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Monday, March 8, 2010
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59 comments:
Is it just me or is this just really wishful thinking from Freddie. This house was bought for 399 at the beginning of 2008 aka before most of crash for 399K as a regular sale. Now it is listed for 390K as a REO. Its also another example of someone who put basically nothing down and had very little savings so when something went wrong he almost immediately lost the house. To get through the delinquent to foreclosure to REO takes some time and this person only bought the house 2 years ago...
http://franklymls.com/FX7273005
hb,
How do I click on that mls you posted? It's not in blue.
VA-
Sorry I forgot to make it a link
TH near Tysons
I got 6 offers on my sale. May get a couple more this am. One conventional and the rest were FHA. Oddly enough, the conv was the best offer.
VA-
Wow the markets you deal with are a whole different world than most of the ones we are looking at.
The mid to upper markets are no where near that lively unless the price is an unbelievable deal. Good luck with the offers and hopefully everything will go smoothly
I get the feeling VA_Investor got so many offers because she priced the property appropriately to sell. We went to four open houses this weekend and all four were overpriced in my opinion (the market will tell me if I'm right). They were priced at 110k, 145k, 170k, and 200k over their 2010 tax assessments. There are still a lot of wishful sellers in the 600k+ markets.
Jeremy-
I agree that she probably priced it well, but I also think they are just different markets. She is selling low tier properties e.g. <$200K while the rest of us are looking into higher end properties $400K+. Although many of us are first time buyers in general these are not houses bought by first time buyers. So I am not sure the fact she got 6 offers really indicates much about what our search will be like.
Jeremy - the 2010 tax assessments were all over the lot. It may be more of an issue if you're talking about properties listed for less than $850K. Above that level, and in the types of neighborhoods you seem to like (Vienna/Oakton), it's not unusual for houses to be listed over $200K more than the 2009 or 2010 tax assessment and to close at $150K or more over the latest assessment. These generally aren't distressed sellers, and they can wait it out, too.
VA_Investor,
Out of curiosity, did you mention elsewhere what property you were selling? I don't want to invade your privacy, but I find myself wondering if it's one of the ones I've looked at over the past few weeks. Some of them were very nice turn-arounds by investors.
Anyone care to recommend a Home Warranty Service for NoVa?
I am in need of one and would appreciate any experience with a provider, good and bad.
I've heard of the following:
Choice Home Warranty
Sensible Home Warranty
...just to name two.
TIA.
Mozart said...
the 2010 tax assessments were all over the lot. It may be more of an issue if you're talking about properties listed for less than $850K.
Oh, I'm definitely looking well under 850k. The house we really liked is listed at 775k, but its 2010 tax assessment is 640k. We could afford it at 700k - but I doubt they'd go that low yet, and would probably just be offended. If it's still around in a couple of months maybe we'll have a go at it.
I know this is not really related to the topic, but I was somewhat amazed about this chart unemployment
It really shows the value of a college degree. Even if you didn't learn learn anything useful the unemployment rate is 5% for people with a degree compared to ~11% for people with just a high school diploma
Jeremy-
From what I see the tax assessments are basically correct for distressed properties (shorts and REOs), normal sales are going for more when they happen, but I mostly am just seeing a standoff between buyers and sellers. No one is in a huge rush to buy/sell so we aren't finding a clearing price.
housebuyer,
I don't if I agree with tax assessments being accurate for distressed sales. My sister closes this month on a REO for ~165k and the 2009 tax assessment is 210k.
I'd say 2009 tax assessments are a good price for 2010 normal sales in the more expensive areas, and much more than that are wishful sellers - unless of course there are extraordinary upgrades not reflected in the tax assessment. The problem is most sellers think they have extraordinary upgrades, when really they usually have the same stuff every other house has.
two 'flipper's specials' on same street, both sold last Nov, now, one went UC in one day, while the other still entertaining offers...
to me, the first house is better in so many ways, and even with a much bigger lot, is priced lower than the second house. only time will tell which gets the last laugh.
Jeremy-
Yeah my comment was only relevant in the areas you area/price range you are talking about. But yes as you said many of the sellers are thinking wishfully, but since they are in no rush to sell not much is happening.
condo buyer said
I think you Arlington buyers who wanted a deal missed your window of opportunity. I wish I had bought in late 2008 or early 2009 market as that was the only chance to buy low in Arlington.
There has not been a chance to buy low in Arlington since The Anonymous decided not to buy in 2002. ;)
In all seriousness, there have been price declines in Arlington. Whether they will ever match those of outer suburbs is an interesting topic. All I know is I pay a substantially lower rent each month in Arlington than I would pay to own a condo. So I have zero regrets in renting an apartment here before I eventually buy a home in Fairfax County.
