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Monday, September 12, 2011
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28 comments:
14 underwater states
but don't worry, the market here is different
NVAR regional sales data is out for August 2011 vs. August 2010
Solds are about the same yoy
median price is the same at 425K
DOM about the same
pendings up 12%
active listings down 9%
This is data for here, not the entirety of Virginia.
Anon said . . .
"Im curious about that too Vinny. Im also curious if you will be here in the future to stand behind that guess -- or if you will simply fade away a-la John Fontain, Neil, Terminator X, Leroy, Novawatcher, Tired Bubble Watcher, Spider, GTE8111, Anon 410, Zerodown, Joel and Sojnia, Spunky, and countless others who confidently declared that March 2009 was "nowhere near the bottom"."
Nice I get a shoutout; 1st time I've checked this place in months (bored . . .) and I get a shoutout.
Nope, Anon, I changed my situation; supply vs. demand. Housing too expensive in DC so I moved. A better job, with more pay, in a much lower cost of living location. I used the cash I'd been saving for years to buy a house outright . . . for 60k. Same place in DC would cost ~500k. I could never afford that in DC. Shoot, 650k here will get you a 11k sqft mansion on 5 acres.
You might thing so what . . . well, that's one less person/family in DC. Eventually things even out. I've lived in many different places in my life. Just about the only thing the DC area has going for it is government.
So now I have a better job doing more what I want to do out of DC . . . hallelujah!
The absolutely fantastic thing about where I currently live is I'm thinking of buying another home slightly closer to work. I can rent my current place out for about 1k/month buy a better place for 80-100k, and have the renters pay my mortgage and more. Life is grand.
Hey, I got one too!
I just don't read this blog much anymore. I have been super busy and there just hasn't been that much going on around here.
It's been awhile since I checked in here. Is the local market still considered stable (even number of sellers and buyers?)
Thanks.
Anon, if you and I could make perfect predictions we wont be here blogging.
Based on data and trends available we just try to extrapolate.
Terry-
As of now the market still looks pretty stable. Prices continue to bounce around neither going up or down very much. Sales rates and inventory have also been pretty stable.
HB
By the numbers the market is stable.
No great big growth, no big fall,
however thats in the face of recessionary expectations and lousy consumer sentiment nationally.
things here are better, just as they are in NYC, but, the real world is suffering, and i'm not sure how long the illusionary world can continue.
It's not an illusion pat, as yet. It is what it is. I find the faltering recovery sad and concerning. A double dip is nothing any of us wants (except contrarian), but I remain optimistic over the long-term and not too concerned over the short-term.
I've said for a few years now that people should expect to fasten their seat belts and hold on. We may have a lost decade but I'll keep my head down and plow forward - what choice is there, really? You can hide in a bomb shelter ala contrarian or you can take the best steps possible to protect yourself and take advantage of any opportunities that come your way.
Hiding under a rock never got anyone anywhere. I'd really like to know whether contrarian shorted CS a few years ago or whether he is short the stock market now. Money where your mouth is.
Me? I'm pulling out as much of this cheap long-term money as I can.
cheryl
I do agree, it's cheap long term money, and it makes a solid argument to borrow 30 years at 5%.
Because of my situation i can't borrow there, but, while ti's there, it's not a bad idea to grab it.
one has to agree with the numbers, the debate is what the future holds.
Certainly, we are in uncharted waters and it's hard to make solid rational decisions.
I'm looking at a very interesting place, i'll tell you about it next week.
Pat
http://mrislistings.mris.com/Matrix/Public/Portal.aspx?ID=109628807-1056173992-32
would this be a good purchase?
Price 450K, 2 units, one unit is producing 800/month. Lets say both units rent, it produces on average,
18K per year.
that's a Yield of 4% or a Cap Rate probably close to zero. Does anyone (Anon?) want to say this is a good idea? Anon likes to make fun of people, but here's a clear opportunity to make a suggestion.
Dumpster diving
45 million americans are on Food stamps and people are dumpster diving for food.
While it's very cocooning to be on a Federal Payroll, and in the federal spend zone, there is a reason why people want to spread pain around.
pat,
I didn't look at the listing but the numbers you put out make it a terrible deal. I am buying a TH for 220K that rents for 2K.
I own something that looks like a terrible deal at first blush- but there is alot more to it. Unless there is some hidden value in your deal, you can do much better.
