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Saturday, August 28, 2010
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61 comments:
Property available for those who don't mind a bit of a commute.
cara, Thanks for the rambler tip!
c, does it come with a complimentary meth lab?
So was checking the area near the open house cara mentioned for others and came across FX7421741.
I actually love the landscaping, but $125K over 2010 assessment? And you get to provide your own washer/dryer?
I know I'm new to this ... am I missing something here?
newbie-
The assessment may be off. The assessment is only 15% above what they paid in 01. Most places in northern VA go for ~30-75+% more than 01 prices. It is probably somewhat over priced, but will go for a good bit more than the tax assessment. You will need to check comps if you want to determine what it is actually worth.
Here a handful of comps from the same road.
house 1
house 2
house 3
house 4
house 5
house 6
Based on those I would think it should go for the something in the mid 300s.
http://franklymls.com/DC7385282
Heres a good one for the bulls.
sold for 260K, they wanted 549
and lowered it to 449K.
Top value for a Bull.
Buyer maybe,
We were in this situation in the past. We decided to rent our current house out and were able to make a "clean" offer.
We went with 90% financing on the new house, so we didn't need cash from a sale of the existing home.
I don't know if this would work for you or if it's something you are willing to take on.
If you need cash, you could do a cash-out refi while this is still your primary home and then lease it and use the cash for your DP. You would need to see if you qualify to carry both (after the rental income is included).
Thank you all for your helpful comments. We have been taking a hard look at finances and decided we are going to try to sell the townhouse first and then buy. To cheer up my wife, our agent took her out today to look at houses. My wife had seen one on line and thought it was intriguing because it supposedly overlooks the Potomac. I am not good enough to link the listing but it is on Taft St in Arlington (AR7414727). Price is $925,000. Wife is still laughing about the house. It is a beaten up house with no air conditioning, unfinished basement and what looks to be original kitchen. They say it is a lot and a half but it is not even a quarterof an acre. The assessment is $580,000. The house actually faces the parking lot of an Arlington Co. rec center where cab drivers seem to hang out between runs. To see the GW Parkway, you would have to walk through a neighbor's front yard and then down a steep path to glimpse a view of the river. Doesn't anyone check these things. There is an open house tomorrow and I am going back with my wife as I can't believe it is that crazy priced.
Va_Investor,
I searched for Housing Affordability Index since you wouldn't provide your link (and I'm not Leroy by the way). Turns out it is a national number provided by the NAR. It is laughable that you think that has anything to do with whether or not it is a good time to buy for anyone here - especially after all the times you have dismissed articles posted by pat and contrarian referring to the national housing collapse. Please enlighten me how the NAR affordability index can be used to make more informed housing decisions in Northern Virginia.
We all know how much better off we'd be if we listened the NAR chief economist, Lawrence Yun, and his predecessor, David Lereah...
Wonder if any NAR employee ever thought "Now" was not a good time to buy?
I know some of you were sad when this house went under contract, but it looks like you can get a second chance at it :)
house
Jeremy -
I think VA Investor was on track, but she just mixed up the index title. NAR indeed publishes the Housing Affordability Index on a national scale as you pointed out. I think she probably meant to refer to the Housing Opportunity Index published by NAHB, which I have also seen referenced here from time to time.
HOI
The HOI publishes information for major metro areas nationwide and their online statistics go back to 1991.
They publish data for four major VA areas - Richmond, Roanoke, Virginia Beach and the Alexandria/Arlington/WashDC area.
The data in there is pretty interesting and does, to an extent, back up what we have conjectured on this blog. Our HOI is currently 64, which places us in the bottom quarter nationally. Syracuse NY is first with an index of 82.8 and, interestingly, White Plains NY (which I assume includes NYC) is last, with an index of 19.9. Next to last is San Francisco, which has by far the highest prices, but also the highest median income.
Looking at the historic data, housing in our area is much more affordable than it used to be, but is by no means at a 20 year high. Affordability was at its highest in 1991 and at its lowest in the third quarter of 2006. In terms of local affordability, we are about where we were in 2000.
