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.
an anecdotal evidence that early 09 (contract date) is bottom: this Ballston TH was sold in 7/09 for $700K, then again in 2/11 for $725K. no apparent update except new carpet in Rec rm.
MM,That aligns with my observations. I would peg the bottom the end of 2008 if only because that's when my buddy bought a foreclosure and he's the type of person that always manages to do the right thing at the right time.My $0.02
MM, I had to laugh--the description touts the 14 (feet?) of custom closet - which can be very expensive - but there is no photo of it.
"When Glennon and Craig Melton came to the closing table..."Interesting, I googled them, She appears to teach elementary school,he appears to sell software for some Northern Virginia Company.I don't know if he does defense work, but, she shouldn't worry about her credit rating getting shot.Couple in their late 30's, restarting. They have some time to build up assets and equity again, but it was a big hit to them.I heard something on the radio that in Nevada most of the people strategically defaulting are the older. They view their houses as wildly underwater, their Pensions and 401Ks as damaged and they would rather take the credit hit now,preserve capital and maybe live in less later but with something thenbe struggling with less capital and a mortgage at 58.
pat,What the heck are they doing taking on a new mortgage in their mid-late 50's? If this is an indication of their intelligence then I am not surprised that they jumped on the stupid prices of 2005.p.s. I resemble that remark about them being "older" as I am fast approaching 53!
cherylOne thing to bear in mind on why I think the DC area still has room to lose price is the Price/Rent Yield is poor. There are great deals out in PW/LO and you say you are nailing deals in Reston. But closer in, it's still iffy. You said you couldn't make deals in Ballston pencil out. That's a warning that in Ballston, the rents are not aligned to price. Maybe DC prices stay high, but does it make sense when rents stay low?
VA_I,I thought Pat said 30s, not 50s, but maybe I missed something. For some people in their 50s, mortgages make great financial and personal sense. Everyone's situation is different. Obviously it doesn't if you have to retire too early due to health or other problems, don't have a pension or enough retirement savings to cover everything, etc. But in any case, I can't understand why you would think mid-50s is too late for a mortgage but shouldn't be called "older."
Sorry, I just re-read Pat's post and realized he mentioned a couple in Nevada who were 58.
Pat-Aren't there a lot of areas that haven't penciled out for years? I don't really follow other markets, but I have heard that Manhattan and several areas offer terrible rent/buy ratios. I don't think Arlington is about to become the next Manhattan, but that doesn't mean that it has to have the same rent/buy ratios of areas where land is not scarce
HB, I've heard that too, and Georgetown has been mentioned as a local example.
A new apt development recently delivered in the Courthouse area. It's already 80% leased with the cheapest apts going for about $3,200 per month plus $90 bucks for a parking space.Lots of $$$ around here.Gross that up for a purchase price.
Ace,I agree that for some "older" people mortgages make alot of sense.But the people that pat cites don't have that type of $$$.For years we only put 5% down because I could do alot better having the cash available to do other stuff. This clearly is not the case with these 58 yr olds.
VA_I, I was interpreting your statement as being more general than you intended it. Without hearing the report Pat heard or my knowing what that particular couple's situation was at the time they bought, it's hard for me to know whether it was obviously a mistake at the time or they just had a run of very bad luck (e.g., losing jobs) in addition to the Vegas collapse.
Jewel,What do you think? This is in our general neighborhood. This is a smaller brick (rambler??) so that third bedroom must be in the basement.http://franklymls.com/AR7503401I think this is a good price and likely close to the bottom. At $427k with 20% down this thing is probably around $2100/month including taxes and insurance. That easily cash flows and is right in Arlington.My $0.02
http://franklymls.com/DC7388167Assessed at 246K, sells for 80K?Listed at 90K?This one strikes me as some sortof Fraud. They papered up somethingand ripped off Fannie.Of course who knows maybe someone got all crazy it was the bubble.
"Contrarian said...the bottom in housing is many years away - probably ten. The next downturn should start in a few months. 2/3/11 4:43 PM"As it was written, so it shall be done...glug, glug, glug, glug, glug, glug...
