Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Saturday, January 30, 2010
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
71 comments:
Here's one of the flipper houses from an earlier discussion: LO7229551
It's now under contract (with KO).
Sold on 11/12/2009 for $545K
New Trust Loan: Cash
Now UC with a list price of $740K.
This is a perfect example of a guy putting his own money/time at risk to make a profit. Don't know what the new closing price will be, but it should be a nice return.
Some might have a problem with this. If you do, you should take it up with the new buyer who is willing to pay the premium price.
Perfect flip. I doubt they had to put over 20K into it. I wonder how much the staging cost.
That is inside the Belmont Country Club, a gated community. That half a million plus was a "great" price there.
When it was a foreclosure, the basement wasn't finished. My guess is that the most money was spent there, unless staging is really expensive.
OK, I'd have to amend my cost estimate to factor in the basement. Still, that is/was a property that only needed (if anything) paint, carpet and minor stuff. It would have been a terrific owner-occ purchase.
Many buyers paint and carpet anyway. Once a seller's furniture and pictures are removed it becomes clear that what looked pretty good no longer does. That's why it always kills me that places with awful paint and carpet are so heavily discounted when time, after time the new people paint and carpet anyway.
semi-OT but does anyone know if one could get addition renters insurance coverage, eg. moving expenses, if the property is in foreclosure?
I'm with you on this one, VA_Investor, but let's hope they don't wise up (more deals for us!).
That's the only deal like that I've seen so far in that neighborhood. Other recent foreclosures have priced at 599 and the 700s.
And on in the 600-700k range.
novahog
750K to live in Loudon?
Unless it comes with a giant herd of cows, it's not worth it to me.
MM
Interesting, i'm not sure if you could get foreclosure insurance, because the risk is so driven by human behaviour. perhaps with a certain amount of risk profile assignage, essentially it's arbitraging the risk between credit default on the owner and the expected cost of the move.
MM,
I've never heard of "foreclosure insurance" but your concerns are valid. I've had a number of rental applicants who have been forced out and have no way of getting their deposit back.
Some just don't know their rights. One called me a couple weeks ago and told me she had 5 days to move and her former LL wasn't returning calls about her deposit.
First of all, there is no reason to expect that you will be thrown out in 5 days. It just won't happen. I heard that there was legislation protecting tenants in a foreclosure situation, but I don't know the specifics.
In any event, even in LL friendly VA, there is no way you will be evicted and have your stuff put on the street in 5 days.
If someone buys the place at auction, they will have to follow normal procedure and this will give you a month anyway. Chances are the "new" owner will accomodate your transition.
pat,
You might feel quite differently if you worked in Reston/Herndon or Tyson's and had some little kids to raise.
WSJ Article: "Fannie, Freddie Chase Bad Mortgages"
"Stuck with about $300 billion in loans to borrowers at least 90 days behind on payments, Fannie and Freddie have unleashed armies of auditors and other employees to sift through mortgage files for proof of underwriting flaws. The two mortgage-finance companies are flexing their muscles to force banks to repurchase loans found to contain improper documentation about a borrower's income or outright lies."
"The result: Freddie Mac required lenders to buy back $2.7 billion of loans in the first nine months of 2009, a 125% jump from $1.2 billion a year earlier. Fannie Mae won't disclose its figure, but trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009."
http://online.wsj.com/article/SB10001424052748704343104575033543886200942.html?mod=WSJ_hps_LEFTWhatsNews
Leroy Says
"Thanks CRT, you are 100% correct about what I am doing and my motivations."
Really?
How come you come out attacking Barney Frank, and not Trent Lott or
Senate Banking?
in 2005, the House moved a Fannie Mae reform bill, the Senate killed it.
When Leroy comes out attacking Barney Frank for this, he's just playing Right wing smear the queer.
It's standard fox news stuff.
pat,
You sound like someone with a major chip on your shoulder. Why not take it to some polical forum?
That is an interesting article Mike.
Little by little lending standards are continuing to tighten.
Since this particular effort appears to be targeting fraud I can't imagine anyone would possibly object.
Does anyone know whether Harriet still reads these comments regularly?
leroy,
I have no idea about how often Hariett monitor's this site. I can only say that I am still very disappointed that she deleted my comments regarding the tragic suicide of the former FreddieMac exec.
We had people here cheering that occurence; a guy with a wife and young kids (who lived 2 miles from me). Harriet allowed those disgusting comments and deleted mine. I should have left over it. Maybe I will. There comes a point...
Leroy
You claim you aren't playing politics in blaming Barney Frank for the failure of the Fannie Mae Bill in 2005.