Thanks HB - Now we have another chance at a unique business opportunity. Though I have to wonder what they found to drop the price so dramatically and add the 'as-is' proviso.
c,
Yes, I looked at articles and charts for the HAI and HOI. I did take a glance at the dc metro area but did not study it in any depth.
National numbers are often thrown about in here, to wit: If prices decline nationally, ours will too.
And often, there is no distinction made between different zips in our region.
I would have to think affordability here is better than 2000, but if it is at 2000 levels I don't see anything to complain about. From my standpoint 1998 - 2000 was a great time to buy (from a rental parity standpoint - as I don't have a crystal ball showing future real price increases).
To dismiss interest rates is ridiculous imo. Ask anyone buying CRE if rates come into play when valuing a property.
jeremy,
Your search should have pulled-up research by many private, public and non-profit orgs. Mine did. If you only want to cite NAR, could you explain ignoring the others that had the same conclusion? Never mind....I already know.
Hi all,
My wife and I rent a condo in Clarendon and recently we've started getting a lot of targeted attorney mailings regarding foreclosure. Just yesterday we received a letter (addressed to our landlord) that appears to be a foreclosure notice.
I've done some basic research, but does anyone has some experience in Arlington with foreclosures that can recommend a strategy to deal with this? I plan on calling our landlord tomorrow to find out the situation.
I would like to correct a mistake in my previous post. SF does not have the highest median salary, apparently that honor belongs to Bethesda.
The affordability/opportunity index ranking for Bethesda is somewhat higher than NoVA, which may make it a better investment than here, if you are buying for investment locally. Of course, a lot of factors would come into play, especially taxes. Income tax is higher in MD than VA. Property tax rate for Arlington is .00865, and for Bethesda it is .00899.
VAI - I would be really interested in HAI/HOI broken down by zip. If you do know of a chart, rather than hunting it down piecemeal, I think several others here would find it useful.
At a guess, parts of DC and PG would be most affordable, though I have no yen to live there. In NoVA as we have often remarked, prices are cheaper when property is further from the beltway, such as PW. Close in, I suspect the Springfield area is probably the most affordable, as well as townhouse clusters in the more "upmarket" zips.
Ben - I don't (thank Heaven) but I recommend you check out posted advice for similar situations on the NoVa city forum,
rental foreclosure
c,
As coincidence would have it, I was at a cookout in Bethesda yesterday. Very charming neighborhood of bungalows, capes and brick colonials 2 blocks from Wisconsin Avenue. I would have been very happy living there.
Many neighbors were present and the age range ran the gammut (sp?) from 20's to 80's. I did see a few tear-downs and expect this area to increase further in price.
Again, we seem to come back to location, location, location.
c said...
Affordability was at its highest in 1991 and at its lowest in the third quarter of 2006. In terms of local affordability, we are about where we were in 2000.
And it is lower than where it was in 2002 looking at that same data. Of course that data just looks at median home price, median income, and the interest rate. It does not consider home value in any way (and I don't know how they could). The fact is that the interest rate is at an historic low and if it ever goes back up again the HOI will go down with it. Twist the data however you all want, but I think we can all agree that a person buying in 2000 when we were last at this HOI level would be getting a better deal than a person buying at that same HOI today. So I don't see how this data is useful in any way to make a housing decision.
Jeremy,
Yes...let's not let the facts get in the way!
That's exactly the point Va_Investor. Look at the whole set of facts. You are clinging to "affordability" indexes because you think it says what you want (need?) it to say. You are not looking at the facts behind what data is used, and what is ignored, when making those indexes.
jeremy,
What facts and data am I (and those who compiled the data) ignoring?
Wage growth in certain communities far outstripping the average? Growth of employment centers? Revitalization and metro stations? Local unemployment? Population growth locally vs. declines in other metro areas. D.C. consistently being ranked in the very top tier for being attractive to business? High education levels of our residents? The top median income Counties in the Country?
