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.
This was on tech ticker this morning (warning - loud video starts automatically).Celente, the director of the Trends Research Institute, who's been tracking trends for 30 years, thinks 2010 brings with it the Great Depression we narrowly avoided last year.I thought this was a cheerful thought for Monday morning.Cenlene on real estate in early winter of 2005 (pdf).
I never understand why people think governments need to stop printing money or will stop printing money tomorrow... Sure if the government stop helpnig the economy we would likely have a depression, but this is why the government will continue to help the economy until a sustainable recovery has taken hold.
I'll toss in another deeply depressing headline:Soup kitchens for all....except in DC of course:Slip Slidin' Awaaayyy...Changing channels...(click)
Recessions and depressions are necessary evil - they can't be avoided and not bad for the long term health of the economy. After all the excesses of last decade, we are due for a major one. If we avoid it, we will languish without much growth for quite some time.
I think they prefer that scenario Spider. A decade or more of stagnant or zero growth and inflation as opposed to a massive depression.
Recessions and depressions are necessary evil - they can't be avoided and not bad for the long term health of the economy.In context I understand what you mean, but in principle I disagree.Depressions translate into severe economic hardships that have the effect of a Freudian hydraulic. Which means, when you exert continuing and unrelenting pressure on something, that something may unexpectedly ooze out in a very inconvenient way or place.In English that means, many will only take so much before they change the rules of the game or create a new game.Severe economic depressions usually are a portent of armed conflict. As history is replete with recent examples...Be careful of what you wish for...not everyone will play nice.
Doug-I agree I think the red would rather have a decade of 1-2% growth rather than a depression followed by 4+% growth.
Move went very smoothly. Thank goodness for strong friends. Infinitely better and faster than hired help. If we ever move out of here, we'll have too much stuff and be too old to go this route again, but I think this was the easiest move since college. Enough money to buy or rent every useful packing material or box known to man, but not so much stuff that it's infeasible to move with a 17 foot truck and a gang of friends. (packed to the ceiling)
Cara, you packed your friends to the ceiling?? I would have bought all the beer and pizza they cared to consume. Just kidding. Glad the move went smoothly! And welcome to the dark side.
Moving is a sure cure for figuring out what you need vs what you want. By the 3rd move in 3 years I was down to a single U-Haul 17 footer. Packed to the gills mind you, but down to one truck.Alas, stuff is slowing creeping back into the house again....Congrats on the move. Plan a party when you finally get everything in place and toss the last box or packing material.
Yup, coffee, donuts, pizza, beer. Those 17 foot Uhauls are great!. (we also did a cargo van separately for fragiles...)I've moved every 1-2 years since I left college, so, yeah, lots of culling.
Does anyone else think the Arlington #s suggest (in addition to the other observations already made) that there may be a lot of Cara's in Arlington now, meaning that people who might have bought a condo or TH last year were able and more willing to buy a SFH now that prices have come down a bit? So this may also have pushed up the SFH sales dramatically compared to attached housing sales in Arl. in Dec.
"I never understand why people think governments need to stop printing money or will stop printing money tomorrow...Sure if the government stop helpnig the economy we would likely have a depression, but this is why the government will continue to help the economy until a sustainable recovery has taken hold."This is somewhat simplistic. While it is true governments can in theory "print" as much money as they want, what they are not capable of doing is printing value. There are serious consequences to printing too much money, and they aren't necessarily something that will manifest immediately. It is for this reason that what the Fed/Treasury are currently doing is regarded as such a risky course of action. If in the course of trying to avoid a depression the Fed destroys the value of the world's only reserve currency we may see a completely different financial crisis and depression...
"Recessions and depressions are necessary evil - they can't be avoided and not bad for the long term health of the economy.After all the excesses of last decade, we are due for a major one. If we avoid it, we will languish without much growth for quite some time."I don't know that I would go so far as to say depressions are a necessary evil, there has been only one in the modern world's history, but I would certainly agree that recessions are necessary for capitalism to function. People have a natural tendency to forget the lessons previous hardships have taught their elders. However, once exposed to serious financial hardship most people have a much greater appreciation for the risk inherent in their financial decisions and remain more conservative with their money for the rest of their lives. This is of course one widely recognized trait of the generation that grew up during the Great Depression and there is already some discussion about how this current recession will affect a new generation. If this recession created a new generation of risk-averse savers it would be for the best. "The Recession GenerationThose entering the workforce now will likely make less and save more—not just in the short term but for the rest of their lives."See:http://www.newsweek.com/id/229959
If anyone thought I was accusing people, here, of being racist for wanting to live in the Langley, Oakton school district, etc., as Tbw indicated I was, I apologize. I will disagree with the general consensus of this board that everyone who chooses to live in SE Fairfax County does so because they cannot afford to live in Oakton or Vienna. How is is advantageous for people who work in the Pentagon or at Ft Belvoir to live in Oakton or Vienna rather than Springfield or Burke? How about if you work in the City of Alexandria or PG County? It astounds me that most of you actually believe that if someone had to choose between Oakton/Vienna and Springfield, that ALL of you believe that Oakton/Vienna would always be selected. I would never make the same assumption about someone choosing to live in Woodbridge over Springfield or Lorton.