I don't have a clue about "Hollywood Hills," but look what $1.26M gets you there, not to mention the bragging rights. http://money.cnn.com/galleries/2011/real_estate/1102/gallery.ashton_kutcher_house/index.html?source=cnn_bin&hpt=SbinWhat would $1.26M get you in Northern Arlington? How about a $1.35M townhouse?http://www.redfin.com/VA/Arlington/2130-21st-Rd-N-22201/home/11248647Or maybe a $1.4M 2-bedroom condo?http://www.redfin.com/VA/Arlington/1881-N-Nash-St-22209/unit-1809/home/28599743Give me a break.
Update: CNN updated that page to reflect the asking price is 2.6 million, not 1.6 as originally shown.
Wow, Mike, Ashton Kutcher's house is beautiful. He and his dad (and the various designers, etc.) did a great job.
http://www.google.com/search?q=DC7400830.this just got pulled entirely, I suspect it was a failed short sale and will shortly go REO.
0.02Cute place, seems overprice a tad.But let the market decide. I think if it were at 399K it would move maybe even get a bidding war.
ContrarianLots of bad news out there, certainly, Mubarak can't be sleeping well, he discovered the Army won't mow down civilians with tanks and his personal guard is reduced to charging crowds with Camels.But on the other hand Bernanke seems willing to print infinite amounts of money. So, what happens in the meantime?We have Boomers now hitting retirement. The first wave is 66.Half the Boomers have no savings other then their homes. Ooops.Now will Boomers who did 40 years in DC as part of JFKs Ask not erawill they sell out now? Will they hang around here and die in place? Who knows? personally If i were 67 and had a paid place, worth say $400K and not a lot of other savings but a pension, i'd bugger off now.Sell at what seems like a good time,Move to Florida and buy a condo or TH for dirt and idle away on the beach getting hummers from old ladies.Those winters have to be getting harsh.
from my friends at Dr Piggingtons"To a large extent, inside the beltway has held up, but there seem to be some wildly swinging prices. I live (Rent) in old town Alexandria. Across the street, a three bedroom rowhouse with finished basement (2100-ish) square feet just sold for 525K. I rent an identical place, though not as updated, for 2200/ month.One street over, a slightly newer 3 bedroom with a garage but no basement has been on the market for months at 725K. Overall there are a lot of for sale signs, but things do seem to be selling.The first house was owned by an older lady who bought 15 years ago, she priced to sell, and was out in like a week. I think the big swings in pricing are totally based on what people need to get out clean, and they generally rent them (at a loss) if they cannot sell. Obviously a lot of renters in the beltway.I plan the future budget for the USMC, and am pretty read into Government spending plans. A GS hiring freeze and reduction in contractor services are already on the table, and this is just the first step.The Beltway and public sector have been largely immune to cutbacks due to the war / stimulus / bloated budgets... this is coming to an end sooner than you think. The workforce in DC is going to take a hit, Beltway real estate prices will take take the same hit.Frankly, I think buying in the beltway is very dangerous right now. Enjoy the sunshine...."what do you all think?
mytwocents,I wasn't aware we lived in the same neighborhood :-)I agree - You could probably get rental parity given that it's 3 bdrms. By the way, the interior details do say all 3 bdrms are on the main level.This is a great example of a house that an "underwhelming" exterior.The buyer did get a good deal, but the room sizes do seem small - esp the kitchen. The over-sized furniture is probably not helping!
Pat, what's your source on the "half of boomers have no savings other than their homes?" This source says that (prior to July 2010, and the market has improved since then) about half now have less $ than they will need to be comfortable in retirement. Not good, but a lot better than NO savings.boomers "As a result, VanDerhei said, more people are in better shape now for retirement than when he last did his study in 2003. Then, 59 percent of early baby boomers were in danger of running out of money, versus 47 percent this year."
