Please post your local house search updates, MLS finds, on-topic ideas, and links here.
August 24 (tomorrow) - 10:00 AM: Existing Home Sales for July from the National Association of Realtors (NAR). The consensus is for a decrease to 4.65 million (SAAR) in July from 5.37 million in June. Take the under! Housing economist Tom Lawler is projecting 3.95 million SAAR. In addition to sales, the level of inventory and months-of-supply will be very important (since months-of-supply impacts prices).
Monday, August 23, 2010
Northern Virginia Bits Bucket 8/23/2010
Posted by Harriet at 6:00 AM
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56 comments:
It is amazing how I manage to read story after story saying how depressed the consumer is and how everyone thinks the economy will never recover, yet you still see that home buyers expect prices to go up 10%/yr for the next decade.
Seeing they expect no wage growth and interest rates to increase how can they possibly expect this growth... I guess hope springs eternal.
housing always goes up
Off topic (except in the sense of the local DC consumer sentiment).
Hopefully you guys will find this as amusing as I did.
Unnecessary back story:
So, we needed to get a second car nowish, so that my husband will be able to control his own transportation (the whopping 1.2miles to the VRE) when I'm home on maternity leave without me feeling trapped without a car, and to transport kiddo to the daycare at his work once my mom leaves. This morphed from a used Subaru to a new one when we looked at the incredibly high resale prices and decided the discount wasn't high enough not to just buy a new one.
The funny part:
So we walked in the Subaru showroom in Tyson's corner this Saturday. And I look around and see that I'm the third obviously pregnant woman in there. I say this outloud, to which the woman next to me, says, "no you're the fourth, one just left on a test drive." Over the 3 hours we were there buying a car, 5 women came in 4 were as far along or further than me, and my theory is the 5th woman obviously must just be in her first trimester...
Only two of us drove away with a new car. But I think the other two were on their test-drive everything we're considering day, which my husband and I did a few months ago.
Greater macro lesson??? Consumers are getting ready to buy, and starting to do so, but may be putting it off until the last possible moment.
hb,
Gah. People don't want houses they want gooses. Sigh.
Cara-
I wonder if there are more pregnancy now than over the past couple of years. I remember hearing that a lot of people were putting off having family because of the recession. I would think that many of these people were the people who recently bought houses and are starting a family now they are less concerned about massive layoffs.
Can't recall who it was that wrote an article about the "Great Depression" that said it took years (not months, but years) for the public to accept the fact that the economic boom times of the roaring 20's was over. And that mindset wasn't changed until the mid 1940's. But the effect of those born right before and during the depression carried the impact their entire lives.
Going to be interesting to see which new "Golden Goose" type of activity gets created to replace the fast and easy money of real estate.
Amway anyone?
Oh, and Cara,
You weren't alone. We just started the switch-out on our own vehicles. The new cars are going. One is already gone.
I am looking for a nice 4WD that is solid and has a familiar maintenance manual. She wants a Toyota Rav4...just 'cause. Am fond of Jeep Cherokee's up until 2001. Solid, easy to work on, and can carry all the family and gear if I need to hit the road.
Nothing wrong with your choice. Those Forrester's seem like a nice solid AWD vehicle.
FWIW.
hb,
Possibly. We were all "older" looking parents. I.e. the kind of people who think too much and plan these things.
TN,
Yup, I think we'll be happy with it. It's the right car for us.
I'm going to look at a condo in NoVa later this week in a relatively newish building.
It's new enough that it looks like there have been folks who initially got in and who are starting to run into problems with ARMs ... there have been a handful of shorts/REOs in the last year and a half.
To me, it looks like a good opportunity, especially since its location is ideal for me, I like the unit AND I plan to sit tight there for quite some time.
Aside from the short-term risk (seems like things will get worse before getting better) is there anything else I should consider?
newbie,
If you can afford it, you are better off to get a townhouse. I find the condo fee's on the new stuff to be outrageous.
Much depends on your lifestyle. I don't know your ideal location and whether I know enough to even comment.
p.s. Pat, haven't gotten back. Out of town and just heard you contacted me.
p.p.s. Bald eagle just flew past. Beautiful day in the neighborhood.
VA, Thanks for the response. I'm a housing newbie, but not young. Moved around a lot and so am just now looking at entry level housing (cause I spent my years stimulating the economy rather than saving!).
Single floor living preferable for down the road not so many years. And I've lived in a high-rise apt for the last 10 years; have gotten spoiled with underground parking and concierge service.