I hear Syracuse is a great place to live. You could live like a King there (Buffalo, too).
ben
stop paying rent, line up a storage pod, expect to be tossed, start planning a new dwelling unit
Blogger pat said...
ben
stop paying rent, line up a storage pod, expect to be tossed, start planning a new dwelling unit
Second that. You've been lucky enough to get a clue beforehand. Don't waste it.
Start getting ready...
Is that the general consensus? Rent is due by the 5th, should I really stop paying starting immediately?
Obviously I need to talk to my landlord to get more details on the current situation, but aren't there some legal protections for situations like this? Doesn't any buyer have to give 90 days or something like that?
Does anyone know the law specific to VA in this regard?
Probably VA Investor would be best able to answer your question since she is a multiproperty landlord, and, I believe, a lawyer.
If she doesn't pipe up try this
link.
It has a primer on basic tenant rights with respect to foreclosure and an online chat link that lets you ask your question of volunteer lawyers.
Ben,
There is a matter of Contract Law. What you have is a "prospective inability to perform or anticipatory breach" on the part of your LL. You are allowed to suspend your performance until you receive adequate assurance (proof) that the LL will not be foreclosed on.
From a practical standpoint, I'd simply bail. I wouldn't pay this month if LL has a month's deposit.
There is some Federal protection for tenants in this situation but I don't know anything about it.
It's quite suspicious that these mailings are coming to the property address. Makes me think LL misrepresented the fact that this was to be a rental.
LL could sue you, but I doubt a judge would find it reasonable to require you to live with such uncertainty and the legal argument above is sound. I have not practiced in 20yrs, so don't take this as legal advice.
I'd be a little concerned about opening someone else's mail. Can you check on-line and see if a Trustee's sale has been advertised? If so, you can cite that as your source of info.
And, don't "freeload". In other words, don't stay for 3 months without paying rent.
Jeremy -
If you are interested in indexes that try to take home values into account, look over the zillow charts. They have them for individual zip codes.
People posting here have taken exception to specific zillow valuations (when they are trying to sell their house) but zillow gives detailed information on how they arrive at valuations, though their exact algorithm is proprietary.
Ben-
I think you are correct the most important thing is to talk to your landlord. After you have information from him/her it will be a lot easier to figure out what your best options are.
It was a bleak week for anyone looking for signs that the housing market is recovering. New home sales in July were at the weakest levels since the government began keeping records 47 years ago. Existing home sales weren't much better.
But in all that news, there's a number that jumps out: Almost one-third of the home sales were in all-cash deals. Before the housing bust, less than 10 percent of sales were in all cash, according to the National Association of Realtors.
NPR: Flipper Cash Propping Up Housing Market
Interesting read.
Ben,
I've told my story many times on here before - I was forced out of my rental in Courthouse in '07 and never heard from my landlord or saw my security deposit again.
bottom line is - plan for the worst and protect yourself.
call the law office too.
How about this house? Not listed on MLS:
http://washingtondc.craigslist.org/nva/reo/1924795076.html
Purchased earlier this month for $700K, now for sale at $799K, with no apparent improvements. I am sure that the new owner holding it for a few weeks is worth $99K.
Liv-
Not that it changes your story since housing is not up from late 2009, but the person has owned the house for over a year. Maybe they took down all of the ugly original wallpaper. I can see that adding some value.
Re: affordability
I think this also varies by local zip code. FWIW, I don't think most zips in Arlington are as affordable (at the same real income level) as they were in 2000. Same for quite a few of the NW neighborhoods in DC and probably elsewhere fairly close in.
Oops. I forgot it was 2010 already. Still...
Rates were 8% in August of 2000. We are at half that now. Arguably, affordability at prices twice the level of 2000 is the same. Then you need to take into account real wage growth (by zip? neighborhood? block?). Have we had zero inflation?
Many factors figure into the vagaries of price increases/drops in various neighborhoods.
If some want to say that "X" house or neighborhood is expensive in relative terms, we could go back and forth for weeks.
Va_Investor said...
