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.
MM, VA, Reecon-My guess is that there will just be fewer sales this year than the last year or two. I agree with you, that there are always people who need to buy and sell, but I think this year will have less voluntary buyers or sellers than 2009-2010. A lot of buyers and sellers who had been waiting for the markets to stabilize finally decided to buy/sell in these years. Many of these people had been waiting several years. Sure there are still buyers and sellers who have been waiting a long time, but I think there are fewer now than there were a year ago. I expect volume to remain low going forward as a higher percentage of sales are people who have to buy/sell. I also think it will be another ~12-24 months before a significant amount of new inventory is created. There were almost no new major projects started in 2008-2009, but a lot were started in 2010. So I think inventory will likely be tight until these come on to the market. Although inventory is tight I don't think buyers are going to rush in and bid up properties. Prices have not moved much over the last 2+ years, so few buyers are worried about being priced out forever...
housebuyer,I agree - on the premise that you're referring to local not national.in the meantime, somebody rushed and jumped on this beautiful house.and it's still not me :)
http://franklymls.com/DC7485116down 40% from Assessed.Those are market clearing prices.
MM-Yeah I saw that house too. It is amazing how quickly houses sell if they have shinny wood floors :) That house is a little far from the metro and near Rt 50 for my taste, but was a decent size at a decent price
housebuyer said......It is amazing how quickly houses sell if they have shinny wood floors :)...interesting observation housebuyer. does requiring people remove their shoes create some kind of false sense of a higher value or even intimacy/connection to the property? i've only seen one other home with such request and it also went UC after first OH.
if a home was apparently bought in cash (i.e. quick closing) how much of an additional discount, if any, would you say the buyer got, all else being equal? 3%? 5%? or 10% or greater?for example, this house ?tks!
MM, That appears to have been an estate sale purchased by an investor. I'd guess in this situation a discount of 10% or more would be a possibility.Looks like a good deal to me, although I don't know the area. I like that attic - it has "dormer with a master bath" written all over it.The house doesn't seem to need alot of work. Anyone could probably move in now.A three week close is not that short a time period. I had 9 days recently with Christmas in the middle (and was able to get a loan closed).
MM-If it is an estate sale I imagine it would depend on the estate. I think there could be two places where the estate would be willing to give a discount. The first is they are probably less willing to let a house sit on the market. The estate probably does not want to pay the upkeep while waiting for a sale. This could be important, because the heirs probably do not know the market and just want to sell the house. As for a cash discount, I would think given two offers people would usually be willing to wait an extra couple of weeks for a 1-2% more money, but I may be wrong.
I'll add a caveat. Everything depends on the motivation of the seller. If it is an estate sale, many heirs just want it done and are willing to take less. All of it is profit and they may not have the resources or desire to fix-up or carry it. As-is, cash sales take away alot of hassles and uncertainty. Money in your pocket in 3 wks is persuasive.
hb,Our comments crossed in the "mail".I've been on both sides of the estate sale situation. I wish I could turn back the clock 20yrs and purchase my grandmother's lake house! It was very cool and very cheap.
Interesting that the house sold so for little, and my guess would be Va_I is right about a cash investor purchase. It's a little too near the hospital and the Highview Park neighborhood, for a lot of buyers. Although the house is neat and clean, there is a LOT of updating and probably structural/systems (e.g., new roof, HVAC, windows) work that needs to be done, based on the photos and description. If it were in another neighborhood, I would bet that it would be torn down and replaced with a $1.5K McBigHouse (not quite McMansion). Maybe it will be somewhat updated and rented.
What's interesting is that it was listed at such a high price initially, if the heirs just wanted to get rid of it. Maybe they began by being a bit greedy (the classic case of a non-updated house with an asking price for an updated home, as we discussed earlier this week) then getting somewhat desperate/tired of the hassle, when it didn't sell after a price drop, and winter set in.
ps -- Just noticed that it's a 2 bedroom, 1 bath home. I'll change my prediction to a tear down. If they had offered it at $525 or so initially, I'll bet a first time buyer would have swooped in long ago.
housebuyer said...... As for a cash discount, I would think given two offers people would usually be willing to wait an extra couple of weeks for a 1-2% more money, but I may be wrong.that's exactly what i'm wondering. but in addition to a faster closing, a cash deal also means no financing contingency so there's also less uncertainty there.
