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.S&P lowers outlook on US debt to negative. And, happy tax day.
Harriet-Although the S&P lowering the outlook for the governments rating shows the trajectory of our governments deficits I do find it somewhat silly. Seeing that all of the governments debt is denominated in $ and they can print money defaulting doesn't really make sense. It is very possible that the dollar is worth a lot less when all is said and done, but defaulting just doesn't seem likely to me.
Interesting foreclosure. I'm sure there is an interesting story behind it: http://www.redfin.com/VA/Falls-Church/1919-Freedom-Ln-22043/home/9474685
HBif the Trasury lowers it's rating, it will most likely see a rise in interest rates.
MikeI suspect it's someone who had too much mortgage and one of those funy option ARMS, but, you know,there aren't any in DC and themarket is perfect here.
housebuyer, as I understand it, then you're saying the end result is successful deflation? On the other hand, printing money can lead to hyperinflation, but that seems relatively rare in US history.http://en.wikipedia.org/wiki/Hyperinflation#United_States
Anon"Objection: We know that prices quit falling when the underwater rate peaked at about 30% 2 years ago. Further, the rate will not be 0% til we hit a new peak years from now. So, if prices quit falling when we hit 30%, why will they start suddenly falling again at 25%, 24%, 23%, etc?"Um Anon,You forget the 8K buyers bribe.That added $30K to the price of housing nationwide, probably a bit more here.What you saw was a concerted federal policy to fight the market trend. So, the trend will return and has.as for the impact of interest rates, it shows up in Real terms and it particularly shows up incommercial property. It's a very direct thing there.third the boomers have been retiring since 2006, no surprise that was the year real estate started sucking wind.Boomers started being born in 45.They started turning 59 in 2004 andwere eligible for retirement that year.now what markets are effected, depend upon how many boomers you have locally.Places like Nebraska the boomers all fled. Places like Here, lots more.Now I tend to be with Cheryl that we will see a long miserable slog of lousy prices, but, we will see what happens.
Don't forget the upcoming budget battles if we're speaking long term nova/dc metro.Budget slashers have their eyes on federal workers and contractors.
Pat,How do you figure an $8k buyer's bribe translates into $30k price inflation?Thanks,My $0.02
Mike-That does seem like a pretty cool house if you are in the market for a house with some of its unique features (inside pool...)Ivan-Sorry if I was confusing. I was saying that it would cause inflation. Devaluing the currency means the currency is worth less, so you need more of it to buy things. This is the same as saying the price of things goes up (inflation)Pat-Its possible it would cause rates to go up, although this did not happen for Japan . S&P downgraded Japan twice in 2001 and once in 2002 and rates have been basically flat near 0 for a decade so far.
"Pat said...Um Anon,You forget the 8K buyers bribe.That added $30K to the price of housing nationwide, probably a bit more here. What you saw was a concerted federal policy to fight the market trend. So, the trend will return and has."Respetfully, no, it was YOU who forgot the 8K buyers bribe. Nowhere in that 4 item list of concerns the other day was the 8K bribe mentioned. If you want to add the relaxing of the 8K bribe as concern #5, thats fine. However here is my objection:As you have noted, once the 8K bribe was gone, the downard trend has continued in most of the US. However, even though the 8K is gone here too, the downward trend has not continued here. Thus, if relaxing the 8K bribe (a) impacted the rest of the US causing it to decline, and (b) did not cause the DC area to go into decline, then why do you believe (c) the relaxing of the 8K bribe will, after a few months of upward price trends, suddenly cause a decline here locally?Incidentally, I noticed you did not respond to my objection about the % underwater falling from 30% to 25%. Please address that issue in your response. "Pat said...as for the impact of interest rates, it shows up in Real terms and it particularly shows up in commercial property. It's a very direct thing there."OK, good we agree then. Just so you know, the last time you cited this concern, you indicated there was going to be a NOMINAL price decline (and perhaps a big one -- I can show you the exchange if you wish). Had I known you had changed your position and we were talking about REAL and not NOMINAL values, I would have agreed. So consider this objection withdrawn."Pat said...third the boomers have been retiring since 2006, no surprise that was the year real estate started sucking wind. Boomers started being born in 45.They started turning 59 in 2004 andwere eligible for retirement that year."OK then -- if it makes you happy, let me amend my objection to conform with what you said..."The anon said...The boomer retiring effect, (whatever that may be) started in 2006, and will not end until 2029. Are you really going to wait that out before you buy? Further, the inflection point of boomer retirement will be around the year 2020. Why then are you willing to consider buying in 2012?"Again, just so the point is not lost, I think these are very sound objections to your concerns. However, whenever I point this out, you usually respond in some tangential way. Now that we have (presumably) gotten those tangential concerns out of the way, can you now address my objections head on to see if we can finally put these issues to rest?
anon"Incidentally, I noticed you did not respond to my objection about the % underwater falling from 30% to 25%. Please address that issue in your response. "That rise was driven by the Tax Credit or 8K Bribe....That's my response there.As for the Boomer retirement thing,look, i'm looking for a good deal that also fits my lifestyle and life goals.Back in 06 and 07 i was pointing out townhouses in Woodbridge that were selling for 60K.but my desire to live in hoodbridge is negative infinity.I also pointed out some deals in western fairfax but my desire to live there is real small.My preference is for DC/ARL/AX, i like the area, and being in the eastern columbia pike communtiy i have become very fond of the community and social network, however, the prices are still pretty nuts.I'm bidding, i put in on a 3/1 i showed on this site 2 months ago, but it went into a price war and went from 187 to 300+. Nutty to me, given the sheer amount of work it needed.If my girl gets into grad school we may have to move into DC, so,that's sort of a hang pattern for me.ultimately, i think reversion to mean is a immutable force.so, let that be my rock for this argument.
http://www.nytimes.com/2010/04/27/business/27home.html"For every home buyer like the Greens, real estate agents say there are at least three others who collected the credit even though they would have bought without it. That means for each new buyer who was truly lured into the market by the credit, the federal government paid more than $30,000. "http://rismedia.com/2010-06-28/home-buyers-who-missed-8000-dollar-tax-credit-coming-out-ahead-2/A home in the Clintonville neighborhood she has toured twice, for example, dropped in May from $185,000 to $167,900. Another Clintonville home on her radar dropped from $179,900 to $167,000 after the credit expired, while a Downtown condo she visited went from $189,900 to $169,500.granted the second cite is from raleigh, but still. The Feds were dumping cash to try and reflate the bubble.