Ramblers in Fairfax (e.g. Springfield) a possibility, but not sure I want to sign up for the hassle of maintaining older homes w lead paint.
newbie-
You should also compare the cost of renting vs. buying. I currently live right across from the dunn loring metro station and even though housing prices have fallen ~30% since peak it is still dramatically cheaper to rent.
the rent is 1900
the mortgage payment would be ~1800, the condo fee is 400, the taxes are ~300, and insurance and maintenance are another couple hundred a month. So when all is said and done it is almost ~1,000/month cheaper than to buy.
Seeing that you get some tax benefits and are paying down the principal it is fine to pay more to rent than buy, but $1,000/month seems like a lot.
newbie-
Although if you know that you are not good at saving buying could be useful as a way to force yourself to save by paying down your mortgage.
newbie,
Where is your "ideal" location? If you've got the dough for the amenities you want and this is going to be your "home", then get want you want. Afterall, we only go around once.
Condo's tend to take the worst beating and recover last. But this doesn't sound like it should/would matter to you. Sit where you'll be happy and pay it off.
I've got a place that will never be a great investment, but I don't care because I love it. If it goes to zero in 20yrs (it won't), it wouldn't matter to me.
newbieinNoVa,
Find out all you can about the HOA finances? Find out if the building is still eligible for FHA financing(even if you're not using it yourself, other prospective buyers will be which will effect the sale-ability). (reasons for no financing could be too many landlords, or too many existing FHA loans in the building)
A 60's rambler is the 180 degree opposite of a condo in terms of maintainence commitment. Unless you want to pay for your yard-work and a concierge service to be there when you need to have a plumber or electrician come, it's huge time commitment. And we've already by our own choice spent almost as much on the house as our entire first year's mortgage payments (replaced all the windows, had all the trees trimmed, odds and ends with the electrician and plumber, ~$500 in paint?). (We bought a rambler in Springfield in January, it would need to have the laundry upstairs for true one story living though, which could be done).
Not that there's anything wrong with seeing the attraction of both extremes. And we love our house, and we didn't HAVE to spend all this money now, we chose to, and it's not as if you couldn't decide you needed to spend tons of money renovating a condo. My husband enjoys the yard work, and we both love our neighborhood and parks, and grilling out in our backyard, But... I'm pretty sure condos are less work.
Cara,
I don't think mid-thirties qualifies you as older parents around here ;). I think you have to be at least 40 for that!
The Subarus are nice but I wish I could travel back in time and get a minivan for our "little kid" car. We have a smallish SUV (bought in 2006) and once you put in 2 carseats, you can't fit anyone else in the car with you, kids and husband (not enough room for another adult to sit between the seats in the back). So annoying when you want to go somewhere with If we want to pick up a friend for a playdate, it doesn't work because we can't fit 3 carseats across in the back row. Also, the storage is sadly lacking, even for groceries (let alone a weeklong vacation or for a big trip). Just worth mentioning b/c a good friend has a Forrester and two kids, and she has the same issues with storage and carseats. Most people keep their kids in the big 5-pointed seats until they are at lesat 5, so its a long-term issue (and not something I thought about back in 2006, when we just had one kid and I thought there was plenty of room).
newbie
to buy a condo, the real trick is condo fees and HOA analysis of reserves. you need to really analyze the reserves and also make sure it'sFHA compliant.
FHA won't lend if it's less then 90% owner occupied, which makes rates higher.
the reason you want reserves is if the building gets a major repair bill the owners all get a special assessment, can you take a $5000 bill to fix the elevators in the main tower, when you live in the low rise complex?
cheryl
if you aren't reachable by phone is your email still working?
Meshell,
Yeah, what we really wanted was an honest to goodness station wagon. The Passat wagon was an option, but would suffer the same problem as the Forrester. And we couldn't stomach the price on a Volvo, BMW or Mercedes which seem to be the only remaining wagons (so we didn't really check them out).
So have they seriously stopped making mini-vans as well? Gah. I don't want a Traverse or Expedition or other giganto vehicles just to get a third row of seats. Hopefully by the time we have this problem, car companies will have regained sanity and started offering non-SUV options again.
(I've sat between two car seats in a Prius, so it can be done...)
pat,
e-mail is the same. Got wireless.
All,
Newbie wants a home. HB, you are subject to the whims of your LL. Best to be in apt. complex for long-term or own your place.
Reserves are very important. Newbie is looking at a "newish" building. I wouldn't think reserves are an issue, but I would want to know delinquencies. Again, investor ratio's and resale doesn't seem to be a concern.