Ace,i'm also 100% certain it'll be a tear down.
MM and Housebuyer,The house on 2nd street is very close to me. I think it was a good deal for the buyer - the kitchen could greatly improved if they knocked down that wall between the dining room\kitchen and created a breakfast bar.I do think this neighborhood is one of the better priced neighborhoods in N. Arlington. It lacks the curb appeal factor. But it's right next to Bluemont Park which is great to have so close by.Being that close to route 50 was a fear for me too. Once the leaves are on the trees, there's very little road noise. However, get any closer to rte 50 and it's a different story :)
Out of curiosity how much do sellers care about having a financing contingency. When I end up buying I am not worried at all about getting the financing. If sellers would be willing to accept slightly less ~0.5-1% I would definitely remove the financing contingency. Do you think most sellers would go for this or do you think most sellers just ignore the financing contingency?
hb,I pay alot of attention. Appraisals are a crap shoot and can be extraordinarily low. There is some "rule" with FHA that you are stuck with that appraisal for 3 months.It's clearly worth more than a percent or two to me to not have a financing contingency (as long as the appraisal contingency is gone too).I will look at your financials to see if you can pull off a loan with a "problem" appraisal. I don't want any "back door" out.When I buy, I can show cash (bank statements, etc). I always get a loan but can close cash if it comes down to it.
Jewel,I agree it's a great neighborhood and a good price point.I also see that house as very similar to something MM posted last week where they wanted $620k and I predicted it was overpriced by about $80k.I think these brick 2/2, 3/2's are worth between 480-540k depending on their condition and precise location.Personally, I like the 2nd street location better than the 16th road location (the coveted 22207 zip) because you're so near the park and don't have to hear ambulances at all hours of the day and night.My $0.02
VA-Thanks for the indication. It will still probably be 6-12 month until I buy, but the estate sale questions made me think of this.
HB,Are you really going to pay extra for a house if it doesn't appraise? Isn't that what you're doing when you remove the financing contingency?You're telling the seller, "this offer is good regardless if I get financing or not." That seems risky to me as a buyer.My $0.02
HB, in the estate stale, it's likely that the investor bought without an inspection contingency. Given the state/age of the house, that probably gave them another x% advantage over other buyers.
My 2 cents, I think HB is in the financing business and can probably have 100% certainty of financing before he goes in. However, he also could include an appraisal contingency while excluding a financing contingency.
My 2 cents,Many other things affect value beyond how many beds and baths the house has, and location, e.g., square footage. There have been many 3/2s sold in the range you specified, but many 3/2s have sold for well over $600K--and even more, if you count the ones being marketed as 4/2s, which are really 3/2s with the fourth BR in the basement.
Ace & My $.02-Yes I will likely have all my financing set up ahead of time. As for the appraisal contingency I only think it is useful if you believe the appraiser knows more about the market than you do. As much as most of us follow the housing market I am not convinced that I would trust an appraisal more than our view of what a house is worth. As VA pointed out appraisals come in all over the place. The main reason I would want the appraisal contingency is that if it did come in low perhaps I could use this to try and lower the offer.
Here's 10 frankly pages (@ ~40 houses per page) of 3 bedroom Arl. detached houses that sold during 09/10 for $600-$900K.3 BR Arl. solds
Here's only 6 pages of Arl. detached 3 br houses selling for < $550K in the same period. And about 1/3 of those were in 22204 (with land values accounting for much of the lower cost), with another 5-10 not in Arlington at all. under $550K
Jewel, I agree--Bluemont Park is gorgeous.
mytwocents,I missed the house that MM posted last week. Was it on Nottingham St in Madison Manor? Although, that isn't in 22207... It seems overpriced (esp for a short sale), they've raised it from $565k to $620k!Ace,I think this has been discussed before, but the colonials seem to go for more money than the ramblers. The ramblers are typically newer, have larger basements and have a main floor bathroom. Whereas, the colonials oftentimes don't have a main floor bathroom, unless an additional has been put on. The colonials just have better curb appeal and appear "larger". The ramblers look like small brick boxes. I guess buyers are willing to pay more for the "appearance" of space.