Leroy-You are correct that they can not print value, but luckily all debts are not based on value (except some T.I.P.S.). So printing dollars does help pay them off. I also think that although inflation is bad we know what it does and how to handle it. People are not happy in this scenario, but its not the end of the world either. In deflation/depressions situations we do not know how to handle them and they are a stronger positive feedback loop. For this reason the government will not stop printing until they are certain they avoided a depression even if it means we get inflation. In fact they may want some inflation to help chip away at all of the debt our country has. There best case scenario is investors continue to be dumb and accept low interest rates while the government uses inflation to its advantage
Hayfield Grad,I think they just keep forgetting that lots of us work in the places you named, that all of DC does not work in Tyson's Corner, thank goodness.Ace,That may be part of it. Common real estate wisdom is that condos and townhouses rise last and fall first and hardest, so for those taking the plunge, it's a lot easier to buy assuming you're going to wait out any further declines than it is to buy a condo or townhouse if you know you're going to want a yard someday. If you're buying now you can't count on the real estate ladder doing your work for you.
"I will disagree with the general consensus of this board that everyone who chooses to live in SE Fairfax County does so because they cannot afford to live in Oakton or Vienna. How is is advantageous for people who work in the Pentagon or at Ft Belvoir to live in Oakton or Vienna rather than Springfield or Burke?"I don't believe that is the consensus on this blog at all. Outside of a handful of people who are obsessed with small slices of close in areas I think everyone here is very open to the idea that there are many nice neighborhoods in the area. I think the same thing when I see people going on and on and on about this metro or that metro line. I have no interest at all in the metro because it has no relevance to my commute. What makes perfect sense for one buyer may make no sense at all for another. Why pay more for less just to get a longer commute?
NVAR Monthy Statsthat wasn't very hard because Harriet shrudely posted it on the main page...
I've been away for a few weeks... Cara, did you already move into the house? Closing date passed, everything work out?
direct link to the pdf of detailed statsactually, I'm not sure what's happening. FFX county: condo number of sales were down -13% YoY, SF attached -2% YoY, SFD -18% YoY, but shooting up in median price.... The condo and TH median prices were pretty flat MoM since August.452 of the sales were of detached homes, only 349 THs, and only 195 condos, so the median home is going to be in the top of the townhome bottom of the SFH range. Maybe move-up buyers were doing lots of rent-backs until their December closes? Other than that, it seems to me that the mix is pretty "normal".
kevin,Yup, closed last week, moved this weekend. All smooth sailing. I can't reccommend Jeff Royce from Frankly Real Estate and Jeff Divack from Intercoastal Mortgage highly enough. All the horror stories you hear people tell about surprises on the HUD-1, or getting your bank to confirm that they'll be able to close on the date specified, etc.? If you don't want to worry about any of that, and have a loan officer who is completely on top of everything, and always accessible by cell or email? Get Jeff D. Their rates are totally competitive, and their service is outstanding. And Jeff Royce was great to work with too, put up with all our indiosyncracies and learning curve in figuring out what we actually wanted with a smile, and helped us get the best price we could get while still landing this house that we really are going to love. The cat's scared of all the space and is hiding in the bathroom next to the heater unless my husband's home though.
Cara-The mix difference looks pretty huge to me. If you look at the units sold by price range for SFH in Fairfax County . You have <200 = -80%200-300 = -55%300-400 = -33%400-500 = -26%500-600 = -1%600-700 = -19%700-800 = +33%800-900 = +70%900-1000= +160%1000+ = +10%Condo's and TH show a similar trend, so unless you think prices went up massive amounts and houses were switching buckets all over the place you get the picture were the median is up because of the mix of houses for sale
housebuyer,That -80% is a red herring.Small number statistics there. 10 goes to 2, is not very relevant to the median.Other than that the pattern is pretty regular. I'd say the median price for the same base product is up, because there are way fewer of them at bargain basement REO prices. Last year there were enough trashed REO's that they were truly selling at amazing discounts, such as near $300k for something that resold this summer for $425k. Now, the trashed out or totally unrenovated homes in the same neighborhood are coming on the market at $375k-$390k. Whether that's enough of a discount to get them to sell is another question.
I wonder if you subtract this from WDC Case-Shiller what you would get?P.G. County Ranked 12th Worst Housing Market for 2010I think there is a typo in the first paragraph - I think they meant deflation not inflation.
Cara-Sure I agree the -80% number is not very meaningful. I assume the numbers you mentioned are for the areas/ price range you were looking in right? Either way it doesn't get at the point that sales increased dramatically in higher price ranges. I do not disagree that median prices may have gone up for similar products, but based on the data I see it is tough to discern this rather than there are fewer small places selling and more large places. I am interested in seeing what happens to assessments. Does anyone know when the Fairfax ones become available?
Cara, fantastic news. Sorry I was out of the loop to have missed that, but congratulations.
housebuyer,Yes, on both counts. But your "dramatic" uptick in the higher brackets is still only 40-ish additional sales, that doesn't move the median on 1000 sales very far.Yes, the larger house market has thawed from it's deep freeze of fear that gripped it last year, but with only 40 additional sales that can't be the driver behind the median. It's got to be the higher prices and change towards organic sales away from REOs down where the bulk of the sales are happening.Still, it's an important aspect, especially for most commenters here who are looking in that above median price range.I don't think FFX county tax assessments come out until March-ish.
