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Wednesday, July 28, 2010
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100 comments:
It really is amazing how clueless some people are. Here is an article about how the housing credit had virtually no impact on the housing market from a University of Chicago economics professor.
credit doesn't matter
Sad that an econ professor at the best econ school in the country could miss the mark so badly.
He's comparing a short term credit applied to the lower tier of markets over a short period of time to the entire net worth of houses in this country. That's just.... dumb. A better comparison would be the amount of the aggregate credits to the combined monthly mortgages of that tier, or even just those who got the credit.
We just came off of a massive bubble fueled by a "what does it cost me this month, I don't care how much the mortgage is costing me in the long run" mentality.
In a new fluff story-line
WSJ article on people who are choosing to be responsible on their mortgages and winning.
It's nice to read about. What percentage of homeowners this is, or could become is left unexplored.
"We feel quite comfortable in saying that the bottom has passed in this region," said Sandy Paul, Delta's national research director. "But if the national and global economies take a turn for the worse, all bets are off."
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/26/AR2010072605403.html?hpid=sec-business
I believe the double dip will show up here, others believe it's different here
Pat-
I agree we will get a double dip in housing, although her comment may be correct that the bottom is in. Prices are ~10% higher now than at the bottom, so I would not be overly surprised if housing fell back to around the old lows without going through them.
pat, sounds like a two-handed economist.
pat, I meant Sandy did.
"Pat said...
I believe the double dip will show up here, others believe it's different here"
Thats not what they are saying Pat. Both your positions are not mutually exclusive.
Right now, prices (per CS) in DC are at 182. They bottomed out March 2009 at 165. Suppose they fell over the next year or two to 170 before they began a long, sustained, rise.
Was there a double dip? Yes.
Was the bottom still 165 back in March 2009? Yes.
I have been reading this blog for quite sometime. I plan on purchasing sometime next June (2011). I have been doing quite a bit of research as of late and looking at new and preowned homes. I paid a visit to two new home communities in the last week. I am amazed at the builders. They are talking about raising prices upwards of $60K and that I need to buy now. Both NV Homes and Lennar told me the same thing. The housing we are talking about is in the $450K to $500K range. The NV home lady at Courtland Rural Village tells me that they sold 5 homes last weekend, which I don't buy. Both NV and Lennar (Director of Construction) tell me that these homes will be out of my price range by next summer. I am looking in Ashburn and Leesburg. The number of homes on the market aren't overwhelming. I wanted to see what people's thoughts were here.
By the way, I don't believe anything that the sales people tell me. Things do appear to sell much quicker in Ashburn and Leesburg when they are in the $475K to $500K price range. I just get irritated by these folks who think I am foolish and should just rush out and bye. I am saving for a large downpayment and at least a year's worth of reserves. My concern is that housing will start to get out of my price range by next summer.
Drshmid,
First off, you're doing the right thing.
As CRT used to point out, it's not the right time for you to buy (regardless of the price) unless you have the downpayment, comfortable reserves, can comfortably afford the mortgage and other costs, and are reasonably sure you'll stay put for at least 3-5 years.
So to an extent the current market versus the unknown future market is irrelevant. Since prices could go either way, buying before you're fully prepared to do so is more potentially disasterous than needing to pay a bit more to get the home you want.
But in answer to your question. It's unlikely that the prices on existing homes will rise between now and then, and quite possible they will weaken. Whether the same is true of new construction is more difficult to judge, (a) because there is a premium for being the first owner, (b) because we don't have any local numbers on new construction to judge whether there might be a shortage of new homes compared to demand coming soon, and if so when.
The best we do have is the months of inventory of new homes, plotted here for Loudoun (I think Ashburn's in Loudoun...)
scroll to the bottom and you'll see that active new construction has been mostly flat for a year now, MOI is down considerably from the near 15 it was recently, to 10.4 months. So, even with tax-credit stimulated buying distorting the monthly picture (compressing more sales into recent months) MOI for new construction in the county is still over 10. Doesn't sound like a shortage to me. But you can keep an eye on that chart going forward if you want a tad bit of warning that new home sales are heating up. Keeping an eye on sold prices in the development using frankly or whatever may be more immediately relevant. The overall new construction actives will give you a broader picture for a sanity check.
(other less savy buyers won't be looking at this though, and may be fooled into bidding up prices, so rationality can't be counted on)
Drschmid-
I wouldn't worry about what they say. They just want you to buy now, because they want the additional sales. If there was really enough demand to sell the houses at 50K higher prices than they would have already done it. Why would they continue to sell the houses at the current price if they knew they could get 10% more. Is it possible they will raise prices. Of course it is possible, but I don't think it is likely, instead I think they are just trying to get you to buy earlier than you are ready to.
Thanks Cara for the information. I have been using FranklyMLS just to watch the market and see what prices are doing. I want to be well prepared when I am ready to buy. I have owned 3 homes in the past and got bit about two years ago and lost quite a bit of money. I have been renting in Sterling VA for about 2 years and saving. The sales people at these model homes crack me up quite frankly with their sales pitches, etc.. By the way, I am not set on buying a new home, I have done that three times and it can be a major pain with getting the grass to come in, often times you won't get a deck or the work a prior owner has put into the house. I have just been scouting things out to see what people are saying. I should of known better than to talk with a Sales rep in a new home community but the prices are pretty good comparatively. $490K for a 4200 square foot home so I thought I would check it out.
Thanks again
Drschmid, I was reading along in full agreement with all comments until I got to your very last sentence...a new home for less a little over a $100 a sq ft..whoa!.. better reassess what the re and builder said about price increases. It appears to me that he is unloading to get captial to build..just a thought..
