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Monday, June 21, 2010
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36 comments:
It looks like the stock of foreclosures has started to decline for the first time since the housing crisis started. I expect this to continue as the rate people are becoming delinquent slows and as banks increase the rate that they are liquidating foreclosures/turning them into REOs.
The level is obviously extremely high and will stay this way for many years (likely over 5). It is also good news for buyers that banks have started switching houses from foreclosures to REOs, because it will add additional supply to the market. REO supply has been trending up for months I think will likely continue to do this well into next year.
So although this is talking about the national housing market it probably holds true for the DC area. (Perhaps the foreclosure stock peaked 6 months earlier, but the trend of increasing the speed of foreclosure --> REO will likely hold)
housebuyer,
faster short-sale decisions too?
is this a joke?
CURRENT LISTING PRICE HISTORY
6/20/2010 $749,000
6/21/2010 $249,000
"...Subject to 3rd Party Approval..."
yeah, good luck with that.
MM-
I haven't seen any reports on short sale speed, because it is a lot harder to track than inventories of the other distressed sales. I would think that banks are probably acting quicker on short sales assuming there is only one bank involved. If there is more than one bank involved who knows...
That seems like a stupid price drop, because there is no way the bank will approve it. The house probably should be torn down, but the land is worth more than 249 so...
not your typical N Arl greedy seller...
PREVIOUSLY SOLD PRICE
4/1/2010 $768,000
2.5 months later, List Price: $775,000
MM, that is so strange. Maybe the house has some bizarre defect. Its really even too soon for the owners to have lost their jobs.
Meshell & MM-
Its possible the person was relocated for their job, an unexpected death, or something like that. But ouch it really sucks buying a house and selling within a couple of months probably at a ~50K loss once transaction costs are taken into account.
More borrowers exit Obama mortgage help plan
"About 436,000 borrowers have dropped out of the $75 billion plan as of last month, the Treasury Department said Monday."
Make sure you get those tax payments in on time. Those poor mortgage companies need your help...
"... Mortgage companies get up to $75 billion in taxpayer incentives to reduce borrowers' monthly payments"
MM said...
is this a joke?
CURRENT LISTING PRICE HISTORY
6/20/2010 $749,000
6/21/2010 $249,000
"...Subject to 3rd Party Approval..."
yeah, good luck with that.
Under contract already. Hmmmmm.
Little John-
I think MM was saying that no bank will accept the contract. It is a short sale so the list price is pretty meaningless. My guess is something think they are going to get a great deal. The bank will say they want ~500k and the person will bail. Although this process will take several months.
Ace,
Interesting article about the "Monster House." What I don't get is the article in that East Falls Church association newsletter says the monster house violated zoning laws. So why was it still built? Seems like Arlington County was negligently lax. I don't know the details but I was under the impression a county can heavily fine people as they continue building a structure against zoning regulations. Maybe back in 2004-05 the zoning board was busy putting out many fires in Arlington due to mansionization but I don't think that's much of an excuse.
[I should put I'm responding to a house reecon and Ace discussed in the 6/17/2010 thread]
HB
I got what MM was saying, I was just surprised somebody jumped on it so quickly.
I'd say you're 100% right about how it's going to play out -- but it is odd to me that the RE agent is willing to go along with the charade. Isn't it a huge waste of time and energy for all involved?
Unless there is more to this than meets the eye...
Housebuyer, Little Johnny,
For short sales, often agents simply change the status to 'under contract' as soon as they have one offer. But it may take a minimum of 3 months before a bank even takes a look at the offer. That is why Frank of Franklymls used to advise people to continue making offers on short sales 'under contract.'
This tool on Forbes website is getting a lot of attention on various blogs.
Clicking on Fairfax County shows tons of migration but both in and out. You can hover over other counties and see the data on incoming and outgoing migration with average salary included. In many examples those leaving Fairfax County made more than those entering Fairfax County. For some I'm sure this is because those leaving are retirees and those coming are in their 20s. However, I suspect some of these are people in their late 20s and 30s moving to a lower cost of living environment than the DC area.
