The lovely renovated rowhouse is still for sale at a reduced price of 349.9K. Back in October it was listed for 367K [To see more pictures click on previous link].
Will it sell at the reduced price?
Most Probably Not. It needs to be reduced much more. Despite its lovely renovation it is still only 2br and it is located on the gentrification frontier.
Posts
it is easy to cherry pick properties in Baltimore and DC that fit you bill of bubblicious properties. There are plenty of idiot home owners out there that still think they should expect 25% yearly appreciation rates. Just because these boneheads are out there doesn't confirm that there is a bubble. Some of the other information on this blog lends more to that idea in my opinion. So stop focusing on the idiot down the street that is trying to fleece some unsuspecting soul. The market is slowing in areas right now, condos, far out suburbs, etc. But still seems viable in some hot spots. I used to enjoy this blog but it has become so biased and single minded I think I may be moving on to greener pastures. Numbers are a good predictor of behavior for real estate - but if we could truly predict future results we would not be on a blog trying to confirm our thoughts. The truth is we don't know what will happen - the smart money is that real estate cools off - but sometimes not following convential wisdom is what makes you the big bucks. I am not suggesting being foolhardy. Just my five cents folks - feel free to start ripping me apart.
ReplyDeleteI agree with you. This blog has become dominated by people who apparently are rooting for the real estate market to completely collapse and financially screw over millions of home buyers. It is also becoming dominated by those who ridiculously claim that renting makes the most financial sense over the long run. This blog still has some great posts, but it is becoming tedious in its cherry pickign to prove its bias.
ReplyDeleteAnons,
ReplyDeletePlease register or just use a name bc it is hard to respond to so manyt anons.
Thanks
David
This blog has become dominated by people who apparently are rooting for the real estate market to completely collapse and financially screw over millions of
ReplyDeletehome buyers."
I do not want to see millions of my fellow Americans in financial ruin.
"It is also becoming dominated by those who ridiculously claim that renting makes the most financial sense over the long run."
For most people who do NOT own, renting makes sense in the bubble markets as price will fall signicantly in real dollars over the next few years. I am a strong believer in homeownership, but getting a toxic mortgage to buy an over priced housing unit that will depreciate over the next few years does not make financial sense. Renting in the bubbe market is much cheaper then buying.
"This blog still has some great posts"
Thanks.
"but it is becoming tedious in its cherry pickign to prove its bias. "
Please provide concrete examples
Let me add something. A townhouse in my part of Alexandria was originally listed for $999,000 about 1.5 years ago IIRC. It was laughable, even at the height of the bubble that a cheaply built townhouse next to projects would sell for that when well constructed, custom townhouses were selling in the 800s not that far away in a "better" part of town. It eventually sold for about $699,000.
ReplyDeleteNow this sold last summer at the end of the bubble. So just because you can cherry pick houses and say their prices are being reduced, well, it doesn't really mean anything. This particular seller was just a jerk trying to rip people off.
That being said, I absolutely do believe that condos around here are horrendously overpriced for what you get. Single family homes, not so much.
Hum, the single family home I rented this year for $1550 is Silver Spring would sell for $450,000(last summer any way). This rental is not a unique deal, as I had a few to pick from in the 1500-2000 range. I don't under stand how they are not way over priced. Could someone tell me the flaw in my thinking. I can't figure out how to buy a $450,000 for $1550 a month.
ReplyDeleteThanks,
-Joe
I like following the specific reduction examples and I don't believe they are being cherry picked to fit a bias on this blog. There are about six homes still sitting in my current location, which I know were overpriced and have been reduced, and are still overpriced and still sitting and sitting. It's not cherry picking of an example if there's many examples to choose from.
ReplyDelete" Would you want your house on the internet listed on a blog saying it is overpriced when you are trying to sell it? Doubtful. Google that address and this blog is likely to come up"
ReplyDeleteNope. However, I would also not want to be a buyer who overpays 150K or whatever. Often, I also say positive things about the property.
Call me Skins fan.
ReplyDeleteI don't see the problem with the prespective on this and other blogs. First off, David does not have the perspective that some of the more extreme posters (myself included) have. I believe that real prices of DC area housing should take at least a 50% haircut over the next 10 years. But not everyone on here, and certainly it doesn't seem David (though I won't speak for him), would agree with that.
Secondly, if you want to read a perspective that says we are in for a soft landing, or people ought to buy, or whatever, there are about 100 million sources you could go to, including your daily paper. Blogs like this one provide alternative viewpoints, thank goodness.
Finally, while anyone can read the stats, and stats are important, the individual anecdotes here are VERY interesting and keep me coming back. I don't think David has found particularly extreme examples; my observations are that his examples are right in line with the general market.
Skins fan here again.
ReplyDeleteVaininvestor said:
"What bothers me are the useless and stupid (for want of a better word) statements that "I'll pay 200K, no more"."
I have probably made statements like that, and if so, I stand by them. They are not an attempt at humor. They are my honest valuation of what I think the property is worth, factoring in the view I have of the house, the available land, the traffic and crime in the area, etc.
