Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
From Bloomberg: U.S. Home Seizures Reach Record for Third Time in Five Months:Bank repossessions climbed 25 percent from a year earlier to 95,364, the most since the Irvine, California-based data provider began keeping records in 2005. Foreclosure filings, including default and auction notices, fell 5 percent to 338,836. ...Default notices are falling while seizures rise because lenders are trying to control the number of properties that enter the foreclosure process, RealtyTrac said. That doesn’t mean more owners are catching up on their mortgage payments, Sharga said.
newbie-I consider the fact that reposessions are rising as a good thing. The number of homes that are severly delinquent has been rising for several years, because banks are not selling houses as quickly as people are becoming delinquent. It seems that finally banks are picking up the speed of selling these houses. It will still take years to sell them all at the current pace, but at least it is a start.
Here's a quote from Sharga that backs up what I've been saying about job losses and foreclosures:Sharga said emerging foreclosure markets include Boise, Idaho; Provo, Utah; Portland, Ore.; Joliet, Ill.; and Fayetteville, Ark. "Follow the unemployment numbers and you'll be able to track it," he said.If we have job losses, we'll have foreclosures. It's pretty simple.
Robert-I agree that unemployment is the most important reason for foreclosures. I also think that unemployment is still fairly high in NoVa compared to historical levels. We are obviously much better off here than almost anywhere else, but unemployment has been over 5% all year. This is basically twice the rate we saw during good times 2009-2010 unemployment So I although I don't think we will have a wave of foreclosures, I do think foreclosure levels will stay high and continue to pressure housing prices particularly if the government stops trying to support the market.
If the pig was in the python before, and I think that was an apt description, the increase in repossessions is one of the vital phases of digestion.So, in essence, I'm agreeing with housebuyer. This isn't bad news, nor is it unexpected. It's just a reflection on how bad things really were. Of course, that's speaking at a macro level. At an individual and anecdotal level, this is pretty awful for a huge number of people.
The Anon, I was reading the entries from the old thread that you posted. Among all the deletions (which I usually suspect belong to Contrarian), I was surprised to see so many TBW deletions.Sure, its one thing to make a rash comment, regret it, and delete it, but thats not what he did. It appears he deleted everything.I know I dont post here much anymore, but I have to ask, did something happen to TBW? Does he still post here from time to time?
CRT-Yes TBW still posts here on a pretty regular basis. Perhaps not as much as a year ago, but at least a couple of days a week. Usually when he deleted everything it was related to schools. Those arguments sometimes got heated and often ended with several people removing most of their posts. Although it appears the post you are talking about was not in reference to schools
HB,I think you need new job losses or a large spike in interest rates. A spike in short-term rates would hit those that are floating with ARM's.Unemployment has remained flat. People have already lost their jobs in the recession, particularly in retail, construction, real estate and tourism. Those job losses along with the subprime meltdown (mostly washed out) caused the existing foreclosures you saw peak in Fairfax County in mid-2008.I'm not saying it can't happen, but the job base, after shrinking for a couple years, is growing.Still, for the bears, November will have an impact and I can't parse any scenario that is positive for NOVA. This could grind our job growth to zero. But, like I said, it needs to go negative in a measurable way to cause significant foreclosures.
help me out here, folks, what's the appeal of this $645K house? Is it really on par with this house ($7K more) and this house ($4K less)?is it attached garage? is it location? and DOM was 4!
Robert-I am pretty sure that short term interest rates are going to stay at 0 for at least a couple of years. So I am not really worried about people with adjustable rates. Although the unemployment rate has stayed constant there are still lots of people losing jobs. Its not the same 5% of people, instead there is a decent churn of people losing jobs and others finding jobs.I agree we will not have a wave of foreclosures, but instead I think they will continue at an elevated rate. I fully agree we will not get close 2008 levels of foreclosures.
MM,Not an expert on the area, but the prices on the two you posted good links for (target and -4K) are in spitting distance, and they're quite similar from my uneducated perspective. Decor on the cheaper one looked a little nicer, but that's not something that should be a factor. So I'd chalk it up to location and that being 'in the ballpark' of appropriate sales prices.
Robert said...I think you need new job losses...Like the Exxon Mobil HQ closing discussed earlier this week, or all the Lockheed Martin executives being let go announced last week? The Defense budget is shrinking, and all the local contractors are feeling it. Lots of money originally planned to be spent in 2011 has been pushed to 2012, and that has slowed hiring below natural attrition rates at least at my company and Lockheed for sure. Did you see today's article that they have postponed building 1 of the 2 LCS ships from next year's budget? That affects more than just the shipyard - lots of software and hardware goes into those ships and their mission packages.