Please name 3 Republicans who failed to push that bill through the Senate or house.
You claim you don't have a team, can you find any Republicans who'se hands are dirty on this issue?
Pat,
I'm hoping leroy does not respond to you. You've made it very clear that you are a fanatic. It's amazing how blinded you are by ideology.
You continue to make a complete fool of yourself. Most liberal/conservative/independent people are somewhat reasonable. You definitely are not.
You are rapidly approaching stalker status with this idiotic nonsense.
LO7229551 looks like a Toll Brothers home to me. I've seen similar ones in other communities and the interiors look exactly like the pictures on that listing novahog found. I think that black fridge might not be the original. That's about all that does not match with this genre of home I've seen in western Fairfax/Loudoun.
REdealSEEKER -- did you tour this one? Is that how you know the basement was unfinished beforehand? If so, I could see that as the only possible renovation.
This home was built in 2002 so it's not like it would need any renovations beyond finishing a basement. I actually thought most people had Toll Brothers finish the basements but maybe I know the few that paid for that option.
pat said
750K to live in Loudon?
Unless it comes with a giant herd of cows, it's not worth it to me.
Comparing bottles of ketchup the house is definitely worth somewhere between 675-725k given it appears they added 1,000 sq ft by finishing the basement. It's a 6,000 sq ft house on a 0.4 acre lot with easy access to Route 7 and Route 28 in a good school district.
I can think of comparable homes in Fairfax County going for $850k+ (reflecting being closer to the action). So this is definitely fairly priced.
Now, whether these bottles of ketchup are all overpriced is the argument of this blog. But comparing to current comps the price is fair.
[Comparable homes on the western edge of Fairfax County. Obviously a similar home in central or McLean would be $1M+]
TBW, here's the previous listing for that ashburn house. At the bottom of the page:
Basement Type: Full,Unfinished,Walkout Level
Based on info in the old listing, they finished the basement, added a full bath, painted, and built a new deck.
tbw,
I got new appliances in 2002 - all black. That was kinda before the stainless frenzy. Maybe not totally before, but there were alot of complaints about finger marks and constant cleaning. I did replace formica with granite.
A few appliances, paint and carpet and voila - turn key reo in which we are happily ensconced. This was courthouse steps, sight unseen except exterior.
Condo Buyer There is a nice one bedroom just came on the market in my building (Belvedere) at $374,900. It is unit 704.
reecon,
do you know who allowed to build such an architectural monstrosity as belvedere? i really wonder what was wrong with the architect?
The home that novahog posted: If you consider finished basement, some upgrades & staging costs - and the fact that we have no idea about the closing price - it may not be as outrageous price as it seems. It is also not too far from the current comps, assuming it closed in high 600s. The home was assessed at 593k without the basement. 2010 assessment should be higher because of finished basement.
Now, the fact the market itself is overvalued is a different argument altogether. I agree with pat - paying close to 700k for this location is crazy. But, we also know buyers haven't learnt the lesson fully (like sellers or flippers) from the bubble burst...not yet anyway. Until RE becomes dull, boring & gets thrown out of the get-rich-quick mentality - it isn't over.
Konstantin I don't know who the architect was for the Belvedere ( or if there really was one). The building was developed by Guiseppe Cecchi who originally came to Washington to build the Watergate (and you know how ugly that one is). Most of the condos Cecchi built are short on architecture but offer great space and mostly good locations. The rumor about the Belvedere is that the supplier shipped the wrong color bricks when the building was half finished, but Cecchi did not want to stop construction so he continued with the different colored bricks which gives the Belvedere its distinctive (but not in a good way) look. The units are very roomy, many views are great, it is a well run building with low condo fees, the amenities are good and many of the units have been renovated after 25 years so it is a good place to live despite the architecture. It reminds me of the places in the middle east which are totally walled off and look like dumps from the outside, but once you get inside they are beautiful. The thought was that the ugly exteriors discourage robbers. If you want a pretty building, go to Kalorama. My sister-in-law and her husband live in a place near the Chinese Embassy and the architecture is stunning. We would move there, but if I have a heart attack in DC, I know the ambulance would never get there in time (only half joking).
Belmont CC is a nice area, beats the heck out of the tiny place with no garage that would buy in Arlington...and it's nice to be able to let the kids outside.
VA,
I've been looking mainly in the Savoy and the Market Street. Ideally, I would like to be there but I am open to the immediate area.
Any thoughts on why these properties are so badly represented?
TBW.
750K to live in Loudon?
Sorry, it shouldn't cost more then $400/Month to park a double wide in Loudon :-)
And I am still waiting to hear how Leroy thinks Barney Frank is a Senator.