Ahh, cars. I had a minivan when my son was young. When he was 5yrs out from driving I got a Mazda Tribute. I had read about the safety of this vehicle because I planned it to be his in 5 yrs.
I liked it so much I bought another and still have it 5 yrs later (as he still has my old one).
I'm sure there are safer cars now. My mother is on her second subaru forrester, having kept the first for a loooong time. I grew up in a family that didn't buy a new car until I was 20.
HB, actually even with condo fees and tax, the payment for the 2bed condo is gonna be very comparable to the rent for my 1bed apt -- mostly because I currently rent near Clarendon, and the condo isn't close to Metro (but has bus service which works for me).
cara/pat, my broker and I both looked; this place is not FHA compatible. I need to find out what the owner occupancy is. If it's close, that's one thing, if not, that's another.
Then again, if I'm planning to hold onto this for 10-15 years, one plus is that I've essentially locked in my rent. And after all, I've been living in an apt building for 10 yrs ... I'm not necessarily afraid of renters :). But the question of the reserves is a good one. I guess I also concerned about riding out another wave(s) of shorts/REOs.
As an aside, I have been looking at properties on the sidelines since May. I had not planned to seriously shop for a while (wanted to see how things settled after the tax credit bump went thru). And I had been keeping my eye on something either in the Preston (near Potomac Yard) or Shirlington Village. But I have to say I loved the look of this unit. But not so much that I want to do something really stupid tho!
newbie-
If you like the unit and you are getting more for your money then renting I agree with VA_investor & Cara. Check reserves, but other than that it sounds like a good move for you. Prices may go down, but you can try your best to ignore the price and just remember that you are paying the same amount as your apartment.
VA, thanks ... very good idea re delinquencies.
Also, interesting. Neither the Preston nor Shirlington Village are showing up as FHA approved. Preston was built in 2003, SV in 2006. Could be that lots of these newish condos may be problematic wrt FHA if not on top of Metro.
newbie,
The thing with the FHA compliance is not about you, personally, needing to sell or buy, it's about the price anyone else who wants to sell will be able to get (due to fewer eligible buyers). And if the price declines more, then there will be more HOA delinquencies as stressed would-be-sellers stop paying either the mortgage or the HOA or both, which is more money out of your pocket through higher fees. (In addition to paper equity losses).
Like VA said, I'm surprised that a newish building is already falling into the trap of not being FHA eligible.
If however, the price point is already such that it could be rented out for cash-flow positive, then I don't think you have a lot to worry about depreciation-wise because landlords will buy them to rent out. But then you can run into problems with a certain type of landlord who doesn't want to do necessary improvements in a timely fashion, or in general makes the HOA finances questionable... But every condo board/ HOA can have those political/financial problems.
But I can't do the stumble to the metro 1 bedroom, van to the metro 2 bedroom conversion in order to tell if the 2 bedroom you're considering is cash-flow positive or not.
HB,
You pay 1900/month to live near the dunn loring metro? Is it a 2 bedroom? Is it luxury appointed - granite/stainless steel appliances?
Curious,
My $0.02
cara, thanks for the comment. The building is VERY nice, it's the neighborhood that is the issue. I'm good with the location, but if you're gonna pay $2200 for rent, you're probably gonna go with a walk to Metro building.
From looking at sales in redfin, the 2bed units are being listed now for $100+K less than solds in 2005/2006. Hence my concern about lots of owners potentially in trouble.
For me, this'd be a no-brainer if I could get in without a big down payment. It'd be worth the risk. Now that I'm looking at 20% down, it's a different kettle of fish!
NewbieInNova,
When I was house hunting, and briefly considering condos, my biggest concern was that all of the nice luxury places were quite new. The problem with "quite new" was that the buildings were thrown up as quickly as builders could get them up (I'd be concerned about quality) and you had a lot of new buyers. Many would be flippers getting stuck with condos they couldn't afford. Normally, this wouldn't be my concern but in a condo building you're all lumped into shared costs. I have to imagine that every single foreclosure/short sale/distressed sale is someone not contributing to the common condo fees. That makes you and everyone else still there responsible for the shortfall.
Special assessments are a real possibility too. Not saying condos are bad, just be sure to take a good look at whatever condo balance sheet information you can get a hold of.
