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Tuesday, September 14, 2010
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45 comments:
Another 10 years and 20 or 30 thousand price drops of this size and the house may sell. I don't know what its actually worth, but do find it annoying that I get a update everyday saying the price is a dollar cheaper
house
We sold our home in Northern Virginia and just moved to the Richmond area. We are renting now and are going to build. A question for those who follow rates closely - any thoughts on where mortgage rates head in the next six months? Considering paying the 1 point necessary to lock in at today's rates for up to 7 months. Thanks for any feedback on this!
hb... wtf? I haven't seen drops like that before. That's just bizarre. What do they think this is, The Price is Right?
nic-
Sorry to not give a very useful comment, but none of us have any idea. Mortgage rates tend to follow the 10-year treasury rate, and if any of us could predict treasury rates we would be very very wealthy.
In general rates will likely go up if it starts to look like the economy is strengthening, but they will fall if we start heading towards a double dip recession.
The only useful advice I have is that if you really need rates to be in the 4.5% range you should pay the point, but if you are fine with the chance that rates may be 4% or 5%+ than its a much harder call.
Kevin-
I assume the buyer told the agent he/she doesn't want to drop the price, but the agent wants people to get daily reminders about this house... I agree the person agent is being really annoying and this would make me not want to deal with the agent.
Well at that price, you're right, they'll need to do 20 thousand more daily one-dollar drops before they start luring offers. Frankly, I think that kind of childish pricing strategy will just chase people away. Who wants to go through a series of back and forth negotiations with a seller like that?
HB,
I thought Frank had fixed that. I recall seeing a blog post that said that the price change had to be at least $500 for people to get alerts about it.
Redfin has the same issue. I emailed them about it; their response was that people can tell from the listing history that this game was played, but I still find it annoying!
hb,
It is an annoying tactic but it's kind of a cute house in it's own way. The renovations may be more taste-specific than they think they are, but if you only needed a 2 bedroom place, no basement, I could see there being a price at which this house would be a good choice, not that I know the area....
Cara-
I agree I can see some people liking the house. I actually have no idea what its worth, because it is so far off what I am actually looking for. I mostly was just commenting how annoying it is that the agent is lowering the price $1 per day so I keep getting updates on the house. I really do need change my redfin updates so I don't get so many properties I have no interest in.
Although I know most of us already expect home prices to fall some over the short term, I figured I would post this article. housing prices to fall
The CEO of capital one (one of the smartest/best run banks) was saying that he expects housing to fall and is positioning capital one's investments based on this. The reason that this is important, is capital one has major operations in this area and a lot of their loans are also from this area. So I assume his opinion is based on more research than we have done.
Although as I said this is just reaffirming the opinion of many of us that prices will fall over the winter and into next year.
housebuyer,
the house went UC.
expect more agents to follow such genius marketing innovation...
Fairbank:
Housing falling nationally does not equal housing falling locally.
Also, note the reason for his prediction for the fall in housing prices: foreclosures.
The foreclosure crisis is waning locally, down by nearly two-thirds in Fairfax County from the peak.
Housing falling nationally does not equal housing falling locally.
They are not mutually exclusive.
Fairfax County, VA
Real Estate Market Statistics
HB,
Bankers are the ones that allowed the whole financial crisis to begin in the first place. I'm more inclined to believe that a bank admitting prices are poised to fall is a great counter indication.
My $0.02
Ace,
how about this bidding war in Penrose? 104 FENWICK ST
granted it's not Lyon Village but shows strength in this neighborhood.
i declare S Arl is not toast...
WSJ's take on the nationaly foreclosure tsunami.
no, it won't hit NoVA.
MM-
I sure hope that doesn't happen... Although at least that house will stop showing up :)
Robert-
Fairbank said inventory is very high due to foreclosures. Sure foreclosures are winding down here, but they are definitely still around and inventory is high and rising, so I think his points hold locally also. Either way I know you claim that DC can rise while everything else falls, but historically this just hasn't happened. I agree we could fall less, but if you look at DC house prices the directional moves have been exactly the same here as across the country.
