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.
Re: mortgage interest rates' relationship with home prices--buried in this article is another hypothesis: Homebuyers scramble as mortgage rates jump"In a normal market, with home prices steadily rising, a jump in rates doesn't cause a big dip in demand. That's because people know their homes will eventually rise in value, and are willing to accept a higher mortgage payment.But now home prices are flat nationally and still falling in some places. Potential buyers are nervous about jumping in."In this environment, any rise in mortgage rates does significant damage because people don't think they're going to get their money back" if prices fall, said Mark Zandi, chief economist at Moody's Analytics."
"Interesting, although I still wonder about this area. I am seeing house asking prices more than what they paid in 2005/2006 and people are still buying.I hope that it makes them fall a bit, or at least stop rising. But demand in this area seems SOO high, erg..."
The other day a comment was made about moving federal jobs to the midwest (detroit specifically) in order to help lower costs of living for people.Well, take a look on USAjobs and see what going rate is in different parts of the country for federal jobs. They are all over the place. And don't forget contractors too, my husband and I moved from near Detroit where he was making six figures, with maybe a 5k jump in income here. I didn't realize it was soo much more expensive here (stupid me for no research, I know...). But, I just wanted to throw that out there that people where he worked could get a 1bd apt for $500/month in MUCH nicer building and amenities then places here that are $2k/month.So, there are many choices in areas that are much lower cost of living. Why the heck did we move here? hehe...
sehr,I've wondered myself why I don't just leave the area. My skills aren't fixed here, and in fact many of them are hampered. But in the end, I stay because this is my home and this is where all my family is.D.C. is a highly transitory area, yet my family has lived here for generations.I still think about moving, from time to time, though.
Ace,Yup, if you're not expecting to get appreciation, then locking in low housing costs is the main driver behind buying now. Which is going to put a lot of pressure on those currently looking. I'm not sure what happens going forward though. Do the newly entering buyers feel the same urgency? Do any price increases caused by the current urgency evaporate, or do they set new comps that will stick? Does the continuing supply of foreclosures provide enough supply of less expensive (upfront anyway) homes to make up for the rise in rates? Whatever happens, my bet is it's going to be local. Places that either have intrinsically few delinquencies or that already shed their weak hands, prices will rise a bit from the current urgency and comps will mostly stick. Places that didn't shed their weak hands, real sellers will have to go back into hiding again while we work through another layer of distress.
Sehrwunderbar,These 2005/6 buyers who have turned into today's sellers? I wonder if they'll be able to get their asking prices, given that credit is tighter and (one would hope) buyers are savvier. Perhaps many of them are likely to withdraw their homes from the market, a new round of shadow inventory, in effect, if they cannot get close to their asking prices. Or, for the subset of these people who have to move, and may have to lower their price, maybe these are more short sales in the making. I'm looking in Loudoun and (mostly, Western) Fairfax, so you and I are looking at fairly different local markets. Like you, I've seen some high demand, but in certain neighborhoods, and certain price points. But as for these new (what I think are overpriced) properties just hitting the market, it will be interesting to see if these sellers can bait any buyers. One thing that tells me they won't is the little list price v. sale price graph that comes up in redfin: for Loudoun, the overall trend in 2010 has been that asking prices have been rising, but actually per sq ft prices are trending down.
Then again, here is an example of where what I just said can be completely incorrect: House in Stowers Community of Leesburg Selling: purchased for 475k 1/2005, Currently Marketed at 535kThere was a recent comp or two of a very similar house, regular sale, that sold for 525k, so it might actually be considered a reasonable price.
I just find prices for houses like this insulting and hope that no one pays anything close to this vienna house In 2000 its assessment was 180K and the person is trying to sell it for 525K for a house with minimal updates. The house is 1100 sq.ft. so the price is almost $500/sq.ft. is it just me or is this totally absurd. What agent thinks its a good idea to price a house that high...
HB So tiny! Esp. that kitchen! And wood paneling from the 70s. Yuck.
hb,Is the $445k 2009 tax assessment sufficiently less as to no longer be insulting? How about the $403k, 2010?How are solds comparing to tax assessments in Vienna these days?Looks like 90-115 in that zip in the 300-700k range, but it would take more work to see which assessment each was against.