LCS and JSF cuts article
MM -I posted in the thread last night, but am still curious. Can you tell us where you got the SAT stats for the area high schools?Thanks,Liv
MM, the second link goes to the same house as the first.I'll sound like a broken record (broken CD? broken iTunes download?) here, but the assessor's site is the first place to go. When the sites show a $40K+ in assessed value (favoring the first house over the house at your third link (Edison)), that provides some clues, though these tell only part of the story, even if they are accurate. The Edison house is 15% smaller. Although it may be in slightly better condition, it doesn't appear that a lot more has been invested in it (e.g., both houses have old kitchens). So I don't think it's odd that they have similar selling prices.
MM, also, notice that the land value is higher on the Fillmore house (by quite a bit) even though the lot is smaller. So there is a neighborhood premium that won't show on photos. (of course, we've talked before about busy streets, etc., that aren't reflected in Arl. assessments).
The Fillmore house is in a great location for commuting to Georgetown and Maywood is really pretty.
Liv Sining,It's from a couple of posts on another message board. The posters didn't include links to FFX or MoCo scores. I found Arl scroes myself.
Xpovos, Ace,this is the comp at $7K higher
CRT -- I dont know, but that is a good question.Like HB noted, TBW can get a little testy when discussing schools, but this was not a school related thread. Looking around, it appears that there were a number of similar threads (all non-school related) where he did the same thing. Since TBW is still a (semi) regular poster, I dont want to speculate for now. I will let him explain his motives. So whats the deal TBW?
MM-The house that was 7k higher definitely looks a lot nicer, although it has a lot less land. Perhaps the lack of land explains why the nicer house didn't get a huge premium. I agree with the earlier posters that the houses that were 4K apart did not seem that different.
should i jump on this with the latest $40K price cut? would be a stretch but doable...
MM-I think it looks pretty nice. Although it looks like it might need some work. Most of the appliances look pretty old, so I wouldn't be surprised if they didn't do other maintenance. So if you think paying for it will be difficult make sure to account for extra costs associated with this. I also don't know Arlington prices well enough to know if this is a great deal or not.
MM, the teal bathtub is kinda awesome. Too close to 66 for me but I am slightly psycho about that.
MM,Overall I like the place.The kitchen looks to be nicely updated. It also appears to be a larger 3/2 than the standard because of that bump out. Also, there's a nice deck out back.Drawbacks would be proximity to Washington, Blvd - you'll get road noise but nothing terrible and it'll slow down considerably at night. You're also right on what I consider the outside range of walkable to the EFC Metro stop. And both bathrooms could probably use make overs.Coming in at $619k though, that's just a smidge higher than what I peg these homes for - the mid to upper $500k's.My $0.02
HB, MM,The 6th & Piedmont area is less desirable (unless metro access is high on your priority list) compared to Maywood. There are apartments in various conditions, run-down houses as well as nicer ones, and non-residential buildings near there. I think that (and the 1987 kitchen in that house), no garage, and small lot, all contributed to the price's not being higher.
Also, the Piedmont house is smaller than it looks (1200 sq. ft.) and appears not to have any basement.
MM, re: the house near Wash. Blvd., it appears to me that the only thing they did in the kitchen was replace the countertop and clean it up. I agree with HB about factoring in the reno. costs. Also, do you need/want a garage?
I like the neighborhood of the Wash Blvd. house personally. I think the house has nice curb appeal (compared to some in this range).Overall, I'm in the "eh" category - nice but not really great for the price.
It appears upon closer inspection I was hoodwinked by the granite. That appears to be the only significant kitchen upgrade.Still, it's a nice place, probably 8-14% overpriced.My $0.02
MTC, I'm sure if you had gone to an open house you would have seen it. I suspect the refrig. is the lowest end stainless they could have bought in the last few years; the stove may be newer but why not match the appliances?Here's one I'd be interested in your opinions about: price? potential vs. tear-down? Woodmont
Ace-I have no idea about the price (I don't follow the area), but at that price I think it would be hard to make money as a tear-down. As a tear down are you thinking they would make one ~$2MM house or split the lot and make two ~$1MM houses? Either way I think the cost of making the houses, will really eat into the profitability.With a little work I think the house could be very nice on a good location.