"contrarian said...
Keep hoping, Anon, your "hopey, changey" is all you got."
Keep glug, glug, glugging the doomaid that says home prices are going to drop 90% and DONT EVER DEVIATE from that, no matter how much time goes by, or how many facts you see to the contrary. I will check back here in 10 years to see how that one is working out for ya!
Remember, everyone else is wrong and you are right, and dont let anyone tell you otherwise!
Arky, I should clarify, that is with the basement finished. The above grade is roughly 3000 sq feet. The basement she said was around 1200 sq feet. I love how they throw that term at you like you won't ask if that is above grade. The development is only 244houses and they don't have a many lots left, at least that is what she said. Both builders are pulling the "Carmax" scheme with pricing. They both used this term. The house is supposedly loaded with Granite, sunroom and fully finished basement.
I am still stuck in the mode of seeing a sign for starting prices and adding a %$100K for options because the house is completely stripped down, at least this is the way it was a few years back, it appears from the surface they are getting away from that mode of pricing but I could be completely wrong.
Drschmid,
What did they mean by that? I've never bought a car with Carmax and after a truly evil experience with them getting a quote for a my trade-in, and my friend having complete lemon problems from them I never ever would in a million years. But I have no idea what they were trying to convey by that.
(unrelated to housing Carmax rant below, feel free to skip the rest of the post).
Carmax is just evil. On newer cars they give the seller a couple hundred dollars more and charge the buyer $2k more, on older models they offer to pay the seller $1-$2k less than true value and then just use that as their profit margin when selling to a wholesaler to keep there from being any cheap options on their lots.
And they're freaking idiots too, tried to make my Saturn go from 0 to 60 in 20 yards and then said it wasn't shifting smoothly and would need $3k of work making the car worth $45. Yes, forty five dollars for an 8 year old car. Frickin twits. It's never been able to do that, and to get it to switch gears you need to lay off the accelerator momentarily each time you want it to shift. Okay, I recognize it's an automatic, so this "shouldn't" be necessary, but it was true when 10 miles were on the car just as much as it was by the time I was selling it.. I hate them, I hate them muchly. I think the dealer just sent us there to make their own trade in offer fabulous by comparison. Oh, and they also didn't understand the concept of a limited power of attorney. Because no one has EVER used one of those before in a car transaction... Un-freaking believable.
So, yeah, I would have strongly advised the sales person to never, ever use that terminolgy again, because it's just a matter of time before the whole world detests Carmax as much as I do.
The Carmax way as far as pricing. They don't negotiate price at Carmax. The advertised price is what you pay. Your right probably not a good thing to say.
LOL, sorry about your experience there and bringing up a bad memory.
Drschmid,
Oh, they mean like Saturn. But Saturn doesn't exist anymore. The "carmax" connotation is definitely not a good one, because it makes abundantly clear the problem inherent in not haggling. The seller sets the price and you overpay.
You can fool some of the people all of the time...
...and can build a great business around that.
Drschmid, I agree with HB and Cara's great advice as well as your own reactions.
I haven't bought a new home here, but from what I understand, builders negotiate by giving you "free" add-ons and upgrades rather than reducing their selling prices.
cheryl said
I'd be ready to kill myself if I bought a 400k+ condo where rent only covers half the costs (or even less). Double whammy - severe price drops and high negative for years.
====
yeah but isnt that what we see all over arlington and fairfax?
in condos?
if condo prices revert to 100X GRM then it will take a lot of demand out of housing?
Hi pat,
I'm not following what you are saying about demand. When I think about demand, I consider rental and buyer - since people have to live somewhere. It's all the same to me. That is why I really don't want any new construction in the pipeline. I want population growth and job creation and, of course, lines of people wanting to rent.
Perhaps the "fear" of falling prices is a silver lining to people like me and will make rentals in high demand for years.
In the early 80's there were waiting lists for every apt. complex in the tysons area. We lived in a hotel for two months. I see very little rental inventory now but that could be partly seasonal.
The bottom has come and gone on the low end (under 200K). There is virtually no inventory in my areas of interest.
Hey DrSchmid,
I'll let the smarter people talk pricing--I'm more about the gossip and decor. But if you are really looking at Courtland Rural Village (in leesburg, right?)---i would keep looking, hon. It is right next to the Leesburg dump and with all the growth out there, that dump is only going to get bigger and grosser.
You are renting in Sterling now but shopping out in Ashburn....is the Ashburn/Leesburg area a better commute for you? Because if Sterling works for you, there are some nice established nabes in that 450kish price range--look around Algonkian Regional Park. I think one area is called Countryside?
Or if you want to be in the Ashburn area, you can get a nice house in Ashburn Farm or Ashburn Village for that price.
I think it is safer investment-wise to buy in an already-built-out area---less chance of ugly surprises in the future, school redistricting etc.
Also, you aren't seeing much for sale right now b/c it is the most dead time of year for real estate. Everyone in DC except us losers is on vaca anyway, and the heat has sucked the life out of the rest of us. You will see more inventory into the fall.
Here is a nice Vienna house that sold for roughly the same price as in 2004.
FX7344400
I can live with 2004 era prices in 2010. It's those morons that think their house went up 50% between 2004 and 2010 that really make me laugh.