Cara- I think the 400K 2010 assessment is not insulting, although I still think it is worth less than that. I assume they are using this as a comp comp which is overpriced, but it looks much nicer and is 130 sq.ft. larger. Although maybe I am the crazy one and the comps say that the bubble hasn't popped at all in this area
hb,I'd agree that's probably the comp, they used to set their price. But that kitchen addition makes all the difference in the world. Way more space than that narrow (but pretty) breezeway, and hugely mitigates the teeny-tiny kitchen problem.
housebuyer: that Vienna house is an insult. You could get an equivalent house for $114k in Champaign, IL, which, by the way, has a lot of high-paying jobs.http://www.realtor.com/realestateandhomes-detail/1816-Southwood-Dr_Champaign_IL_61821_1116730962
NovaWatcher- To be fair the house I was talking about had 2 baths instead of one, so your comp would cost a whooping 130K to be comparable :-pThe amazing thing is that the house I was talking about isn't even that close to Tysons and is pretty far from the city. The metro also isn't really walkable. Maybe if the location were better I would somewhat understand the price, but its location isn't that great.
Hey all, FFX Cnty inventory tipped over the 3000 mark while we weren't looking! VirginiamlsOkay, so that's still immensely down from last year, but its the right direction. Recharts take a peak at Alexandria City, it looks like inventory is about to exceed last year's! Seller's coming out of hiding this spring, or REO's finally hitting market? Can't tell.
Cara- It looks like sometime in May we will probably have more inventory than last year. Maybe a little of the inventory will be in good shape and priced reasonably in the area I am looking.
hb,Yup, in May with a straight line, or June with some dampening. Looks like this year may not turn out to be the worst year "ever" for selection. (except in PWC and Manassas, unbelievably flat low inventory).When's the wedding date/ your ideal time-frame?
"Cara said...Seller's coming out of hiding this spring, or REO's finally hitting market? Can't tell."My guess is its the sellers coming out from hiding. If it were REO, my guess is the spring bounce would be most prominent in REO laden PWC, yet PWC had the smallest bounce of them all.Instead the bounce seems to be coming from (relatively foreclosure free Arl & Alx), with some Ffx too.
Anonymous,I think so too, except that I'm skeptical that there are any more foreclosures left to come in Manassas and PWC. They started early, and they've had a ton. I'm not so certain there are any weak hands left out there.But yeah, at this point I think this is seller's coming out of hiding, but any coming foreclosure wave will get added to this.
Cara,Don't forget the economic downturn we've been going through is separate from the bubble bursting. I would say that the weak hands from the bubble bursting have been worked out, but I wouldn't be so sure that there isn't a secondary wave coming from the contracted economy. Mind you I don't think it'll be nearly on the same scale, but I think there's quite a few new weak hands to deal with.
mytwocents,True. And with prices down so much further in PWC and Manassas the newly weak hands there are more likely to appear as distressed not regular sales.The turnover from HAMP and HAMP-like programs into REO's should indeed be most easily visible in PWC and Manassas, partially because they haven't shown much if any sign of a spring build-up of inventory.So our cleanest inventory sign that foreclosures are ramping up here should be out where inventory is flat. (well, baring anyone actually publishing convenient compilations of trustee sales numbers soon).
Cara- The wedding is memorial day weekend. Our lease doesn't end until September, so the timing could work out pretty well to start looking seriously in June/July and buy at the end of our lease. If we don't see anything that excites us we may just rent another year, try and save an additional 50-100K which should let us get a nicer house.
CR First America Core Logic fraction of sales that were distressed in January.about 34% (by eye) REO+ short in "DC" with about 15% of that being short sales in January.looking into the full FACL report, DC is down from ~47% in January 2009.Would you all have guessed it was still that high? 1 out of 3? Actually with a couple of year-long shorts in my neighborhood closing recently, my neighborhood is about exactly at that since February.
"Cara said...Would you all have guessed it was still that high? 1 out of 3?"Yes, but only because I (and I assume many of us on this NOVAcentric blog) dont really follow whats going on in MD. MD was indeed a latecomer to the bust, but it got whacked. 2009 was the worst year on record for PG & MoCo. Not to mention the carnage in PG is similar to what we saw in PWC (except that it took 2 years of -20% in PG vs 1 year of -40% in PWC).
