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Friday, September 17, 2010
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34 comments:
The Wall Street Journal
top stories in Personal Finance
10 Reasons To Buy a Home
Enough with the doom and gloom about homeownership. Brett Arends explains why owning a home is a good thing.
Buy a house in 2008 for $1 mill.; put it on the market in 2010 for a price 27% higher, with no description of any work done in the interim.
MM, I'd say if this seller gets her price, no toast here.
Peary St.
Ace,
That house needs some landscaping, it looks bare on the outside. Also the garage entrance in the backyard is weird.
MM-
I almost find the article laughable. They do a great job of looking at every possible advantage and ignoring the disadvantages. (e.g. if the economy takes off your house may go up in value. What about the flip if the economy stalls your house will go down in value...)
Also I laughed that they are saying over the next 40 years we will make a lot of households. I don't think anyone is claiming housing will fall for 40 years, instead we care about the next 1-3 years.
Ace-
Seeing that the old listing from 2008 had no pictures and said the house has lots of potential I assume it was in pretty bad shape. I could be wrong, but I assume the house got a pretty serious makeover.
Good point, HB, but shouldn't the agent have described those changes?
Jewel, yes, it looks as though there is still work to be done, but maybe the plan is to complete it before the sale.
Ace-
Yes the agent definitely should have commented that the owner spent $$$ fixing the house if they did.
how often do you see an agent successfully convince the sellers to accept a contract $200K less than the original price, within 60 days? not very often i don't think.
Ace,
no way jose re: Peary St house, or i'm toast.
Some very interesting maps from Brookings Institute comparing the health of various metro areas:
http://www.brookings.edu/metro/MetroMonitor.aspx
Folks here might particularly find DC's performance wrt housing prices interesting:
http://www.brookings.edu/metro/MetroMonitor/housing_prices.aspx
MM-
The agent probably said from the start that the house was worth 750K, but if the owner wanted they could list it higher and see if they got any action. 20% off in 2 months is unusual, but not totally crazy. Also seeing that there is no furniture in the house it is possible the couple already moved and was in a rush to sell the house
Newbie-
That site is interesting and definitely bearish on the DC area. I wonder where it got its numbers that the DC area is down since the 2009 and Q1 2010?
MM, you're right - doesn't happen often. HB, I agree about what likely played out - also notice that the owner paid very little for it many years ago, and in some sense may have had plenty of room to negotiate. (Though I'm in the camp that all sellers "lose" the same amt. of $ if their house value drops in the same way, regardless of whether they put/borrowed the money in the house versus put their money somewhere else--the seller's perception is what matters.)
ps could have been an estate sale - the heirs just wanted it sold, or an older person/couple need to move into assisted living, etc.
Ace-
I agree seeing that they bought the house 33 years ago the owners were likely elderly and I would not be surprised at all if it was an estate or they were moving to a retirement community.
Regarding the Peary St house - kind of a strange place to put a BBQ, and the owner had to be a trader with all that square footage of LCD screens.
http://franklymls.com/DC7416264
assessed at 279K sells at 130K
2BR 1 Bath
I find this listing humorous. The owner tried to sell the house for 375K as a regular sale in December 2009 (when the market was stronger). It has since become a foreclosure and the bank is listing it for 445K.
My guess is that if the owner couldn't sell it for 375K as a regular sale there is zero chance a bank will be able to sell it for 20% more as a foreclosure. I wonder what the bank is thinking...
HB, which listing did you mean?
Ace-
Whoops! I meant to attach this listing house
Not really exciting, I just find it funny that the bank is trying to charge significantly more than the owner was.
HB, agreed. The only thing that could possibly be rational would be if it was returned to the bank in bad shape and the bank fixed it up before selling, or if buyers are willing to pay a premium not to have to wait indefinitely to hear back on short sales.
I suspect neither of those accounts for it, though. Some people just don't understand or don't want to accept how markets work.
Ace-
I agree both of those could have worked. My guess is the bank is just charging too much. The house was bought in 2007 for 450K and they are trying to sell it for 445K. This area definitely fell more than that over the last three years.
HB
remember only hucksters say houseprices fell.
Catching up on some earlier topics.
Why all the fighting over Springfield re cara? I thought cara lived in Burke?
Regarding Montgomery County schools it is true that Blair's magnet program is much, much smaller than TJ. It's a school within a school. It's been shown that TJ draws students from the richest areas of Fairfax. Unclear if Blair's magnet program does the same.
According to Forbes Bethesda, MD is the #1 most educated town in America. McLean is #4. Potomac, MD #7. North Potomac, MD #19.