Cara-There are 40 additional sales in the higher brackets fewer sales in the real bottom buckets I think there is also at least 40 fewer sales due to a lack of inventory. So this would move the median about 40+ houses. If you look around the median there are 100-150 houses per 100K bucket. So moving this could easily move the median 40K which is over half of the increase. I do agree there is a real increase in addition, as shown by the fact that CS is also up since last December.
housebuyer,But the bottom bucket's drops are a shift in condition not size. It's not as if there was a glut of 2 bedroom 600 square foot houses that got sold last year and aren't up for sale this year. I don't think were in any actual substantive disagreement. I'd say roughly $10-20k of the median shift from last year is the thawing of the larger home market, $10-20k is from the shift away from REOs towards organic sales, and $5-15k is from the actual increase in the prices that some organic sales were able to command this year. In the market segments where the REOs were the most rampant those changes would be more dramatic, but they get smoothed out by the rest of the data.
A lower-end reo I looked at last week got 22 offers. Obviously, the first-timer's are still out there. It will be a frenetic spring.
It's quite easy to see that all the negative numbers are on the bottom and positive ones on the upper price buckets. There is absolutely a change in the mix.Condition vs size doesn't really matter. It comes down to the fact that the average price is higher because "better" homes are selling, regardless of what makes them better. I stand by my statement that this is because more and more WTF sellers are finally coming to reality and adjusting prices to get those homes sold. I wish there was a column for % of initial list instead of the % of final list that a home sold for so I could easily verify this.
HayfieldGrad,I have plenty of friends from college who grew up in much nicer homes in Burke, Fairfax Station, Springfield, etc than I did. I *never* said those were undesirable areas. You are making quotes up.I also have college friends who went to West Potomac, Stuart, Falls Church, and so on. Also a few who went to TJ instead of those schools. Also have some college friends who went to Wakefield. Also have heard local realtors talk about the various schools. Have friends who stopped going to Springfield Mall. I've given you the various comments they made over the years.Obviously given I have friends and classmates from those schools you can succeed at those schools. I've never disputed that. But I also have met people who have succeeded despite going to DC Public Schools. I don't think anyone yells at people for saying they don't want to send their kids to DC schools. There are good teachers there. And the low test scores can be explained away by socioeconomic factors as well. So why do people get a pass when they say they will not send their kids to DC schools but it's offensive to say you don't like Mount Vernon, Wakefield, Stuart, or whatever? I'm sorry but it's the same rationale. According to Woodrow Wilson (DC)'s website they offer these AP courses:Common AP Courses Offered at Wilson * Physics * Calculus AB * Calculus BC * U.S. History * Comparative Government * Computer Science AB * English Language * Spanish Language * French Language * Studio Art * U.S. Government and Politics * Statistics * Biology * Latin Virgil * English Literature * Spanish Literature * French Literature * Art History * World HistoryThat's as comprehensive a list you'll see at Langley, Woodson, Oakton, Madison, Herndon, Robinson, and so on. And of course Lee, Stuart, Mount Vernon all have the IB equivalents. So why is it okay to pass on Woodrow Wilson HS but not okay to pass on Mount Vernon or TC Williams?
The Anonymous,Re Arlington...So you read in some blog in 2002 that there was a bubble in Arlington. During this time you lived in Arlington, right?And when the Market Common in Clarendon opened up with a Pottery Barn, Williams-Sonoma, Barnes & Noble, Apple store, Cheesecake Factory, Crate and Barrel and so on you thought that was not a relevant positive factor? I know Cheesecake Factory and Barnes and Noble might scream "the masses," but those sort of national companies do their homework and generally open in upscale areas.I don't know the exact dates of everything but I think early 2000s also brought the Ballston Harris Teeter on Glebe Road, the Clarendon Whole Foods, Pentagon Row Shopping Center (Harris Teeter, Bed Bath and Beyond, etc) complete with a Reston Town Center-esque ice rink. I think a little before that Potomac Yards Shopping Center opened on Route 1 and I think some time around the center with Costco, Borders, Best Buy, California Pizza Kitchen, etc opened up. Also a million high end condo and apartment and TH communities opened up in these various areas.Again, I know to many Arlingtonians and Alexandrians this is a yucky and soulless list. But for many suburbanites they are a delight. In the 1990s if you wanted shopping like that and you lived in Arlington you were always driving west to get to it. So why buy there. Once they made the shopping a little more mainstream I think it made a lot of people consider Arlington when they would not have before. CRT's stats show that.I still think there's some frothiness in Arlington and prices will go down, but a lot did change there. I just don't see how someone living in DC or Arlington during the late 90s/early 00s and seeing all the construction wouldn't think that would be a valid boost for property values.Can anyone make a similar list of dramatic changes for Fairfax County? I don't think they can. housebuyer speculated Tysons Corner grew a lot more but the numbers I found showed the growth in the 2000s was much more modest than Tysons growth in the 1980s and 1990s. And national retailers never shied away from Fairfax County.Assuming the redevelopment of Tysons and the Silver Line goes well (i.e. all the new capacity is leased, traffic does not become worse, people actually ride the Silver Line, etc) I expect that to have an upward pressure on property values along that corridor.
Wow I had no idea how expensive Lake Barcroft properties are. This place looks awful. barcroft If this was a mile or so off the lake it would probably go for 400-500K. Does being on the lake really make a place twice as valuable?
Sorry there was an extra " in the address just delete it if you click on the link.
Lake Barcroft waterfront has always been expensive. It's fair to say that anything on any water will command that same premium or more.
tbw,I guess if people are passing on Mt Vernon, I guess it is because they don't want their children to go to school with military kids who live on Ft Belvoir. I know about that because hundreds of Fairfax Station parents refused to send their children to Hayfield for the very same reasons.
