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.
"contrarian said...So much for the bottom callers a few years ago:Housing Crash Resumes3/24/11 11:28 PM"Contrarian, ignoring that your source has been wrong about pretty much everything he has said for the last 2 years, suppose this is the one time he is right. If so, did you read carefully what he said?While he said 90% of the homes in the country are headed down, heres what he said about the other 10%:"So yes, real estate favored by this top 10%--Manhattan, Westwood, San Francisco, etc.-- will hold its own as those benefiting from fat Federal contracts, Wall Street's renewed license to practice piracy, the bubble in lighter-than-air Web 2.0 stocks, etc. try to outbid each other"Gee, I wonder what city happens to benefit the most from "fat Federal contracts"? Does the name "Washington D.C." ring a bell?So basically, what your source is saying is that D.C. (or at the very least its immunozones) are "different". These places will continue to "hold their own", while real estate rest of the country heads down to 1987 (glug, glug, glug) nominal pricing. That is wonderful news for those of us around here -- knowing that our homes are immune and will continue to hold their own...Personally, I dont put any stock into this permabear source of yours. However, it seems that you do. Yet if he says that some areas are going to hold their own, that is in direct conflict with what you have told us, time and time again, that even DCs immunozones are going to crash... any second now.So what are you trying to tell us? Are you now conceding that you are wrong, and this guy is right in that DCs immunozones are not going to crash? Or are you saying this guy is wrong (in which case, I have to wonder why you even posted his ramblings in the first place)?Help us out here...
I should've bought this house last year but didn't, and now I'd have to pay $36K 'penalty', plus $24K paid rent, plus not getting the $8K from Uncle Sam, plus lost equity, plus one year worth of angst.Good things happen to those who wait. Right.
MM,People always seem to write off "wasted" rent money, but they never add up all the interest they would have paid on the mortgage during that year. The rent is likely cheaper than the mortgage interest - even if you do qualify for a 25% write off on your taxes. Don't forget property taxes and all the other homeowner maintenance expenses.The assumption is that you saved the difference in rent vs. house payment to put in your down payment fund, which some people are better about than others.
MM-You are also assuming that the house goes for list price. It obviously could go for this price or higher, but most houses end up going for less than list price. If this is the case the 36K will be less. Also if you buy before you have ample reserves you risk running into a situation like the person selling the house. Even if they do get list price they will end up losing a lot of money once they pay agent fees and closing costs.
hb,Not many have to sell after only one year. Transfer? My guess is that the market is stronger than last year - we will see.It seems that MM would have been ahead by buying last year. I doubt it goes for close to 580K.Clearly rent was not 3k per month (36K). I don't know what this would rent for. The amount "saved" by renting depends on many variables.
It is funny how the list price of the house just happens to be 6% higher than last year's price. I'm sure that must be the current market value, not just "what can we price it at to get all our money back and pay the realtor fees?" Right.
Jeremy,I doubt that the 6% was lost on many. No matter, as it has no relevance to FMV. We will have to see after the market speaks.
VA-I agree it is unusual to need to sell after 1 year, although the economy was still pretty shaky a year ago and a lot of people were still worried about losing their jobs. You and MM are also correct that she would have been better off buying the house a year ago, but she also would have been better off buying almost any asset class a year ago. Almost all asset classes went up over this time frame (the market is up ~20%, gold is up 25%, oil is up even more). If you invest in anything at the very start of a recovery and you don't have a double dip you will likely do well. I just don't see a ~5% move as a big move. Also interest rates in April 2010 were between 0.25%-0.5% higher than they currently are, which also makes the loss slightly less than full 36K.
I guess my main comment is that yes it would have been better to buy a house a year ago, but this will normally be the case. In general it is good to buy most asset classes although they do involve risk.
"If you invest in anything at the very start of a recovery and you don't have a double dip you will likely do well."Put another way -- its best to buy at the bottom versus some other time that is not the bottom ;-)
Defense cuts looking less likely every day...
Does anyone here like the new franklymls layout? It looks like they changed everything around this morning and personally I like the old layout more. I was curious if I am the only one.
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