Post removed in hopes that the issue will just go away so we can talk about housing again. Don't feed the trolls.
Speaking of which, the wife and I are going to look at a short sale tomorrow - first official home visit. It's in the neighborhood we want, but not the style home we'd prefer. The list price is great though, and the previous list never got an offer. I know short sales are long shots, and I'd prefer to buy later in the year or next Spring - but at least this way we get to meet the realtor and get this whole process started. My wife's mother worked with this guy at Long & Foster, and they used him when they retired and sold their home. She gets a referral for sending us to him which she is returning to us. It's as close as I could get to convincing my wife to use a discount realtor.
Of course the snow may cancel the whole thing, we'll see.
Reecon Thanks for info on the 1 bed at The Belvedere. I'm meeting my Long & Foster agent (she sold condo to my brother) at 11 and we will see it plus about 5 more. These condos aren't exactly what I want but I am hitting busy season at work and want to get into something soon to do the buyer's bribe. I agree with Konstantin that if you want architecture you don't look in Arlington. It is only about location. If I could live anywhere it would be Georgetown but public trans is bad.
spider said: "I agree with pat - paying close to 700k for this location is crazy."
Why? Because you don't want to live there?
Forget about this particular house. What should you be able to get for $700K "out there"?
Pat and Spider,
I would have agreed with you several years ago, before I moved here. I had a monstrous commute from Leesburg to Georgetown. The commuter bus trip lasted just under and hour. Of course, it made decent time with access to the HOV lane. The commute is not bad if you work in Western Fairfax County, and something of a stretch if you work in Tysons, but still manageable.
Leesburg shopping is also pretty good, very convenient. If it's important to be close to nightlife, a huge variety of restaurants, a diverse array of cultural events, easy hops on public transport, then, moving from Arlington to Loudoun, one might suffer from withdrawal.
Also, upscale housing here abounds. Most housing here was built during the bubble, too, reflecting the passions for McMansions and upscale features of the bubble decade. Looking for a comparable properties in Herndon can cause sticker shock, too. 350k townhouse in Leesburg? 100k to 150k more in Herndon. And even if you factor in transportation costs and commute time into your costs, you can't exactly get rid of your car if you do move to Herndon.
TBW -
I saw that house online, too, and saw it on the old listing, just as Novahog pointed out. Last fall, my family was driving in that area to see another house, at the Ridges of Ashburn (after making an appointment, we were not allowed into the house, because the owners had just come back from the emergency room), and my husband asked if there were any good deals on foreclosed homes in Belmont. So, I did some searching in that area. That was the one house I saw, among another short sale or two. But "affordability" criteria could only be met by lowballing, and as we see from the outcome, we wouldn't have gotten the house.
good luck, Jeremy.
I wish the spring would hurry up and get here and bring out some other options for us.
Interesting table in this article:
When owning your home doesn't pay
That is an interesting table. I don't really have time to read the article right now, but this is something we have debated in the past. (How exactly lower interest rates affect the traditional 2.5-3x income purchase price rule of thumb)
Leroy,
That issue of 2.5 to 3X has been a "problem" for me for the last few years (at least) when discussing affordability.
The rule of thumb was 2.5-3 when rates were 12%. Something doesn't compute.
I know the fear is that rising rates will lower prices but I haven't seen stats on that. I've offered an idea for hedging that risk via FHA.
Most here seem to want a long-term home. It seems the only "fear" should be a distress sale. And this problem/fear has existed forever.
Why shouldn't DTI and conventional ratio's trump the 2.5 to 3X? Afterall, that was how we backed into that multiple years ago.
VA,
I've been looking mainly in the Savoy and the Market Street. Ideally, I would like to be there but I am open to the immediate area.
Any thoughts on why these properties are so badly represented?
On the news, they just did a segment on house flipping. I know there was a discussion here about it a few days ago.
The segment said that flippers are coming back they way that they were before the bubble. They said that buyers will now be able to get FHA financing on flipping homes.
They said that new people are getting involved, they focused mainly on Phoenix area though for showing the people at the courthouse auction though.
"The rule of thumb was 2.5-3 when rates were 12%. Something doesn't compute."
That rule of thumb was not invented between 1979 and 1985, the roughly 6 year period when mortgage rates were above 12%.
I know this from having spoken to people of my parents' generation who bought well before 1979 and are very familiar with that rule of thumb.
http://www.freddiemac.com/pmms/pmms30.htm
Of course the rates we are seeing right now are far below any time in modern history so that does have an effect on things, but it isn't fair to say that that rule was somehow formulated during the relatively brief period when interest rates were >12%.