Cara said: "Instead the bounce seems to be coming from (relatively foreclosure free Arl & Alx), with some Ffx too."Yep. Make that North Arlington.
hb,Great timing.But if we made enough money to save 50-100k a year? I would have held off and bought a nicer house more in keeping with that salary...Not leveraging it, just straight, but neither $50k nor $100k is small potatoes. It can make a very noticeable step up. Of course there is also a limit to how much of my net worth I'd be willing to tie up in real estate...
Cara- The problem we have is that although we can save a lot of money I have no job security and my pay can very by a factor of 2-3x. I would also probably take a ~50% pay cut if I got a different job so I can't really lever my salary when buying a house. So we need to make sure that the loan size is small enough that if I lost my job we could easily afford it on what my future salary would be. This leaves us in the situation of always wondering should we wait another year, because our savings would get us a nicer house or get a decent house now and decide 5 years from now whether we should get a nicer house. I am hopeful that we can find a solid house that this fall that will fit all of our needs for the foreseeable future.
hb,That is rough. Yup you have two basic options, buy something solid and good enough soon, or wait until you can put 50% down or more. But if my compensation was that variable I'd want a really sizeable chunk of my savings liquid. (or more liquid than a house, anyway). I'd probably buy sooner, and start getting that liquid savings back up again once it's not partially earmarked for the house. An 5 years from now you can see where life has taken you. Otherwise you're essentially commiting yourself to staying in your current job for the sake of a nicer house.
Cara- I think we will likely follow the path you were discussing and either buy something this year or next year. After this we would try and rebuild savings and as you said see where life takes us over the next 5 years
housebuyer saidMost financial bonds actually did fall 30% in the recent downturn. I hold multiple bond mutual funds and none went down that much. It's possible I have good luck but I'm skeptical. Can you list a few examples and time periods where it went down 30%?
HayfieldGradThe elderly people also have to have net assets, excluding the value of residence and up to 1 acre of land the property is located on, worth less than 340k. Wouldn't the value of most people's annunities, 401ks, IRAs, etc. exceed this amount especially in the first decade or so of their retirement? Good catch. As for your question, I'm guessing a lot of the 65+ residents of Fairfax County have assets that large. However, I'm sure a good chunk do not since you do not have to include the value of the real estate.
housebuyer saidEverything I saw mentioned the census. I was actually surprised it was only ~40-50K people. Most sources originally thought it would be 60-90K peopleI was at an event this past weekend where there was a Census 2010 booth. They were giving out some freebies with Census 2010 on it. A woman was asking people to sign up for temporary Census jobs in DC. I got the impression if you signed up you'd essentially get one (presuming you did not seem crazy, totally unreliable, etc.)Despite all those articles about the Census getting applications from professionals and despite the high unemployment it seems like they still need more people. Perhaps because a lot of people want a job but not a temporary job (and/or one that pays $20/hr.)
The Anonymous saidAnd I love how you say its "not even close" to a safe bet. Not even close??? Perhaps HB is looking at past results to get a gauge on the future. If he did, he would find that incomes in the DC area have risen 40 of the last 40 years (1969-2009) 40 for 40 is a pretty good -- sounds to me like it IS a safe bet -- as safe as any bet about the future.I agree that higher incomes are a safe bet for the future. However, it's not 40 for 40 -- at least for Fairfax County. Income was lower in 2003 than it was in 2002. But in 2004 it was higher than 2002. I don't know what happened pre-1979. Do you have a source? There were some rough years for the country in the 1970s.IncomeI know this is a nitpick but I stress it since I think we might have a year or two coming up where the number is lower. But then likely post-recession numbers that are higher than before.
