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.
interesting article about what constitutes "rich":http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/are-you-rich-heres-how-to-tell.aspxSomething of note from the article:"The average U.S. household is home to 2.54 people, so factoring in the actual size of your household produces a more realistic estimate of how much income it takes to live like the wealthiest 5% of Americans. For a family of four, nationwide, that's $490,000.By the same measure, here's the household income required to be "rich" in the five most and least expensive cities in our sample:City Couple without kids Family of 4 New York $359,494 $718,989 San Francisco $359,061 $718,123 San Jose, Calif. $354,513 $709,025 Washington, D.C. $347,917 $695,833 Boston $316,613 $633,227 Colorado Springs, Colo. $207,472 $414,943 Omaha $207,019 $414,038 Fresno, Calif. $205,349 $410,698 Albuquerque, N.M. $193,483 $386,965 El Paso, Texas $175,161 $350,321 U.S. average $245,218 $490,436 "
Sehr,Are you just doubling the 2.54 amounts? I don't follow.
I wasn't gathering any of the data, it is listed in the article that MSN looked in various metro areas and looked at incomes for the highest percentage of households and listed what is considered "rich" in the various areas. They also factored in a couple with no children and a family of four to show what is considered rich for both.I thought it was an interesting article to post here because of the various discussions on median income etc and what that fictitional family can afford.A "rich," by average income of the highest percentage of incomes in DC, couple without children has about $347k/year salary.
I think the assumption that you need twice as much money to be rich if you have two children as when you have none is highly questionable, even if you factor in an expensive private school for both kids.
I agree, KeithK, especially in this income bracket. Aside from the housing costs which do not come anywhere close to doubling for a household of 4 vs. a household of 1 or 2 (you only need one kitchen, for example), you don't need 4 cars. When a family of 4 goes on vacation, they don't get double the number of hotel rooms (usually), and there are many child or family discounts available on all types of services, from movies to health clubs, to airfares, etc. However, I am glad to see some realistic estimates for the couples that truly reflect how much more it costs to live at a "rich" level in one place vs. another. If I hear one more person tell me that if you make $200K, you're rich, regardless of where you live, I'll scream! I suspect the NYers and SFans will disagree that the cost of living is only slightly higher than in DC though.
Ace- Your kids aren't old enough yet if you don't think you need 4 cars :-pI would guess 75+% of people I knew had a car on their 16th birthday (I guess 16.5 now that the driving age changed). Obviously these cars were not nearly as expensive as the parents cars.Although I absolutely agree with your premise that a family of 4 does not cost twice what a family of 2 does. Food costs are probably very similar. Rich people without kids go to fancy expensive restaurants. When you have kids you don't want a 2 hour dinner so you end up at a casual diner. Clothes, jewelry, vacations... are much cheaper for kids than adults. Although I think this misses the point of the article, which is NY, CA, DC, and Boston are expensive compared to Colorado/Texas. I was actually a little surprised that DC costs are much closer to NY than Boston.
So true, housebuyer. But seriously, the article should have distinguished between a household with toddlers, or elementary age kids, vs. kids in college, if they were going to break it down. And many people do not live in coupled households (singles are over half of all households, as of the latest census, I believe) or they have expenses for caring for other family members (parents, siblings, nieces, grandchildren, etc.). So I am not sure why the authors chose to break it out as they did, other than it was an easy way out. But I agree with you that the key point is that the $ standard for "rich" depends very much on where you live. The federal tax law should fully take this into account.
Ace- I agree it would have been significantly more accurate if they said it costs A for a single B for a Couple and C for young kids D for older kids... But I really doubt they did any analysis they probably just said what is the 5th percentile of wealth and then multiplied by cost of living multiples for cities and number of size of family.I also agree on the tax laws, if you are family of 4 in this area making 60K you must live a frugal lifestyle while in many parts of Texas you would live a wealthy lifestyle, so there is no reason the government shouldn't adjust for this. In reality they actually do the opposite, because wealthy areas tend to get a lower percentage of their tax dollars than poorer areas.
Agreed, HB. Most of the individual income tax code is based in part on the idea that people less able to pay are taxed less (e.g., exemptions are given for children; deductions are allowed for casualty losses; rates are progressive). So it is not at all a new direction to suggest that the tax code should take into account that $1 in income in City X does not buy what it does in City Y.
housebuyer,75%! I would guess maybe 3 or 4 of my 300 classmates got their own car when they turned 16. Most of my classmates drove their family's second car like my sister, brother, and I did. In fact, I know, that Hayfield is one of the few FCPS high schools that has never had a parking shortage.
