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Thursday, January 28, 2010
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55 comments:
I agree with shamrock, looks like we're poised to be up YoY starting next month. As housebuyer points out, for current buyers that's kind of beside the point (except for those buyers with time machines, in which case they should go back and buy in 2000 or earlier...). So remember to ignore the hoopla next month, it's the slow drift downwards that matters (unless you're happy with today's prices).
Cara,
Are you talking about CS for WDC? NOVA is already up, way up YOY. Maybe there needs to be another blog for WDC Metro.
Robert-
I agree the Nova is probably already up YoY, but other than some anecdotal evidence do you have any real data behind this. Please don't use median price, or any metric that is dramatically changed because the percentage of distressed sales (e.g. short sales/foreclosures) has fallen significantly over the year. The reason we use CS, is because it is the best at getting rid of these problems, and I think we all understand that not every neighborhood moves the same way, such as Maryland is under-performing Nova.
Va_Investor,
I'm going to Arlington courthouse tomorrow to observe the auction of this N Arl home. 11:03 is the time. Say hi if you see me!
housebuyer,
I bet Robert's referring to Great Falls because that's where he lives and get his anecdotal evidence from...
MM, how do you know that is an auction? Can anyone observe auctions? Is it really that interesting/comical to observe auctions?
Does assessment really matter to a buyer? Should it? How much?
I've seen lots of homes listed on franklyMLS for 100% or more, even 300% assessment. What does that mean? If the market demands that housing is more important than assessment, doesn't that mean assessment is just random from the buyer's perspective?
When should you buy over assessment? Should you always try to buy under, and how much percent is a "good deal"?
wunderbar-
Assessments are by no means perfect, because the county does not look at your individual home. It is just based on sales of homes that are close to yours and adjusted for differences like size, bedrooms...
Although there are a lot of things wrong with assessment they are generally pretty close (within ~10%), so we often use them as a way to compare prices, since we haven't researched every market. So it is better to look at comps and try and determine what a property is worth rather than just trusting the assessment. Also in general assessments are too high when the market is falling and too low when the market is rising, because they only come out once a year and are based on sales fro mthe previous year.
So would assessments this year be considered too low since it seems the market is raising in the area?
(at least it seems like the prices are raising)
sehrwunderbar,
there's a notice of trustee's sale on that property published on local papers.
it interests me but may bore others, and for all i know it might not happen at all. many sales are canceled seconds before the auction.
Why? Do they get an offer or just decide to take off market or something?
MM said...
"I bet Robert's referring to Great Falls because that's where he lives and get his anecdotal evidence from..."
He would have to be referring to somewhere besides Great Falls. Most of the homes there are in the mid to upper buckets that aren't doing as well as the lower price points.
I know Case-Schiller is the best we've got to determine same house price changes, but even then it seems like the mix of homes selling will affect the numbers. If the low end is selling better this year for higher prices, but the high end is hardly selling at all and still declining - then wouldn't the CS data be biased towards the positive gains in the low end since there were so many more sales there? This seems especially relevant now since the buyers bribe has affected sales volume on the low end much more strongly than on the high end.
Is the CS data available for specific price ranges?
Jeremy,
The C-S data has 3 tiers, broken into thirds of the volume in the market. So the lines between the tiers are allowed to drift. Lack of REOs in left in the very bottom of the lowest tier may indeed have shifted the boundary up, which will also then move the CS number for that tier.
Robert,
I meant CS for WDC Metro. "we're" was indeed ambigous.
Looks like someone finally put a contract on my favorite WTF Great Falls home: FX7194976
Final list was 35% off the initial list. Wonder what it eventually sold for. Guess I'll find out soon enough.
Cara,
Do you know if there is any way to get to that tiered data? Or is that only for paying members of their website? I'd love to see the results for just my price range, as I'm sure would others here.
"Cara said...The C-S data has 3 tiers, broken into thirds of the volume in the market. So the lines between the tiers are allowed to drift."
Speaking of which, does anyone have any info on the 3 tiers now that it is subscription based info? I know the high tier was up a few tics from the bottom but I lost track of it several months ago.
This home seems really overpriced to me, although most homes in the area seem overpriced for my taste.
http://franklymls.com/AR7247397
I've always run into the same problem you have of needing paid access, but occasionally others on this blog have posted the data...