Your colleagues who paid $628k for a 2 bed and den and $598k for a 2 bed are paying much more than they would to rent similar condos in Clarendon.
MM,
I'm with you on the 5th street house - it does look better in the pictures. However, why did the flippers go to the time\expense to put that ugly tile down in the basement? Home depot probably had a sale that day I guess.
*Most* of the flips I've seen in Arlington just don't seem "right" cosmetically - alot of corners cut. I never put a bid on one because I was afraid to find out what an inspector would say.
Va_Investor said
Try finding something under 100K. In the fall of '08 and early '09, there were plenty. Houses in Woodbridge. TH's in Herndon and S. Reston, Houses and TH's in Sterling. If those prices come back, the economy is in serious trouble. I bought property (that was in decent to great shape for 30 cents on the dollar.
But they were worth less than $100k. You've admitted all of those properties were blighted and falling apart. If some investor bought a home for $80k in Manassas Park and put $30-50k of work into fixing it up and sold it for above $100k that does not show that the home was underpriced in '08-'09 but fairly priced.
TBW,
I'm going from paying about $1900/month rent in a 1 bdrm apartment above Ballston metro (yes, I realize that's outrageous) to a 3 bdrm house in Arlington for $3000/month (mortgage, taxes, insurance included). I get a much bigger place and a bigger tax deduction now - for me it's totally worth it.
tbw,
No one in their right mind would do what your numbers suggest. I don't have the time or inclination to provide you 100's of examples with NET profits in excess of 70 or 80%.
Jewel,
My point was about whether someone should be paying ~$600k for condos in Clarendon. Not whether the SFH prices in Arlington make sense.
Va_Investor,
The numbers are not important. The point is that this:
http://franklymls.com/MP7249518
would be listed for less than $100k if it had not been remodeled.
and there are still plenty of sub-$100k listings in Manassas:
http://franklymls.com/MP7242741
http://franklymls.com/MP7204210
http://franklymls.com/MP7196104
etc
TBW,
You said...
"My point was about whether someone should be paying ~$600k for condos in Clarendon. Not whether the SFH prices in Arlington make sense."
I agree with you.... In fact, some friends of mine just spent $800k on a condo near U Street. Might as well buy a townhouse for that price.
What do you all think about this property?
http://franklymls.com/FX7270353
tedk,
I think these Mantua homes are substantially nicer than the one you found. They are more expensive but not dramatically so and I think they are dramatically better -- much more square footage, *much* more (to me at least) curb appeal, and garages.
http://franklymls.com/FX7267927
http://franklymls.com/FX7041703
Not everyone has my tastes (fortunately for me as Cara used to point out.)
tbw,
If you are going to MP wear your bullet proof vest. I don't buy that garbage in Georgetown,etc.
Heck, a year or so ago, you could have had a house well under a 100K in Woodbridge. I bought a 3yr old house with a 2 car garage and .5 acres for 115K. Prices are way up for the most part.
I could give you many subdivisions to look at since '08, but you can't see it.
http://franklymls.com/FX7225294
I think we may have discussed this home before. However, I think it predated the pretty funny comments at the bottom. I wonder if whoever purchased it was aware of the large issues. Of course, it is possible the commenters are overstating how bad it was.
Va_Investor,
I think we agree more than you may realize. I'm not disagreeing that the market is different than it was in 2008 in Woodbridge and a few other places. But the houses have been renovated and are nicer. So I think the higher prices mainly come from nicer housing stock. That's different than the same housing stock being priced more. Do you see the distinction?
In any event, I think most of us are more interested in how you priced your listing this weekend. I know you don't want to say too much but perhaps you could say what percentage of the 2010 assessment it was at and where the offers came in.
TBW-
The place tedK was looking at was 20% cheaper than the ones you showed, so its not that surprising it is not as nice.
TedK-
I think the place looks nice although I wouldn't really want to pay 50K more than the person who bought it a little over a year ago and did not do any renovations.
housebuyer,
My point may not have been clear. I would say the homes I showed were 35-50% better for 20% more in price. Either they are underpriced or the one tedk found is overpriced. OR the median buyer will disagree with me and the price differential is fair.
TBW, HB,
Thanks for your comments. We visited the Open House yesterday. Actually the current owners are moving back to Boston (their hometown) because of an employment situation. The husband works for a major defense contractor. Wife is a lawyer, works part-time from home. They spent a little more than $100K on redoing floors, bath rooms, energy efficient windows, kitchen and closets, after buying it for $507K about 1 1/2 years ago. They are not speculators.
