get arrested.' Asked whether she could afford a home at that price, Peterson said yes, based on her income at that time as the owner of a child-care business".

This story didn't sound credible to some of us here on the blog. Randy, a commenter, did some digging and found out that Veronica's story has been mentioned before. Someone else in the comments section of the Post (a "steve1231") noticed it too. (By the way, the reporter of the article (Darryl Fears) is on record saying that those pesky Washington Post comments should be banned if they can't be filtered in advance . . . ).

The Documents in the History of Veronica Peterson:

First, we have an article from the Washington Post last year by Staff Writer David Montgomery, dated Thursday, October 2, 2008; Page C01:

The Foreclosees Protest An American Dream Turned Nightmare

"There is [ACORN protestor] Veronica Peterson, who bought her house on Fox Grape Terrace in Columbia for $545,000 in November 2006, and eventually lost it. The monthly payments were $4,450, even though her previous year's income was $50,000 plus child support from her ex-husband. Only later, when housing counselors brought it to her attention, did she notice that on the loan application the broker had inflated her income and listed assets she didn't own.

'These loans were weapons of mass destruction,' she says, getting ready for the Man with her son Ryan, 3, who is holding a copy of "David and Goliath.' 'They destroyed our credit, our lives, and they blew up in our face.'"

Second, we have the reporter who actually took the time to look up the loan. Edward Ericson, Jr., on 7/30/2008 did some digging for the Baltimore City Paper in "Victim Mentality":

"The online court and land records show that Peterson closed on the house on Nov. 3, 2006, with two loans from Washington Mutual. The main mortgage, for $436,000, had a starting interest rate of 8.5 percent, adjusting in December of this year to the London Interbank Offered Rate plus 4.99 percent. The second loan, often called a "piggyback," totaled $109,000 with an interest rate of 11.25 percent, according to The Sun.

Those two payments together would have totaled $3,386.17 per month. That's before property taxes, upkeep, utilities, etc. Peterson would have to earn at least $50,000 per year just to make her house payments.

But it appears that Peterson made few--if any--payments. The foreclosure was filed July 31, 2007. The balance on the main note then was $435,735.86, plus unpaid interest accrued from Jan. 1, 2007, plus $1,005.72 in late charges. This suggests that Peterson made, at most, one payment on her house: the December, 2006 payment. Given the grace periods typical in home-mortgage business, it is at least as likely that her first payment was not due until January 2007, which would mean she has made zero payments.

Had she made all of her payments, Peterson would have spent about $64,335 so far. Had she rented a similar place, she would have been charged around $2,500 per month--a total of $47,500 -- since January 2007. Instead, she apparently paid nothing".

Ericson's research was in response to an article by the Baltimore Sun entitled: "Rescue is Quirk of Timing": "But for hundreds of thousands more, people like Veronica Peterson, it comes too late".

On July 30, 2008, according to the Sun and quoted by blogger Psycho Phil, Veronica "Peterson is waiting for the eviction notice that will force her out of the $545,000 house she bought in Columbia two years ago".

The original July 30, 2008 Sun article is no longer available without a fee, but the photos are still posted.

Other blogger posts related to the July 30 article:

Today's Financial News: "Mortgage Crisis: No Pity for the Stupid"

On the Record: "When is a victim not sympathetic?"

Psycho Phil: "Baltimore Sun chooses the wrong ‘victim’"

Also, there are 417 comments on the Topix post from the original July 2008 Sun article, with little (understatement) sympathy toward the borrower.

Here's a YouTube video of her telling her story.

$15K House Purchase Update

H/T Calculated Risk:

WSJ: "To make room for added spending, the White House, joined by House Democratic leaders, is pressing to scale back certain Senate-passed tax breaks, including ... an $11.5 billion proposal to give car buyers a tax deduction covering local sales taxes and interest on auto loans, and a $35 billion proposal to create a new tax credit for home purchases."

Update Wednesday afternoon: (h/t Manju):

"Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles".

Update Wednesday evening (h/t Jeremy):

"The homeowner tax credit has been kept but significantly reduced. The Senate version proposed a $15,000 credit, double that of the House bill."

But apparently we're not impressed: according to a new Rasmussen poll, nineteen percent (19%) trust members of Congress more on the economy than on their own judgment. 67% think they could do a better job.

Northern Virginia Bits Bucket 2/11/2009

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Truman Balcony Included

Our favorite 'White House' is back on the market! At 17,000 square feet, you could buy in with friends, but you might argue about who gets the West Wing.

Northern Virginia January Housing Sales

January sales were up year-over-year in every Northern Virginia county with the exception of Alexandria City, where sales were down 2.6% (to an 11-year low).

Sales were up (again) significantly in Prince William County to an 11-year January record of 759 (up 111%). Prince William (including Manassas City & Manassas Park City) has shaved its months of supply down to 5 months' from 17 months' worth last year, which is remarkable. The median price of those sales was $165,000, which is the same median price as December 2008 and a 41% drop from the year before. Arlington County sales rebounded a bit from last year and were up 27%, although Arlington's in its third year of median price declines.


Source: MRIS

Northern Virginia Bits Bucket 2/10/2009

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Housing Economy Thread

I thought I'd start another post for anyone who wishes to discuss the bill in the Senate, as it relates to housing, as well as the Treasury plan. So far, the former still includes $15,000 for homebuyers, but the 4% mortgages were voted down. News about the latter:

US Treasury to prop up housing under revamped bank bailout.

"Summers declined to get into details of the new TARP relief, but said a large chunk of it would go to housing.

'The president's made clear that he's very committed to (preventing) foreclosures. I expect that it will be 50 billion dollars or more that will be directed at providing support for the housing sector of our economy,' he said."

But we won't know the details until "the plan" is released tomorrow.

Update: Pimco's Bill Gross says mortgage rates likely headed to 4.5%.

Northern Virginia Bits Bucket 2/9/2009

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Northern Virginia Weekend Bits Bucket 2/7-2/8 2009

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Northern Virginia Bits Bucket 2/6/2009

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In the news: Fannie Mae easing rules for refinancing:

"Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees. . . . The company’s DU Refi Plus program will start April 4."

Here's a link to Real Estate Live today at the Washington Post. Let's see if Cara's stimulus question gets answered.

Northern Virginia Bits Bucket 2/5/2009

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In Centreville, 18 Contracts, "most over asking price".

Northern Virginia Bits Bucket 2/4/2009

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Northern Virginia Bits Bucket 2/3/2009

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Northern Virginia Bits Bucket 2/2/2009

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