Hayfield- The article was talking about families that make many hundreds of thousands of dollars. So you should not be looking at hayfield and instead should look at Langley, McLean, TJ, Woodson...I agree that a small percentage of people in the country get a car for each child, but the article was about how much money wealthy spend on their kids. Do you really think only 3-4 out of 300 people making 600K a year give their kids a car?
I agree that just because someone has children doesn't mean they are automatically paying twice the amount as those that are childless. I had actually read an article a while back saying that each additional child actually costs less due to already having things on hand from previous children etc.
Actually, housebuyer, the truth may be somewhere in the middle. If you believe the authors of "The Millionaire Next Door", those with high wealth (which is not the same as high annual income, I realize) would be unlikely to buy the kid a car but would instead make the kid earn it. According to those authors' study, people who are showy fritter away money on expensive gifts as well as unnecessary spending on themselves and as a result have accumulated less wealth. So it would be interesting to see how many people buy their kids those beamers.
Ace- Yeah I agree, but as you said the article is talking about income not wealth. I should also comment that most of the people I knew got their parent hand-me-downs on cars. I had one of the nicest cars of my friends and it was a 7 year old mustang with ~100K miles on it. It was probably worth 2-3K. Perhaps if I went to Langley I would have seen more of those kids driving new Porsches rather than old Fords.
Whether they're toddlers or teenagers you still need to budget for their lifetime education expenses.And I don't imagine the 5% tippy top of rich folks have the same picture of hotel that you just described. I'd think at least paying half again as much for a full 2-room suite rather than just the bedroom, kitchen and sitting area. Or even something like the cottages at the Inn at Little Washington. That's the life I imagine for rich folks. Week-long vacations at the Inn at Little Washington. I'm such a foodie.
This deals with national rather than local info but you might find it interesting:Americans' net worth still down 21% relative to 2007
Cara, that's true, but even the most elite education certainly does not double a top 5% household's cost, or anything close to it, throughout the child's lifetime. Remember that the top 5% are not ultra wealthy either. I work with a lot of people who fall into this category. $357000 (for our area) is quite comfortable, but these people aren't the Vanderbilts. They don't take out 4 room suites for themselves and school age kids when they go on vacation. And kids older than that generally don't vacation with the folks.
Half again as much, perhaps. Double, no way.
I should also add - income taxes, together will all other taxes and social security, take a pretty hefty bite out of incomes over $200K already. The AMT kicks in for a lot of households around here well below $357K. I'm not crying with pity for these folks; I am just saying that they have less disposable income that it might appear, and they are careful with $. Just as one example, my next door neighbors (2 full-time lawyers) are likely in this bracket and have two kids. They live in in a < 1700 square foot house with peeling paint, take camping vacations in an RV, and refuse to hire any household help for just about anything except electrical work.
Ace,I think you're underestimating how much one can choose to pay for college...Different lives. We never had our own cars, and all got public education and well I got an Ivy League education, but it didn't cost so much back then. But, as soon as my parents could afford it, we had our own separate hotel room for the kids. And they were never even close to these ranges. I'm guessing those lawyers have considerable school loans to pay back. Or are just stingy. Or enjoy doing their own work.
who else likes this home? will a full price offer be enough though?
MM- It looks really nice, although some people may be scared off because it needs a lot of work. The kithcen should be gutted and the basement looks in pretty rough shape also
No, Cara, I well know how much it costs to go to the most elite universities. It does not take saving 18 years of $150K or more per year, or anything close to it, to afford to go there. And many of the students receive financial aid. That's what this article is talking about, not what it costs a middle income family to afford it.Those lawyers are middle-aged and have paid off their school loans.
MM,That's a great house. And I don't see anything "desperate" aside from the kitchen, which shouldn't be that expensive considering how small it is. (I also could probably live with that kitchen just fine for a while if I didn't have the money on hand, the appliances look new enough).How does it compare to the comps? That's always my question on the price.
MM, IMHO, I think that house will go fast. It's priced fairly, it's in a good location and appears to be in good shape. However, it doesn't appear that a ton of $ went into it. People can live with the kitchen and unfinished basement but may not be willing to overpay. I don't think it will go for much over asking. But you never know...