HB,There is a CNN article today about exactly the kind of commodity "price shock" (potentially stagflation) you and I were discussing last Wednesday.article
Ace,That home is a bit bigger than what I've been focusing on. That said, it has a lot going for it. 5 bedrooms (though I would guess 1 or 2 are in the basement). It's also a nice semi-secluded area. I imagine spout run is busy during rush hour but probably no where near the extent that GW Parkway is and you have a nice buffer of trees.Again though, I don't have a good frame of reference for this part of 22207. I see the home values as being too high, and the location too remote, for group rental purposes. So that limits your rentals to families. And if a family can afford $4k/month to cover that mortgage they'll likely just buy. So the rental comparisons I like to consider begin to break down and I don't get a good feel for the valuation.I would guess though that this compares favorably to comps.My $0.02
HB,What I intended with my question was whether, even with $$$ invested in the house, do you think it would ever be pretty? The stagers did a good job, but it appears to me that the family who lived there didn't put a dime into it in 10 years, so it needs a lot of expensive work (all the bathrooms are original, and very ugly; it has original windows, cracked walkways, awful landscaping, etc.) You might be ahead to start over. I'm not sure if it can be subdivided - it's zoned R-10. MTC,I'm not a RE investor, so I am interested in it as a SFH rather than to rent to someone. I'm not sure the neighborhood zoning would permit a group home anyway. There is some noise from Spout Run even on the weekend. It's also a little dark due to the trees and the house across the street's being perched on a hill, blocking some sun to the house.
Jeremy,RE: Job lossesYes, I did see those reports on Exxon, LMT, and the LCS. I would offer up ObamaCare (run out of HHS), FinReg, and VeriSign as offsets. I'm not saying it's one-to-one. I'm just saying it's a mixed picture right now.
Ace-I don't like the outside very much. So there isn't a whole lot that can be done about that. The rest of the problems can be fixed, but as you pointed out it will be pricey because there is a lot to do.Jeremy-That is a well written article. I personally don't think it is a likely scenario, but it is one to keep an eye on. It appears to be based on the assumption of a weak dollar, which I think will only happen if the global economy strengthens. The author says the dollar is falling, but this has only happened since July as the economy started looking better. There are a lot of other reasons I think it is unlikely commodities will start having significant increases, but even if this is an unlikely scenario it is good to consider it and think of what the consequences would be
Robert & Jeremy-I agree that it is a mixed picture as of now. If the proposals to cut contractor budgets by 10%/year actually happen it will not be mixed. That would be very bad for our local economy. I don't think we will get much clarity on these matters until after the elections.
Ace, how would you use tax assessment to evaluate an un-updated house? like the ones you & i last posted?
Contrarian said...He is simply making sh*t up.OH REALLY? Did you not say this:__________________________________"Contrarian said...The Anonymous, are you naive enough to believe that at this time next year the market will not be lower than it was back in March (2009)?9/30/09 11:33 AM"http://novabubblefallout.blogspot.com/2009/09/northern-virginia-bits-bucket-9282009.html#comment-2463858820118826913___________________________________
contrarian,I don't think The Anonymous is an "internet predator" just because he quotes old posts. You say some pretty outlandish stuff sometimes, and he is just showing the new people your track record. If you would actually admit that you are wrong more often than you are right then maybe he would cut you some slack - but apparently you'd rather delete everything and try to hide that track record in hopes that some new readers might take you seriously for a month or two.
Ace You know that neighborhood is full of people from The Fellowship. Their headquarters is at the end of 24th St. and they are slowly buying up many of the houses in the area.
Reecon,No, I didn't know that. Thanks for the tip. I just looked them up on Wikipedia. They would probably kick me out of their neighborhood...MM, re: your question - see my earlier posts on how I look at assessed values. You may also want to look up Arlington Co's description of their process. Basically, the assessed value of a given house on the market should reflect the average selling price of the house in the neighborhood. So if the house is in worse than average condition (compared to those that sold during the assessor period), the assessed value is probably too high. You could estimate how much the improvements would cost to bring it to an average level and discount from the AV to get a rough estimate of current FMV (taking into account any changes in value since the assessment period eneded, plus/minus the values of factors you think Arlington has failed to take into account in their broad brush approach.
I should have typed,"Basically, the assessed value of a given house on the market should reflect the average selling price of the houses in the neighborhood, of comparable size and lot size, # of BR & BAs, garage or not, basement or not, etc."
Reecon, the plot thickens. Here's a 2003 article on the Fellowship's presence in Woodmont and some neighborhood disputes. Fellowship
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