Meshell
I am aware of the dump and looked at the location. I was more curious to just see what they had to say. I even brought it up with the Sales lady and she had quick answers (which concerned me). I have looked at houses in Sterling and am not a big fan of Countryside. We live in a single family in Cascades and the houses move pretty quick believe it or not and they are still way over priced. Although I have seen a few go under contract for about $75K less then the original listing price. We have been in this area for about 2 years and don't feel that it is very family friendly as most households have dual incomes and the children are being raised by day care and 3rd party members..
Another Oakton one:
2005 sale price: $1,127,625
2010 sale price: $612,500
http://franklymls.com/FX7206773
next door neighbor: 3108 Pine Oaks way, Oakton, VA
2004: $850,000
2010: $601,000
I had my eye on this place but we never went to look at it. The interior photos looked nice.
http://franklymls.com/FX6956336
cheryl
what i mean is condos are a entry to townhouses, townhouses to starter ouses, starter houses to family houses, family houses to mcmansions.
when the gap widens people prefer condos when the price gap betwen condos and houses narrow people stretch for the house.
condos should be cheap, they are the easiest to build.
"I can live with 2004 era prices in 2010. It's those morons that think their house went up 50% between 2004 and 2010 that really make me laugh."
Jeremy, while I agree that is a fair price compared to the comps, did incomes increase that much since that place sold for roughly half that amount in 1999?
I think the term "raising" is a little ugly--the Mommy Wars are so 1980s and zzzzzz.
I'm surprised you aren't meeting stay at home parents in such an affordable area--I would think the cheaper the neighborhood, the more one-earner families. I don't think you will find a huge difference in ashburn vs. sterling--kind of similar places.
Hmm...i was wondering if anyone would question the 1999 to 2004 100% jump. Catching up from the lost decade of the 90's?
re: other kids. Our neighborhood is just now shifting to the younger crowd with babies. Only 3 houses so far. Two have nannies, but at least the kids are here.
When we had our son, all but a very few had kids in HS or older (Hence older parents, too!) The liitle kids went off to day care, except mine.
Something to think about when you buy. Also, I would highly recommend a cul de sac.
kevin & Va_Investor:
If 1999 to 2004 is a 100% jump and I am okay with the 2010 prices being equal to 2004 then that says I am okay with 100% for 1999-2010. I don't think that's too far off, maybe a couple years premature for a doubling of price. Income is part of it, but there are also more people competing for the same houses than in 1999. Maybe in 2011 we'll be able to get 2003 or at least 2004 prices still, making the numbers look a little better.
I should clarify that I'm okay with paying a bit more than historical data would suggest because I believe we are going to have massive inflation whenever the economy does finally recover and people have jobs again. All this government spending and money being thrown around can't have zero consequences. I'm hoping to be locked in to a mortgage before the inflation starts so I can pay it off with cheaper future dollars.
Hmm...i was wondering if anyone would question the 1999 to 2004 100% jump. Catching up from the lost decade of the 90's?
LOL yes, the bubble was just about catching up and well exceeding the fundamentals. You really think there was a reverse-bubble or something?
"I believe we are going to have massive inflation whenever the economy does finally recover "
that will be a long while
Drschmid-
I am very familiar with the Crot..Rural Village as well
They haven't been able to give away anything there much for the past 3 years...heck I think Ryan homes even left there...
They have had several FC's there & that should kill the Comps - throw that up to the Sales Manager & look for her quick responses...
And yes, the dump is there as well- plus no good road to get to the place..
Check out Stanley Martin (can't think of the name of he 'hood)
at the corner of 15 & 50
3 Acre mountain view lots - get a house with all the bump-outs, as the floorplans they are offering their are mid-sized homes at best
The local Builders are more negociable (sorry about my spelling)
The big nation-wide Builders, not so much
I'll never forget one old battle-ax Sales Manager at Toll telling me 2 years ago "we never lower our base price!!"
Uh, yeah they have....
Jeremy-
Although it seems like tons of money is being thrown around, money supply is growing slower than usual and as the country delevers this will probably continue. Also Japan clearly shows the government can throw money around for decades without inflation. Although I don't see deflation I think inflation will be muted for a many years.
Meshell, Drschmid,
If you want more one-earner families, or at least a good healthy mix of life choices, you need to be closer to or under the $400k price point. Preferably someplace that was under $300k before 2004, such that at least the established families bought when one income was clearly sufficient.
Yes, there are one income earners who make over $150k, over $200k, but they live in like Arlington and are thoroughly mixed in with those that require two incomes to make the same amount. And/or that tends to coincide with high school to college age kids not little ones.
Says the soon to be day-care mom, whose best friend is a stay at home mom and friendliest near-neighbor home schools, who half hopes her own home value will go down another 5-10% so this neighborhood can revert to its status as the lt. col. neighborhood it always was until the bubble.
And for those of you watching inventories for signs of impending price reductions, 7/27 data is up
http://www.recharts.com/nova/nova.html
NoVA end of July inventory looks like it will be slightly higher than the end of June. NVAR looks flat to me. Not a lot of movement, but no decline in inventory either.
I'm seeing more shorts being listed as well as more old shorts closing in reasonable timeframes for what could be over 10% off market (without knowing the exact condition it's impossible to say). So good things could soon be coming available to those who have waited and are willing to have patience.
The timing of the new lists I assume has to do with the failure of HAMP modifications not some conspiracy to keep shorts off the market during the $8k heated season.
Cara, to build on what you said, here is something I noted about inventory growth for this summer. It may just be a fluke but from May 1 til now (7/27) this is how inventory in the 5 principal areas has changed.
