Hudson & Marhsall is hosting a real estate auction from Tuesday, October 02, 2007-Sunday, October 07, 2007 for 300 properties throughout Maryland, DC and Virginia. Most of the properties that are located in the Washington, DC metro area are located in the outer suburbs (In places like Manassas, Orange and Winchetser, VA).
Careful! Better deals can be had in the future. Prices will continue to fall in the Washington, DC metro area in the coming years. We are not at the bottom!
Posts
David,
ReplyDeleteI saw a news article on the auction this morning and my first thought was "Tell the bubble meter." This is significant.
I agree prices will be much better in a year. Its interesting that the REIC predictions are for 20% off. Is that based on anything but hope they don't drop more?
I'm afraid my predictions for DC's status in this market are wrong. I predicted a 20% to 25% drop in prices over a period of years. Seeing this happen over one year requires me to rethink how far will this go?
If anyone attends, please post information! Shills? Declined bids? If anyone finds out how many sell and how many close, that would be fascinating. I guess we'll see how many buyers were waiting to "pull the trigger." Then over the next six weeks we'll find out how many qualified buyers actually did close. I'm expecting high "buyer's remorse."
Got popcorn?
Neil
Neil,
ReplyDeleteThanks for your comments. I added a link to your blog from this blog.
I plan on attending (and possibly bidding) at least one of the 2 weekend days. I'll try to note some selling prices as they go. Though I don't know how to find out about rejected bids, other than noting their eventual return to the MLS.
ReplyDeleteA few of the properties had pre-auction offers accepted on them. I very curious as to what kind of offers the banks were saying yes to.
I also noted several of the properties have multiple neighbors trying to sell as well. They may be in for some shocking news when these sales become comps.
I went to Niemen Marcus the other day to browse, and I was reminded of this blog.
ReplyDeleteThe store is full of $10,000 sportcoats and $2500 sweaters and $1200 shoes. I'm walking around thinking "who the heck can afford to shop here" what are a bunch of shieks coming to Tysons II to buy this stuff?
And yet the place stays in business.
"And yet the place stays in business."
ReplyDeleteThere are some seriously rich people in the area, that has always been true. The key to remember as far as how this relates to the housing market... is that the proportion of seriously rich people didn't change dramatically in 2001...
a) you're wrong - people have gotten dramatically wealthier in that time, particularly the lawyers; and
ReplyDeleteb) what makes you think prices were "right" in 2001?? They'd barely budged in 10 years at that point.
Anon 5:13,
ReplyDeleteI call BS on the lawyers getting richer. Salaries for starting associates at big firms jumped from 90K to 130K in 1999 when Wilson Sonsini in Palo Alto started a bidding war and the NYC and DC firms soon followed. That was eight years ago, and starting salaries are now at 160K. Housing didn't start to spike until late 2002 into 2003; if law firm salaries dictated the DC market's ups and downs, the spike would have occurred in 1999.
The spike in housing had much more to do with low interest rates and speculation than it had to do with law firm salaries. And if you think the upcoming consumer-led recession won't cause cutbacks at East Coast law firms, you are sadly mistaken.
Lastly, could you please choose a name? It is easier to respond to, and you can remain anonymous. My real name isn't "Terminator_X".
Anonymous said...
ReplyDeletea) you're wrong - people have gotten dramatically wealthier in that time, particularly the lawyers; and
b) what makes you think prices were "right" in 2001?? They'd barely budged in 10 years at that point.
The first question makes me think that "anonymous" is really Lance. Sorry, the housing bubble is an international phenomenon, not just a local Washington, DC phenomenon. Try reading The Economist sometime and you'd know that. Even in the DC area, lawyers only make up a fraction of the work force. They can't drive the whole market.
Regarding part (b), that has already been fully addressed by Yale economist Robert Shiller. Even Sam Zell, America's greatest real estate investor, knew it was time to cash out of real estate.
Anonymous 5:13 said...
ReplyDeletea) you're wrong - people have gotten dramatically wealthier in that time, particularly the lawyers; and
b) what makes you think prices were "right" in 2001?? They'd barely budged in 10 years at that point.