Remember also that with the exception of Langley, most high schools in Fairfax consciously have at least one elementary school with more diversity/low-income families. I don't know if Montgomery's richest high schools do that.
Ace,
You asked for whether Gray winning would affect home prices. I have sort of become convinced from reading this blog for a while and discussing demographic trends that DC probably will continue getting richer.
Many more households are singles or DINKs. As we agree, they do not all desire apartments/condos. But a world that is 50+% non-families desires more of them than one that is less than 50% non-families.
That being said a few articles recently have shown that Rhee was successful in courting people who previously would not have considered DCPS to enroll their children. White enrollment went from 7% to 10% and Latino enrollment went from 11% to 13%. Those are small changes but probably counter to what the trend line was from 1970-2007.
Washington City Paper on Rhee Meeting with Parents
Rhee A Force in Real Estate?
I guess we'll see who Gray appoints and whether that person continues the trend.
Locally, I think those trends are pretty interesting for Arlington. Could they get some parents to reconsider Wakefield HS as South Arlington communities re-develop (Pentagon/Crystal City, Shirlington, Columbia Pike corridor)?
TBW - Not sure what the basis is for your comment about FCPS high schools other than Langley "consciously" including at least one feeder school with low-income kids. I guess the inclusion of Timber Lane ES in McLean's attendance area (as opposed to Falls Church or Marshall) seems like a bit of a construct, but on the other hand Cunningham Park ES (in the Town of Vienna) is a natural fit for Madison HS and I'm sure there are similar examples elsewhere in the county.
Given Langley's location, it would take quite an effort to district low-income students into the school without creating either a very strange boundary or an attendance island. On the other hand, others have argued that Langley should have been kept small, and that FCPS is doing the bidding of Great Falls residents in Western Fairfax by building an addition to Langley and continuing to send their students to Langley when schools like Herndon and South Lakes are much closer.
http://franklymls.com/DC7419916
assessed 365K. sells for 265K
Question for the class: I'm considering buying a property in DC. It's a foreclosure, it got foreclosed on while it was being "renovated" (rebuilt after a fire), and checking with the city, I discovered that the guy renovating didn't call the open wall inspections, he just started installing the interior.
What's the best way to approach the bank and say "this house is legally uninhabitable, and your price, while reasonable for what it appears to be, does not reflect the fact it'll need to be gutted, inspected, and rebuilt" without saying something that will screw up the mortgage process?
TBW, thanks for the links. The comments on Barras' article were interesting.
My prediction is that the future of DC housing will depend on Gray's performance not just with respect to schools (Rhee or no Rhee) but with respect to administrative efficiency, crime statistic improvement, etc. These matter to potential homebuyers too, and as long as there are near-alternatives such as Bethesda and Arlington, the DC can't let the gap get too big.
The continued commuting nightmares obviously work to DC's advantage.
Also, per MM's links of several days ago, there has been a dramatic (IMHO) rise in the Wakefield SAT numbers, while the numbers for the other two Arlington high schools have stayed around the same or increased slightly. Anticipation of the development? Outmigration of ESOL families due to unemployment increase? Sheer chance? I don't know.
Dave, interesting question, but I don't have any knowledge to offer.
Ace,
That house on Peary was overpriced in 2008. I know the street. It is way overpriced. But that is the case with other homes in that neighborhood which started asking over $1M for a rambler and had to reduce their price below $1M and sat on the market for a long time. They are just delusional.
dc2,
Glad to hear you say that. As someone who doesn't know the street, it did seem the buyer overpaid at the time of the last sale, if HB is right that most of those improvements were done since the last purchase. And even if s/he did make them, I don't see $200+ worth of improvements, and the market has declined a bit since 2008.
All that said, I have to say that I have been wrong several times, especially with re-done ramblers, in thinking something was overpriced. I chalked that up to the fact that a lot of baby boomers with equity from another house but who are now looking for one level living (plus a finished walkout basement) don't have many choices in Arlington, so there's a supply demand imbalance. So it will be interesting to see if it goes the way of the other houses you have seen.
Ace,
At Wakefield Whites have good SAT scores 2 out of last 5 years, is that good enough for parents? Also they're the minority there.
White
2010
Reading Writing Math
Wakefiled 611 597 596
W-L 614 590 608
Yorktown 610 586 616
Arl 611 588 612
2009
582 537 567
616 586 610
611 589 606
610 582 603
2008
616 598 588
610 591 600
601 592 603
605 592 601
2007
563 548 566
611 599 597
606 593 605
602 589 597
2006
583 556 562
605 586 593
597 593 595
598 587 591
linky
MM, very interesting numbers. Thanks.
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