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Thursday, April 22, 2010
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35 comments:
Here's another a seller losing his/her delusions:
http://franklymls.com/AR7258395
Ace-
That house could probably use better staging, but I really like the architecture/structure of it.
Do you think they'll clue in and take up those awful and unnecessary green carpets and take some new pictures next? You'd really rather see the state of the hardwood floors underneath. It's one thing if it's a nice oriental or fashionable rug, it's another if it's a fugly piece of scrap carpet.
I know, the place has other much more expensive "needs updating" issues, but putting your best foot forward on a million dollar homes with winter views of the Potomac... Either way one would think it will now sell quickly since the new list is under the tax assessment. (sorry couldn't be bothered to get comps this morning).
hb, Ace,
agreed, I like the bones alot.
HB, Cara, agreed. Yes, it appears to need at least a hundred thou (and I would double that and more even without seeing it) in deferred maintenance and upgrades but has a lot of potential. However, it appears to be very dark (surrounded by trees) and has no garage and apparently no real back yard. I suspect those things are holding it back for many buyers as well. But at this new price, it may find a buyer, because of the bones and the nice area it's in.
Ace,
Does Arlington require permission for tree removal? Compared to the cost of redoing the kitchen and baths (and I worry about the deck), taking down a few trees to create more light and a back yard is relatively painless.
I like tree-houses though, my favorite apartment ever was on the 5th floor but with a field of trees next to it so old and tall you really felt you were living in a tree house. Cuts down on cooling bills considerably too.
Cara-
Even if you can't get rid of the whole tree removing the branches that are directly over the house would definitely got a long way towards getting some light into the house.
Cara,
Permission is required to cut down trees within a resource protection area (RPA), but based on the County RPA Map, the lot appears to be outside the RPA.
Ace,
That house also backs right on to the GW Parkway in back. It probably isn't terrible in the summer when there are leaves on the trees, but in the winter there is probably quite a bit of traffic noise.
Liv Sining,
Well it's hard to get a view of the Potomac otherwise.
One would have to be there to see how much elevation it has above the parkway. Height can help quite a bit on road noise too.
Out of curiosity did anyone get their redfin email?
cara,
There are other river-view options. :)
http://franklymls.com/FX6769695
In all seriousness, I looked at this house which didn't sell:
http://www.redfin.com/VA/Arlington/2781-N-Quebec-St-22207/home/11231023
and the noise was pretty noticeable outside, even in the summer. Inside it wasn't bad, since there were double-paned windows. I haven't made it to Ace's listing because we prefer the Yorktown school district, for better or worse.
Liv Sining,
:)
Indeed, there are other options. My geography of Arlington is too weak to know how many of them there are in Arlington that aren't near the parkway. One suspects that homes with water views and no road noise cost more. If not the $8million, I'd hazard a wild guess of $2 million.
A topographical map of the area that would show the height above the road might help. If I recall correctly, that's about $40. But given how few properties are available at any given time, just going to them all would suffice. Unless not having a water view is a deal breaker for someone.
So, Ace, why isn't this house on your short-list? It's contemporary, in N. Arlington, and under $1 million. Too expensive after including renovations? No garage? Or no interest in living through renovations a second time around? You'd trade lack of water view for lack of parkway noise?
You can check out the topography on the Arlington interactive GIS site:
http://gis.arlingtonva.us/acmap/WebPages/Map/MapViewer.aspx
Search for the address, turn on the building layer, then click on Environmental and turn on the contour layer.
The Parkway elevation in this area is about 150 feet. The house is located at 185-190. If you take the most direct route, perpendicular to the Parkway, there is a pretty steep hill dropping from 190 to 150 right at the edge of the Parkway, which would probably block much of the noise. If you look directly North, out of the back of the house the slope is much more gentle leading toward the elevated section of the Parkway (still at 150ft). Here the hill might not block much of then noise, but the distance is a little longer and there are a lot of trees in between the house and the Parkway and they might.
Bottom Line: You'll have to check it out in person to know for sure what the noise is like.
Also, a lot of the time it won't matter, because the noise of planes flying out of Reagan National will drown out the noise of the traffic.
Anon-
Agreed that is a good point that there is always somewhere that you could be making a better return than housing, although the obvious problem is you have no idea where that is until it has already happened.
Although to be fair housing had the highest return of any asset from 2000-2006, because it is the only asset that you could buy with no equity. So in addition to getting the doubling of the house price you never needed a downpayment making your returns incredible :)
KeithK
Oh neat!!!
When I was looking for something like this for FFX I could only get a something by ordering and paying for it.
Better link:
http://gis.arlingtonva.us/GIS/gis_acmap.asp
That takes you to where you search for the address.
Cara, it's not on my list for all those reasons plus I like a sunny house and have to have a back yard that can be fenced. And, it would be the third house rather than second needed huge renos. Some reno. is ok if the price is low enough. This house would be too expensive. I don't need to live in a deluxe neighborhood.
