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Monday, March 7, 2011
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41 comments:
Anyone go to any interesting open houses? Between having a sick wife and terrible weather we decided to stay in. There also wasn't much that we were interested in.
No opens. I suspect many decided to stay home and watch some sports (My alma mater won the Women's ECAC Hockey Championship Saturday - I was only watching to make sure my records weren't beening broken!).
The downpour didn't keep 6 prospective tenants from showing up at a remote property yesterday. I have 5 applications to wade thru. Why do so many renters insist on having a dog? I am officially putting my foot down after seeing (and smelling) this property. I love dogs...but some wreck it for everyone.
VA-
I agree it is a shame that some owners can't respect the property with their dogs. If you take care of your dog and train it, there shouldn't be any problem. I grew up with a 100 pound lab, and he never messed up the apartment.
PS boo about the hockey, I just checked the results and it appears your alma mater beat mine. Although as a swimmer I was watching that his weekend instead.
hb,
Well it least it wasn't some other school(s) that won (I won't mention names):).
No open house visits here. A lot of "new listings" lately are unsold houses pulled after not selling in 2010. Most seem to be listed at the same or similar prices. It will be interesting to see if timing or price truly was the problem.
I went see this. One level, no basement, one bath. I bet an investor scoop it up to tear down then build new.
We'll never run out of land to build, even in N Arlington. I think housebuyer was the first to say that.
Wow, MM, from the photos, they put some money into the renovations and they look nice. And it's not the smallest of houses - 1100 is small but not like 900 sq. fit. This makes me think the sellers won't let it go for developer prices, which are usually way below assessed value even without renos. So I think someone will buy it and move in. The buyer could always "pop the top" later.
MM,
I like that house. It's small and the one bath is a killer (been there, done that), but I'd prefer it to a condo hands-down.
One bath is workable. Many people grew up in one bath homes. It reminds me of my mid-20's after a late night out; there were many a "race". I'm sure at least a half-bath is doable.
Nice updates. Combo of old (bath tiles) and new. I'd buy it, but then again I'd like to buy alot of places and this one makes zero sense for me. 25yrs ago it might have been a different story, but back then I might not have been able to afford the area or a renovated house.
MM-
Was the fridge in the room right next to the kitchen? It is a little odd to not have a fridge in the kitchen, but it would be a huge pain if it also was not in the room right next to the kitchen.
Ace/Va_Investor/housebuyer,
I like it as it is now, and the updates are nice except 1) the floors need redone and 2) the fridge is in the laundry room - which is next to the kitchen. (the LA said owners regretted this reno decision.)
It's priced comparably to a condo but the 1-ba could be a huge turn-off for many, especially those who currently living in a condo with more than 1 ba.
Ace, even at list price, a builder could tear it down and build a $1.3MM house, and still make ~$500K, no?
MM, it depends on how hard it would be to add at least a half bath. I have friends who sold a house that had only 1.5 baths, and the house was basically entirely un-updated (though maybe 50% larger than the cute house you linked to, and with a basement), and I was shocked that they were able to sell it for close to $700K last year (to a family who is updating it to their taste). So my guess is that if a half bath could be squeezed in somewhere in "your" house, it will appeal to people who want to buy for less than $600K and don't want a condo.
Developers usually don't want to pay any more than they have to for the land. There are still plenty of run down houses on nice lots around Arlington, so while they might be able to make a profit on buying this as a tear down and building:
(a) they probably have cheaper alternatives where they stand to make more money and
(b) if at least one "move in" buyer is interested, the developer will have to bid against that buyer, who would be willing to pay more than for a hovel.
So they look for an $800K (or less) lot they can subdivide or a lot worth $500 but is selling for $400K (or less) (adjust upward or downward for neighborhood).
Let's say the developer gets this land for $550K (I don't think s/he will be able to), drops $20K to demo, then spends $150 per square foot minimum for the level of quality expected in Arl. (would charge the buyer retail at least $200 psf) to build a two story house with 3000 square feet above ground, plus a basement costing another $50K. After subtracting the cost of acquiring and selling the property, that doesn't leave much profit from the $1.3, at least not as much as s/he could make with a different land purchase.
I should add that I assumed it would go for over list price. But obviously with each passing day that it's on the market, the less likely that's going to happen.
Of course it's also possible a developer will buy it and then pop the top immediately. This might be less expensive than a tear down. There are several developers working in that neighborhood right now, so you just never know.
Contrarian-
Wow some politicians are crazy! Hearing that speech made me think of high school elections where they promise you free candy, no homework, and longer lunch breaks. I mean how could he seriously say that we should put it in the constitution that all children should get IPODs.
tks Ace. didn't know my estimate was way off for new house. good thing i'm not a developer :)
so perhaps someone buys it then add a 500-sf addition of family rm/office and a master br - total cost at ~$650K?
BTW the current one bath is VERY small. you could probably convert the double closet in the hallway to a half bath.
Ace,
this is a tear down of a $560K house. Listed at $1.4MM+. Lots of competition in the price range though.
HAPPY 2 YEAR ANNIVERSARY CONTRARIAN!!!!!
Remember this?