Aaaaand there it is -- the tangential eruption I was looking for. OK Pat, your not going to answer. Thats fine. Most people dont. The reason I am getting after you is that if you look back on the history of this blog there are quite literally hundreds of arguments for why the market will (or in this case will continue) to go down. Of those, there were maybe 5-10 good ones - and of these 5-10 probably only 50% of them had any effect whatsoever.Thus, I think its best to believe in the good reasons, and discard the ones that are stupid -- it really helps sharpen ones thinking. Our best bloggers in the prediction department were the ones who were able to separate the wheat from the chaff amongst the hundreds of arguments. Compare that to Contrarian, who never met a doomish argument he didnt like and glug glug gluggs all of them down, with reckless abandon.So really, for me it comes down to using ones brain to consider those arguments that are still of concern (i.e. austerity), but to also REJECT those arguments that no longer have any bearing on the situation (i.e. Mr. Mortgage's "the quickening"). I happen to think your fairly intelligent, so I dont know why you dont do more segregation like this. If you ever want to actually buy a place and be reasonably comfortable with making that decision, you really need to sharpen your thinking IMHO. Otherwise, as I have said before, embrace long term renting and all of its advantages in this uncertain world of ours. There really is nothing wrong with that.
Pat,Were those numbers in response to my question?First off, the $30k reported in that first article was the cost to the Federal government for having incented 1 buyer. Basically they were saying that for every 1 buyer that only bought because of the credit, 3 more buyers also collected the credit who would have purchased anyway. So the credit brought 1 fence sitting buyer for every 3 ready to pull the trigger. So that's "$32k per actual induced buyer." Fuzzy math but acceptable.The other examples show price deviations from $8-19k. But then, these houses didn't actually sell at the inflated price so it's not like you can claim the credit inflated them.I still don't see how you get to the number $30k with any sort of rational reasoning.My $0.02
This is a listing that has me scratching my head. Sold 11 months ago for $250K and now listed, after upgrades I assume, for $629K? I have trouble picturing upgrades that nice.
Katie -- only once have I seen that type of premium even remotely justified, and that was in a house that was first sold in serious disrepair. In that case, the flipper walked away mid flip, leaving walls stripped down to the studs, no stairs (only a ladder) to the 2nd floor, etc. In the resale, the house was pristine, with top of the line appliances, finishes, etc. So thats the only thing I can think of in your case that would justify that much of a price increase.
Hey Ace, being a fan of contemporary, have you ever looked into the "Hollin Hills" neighborhood in alexandria (FFX co. portion)?http://franklymls.com/default.aspx?m=R&l=0&h=ALL&s=Hollin+HillsIts certainly a bit of a compromise from N. Arlington in terms of proximity. However, it is a tad cheaper, and there seems to be a much greater selection of contemporaries in the area. This one in particular looks like your cup of tea:http://franklymls.com/FX7568777
TA, yes, but it is way too long of a commute for me.Some of the updated houses there are really beautiful.
Ugh it is frustrating dealing with sellers that refuse to negotiate or accept comps. We were looking at a townhouse listed at 645K when all comps since 2008 have sold for 565-615K. The most recent comp was 600. All of the places are identical and made in 1999 so basically no one has updated anything. After we put in an offer of 605K, which was rejected. We then said we would go to 620K (we really liked it and expected it wouldn't appraise so perhaps a chance to negotiate later). His response was the offer needs to be at least 640K (the neighborhood hasn't sold houses at this price since 2006...)Both his and our realtor agreed and told him that there is no way the house will appraise for 640K, but he doesn't seem to care... Ohh well I guess we will wait a few more months until the next one comes on the market.
HB, sorry that a delusional seller kept you from buying.I wonder if in several months, when the seller either gets tired of waiting for a higher offer or gets a contract but the appraisal doesn't come through, s/he will contact you about putting in another offer. By that time, I hope you will have found something better and you can laugh at him/her.
Ace,Or more to the point, offer 620k minus two months of the sellers likely mortgage payment.Too passive aggressive? :-)My $0.02
Ace-Thanks and I will be interested to see if that happens. I will post the house if/when it ends up selling and what the price is. mytwocents-That would be a fun bid :)
http://docs.google.com/viewer?a=v&q=cache:EXzaNGPXo5MJ:assets.opencrs.com/rpts/R40955_20091201.pdf+price+effect+of+home+buyer+tax+credit&hl=en&gl=us&pid=bl&srcid=ADGEEShUib6PCMYzfgjQevPjCIscgteXJSIIEzeAKy4JpSts2FAlztwMNoOPrzs_lGv5Uf7BN-GWYxeerDtj60lHgFySOF5KRZUNVlJXBZpfXKD10i3XoTd4IrVgVRx9jUP_i4_Ctwdb&sig=AHIEtbT7j0vIZ3z8euxqDD5QAOULfJ55ZQlook at table 2 here.
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