I'm really glad to hear how much you are enjoying your new house and neighborhood. I think your timing was perfect for your situation.
"HB said...Although to be fair housing had the highest return of any asset from 2000-2006, because it is the only asset that you could buy with no equity. So in addition to getting the doubling of the house price you never needed a downpayment making your returns incredible :)"
Yeah -- in a counterexample to NVC I almost pointed out what would have happened had I bought in 2003 and used 3% down in Arlington. Thanks to leverage, my ROI would be well above 1,000%.
I didnt use that example -- in part because calculating the actual return would make me sick to my stomach!
Ace,
I understood that my WaPo examples excluded condos. But it showed that SFH and TH in many parts of Arlington were still increasing in 2006 and 2007. I agree that condos were showing more weakness around then (partly because there were a glut of new condos). I expect those condo buildings will (or have) bottomed more quickly than the TH and SFH in Arlington.
I think this is the point some of us are trying to make. Those areas or submarkets that dropped first will bottom first. Those that drop last will bottom last. I know not everyone agrees but we are all entitled to our opinions until the bear market is clearly over and we can see when each area had its minimum. It's still too early to say who is right.
On a side note, I'm not sure why The Anonymous and mytwocents and a few others feel five years is some magic number of how long a bear market can go. Here's a chart of Japan's housing bear market from patrick.net, which unless this is bogus lasted 15 years.
Now, I agree with the Anonymous that I'm not waiting until 2016 to buy a house (let alone 2021 if we had a 15 year bear market.) But I do think it's a bit bizarre to think the bear market could not go on much longer ESP in these submarkets that did not really drop until 2008.
tbw,
It's kind of difficult to do, but you could check out the bottoming process of the last local bubble to see if getting hit first means leveling off first.
I know out in Burke those piggyback townhomes I was looking at got hit first last time, and appreciated last this time (by a good 2 years relative to SFHs). I didn't check the dates for which started flatness first though.
Ace,
Since you don't want me to say take the 2000 assessment and add 10%, here are examples I can find in 22201 where there is a 1998-2000 sold price that shows a greater than 100% increase. It's not hard to find examples. I'm only using things listed as having been built 2000 or before so none of these are tear down and rebuilds from this decade. Some are THs built in the 1990s so I doubt there's been much in the way of renovations since if they were built in 1996 they were modern to begin with (unlike say a 1940s SFH).
http://franklymls.com/AR7312294
1998 sold: $365k
2010 asking: $1.049M
Increase +187%
http://franklymls.com/AR7297077
1999 sold: $419k
2010 asking: $950k
Increase +127%
http://franklymls.com/AR7283293
1998 sold: $259k
2010 asking: $835k
Increase +222%
http://franklymls.com/AR7269460
1999 sold: $279k
2010 asking: $740k
Increase +165%
http://franklymls.com/AR7290058
2000 sold: $235k
2010 asking: $679k
Increase +189%
Do you want more examples?
http://franklymls.com/AR7294701
1998 sold: $216k
2010 asking: $675k
Increase +213%
http://franklymls.com/AR7288948
1998 sold: $285k
2010 asking: $670k
Increase +135%
http://franklymls.com/AR7284930
1999 sold: $272k
2010 asking: $650k
Increase +139%
http://franklymls.com/AR7246534
1999 sold: $241k
2010 asking: $625k
Increase +160%
This is only partway through page 2 (of 6) of a FranklyMLS search of 22201. I only gave one example yesterday because it's so common to find enormous price increases like this. I think the average home around the Metro corridors increased much more than 100%.
cara,
I agree that seeing what happened in the early 1990s bear market would help a lot. It seems from years of looking at tax records that everything was pretty much dead most of the 1990s but I have not really gone down to minute details. Unfortunately we didn't have blogs really getting into the down and dirty of local real estate markets back then.
Another difference with the 1990s bear market is it was more about long, flat periods than big drops. Also the absolute numbers were less scary since a 5-10% drop back then for the average home was $10-20k.
Mortgage rate news from Freddie Mac. Currently the huge increase two weeks ago looks more like an aberration than a trend as the rate went down last week and was flat this week. Interesting to see what happens the rest of April and into May:
Rates on 30-year mortgages didn't budge from last week and remained above 5 percent, Freddie Mac said Thursday.
The average rate for 30-year fixed-rate mortgages was 5.07 this week, the same as the previous week.
tbw,
Would you believe a bubble blog if you read it 20 years after the fact?
But yes, without the dramatic drop it's harder to detect when the drops started and when they stopped.
Searching throught FFX county records for First Landing (the piggy back condos) you can see the bubble pop up with a 20k increase from 1986 ($78-80k) to 1988 ($103k), Things peak (amongst units that have since then never been resold) around $124k, but struggle to hold onto $100k-$115k starting in 1992 and continuing through 1997. They don't escape this price range until 2001 with a $145k sale.