"MM said...
just wanted to add this here. perhaps soon home buying will no longer be on my mind...
Dow 6,652.19 -223.65 -3.25%
3/5/09 12:12 PM"
**********************************
"Contrarian said...Are you surprised?
I guess denial is a wonderful coping tool, eh MM?
BTW, the Dow was up around 9000 at that time.
Others also suggested I was way off base.
The question now, is:
At what point, if ever, will TedK, The Anonymous, MM, etc., accept the obvious?
And, if for some reason it has not become obvious, why not? :-)
Have you all thought about starting a 12 step program and calling it A-D-D Anonymous?
Members would include those who chose to simply sit there during the greatest collapse of wealth in history and watch their Assets Deflate Daily.
Sad, but true. So sad. People choose to be victims, martyrs, instead of dealing with life on life's terms. Truly amazing.
3/5/09 4:47 PM"
http://www.blogger.com/comment.g?blogID=4787878578920468587&postID=141772809946587924
hb,
Looks like a rematch on March 12th. I think I'll have to get my jersey out for this one!
MM, yes, the addition would make sense for a buyer getting it for him/herself (if you could do it within the Arl. Co. rules for the lot size, etc.). However, the $200 per sq. ft. would likely be a minimum for an addition.
Thanks for the link to the $1.475 mill. house. Notice that the buyer/developer is not a well-known name around Arl. like Sunnyside, Morris-Day, or Troutman, so he may not be as shrewd about buying land and making profits. And, we'll see if the new house sells for the price he wants.
oops, $1.425 mill.
MM, one other question about that house - it's unusual if a house is in the Yorktown district for the agent not to include that in the description. Is the house in that district? If so, it might go for a bit more than if it is not.
I agree that the lack of a basement or usable attic is a big issue.
VA-
Both men's teams are also left in the tournament, so we may have several more rematches. It looks like the Cornell women are by far the best in the league, but the men are much closer.
hb,
Those men's hockey games were a highlight of my time at school. Harvard is still the game of the season according to my son.
I follow the women because I get e-mail updates. Our Lax coach was poached by Penn State - they are paying him 500K! Can't compete with that.
GO BIG RED!
My $0.02.
mtc,
Alum? 3rd generation here. I bleed red (well of course I do, but you get my drift!).
VA_I,
Yep. Class of '96.
My $0.02
mtc,
'80 here (hate to admit that!). Hume Ec. Husband Hotel '80. The little boy is Hotel '11.
My dad had 5 degree's (perhaps a record). If being a full-time student was a paying career, he would have been a very happy man!
I was a "townie".
Ace,
yes it's in YHS district; the agent's car has a dc tag so he might not know.
couldn't see the attic coz the agent wasn't able to pull down the attic stairs claiming it was locked.
there're quite a few $1MM+ new homes for sale and more to come in the neighborhood. it's good to be a buyer in that price range. :)
MM,
If land value= house price, what in your mind is the downside?
Later on; pop the top, addition?
http://franklymls.com/AR7510337
assessed at 467K, listed at 440K
sells at 424K
Va_I, Arl. says 2011 land value is around $465K (house about $100K more). Current asking house+land ~ $525K.
Pat,
I pegged those smaller brick one story homes between 400k-450k. With the nicer, updated ones in N. Arlington perhaps commanding as much as $550k. I think much lower than that is unlikely because things begin to pencil out at those prices.
I think significant further downside is unlikely.
My $0.02
.02 says
"I think much lower than that is unlikely because things begin to pencil out at those prices."
Um, shouldn't prices descend to
a pencil out rate first?
Pat,
To answer your question, I would say no. I think there are enough home buyers out there willing to pay a premium to own that they won't let the price descend all the way to cash flow. There are also more buyers with a higher risk threshold than you or I. At least in prime locations. This goes back to the immundria locations being last to fall and falling the least.
Unless inventory spikes so that investors dominate the market, falling to cash flow isn't a given.
My $0.02
MM,
Sounds like a pretty lame agent.
Have you seen anything else interesting?
Ace,
saw this too - big house, small yard, could use some updates. supposedly got a contract yesterday.
two cents
well if people want 2% yields on their houses, cool for them,
we are putting in garden beds at the rental this spring.
I hate to do it, but, if i can keep my cheap rent, why would i want to
drop $500K when i can rent for $1K/Month
Pat,
Investing money into your rental to make it more enjoyable is the opposite side of the coin of accepting a low yield on a house.
At some point you're going to grow tired of a small space, no laundry, marginal neighborhood, lack of amenities/conveniences and rent you can't control.
In your case the very last point isn't quite an issue but that's not the same for the majority of your competition.
My $0.02
pat,
I seriously doubt it would take 500K to replicate your current living accomodations. If you want to do a rent comparison, you need to do apples to apples.
Rental parity is available in many areas in the region. More desirable locales (such as Arl.) may have an ownership premium, but my guess is that these are the locales that will see appreciation out-perform.
I don't know where you get the 2% and you are not placing any value on "owning", locking in your costs and paying down a mortgage.
You may feel comfortable that your rent will remain dirt cheap and if you are correct you will "save" in the short-term. If we hit a few years of decent appreciation, any rental savings will pale in comparison.
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