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Friday, April 2, 2010
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38 comments:
Hey spider,
Here's your stampede:
Jim the Realtor
BofA trustee sales way up!
It's just in CA, the Inland Empire of CA and Las Vegas, NV.
But, you never know, it may yet come our way. The fact that we're not amongst the hardest hit areas in the country will be working against this, but this is the closest thing to a good sign for those who think a stampede is coming that I've seen in a very long while.
Personally I think they're testing the waters, seeing what this does to the market, and will move on to Florida and Phoenix next before considering something like this for the major metropolitan areas.
If they don't get enough buyers at auction, and end up still having to list them all through the MLS, I don't think they'll go through with a big push. So, either this means you'll be able to buy from a flipper, or you need to get your short-term financing lined up to be ready to go to auctions.
Does anyone know how easy/difficult it is to get your land zoned to allow more than one house. This house has 1.2 acres about a mile from Tysons. Even if it could only be split into 3 lots I imagine you would be able to sell 2 of them for ~200K each and you would end up with a decent sized house for ~200K. I no nothing about the process of rezoning and am not really interested in doing it, but I imagine you could probably do pretty well.
tysons house
cara,
i have a lifelong buddy who's a RE agent in LA. about two years ago he told me BoA would start dumping foreclosures in LA. so it took 2 yrs for the rumor to become reality.
if indeed BoA had planned to do this for two years, what changed? why now?
MM-
Prices have finally started rising in LA. I assume that means the market is a lot stronger now and investors no longer feel like they are risking losing 2%/month they hold properties. This confidence probably why they felt now was a much better time than the previous could of years.
MM,
I don't know. Irving Housing Blog had reported that at a BofA representative at an industry function has said that foreclosures were going to increase 600% this year. I didn't report that here, because it seems too implausible and baseless. But real numbers from trustee sales on the other hand, I think is worth mentioning.
I don't know what BofA's game plan is, or why. I don't think they were in a capital position to be ramping up foreclosures 2 years ago. Maybe they are now, or maybe they see more flipper interest... I don't know.
cara, hb,
i just remembered that banks by law are not allowed to sit on foreclosures more than one year.
Texas Native,
Did you check out crazy lady's home at the open house? It's being foreclosed on again. can she stop it twice? too bad Jewel had bought already and can't help her out this time :)
Housebuyer That property is zoned R-1 which means you can only build one house per acre. You could get it rezoned but that takes time and money. Because it is on a busier street it might not make sense for a builder to do it. We have a house on Cottage St. in Vienna on an acre and a half which we tried to re-zone a few years ago. Fairfax Co. basically told us not to bother.
MM, excellent detective work!
HB, just a hunch, but, in addition to what reecon said, I would think that a good Realtor would have investigated this and if the land could be subdivided, would have said so in the MLS remarks. And, not only is it close to one busy street - it's near the intersection with a second busy street as well.
MM,
Interesting. Is that 1 year of delinquency before they must foreclose, or one year after foreclosure that they must hold a trustee's sale? Or one year after the trustee's sale that they must put it on the market?
State law or some national banking regulation?
MM-
I think they can not sit on it for over a year once everything is ready to go. I can tell you for a fact that most MBS have plenty of foreclosures that have been foreclosures for over a year and have not become REOs yet. I assume the bank just hasn't finished all the paperwork or something like that to make it legal
reecon-
I thought R-1 just meant a single family home rather than a multifamily home or condos. I am pretty sure that all of the large houses across the street are also zoned R1 and their lots look like they are only .25 acres.
Ace-
I agree if it was currently zoned so it could be subdivided the agent would say so. I assumed it was not I was just curious on how much time and effort it would take to rezone it. I have no idea, which is why I brought the question up. If it would only take a couple of months and $50K it would be worth it. If it would take a couple of years and $500K it would not be worth it.
Well, foreclosure law varies from state to state. I do remember reading something back a year or so ago that so many illegals bought homes with a stolen SS# and name that it really so them down. They have to clear the title by hunting down and contacting the people and such. This happened alot in our area, too. There was mega fraud being commited in the loans.
HB, thanks for your clarification. My point is that, barring extreme agent incompetence, I think we can safely assume that the type of change you described would be very expensive or impossible, if there is no mention of the possibility in a listing like that, as it greatly affects the desirability of the property. The seller's agent is going to err on the side of making something sound like a possibility even when it's highly unlikely to be approved or very costly; if the seller has approval already, they will definitely state that. Fairfax Co. may be different from Arlington Co., but the architects I have talked to about possible projects have generally been quite cautious even when what I had proposed was clearly within the rules as stated on the website, i.e., they may have known about additional complications that made it even more difficult to change zoning or get a variance. Arlington has greatly tightened rules for this kind of thing in the past 5 years (while grandparenting-in existing variances) and I would not be surprised if FFX has also.