HayfieldGrad saidActually, there are 1 story homes with basements built in the early 1990s in Springfield/Lorton. The Middle Valley subdivision has whole street of ramblers like this one. The Crosspointe subdivision which spans over the Lorton and Fairfax Station zip codes also has some 1 story homes like this. Also, the builder for the 10 home Laurel Overlook has a 1 story model as one of the 4 home designs. Looking in frankly, it seems at least 3 lots were advertised as "1 story" living for this new community.Good finds HayfieldGrad. However, the homes you found are bigger and have more curb appeal. Here is one of the 1990s ramblers you found: http://franklymls.com/FX6251988Here is one in Vienna from 1954 http://franklymls.com/FX6899219The 1990s rambler has 500 more above ground square feet, a two car garage, and it has gables given a more modern exterior look.The other one you found http://franklymls.com/FX6898612 has 1000 more above ground square feet than the Vienna home, a two car garage, and gables.I also suspect the basements in the two homes you found are nicer than the 1954 Vienna home. They also have some high ceilings/great rooms. They are very modern in some ways.But anyways good finds. I guess there could be room for some two story homes instead of three even if we were rebuilding from scratch.
Ace,Correct, it doesn't cost 150k/year for 18 years, but it can cost 400k all told, times two kids, divided by 18 years or ~45k/ year, plus $20k each for private school.Put it this way. If I made $700k/year, or ~$455k net, I could concieve of putting $220k towards the kids expenses and inheritance a lot easier than I could concieve of spending $220k on myself. Sure, probably a quarter to a half of that would be for the inheritence part, initially. Once they wanted Manhattan apartments and producer funds for their film making careers, it'd be going directly to them, though.See, isn't it a good thing I don't have that kind of money so I can't raise spoiled brats?
tbw,They also cost a lot more. (house price wise, not land wise). I'm not sure what your point is. I actually only really liked her (and your) first one. The other two look like a truncated two story home more than something intentional. And the layout on the last one didn't have the rambling/flowing aspect that made the best ones great. Not that the 1000 sq foot Vienna one is one of the good kind, because it sure doesn't look like it. But the 60s ones in my neighborhood can have both flow and curb appeal and less than 200 sq feet less than the 1991 one. Few garages though.http://franklymls.com/FX7130076Too bad none of the gorgeous ones that back up to the ravine have sold in the past 4 years. They're all sited such that the huge 10 foot wide living room window overlooks the ravine. And most of them have finished the carport so nicely that you'd never know it was a carport if it weren't for the other examples in the neighborhood. The just have this one-ness with the land... (Probably cost $100k more than my house though for the one-ness, view and renovations).
MM,That home violates one of my "pet peeves." Claiming the home is walkable to the Ballston Metro.Luckily I don't have to worry about these lies much any more. Google Maps has introduced a feature that estimates how long the walk will take (also offers bike directions too). Google maps estimates the walk at 25-30 minutes.I have tried some walks I have done many times and find it does a good job estimating how long the walk will take. I think if this feature gets popular people will start to realize what is a 10 minute walk from Metro and what is a 25 minute walk.
I will say that yes you can walk to Ballston Metro from there. Twenty-five minutes is doable. But honestly anyone taking Metro from Ballston to downtown DC *is not* going to walk 25 minutes each morning. That walk will be longer than the actual time spent on the Metro getting downtown.
tbw,Some of us walk faster or slower than others. How far is it? I used to do an uphill 0.9 mile in 15 minutes, and the downhill in 12 back in Boston. Granted other pedestrians often told me to "take my time" "what's you're hurry?". Gah. They didn't have a commuter train that only runs once an hour to catch. 20 min to the mile is my usual liesurely pace, as opposed to my commuting pace. Of course that commute also made me lose 15 pounds in 3 months.