So yes, since the bottoming process was so short all around, and the bottoming so shallow it would be difficult to detect a pattern from the last bubble's data.
Anon-
As someone who works in the finance industry I get really upset when other people in the industry talk about how dumb the normal person was for not finding the best investment... First, I don't trust most of the returns these people claim, because I have all the data on funds returns and I can tell you that very few funds make that much money. More importantly though the average person can not afford to risk most of their savings so they are willing to take on lower return options (savings account) in order to know the money will be there when it is needed.
Sure if all you are worried about is building wealth you can probably do better than buying a house, but I think most people want to live not have the absolute maximum return on every dollar of savings they have.
TBW,
And one of my key points is, rather than take individual instances, look at the overall data with the same measures at point 1 vs. point 2 to make the strongest case.
I completely disagree with your assumptions about 1990s builds. Many people replace HVACs, kitchens, baths, siding, windows, etc., in 15-20 years' time, though it's probably true that the majority don't. That's an important reason why the individual instances aren't very compelling. For example, in the one SFH you posted, it's clear that the owners recently reno'd the bath and it appears they did the kitchen, and lots of other smaller things as well. So they may have had what appears to be a bigger than average increase in value due to bubbling, when in fact a part of it is due to upgrading.
My primary point remains the same: from the data I have seen, around mid-2006 to early 2007, Arlington (all types of housing, all neighborhoods) stopped rising and, in many areas and with condos in particular, started giving back some of the bubble increases. Since then, some neighborhoods and some types of housing have declined more than others have.
There are always going to be a few cases of buyers falling madly in love with a condo or house and/or its location, and paying too much for it. But if there were a lot of buyers bidding up all the houses, condos, and THs, the overall stats would show this.
I also think CRT's #s are much more on target with respect to the overall increases pre-mid-2006. There weren't as many crazy speculators and liar loans in Arlington (not even in the worst parts of 22204 and 22206) as in many other areas in the region, so the numbers did not increase as dramatically. Some areas also have not dropped very much since then. There is variation in Arl. just as there is in every other county.
From today's Arlington Sun Gazette:
Up, Up, Up: Home Sales Rise During 1st Quarter
Home sales across Arlington during the first quarter of 2010 were up nearly 29 percent from the same period last year, and the average sales price of homes sold also posted an increase.
A total of 486 properties changed hands in the county during the month, based on figures from Metropolitan Regional Information Systems Inc., the area’s multiple-listing service.
Double-digit increases from 2009 figures were posted each month during the quarter: up 10.9 percent in January, 48.9 percent in February and 30.9 percent in March.
The average sales price also rose, though not at such an upward trajectory as sales.
The average price of all homes that sold across Arlington during the period was $474,712, up 3.9 percent from a year before.
Total sales volume of all transactions during the period was $238.7 million, up about 34 percent from the $179 million reported a year ago.
Arlington’s increase served as a booster shot to the inner suburbs, which, as a group, managed to grind out a slight increase in sales during the quarter despite a decline in Fairfax County.
CARA
Never take down a tree to add light to a house. Instead, look to see if you can add a skylight or a Solotube.
I added 5 solotubes and my colonial went from Draculas living room to bright and airy.
In fact it was so bright I had to immediately repaint the interior.
The whole damned place was showing every ugly flaw and paint chip.
The living room paint was so awful that it was making me nauseous
I'd never cut down trees, but,
if you identify a stairwell and can add some solotubes, the whole place
will just transform.
http://franklymls.com/DC7228635
here's another schizo listing,
assessed at 560K, lists for 249K
some bidding war breaks out and it sells for 330.
I agree with this housing prices not seasonal
Seeing that housing prices went up for 5 straight years and then down 3 straight years it doesn't sound seasonal to me. Sales are definitely seasonal, but I don't think prices are...
pat,
Good alternative.
I personally wouldn't do either.
Your solution is way too expensive, and I have a fear of skylights leaking. (Never known one that hasn't, of the whopping three sets I've known).
But personally, as I implied above, I wouldn't cut the trees. One for the reduced energy costs, and two because I love the tree house feel. (although cutting branches that may fall through your roof may be a good preventative maintainence step).
I think most people don't understand how bright sunlight is. Being in the shade outdoors on a sunny day is much brighter than pure interior light.
Cara and Pat, I think your posts show that the ideal solution (though not always feasible) is to know how much of a natural light vs. trees vs. river view vs. quiet (etc.) person you are, and try to find a house that best matches it. Although my current house doesn't match some of my needs/wants, it is very sunny and has great windows for getting a breeze in the house. Several people have recommended planting more trees on one particular side, to help reduce energy costs (due to heat in the summer) but I gladly put up with the heat to get a full blast of sunlight. Someone else would make a different choice.
Cara, my experience with friends' houses with skylights is the same as yours.
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