Thank God there was only one HS in the town I grew up in!
I really do find it funny how pushy parents are about the schools there kids go to. Sure if one school is safe and the other isn't that makes sense. But fighting to get your kid into a school that has an average SAT score of 1200 instead of 1100 makes no sense to me. The kid and parents make a much larger difference than the school. In fact your kid will likely get into a better college by being the valedictorian of an average school than being basically average at TJ or Langley...
housebuyer,The listing says the home is 4,578 square feet. It does not look that large but if it were really that large the price is not entirely insane.Did you see that in 2007 they tried to sell this for almost $3M? That's crazy.
Is my memory correct that some here'd gotten quotes for a 1-br addition @ about $250-$300/sf in Arl? IOW, for a 20x20 rm it'd be $100K+? Tks!
housebuyer,Says the guy who went to TJ instead of Woodson and Dartmouth. ;)But yes I agree things do get a little silly. I've met more than one person who made sure I understood they were in the part of McLean zoned to Langley and not that totally poor part that is zoned to McLean. They didn't actually say totally poor; I'm just mocking how they stressed their kids went to Langley and not McLean.Everyone has their comfort level and what seems good to them and what does not. I happen to think Lee, Stuart, Mount Vernon etc are unsafe. I certainly do not think they are inner city schools but I do think they have more of those problems. On a side note, I think a top student at any area school would be a top student at any other school. The only time you might be top at one school but average is base school vs. magnet school.
me NEWbie poster. Me looks at tabeles in open poSt and see Thee tngs:1. Price go lot 2000-20052. Prisez go down lot 2006=20083. Prisez go up lot 2009Jist my obsrvaytion!pS ignore mi Handel. Robert is not me. He is dumbass doesnot lstn to reezon
HayfieldGrad saidI guess if people are passing on Mt Vernon, I guess it is because they don't want their children to go to school with military kids who live on Ft Belvoir. I know about that because hundreds of Fairfax Station parents refused to send their children to Hayfield for the very same reasons.So if parents do not like Mt Vernon then they do not support the troops and the terrorists have already won? Since the race card and class card did not work you now run to the you must not love America card.Considering that the vast majority of the schools we are talking about do not have Ft Belvoir as a feeder that is such a non-factor it's beyond ridiculous that you just cited it.
TBW- The real reason I went to TJ is I am a math guy. I hated English/history... and these classes were a lot cushier at TJ. If I hadn't gone to TJ I would have had more time to focus on swimming and maybe the Princeton coach would have recruited me instead of just the Dartmouth coach :-p
tbw,If Lee and Mt Vernon are dangerous with your logic than West Potomac, Edison, and Hayfield are also dangerous. Some of the neighborhoods that go to Hayfield are closer to the Springfield Mall than the 22150 and 22153 neighborhoods that go to Lee. The Hagel Circle neighborhood in Lorton that goes to South County had a double murder and 2 armed robberies last year. A woman was attacked in broad daylight at Giles Meadow Park near So County last fall. Sounds like more crime happened in the last several months of 2009 near So County than at the Springfield Mall and Lee High school. The 1st high school I went to had a murder take place right next to the school. The body was found near the school tennis courts. You must think my parents were insane to allow my sister and I to continue at that school.
HayfieldGrad saidI guess if people are passing on Mt Vernon, I guess it is because they don't want their children to go to school with military kids who live on Ft Belvoir. I know about that because hundreds of Fairfax Station parents refused to send their children to Hayfield for the very same reasons.Was this even debated by the county btw? When did this happen? I find the proposal pretty ludicrous.Fairfax Station is about five miles from Woodson HS and 15 miles from Hayfield HS. That's three times the distance. Of course parents threw a sh*tstorm.
tbw,The Fairfax Station meighborhoods adjacent to Lorton were zoned to Hayfield. Those neighborhoods got sent to Hayfield because W. Springfield, Robinson, and L. Braddock didn't have any room. A lot of Hayfield kids traveled 10-15 miles to school, including me. One reason why the school system messed up the school enrollment projects for S. County was because they didn't count on a bunch of Fairfax Station parents enrolling their kids at S. County. Apparently, a lot of Fx Station people put their kids in private school to avoid Hayfield. FCPS wrongly assumed that they would keep their children in private school.
HayfieldGrad,Fairfax County publishes (rightly or wrongly) "safe and secure" stats for each school. I don't think I'm making up there's a difference.Here's Mount Vernon:Serious Incidents 15, 7, 17Fights 20, 23, 23Other Weapons 8, 5, 10Here's Langley:Serious Incidents 3, 3, 3Fights 4, 6, 2Other Weapons 1, 0, 1Frankly, Langley's numbers are too high to begin with and Mount Vernon's are just ridiculous.
Foreclosures in Fairfax CountyBased on data from the Department of TaxAdministration, the number of county-wide netremaining foreclosures in Fairfax County was 899 inOctober, down from 981 in September, reflecting 237properties coming out of foreclosure, partially offsetby 155 additional properties added to the foreclosurelist. This is the lowest number of net remainingforeclosures since April 2008. On averagethrough October, properties that have been re-soldwere in active foreclosure status for 4.6 months.