So on this sale they will take a significant loss after commission.
And the tax assessment on this one is very misleading.
For someone looking to buy in the $530--600K range, this looks like a good value to me. Buyers can even walk to Pickett and take the CUE bus to Vienna Metro.
The negatives in my mind--
1. Some people don't like splits
2. The kitchen is a bit small even though the property has a lot of space otherwise.
3. The hardwood and the laminate (lower level) don't look very high end to me although the agent claims it is high end.
4. The lower level doesn't seem to get enough natural light.
5. It has a car port, but no garage.
tedk, if the employer is transferring the owner, it's very likely that the employer will cover the loss. (If the owners are choosing the move, it's less likely.) So I hope you don't feel pressured into overpaying.
I'm surprised that the agent describes the kitchen as renovated, as it looks pretty old/outdated to me. The new windows look nice (and good windows are very expensive).
A lot of people do not like split-foyer designs (according to real estate agents I have worked with, the favorite is Colonial, followed by Cape Cod, Craftsman, and bungalows, then other types including split-foyers).
tedk, one other thing - regarding comparing apples to apples, in many split-foyers and split-levels, the basement space is much smaller than in Colonials. Colonials in a sense have 3 levels and splits only 2, even though they may look similar at first glance.
Split-foyers are like a ranch in the sense that they have one "real" level comparable to two "real" levels in Colonials, and then the Colonial may have a full basement with some finished space that compares to the finished space on the lower level of the split.
Split owners often count the finished square footage in the lower level as part of the overall square footage in the listing, but FX Co. separates out all space that isn't entirely above grade.
I should have included ranches in the less-preferred style of houses per the Realtors I've talked with. However, it seems to me that a lot of Arlington ranches have gone for relatively high prices in the past couple of years, maybe because many older buyers who can afford to pay a lot want fewer home levels because steps get harder to ascend and descend.
Visited an Open House yesterday in Alexandria, Fairfax County (inside the Beltway). Realtor told me she has seen an uptick in prices. Town House sold in one day before the official Open House. She just did the Open House anyways. Property priced at 15 percent above 2010 assessment. This was obviously too low given that it sold before the Open House and for more than asking price.
TBW: if you are going to buy a house in Fairfax, that is fine, rent in Arlington for less than I pay for my condo or my friends pay for owning their condos, that doesn't bother me. I would never live in Fairfax again, so I am happy to buy a condo in Arlington which costs me more than I would have to pay for rent. When I make serious money I will probably be in New York or overseas so I will always have the condo as a place in the area to return to short term or rent as needed. My colleagues feel the same way. We can always rent the places to people like you who are waiting to buy elsewhere. That's what makes a market. The only advice I could offer you is to stay in Arlington until you get married because the Starbucks on 123 and that dorky coffeehouse in Vienna are full of women like my mom and her friends.
Ace,
Agree with most of what you say. But that Mantua Hills area is full of splits and bi-levels. Going by market trends and the costs of renovation, I still think that house is fairly priced.
tedk, just to clarify - I was just trying to point out how the house may compare to others, with regard to market value, not arguing that I know for certain that the house is overpriced relative to what it should bring. I'm not familiar with the area, and you obviously are, so you're in the best position to judge.
Also, I happen to like contemporaries myself, so I'm just sharing what Realtors have told me and what I've noticed rather than my own tastes - definitely if you like split-foyers, you can get a better deal on them. Likewise, I figure if I ever run across a good contemporary/modern house here in my price range, I will get more for my money because most people do not like them.
Jeremy: be careful for using assessment at the individual level in Vienna/Oakton. I've seen many instances where one house is clearly nicer (land, architecture, etc.) but assessed for significantly less than another. I've also found that they tend to sell farther from the assessed value than similar homes (which are cheaper) or similar values (nicer homes) in Oak Hill/Herndon.
Not that the assessed value isn't a useful tool -- but consider it a starting point and not the ending point.
It's not just Va_investor, and not just low end, it's priced to move.
My friend who owned in Rockville, and was trying to sell all last year, dropped that LA in the fall, and put her home up at a competitive price this time, $60k lower than the last price last fall, now just under the $900k mark. Got 4 offers in 5 days, winning bid full list, as-is, all cash, two-week close. That despite it still being a higher price by $50k than the two short-sales last year.
Price it well and you will get multiple offers, snow storm or no, low-end or high.
I'm so happy she got that albatross off her neck. Yes, she lost money on her 2004 purchase. In fact she probably lost more money than our entire downpayment. But now's she's freed up the rest of her very substantial down-payment for when she's ready to go through the bother of moving again and buying in her new home town. She has a gorgeous rental for now, and pretty much as long as she wants.