You've probably already seen this, but, just in case...
http://finance.yahoo.com/real-estate/article/109209/time-to-storm-the-castle?mod=realestate-buy
"Home sales across the board remain sluggish. Sales of existing homes fell 0.6% last month to a seasonally adjusted rate of 5.02 million units, while new-home sales fell by 2.2% last month to lows last seen in 1963. But the mismatch of supply and demand is now widest in the seven-figure market. In the most coveted Northern Virginia suburbs of Washington, for example, supplies are fairly tight up to about $900,000. But it is a buyer's market between that level and $2 million, says James W. Nellis II of Re/Max Allegiance, a local broker."
MM,
Nice find! It's an adorable house, but not for $879k. My husband has been inside it, and said the rooms are much smaller in person than what the pictures show. Also, even if someone was willing to pay that much for it, I really don't think it would appraise.
If it does end up going to auction... good luck to whomever purchases it. I wouldn't be surprised if this woman burned it down before closing.
Anyone go to the open house? The owner is the listing agent.
cara said
The best reasons explaining what has actually occurred are that high interest rates generally accompany inflation, and that housing has extreme price stickiness. I don't think you need me to beleaguer these explanations, because I'm pretty sure you understand them. And for me anyway, if you don't trust what a world's worth of data has to say on the subject, I don't see what a better theoretical(*) explanation will win for you. I can try if you'd like to hear it though.
Yes, that's exactly my point. High interest rates in the past were accompanied by high inflation. In this area that led to explosive wage growth. That was my point about the 66% rise in salaries over a few years from $30k to $49.7k between 1979 and 1985.
I don't see that much wage growth between 2009-2015.
1979 - $30k
1985 - $49.7k (+66% from 1978)
1991 - $61k (+23% from 1985)
1997 - $72k (+18% from 1991)
2003 - $80.8k (+12% from 1997)
2003's number was below 2002 so that makes the growth a little lower than it otherwise would have been. Our most recent six year period
2002 - $85.3k
2008 - $107.4k (+26%)
was a little bit better. So wage growth did pick up this decade but even during those boom years it was nothing like the wage growth of 1979-85. I think you'd have to be pretty optimistic to think wage growth between 2009-2015 will be anywhere near as booming as 2002-08 let alone 79-85. I'd love it if we had another +26% but I'm not holding my breath.
cara,
Hmmm...BofA has been saying they will ramp up foreclosures significantly as 2010 progresses. So, we see some evidence of that. I still think we will see more REOs in nova as we go. It is hard to believe banks can hold on to these assets on their books without physical deterioration, if nothing else.
HB,
That's a relist - I have noticed it on the market for almost a year now. This and many such tear-downs is exactly what I was referring to earlier. Comparable existing move-in-ready homes are selling for way higher than cost of land+new construction+margin. Short-term exuberance and long term reality are quite noticeable.
housebuyer,
There are different types of SFH zoning. Some allow four homes per acre and some might allow one home per acre. Around Clifton they lobbied for very restrictive zoning of one home per five acres.
If current zoning allows you to subdivide the lot then it would be relatively easy to do so. If subdividing the lot would require a variance from zoning then you'd have a lot of work. I'd guess at least a year if not much longer. The process would not be too dissimilar from the "fun" Ace had when dealing with the assessments. Except here it would be a different quasi-judicial body (the Board of Zoning Appeals.) I imagine BZAs differ in how consistently they grant variances. I'd guess a huge factor is whether any neighbors complain. I think you have to put a big sign noting the request so a neighbor would likely see that and if they are the muckety-muck type might complain (of course some complaints are valid since some proposals would overwhelm local roads etc.)
You'd almost certainly have to hire a lawyer who specializes in this and preferably someone who is a repeat player before the Fairfax board.
va investor said - "I'm not leaving thousands on the table over one screwball appraiser. "
"screwball appraiser" - are you kidding me?
If we had appraisers like that - we would not have had bubble in the first place. I would call it an honest appraiser Mr. investor.
Appraisers need to be regulated closely & I bet you will see such instances more & more - it is well overdue in my opinion.
spider,
I've got the appraisal in hand. I've been thru appraisals 50 or 80 times. I know a valid one when I see it and know junk when I see.
I've also been on the buyer side of a low-ball appraisal on a house that was a steal. We ended up having 3 different appraisals and the diff. b/t high and low was 60%!!!!
Not that you don't have a point about bad appraisals a few years ago, I'm talking about ONE that was done a week or two ago. I'd link it but won't for obvious reasons. Don't assume all appraisers are competent.
va investor - what % of 2010 county assessment did it come at?
about 5% over 2010 assess. and it's Loudoun lower end, not that either really matter.
Ace-
You are probably right that it is very difficult and time consuming or the agent would have mentioned the idea.