The rich are different For Darren Thomas that ocean view was quickly losing its value. He says, "I bought it for [$1.385 million]. It is worth less than [$800,000], maybe less."Thomas bought his townhome in 2006 but after seeing its value drop steadily he stopped paying."I haven't made a payment in two years," he says. "It was business decision. It was an easy decision. I have a property worth six or 700,000 less than when I bought it. I was making payments of 10,000 a month."Thomas has gone into strategic default. He could make payments but is refusing to put more money into a home that is worth less than his mortgage. Among luxury homeowners he is not alone.One in seven homeowners with loans over $1 million are seriously delinquent compared to one in 12 with mortgages below $1 million.The more you owe, it seems, the better off you may be. Darren Thomas continues to live in his home because banks are often slower to foreclose on million-dollar homes.
Also, if you have the inclination to search old threads, you'll see a link showing that only a tiny minority of retirees choose to uproot themselves from their friends, family, and communities in which they feel comfortable, to move to places like FL.Re: your Piggington comment, I personally agree that if the budget truly is limited for defense contractors substantially, it will have a small effect on housing in the area. But that's a lot of "if." Small cuts, or cuts/freezes that affect only fed. employees (rather than private contractors, consultants, etc.), which are a smaller % of the area employees than a lot of people realize, I don't think there will be much impact. There are many DC area people who have been living with layoffs, limited pay increases, etc., many of which are in industries that are not related to defense or the federal govt. here. So some of these effects have already played out.
housing affordability "discussing housing affordability in the public arena, the housing index measures are technically unsound and in some cases, when data is manipulated, unethical. Victorian economist Alun Breward explained this on the ABC radio program Ockham's Razor in April 2005.Housing affordability and mortgage affordability are two separate subjects and must be treated as such. The price of housing must be a reflection of the underlying incomes supporting it. Varying mixes of equity and mortgages with ever-changing conditions, structures and interest rates are simply the "fuel".We don't mix fuel prices with car prices to generate car affordability indices - conveniently ignoring maintenance and depreciation costs, as the housing indices do.Another useful check measure for housing affordability is the relationship between the value of the total housing stock and gross domestic/state/metropolitan product.Again, housing should only be worth the underlying income underpinning it. The total housing stock should not exceed 1.5 times, as is the case with Texas. Better still, in the state's largest city, Houston, housing is worth just 1.1 times its gross metropolitan product."
pat,I'll take a little issue with your article/comment about the "rich".There are alot of wannebee's that own 1mil dollar homes. That is no indication of wealth. This one guy seems to be using his "business" decision analogy to disguise his true position (a guess on my part).California doesn't have recourse in most situations, so perhaps he doesn't care about his credit and there will be no hit to his other assets. If he has any.Obviously he didn't pay cash since he claims it's the bank's loss, not his. I'm curious as to his net worth and the ratio of assets to liabilities."Rich" is a relative term. My thoughts are a minimum of 20mil.
Pat,You misinterpreted my post. The house did sell for $427k. It closed yesterday. As I said, with 20% down the monthly cost of that home is probably about $2100/month.That is well within what you can get for home rentals in that area of Arlington which are approximately $800-1000 per room per month.I think the low-mid 400's are the absolute bottom for SFHs in 22203/22205. And more than likely you'll go up quickly from there when you are dealing with well appointed, up to date homes. The prices are supported by both rents and incomes.My $0.02
"contrarian said...Anon,I presume you, like CRT, think a $14 trillion debt (so far), baby boomer retirement, stock market collapse (still ongoing) and economic depression (worst still ahead), and civil unrest will have no effect on housing prices?"No, they will have an effect. Just like they did last 2 straight years where prices rose.
"contrarian said...pat,I posted a comment last night responding to your earlier comment above, but shortly after I posted the comment, ***Poof*** it disappeared into cyberspace. The same thing happened the other day when I responded to Va_I.2/4/11 10:02 AM"Perhaps your computer (knowing you are just going to delete the post anyway) is saving you the trouble?
"contrarian said...Anon,I guess it hasn't occurred to you that nationally housing prices peaked 10 months ago?2/4/11 11:57 AM"Nationally? Sure. Here? Not so much...http://novabubblefallout.blogspot.com/2011/01/s-november-home-price-index.html
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