You're correct, of course. However, neither Anon 2:46 or Terminator-X can see that because all they can see is that their nominal wealth and income haven't increased .. so, who could others' have? Also, they seem to be operating from the assumption that ownership rates must remain constant over time. The fact that the widening gap between the haves and the have-nots could mean higher prices for homes in the coveted cities/areas where the haves want to live (and invest in) hasn't crossed their minds. Nor will it since they approach the whole matter with a sense of entitlement and not the mindset of someone willing to do the best they can for themselves under real and existing circumstances. It's just easier to feel one should be handed what one wants.
James, the fact you think that everyone who 'tells it as it is' is one and the same person speaks to your inability to accept facts. i.e., it's easier for your brain to discount it as 'not true' by fooling itself into believing it is one person's opinion and not just 'the truth'. Of course, the saddest part is that you're only hurting yourself by sticking your head in the sand and relying on your self of entitlement to see you through your housing challenges.
ReplyDeleteNeil,
ReplyDeleteI was just wondering what the address of your blog is. If you could please let me know, I have always chucked at your brutal honesty and would appreciate being able to read more than just your replys to comments posted on this site.
Thanks.
lance said
ReplyDelete"The fact that the widening gap between the haves and the have-nots "
If the have's are the 3 mexican families crammed into the one king farm home just to pay the rent, I prefer to be a have not. If the haves are the guys that buy an 800k row home and have to rent out the basement to make ends meet... again, I prefer to be a have not.
Lance, you have been proven completely wrong. You said there would be bidding wars, you said dc homes wouldn't go down. Admit you were wrong and lets move on. The only thing you have to argue on your side is when home prices will stop going down. Recessions are hard to predict and really is not that important. It appears that the rest of markets are feeling pain, however.
I wish you would show some class and just admit you were wrong. I am not saying you have to admit to the calamity that some BH's are predicting, but at least admit you were wrong about your predictions. Show some class and earn some respect.
Bob
Bob,
ReplyDeleteWill you please show some class and admit you and the other bubbleheads were wrong about a bubble bursting. Nothing has burst. The value of peoples' homes hasn't evaporated as you had classlessly wished. Yes, a few homes in edge markets and transitional areas have gone down in price, and a few unqualified buyers have been found out, but this is what always happens in the downside of the market. There's nothing new happening here and definitely no so-called "bubble" bursting. We who trudged on with our lives are doing just fine. Those of you still wishing bad on others so that you can profit off of the misfortune you wish on them will just have to accept that it ain't gonna happen. Work for your homes like the rest of us. THAT would be showing some class ... and honesty.
Area Jobless Rate Is Lowest in U.S.
ReplyDeleteEmployers Face Tightening Labor Market
By Cecilia Kang
Washington Post Staff Writer
Thursday, October 4, 2007; Page D01
The Washington area unemployment rate fell to 3 percent in August, the lowest jobless rate of any metropolitan area in the country, as continued strength in government contracting, high-tech and retail industries fueled employment growth.
"... As a sign of confidence that companies will continue to expand, the number of construction jobs in Northern Virginia rose by 200, to 97,800, mostly because of commercial development, Mezger said.
"Generally, 5 percent unemployment is considered full employment, and Northern Virginia has been at about half that rate for years." he said. "At that rate, its hard to for employers to stay staffed.""
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ReplyDeleteNeil,
ReplyDeleteI was just wondering what the address of your blog is.
Just click on my name. However, my blog is a 3rd string. Most of my latest articles were for a blogger dinner I organized. :)
Or click "Real estate comments" in David's links (bottom of the links).
Lance,
Good to hear DC is attracting talent. That report is definitely positive. I'm also hearing about up-ticks in furniture manufacturing in the US (yea, overall furniture demand is down, but to meet varying demand, production is moving back from China).
So its not all black. But inventory is still high. Sales are still slow.
I'll admit unemployment is doing much better than I would have thought. But construction is a dangerous example; the surplus inventory will cause it to hit a wall soon.