Re Belmont Country Club home -- do the people who buy homes get membership to the country club? Or do they have to shell out another five digits after buying the home for membership? If membership conveys with the home that would also help explain the home cost since country club memberships are very expensive.
Leroy,
I can't attest to any rule of thumb prior to 1980 or 1981. Why is it you believe that the rule of thumb should not vary with interest rates? How often have the conventional ratio's of 28/36 changed? I remember when jumbo's went to 33/38 and I know FHA has always been higher (at least back through the 80's).
My parents bought something in the 60's at 6%. I'd say these rates are a one-time chance to get alot more house than in the past.
When it is said to look in price range of 1-2x income. Does that mean amount of loan, or total that would be paid back.
For example, say income is $100k. Should the person be looking for a home that can close at $200k, or the home that has a mortgage with amortization over 15/30 that adds up to $200k?
"Why is it you believe that the rule of thumb should not vary with interest rates?"
I didn't say I thought the ratio shouldn't vary, only that that rule of thumb pre-dates 12% interest rates.
"I'd say these rates are a one-time chance to get alot more house than in the past."
Only if the price is good. Interest rates were very low during the bubble years as well and that didn't make buying a good idea then.
Now obviously we aren't looking at nearly the same sort of downside risk as we were in 2005 or 2006 but it is possible we will see further declines in many areas/price brackets. (especially if interest rates move up relatively sharply.)
Clark,
Market St and Savoy are pretty hot. I did see a couple of shorts at Market St (3/2) for about 380K.
A couple years ago you could have gotten a 1 bedroom for close to 200K. Prices seem to have firmed-up as the foreclosures have washed out for the most part.
Oak Park and Lakeshore Crest are much cheaper in terms of price and condo fee. I have seen some deals at Abington Hall and the Stratford.
I believe that the best buy for the money is ParcReston. It's across the street from RTC, but very popular. 2/bd/2ba are going (fast) at about 200K.
If you can pay in the upper 400's, Edgemere TH's are nice. For the low 300's you can get a place by Harris Teeter at Whisperhill. These have the advantage of no condo fee and are occupied, mainly, by young singles.
Leroy,
I'd say that nothing is risk-free. It is clearly a much safer time to buy than it was in 2005.
I think DTI is more important than price multiple.
The question which none of us know the answer to is whether prices will drop further and whether future rate increases will exceed wage increases.
One could argue (without really knowing the answer) that rate increases or other "things" will drive down prices and you could pay much less for a house in a few years. Well, I could argue that you should get as much 5% money as possible and then take advantage of higher rates and inflation in the future (through investment yields).
If you walk around all day worrying about worst case, you'll be frozen. If an emergency causes a loss of 20% and you can't stomach that...then don't buy.
DTI?
verywonderful,
DTI is debt to income.
The conservative standard since 1980 (as afr as I know) has been 28/36.
Meaning your house payment (principal, interest, taxes and insurance) should not exceed 28% of your gross monthly income. Your total of house payments and other debt (car loans, credit card payments, student loan debt) should not exceed 36% of your monthly gross.
With FHA you can go much higher (in the 40's). I think much depends on your career. Are you starting out and expecting promotions or do you think your wages are stable? Obviously 28/36 assumes no significant promotion or wage increase.
Frankly, when I was in my 20's I expected raises to far outpace inflation and bought based on that.
If you expect to stay at the same level, then spend accordingly.
VHA investor, thanks soo much for explaining that to me, I was wondering what the ratios you guys talk about are for as well. It's so nice to see it explained so that I can do the math to figure out how my husband and I are faring!
How much does the average fast food/target/grocery store person around here make?
My husband has a great job, but it just seems like we won't be able to afford over $300k home, which doesn't really get you anything around here. I graduated from law school n May, but I don't really want to commit to anything because we want to start a family. I am not in a position to commit to a job for only a few month to year at max when I know so many others are looking for careers. (the idea is that I will be stay at home mom, which I can't wait to be!)
Where do those people live?
For anyone interested, this is the short sale we went to see today. It wasn't under contract at the time. Anyway, it is a complete dump inside. Nothing had been remodeled ever and you could tell from the smell and ever popular green indoor/outdoor carpet in the sunroom/porch thing. They didn't have any nice or expensive furnishings at all and their vehicles consisted of a work van and a honda accord. I really don't understand how they got a loan for $815,000 in 2004 to buy this house.
Jeremy, can't get the link to work.
Figured it out, need to get rid of the %22 at the end of the link.
Leroy, I remember my parents' mentioning that rule of thumb many years ago.