TBW: you're right, for 20% more, you can often get a much nicer house around here, and the increase in 'niceness' is often way out of proportion to the increase in cost.
But prices are so high around here (still), that the 20% price increase can be way out of someone's reach.
the Starbucks on 123 and that dorky coffeehouse in Vienna are full of women like my mom and her friends.
Are they hot?
tbw,
30-50% better? At some price point, these things can't go by percentage anymore... Because they're not even close to being available to the same buyers. 700-something and 500-something are far enough apart as to be irrelevant. Perhaps the reason they don't command as much of a premium as you think they should is because the buyer pool is also shrinking up there.
The whole colonial, cape, split ranch thing in terms of differences in price can actually mostly be explained by true and fair measures, like above ground square-footage, number of bedrooms and number of bathrooms. There's a little bit of a cute factor premium on top of that for Cape's and bungalows. The thing is, in a given neighborhood if it was all built by one builder, the foot-prints are often similar, meaning that the square-footages are quite different. So it's very difficult to do a true apples to apples comparison. But I agree with Ace, split foyers are essentially ranches with wierd entrances and complete basements. The wierd entrance means it isn't as tenable for less mobile folks. And at least in my neighborhood the above-ground square footage is noticeably smaller in the split-foyers, in trade-off for a larger below-ground space. Since I, personally hate below ground space, or an excess of it anyway, I'd never chose a house where half of my space was basement, finished or no. But, that Mantua home has much much more above ground space than the ones in my nieghborhood, so may not suffer the same problem. Heck you could research the costs of converting part of the basement to a garage for all I know. A split with a garage is definitely an improvement...
Basically my point is, if you just look at houses in a neighborhood you end up with the rankings Ace had, but if you look at price per above ground square foot for models with the same number of beds and baths then the differential goes away, mostly. In fact it, in price per square foot it can flip, because a 3 bedroom/ 2bath colonial can be tiny on an itty bitty foot-print with practically no basement and feel more like a townhouse, whereas a ranch with the same above ground space has flow, the second bathroom serves dual purposes, the basement will be larger, and it's useful to a wider pool of buyers.
tbw,
I sold for about 30% above '09 assessment. 2010 is not out yet. I paid about 20% under '09 assessment. I only had to paint and carpet.
The other property was a house in an exurb that had sold new 3 yrs before I bought. Orig price 290K. I paid a little over 100K. I put 3k in (paint, some carpet, some mulch and shrubs), and sold it in 2 days for around 200K. I can't remember assessments and they aren't online.
I kept all the rest as rentals. The most recent sale was in a marginal area and the Hoa reserves were awful. Property 2 was a long way away and, after 4 wks of trying to rent it, we sold instead.
I clearly do not agree with your assessment that the price increases on the lower end are due to renovations. That is crazy and you would know it if you followed that Market. Reo's, in areas that I follow, are up 20-30% (at least). One that comes to mind immediately has comps of 80K from a yr ago and is listed (and UC) at 119K. There were 3 offers.
Jeremy - I don't think you can get the house you like for $700K. My guess would be $725-35K realistically. If it were in Vienna, it would be under contract already, but you may have a shot since it's further out. But houses in that area sold for $100K over assessed value back in 2007 and 2008 when the assessments were higher than they are in 2010.
Cara, I understand your point, but I think the Realtors meant their point as an aesthetic, taste issue only -- all other factors being equal, people (at least those who work with the primarily-Arlington Realtors I've talked with) prefer Colonials, etc.
However, you are right that this may also be confounded with the space issue and other factors. As another example, they point out that a Cape Cod with the same square footage as a Colonial doesn't have as much space, because of the sloped ceilings on the 2nd floor. Interestingly, Arl. does factor this in to its assessment (e.g., a 1.75 story Cape Cod is assessed for less than a 2 story Colonial if they have the same other features).
I'm with you on the below-ground space, though I understand why man-cave types and people who want a toy/rec room for the kids like basements.
Ace,
I don't think most realtors think deeply enough to analyze the Why part. They just see consistently different prices within the same neighborhood on non-expanded homes. The cape/colonial/split/rambler separation is the easiest distinction to make, so that's what they attribute it to, and it is accurate.
I think the other reason I chafe against this is that "colonial" is total BS. It should have some architectural meaning in terms of actual period or at least styling, but it doesn't. This annoys me no end. But "conventional two-story-box house" wouldn't sell as well.