Apparently, a lot of Fx Station people put their kids in private school to avoid Hayfield. FCPS wrongly assumed that they would keep their children in private school.Do you have any evidence/hard data to back this up? There's always been overcrowding at high schools where there is new home community growth. In the 1990s Chantilly, Centreville, etc were all overflowing and had huge trailer park classroom lots. That's why they built Westfield. Same with South County. Because people stay in homes for a long time and people usually buy when they are childless or with babies, there's always an older population and fewer kids in established communities than in brand new communities. The fact that South County hit capacity quickly is not evidence that there were a lot of hidden families. And I can assure you that the people running the schools are not naive to how parents view the various schools. They were not shocked by the reaction to the South Lakes redistricting.
TBW - If there were always more kids in new communities than older, established communities, then presumably Annandale HS and its feeder schools would not be among the most overcrowded in the county. Also - if you knew the history of the School Board's dealings with the Hayfield area with respect to South County SS, you'd have a bit more sympathy for Hayfield Grad's opinions.As to the South Lakes redistricting, I agree with you. There were a lot of pissed-off folks who dumped their homes on the market in 2008 and in some cases sold at a big loss. Now that Hughes and South Lakes are actually filling up with students from the redistricted areas - which the opponents wrongly claimed would never happen - those redistricted neighborhoods in Fox Mill, Floris and the "Madison Island" are going to get more attractive again.
http://franklymls.com/DC7211690 Assessed at 320, went UC after 47 days with no price change, so,assume it went at or within 10% of list.almost 50% drop in price from Peak.
Jeremy, I think there is a column on franklymls that will do what you want, for sold properties: %OL.It looks as if Frank has added another column I'm glad to see: %TA, which shows the selling price as a % of tax assessment.
"TBW said...I just don't see how someone living in DC or Arlington during the late 90s/early 00s and seeing all the construction wouldn't think that would be a valid boost for property values."TBW -- you realize that a few years back, you would be absolutely crucified for uttering something like this on this blog?If you made that argument, the polite response from the intellegencia was always "well thats just because you think your neighborhood is "different" or "special" and I can assure you it is not. All housing prices will revert to the mean..."Even worse, you were likely ridiculed for thinking there is a "new paradigm" whereby all houses out in the exurbs revert to the mean, except for those in the "immunozones" which would levitate above the rest. The real truth, they would tell you, is that the correction is just "moving in" and just hasnt hit there yet.Even when CRT pointed out the income & demographic shifts there was fierce resistance from the "its moving in" crowd. John Fountain in particular would get so angry that we even discussed this -- insisting it (as in thei big smackdown coming to Arlington) just hasnt happened yet.Thus, so while I agree with you in that there IS a new paradigm and it IS different here, I only wonder if you would have been willing to admit that (and withstand the withering criticism) on this blog back in 2007 or 2008?
TBW -- the other reason that wouldnt fly is because admitting that would mean that certain people were "priced out forever" from the Arlington market.In hindsight, that is true, there certainly were some people who will never be able to buy in Arlington again. However can you honestly think that to admit that would have gone over well on this blog?
TBW said...So if parents do not like Mt Vernon then they do not support the troops and the terrorists have already won? Since the race card and class card did not work you now run to the you must not love America card.Way to flush out the argument. Great post.
VA_Investor said...A lower-end reo I looked at last week got 22 offers. Obviously, the first-timer's are still out there. It will be a frenetic spring.I know it seems like your post was skipped over by the masses, but it is noted, at minimum, by me.Just daily browsing is showing enormous activity right now. New listings are still ahead in January, but there is tons of stuff going under contract since 1/1/10.
Robert,It's not only the activity, it is the price point. While Cara dismisses median increases by claiming more "organic" sales, I'm looking at apples to apples and seeing reo's coming on at 20-30%+ above a year ago and selling.We either have people who have lost their minds or we are coming back from a huge over-correction. I see places at the higher reo pricing still going for 50% -60% of peak (vs 30 - 40% last year).I don't see anyway that we revisit the lows. That (later '08 and most of '09) was an opportunity, but not for the risk-averse. The property I saw was an reo listed at 155K. I heard the high offer was over 185K. It's a perfectly nice community that I would live in myself.
Volume has generally declined. Hopeful this is a sign that buyers are balking at the freshly re-inflated home prices.
http://franklymls.com/DC7231226 sold in 05 for 175 now theywant to sell it as a foreclosure for 315?That's smoking crack
VA-I am pretty sure that Cara also said that REOs are going for way more than they used too. I think she said organic sales haven't changed that much, but there used to be a big differential between organic and REOs and there no longer is. Cara can you correct me if I am miss-stating your idea.
Pat-I wonder if the sold data is right. Zillow thinks it is worth 340K. It seems really strange that zillow would think the value double from the end of 2005 until now.
The Anonymous,To be clear we are talking about what your stance should have been in 2002. I think things still got crazy in Arlington (like everywhere) as the decade progressed. The 2006-07 prices were all sorts of crazy and even today many prices are crazy.Take the average Orange Line condo. You probably still can't get parity between the monthly rent and mortgage + condo fee costs. I suspect in 2002 the rent/mortgage calculus was close to even or maybe slightly more for the mortgage. So I think I am different than those in 2007 who said it would not move in. In 2006-07 it was most definitely the case that a condo that would rent for $1800 would cost you $2800-3000 in mortgage+condo costs. I looked at Arlington condos back in 2007 and ran the numbers. I think a lot of the bears predictions in 2007 did come true: foreclosures in Arlington, condo buildings converting to apartments, some people not bothering to buy in Arlington, and so on. They may have been too bearish in arguing prices would drop as much as Ffx, Lou, and PWC. But the bulls were more wrong from what I recall. They were arguing 2006-07 prices in Arlington were 100% entirely non-bubbly. That was clearly a ridiculous stance.