To be clear, the article that I linked was not using the table to tell people what they could individually afford. Instead, the author's intent was to show prospective buyers when the prices in an area were above a sustainable (traditionally) average. In other words, if the prices were more than X times the local income (with X reflecting the traditional maximum ratios and current interest rate), then buyers should be aware that prices may be too high and could drop.
Also, the table footnote indicated that no consideration was given to taxes and other expenses since those varied by location.
Here's a pgh. from the article with the table:
"However, if you find that the median home price in your area exceeds the median household income multiples in the table above, you should be cautious in terms of investing in your local real estate market, because the higher multiple is telling you that the value of homes in your area is higher than what can be sustained by the household income generated by the people living in your area. In this type of environment, the real estate market is not conducive to owning a home, and if you purchase a home, you will most likely be paying too much money for it. In addition, when the housing market is valued at these levels, it is highly likely that you will be putting yourself in a position in which you will be stuck owning the home for a long period of time. As a result, you are probably better off renting in this type of environment."
I think median sales price in FX County is about 370K and median income is about 100K.
So, 4.2x 100K equals 420K.
At 370K are we underpriced?
VA_Investor,
28% DTI is something like a red zone on the tachometer, it is an upper bound for your house expenses. I would say if you are above whatever ratio is determined by interest rates it means trouble. Below it doesn't mean underpriced. Also keep in mind, that rates are really low, so if they go up we can become overpriced in a sec.
Sehrwunderbar --- you have finished a law school and planning to be a stay-at-home mom long-term? You are special.
By the way,
VAI, I don't think it makes sense to break the metro area into segments in order to apply the author's metrics, since certain areas are going to have much higher home prices, with certain income and wealth, than others. In any case, you may want take up the issues with the author or others here, as I don't want to rehash those old arguments again. My point was to clarify what the author said because it was being misinterpreted here.
That's the plan :)
Visited this open house today in Arlington:
http://franklymls.com/AR7248499
Place was mobbed. Realtor (who I know) said over 150 people had visited and he had run out of literature.
VA investor said:
I think median sales price in FX County is about 370K and median income is about 100K.
So, 4.2x 100K equals 420K.
At 370K are we underpriced?
Median household income in ffx county is $107,400. Median home value is $502,205 all (detached, attached, multi) and $602,303 for detached only. That's pushing around 5x. Are we 20-25% overpriced?
Sorry about the typo in my previous home link. Here it is corrected:
FX7200814
Median home value is $502,205 all (detached, attached, multi) and $602,303 for detached only.
Shamrock -- source? MRIS shows median values (all home types) around 365K
http://www.mris.com/reports/stats/route.cfm
The most generous source I can find (NVAR) shows detatched alone at only 525K
http://www.nvar.com/LinkClick.aspx?fileticket=qeJzOLJNfnE%3d&tabid=575&mid=1462
It strikes me that at 750K anything in loudon is way above the median, you may not find a lot of future buyers for it.
Good find Jeremy. It must have been quite a dump if it took the 2001 era price to sell it.
You said
I really don't understand how they got a loan for $815,000 in 2004 to buy this house.
Well they bought in 2004 and foreclosed in 2009. So maybe a five year ARM?
sehrwunderbar said
How much does the average fast food/target/grocery store person around here make?
...
Where do those people live?
I think grocery store workers (particularly Giant and Safeway where they are unionized) used to be well paid. Not anymore. I think this is because food costs have not budged much over the past 20 years and there is intense competition with companies like Wal-Mart, Target, Costco, etc.
Whole Foods (IMHO) is the worst in that it often pays employees LESS than regular grocery stores like Giant, Safeway, Shoppers, Harris Teeter despite charging 2-4x for the food!
pat,
Again, your comment makes no sense. While I agree that the house is overpriced in the sense that everything is overpriced it's not overpriced vis-a-vis the current price of homes. You act like there cannot be luxury neighborhoods in Loudoun. That makes no sense. Loudoun's median HH income is the same as Fairfax. They are not going to give 5,000 sq ft homes on large lots for free.
pat,
I read a study about baby boomers' housing preferences the other day.
Somewhere around 30% want to live out their days in the suburbs, 30% in the exurbs or more rural, and approx 10% in an urban setting.
If accurate, I imagine this will play out over the next 20yrs.
Perhaps this might cause you to re-evaluate places like Loudoun. Loudoun and Fairfax have the highest 2 median incomes in the Nation.
No doubt many will be aging in place, but a gated golf community sounds pretty good.
Actually, I read in the same article, many boomers will be buying a slighter larger house for retirement not down-sizing which is the general perception.
Post a Comment