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Wednesday, February 1, 2012
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29 comments:
I have been watching a neighborhood on the outer limits of NoVa for about one year now. Prices have been dropping. Some houses have been on the market for 100 days plus.
Suddenly, in the span of this last week, nearly every house in the neighborhood is under contract. A new home, built by a private builder that had been reduced in price twice, suddenly has a 10% increase in its asking price.
What's going on here? Is it the newest wave of interest rate reductions?
I'm not coming in without having done my homework. I've been reading sites like this and paying attention for a long time. What I'm reading on blogs and the news tells me that this is an anomaly.
Mortimer-
I don't think it has much to do with the interest rates. Usually people are pretty slow to realize interest rates are falling and are not quick to act when they do. I saw that happen when I started looking in March 2009, right when the stock market started going higher. It is possible the recent run up has made people more confident and willing to buy although that also seams surprising. My best guess is that an large investor decided that they could get strong returns renting the place and decided to buy a lot of houses. Other than this I am not sure what else could have happened.
HB,
Interesting theory. Thank you for your response.
Thanks everyone for the discussion on the thread from the other day.
I, too, am interested in the cost of money that is the difference between renting and owning. If we bought that house, the mortgage (including reno loan) on a 15 year loan would be $100 or so less than our current rent.
We got word that there are a few offers including cash offers on the place. I presume we are against some investors due to the cheap cost.
I vacillate too often, so I am just not sure what we want, lol.
sehrwunderbahr.
Well at least the investors will be calculating yield.
as for what the fools want to pay, Anon would strongly suggest you get into a bidding war.
Mortimer,
hard to say what's going on.
No Doubt Obama is trying to goose the economy, but, it's a failed approach.
Disaster Capitalism isn't an effective tool for sustainable growth.
Mortimer,
I think people are comfortable that a bottom has been reached and want to capitalize on current rates. Investors are buying lower end. My guess is you are seeing end-user's. What price range are you talking about?
Thanks for the replies.
The price range is $250,000 to $350,000. Most of the homes are between $300,000 and $350,000.
GO GIANTS!!!!
http://www.washingtonpost.com/business/economy/survey-home-prices-declined-in-19-of-20-cities-in-november-prices-back-to-2003-levels/2012/01/31/gIQAaKwoeQ_story.html?source=patrick.net&hpid=z4#article-leaf-page
Survey: home prices declined in 19 of 20 cities in November; prices back to 2003 levels
Don't worry, Immunington is beating the trend....
http://blogs.wsj.com/economics/2012/1/31/a-look-at-case-shiller-by-metro-area-8/tab/interactive/?source=patrick.net#s
Atlanta, Vegas, Detroit,Cleveland, Phoenix Are all great Values.
Yeah, Detroit is a GREAT value... but then you'd have to live there. Have you ever lived in Detroit??
I can sure tell you a story or two about that "wonderful bargain" of a place.
Pat said...if arlington doesn't clear by 2012 well then its immune.
sehr
Detroit has issues, but it can get better.
buy an old crack mansion on the river, get some guns, hire guards and kill any zipperheads who mess with you.
but Atlanta, phoenix and Cleveland have great values.
Anon Says
"Thus if one was "ready" in 2004, they are in the same position (pricewise) as they are in 09, albeit with 5 years of unnecessary rent in the interim."
One could just as easily say
"The Ready Renter has the same position in 2009 albeit without 5 years of unnecessary interest payments, maintainance,,,,"
Anon dishonestly refuses to ever discuss interest as rent on money
"Pat said...One could just as easily say
"The Ready Renter has the same position in 2009 albeit without 5 years of unnecessary interest payments, maintainance,,,,"
To the extent that interest and maintenance are not part of what the landlord calls "rent", then yes. Absoltuely. And if ready renter likes avoiding these costs for 5 years, he should love avoiding them for 50 years. There is nothing wrong with renting for life.
"Pat said...Anon dishonestly refuses to ever discuss interest as rent on money"
Dont you dare accuse me of being "dishonest" about this. In part because I explicitly acknowledged interest as "renting money" 2 days ago.
The bigger reason though is when it comes to dishonesty, there is probably no bigger contemporary example than:
"Pat said...if arlington doesn't clear by 2012 well then its immune."
The olive branch is still extended Pat. Discuss this openly and honestly, and we can begin anew. The choice is yours...
"Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as "MERS certifying officers," have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have."
So how many think there were frauds here?
http://franklymls.com/AR7689657
assessed 284K, listed 259K,
sold 251K, 53 DOM,
not too stale, actually a nice little duplex,
I had looked at this one before
they were selling in september, and prior buyers couldn't close the deal and by then, I was in terminal on my place in DC.
http://franklymls.com/DC7277338
656 DOM, down from 330K, looks clean.
I know someone was talking about foreclosing on there place a few threads ago. I forget who it was, but there is more evidence that it may be worth talking to the bank about a short sale. According to CR some banks are offering the current owners up to ~30K to give up the keys. Although I assume this depends on the state and the amount of money the house is worth. So for a cheap house I assume they will not give a lot of money, but it sounds like they may at least work with you...
HB
you are talking about Deed in Lieue of Foreclosure.
short sale is where you sell for less then the mortgage and the bank writes down the mortgage.
Deed ILO is just a paperless foreclosure.
Pat-
Its possible the article is also talking about that, although it specifically is calling out short sales short sales
HB
the article uses the wrong lingo.
a Deed ILO is where you send the keys to the mortgage holder,
a short sale is a third party salse
for less then the mortgage price.
Pat-
I didn't read the entire article at CR linked to, but I assumed that it was probably talking about both. I know at some points they were offering people money to do a short sale also
http://franklymls.com/DC7578621
200K 3/1.5 the realtor comments are hysterical.
Honest description would be
"Ugly Hag, 40 years of abuse, uninhabitable, unfinancable, rode hard, put up wet"
per NVAR/MRIS YOY (1/11 - 1/12) inventory is down 14.6%
I don't see how prices will drop given the inventory situation. And now we have the bulk sales of reo's happening.
VA_I,
I know a few younger folks (mid to late 20's) that have been looking for apartments and group rental houses in N Arlington along the orange line.
It seems that a room in a group house for $800 is a screaming deal. $1000 is more typical. For a simple 3 bedroom house then, or something that can accomodate 4 roommates, the cost runs between $2800-3500.
On a cash flow basis, that would readily support a $500-$600K mortgage. I would hazard that that really helps put in a floor on the N Arlington colonials.
My $0.02
mtc,
What is it about N.Arl? My son and his friend are paying almost $2,100 for a very small 2/1 1940's apt. with pink bathroom tile.
Woulda, coulda, shoulda....
VA_I,
I think it's just a really good mix of restaurants, bars, and a younger crowd. Also, commuting from Arlington is pretty easy. Whether you're heading to downtown, Tysons, or Reston you'll likely get where you want to go within 30 minutes.
My $0.02
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