The Anonymous saidTBW -- the other reason that wouldnt fly is because admitting that would mean that certain people were "priced out forever" from the Arlington market.In hindsight, that is true, there certainly were some people who will never be able to buy in Arlington again. However can you honestly think that to admit that would have gone over well on this blog?Yeah I don't understand why that is a big deal. Oh no. You have to live in Fairfax County instead or Arlington. The richest (or almost richest) county in the country. With the lowest per capita murder rate in the country. With the 12th largest office market. With great schools. (Stop me before I turn into Robert)Yeah for those of us who work in DC it's a longer commute but it's not the worst thing ever. And yeah it's not as walkable as Arlington on the whole but there are definitely areas of Fairfax that are walkable if that's really important to you.That being said -- we have to be careful not to say some bears are whining they cannot afford homes they like. Many of us are saying we just don't want to overpay and *suspect* when prices bottom out we can afford said homes. No one is going on a hunger strike if they end up in another community once the bottom hits nor waiting 20 years for the bottom to hit.
Va_Investor,How do you know those 22 offers were not all investors? Or 20 investors and two actual first timers? Just curious.
TBW, The Anonymous, etc... check out the "Dec Decade of Sales" discussion. I have added a couple new posts that I won't repeat here because of their length and ready accessibility to anyone with an interest.The bottom line is that TBW would not have been "crucified" for suggesting Arlington had grown more valuable relative to other parts of the area. We were already discussing exactly that, and politely, back in 2008. Not only that, but The Anonymous was part of the discussion so he can hardly claim to be unaware it took place.
Va_investor/Robert,I also noted your 22 offers statement, just didn't have a comment to add to it. It's definitely notable and good news that the investor-end is still hot.Recall that I'm the one who keeps pointing out the new REO's that are priced a good $25-75k over what they were last winter. I haven't seen them go under contract yet, but with this few available they might. Unless non-REO sales jump up $50k as well, there's not a lot of profit margin left in the REOs near me. Which in a perverse way could be good for owner-occupant buyers who want fixers. I guess...I probably should post some examples, huh? I don't think anyone's going to believe me that it's relevant anyway.
Cara,I see, at a minimum, that the floor has risen. I find it hard to imagine that reo/short activity in your region is so much different in the areas that I follow.There are a couple of possibilities; an over-correction has been remedied on the reo's or normal sales are lagging.Is this a dead-cat bounce? Let's see how the Spring plays out. It's very hard to argue with rental parity in the lower end - no offense, but that includes your range.
Va_investor,The TH's and condos around me are the same I assume, I just haven't been following them lately. The SFH's were at $275-$325k last year and most were flipped and sold for $400-$450k this past summer. Now they're priced at $369-$390k but not all are open to FHA financing. So they're sort of pushing the hairy edge. They're at rental parity if you have 20% to plunk down and don't count opportunity costs. But they're above it otherwise. So, they could get support from owner-occupants, and I think they will, but it's borderline math-wise.What I actually think is playing out? Although everyone here will claim it's wishful thinking? Is that the organic sales of stuff in good condition are now solidly over $400k in my neighborhood. Thus, people looking for a bargain will scramble to get the "deals" that are priced $25k below that point. (despite the fact that they cost $100k less last spring). And some intrepid investors will continue to vacuum up all the shorts in case any bank lets them go cheaply, putting those back on for $425-$450k. Where I'm looking the deals for investors are exclusively in the shorts (not that there are any open right now, but one could put in a back-up) and at the courthouse steps.So it's a similar situation, but since it's the one I actually live in now, obviously it's one I'm more cautious about.
Va_Investor,I have a financing question on buying foreclosure. The notice requires settlement in 15 days, so I'm sure that excludes the traditional mortgage option. But I also wonder if 'pros' are bringing their own cash to closing, and am guessing there're short(er)-term financing options available to the pros. Is such option accessible to non-pros like myself, even if it'd be at a premium? Would my 'traditional loan' lender be a good resource to find out such products, or are there different lenders/bankers catering such needs?TIA!