Cara, there's no question that it's expensive - and no question that investment returns for each of those 18 years of savings would have to be better than they were during each year of the decade ending in 2009. But my point was that a family of 4 would not have to make anywhere close to twice the top 5% current cutoff DC area salary (plus increases over the 18 years) in order to cover it, even for 2 kids who get absolutely no aid, which some kids get without regard to need. And knowing you, you would figure out whether it would be cost-effective to buy the first kid a condo in Boston that the 2nd kid would take over once s/he arrived, and if so you'd make a cool profit on it as well!TBW, I'd say the walk home is an even bigger issue. Many people put in long days and the last thing they want to do is walk home, alone, in the dark and sometimes the cold, for 30 minutes daily, and after the commute to get to the Ballston metro! In any case, I'd like to thump all agents on the head(s) who make those claims. I guess they figure if they can get some people to look at the house, they may be able to get them to overlook the facts about the length of the walk.
hmm... perhaps this is a better deal @ $75K less? (note to tbw, *NOT walkable to Metro)
cara, ace, tbw et al.believe or not i once walked past near that house on Glebe to Ballston in the early morning, alone. i think 20-min is a fair estimate. (hail to the power of google).however walkable to metro or not is not a concern as i don't ride metro more than 20 times a year to work. my pet peeve though is the shared drive way, and a one-car one, no less...
Cara- Luckily if the kids school will end up costing 400K you have a couple extra years to pay for it. I assume 400K is assuming they go to med school or law school. I don't know of any school that costs more than ~200K for a 4 year university.
Cara, Re: desirability of colonials vs. ramblers based on your data analysisI believe what you are saying is that if two homes (a rambler and a colonial) had the same square footage and were built on the same year, that you did not find any price differential (meaning both homes sold for the same). Is this what you are trying to say?I do not think that proves the point, necessarily. The only way to prove the desirability of colonials vs. ramblers is to survey people. We need qualitative data.For example, I belieive a rambler that has, let's say, 3,000 square feet vs. a colonial with the same square footage. The rambler should be more expensive than the colonial because it is in fact more expensive to build. So if these two properties sold for the same price, the rambler was less desired. If your analysis took you to homes that are a lot smaller. Let's say a 1,200 rambler vs. a 1,200 colonial. I would assume people would prefer in this case the rambler, because a 1,200 colonial can feel extremely cramped, unless very well done. So the rambler should show again a higher price than the colonial. But did your data showed that? In addition, you can always pop the top of a small rambler and make it a colonial as so many people are doing these days in all established neighborhoods closer in. So the rambler affords that extra flexibility to convert it to the home they ultimately wanted, a colonial. Instead of buying a cramped colonial.But for me the bottom line is that a lot of people would buy colonials if they could afford it. But reality sets in and they settle for the rambler or other type of home. The fact that colonials are bigger, and newer compounds the fact that people prefer colonials. As far as the future, I doubt that we will see bigger ramblers because these are more expensive to build, so there is less profit for builders unless people really wanted these properties and were willing to pay that price differential. They are not. That is why they build conlonials instead. Land is too expensie to build large ramblers on them, when you can build a larger colonial on the same lot. In that case, I believe the rambler should be pricier than the colonial, but I do not know if your data showed that.
Anonymous said "DC2 - this has been going on (in most areas) for at least 6 months now. No doubt its real."Well, I started thinking about this a little more, and in reality the Case-Shiller index is a better indication of prices moving up than the MRIS data. Do you all recall if the index is up for Washington consistently for the past 4 months? I know it was up in December. Another explanation for the increase in prices we saw the past 4 months with the exception of a few counties such as Arlington and Culpeper, which saw decreases at one point or the other, may be that the blight VA investor refers to, is mostly gone. Therefore we do not have those super low priced sales bringing the median price down. Those propoerties sold at the end of 2008 thru the summer of 2009, so we are going to see price increases through the summer of 2010 on the MRIS data.But does that mean that home prices are really increasing by that much with the exception of those that were sold way below market value? Not necessarily. I think we need to wait past this summer to see what the real story is, and check the Case-Shiller Index also during that time frame.
cara/Ace/MM,I'm pretty sure going north on Glebe is going uphill. So walking to Ballston will probably be quicker than walking back.Ace saidTBW, I'd say the walk home is an even bigger issue. Many people put in long days and the last thing they want to do is walk home, alone, in the dark and sometimes the cold, for 30 minutes daily, and after the commute to get to the Ballston metro! Agreed. Nothing worse than walking in a rainy, snowy, whatever day home. But in good weather like the past few days walking home is a lot more fun than going to work. At least for me. It means you have some time to relax or go out with friends (or for some of you see family/roommate/pets/etc). Cara saidSome of us walk faster or slower than others. How far is it? I used to do an uphill 0.9 mile in 15 minutes, and the downhill in 12 back in Boston. Granted other pedestrians often told me to "take my time" "what's you're hurry?".It's 1.1 miles. Do you really walk that fast even in July and August? In your business casual attire?