Arl -1%
Alex -2%
Ffx +7%
Lou +9%
PWC +13%
Its possible that what we are seeing here is movement of the vaunted "shadow inventory". These disparate results would make sense given our general understandings that the immunozones had very little shadow inventory to begin with, while parts of FFX, Lou & especially PWC were loaded with it.
I am not in the market, so I am curious if someone on the ground (especially out in Lou & PWC) could verify this. Is that what we are seeing now? Are you outer county searchers seeing a notable increase in REO & short sales over regular discretionary sellers?
CRT
I am seeing an increase in REO property, albeit not a huge amount, and Short Sales coming onto the market. The interesting thing that I am seeing out in the western part of Loudoun are the banks are dropping prices a little quicker than in the past. For instance, this property has only been on the market for 29 days and they have already dropped the price roughly 55K, and it is still too high in my opinion.
http://franklymls.com/LO7377378
I am watching the market like a hawk although I am not buying until next year. I still believe that the housing prices in Loudoun are extremely too high and wonder how many can afford these mcmansions even at today's prices. I make a great living and find it hard to understand how so many families can afford houses over $650K in this area. Maybe it is just me and my ignorance but at some point this has to catch up with people.
dr schmid
i think price to income is still out of whack cheap interest helps but for those who will sell again in 5 years that will be a whack if rates rise to trend.
Interesting #s, CRT. Also, Kevin, I have a question for you: Have you figured out a way to avoid using an agent to get showings? That to me is the biggest hurdle for buyers, and why so many people still use buyer agents. I don't object to paying a good buyer agent for his/her time. However, buyer agents often don't respond well to buyers who don't fall in one of their clear-cut categories and who therefore are, in the agents' minds, "not serious". I just want an agent who will show me a very small # of houses when they arise, after I have culled the herd substantially. I do not want to have any more conversations along the lines of "have you looked at Vienna?" when I've clearly said what are the outer limits of neighborhood flexibility; settling for trade-offs that a buyer shouldn't have to make (and would make no sense to make given the buyer's current situation); putting my house on the market before I find anything that interests me, etc. That's why I appreciate open houses and wish there were a way to avoid having to have an agent just to look at a house.
Drschmid,
It both is and isn't hard to understand.
Loudoun and Fairfax Counties have the highest median household incomes in the US:
Wikipedia entry
2007: $107k.
(sorry for the easiest to find, but not necessarily most definitive source on that).
When we've discussed this in the past we've found that pockets within Loudoun have even higher incomes. (at the bottom of the redfin pages there are links to "community info" that include income data, not the most trustworthy or transparent of sources but useful nonetheless)
redfin random house in ashburn
following to community demographics, you see that 3200 some make near the median income of $100-125k/year, but another 2500-odd make between 150 and 200k.
The current median sale price in Loudoun is just under $400k. While a 4 to 1 ratio for house price to income is way out of whack historically, it's not far off in terms of DTI at today's interest rates. (4.6% APR, 107k income -> $389k mortgage, which is a small downpayment away from the median sale price)
So while a $650k home price is hard to comprehend, the median income household is not buying that home. And the income distribution is such that there MAY be enough of a market for $650k homes.
Given the 5 MOI even under tax-credit conditions, there may not be.
If you haven't checked them out yet, take a gander at the second link on Harriet's main page, to MRIS reports. Those will break down inventory into SFH, attached, and by price range, so you can look and see if the MOI for homes over $X is growing or shrinking.
NVAR monthly report link to June PDF that may not work, you may need to click through yourself
500-600k 68 sales 302 active 4.4 MOI
600-700k 39 sales 167 active 4.3 MOI
700-800k 15 sales 105 active 7 MOI
800-900k 11 sales 101 active 9.2 MOI
900k-1m 8 sales 56 active 7 MOI
1m+ 6 sales 177 active 29.5 MOI
totals excluding 1m+ market:
141 sales 731 active -> 5.18 MOI
That was June though, so probably as good as it's been for months/years. You'll need to go back through them yourself to see how you feel about sustainability or wait until August for less government intervention effected data (if you think that makes enough of a difference to the move-up market).
Hi Cara
I was aware that Loudoun over the last 5 years has had the highest income but it still boggles my mind with the housing prices that many of these people are not saving much as they are working just to pay the mortgage. Thanks for the info as I like to consistently educate myself. I jumped into the real estate world a few years back and made bad decisions once the market went south, hence the reason I am renting right now. I got caught in the hoop la of the boom and it bit me badly. You will probably see me posting on here to gather as much info as possible as I prepare to buy a house next year.
I appreciate everyone's feedback. I am on the side that thinks we will see another 10-15% price decline in the next year.
Drschmid-
I actually did a drive-by to the lot you posted last week.
I kinda like that neighborhood (lakes @ Red rocks/Northlake)so I'm watching it as well.
I noticed that most of the homes in this 'hood have backyards that are small & very exposed to one another..I also drove around to the other "end" of this neighborhood, where that smaller homes & TH's are & quite frankly I thought a lot of it looked unkept & sketchy.
it appears they have many SS's & FC's (shadow inventory!) in this area & it's not helping the property values I'm sure
I was pleasently surprised by Spring Lakes next door that appears to be an NV built neighborhood, for similar prices on much larger lots.
I refuse to look in Lansdowne (no matter how cheap the house may be!)
The HOA fee there is crazy to me (a car payment amount back-in-the-day!)
I see many people listing now in Loudoun & Northern PWC at some serious high/crazy prices
I think they have heard that other homes have sold in their neighborhood for $$ much due to the 8K bribe
Those days are done, as we all know
I'm waiting to see who "really" has to sell come Sept 1...