Little John-
I wonder if the person is using the listing agent. If so the listing agent is fine if the contract ends up falling through, because as long as the bank gives a final price it was a successful contract to the agent. Once the agent has a bank approved price it is much easier to sell the house, so at least this is my guess at what is going on.
TBW,
"What I don't get is the article in that East Falls Church association newsletter says the monster house violated zoning laws. So why was it still built?"
Maybe you are asking a question that is over my head, but it appeared to me that what happened was:
1) there was some ambiguity about whether the Monster house while initially under construction (pre-2005 neighborhood newsletter) violated the zoning laws in existence at the time (and failure to get permits, and/or perhaps some incompetence or lax enforcement in 2001);
2) subsequently, legal action was taken, with the neighbors arguing that it DID violate the laws;
3) they won, but the owner declared bankruptcy and the house was left unfinished
4) at that point the neighbors and AC tried to be flexible with the new buyer in the hope of compromising to make it better (smaller) but not push as hard as they could have
5) meanwhile AC enacted new codes that were tougher and less ambiguous than the prior codes. Because of the factors you described, more more attention was then given to enforcement.
This was a bit of a painful read. Apparently the Obama administration has a housing report that comes out monthly. It effectively is bragging that housing prices rose and created a trillion of household wealth. I don't think this report is likely to make many buyers happy. It effectively talks about spending over a trillion to make housing less affordable.
hous
Looks like we'll be putting our TH up for sale in the next week or so due to a job transfer this fall (earlier than expected, but still have a few months to get our place under contract). Considering paying the flat fee to list on the MLS as was suggested by someone on this blog. Has anyone used the FSBO website before. I think their flat rate is $299. I guess we'll set the buyer's agent commission at 2.5% or 3.0%. My assumption is that paying the flat fee for the MLS will get us just as much exposure as signing on an agent. Am I missing something? The thought of having to pay $20K to a realtor to sell our place is just a little more than I can stomach. Hopefully the FSBO will work for us.
TBW, that is a cool map but I can't click on some of the counties because of how they implemented the lines over top of them blocking the mouseover. I do seem to notice more of the black incoming lines from up north and a whole lot of red lines fleeing south. We are being invaded. I expect every road to be a toll road by 2020 if my trips up to NYC are any indication of the northern infrastructure funding philosophy.
nic-
If you do for sale by owner I would definitely use a 3% not a 2.5% commission. You will already be losing out on some publicity by not having an agent, so I don't think you want other agents to shy away from showing their clients your place. As it is they will probably hesitate to do this anyways, because they will probably think the transaction will go less smoothly, because they will assume you do not know what you are doing.
I have never bought or sold a house so my advice is probably worth almost exactly what you paid for it.
Surprise economist yet again overestimated the number of sales. They thought the tax credit would push sales to ~6.11 million, but instead sales were closer to 5.66 million. My best guess I am interested to see what the July sales will be. June sales will still be elevated due to the credit, but July will likely be down huge.
Sorry meant to attach the article homes sales
CNN Money had an article that expands on the mortgage modification numbers novahog brought up in this thread.
link
The HAMP initiative saw a surge of people leave the initiative in May. More than 152,000 have had their trial adjustments cancelled since the program started, mainly because they could not document their income or because they earned too much to qualify for assistance, officials said.
It's funny that all those people suddenly dropped out now that they are actually checking the income requirements.
The number of trial modifications started continues to ebb as more servicers require borrowers to document their income before entering the program. Only 30,099 trials were started in May, down from 47,160 a month earlier and nearly 110,000 in December.
nice work by the listing agent: not only is the zipcode wrong, but also the county!
poor owner already in distress just can't catch a break.
MM,
After watching listings so closely for so long, it does boggle the mind just how shoddy the work done by agents frequently is.
More common than the just-plain-wrong listing like the one you found, is the so incomplete as to be almost useless listing.
