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.
CNBC Article: Homeownership May be for the Few, Not the Manyhttp://www.cnbc.com/id/41782186/print/1/displaymode/1098/Not DC-centric, but interesting nonetheless.
""move up" means that they sold an existing home to purchase another. I would guess that anyone doing this b/t 2003 and 2006 made out like a bandit on their sale and paid top dollar on their new purchase. A wash perhaps?"I would argue it was a loss.Take two houses, one for 100K, One for 200K.The Seller puts down 20%. The Lower house goes up 20% the bigger house goes up 10%.So the person put down 20, sold at 120K walks with 40.The New House Is now priced at 220K.To buy they put in their entire 40K plus another 4 just to get back to their old Equity Basis.Now what's worse, is the Taxes are say 1% and the Insurance is 0.5%So they were paying 1500/year on Taxes/Insurance.Now they are paying 3000/year Tax/Insurance.say they have held for 5 years, they had to put in more money and they had to put in expenses.Unless their income increased it was a huge stressor.
Pat,Your insurance estimates are still too high. You're neglecting the utility of a larger space (implied by move-up). Finally, who would move up unless they could afford a larger spacer?My $0.02
I have what should be pleasing news for VA_Investor. A coworker who lives in my old apartment complex in Tysons told me this week that her new lease is a 20% rent increase over her old one. In the 3 years we lived there we had one rent increase and one decrease, both less than $100 a month.
Jeremy,The data reflects a shortage of rentals and a significant increase in pricing power. I believe this will continue to be the case for a few years.I raised 5 properties last month but will have to wait on others until leases expire.I have also read articles (and have believed this for awhile) stating that new inventory will come on at the higher end, further squeezing lower cost supply. Land costs are such that development requires higher end.Clearly the stars are aligned for higher rents. The most I went up was 10%. I'll have to reconsider this as leases come up for renewal.
Pat, here's what stresses me:Having to go up and down two flights of stairs per load of laundry because there's no room to move the WD to a higher floorHaving a kitchen so small only one person can be in it at a timeEtc.Everyone who wants to move up has a long list of these things that trade off against the stresses of paying more and taking a risk of a drop in prices after you buy, etc.
A little OT, but a good way to keep home ins. premiums low is to take a high deductible (e.g., 1% or more of the building (not land) value) policy. You're not going to file on small claims anyway, since that can lead to higher premiums or cancellation.
VA_Investor and others,How do you decide on the rent increase amount? What numbers and factors do you pay attention to? Thanks.
SUPERBOOM: Why the dow is going to 38,820http://finance.yahoo.com/blogs/breakout/jeff-hirsch-dow-38-820-bust-20110406-114000-143.html?sec=topStories&pos=7&asset=&ccode=You heard it here first boys -- buy buy buy!!!Uggh...this guy reminds me of Contrarian's source for dow 40,000 by 12/31/2009 -- how did that one work out? Oh well, at least this guy says we wont peak til 2025 - gives him alot of time to sell books before he has to admit he was wrong.
friendly,It depends. I check what other comparable places are going for. If it is a vacancy I will come in slightly under market so that I get more applications. I am looking for tenants that will likely stay for a number of years.For existing tenants, I try not to go up too much at one time and will generally be somewhat under the going rate. If they are great tenants (take good care of the place and fix minor repairs, etc.) they won't see many increases. If I believe someone will be leaving in a year or two, I will definitely max-out the increase. It won't be worth it to them to move to another place.I usually get a 2yr lease at the outset. This back-fired on me last year.Right now landlords are in the driver's seat. I intend to really push things in the next few years.
Va_Investor - why are landlords in the driver seat?
melkam,Supply and demand. The vacancy rate for Northern Virginia has dropped significantly over the past 2 yrs.There are several factors at play; lowering unemployment, population increases, job creation and lack of enough new supply of rental units.Buildings are underway or planned but won't be delivered near term.
CherylCan you reconcile the vacancy rate i found in Arlington with the issue of supply and Demand?Is there an imbalance in Fairfax/reston?Is the problem that the banks are holding shadow inventory off the market?
pat,What is your source? I put mine up a week or two ago when hb (?) claimed a vacancy rate much higher than actual.I've also investigated Realty Trac's numbers on bank-owned and they were absurdly high.
Is the problem that the banks are holding shadow inventory off the market?At least someone understands that banks are secretly holding inventory off the market to keep prices from tanking. They are colluding to support current price levels. They know that if they dump all of their inventory at once, their balance sheets will implode and they will be out of business.
"Pat said...Is the problem that the banks are holding shadow inventory off the market?"I think the problem is we on this blog use the term "vacant" in a very narrow way when its often defined in much broader sense. On this blog, when we think of "vacancy", we think of places that must be rented or sold in the near term -- thereby putting downward pressure on prices. However here are other examples of "vacant" places:Live in NY but own a 2nd home in McLean for business? The McLean place is "vacant".Live in Middleburg, VA but have a long term rental in Arlington for days you have to come in to the office? The Arlington place is "vacant".A place in Shaw, abandoned in the 1968 riots and unlikely to be rehabbed soon? Vacant.Partially built complex that is 90% pre-sold but yet unoccupied? Vacant.The thousands of close in townhouses that are part of a thriving business community? Vacant (because the occupants dont live there).The point is, a high and or increasing vacancy rate is not always a sign of increased distress. Take a look at this graph of homeowner vacancies from the Census:http://cr4re.com/charts/charts.html?Housing#category=Housing&chart=HomeownerVacancyQ42010.jpgThe vacancy rate has been rising nearly continuously since 1978. However, prices clearly have not been falling for the last 33 years. So again, be careful how you use the term "vacancy". After all, what if someone saw this graph in 1981 and declared "the vacancy rate is rising, so prices MUST come down". 30 years later, I think its safe to say that guy made the biggest mistake of his life.
Post a Comment
Subscribe in a reader