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House Equity Loss of the Day - Hank Paulson's in Washington, D.C.
A cool mil.
Thursday, December 30, 2010
Northern Virginia Bits Bucket 12/31/2010
Posted by Harriet at 11:35 PM
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35 comments:
Apparently super expensive houses aren't as immune as some of the less expensive areas. Hank Paulson just sold the his house in DC. He paid $4.3MM in 2006 and just got $3.25MM Paulson lost $1.05MM on his house
Harriet I should have read your comment before posting. Opps. In case anyone wanted the frankly link to the house Paulson's house
HB, the second link is to another article on Paulson.
Here's the frankly link:
Paulson's house
He's definitely not the only seller in the stratosphere who took a hit. Here are all the 09/10 sales above $2 mill. using "washington detached" as search terms:
frankly sales over $2 MM
So that's where the rich and powerful folks live in DC. Right around the V.P.'s home at the Naval observatory.
;-)
45% loss
I saw this place, really weird layout,
i couldn't figure out if it was meant to be a quadplex or some sort of semi victorian boarding house.
it was in real rough shape, and had a really shite lot, but, the price was
approaching reasonability.
it sat some 67 days at the last price
tenants & landlords,
would an emailed notice of lease termination be 'official' enough? if only hard copy counts then there's a chance i get one more month...
tks!
MM,
Read your lease.
hb,
Knowledge of "super expensive" has been out there for years. Most people in this range can handle a million or two loss if they want to move.
A big new job will pick that up, otherwise assets are such that (although it sucks) it's no big one. None of us know what they made on other homes or stock options, bonus $$$, etc.
Va_Investor,
it only says "written Notice" and "Notice to terminate the Lease"
so i guess email counts?
VA-
I agree I am sure that Hank will be able to put food on the table. I am pretty sure his wealth was reported at ~$700MM, when he was appointed to office. Although the house sat on the market a long time, so I think this was probably the best he could do. So either his area fell 25% or he overpaid at the start. These houses have so few comps it could have been either.
Shiller leaves out 1990-2010 because, in his words, they were a "bubble." (He concedes including those years would increase his multiple from 15 to 16.5)
He uses 1890 to 1990.
So, he includes the Great Depression, but leaves out the last 20 years. Go figure.
MM,
I'm sorry. I thought the issue was the method of delivery.
Cotton and Silver for 2010. Who woulda thought?
MM,
oops. Reread your post. I'd say e-mail is sufficient if the lease doesn't otherwise specify. You do have "actual notice" in any event.
I used to post every so often and I haven't posted in a long while and this will probably be my last post in a long while.
@Robert
Some people thought it would. I've invested and been investing in silver since 2005. Although I don't plan on buying anymore right now. My guess is 33-36 peak with a nice correction to 22-25 sometime March-June next spring. I'll buy more then. If it doesn't correct, well I'll ride the bull until I'm ready to rotate sectors.
So far best investment of my life, way more than doubled my money. My biggest regret was not buying more at a rock bottom price in 2008 when I thought I would be buying a home in DC. Instead of saving the cash for a downpayment I should have bought more silver . . . but oh well.
I hope my 2nd best investment will be the house I recently bought. Not in DC though (still think it's too high). 57.5k for all brick, 2000+ sqft, .4 acre, late 60s, decent neighborhood, in the metro area of a major city. No major renovation needed, tile floors, move-in ready. Needs a little paint, but oh well. Sold in 2003 for ~125k, probably would have gone for 180ish peak price. In the mid 80s prices in this neighborhood were in the 70-80s. Same place in DC would be 300+. No comparison.
In some places, I think prices are pretty darn good . . . in DC, not a chance.
The really perverse aspect about it is that I'm actually hoping prices collapse even more. I could lose 20-30k and I really don't care. I still come out ahead vs. renting. In addition, if prices fall another 30%, I'll more than gain my lose back when I move up to a bigger house. I.e. a 30% lose on a 200k house is much bigger than 30% on a 60k house.
GTE811
Can you say where you are househunting?
Every now and then I look up in baltimore and I just get heartsick.
Beautiful victorians, Gorgeous row houses, Close to a surface rail, nothing over 100K.
I know baltimore City is F&%Ked up, but still,,,,
Sure, hotlanta. I'm doing a sabbatical of sorts. Hopefully, in a couple of years it will be dr. gte811i. We'll see how this works out . . . .
Homes are so cheap here, 5 years ago I would probably have rented. A comparable 4 bdr. home rents for 1k. I've seriously thought about picking up another house for 30k, renovating it and either flipping or renting. Though, I'm not quite sure I'll have the time for that.