"Leroy said...The bottom line is that TBW would not have been "crucified" for suggesting Arlington had grown more valuable relative to other parts of the area. We were already discussing exactly that, and politely, back in 2008."Heh. To see how ludicrous this is, one only needs to go back to the thread you noted yesterday.http://tinyurl.com/ybw6n5oTo your credit, YOU were polite, but take a look at the comments from John Fountain.First JF starts by denying that anything has changed in Arlington, in direct contravention to TBW's assertion above that its "obvious" there was massive change in Arl:"Nothing has changed in Arlington since 2000. Desirability was high then, just as it is now. It's proximity to DC was good then, just as it is now. The only thing that has changed is the price, which more than doubled while incomes barely rose over that same time period."When I say that might not be right he responds with the typical "you think its different here/new paradigm" bullshit:"Well, if that is your argument, then it would sound like you are suggesting a "new paradigm" in which historic valuations don't matter at all and "it's different this time."After a response from me, he goes on to throw out a strawman about homeless on the street in Arl. And even Cara suggests I am engaged in "wishful thinking" and need to "take off the rose colored glasses", all for suggesting ARL might not revert to the mean.Then following another strawman from JF "well anon, at least you've completed step 1 and backed off the theory that population rose while housing supply remained constant" he then says:"Listen, the fact that you are reworking your theories on the fly as old ones are dismantled doesn't strike me as too convincing. Come on, anon, this is common sense."In fairness, Cara did apologize for "jumping down my throat". JF however, soldiers on, again with the its different here"This is pretty clear evidence that a large portion of the rise in home prices is attributable to something other than "Arlington is now in much greater demand." And I think I know what that something is - a housing bubble whose reversal in Arlington is stickier than in other areas largely due to folks still convinced that it's different here."I then ask how many years we have to wait til prices revert to the mean? I ask, how do we know we arent missing something here? JF responds with:"The way I know I'm not missing anything is because two years ago it was "well, prices may slip a bit outside the betlway, but inside the beltway they won't fall at all." Then it changed to "well, places inside the beltway other than Arl/Alex may fall a bit, but Arl/Alex won't." Next it was "Well, south Arlington may fall, but not by much. And north Arlington won't fall at all." And now it is "Well, south Arlington may get crushed, but north Arlington won't fall that much more."With each iteration, those who thought it was "different this time" for a particular area came to realize it wasn't different after all. We're down to a very small geographic area left clinging to the "gravity doesn't apply here" notion. It's only a matter of time."This type of exchange was pretty typical of what happened when you dared challenge the notion that Arl wont revert to the mean and there was little that was polite about it. To suggest that TBW would have fared better by pointing out the "obvious" change in ARL, is pretty absurd. Also, please dont think that im just being overlysensitive. Lord knows I goad people here as much as anyone. However, its perfectly clear that if you dared suggest ARL wont revert to the mean back then, you were shouted down from the gallows, and to suggest otherwise is false.
MM,Intercoastal Mortgage can close a conventional loan in 15 days. Or that's what Jeff Divack said. If you want to live and breathe your mortgage and closing and nothing else for two weeks it can be done.And seriously, once the bank has you on as a buyer, are they really going to drop you over being late by a day or two? Not a chance, not worth their time or money. I've never seen such a time frame before but if you're serious about it, you need to talk to Jeff.
Cara -- hope you dont think I was criticizing you. In that same thread, you gave me one line I still remember to this day:"Cara said...If Arlington survives the spring and summer, then worry.(someone probably told you this last year, didn't they?)"I love that ironic streak in your posts! And thanks once again for being a very valuable contributor to this blog.
The Anonymous/LeroyThat's a really good thread.I'd like to put my full comments here, so people who don't want to read the whole thing see the context:"Cara said... sundry folks,Echoing things already stated, the desirability is real, but the price is inflated. If people move-up to arlington, you must consider the fact that those move-up buyers have had way more appreciation equity in the past few years than they otherwise would have without the bubble. When the people who bought in 2003-on come to move-up they won't have any equity for two reasons, (1) they overpaid in the first place and (2) the appreciation they thought they had has evaporated. So, if the price support for N. Arlington's most desirable neighborhoods comes from move-up local buyers, there will be a time delay, but the support _will_ falter. Yes, it's not the direct income argument, but it's no less real for it's indirectness. First-time buyers ability to pay are the engine for the entire market, because someone along the chain has to sell to them. Thus, the 20% YoY gains for multiple years is bubble money either way. Yes, it was appreciation that had been made fungible, so there will be far far fewer foreclosures, but buyer support going forward will falter, because they don't have that appreciation money. (or they only have a non-bubble amount of it for life-long owners retiring to someplace more convenient)."..."thanks for the numbers anon,There are still aspects of this that seem more like wishful thinking than reality.For instance, why does increased rental construction indicate to you greater demand for single family homes? Isn't it just as likely to indicate increased demand for rental properties (as well as increased cash-flow in them) due to slackening demand for over-priced homes? Isn't that an equally likely explanation?You have to take off the rose-colored glasses and look at it from another side. Rich people don't get rich by overpaying for houses. An essentially flat income distribution doesn't translate into a 3x higher price than surrounding areas. The almost exactly parallel bubble rise strongly advocates for linked systems, not a new paradigm for Arlington. That linkage may be further up the food chain and hence have equity cushioning for Arl/Alex. But the idea that the lower half rents and the upper half owns is a load of baloney. There are other reasons not to buy, like transience, feeling the prices are absurd. Being able to get someplace much swankier for less money renting while saving money hand over fist. And seriously, Arlington is not Georgetown or Capitol Hill. For example by you links, Arlington County is a very normal Bell curve.The entire "they are making any more land" argument relates to peoples desires to live in certain places, it does nothing to change what size mortgages they can handle. Nor what size mortgages banks will trust them to handle. The steepness that you're suggesting the price/demand curve be is implausible for such an iliquid inherently depreciating (due to the need for maintanence and continually rising taxes) asset. The move-up equity argument provides a mechanism by which prices would rise that much and with similar timing to outlying areas, in both the rise and the more shallow decline. Yours, has nothing but the wishful thinking aspect that if you're right, then Arlington really does have that cachet of being able to pay 500-750k for a glorified shack. Rich people have more self-respect than that."As you can see, as often happened around that time I was getting frustrated with the entire concept of overpriced housing existing.continued in another comment...