Cara, I agree that many aren't analytical, but I think you're giving them even more credit than I am by saying they are reporting what they see based on price. I think they are reporting what buyers says when they pull up together at a house or look at pictures, or when they walk through and find a cape feels cramped. Although "Colonial" isn't any more authentic (with reference to the original Colonial houses) a term than "Craftsman" (unless the latter was actually built about 100 years ago) it has a pretty consistent meaning, to Arlington buyers.
...and, for that matter, the term Cape Cod also is inauthentic since most were built well after the original Cape Cod houses.
And "ranches"--well, not too many horses are found on .14 acres.
So I suppose we could rename these as "1.75 stories maybe with some dormer-style windows" and "one level houses maybe with a basement."
It's partly marketing, and partly, saving newspaper ad costs by using shorter descriptions.
Mozart,
I agree with you that I won't be able to get that home for 700k. 100k over assessment seems reasonable considering the condition of the home. 150k or 200k over like others in the neighborhood are just wishing prices. That's okay though because we really want to buy next year, and are looking this year for practice and the odd chance that the 'perfect' home for us pops up. By this time next year we should be in a position to stretch a little over 700k if we find something we really like, but we absolutely cannot do that right now. We need to leave room in the budget for child care, probably starting about 9 months after we buy if my wife gets her way (and don't they usually?).
Ace,
I know wikipedia is a terrible thing to judge architecture by, but if you can believe those entries "colonial" is the only one of the four main NoVa designations that's architecturally inaccurate. Yes, most Cape's here are revivalist Capes, not colonial Cape's. But "Ranch" and "split-level" really are the names of those styles.
I'm not sure what would be so bad about calling a spade a spade and calling them two-story.
Cara, I certainly understand why "Colonial" grates on your nerves and I am not going to defend its usage to a purist. But:
--I didn't say that "split level" was inaccurate. Since it wasn't used to describe any other type of house from a prior period or with alternative features, it seems to me that it's pretty accurate.
--"Ranch" is the term that Realtors have used for one level houses, but my point is that doesn't mean that "ranch" is any more accurate a name than is "colonial." It does not describe a ranch, e.g., a place where people keep horses or other animals, any more than "colonial" describes a house actually built during colonial times with certain other features. It's a marketing name.
--I don't see how one can distinguish the common usage of "Cape Cod" as being on any more solid grounds than the use of "Colonial." Both are used to refer to "revival" styles and revival style houses typically have some but not all of the elements of the style. I am talking about the 30s and 40s homes, not the 80s or later (though I suppose if those have most of the features associated with "colonial revival" they could also be called "colonial revival"). In many cases, these houses (at least in Arlington DO have some features consistent with the style, e.g., all brick, 2 story, simple facade, symmetry (though many aren't symmetrical), double windows.)
So I guess my point is that I can see why someone would find any of the terms "Cape Cod", "Craftsman", "Colonial", or "ranch" objectionable but don't see a good basis for calling one objectionable but being fine with the others. If the issue is that they are calling a house with features that are largely inconsistent with the name of the style they are using, that would be another reason to take issue with the term usage as well.
FWIW, here's info from Arl. Co. about Colonial Revival and some other styles of houses built in Arlington:
http://www.dhr.virginia.gov/registers/Counties/Arlington/NR_Arlington_AshtonHeightsHD_Section7.pdf
Ace,
FYI, I am not looking to buy as I bought last year. I was just talking about that property because of my general interest in the housing market.
Ace,
"Ranch" is the name of the style. Literally. As I said this is all with the caveat, of if wikipedia is to be believed.
But the "colonials" don't actually have anything in particular in common with any of the recognizable styles existent in colonial times. Not in my neighborhood anyway. And the differences are many. Colonial houses didn't generally have the second story jut out further than the first story. Half-brick, half-vynll, also not common as far as I know. There's just nothing colonial looking about them. Now the ones from the 40s do tend to look closer. But the 60's ones? No, too many differences.
Some more generic term like "traditional" I wouldn't object to. But "colonial" for a 1960's two-story is just offensive to mine hears.
Ace,
Thanks for the link. It's starting to make sense now. Where you live, "colonial" isn't bad, because it actually does fit the buildings. Where I live, it drives me nuts, because it has next to nothing to do with the building style. I indeed, do not object to Tudor revivals being called Tudor, or Colonial revivals being called Colonial. That's just short-hand.
FX*(Springfield,+Burke) colonial detached active 250k to 500k
Two out of 17 hits with front pictures have aspects that are reminiscent of "colonial revival". Maybe 3 or 4 if you're being really generous.
There is just the problem of what the heck does one call this:
http://franklymls.com/FX7272024
I don't think this style has been graced with a name. 1960's tract home describes too many styles and is not going to sell houses.
Novawatcher: Not hot. I think you have to get closer to Tyson's to see any cougars.
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