HB, If you're financing any money at all though the bank is going to require an appraisal right? So for instance, you bid 120k on a house. Appraisal comes back at 100k. I would think you're now on the hook for 20% down plus the overage for a total of 40k. The bank won't care about your 20k skin in the game if the appraisal is low.So now, after getting an appraisal so low, I would be worried about not having an out. Is the advantage worth it? Is there another angle I'm not considering? Thanks,My $0.02
Jewel, I'm not sure what you're reacting to (in what I said) re: ramblers. Are you just adding that as another factor that might account for why some 3 BRs sell for more than others do? My point is just that there is a wide range in values in Arlington of 3/2s, depending on many factors, including condition, quality and style of updates, location, size of lot, square footage, curb appeal, etc. My two cents has on several occasions estimated what are IMHO not market values for certain houses or viewed several (including colonials) as comparable, when they really aren't, IMHO (and in MM's HO). For example, last week (?) s/he compared a ~1200 square foot house with a ~1700 square foot house. These houses had very different Co. assessed values, probably primarily based on this difference. So I am reacting to that as well as to the statement that "I think these brick 2/2, 3/2's are worth between 480-540k depending on their condition and precise location." Maybe s/he was limiting the "these" more than I thought. My links were just to show that the majority of houses in Arl. with 3 BR (some of which have <2 full baths) that have sold for much more than $540K.
ps, if I'm right, this probably means mytwocents got an excellent deal on her own home. Also, I agree that the short sale appears to be overpriced, if the condition is typical of a lot of SSs. Per Arl. Co.'s 2011 assessment, the house is worth far less than the $620K.
my $0.02-Yes you are correct in your scenario that you would need to put 40K down instead of 24K. I am just not that worried that an appraisal will come in that low and I will likely put down 30-40% anyways. There will also be other outs like HOA or maintenance issues. I am not saying I am going to do this I was just trying to figure out how much most buyers would value not having contingencies.
Ace,Yes, I should have been more clear. Style of home (i.e. rambler vs. colonial) is another factor in home prices. Ramblers seem to go for less than Colonials.Mytwocents must have gotten a good deal... My 3/2 home was >$540k!
Jewel, thanks, I agree.
Cheryl says:"As far as a family of five growing up in a 3 bed, 1.5 ba, I would suggest those days are behind us. Do you think we will retreat to that size home? "It may well be more probable then not.Consider a couple of things1) My dad bought that house in 1968, with 3 kids, a stay at home wife, working as a programmer in the belly of standard oil, it was2X his annual salary,we had 1 car,1 TV and inside of 2 years he saved enough money to go start a company.Today, most people are drowning in debt, and the T2 presentation shows that. Most americans have 3 times the household debt a generation before didn't.(Thankyou ronald reagan).big houses require lots of electricity, lots of gas heat, and lots of housekeeping. I remember as a kid, i could vacuum the whole house(The carpeted rooms) in about 45 minutes.(3 BRs, Bath, LR, DR,Hall).A 5000 SF house you need a full time housekeeper.Ops costs is going to matter as energy prices keep rising.And while DC is a rich area, it's mostly because unemployment is low.Most of the US has higher unemployment. Median wages aren't great in DC, it's just everyone has a job or two.Add a little more unemployment like the teabaggers are screaming for, or, cut back credit. Things won't be the same.Why did the Bush administration increase the size of FHA mortgages?Those are meant as low income loans?why is FHA guaranteeing Million dollar loans?That's something these raging idiots in their tricorn hats should be screaming about.takeaway FHA guarantees and what happens to the market here?
http://franklymls.com/DC747949028% down, needed some work,but went for 250K beautiful property.
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