Cara-
BofA has had a decen't capital position for the past 6 months or so. I don't think capital was why they were going so slowly, instead I think it was due not wanting to foreclose on people while the government was changing all of the programs. I actually would believe a 600% increase. A ton of the old countrywide (now BofA) MBS have about half the people over 90 days delinquent, but they are selling less than 1% of these per month.
Spider-
Thanks for updating on the age of the listing
TBW-
Thanks for the comments. Houses across the street are on .25 acre lots so there is a good chance it has similar zoning. Either way I assume you would need a ton of cash in order to buy the house build additional houses and sell them. Perhaps if it gets cheap enough some investor will decide to do it.
Blogger MM said...
Texas Native,
Did you check out crazy lady's home at the open house? It's being foreclosed on again. can she stop it twice? too bad Jewel had bought already and can't help her out this time :)
Our Agent friend talked me out of it. Apparently she has quite the reputation locally. Since I am already a natural occurring nutcase magnet, I decided against going since I have already hit my quota for April as of today.
Last weekend at the tidal basin I watched a red hatted gal talk to a cherry tree for 30 minutes or so. After a bit it seemed like an intimate conversation was taking place and I sorta felt like an interloper. But I snapped back to reality and just stayed put.
Crazy people seem to have a map of where I am going to be. No need to go to where they already are.
:)
Texas Native, that's why all of us are here! Birds of a feather...
Caution! Appraisal Comment follows
please diregard if uninterested!!
The higher unit (exact comp of mine) went under contract in ONE day. Ask was 20% over my low-ball b.s. appraisal. This is 30K!!!! to me.
VA_Investor, you may want to visit Frank Llosa's blog entry about the appraiser from Purcellville.
I agree that stopping the bubble era collusion and other abuses is a good thing, but now we have instances where appraisers who really don't know the area or are inexperienced coming up with odd appraisals. It's always been an art rather than a science but there seem to be more problems now than when things were stable pre-bubble (at least in areas that had pretty traditional real estate markets).
Ace,
Thank you. You are absolutely correct. I wouldn't rely on an appraiser for a true value anymore than I would rely on an agent. In my current case, even the Sellin Agent is in a fit about the number and his client is heartbroken. She and her mother plan to make it their home.
I think it's irresponsible for Kevin to imply he "knows" more than I do. He thinks he's the "catcher in the rye", saving people from con artists like me.
Can he guarantee mother and daughter that they will get a lower price in the future? Can he tell them to keep renting and put off buying a home they love and plan to live out their days in? Bear in mind that their contract is almost 15K less than the most recent UC (and in one day, we call all guess what it went for).
Sure, anyone buying would love to have the leverage of a low appraisal, but when 20 or so people are lined up to pay way more there is no leverage. Plain and simple. I think Arkey went thru some similar stuff last year.
VA_I, just out of curiosity, where does your would-be sales price fall in relation to your 09/10 tax assessment valuations?
Kevin,
I believe we are about 5% over 2010 assess (not that I have any confidence in those). They trail and low-end had way overcorrected.
I am at less than 50% of peak for a completely renov. unit (end unit backing to green space and the w &od path).
You think I'm some scum bag creep, rip-off artist. Fine.
p.s. please excuse my spelling errors (eventhough I can't spell!). These are due to eye trouble from recent major surgery. And cara, I'm more aggravated about the pain I'm in rather than the appraisal.
You think I'm some scum bag creep, rip-off artist. Fine.
I didn't say that, I just know the mentality of sellers in this market (keep in mind I was one of them in summer '07) and I know there's still a lot of denial out there.
Excuse me Kev,
But you don't know what you are talking about. Others can weigh your experience and judge appropriately.
Whatever you say. Good luck with your sale.
Well thank you Kevin.
Who's "giving" me anything here? What is coming to the table? Seems pretty oneway with alot of potshots. What info have I been given/learned? Don't ask me anything.
tbw,
You only addressed the first part that I already knew you understood.
You neglected the entire second half of the explanation. Fixing housing costs in an inflationary environment, and stickiness due to leverage.
But in answer to the part you're trying to take on, we won't "need" explosionary wage growth if we don't have >8% rates. Barring inflation I don't see rates of over 6.5% coming about. 7 tops, and I find it incredibly implausible. With inflation, some wage growth will come. Maybe not enough to make owning a no-brainer like before, but enough so that it still computes.
In all the earlier eras you list for DC, pre-bubble, buying a house looks like a no-brainer with 20/20 hindsight. Even when rates were at their highest. Do you really think the housing market and people's want to own their own home is so fragile here that it needs to be that blatantly obvious in order for anyone to be willing to make the leap? You've got 40 years of ingrained culture during which buying was almost always the right move, do you really think one bust is enough to break it, such that people will only buy if they're certain it's the rational choice?
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