My $0.02
newbie,
If it no longer sounds like a good idea once you're shucking out 20%, then it probably isn't a good idea... Buying the nicest place in the neighborhood has always been against common real estate lore. You are buying the neighborhood not just your own X sq ft, so unless you see a general gentrification trend, or reasons to believe that will happen...
mytwocents, thx. I had initially started looking at SFH and TH -- you should see my Redfin favorites list -- but had a bit of an AHA recently realizing that as a 50+ single woman, I *like* condo living (dedicated underground parking, concierge, convenient to the hot spots along the orange and yellow lines in NoVa).
I'm gonna go look, but at least now I won't be like the bride-to-be falling in love with an obscenely expensive dress ;). I may go back to plan B, which is wait it out a few more months. Who knows, I may be able to get this condo or similar at a bigger discount!
has anyone posted 236 CLEVELAND already?
10 Tax A: $640,800
2010 sold price: $550,000
not desirable location but not bad either. house in OK shape too. maybe bad neighbors?
MM,
I would say that price is just about right for the current market place. IMHO, this is the price slash that finally hit Arlington. That 4/2/0 looks like it has 1 if not 2 of the bedrooms jammed up into the attic. So it's not that big and is on par with a lot of the small brick colonials being sold in 22203 and 22205.
NewbieInNova, this is why I caution against 400-600k for a condo. There are plenty of charming little SFHs in Arlington at the same price point.
My $0.02
mytwocents-
I am in a 2 bedroom 2 bath condo that is ~1050 sq. ft with two parking spaces. It was built in 2006 and is pretty nice. Large walk in closets, granite, stainless steal appliances, a ton of 42 inch maple cabinets, super energy efficient. All units come with 42 inch LCD TVs. It also has a pretty nice gym and pool.
pat, et al
The investor limits are 30% to 35% investor for conventional and 40% (with higher exceptions) FHA.
VA, the investor limits are lower for conventional than FHA??
there's no chance for this N Arl SFH to make it to the auction, but I think it's the lowest principal amt I've seen:
TRUSTEE'S SALE OF 2253 N HARRISON ST Arlington, VA 22205 In execution of a Deed of Trust in the original principal amount of $100,000.00, with an annual interest rate of 6.5000% from SHANNON M. VADNEY AND JOHN A. MATTERA dated May 15, 2008
looks like a simple $100K HELOC case, and owners live in a nice house in FFX with backyard poll. i'm curious what must have happened.
pool, that is :)
no chance for this house either, but whoa!
...with an annual interest rate of 10.2500%... dated November 29, 2005...
can you say loan shark?
MM-
Not a loan shark, just correctly pricing risk, seeing that the person defaulted on the loan, the 10% probably wasn't enough for the 4 years the person made payments :)
It is possible that both of those houses make it to the court house. Just because the loan values are small doesn't mean the owners aren't underwater because of other HELOCs they took out.
cheryl
i thought it was all these weird staged rules nowadays, like FHA needs 90% if there is a foreclosed unit in the building or 90% o/o if you want the 3% homepath or 90% if the market has declined more then 10%.
I sat with a gal who owns 2 condos in DC and she said the FHA is requiring 90% O/O in her building and that is huring her ability to sella unit.
Off Topic: H0ME WARRANTY
Just curious, have any of you bought a warranty when you bought your home within the last year?
What company did you use, and did they ever pay to fix something that broke?
Newbie, those limits are for investor owned units. Conventional lenders want more owner occupied units hence lower percentages for investor owned.
So we went to this open house this weekend and liked it a lot, especially inside. We thought about it overnight and decided not to start the offer process because we really don't want a pool - and this one's takes up the entire backyard.
Anyway, something was curious about this house. It is listed as a 4 bedroom (3 upstairs and one basement) but really could have very easily been 5 bedrooms. They took out a small portion of wall to connect the master to another bedroom. It seems like it would have been worth it to put that back before selling. Am I wrong?
The only thing I can think of is maybe having to do with the septic only being rated for 4 bedrooms - would that keep them from selling at as a 5 bed house?
Jeremy-
I am not sure a 5th bedroom would add much value. In my parents neighborhood half the houses have 4 bedrooms with a huge master the other half have 5 with a normal size master. There does not appear to be any difference in the prices for the bedroom. 4 bedrooms still allows a family to have a couple kids and a guest room. This is a pretty standard desire around hear so I think almost an equal number of people would want a better master than the 5th bedroom
Jeremy,
Aww! I really like that one. Not pool people, huh? I know it's a liability and maintainence issue, but while I'm not sure I'd ever put one in, I'd love to have one. Both my aunts/uncles had pools off and on when I was growing up, and I absolutely loved them. I like the proximity to the park the house has too.