Paper Economy allows you to graph them, but not look at the raw numbers and I'm never sure of its fidelity.
Va_Investor,
You are seeing disagreements where there are none.
Yes, if someone buys a house for $400k at the courthouse that if sold in the regular process would have gone for $430k, then when they sell it they will get that $30k profit.
Are you saying the Reston home Shamrock found was a courthouse foreclosure? If so, how can you tell? My understanding was it was sold for $410k in a regular process and that was what my commentary was based on.
On a side note, I feel like I've seen ads where they mention a foreclosure auction and allow you the chance to preview the homes before the day of the bid. Maybe that's uncommon, maybe not. But if it's common I think many bidders get a chance to see how many defects the home has.
Anonymous-
I am pretty sure I put out the percentage change for all three tiers in my original post on Tuesday. If not then I am pretty sure all of the tiers were basically down the same amount.
Wunderbar-
You can get the data from the standard and poors site. It is free to sign up.
Leroy,
Here is the problem I see with your baker analogy.
I bet an expert baker could make an excellent apple pie that Cara, Ace, housebuyer, Robert, Va_Investor, spider, pat, The Anonymous, and I all love. Maybe there would be one or two people saying they've had better. So the chef unites 80-95% of us on the pie.
Contrast that with homes. Let me give you just ten possible variations the flipper will deal with and I bet it will be hard to find 80-95% of us agreeing on all 10.
(1) Hardwood floors, pergo, or carpet
(2) Gas or electric oven
(3) Type of sinks for bathroom(s)
(4) Kitchen tile style
(5) Bathroom tile style
(6) Color of walls on main floor
(7) Type of kitchen counters (pattern and material)
(8) Master bathroom shower and bath decisions
(9) Front yard gardening decisions (shrubs, walkway, etc)
(10) Closet door designs
A flipper cannot make decisions on the above 10 (let alone every other little decision) that would make 80-95% of the buying class completely happy. There is not that much uniformity of taste on those decisions.
A major reason a lot of people like to buy a new home is they get to pick everything for the home in a design studio (if they buy before the home is built.)
serhwunderbar said
I've seen lots of homes listed on franklyMLS for 100% or more, even 300% assessment.
Usually if you see a house listed for 300% of assessment it means it is a tear down and rebuild and the lower assessment was based on the home no longer there.
The Anonymous,
Here is a concrete prediction. When Robert is wrong about C-S he will try to weasel his way out of it with language like this:
Are you talking about CS for WDC? NOVA is already up, way up YOY. Maybe there needs to be another blog for WDC Metro.
He's now on this "PG County and DC are bringing C-S down even as [allegedly] NOVA goes up."
I trust you'll call him out that it's an invalid attempt to defend his bad prediction since he knew when you asked for C-S predictions that the entire metro area was included in the C-S number.
Mmmm, mmmm, pie.
But see, my one friend only cares about how high she can pile the pie and manages to get 10 apples in one 9-inch pie by painstaking wedging of each slice into the last. I like a good crust best and want a pie no higher than the pan for the best crust to filling ratio, and my other friend makes kuchen, which are delicious and take even an amateur only 10-15 minutes prep time, plus baking.
Good flips are like my second friend's kuchen. Tasty and straightforward and appealing to a large swaths of the pie eating public.
Cara,
I thought someone would make an objection like that and note variations in pies. :)
Maybe I'm overestimating how persnickety homebuyers are. On the other hand, am I alone in saying that I would prefer to be buying a new home and the only reason I look at existing homes is because Fairfax County essentially is built out?
What few new home communities you see usually have a reason for the land having been available for so long (they hug I-66, I-495, etc).
tbw,
No, you're not alone at all. I would like the fabulous tree-house of a home my parents built in the appalacian part of Ohio for $250k, but here the construction would have been $400k and the land another $300-400k, so, yeah, new is just not amongst the comparable options.
Not everyone has the same taste in clothing, or needs or shape, but clothing brands seem to do alright at selling us clothing rather than everyone going to a tailor. A flipper or normal seller's choices don't have to suit all buyers, just a large enough segment of appropriate buyers at that price point, size, location and ammenities, to find a few interested buyers. The wider the appeal the more you can charge normally, but there are niche markets as well that sometimes command higher prices due to NOT looking like everyone else's taste. And new construction is the ultimate in depreciating niche markets. It's a one person niche, good luck selling your choices to another buyer who doesn't get to make new choices for the same price you paid.