As long as my investments beat the Case-Shiller index, I'm happy. :)
Got popcorn?
Neil
lance said
ReplyDelete"Yes, a few homes in edge markets and transitional areas have gone down"
This is what is called denial. There is really no discussing this with you, logically, or intelligently. I wish there was a housing head with a head on his shoulders so we could logically debate, using facts, the areas home values. I would really like to get an honest assessment from somone on the other side of the fence to give me some brain fodder.
The wait for a logical housing head continues...
Bob
"You're correct, of course. However, neither Anon 2:46 or Terminator-X can see that because all they can see is that their nominal wealth and income haven't increased .. so, who could others' have? "
ReplyDeleteLance, you are pathetic. Even after being proven wrong again and again and again you keep rolling out the same BS.
Like an earlier poster said, open up the Economist sometime. Or read a major newspaper... or travel if you have the cash.
At this point your little theory that DC just suddenly got rich is so totally debunked that you have got to be the dumbest guy on earth to keep brining it up.
""Yes, a few homes in edge markets and transitional areas have gone down"
ReplyDeleteThis is what is called denial. There is really no discussing this with you, logically, or intelligently. I wish there was a housing head with a head on his shoulders so we could logically debate, using facts, the areas home values. I would really like to get an honest assessment from somone on the other side of the fence to give me some brain fodder."
What lance isn't mentioning is that the guy down the street just cut his asking price... and his house is a LOT nicer than lance's...
"I call BS on the lawyers getting richer. Salaries for starting associates at big firms jumped from 90K to 130K in 1999 when Wilson Sonsini in Palo Alto started a bidding war and the NYC and DC firms soon followed. That was eight years ago, and starting salaries are now at 160K. Housing didn't start to spike until late 2002 into 2003; if law firm salaries dictated the DC market's ups and downs, the spike would have occurred in 1999. "
ReplyDeleteFunny how much of this you have wrong. It was Gunderson (Palo Alto), not Wilson Sonsini, in December 1999, raising to 125. New York didn't respond until early 2000. DC didn't until late 2000. New York then, at the end of 2000, bestowed new big bonuses, which DC firms have only been gradually matching since then.
So, in other words, you've absolutely wrong. But thanks for playing.
And just to reitterate, my salary has gone from 160 in December 2006 to 210 now. Life is good.
ReplyDeleteThis comment has been removed by the author.
ReplyDelete"what makes you think prices were "right" in 2001?? They'd barely budged in 10 years at that point."
ReplyDeletebecause in 2001 prices were closely aligned with their long-term historical relationship to rents and incomes. the fact that they didn't move for 10 years was due to overvaluation in the late 80's/early 90's.
next.
LOL...
ReplyDeletelance lance lance...
Will your delusions never cease?
"The house was well-overpriced initially, and is still well-overpriced now. "
This is about the only accurate thing in your post...
"The house needs a total renovation (e.g., the kitchen --- including appliances --- is some 40 to 45 years old). "
You have got to be kidding me. That house is in incredible shape for the most part. The kitchen is a little old but a total renovation? You are out of your tiny mind.
In case anyone is curious the house down the street from lance is 1623 S st NW.
Check out the photos on this page:
http://www.martin-jeff.com/virtual.htm
This house is easily twice as desirable as Lance's and no, a rentable basement doesn't make up the difference. The buyer of your neighbor's house will probably be someone who actually has money, not someone who wants to play pretend like you do Lance.
BTW, What happened to "average rowhouses" in the District going from $1 million to $2 million in the last 12 months?
If this house, a 6br 2ba 19th century rowhouse with 5600sf, isn't able to approach $2 million then what the heck is "average?"
David,
ReplyDeleteI was doing my normal tracking of inventory on ziprealty this morning and noticed something. The inventory in DC is spiking back up? Did a major project list itself on the MLS? Yes, the "end of the month" delistings still dropped inventory for the greater DC area from 68,318 (end of September) to 65,842 (start October) back up to 66,580 today. This is odd... historically mid-September is the peak in inventory and then there is a decline.