Would my view change if I actually went and saw the house? Probably- but my value could go up or down. Also, it is useful to have such a number in my head to avoid even bothering seeing a house. When I see a 50 year old house on a 1/8 acre lot in a crime and traffic-ridden neighborhood selling for 500K, and I know I wouldn't pay more than around 175K, there is no point in me looking.
If my (or anyone else's) value is way out of line with reality (as you seem to think), then that is my problem. If I think it's 175K, and the rest of the world thinks it's 500K, then I'll be out of the market to my own detriment. If I'm right in the long run, though, good for me.
But what's also important to remember is that some of these stated values that you find "idiotic" are very close to what the same type of house sold for only 5-6 years ago. Saying that a house that sold for 150K in 1999 is now worth no more than 200K is hardly "idiotic," even if someone is trying to sell it for 500K.
I am against speculative episodes.
ReplyDeleteThe posters at the beginning of this chain have said everything I've been thinking while reading this blog during the past few weeks or months.
ReplyDeleteThe number of posters lusting for a 50% or more market crash indicates a disturbing level of simplistic reasoning. This detracts from the overall quality of the site. Don't posters hoping for a such a dramatic market crash realize that, if there were a crash, the entire local overall economy—including yourself—would be adversely impacted. Don’t you realize that, since many people would lose their jobs if such a crash occurred, it would probably be of no use that a house presently listed for 699k could be had for "no more than 175k." A cursory knowledge of past economic catastrophes shows that the ultra wealthy survive and relatively proper during them, but all of the lower classes suffer the most. In other words, if you can’t easily afford an “overpriced” house now, you probably won’t be able to afford a “price reduced” house after a major market crash due to the economic impact of the crash.
David’s postings showing price reductions on selected properties, although entertaining, are not highly informative. I would have to know the owners’ basis for the property before I’d make any conclusions on the meaning of the price reductions. For example, I recently sold a property for 15% less than my asking, primarily because I wanted to close as quickly as possible for tax reasons. This reduction was of no real consequence to me since 1) the 15% reduction was a wash due to tax savings; 2) the selling price was still twice the property basis.
In addition, a truer indication of an “actual” price decline (which I suppose would be the best evidence of a bubble) would be a comparison of past sales price to the offers that the sellers accept. I don’t think many sellers are selling for a loss, and I don’t think many sellers would realize a loss even if they lower their asking prices 15-20%. If I buy a property for 200k, list if for 600k one year later, and after an asking price decline, accept an offer for 550k, does this mean there’s a bubble? I don’t think so. This is the type of property David highlights as “proof” of bubble bursting, but I don’t think my example necessarily supports David’s conclusion.
I do not bring these example as 'proof' that there is a bubble. To bring proof there is a bubble macro facts and figures should be presented not a collection of micro examples.
ReplyDeleteThe point of these listings is too show overpriced housing that is not selling. I like to watch how the sellers reduce or hold on to the price as the market continues to weaken.
Skins fan here:
ReplyDeleteTo anonymous 12:19. I am not "lusting" after a 50% decrease. I do think a real decrease in prices of 50% is inevitable. Prices seem to have more than doubled in the DC area in the last four or five years ... why is a decrease of 50% (which might still leave prices higher than 4-5 years ago) be "simplistic"?
Would a 50% decrease in prices have adverse effects on many others? Absolutely. It is awful that our policymakers have allowed this bubble to happen.
That doesn't mean that the bubble won't pop.
Too many people look around, observe what has happened the last 2 years, and don't question. A few years ago, an old house on a small lot in a marginal neighborhood in the DC area was priced at under 200K... and not that many people were interested in buying it. Now, if I say that real prices are going to go back to those levels, I am being unrealistic? I don't think so.
But time will tell.
Vainvestor,
ReplyDeletewhat a cop-out.
-Joe
According to this...
ReplyDeletehttp://sdatcert3.resiusa.org/rp_rewrite/results.asp?streetNumber=3015&streetName=Baltimore&county=03&intMenu=2&SearchType=Street&submit4=SEARCH
It's total value is about $150K -- what does that mean on a chart like this?
Way too much salivating at other people's possible misery.
ReplyDeleteAnd a drop of 50% in housing prices in the DC area? I'm sorry, but that's just ridiculous. The only way the average price would drop that much is if, God forbid, a major catastrophe occurred in the DC area.
I have no doubt that some houses are "overpriced". But how does one define "overpriced"? Saying something childish like "Well, I wouldn't pay more than $175k for that house being offered for $500k" isn't indicative of a house being overpriced; it merely means the person won't pay the asking price. Good for them. Now what if someone else comes along and pays the asking price? Doesn't that mean the house was correctly priced? Or if several people come along and get into a bidding war and the house sells for $600k - doesn't that mean the house was underpriced?
And for the PhD poster, Anon #2 never said it *always* makes sense to own versus rent. He/She was disparaging those who have claimed that renting is always better than owning. And as a Nobel Peace Prize winner, I am unimpressed with your credentials.
Complaining about a perceived bias seems a bit ridiculous when the name of the blog is called Bubble Meter.
ReplyDeleteDavid, keep up the good work.
Walloon.