Newbie-
Thanks. I actually only get updates from redfin. Maybe I should switch to getting them from frankly instead.
hb,
I think it sold for too much considering how busy annandale road is in that area--it is stop and go at rush hours with cut-through traffic.
I think you should post a comment on the listing about the ridic price drops. ;)
mytwocents-
Not all banks should be treated the same. I agree there were plenty of idiot bankers (Lehman, Bears, Wamu, Indimac, AIG, Citi...) But there were also several very smart banks (Goldman, JP Morgan, Cap One...)
Over the past 15 years Fairbank has shown that he knows how to grow a bank from nothing to a top 10 bank while keeping risk controls very tight. He had everything correctly positioned so that loses during the recession were very small and he was able to use it as an opportunity to grow. In general I trust his opinion
http://franklymls.com/DC7381793
assessed at 403 sells for 245K
4/2/1 Semidetached
not where i want to be but a good deal
hb,
By inventories being high and rising I take it you mean nationally again... They're almost perfectly flat right now in NoVa, even out in PWC.
Cara-
I was thinking months of inventory. We are getting to the point where of the year where sales and inventory should be falling. The fact that inventory has not fallen as sales fell (will continue to fall)causing MOI to go up.
Wow sorry for the English in my last post. It appears I am particularly bad at using grammar/typing today...
hb
the only reason JPM and goldman are standing is paulsen bailed them out in the greatest act of treason of any public official.
the AIG bailout was entirely to bail out goldman and paulsen gave JPM billions
theyare still all bankrupt
MM, cute house, nice neighborhood, short commute.
I think we should all send a crisp new one dollar bill to the buyer of HB's another day, another dollar, house, to thank him/her for putting a stop to those nuisance alerts.
Any predictions on the outcome of the DC Dem. mayoral primary, or on its consequences for housing?
pat-
I think we should agree to disagree on Goldman needing the bailout money. There have been plenty of reports from Goldman and the government that Goldman had its AIG risk under control. Although I am sure you can find many reports saying Goldman needed the money so arguing will not really get us anywhere...
Either way if you want I can change the list of good banks and say (Capital one, US Bancorp, Bank of New York Mellon...) The main point was not every banker in the country has no idea what they are doing. Sure as a whole they are greedy and clueless, but there are many very smart people in this industry. I personally think Rich Fairbank is one of them.
MM,
Ah, memories. The first house my wife and I looked at with a Realtor was the mess across the street on Fenwick. (http://franklymls.com/AR6980929). We liked the location and potential, but at the time couldn't swing both the purchase and the immediate renovations needed (no kitchen remaining to speak of). I'm sure whoever bought is overjoyed that the place across went for $575k after they bought last year for $385k.
Per the first house in the bucket today, the one picture that grates me is the main bathroom. They took up so much space with the monster tub that most people almost never use, and left only enough room for a crappy triangle shower. Awful decision, IMO.
I'm sure many people have noted this previously, but "Rich Fairbank" has to be a pseudonym for CapOne's CEO, doesn't it? :-)
HB
2006 was the ultimate example of greshams law.
the fols so drove the market that even the cautious were pulled over.
the I Banks went mad on CDS and derivatives, the regionals went nuts on C&D loans.
only the private banks stayed clean.
Goldman was hedged on AIG they had paulsen at treasury. The greatest hedge of all.
but this is a chat over beer.
9/14/10 11:17 AM
Blogger MM said... WSJ's take on the nationally foreclosure tsunami.
no, it won't hit NoVA.
I agree with that statement right up until Tuesday November 2, 2010, about 11PM EST.
After that, things are probably going to change in the housing, financial industry, and corporate America.
Change I said. Not a "better" or "worse" prediction but I will bet a dime to a dollar that the headline for the WSJ on Thursday 11/04/2012 will be more about the sudden change in the market than the election 48 hours previously.