Man based on the bing map it doesn't look any of the houses there are that bad from the outside. bring bulldozer Does a house with 1500 sq. ft. above ground and I think another 1500 below ground not even warrant fixing it up rather than tearing it down.
"I bet an expert baker could make an excellent apple pie that Cara, Ace, housebuyer, Robert, Va_Investor, spider, pat, The Anonymous, and I all love. Maybe there would be one or two people saying they've had better. So the chef unites 80-95% of us on the pie.
Contrast that with homes. Let me give you just ten possible variations the flipper will deal with and I bet it will be hard to find 80-95% of us agreeing on all 10."
Sure, there are differences in taste in houses and that is something a flipper would have to consider. That is why most flippers keep things very generic... stainless steel appliances, granite counter tops, etc...
My analogy really wasn't intended to extend to this level of detail however. My only point was to provide an example of a case where someone with the right skills can create a great deal more value than the average individual with the same resources.
Besides, there is a large pool of buyers who simply won't buy a house that requires even minor renovations and are willing to pay a great premium to avoid having to change out carpet or put on a coat of paint.
These are the people that flippers are really catering to.
"On the other hand, am I alone in saying that I would prefer to be buying a new home and the only reason I look at existing homes is because Fairfax County essentially is built out?"
I don't feel that most new construction today is of the same quality of construction of houses that were built 30+ years ago.
I would much prefer an existing home over new construction in most cases.
If I could get a truly custom home from a true custom builder(no I don't mean Pulte)... that might change things.
If I had to pick between a home built in the 80's, 90's or 2000's and a home built in the 20's 30's or 40's I would certainly go with the older home.
Leroy, doesn't that assume the people living in the home the last 80,70,60 years took good care of it?
I prefer a well-built home, but if it isn't taken care of then the newer home is in much better shape.
Of course, I was assuming all else was equal.
I wouldn't buy an old dump over a new house in good condition.
Jim the Realtor on new short-sale rules...
If this information is correct it sounds as if, starting April 5th, all borrowers who apply for HAMP and are rejected for inability to pay, must be allowed to sell short and have all the remaining debt extinguished. Could that really be true?
So long as you managed to hang in there until April 5th 2010, you get a get out of debt free card? (other than change in FICO and new mortgage loan eligibility) Yikes.
TBW et al.,
Could I please have any of Cara's friends desserts, warm, with a little ice cream on it? Gee thanks, now I won't be able to concentrate on anything else because I'm dreaming about pie.
Sadly, I am much closer to obtaining the pie of my dreams than the house.
MM, good luck if you bid at the auction.
Ace (AKA Homer Simpson)
I've been following this and other housing related blogs over the past year and must commend you guys for well thought-out and debated arguments. I thought I’d offer a few observations on a first-time home buyer experience in NoVa.
In summary, it sucks. I’ve been searching for a condo in the Herndon/Reston area and the units I have seen have fallen into a few categories; way overpriced (on a purchase price to rent calc), multiple offers with mine being the lowest, or magical properties that are listed on Redfin/Zillow that no-one has a chance of buying. I’m at the point of trying the “Courthouse Auction” option or renting again.
I had a few questions, If houses are in foreclosure or complete distress why not list them on Redfin or Zillow to drum up demand and give the somewhat average buyer a chance of purchasing it? Wouldn’t this increased demand which would increase the average purchase price of these properties? Secondly, why is there seemingly no attempt to represent condo listings well on the MRIS or Redfin? I am not trying to badmouth or disparage the Realtor profession but I have been shocked by how bad these are presented. For most people, this is the largest investment that they will make at that point in their life and one awful picture with no description is worthless to the average homebuyer. I even saw one listing that had 6 pictures, all with the camera pointed directly at the carpet.
Clark,
I know Herndon/Reston pretty well. What developments are you looking at (if you don't mind saying)? You know me, I'm always happy to give my two cents - whether it's wanted or not!
Cara said
Not everyone has the same taste in clothing, or needs or shape, but clothing brands seem to do alright at selling us clothing rather than everyone going to a tailor.