(cont)I stand by my argument that wealth, not just income, is needed to sustain North Arlington prices over the long haul. However, I would modify my theory of last year, in that I no longer think that the source of the wealth needs to be entirely move-up equity extraction. It's still the best explanation for why Arlington's rise so perfectly parallels the rise of the whole bubble, rather than paralleling the actual improvements step by step. However, now that future move-up equity is evaporated/evaporating, things can switch over to other sources of wealth. In fact for Arlington to continue to hold onto as much of its gains as it has so far, the wealth source will have to switch, otherwise it will experience a slow drawn out decline when/if interest rates rise such that 150k borrowers can't buy 600k houses on income anymore. (those are NOT specific verified numbers).But the Anonymous, you're argument in that thread was not about Arlington becoming better, or all the things that had improved, it was claiming Arlington is the next Georgetown. Which, while pockets of it are already posher than Georgetown, I think you'll admit is still controversial, and a strong matter of taste. If N. Arlington isn't your cup of tea, the prices there are especially difficult to wrap your brain around. Over the course of time since then, I've just backed off discussing Arlington at all if I can avoid it, and leaving it to those who actually want to buy there to decide what the prices should/will be. The thing is, honestly, other than John Fountain, I don't see what you're talking about with respect to a lack of openness and free-flowing discussion. I don't see anyone trying to shut anyone else up. Seemed pretty darn civil.
Cara,Thanks for sharing.The 15-day term is on the notice of trustee sale, it reads "...The balance of the purchase price will be due within fifteen (15) days of sale, otherwise Purchaser's deposit may be forfeited to Trustee...."But what you said makes sense too.
Cara-I wonder whether they would give you the extra time. They normally make you pay the lessor of 10% or ~$20K the day you buy it. They may be better off keeping your cash and relisting the house.
MM,Oh, it's a trustee sale not an MLS listing... That may be another beast. But my point was, before assuming it can't be done, check with someone like Jeff, who specializes in the difficult.The bigger problem may be the home inspection if there's no get-out-of the contract free time period of a day or two to have it done.The Anonymous,Well, most of my tags for indicating a bottom is in have now happened, so I guess you should officially now worry that no more sizable drops will occur. I stand by my wheat from the chaf argument though too. What's for sale today at "inflated" prices is better stuff that excludes the dogs and ones with un-fixable problems of location which now must drop their prices to compete.
housebuyer,Anyone trying this needs to personally verify with their loan officer what is and is not feasible anyway. I'd want to be done in no more than 10 days if they said 15, but that's me. You're right, they might make more money that way, and they'd do it in a heartbeat if they felt you weren't acting in good faith or wouldn't be able to close. But it depends on what their prime motivation is. Dumping the house, or potentially getting more money.
Cara-I think getting more money is in their best interest. I was looking at the foreclosures in the washingtonpost and I am pretty sure they were being collected by a debt collection agency, which I assume only cares about optimizing profits. Yeah there is a lot of risk about the inspection. I was only looking, because I keep hoping my landlord gets foreclosed on and I can buy my current place at a good discount to what REOs are going for.
housebuyer,There's a risk factor in there that needs to be accounted for when marketing it again. And time costs. Both of which enter the optimization. But I haven't been following the trustee sales, just the MLS REOs so the dynamics are sure to be different.
"Also, please dont think that im just being overlysensitive. Lord knows I goad people here as much as anyone. However, its perfectly clear that if you dared suggest ARL wont revert to the mean back then, you were shouted down from the gallows, and to suggest otherwise is false."There have always been some abrasive personalities on this and other blogs and they have fallen on all parts of the spectrum. I think the big problem is that people tend to lump other posters into one extreme or another. There have been a handful of real doom and gloomers on this blog, and there have also been a handful of "there is no bubble, real estate only goes up... buy now or be priced out forever" types. Most people here fall somewhere between the extremes. While I am at it, it is perfectly reasonable to go from being a bear to being neutral or positive on the market as the correction has taken place. (It is only natural that people's views would shift as the market fell, that is how markets work.)I get irritated when I feel like people are not being honest in their arguments or are trying to lump me in with group X or group Y and somehow attribute other people's statements to me. Once upon a time I was soundly in the bear camp, and for the most part my predictions proved accurate. Now with most of the area already well into what I expect to be a long essentially flat period I am more or less neutral. I am going to post one of my 2006 posts with plenty of specific predictions in it in the latest bits bucket since we are all in a "show your cards" mood...
housebuyer,The Princeton hockey coach was all over me to transfer (I think his name was Quackenbush?). I was totally on board, but my parents were not. In-State tuition at Cornell is quite the bargain. I enjoyed the attention.
leroy,I'd love to post ALL of my comments going back to 2006. I think they have been dead on. Sure, I traded insults (I'm not used to being called a liar and a shill), but only to fend off unwarranted attacks and distortion.p.s. was Lance right or wrong? I did not come down on him because that really wasn't my place.
VA-Yeah I agree it is hard down to turn down instate tuition at Cornell. Luckily for me financial aid has improved dramatically. I only had to pay about half of Dartmouth's costs even though my parents make ~200K.
"I'd love to post ALL of my comments going back to 2006. I think they have been dead on. Sure, I traded insults (I'm not used to being called a liar and a shill), but only to fend off unwarranted attacks and distortion.p.s. was Lance right or wrong? I did not come down on him because that really wasn't my place."lol, whatever... BTW, it is funny that now you think it "wasn't your place" to come down on lance... you two were practically a tag team in trying to convince the "bitter renters" to buy at the top of a massive massive bubble. If you aren't secure enough to admit your own mistakes at your age even when everyone involved already knows them you probably never will be.
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