There are several hair triggers in the financial sector that are going to trip if there is a change in either house. Seen it before, know the signs. Already got the portfolio prepped.
Election + nervous stressed investors is never a good mix.
FWIW.
Fairbank said inventory is very high due to foreclosures. Sure foreclosures are winding down here, but they are definitely still around and inventory is high and rising, so I think his points hold locally also. Either way I know you claim that DC can rise while everything else falls, but historically this just hasn't happened. I agree we could fall less, but if you look at DC house prices the directional moves have been exactly the same here as across the country.
DC has the highest Case-Shiller number since 2000: 185.77. So, obviously, something is different here.
As an aside, if NOVA were counted separately, what do you think the number would be?
Directionally, sure. If you tell me nationally prices will fall 20%, I will agree they will fall here. 10% nationally, not sure.
One more question: foreclosures matter more or less than the elections in November? I think you know what my answer would be.
Any predictions on the outcome of the DC Dem. mayoral primary, or on its consequences for housing?
That's funny.
TN,
Markets anticipate events. They've priced in a Republican win in the House and a 50-50 split in the Senate. If you are predicting that Dems will hold both houses and that will cause the market to crash, then I might agree.
Robert said...
DC has the highest Case-Shiller number since 2000: 185.77. So, obviously, something is different here.
The Case-Shiller number was 190.00 in September 2008 according to the data Harriet has posted on the main page of this site. It was much higher than that during the peak bubble years.
Robert said...
As an aside, if NOVA were counted separately, what do you think the number would be?
The number itself doesn't matter - what matters is what it would be compared to the NOVA number by itself from during the bubble. It has always been higher than the DC region as a whole. That doesn't say anything at all about whether it is overpriced or not.
Robert-
I agree that things are different here. I haven't tried to say they aren't, but I think this just means that the size of our moves will be different not the directions. Although we will definitely find out over the next few months to years.
Ace-
Amazingly enough it is not a pseudonym I have a handful of friends who knew/worked with him when he was a consultant in the 80s and early 90s. So at least his name predates his banking career
Jeremy,
True. House prices in NOVA corrected from the easy credit days. I've said that.
Robert,
re my question: "Any predictions on the outcome of the DC Dem. mayoral primary, or on its consequences for housing?"
and your response: "That's funny."
Not sure why - I didn't intend it to be funny. Here's one opinion I've heard - Vincent Gray will will, the city will move backwards, especially with regard to school progress (because he won't keep Michelle Rhee or she'll decide to take an offer elsewhere), thus making the district less desirable for home purchases.
"will win", that is.
Ace-
If DC school system starts to go backward I can see that hitting housing prices some of the less expensive areas in DC. I don't think it would have much impact on prices for Georgetown, Dupont... or the areas that are trade offs for Arlington. Most people in those areas send their kids to private schools.
Ace,
Is there any evidence that after Michelle Rhee came to DC, the housing prices increased, or at least kept their value in the downturn? I think the bad rep of the DC school system is such that, it will take too many years for any significant, sustained change, even if Rhee stays. So I think the Rhee impact on house prices would be minimal.
The elections would matter for other reasons, for instance, depending on who is very tough on crime. Is it possible for a new Mayor to change the crime rate in DC as Giuliani did in NYC? I doubt it.
tedk,
I think a key problem with answering your question is that no one knows what the current state would be in the absence of Rhee and others in the Fenty administration, and another is how to control effects of other variables. Certainly most DC values have held up a lot better than those in many other areas, e.g., Prince William County, in the last 3-4 years. But several different factors could account for that.
Tedk, you're asking for a bubble-controlled analysis of her impact on the District. You could earn yourself a PhD in economics if you can prove it either way. Everyone knows she cleaned up the worst school system in the country. Her departure will be a huge loss. Though I'm sure the teacher unions are salivating.
maybe fenty can run on the GOP line.
does anyone have a source of data on vacant housing units in the MSA?
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