But if you were going to spend $1,000-10,000 on it and wear it every day you would probably have it custom made, right? (Point being your house is most people's #1 asset and something they spend at least 1/3rd of your life in, usually more.)
Side note: I also feel like a lot of these flipper homes were perfectly good before the flipper changed them. Case in point the 20194 home Shamrock found. I doubt it was a bad home.
Seems to me some of these flippers are taking a JC Penney's-Sears home and making them into Nordstrom-Bloomingdale's homes. I'm not convinced we need so many Bloomingdale's homes.
I guess if my theory is right that *eventually* (housing market crawls like a slug) the flippers will get burned and someone will get a Bloomingdale's home for the price of a Sears home (or for some price in between).
housebuyer,
That is bizarre. If the home really is not valuable then the price should not be $500k but instead just the value of the land which would at most be $300k (Fairfax Co is only estimating it at $230k).
Leroy said
Besides, there is a large pool of buyers who simply won't buy a house that requires even minor renovations and are willing to pay a great premium to avoid having to change out carpet or put on a coat of paint.
I doubt the home Shamrock found even needed renovations.
If you are not willing to manage *minor* renovations then you are not really understanding what it means to own a house. Do they expect to move every five years to avoid ever having to fix something?
Who are these people? Will they freak out if the kitchen tile starts to come apart? Will they freak out when they need a new dishwasher? How about when the garage door opener breaks? I could go on. How about when that 15 year old roof needs to be fixed/replaced?
Leroy said
If I had to pick between a home built in the 80's, 90's or 2000's and a home built in the 20's 30's or 40's I would certainly go with the older home.
Okay...
But almost everywhere most of us are looking in Fairfax County lacks homes built in the 20s, 30s, or 40s. Even in Arlington I think you'd have trouble finding 20s-30s homes.
For precisely the shoddier home construction reasons you allude to I would prefer a new home to one built in the 70s or 80s.
Leroy says
"Let me just say that what you are doing is laughably transparent."
Sorry Leroy
What you are doing is laughably transparent it is the Bill OReilly
Rush Limbaugh psuedo conservative BS line.
You condemn Barney frank as utterly
responsible 100% for the Housing Bubble, when I point out that Time and CNN posted dozens of people as responsible and not included him
you say "Oh all politicians are the same".
When I point out that, no, in fact not all of them are the same and some are Monsters, you say
"Oh, that's just childish"
Sorry Leroy, we have a Black president because, no, some things do matter
and, you can deny it all day long, but you are water carrying for monsters.
Umm, Pat, what exactly do you mean "we have a Black president because some things do matter"?
Are you saying that the color of his skin matters? I thought we were past that...
Pat, clearly you don't realize it, so i'll throw in my 2 cents. You're acting like a partisan fool who can't stand the fact that others won't drink your kool aid.
Sorry Leroy, we have a Black president because, no, some things do matter
Just bizzare. Why does our president's skin color matter?
and, you can deny it all day long, but you are water carrying for monsters.
This kind of stuff doesn't help your cause. You should drop it...you sound ridiculous.
When there are multiple offers on a property does each party know what the others are offering? If not, why not?
All you Barney Frank lovers/haters/indifferents, tune in to the re-run of the Rachel Maddow show on MSNBC after 11 PM to see Tracey Ullmann's segment. They have her in makeup as Barney Frank and it's uncanny.
Sehr, no, generally, you aren't told the other bidder's offers. The seller's agent is obliged NOT to share info about the other offers in order to prevent buyers from bidding less than they might when they don't know how high the others are. Until the sale is closed, the house still is unsold and could fall out of contract, so typically no one else knows what has been offered until after closing.
http://franklymls.com/DC7181342
Assessed at 416, sold at 322,
4 BR, neighborhood is a bit sporty
but, the price is declining.
if we didn't have the buyers bribe this place would have sold at 290
and if bernanke wasn't printing money at 2%, we would see this place at 230.
as long as the trend is downhill, it's going to be hard to stop until the supply is soaked up.
Here ya go:
http://www.youtube.com/watch?v=YJszSwr1P7U
Tired Bubble Watcher: I'd glady take a Sears home any day. The Sears homes in Arlington and DelRay sell at top dollar whether renovated or not. Flippers can't get them because owners scoop them up quickly. If I could afford Ashton Heights, Lyon Park, Lyon Village, Maywood or DelRay, I would buy a Sears home.