Considering how much money they stand to make off a sale, they half-ass it more often than not...
no schools listed
one picture
mis-spellings of vital info
Infuriating...
LJJ,
In my experience the ones with no school listed usually do it on purpose. They recently redistricted where I am looking and the homes still in the Oakton or Madison school districts always make sure to list that fact. The ones that do not list it 90% of the time were in the redistricted zone when I check against the new school maps.
Jeremy
I'm sure a lot of the time they do leave it out on purpose, but more because the house might be in a less desirable school district than because of re-districting.
Maybe they're hoping that buyers will fall in love with a house before they ascertain which district it is in, and would have rejected it immediately if the listing was more transparent.
BUT I'd bet most times it's because they can't be bothered to find out what school district it's in.
LJJ,
I think Jeremy was trying to put it nicely that the people who were redistricted were going to a less desirable district. I agree that most of the time they are just being lazy, because I have seen a lot of houses in great school districts not have the school shown.
Hi Nic-
I would interview a few realtors even though you want to go FSBO. Ask them for a free market analysis and get suggested list prices from them, then price your house a little lower than their suggested price.
Also quiz them on what you need to do to get the house market-ready/staged.
Yes, I was implying that they intentionally left it out because the home was now in a "less desirable" school district. People get very touchy about schools so I was trying to be nice. Regardless of what weight you personally give to school rankings, you can't ignore the fact that a home that was previously in the Oakton school district will sell for less if it is now in the South Lakes district.
Jeremy - The redistricting to South Lakes took place a couple of years ago (February 2008). It's not exactly a recent development.
After the redistricting, there were some folks in the redistricted areas who put their homes on the market and instructed their realtors not to identify their new schools in the listings. Instead, they told their realtors to substitute "Call School Board" for "South Lakes," etc.
Guess what - those sellers took a bath and did much worse that others who simply indicated their homes were in the South Lakes district. No one was fooled, and the "Call School Board" tag just prompted questions.
I don't think this lesson went unlearned. If the schools for a house in the South Lakes district aren't identified, I suspect that it has more to do with a lazy realtor than a deliberate attempt to pull the wool over someone's eyes.
The flip side of what you describe, of course, is that some realtors will definitely go out of their way to emphasize in their marketing materials that a house is in the Langley, McLean, Madison, Oakton or Woodson districts. In some instances, there is almost a direct correlation between how overpriced a crappy house is and how frequently the realtor emphasizes that it's located in a particular school district.
Sometimes karma has a way of catching up on those realtor, however. Sales in the area in the Marshall HS district where I used to live (where the homes mostly go for $750k-$1.5M) has been much more active this year than last year, with many properties going under contract The one exception has been a new Sekas development where the realtors - a local Vienna team who are well known as big Madison cheerleaders - haven't landed a new contract for many months.
Mozart said...
Jeremy - The redistricting to South Lakes took place a couple of years ago (February 2008). It's not exactly a recent development.
The resolution passed in Feb 2008 and started phasing in Fall '08, to be completed in 2012 as the students who started at the other schools graduate. You are right that it is not "new" news, but it is recent enough that people still get upset over it. I guess I've just been looking at houses too long since when I started looking that actually was a big deal. We've narrowed our search down to only neighborhoods off Vale Rd now, so it isn't an issue with the houses I look at these days.
Jeremy - You're right that there are still hard feelings about the South Lakes redistricting, because people felt the School Board rammed it down their throats.
My point is that it happened long enough ago that RE professionals have learned their lessons.
If you were to look at listings in PG County, you'd find that it's very rare to see the schools identified. Conversely, in Fairfax County, it's very rare to see the schools not identified - and very easy to check an address for the assigned schools. That being the case, I'm absolutely convinced that not identifying a school in a FFX listing is a red flag that hurts a seller.
The Vale Road area is very nice. I've had colleagues who live in that area and work in downtown DC. They either get to work early (in some cases after driving to the Vienna Metro) or rather late; not a single one can stomach the idea of rush-hour commuting to DC from that area.
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