Rates were 8% in August of 2000. We are at half that now. Arguably, affordability at prices twice the level of 2000 is the same.
Now I see the problem. You just can't do math. Your payment isn't half as much just because the interest rate is half as much. Put the values into your favorite mortgage calculator and see for yourself.
Ben: as Va_Investor noted, I believe there are some new federal protections. MM - perhaps they weren't around in 2007, when you had your experience.
Anyway, I don't know all the details, but you should definitely look into this before making any decisions.
oops,
You got me there. How would inflation and wage growth affect this 30% difference ten years later in time? In other works, what is the present value?
I used a 200K loan at 8% vs 400K at 4%.
I am math challenged. Any help from the board is appreciated.
http://franklymls.com/FX7424565 rambler in King's Park.
Sadly she's way overpriced it for what it is.. The kitchen "renovation" slapped a new counter on the original kitchen and then completely surrounded the eat-in area with built-in cabinets such that the only "eat-in" area is the counter-top. Definitely the cheap way to go about it, and not necessarily an improvement.
(in fact I'd want to rip it all out immediately). Gorgeous yard and patio, bigger bedroom windows than some, and they've mostly or fully finished the basement. Their furniture is making the space look a lot smaller than it is...
cara,
I did take a drive up there yesterday. I really liked the yard and curb appeal, but that kitchen/front room is bizarre! It looks more like an office for an at home business, especially with the conflicting front doors.
Also the swim club across the street could be a plus or a minus.
Me, I think I'll probably keep my eye out down closer to the Springfield business district (or maybe near the Whole Foods in WS).
The Hanover/Highland area is much more walkable -- the Parliament house is a 23, the Dana Ave house I mentioned Saturday is a 69 -- which appeals to the urbanite in me!
VA_I-
If you double the house price while having the interest rate drop from 8% to 4% and use the same down payment the mortgage payment would increase 50%. For Fairfax county the median Family income went from 82K to ~107K(this is from 08, but I doubt it went up in 09 as the unemployment rate doubled in a year). This is a 30% increase,
So mortgage payments went up 20% faster than wages and you also have the disadvantage that if you pay your loan off early you are getting 4% instead of 8%. So although affordability has improved considerably since 2006 affordability still looked better in 2000.
Mike,
you're right i believe there's been some new rules/laws, i hadn't pay close attention.
Ben,
definitely look into that, sorry for the misinformation. it makes my blood boil every time i see renters get screwed like this. good luck.
VA-I, your math is off. Most people do not finance the whole price of the house, so mortgage rates' being halved does not necessarily equate to the same reduction in monthly payment.
HB, in addition, both the 8% and the 4% are largely tax-deductible for most people, so buyers get more of a tax reduction with the higher interest rate, esp. if you are in a higher bracket.
Ace-
I thought about pointing that out, but the tax deduction ends up being very similar. You are paying 8% on a loan half the size of loan you are paying 4% on. So the total amount of interest you are paying is close enough that it isn't a huge concern.
Ace and hb,
Thanks for the help. If we accept the 20% as a general rule, it's still far less than the doubling or more thrown around here.
Also, I would imagine real wages in the expensive areas have outpaced the average. Just a guess, but one that has been documented (for N. Arl and Alex) by a different poster.
VA-
I agree mortgage payments have outpaced wage growth but only by ~15-20%.
I also agree with you that wages in the nice areas also outpaced average wages, but I think house prices in a lot of the nice places are still up more than 100%.
Either way affordability has gotten to reasonable levels, so if you are planning on staying a long time now is a decent time to buy. Slightly worse than 2000-2002, but much better than 2004-2008. I do expect housing prices to fall another ~10%, but seeing where we came from a 10% drop isn't that much and if you have a decent down payment ~20+% it shouldn't be disastrous.
So my general conclusion is that if life dictates now is the time to buy than you should go ahead, but if now is not the time to buy than there is no reason to try and buy early.