"You condemn Barney frank as utterly
responsible 100% for the Housing Bubble"
I didn't say that. What I did say was sufficiently clear for anyone at an adult reading level. Go back and reread my posts if you are unsure.
"and, you can deny it all day long, but you are water carrying for monsters."
What I am doing is refusing to debate politics with someone who isn't interested in or apparently capable of providing a worthwhile debate.
You are looking for an internet partisan mud-fight where you will have a chance to air your list of grievances about what the "monsters" have done.
I just don't care about your childish partisan worldview and am not going to waste time on it.
Once again, I see what you are doing and believe it or not this isn't my first day on the internet and you aren't the first troll I have run across.
"A fanatic is one who can't change his mind and won't change the subject." - Sir Winston Churchill
http://franklymls.com/AR7184903
started at 250K then they jumped the
price now it's 279 and U/C
Leroy
you can claim all you want, you
are still joining in on the right wing game of Smear the Queer.
It's okay to be a fag-basher Leroy
just be honest.
You want to blame Frank, how come Time never even got him on their list?
Or are you saying Time is fierce, fanatics for the Dems?
For anyone trying to build their own house near Tysons, this is about 100K cheaper than an decent piece of land I have seen.
http://franklymls.com/FX7247363
clark,
Hang in there and best of luck. Condo's in the suburbs are the low man on the totem pole as far as realtors are concerned, so I'm not surprised they aren't getting well exposed in terms of pictures and staging. Maybe most of the owners are going with discount realtors, or just don't care that much. Sort of like, it's a 2 bedroom condo built in 1985, what do you think it's going to look like?
Buying a home takes a lot of legwork and time. You say you're always the lowest bidder, how could you know that? You can tell you weren't the highest. How do your bids compare to comparable sales? If you're not comfortable paying within spitting distance of the going price, then you're not going to "win" a bid. Also, do you end up bidding primarily on ones that do have multiple pictures? Are you letting the need for fresh paint and fresh carpet (even hardwood is not that expensive for 900 sq feet) blind you to the potential the shoddily marketed places have?
It could of course be that that market segment is simply too competitive right now. From Va_investor's tales, it certainly sounds like it.
Pat - seriously, what is wrong with you? Leroy said negative things about Barney Franks role in the bubble and you are furious because he didnt say anything (negative or positive) about Tom Delay?
Its like when I said I wish all the big banks drowned in a pool of blood, but I supported TARP (for the impact retail level businesses I detailed). Yet, you said I support greed and incompetence on wall street?
By your line of reasoning, a far rightey would come here and say,
1. you support Obama
2. Obama supported the interests of Ted Kennedy
3. Ted Kennedy murdered Mary Jo Kopekne
4. Since you didnt denounce Kennedy, you support murderers!!!
You see how silly this is? The reason Leroy wont address the issue is not because he cares one way or another about Delay. Its just because you are so blindly partisan that you cannot carry on an intelligent, rational conversation with him.
Its very much like when one who is deeply religious tries to persuade someone with a science background that evolution is not true, and cites biblical passages as "proof" that the world is 6,000 years old. Obviously, the science minded person will not be able to persuade the biblical minded person otherwise, therefore its not worth his time to even engage in debate.
This is all Leroy is doing. I see his point, and I think we all do. What you are doing is roughly akin to citing bible quotes to Leroy when (for purposes of this discussion) he doesnt care one way or the other about the bible.
Frankly, I am very embarassed for you as it seems your blindly partisan views cloud your judgment on matters not even related to politics. I think your best move at this point is simply to agree to disagree about the role of Barney Frank and the bubble (since neither his sexuality, Obama's skin color, nor Delay's actions was ever really at issue) and move on.
Thanks CRT, you are 100% correct about what I am doing and my motivations.
I enjoy a good argument as much anyone and I do sometimes play the part of the antagonist, but I can think of nothing less rewarding than trying to have a debate about a complex topic with a fanatic.
For the record, let me just say that pat's comments insinuating that my opposition to Barney Franks's policy positions has something to do with Franks's sexual orientation are both false and extremely distasteful to me.
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