Pat-
Obviously if it really only rents for 18K a year that is a terrible deal. Although seeing that the place is 1800 sq. ft. above ground and 900 below ground the rent seems absurdly low. My guess is that the apartment that is not being rented is twice the size, because it includes the basement and rents for significantly more or they both rent for more.
Although either way seeing that the place hasn't sold the price does not mean very much. There are always places that are listed for more than they are worth in any market.
In my current building you can get places that rent for 2K for ~300k, and as VA_I says she has similar places that sell for 220K that also rent for 2k. So all your listing shows is that in some places people are listing houses for prices that would be bad cash flow investments
New weekly RBI report for NOVA.
New listings and inventory down over 20%. Months of inventory heading towards towards a healthy market of 6%.
I know weekly is meaningless in the scheme of things - but the trend is your friend.
VA Investor,
Could you please let me know of any lender who may accept less than 20% on a condo and it is still doing 2nd mortgages? The ones I talked to want 20% down.
Thanks.
dc2,
I heard that Wells Fargo had some low-downpayment loans available but I don't know what the terms would be or whether a second is placed to avoid PMI. I was told by an agent that Wells is doing 3% down, conventional financing. Otherwise I really don't know.
Those in Govt and govt contracting are starting to feel the pinch. Many contractors have had the salaries cut in half and the govt. is poised to cut trillions in spending.
This will cut bonuses for govt employees and hiring freezes, pay cuts or layoffs are in the near future.
dc2 can you use a fha loan? If so you will only need 3.5% down
hb,
FHA has gotten incredibly expensive due to a virtual doubling of the MIP. I recently investigated an FHA streamline refi for a relative. Despite a decent drop in rate, the payment would increase due to the steep MIP. I still believe in the value of an assumable FHA loan, but the increased PMI cost makes these loans less compelling than they were a year or so ago.
Also, anyone considering an FHA on a condo should first go to the HUD site and verify that the condo development is "approved". Many have lost their approval due to percent of investor owned units and various other issues.
If FHA (and their very generous qualifying ratio's) is the only way to enter the market then there is little choice but to assume the burden of past losses.
VA-
I fully agree that FHA loans are expensive (rates + MIP are both bad), but if someone really needs low down payments than this may be a reasonable option.
Anyone see Perlstein's article in the post this past weekend. I've thought the same thing about refi-ing people with no lates. The risk is already in place and this would reduce it - it's a no brainer, but the bond holder's are extremely opposed as they will lose the higher return on performing loans. I say tough beans.
hb,
Bingo!
VA-
In general I think it is probably mildly positive to do this, but there are some downsides to the plan. First, the owners savings would be spread over 30 years while the losses on the securities value would be immediate so the net effect could be anti stimulative in the short term. Also assuming that banks would need to review the refinance application they would probably charge a couple of points. So either homeowners would need to pay the fees or buy down the points with a higher rate, in which case the loan rates may only be slightly better than the borrowers current rates.
hb,
The proposal is streamline (no verifications or appraisal). This would be mandated to freddie and fannie and I doubt they would get away with throwing a bunch of points in there. More of a note modification (which portfolio lenders used to do for a nominal fee - I paid $250).
The affect would be to pump tons of cash into the economy and get people spending. Remember, the borrower has to be current and no lates (?) so they obviously can afford the present payment. Due to LTV they can't take advantage of the cheaper money and lower payments.
This would be very stimulative. Perlstein had the numbers. Coincidentally enough, I saw a clip of Bill Clinton speaking yesterday endorsing, basically, the same plan or like version.
VA-
Thanks for the clarification. Without the points the plan sounds much better. It still does have the issue that you get more spending from the people whose loans get modified, but you get less spending from the people who owned the securities who took large losses on them. Although in one case it is more pay vs. in the other is a less direct wealth effect, so I assume it would create more spending.
The only thing that makes me hesitant about this is that Calculated Risk does not think it would be successful even if it is passed, and generally they are pretty good at figuring out the implications of these types of things.
Cheryl
Bear in mind, the refi does create one type of new risk.
Right now the mortgage is Underwater so it has a certain risk which is reflected in the higher interest rates.
By Re-fing the mortgage to a new rate, you now reprice that risk to a lower value, which was part of the whole bubble. Mispriced risk.
How is this different from a Teaser rate mortgage?
It might be one thing if FHA marched in, took a First trust on that 80% LTV at a new rate and let the old mortgage go hold the top 20%+ as higher risk, on a second,
but, now all we've done is transfer low rate risk to the taxpayers again.
Thank you, VA Investor and housebuyer for your comments. :)
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