VA_I, but you are misinterpreting the CRT data about Arlington. His data don't show that, for a given Arlington resident living there over time, incomes have risen faster than normal. His data suggest instead that people with higher incomes are moving to Arlington at a greater rate than to other areas.
HB, good point.
Va_Investor said...
Thanks for the help. If we accept the 20% as a general rule, it's still far less than the doubling or more thrown around here.
So we agree, housing is 20% less affordable than in 2000 and not at a 20-year high? I don't know where the "doubling or more" you're talking about comes from, unless you're referring to conversations well previous to the current one.
housebuyer said...
So my general conclusion is that if life dictates now is the time to buy than you should go ahead, but if now is not the time to buy than there is no reason to try and buy early.
This I agree with (or else I wouldn't be going to open houses every weekend). I have also noticed that more people are becoming reasonable with initial list prices the farther we get from those 2006 comps they used to drool over.
newbie,
If you don't have kids you'll definitely do better on price closer to the Springfield business district.
(well you'd do better on price anyway, I just wanted to stay in the Lake Braddock, West Springfield or Robinson districts).
I find the walk-scores to be pretty inaccurate once they get above 20. They don't take buses into account, and really it's a matter of which things you want to have the option of walking to and how far you think is reasonable, as opposed to the choices made for you by walk-score.
cara,
No quibble on the accuracy (or not) of walkscore's scores. For one, they do "as the crow flies" math which is a problem when that's actually not walkable (e.g., over the beltway or a waterway).
And they also don't take into consideration terrain. Springfield near Commerce St. is much flatter compared to where the Parliament house is.
Re bus service, the lower business district is (IMO) better served by Fairfax Connector (particularly the 310 and the 321/322 lines). The WMATA express busses are great for commuting, but tend to have little (or no) weekend service.
I'm anticipating both visiting relatives without cars and also my needs if I age in place in this home.
But I'm with you that school district is much more important if you've got kids in school or want some resale flexibility.
newbie,
The "downtown" area is also much closer to hotels if relatives/friends want to stay nearby... The new Residence Inn is very nice, and is where my mom usually stays (cat allergies). Proximity to both an asian and a hispanic grocery store is also a good thing. (near the backlick VRE station). They're not that far from me, and yet just far enough that I never go.
Jeez Jeremy,
I refer to a published article about housing affordabilty and you go over the top. So it's a nationwide 20yr high. It's different here. Yes, I'll agree that regionally it's 20%.
Give me a *@#% community of like homes that you are looking at and we can figure out real wage growth and all the other factors that come into play.
I can tell you that our income did not go up 20% in real dollars over the past ten years; how about you?
Jeremy,
You never did give the "factors" that HOI failed to include. And I'm sure I had responded soon after I posted the "20 yr high" that I only glanced at the local region.
hb followed up citing the Hoi and regional data.
Let's not parse this to the point where you later claim that I mislead the entire board and keep dragging that out yr after yr.
Well I haven't been out of school for ten years quite yet, but my income has gone up over 50% from what I started at. Of course I've been promoted and switched jobs along the way. I think you need to compare salaries of the same position with 10 years ago, not what the same person makes 10 years later.
Let's not parse this to the point where you later claim that I mislead the entire board and keep dragging that out yr after yr.
I wasn't planning on doing that. I was just disputing the idea that "affordability" being at a 20 year (nationally) high meant it was a good time to buy. I did give factors that were left out by the NAR analysis, such as the fact that interest rates being at historic lows meant the likely higher rate in the future would hurt your home's "affordability" when you want to sell. I also said that, "a person buying in 2000 when we were last at this HOI level would be getting a better deal than a person buying at that same HOI today.", which housebuyer was nice enough to give you an example of how that is true.
Look, I'm not trying to pick on you or saving your posts to dig them up later like some people on here do. I disagreed with something you said and for the past two days we discussed it. We are now in agreement that housing is roughly 20% less affordable than in 2000 and not at a 20 year high, so I don't see the need to take it any further.
c, hb, jeremy, ace etal
city-data.com has alot of good info. You can look by city in nova.
VA-
Thanks that is a good link
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