Cara,
Are there lots of little kids in your neighborhood? I don't care what the parents do all day (as long as they aren't running a home-based brothel!)--I just want to make sure our next street has some little kids on it. I'm so over being surrounded by cranky old people. I need some neighborhood "tells" for houses with kids...minivans in the driveways? Plasticrap in the front yard?
Drschmid,
It boggles my mind as well. I always thought the point of making more money was that you then didn't have to put as large of a portion of it towards necessities like housing. But some people will, some people won't.
Random thoughts on the 2 person incomes in this bracket.
1) They can't afford the same house as 1 income if their kids are in daycare. So, they don't provide demand at the same price point as one would otherwise have thought.
2) 5 year Interest Only ARMs. We worry about them resetting... or people counting on having more income by the time they start amoritizing. But what if they're not counting on that, just counting on losing that minimum $1000 per kid monthly cost. Was it really that crazy to buy the family home from the get-go on a I/O loan, enjoy living in it now, and then start making principal payments once the kids are in school? I could see a lot of people thinking that was a good, reasonable plan. And for those who don't suffer any unemployment it will work too.
Just musing. My husband and I went with the mortgage that either of us could support instead. But house demand is set by what the bulk of people do, not what skinflints like me do.
Spunky
I am with you. The section where the houses are smaller and with the Townhomes is ghetto. There are alot of foreclosures and short sales there. Spring Lakes is very nice, I like the lots but people are still pricing the houses as if it was 2007 and they just finished a pipe of crack rock. Many are beginning to lower prices though.
I have not heard anything good about Lansdowne. I have heard the neighbors aren't friendly and complaints about the HOA. I am seeing houses drop quite a bit there as well.
Meshell,
There are lots of kids in our neighborhood. Of all ages. Plus lots of friendly old people sitting on their porches. The only real tell is seeing parents walking with kids, the high schoolers at the bus stop in the morning, the kids walking back from the elementary school if I come home really early, and the kids playing in their driveways on trikes with their older siblings helping them out.
So, literally, I see the kids themselves. Plus our K-3 school's enrollment is on FFX Cnty public school website 705 students, and the boundaries are practically this neighborhood alone of 1000 houses + 400 THs, so that's 1 kid just in K-3 every 2 houses.
That's a lot of kids.
(you can use redfin's community links to find number of houses in a subdivision)
Ace:
Not really. They often steer clear of FSBOs and deeply resent people that won't use their industry's services. It's like Jiffy Lube taking it personally if you change your own oil or put on new wiper blades. It's ridiculous.
You can get your RE license and sell your house, but of course then you'll be paying your broker thousands of dollars to... use his fax machines. You can't be an active agent without a broker, and being a broker requires at least three years experience as an active agent.
Then there is NAR... ugh. Brokers that are realtards cannot employ an agent that isn't a realtard as well. Guess how much luck I'm having trying to find a broker to work for that isn't part of the official cartel.
The whole game is rigged top-to-bottom.
Thanks, Kevin. The problem for me is more that of the buyer's role than the seller's. I don't see a way to be able to look at the few houses that may work for us and that I can afford (after checking out all the info on frankly etc.) without working with an agent who won't really do what I want/need for him/her to do. But you've given me an idea - maybe it would be worth it to me to take the classes and get the license just to be able to show myself the houses!
cool...thanks for the redfin tip :).
Ace,
so if you see a house you are interested in viewing, the seller's agent won't meet you to show you the house???
Ace,
Have you considered using Redfin? I've only used them once so far to tour two homes, but it was very "no pressure" and you get unlimited tours.
Meshell said...
so if you see a house you are interested in viewing, the seller's agent won't meet you to show you the house???
If you do this without your own agent then that selling agent will be entitled to the full 6% commission that you end up paying.
Meshell, actually your question relates to a discussion we had earlier this week. If you contact the listing agent directly, the listing agent keeps both halves of the commission (rather than splitting it with a buyer's agent) AND you lose any advantage of a buyer's agent in negotiating for you or doing other work. In effect, you are paying a commission without getting services, and/or you may pay more for the house. So it's usually advantageous for a buyer to use a buyer's agent (as Kevin says, the NAR has thought of all the angles in setting up the cartel to restrict competition). But the problem is that, though it is understandable that agents are playing the odds by dealing with buyers who must buy within a time frame, have no encumbrances such as a house to sell, have widely shared tastes in houses, etc., that just doesn't fit my situation. I am very willing to reduce the drains on their time by not dragging them (and me) around to a ton of properties, and to pay their commission. But some (most?) are simply not sufficiently flexible to alter their methods of operation to enable themselves to get paid well for a small amount of time and effort on their part, and/or they spend their time telling me things everyone on this board knows already (or knows not to be true). So I'd like to find a way to sidestep them altogether.
Jeremy, thanks, I've thought about that; maybe I should think more about it. It's good to know what your experience with them has been.
Meshell and others, City-data.com also has a lot of community statistics.
Drschmid-
If you have anymore questions about this area just ask me
I think you & I are the only ones on this blog looking this far out..
Spunky
Meshell:
Sellers agents are more than happy to work with an unrepresented buyer. In fact, in many cases, that's exactly what they want. Then they keep the whole freaking 6% to themselves. Pretty unreal.
Ace
All I have to say is Amen. RE Agents are paid way too much for the little amount of work that they do. I have worked with a few great agents but for the most part, the ones I know personally I wouldn't trust any further than I could throw them. They are used car sales people if you ask me and no better.
My last agent when I was selling my home, a 1 million dollar home too, wouldn't even come and refill the brochure box after asking him three times.