Rosebelle,
We have just finished battling with our home warranty folks, HMS, over the repair of our dishwasher. I recommend you stay clear of this company. I feel like we've been scammed - and guess who the arbitrator is for them? They, themselves! My husband and I think in the future, we'll be better off by putting money away each month into a household repair fund, than to waste our money on this kind of bogus operation. We ended up paying $50-100 dolars for a diagnosis each time a repairman comes out and then they don't foot the bill when there is an honest to goodness machine malfunction. Please beware of HMS!
Cara & Jeremy-
I agree with Cara that the house looks great. Although the pool takes up the entire backyard there is still a massive front yard that can be used.
Jeremy-
Is the house priced decently. Although the house looks nice it doesn't look like they spent an extraordinary amount of money on upgrades and they are listing it for over double what they paid about 10 years ago. I would have thought once you get out towards the Fair Oaks area you wouldn't have to pay double 2000 prices anymore. Although I haven't looked at this area, so I am curious about your opinion.
Rosebelle-
I have never heard good comments about any home warranty company. I agree that you are probably better off just krisjim that you should just stash money away every month for when something goes wrong.
Blogger Rosebelle said...What company did you use, and did they ever pay to fix something that broke?
Rosebelle,
The answer you seek lies with each Home Warranty company. Ask them for a list of satisfied customers in your area. If they can't produce such a list, then that in part is your answer.
There are very few Home Warranty companies that leave a trail of happy satisfied customers.
The other poster was correct. Sometimes it's best to sock away a $1000 or $2000 or have acess to a line of credit to deal with appliance repairs.
I wish I didn't know what I know because I just fix all the stuff myself. I spent Saturday morning resealing a sewer line (it's a 1/2 bath in the basement that was never completed) that a plumber wanted $800 to do. My cost was two hours and about $40 worth of supplies from Home Depot.
Cara,
We are planning to start a family soon and don't want to worry about having a pool with very small children. Plus, neither of us would really use it much and can't justify the additional monthly maintenance/chemical cost and time to keep it clean.
housebuyer,
I think this particular home was finished very nicely inside (compared to others I've seen) and was worth a premium compared to others in the neighborhood. It was also a bit larger - the upstairs bedrooms were bigger than a traditional rectangular shaped colonial and had massive closets. I don't think they'll have a problem getting within 5% of asking price for that house - but obviously I will be happy if it sells for less than that.
housebuyer,
As for double 2000 prices, there are a couple of homes on my saved franklymls list that we would buy right now if we could get them for double the '98-'02 sold price. Maybe prices in Oakton were on the low side back then, or the really nice homes/lots didn't sell for the premium people seem to want for them today. Or maybe the current owners just did a good job with updates and landscaping.
Jeremy-
Thanks for the update on prices in Oakton. Although I am not currently looking at it, I wouldn't be surprised if we give it more consideration as we get closer to buying. Seeing that we just renewed our lease until Jan 2012 I just can't keep track of all of the nice areas :)
Jeremy,
It's not that uncommon for people to fill-in a pool.
Haven't been paying much attention to the blog as we have sold the houses for the 3 sisters-in-law and all have moved to their retirement community. During last winter's blizzards, several of you jumped on me for predicting a baby boom in the late summer/fall. Cara's experience at the Subaru dealership provides some anecdotal info. The docs in my old practice provide better info with all vacation cancelled for August/September/October because of the high number of deliveries scheduled. It's okay, because I've always liked babies and Subarus.
re: Home warranties
Another scam is that the company may call the cheapest "repair firm" in the area. I had a two year old top-of-the-Kitchenaid line dishwasher that broke down while company was visiting for Thanksgiving (is there a worse time)? It took 7 (yes, seven) visits, half of which involved no shows or showing up hours after the appointment time, before the unit was repaired. Calls to the warranty company, including asking to talk to a manager, requesting that a different repair shop be called were absolutely futile. For the amount of time wasted I could have bought another dishwasher, or two, or three...
Va_Investor,
That is an option, although at 750k we really wouldn't have a bunch of extra money to do home modifications or landscaping. We live in a 900 sq ft apartment right now so we are already looking at furniture expenses when we buy. Basically, if we're going to spend $700k+ we've got to get something we can live with without updates/changes for ~5 years or so - at least until we get all the child expenses figured out and covered.
Hey krisjim26, Can you email me? I tried your previous email, but it no longer works.
Thanks
Frank
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