The CS does not do justice to this town. If they include a 200 mile radius of the city it might be off 25%, but urban and suburban it's off at least 50-60% and if you look you can find things at 30% peak price. Strangely enough, the exurbs haven't fallen much. I also wonder if they include the bank foreclosure repossession price in their numbers.
I came this close to closing on a 3900 sqft, 1989, all brick, 2 story, 2 acre, beautiful neighborhood, with a pool house for 150k. Sold in '07 for 373k. I just couldn't do it . . . pool + little kids, further from research location, too big for my 1st place, etc. Plus no mortgage! 60k will be much easier to dump vs. 150k.
The price disparity between here and DC is ridiculous. I've run the #s and I could commute to dc weekly rent a dump 1 bdr and still save more money than if I actually bought a place up there. Of course, I don't think I would ever want to do something like that, but if my back is to the wall. . . .
If I need to move back up there, I can sell this place. And I'm not selling for less than 25k profit, otherwise I'll just rent it out for 1k. That would cover a good portion of housing costs in DC.
I bought this place @ an auction and I've gotten pretty good at spotting deals here. From everyone I've talked to, if you can't buy a place fix it up and flip it in 6 months for at least 25k profit, no deal. If you can't rent it out for at least 250/month profit, no deal (i.e. if you can't make positive cash flow on a rental from day one, no deal). I've seen plenty of flips and one could make some pretty good money at it here. The risks are pretty low too. Pick a place up for 30-50k, put 20-30k in and sell for 90-110k. I've seen some gone bad, but that is for places that should have been torn down.
Plenty of homes too. Every month or so the auction companies will auction off about 300-500 homes each. $20/sqft if it's dumpy, $30/sqft if it needs some renovation, $40/sqft if it's decent, and $50-60/sqft if it's posh. Auction homes generally go for 30-40% off their final listing price.
Like I said, I actually want prices to come down another 50%. So I lose 20-30k, big deal. That just means the place I came close on for 150k would be ~80k. I think I'll take that.
Sorry, I don't know much about Baltimore. I guess it just depends, but IMHO the entire DC area is still overpriced . . . but what do I know. If/when prices get back to late 90s or more accurately late 90s wage adjusted then I might change my tune. I don't think they are their yet.
In the hinterlands (Warrenton, Culpeper) maybe. I've actually seen a few places for the 1st time in about a year that I'd thought I'd check out if I were still up there. Just one or two. The rest of Nova, I don't think so. Incomes are up ~50% since 1998? --- nope scratch that. Check out
http://projects.nytimes.com/census/2010/explorer
Median incomes up at most 10-15%. Yeap. Talk to me when DC price are ~2000 prices and I'll reconsider. Until then, I'm not buying a bottom in DC.
Ace,
Read your post on the house which was taken off the market. I am not surprised. Thanks for the update.
Aussie Buyers warned against US Deals
My Favorite Line
"'Some of the properties being offered are in ghettos and you need a bullet-proof vest and an armoured Humvee to collect the rent in there,'' Mr Jenman says."
hey Tex, sounds like your description of DC.
Pat, yikes - the Aus $ is at almost parity with the US $. The last time I was there (years ago) the US $ was worth nearly $1.50 Aus $. I'm guessing they won't see many US tourists this Aus. summer.
Not my description. Check out Wikipedia's:
http://en.wikipedia.org/wiki/Crime_in_Washington,_D.C.
Seems odd that a page already exists for "Crime in DC." Wonder why? Seems topical....:-)
Note to self: You need to finish creating those Wiki pages for:
: Crime in McLean
: Crime in Fairfax
: Crime in Falls Church
: Crime in Rosslyn
: Crime in Alexandria
Tex
It's a city. look at the Per capita crime rate. 23/100,000 homicides.
Most of those are in the drug markets.
TN Why would you worry about creating Wiki pages for those jurisdictions when the crime stats are easily available for them and DC through the police depts. The real problem in DC is the heart attack rule. If you have a real medical emergency in DC it is highly unlikely an ambulance will reach you in time to get you to a hospital and most of the meds who run the ambulances are poorly trained. Look at those stats for DC if you really want to be scared.
"If you take out the killings, Washington actually has a very very low crime rate." -- M. Barry, Mayor of Washington, DC
Foreclosures hit high end out west
"Mortgage defaults are not just a problem of the poor. Sacramento's wealthiest residents are defaulting on their recent home loans at least as often as everyone else – and in some posh enclaves, more,"
http://franklymls.com/DC7475780
Gorgeous...
50% down from Asssessed...
GTE
Thanks for the explorer.
It kind of confirms my take.
I look at houses, and the rents don't make sense against the buy price.
I think that's unsustainable.
http://franklymls.com/AR7490303
down 30%
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