TBW- I think I probably wasn't clear enough when I said financial bonds. I was trying to say bonds from financial companies. If you look at bonds from almost any of the major financial firms they fell this much. You are correct though that most bonds from non-financial companies only fell 10%-15%. A big part of this is that although the risk premiums on these bonds increased dramatically treasury yields were plummeting, which should have made bonds go up a lot. Obviously the far worse period for bonds was ~1980 when yields went from 8%-15% over a couple of years. This would have made 10-30 year bonds fall 30-45%
Va_Investor saidOn a higher scale, Parc Reston is a good value in my mind. Right across the street from RTC with an underground tunnel to avoid crossing Reston Pkwy. Again, very friendly staff. High condo fee (350?) includes no utilities except water.VERY interesting. I had no idea there was a pedestrian tunnel. It looks like after you cross you are dumped near the B&N at the Spectrum Center? Is that it?
TBW- I agree that we may have a few years of downward incomes over the next 40, but you are correct that is a bit of a nitpick. I would put the odds of incomes being up in nominal dollars over the next 40 years in the 98-99% range. Its possible real incomes are down ( I doubt it), but nominal incomes being up is a pretty safe bet.
Xpovos saidI've wondered myself why I don't just leave the area. My skills aren't fixed here, and in fact many of them are hampered. But in the end, I stay because this is my home and this is where all my family is.D.C. is a highly transitory area, yet my family has lived here for generations.At least you would not have to take another bar exam if you took a job elsewhere (unless you are another lawyer on this blog.) Although I'm told that people who work for the federal government just need to be barred somewhere and not necessarily the state they are working in.Perhaps living elsewhere and visiting for Easter, Thanksgiving, and Christmas (or perhaps less traveled weekends) would give me enough DC area to see each year.
tbw,Yes that is the Parc Reston tunnel.All my fed friends from law school took the PA Bar. If you passed the multi, they didn't even grade the essay. I don't know if this is still the case.
c, Va_Investor, $350K is too high. $120K is more their range. This is for an older gentleman who just needs an affordable place. The daughter has not thought out all the options but basically they're looking for something small that they can buy outright. He gets around just fine but they'd like a place that is close enough that they can check on him. If he needs assistance, they can take turns watching over him. Anything in the swath from Reston to Rt 50/I66 is close enough.
Tag,There is one at Northgate right now for 117K. Reston 20190.
Anyone notice this listing...look at the comments. I can't even imagine putting a floor over an indoor pool..that is so odd.http://franklymls.com/FA7189252
Meshell- That sounds crazy to me. Indoor pools in houses in general are a terrible idea. They create a massive amount of humidity and if you don't have the right type of dehumidifiers it will destroy your house. It also boggles my mind how someone thought putting a floor over it would magically fix the problem. The front of the house looks really pretty though :)
Tag -Also take a look at this one.
Meshell -Either the LA completely rewrote the listing or you or I have the wrong link because I can't find any mention of a pool in the comments or anywhere else on the FA7189252 listing.HB - I always thought that an indoor home pool would be beyond awesome but I never considered the humidity damage.
c,The indoor pool is mentioned in the user comments at the very bottom of the page.
c, Tag,The only problem with Thoreau is that it's "over 55". This would make it lower valued due to re-sale limitations/rental limitations.That said, I've met many residents of that development because they frequent Lakeside Inn which is a fun waterfront restaurant very nearby.Thoreau also has a tunnel under Southlakes Rd so it is safe to cross over to the shopping center a block or so away.Anyway, I believe there has always been a significant discount on those units due to the "55" issue.Meshell,I considered one of those smaller lap pools (the one with the jets) for a sun porch we had at our last house. The porch, however, was lined with french doors to the out side and closed off by french doors to the inside of the house.
Tag,Follow up.On the other hand, living at Thoreau could provide an environment filled with his peers and, presumably, many clubs, groups and planned activities that your friend's father may enjoy.
Va,The one thing I personally don't like about the unit c pointed out is it's size. It's really small, and approaching 200/sq foot. What would you say is the going price per sq ft for condos in the general area?
cara,I'd have to look into it. I don't follow South Reston.
Interesting - the floor-over-the-indoor-pool house is now off market. How much you wanna bet that when it reappears, the user comments will be blocked? The seller is an idiot if s/he thinks she gains something by not disclosing that info. Any buyer is likely to discover the pool when the property is professionally inspected. And what if someone going through the house while it's on the market somehow falls through that floor?
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