Spunky
What areas are you looking at in Loudoun. I am keeping my eye on
Sterling-Potomac Lakes, Cascades and a tad in Countryside
Leesburg-Spring Lakes, Woodlea Manor and a few other small neighborhoods throughout.
I am going to stop by to see why this place is so low, it looks very nice from FranklyMLS but don't know much about the neighborhood and the seller blocked comments and zillow from the site. If you look carefully in one of the pictures of the backyard it looks like a parking lot behind it but I don't see it
http://franklymls.com/LO7397353
Here's another example of a bank acting quickly to lower the offer price. It's now at the 2005 sold price. Not a great location, though . . .
http://www.redfin.com/VA/Arlington/2141-Patrick-Henry-Dr-22205/home/11236611
Drschmid-
That new listing you are looking at is in an interesting 'hood
If I recall it's an old 'Elite Homes' build (they are out of Business, btw, which is sad cause they were a good local Builder)
Those homes are in a hilly area & many of the lots are cliff-like - with really poor yards -they usually sell in the 500k's - check on Frankly's site to see the statistics/Comps
I don't know much about Sterling-
I am watching these zips:
20176, 20180, 20175, 20148, 20148, 20105
I also watch Haymarket too - but mostly rural areas, not DVCC
Prices are beginning to drop-
whats AMAMZING to me is a 'hood that has Foreclosures in the 500K's with new listings coming on in the 600-700K's check out Red Cedar in Leesburg!!)
Spunky & Drschmid -
I'm looking in Loudoun too. We'd like to move further in, in Fairfax County, but prices for newer single family homes are way out of our range.
As for Spring Lakes, no homes have been available lately. Last three shorts on the market have sold for the mid-500s. The community is on our wish list as well, but that wish will only come true if and only if we get a return to some early 2009 prices. If you look at 2009 Spring Lakes 20176 sales on franklymls, you'll see that there were two distressed sales for ~475k.
There aren't too many communities with yards as large as those in Spring Lakes. The Lakes of Red Rock next door to Spring Lakes have is made up of veritable McMansions, but seem to have much smaller yards. As for Lakes of Red Rock sale prices, unless there is considerable market decline, my guess is that the least expensive houses in that market won't go below the 550s. I notice that some of those houses sold for the high 400s in the early 2000s.
As for determining where the market is going, Spring Lakes doesn't seem to be a good gauge right now, as there are not any available homes on the market. I heard a rumor that one house sold via foreclosure auction to someone for the 300s, but a search of redfin solds and Loudoun assessment records turned up nothing. I'm going to assume that price was a figment of someone's imagination.
Just across the road from Spring Lakes, in Potomac Station (the newer section developed in 2001 on the West side of River Creek Pwy), about 8 homes for sale are languishing, a few having become short sales after sellers had to drop their prices. Quite a few homes sold there this spring, but that neighborhood market has turned ice cold post-tax credit.
That section of Potomac Station is very nice, but I would say not as nice as Spring Lakes. All Spring Lakes homes have brick fronts; Potomac Station homes mostly have smaller yards and with either siding or brick on the front. Prices are more reasonable there, though, and a buyer has a better chance of getting something there for less than 500k.
Drschmid, have you also looked in Stowers (20175), with Richmond American homes? Their tax assessments have dropped steeply this past year, due to the high number of distress sales there in 2009. However, you can certainly get something there for 450-500. The big disadvantage of that community is highway noise and the accompanying exhaust pollution. A large percentage of the homes have back yards that face Route 7 or the Toll Road. Plus, after great controversy, the community was reassigned to Sycolin Creek Elementary School, located about 4 or 5 miles down a long country road, in the opposite direction of most people's commutes. Previously, students went to the school just outside the community. But the houses are big, newish, and nice.
Mike, that looks like something that might interest MM (except for the busy street). But I think she was negotiating on another house at one point. Hey, MM, are you still out there?
RE Seeker-
You are correct- things are starting to "languish"
Give them all another 4-6 weeks of languishing & we'll see who's ready to sell
Me thinks a lot of these Sellers were trying to hitch their selling wagon to the 8K deal and are basically SOL
Those that must sell will be lowering their prices (and many can afford the loss (they bought in the early 2000's), if they haven't HELOC'd themselves to death
Keep your eye on the ones you like & don't hesitate to throw some lowball offers - !!
I went to an open house for a Potomac Station home in the Spring. Originally priced in the high 500s, the seller lowered it once before the open house. The owners had purchased a house out in Rockville for 600 or 800k due to a new job, and have been trying to carry both mortgages for several months. It's a nice house, but a hard sell with a master on the first floor. More recently, the regular sale turned into a short. So, while we're not interested in that house, someone might have lowballed successfully if they had done so before carrying too mortgages became such a big burden for the seller.
The other thing about that house: too many colors, too bright and too dark, too taste specific. The agent told me that the owner painted only to prep the house for sale; the family lived with white walls for 8 years. I wonder if something as simple as color deterred the sale, causing such significant financial distress?
Huh??? In what way are these neighborhoods "affordable" relative to other neighborhoods? Do people who write these stories ever actually visit the places they are describing or, if they can't visit, check out the data online?
"Like New York, D.C. is a place of great opportunity and great cost for young adults. Job creation is constant in the government and government-related sectors. But rents and living costs are quite high. Fortunately, a constant influx of college grads, as well as immigrants, has spawned several off-beat, affordable neighborhoods, such as Adams-Morgan, Chinatown, and Ballston and Shirlington in nearby Arlington, Va. Group homes abound."