MM,The $75k difference is probably partly based on (a) one is on Carlin Springs Road (a semi-major road) the other is not on a major road and (b) many people would prefer Glebe ES & Swanson MS to Barrett ES & Kenmore MS. I presume there may be a square footage difference as well.
MM You might not want the house on Carlin Springs because it is busy. But Barrett and Kenmore are not reasons not to buy the house. When Barrett lost many of its ESOL students because a number of the low-cost Buckingham apartments were torn down for townhouses and two new buildings, Arlington made it a math focus school and it is doing well. Kenmore Middle School has an arts and communications technology focus and about 35% of its enrollment is students who live in North Arlington and elect to go to Kenmore for the ACT program. Not so many years ago, people were making similar comments about Glebe Elementary school and Swanson Middle School, now they are the schools people want. As with everything in life change occurs and schools often change.
tbw,Nope, I don't walk that fast. 1.1 and 20 minutes is accurate for me. Thanks!dc2,Qualitative data still needs to be collected in a quantitative manner to be persuasive of convincing to me.You are correct in your guess of how I did the comparison. Specifically, my data were for 1350 sq foot houses. Built so long ago that the construction costs are long since irrelevant. (and when land there was "dirt" cheap). And precisely, the ramblers do have all the positive attributes like expandability, and being a better use of a small amount of space. Hence why there apparently are many people who are at the price point where 1300 sq feet is all they can afford, see the virtue of them over the colonials and thus they end up similarly priced. To flip it around and say, well those ramblers are actually better and hence they should have cost more, is just obnoxious. The question I was addressing was price per square foot. The fact that 1350 spread over 2 stories (just talking above ground here) feels cramped may be the explanation, but it doesn't negate the fact that it's a perfectly fair comparison. The larger colonials in the neighborhood are 1550 sq feet and the additional 200 sq ft is at the same price per sq foot.The original point and question I was trying to address was whether everyone's continuing mantra of colonials are better and worth more held water in the market I was buying in. And it doesn't. At this price point which implies both this size and this age, you should buy whichever appeals to you, there's no intrinsic advantage of either style (other than the capes, which did go for slightly more). In other words, people shouldn't listen to it blindly, they need to look and see if it applies to them. Because it doesn't, necessarily.Ramblers are a niche product for those who like them, and those who need them. They're more expensive to build, mostly because they require more land. And out in Loudoun, they can just put in an elevator... which I why I think you'll see them built more in places like Lorton and or Prince Georges. For them to make sense to build, land has to be cheap relative to building costs.Basically, and I think we're agreeing on this, because this is very similar to what you said, the various house types all have sizes at which they are the best use of space. For under say 1500 above ground, a single story is the most efficient and feels the most spacious. Starting somewhere around 1800, the single story building takes up too large of a footprint to be viable on lots of 0.25 acres or smaller. (and eliminates the "one with the land feeling") And that's also the point at which the typical 4 bedrooms of a two-story start to all be good sized.Thus since there's a time and place, and size and price for both one and two story houses, I think you can see why the blanket statements of "people want a 2-story" frustrate me. People mostly just want larger houses than they can afford. And at those sizes the two-story layout is more economical (irrelevant obviously if you need the one-story for some reason). But when push comes to shove and you need to buy a house within your budget, many people find that the one-story layout is better if that's the size house they can afford. In other words, the question you're asking of what would buyers want if they had no constraints, is not the same one I was answering, nor do I find it compelling. So you said you like the spanish style ones on the West Coast? Unfortunately I don't think they build them like that around here. Me, I like the ones I can't afford in Hollin Hills like this one:http://franklymls.com/FX7018792Just look at all those windows! But it does need the 0.47 acre lot to make it work. People are paying a pretty penny for those. So, sadly neither of us can have a rambler that we'd really want. Me, because it costs too much, you, not unless you move...
oh, wow, Cara, I love that house you linked. Very nicely done.
What Ace said. I think the outside is kinda fugly but love the way it looks on the inside. I never saw this listing because it is way over my price range but seems pretty modest for many on this board.
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