10 great cities for young adults
Ace,
I lived in Clarendon in 2004-06 and it is cheap to live if you're splitting the rent 4 ways with your college buddies. We had a 4 bedroom place walking distance to the metro for $2700 a month. $675/month isn't a lot when you're young and want to live near the action.
Ace,
This area is only affordable for young people if they're living in a group home. I lived in a group home for 2 1/2 years, before my LL in Clarendon announced he was selling his house in the 300s in 2002. At the time, I thought that was a shocking amount of money. I then moved to a one bedroom apt off Columbia Pike. To keep my rent within 25% of my income, I took a roommate. Not an ideal living situation at the age of 30. Admittedly, I wasn't exactly frugal, always eating out and buying books and clothes, living paycheck to paycheck on a small non-profit income under 40k. But if I had been more frugal, paying 800 or 900 for rent still seemed like a lot of money.
Actually, everyone I knew back then was in a situation similar to mine, having no choice but to live with other people. So, the most accurate statement is, "Group homes abound." The writer doesn't incorporate that very important fact into the affordability analysis.
They are used car sales people if you ask me and no better.
That is very insulting to used car sales people.
REDS, yes, the author needs to compare apples to apples. Otherwise, it's a bit like saying Saks is more affordable than Wal-Mart, because you and your sisters could split the cost of a jacket from Saks, so that the cost to each is less than you would pay for one jacket at Wal-Mart.
"Ace said
REDS, yes, the author needs to compare apples to apples."
Yep, if they are interested in showing DC as being cheap instead of "group homes in Ballston" the author could just as easily have said
"Like New York, D.C. is a place of great opportunity and great cost for young adults. Job creation is constant in the government and government-related sectors. But rents and living costs are quite high. Fortunately, one can always just go live in a van down by the river"
So seriously, how many open houses are enough before you realize maybe it's something else like price that is keeping your house from selling?
FX7296229
and
FX7325976
FX7296229
5.59% growth year after year over 29 years. Not a bad investment for the original $170K purchase price back in 1982.
Not bad at all if they get it...
FX7325976
Hey, isn't that "Bud" Spillane's house? Former superintendent of Fairfax County Schools?
Seems to be "Spillane" stuff everyone in the photos along with a cannon worm on the wall (which I envy).
I needs me one of them cannon worms.
Anyone have any thoughts on Belmont,Brambleton or any other neighborhoods in Ashburn, I have not researched it much, with the exception of Ashburn Farm/Village.
The housing prices are still very high in many areas of Ashburn with the exception of Ashburn Farm/Village. I would think the issues we are seeing elsewhere would begin to hit here. I like the Ashburn area but they seem to all be built on top of each other.
Jeremy, looks as if someone needs a good swat with the Clue Stick, esp. when the county tax assessment has also plummeted, when your asking price is wayyy over last year's assessment, and your upgrades are incomplete and in some cases, er, questionable...
The Anon, I hear the cardboard boxes in NY are nice too...
Drschmid,
If you want something brand spanking new, or almost brand spanking new, then Bramblton's the place to live. However, most houses start in the mid-500s. And if a house is in the mid-500s there, it's probably a short sale.
The one Brambleton 400k short sale I found a month or two ago: EVER SO SHADY.
I contacted my agent as soon as I saw it. She's very responsible and responsive, so when she told me that she called and got no answer from them, I knew there was something funny about that short. She said that she never makes herself so unavailable, especially the first day she lists a home. Four days later, after the weekend, it was already under contract. Wonder how many interested people didn't get to see the place and make decent offers.
(Side tidbits: A quick search on the house revealed that the owners had a cattery in the home. A definite minus for those with cat allergies, probably much worse than moving into a house where there were only one or two cats.)
New construction there? A quick look at new houses sold in Brambleton shows that you can get them for the asking price (489k and up), with the additional discount of the builder paying closing costs. But I've also read on loudounscene.com that buyers pay a hefty price for upgrades.
Brambleton homes have a very different look and feel than those in the 20147 part of Ashburn. Ashburn has a lot of older homes, with more standard, older style colonials. Brambleton has more of a neo-traditional feel, with shinier versions of the style of houses occupied by my great grandparents living in a grimy, stinky industrial town.
So seriously, how many open houses are enough before you realize maybe it's something else like price that is keeping your house from selling?
That second house is hilarious. It's down the street from my friend's place. Drastically overpriced, NO back yard, and I kid you not that the for-sale sign on the front lawn says "now's a great time to buy".
Pretty much everything you could hate after the bubble is encapsulated in that listing.
Hey, isn't that "Bud" Spillane's house? Former superintendent of Fairfax County Schools?
Yes. He's well off and wants peak bubble money for the house. Typical boomer asshole IMO.
Drschmid-
Ok you asked-
Belmont CC is ok & there are some cheap deals there if you find a home that needs to move - I don't like it because:
1) Toll Brothers builds are BAD (IMO!)
2) again, high HOA fees
Now,onto Brambleton - Which I like & think WILL increase in value over the Silver line being near by (ok, in 10 years or so!)
However my problem w/ Brambleton is the lot sizes - which are tiny , again IMO (there have been tons of FC's & SS'S there too, so watch the comps!)
I am originally mid-western & have already "done" the NoVA postage stamp sized lot, thank you
Again, IMO, the reason one moves out to Loudoun is to get some LAND
Not live on top of each other like most of Fairfax
Ok so why would I pay 500K for a Brambleton house versus driving another 3-5 miles down Evergreen Mills road for a larger house on an acre of land (and maybe a mountain view?)for that same 500K?
I know not everyone wants that much to mow, I have a husband that actaully enjoys yard work or we have it done (very cheap here)
Just my 2 cents!
Thanks Contrarian,
I was trying to find those earlier yesterday and couldn't.
Washington-Arlington-Alexandria, DC-VA-MD-WV
filings:
27,631
% of housing units
1.28
1 of every X units
78
change from July-Dec 2009
-17.98
change from Jan-June 2009
-5.41
It's still bad, but looks like an improvement to me. We'll see what happens with the failed HAMP modifications starting nowish.
I know these are not fair comparisons to the DC metro area but the Q2 (rather than first half) foreclosure rates were Virginia 0.5%, Maryland 0.7%, DC 0.3% off contrarian's second link. But the Q2 alone rates are up in both VA (14% increase) and MD (67% increase) (down in DC by 23%). I would take this to be the effect of a downturn in foreclosure notices last year due to the ramp up of HAMP.
Spunky,
Just curious, how do you define "cheap deals" when referring to Belmont CC? I know that there are some townhouses there, which have been priced as low as the 300s as short sales, but that happened at market nadir. Single family houses inside the gated community generally start around 600k, and those located outside the gates start at the mid-500s. Also, I've noticed as of late that those good townhouse deals have vanished. They've been replaced by regular sales, at much higher prices.
There are probably some much improved prices, good values, but I would hesitate to use the word "cheap."
One exception: remember the poster sai, who wasn't sure whether or not to go ahead with his shortsale? I think his house closed for 513k. Not cheap, but certainly a good deal and good value for a place inside the gates, almost 100k less than what a similar home would sell for as a foreclosure or regular sale. But that transaction began when we were just emerging from market's previous bottom.
On the other hand, Meshell also said that it would be scary to buy there, as values have plummeted.
Any specific complaints about Toll Brothers homes? I thought they were considered to be better than, say, Drees or Beazer, but I don't have any specific info on them.
Hey, Kevin, please don't insult us real boomers. According to The Google, Bud Spillane was age 71 in 2006, which would give him a birth date of 1935--one of the Depression babies.
REDS, if you have a checkbook.org subscription, you can check out the neighbor ratings for Toll Bros. The Haymarket location had 4 ratings, all but one negative. This is a small #, but the home builder with the largest # of ratings was only 7.
Here was the one comment, from Nov. 2006:
We moved in 2 years ago. We're still working hard to get things fixed from our closing walk-thru.
"We were not told about all of the options and some of the custom items we wanted completed, we were told it couldn't be done. However, these same items were completed in other homes.
Management is lacking as we have had more than 5 managers we have had to deal with. When writing to Corp. in PA, Robert Toll sends the problem back to the same manager and it still doesn't get completed. Someone needs to oversee the subcontractors and quality control is non-existent."
woops, first quotation marks should be before the first "we."
Thanks, Ace.
I have heard similar things about Brookfield, which has built out in Lansdowne.
Speaking of Lansdowne as a community lacking in community togetherness, I agree. I'm sure there are nice, friendly people there, but my anecdotal stories are mostly negative. Like the babysitter who carries on affairs with the fathers in her basement where she has her daycare, while her husband works in the faraway city, or the depressed mother who sets fire to her mcmansion..... It's the "hidden" dysfunction of the perfect 50s family all over again. I don't know why my anecdotes don't include the dysfunctional behaviors of men, but that's just what I know about lovely Lansdowne. Also, of course that's not the only place with crazy behavior, it's just that the pronounced wealth there doesn't impute happiness and stability.
I also know of the additional stress caused by 1. bad Brookfield buildings, including incomplete and shoddy construction, on luxury homes; 2. people trying to sell their old homes to move into these new homes just as the bubble was bursting, and 3. people trying to hang onto these dream homes during the recession.
Seeker-
Regarding your questions about Belmont CC
-sorry to use the word "cheap" for pricing - how's about less expensive than 2006 prices ?
- Toll is built cheaply (IMO)
- just because they are listing in the 600K "inside" doesn't mean that's what they are closing for
remember what I wrote :
Belmont CC is ok & there are some cheap deals there ***if you find a home that needs to move***
You need to look for the famous "3-D's of Real Estate" (according to Robert Irving, RE Author)
1) The Desperate - Sellers who HAVE to sell (dad's been working on the new job in Montana now for 8 Months & she's stuck here with 5 kids trying to sell the house!)
2) The Divorcing - warring spouses ready to dump the love nest so that the other one doesn't get any $$ out of the deal
3) The Dead - deceased Mom/Dad's house that the kids want to unload to liquidate the cash out of the deal (morbid I know, but happens everyday here in the good old USA)_
Spunky,
I hope there are houses selling for much less, but when I look at actual solds there, using franklymls.com and redfin, I see that they sell for around 600k. With the exception of the one I just mentioned, plus maybe a few that sold for the mid-500s within the last year on Blackwolf Run Place. Now, maybe in this downturn, things will change. I would like that to be the case. But 600k is fairly normal. Not too much lowballing that would bring those houses to the low 500s or less.
Seeker-
Let the lots in the 600K's at BCC sit another 4-6 weeks
you may see some price drops from those who want /have to move
Remember - these recent (last 6 Months or so) sellers are boosted/dilluded (?) by the 8K fantasy (uh, heck, uh the same house as mine closed for 710 last week - heh, heh....)
I think we'll be returning to last years prices pretty quick (like you said 500K's)the longer they sit
remember - someone has lowballed them down - they don't normally knock the listing price down that low!!
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