I plan to do a new series on inventory starting in a few months. But I need to to have enough YOY comparisons and that isn't until in January.
Any comments on the inventory starting back up again in a non-seasonal manner?
Neil
Oh my God, Dave, did you see that Diana Olick gave you a plug on her Real Estate Blog! Check it out. I am so proud...
ReplyDeletehttp://www.cnbc.com/id/21119871/site/14081545
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ReplyDeleteHeh...
ReplyDelete$500k in upgrades to bring it up to "standard?" Let me repeat... you are out of your tiny mind.
Even on a historic house $500k of work is a massive restoration and something this house isn't even close to needing.
Is that how you are trying to explain away your clearly BS comments about "average rowhouses" going from $1 million to $2 million?
Face it lance... if this house goes for 1.5 million your comparably tiny house wouldn't come close to the 900k you paid for it in 2005.
Keep living the dream lance... lol...
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ReplyDelete$500,000 in renovations . . . hahahahahahhahahahah!!!
ReplyDeleteI keep waiting for Lance to say "SURPRISE! I'M BEN JONES AND I'VE JUST BEEN F!@KING WITH YOU GUYS!"
In closing, all I have to say is Interest only.
LOL...
ReplyDeleteThe delusion continues...
You think the same future owners that would want a $100k+ kitchen renovation are going to want renters in their basement?
Every step of the way you reveal what a fraud you are.
You try to play the part of one of the "haves" but the moment you open your mouth you betray the fact that you are just an average joe who is on an ego trip because he was able to leverage his way into a neighborhood he don't belong in.
People who can afford a $1.5 million house aren't going to be interested in subdividing it into a bunch of little apartments so they can live like one of the recent immigrants crammed into a mcmansion. Try to use your head for a minute... what kind of person willing to put $100k into their kitchen alone is going to want to convert their house into a little apartment building?
Have you considered the extent to which YOUR house is probably brining down your neighbor's resale value? Who wants to pay $2 million to live down the street from a house half as big that someone converted into a boarding house?
Out of curiosity... how much did YOUR kitchen renovation cost? I would hate to think your kitchen isn't "up to standard." lol...
"$500,000 in renovations . . . hahahahahahhahahahah!!!"
ReplyDeleteGo take a look at the pictures of that house if you haven't already...
It is actually kind of sad what a fantasy world lance lives in.
If he thinks that house needs a "total renovation" or that it
"easily requires $500K in upgrades to bring it up to standard..."
...imagine what standard he must be holding the house to.
You would think lance lived in some kind of a palace right?
Not true...
not true at all...
David.. great site and posts. Was wondering if you or any of your readers know of any objective blogs around on the Myrtle Beach/Charlston South Carolina real estate blogs. thx in advance and again great site.
ReplyDeleteHey,
ReplyDeleteI just did an interesting calculation. Between the drop in Case-Shiller (yea, looks like nice drops since July, but we'll take the July data) and how much I've been able to save (renting versus owning), my monthly nugget is down $800/month by waiting the last year (I did include the increase in interest rates at my credit union over the last year.)
:)
Neil
Lance is out of his mind. That house is beautiful and in tip top condition. And $200,000 for a new A/C system?? Hahahahahaha!!!!
ReplyDeleteWhen 'anonymouses' talk tough, it comes across like a chihuahua barking.
ReplyDeleteBelow is a restored property around the corner from the one being discussed.
ReplyDeleteIt is being offered by Coldwell Banker (www.ColdwellBankerMove.com)
Price: $2,095,000
MLS#: DC6535856
Anon, if you believe that the house can be restored for as little as you think, then you should buy it. Once restored it will be worth $2.1 M.
Lets not forget a few things about good ole lance..
ReplyDeleteHe is over 50.
He recently bought a row house for something like 800k on an interst only 10 yr loan which coverts to a 20 yr fixed, which means is payment probably doubles.
He rents out his basement to get buy.
Seriously, if when I am 50 I am in your situation I will be really upset. When I am 50 I will be thinking of only one thing, being retired, and being debt free (a mortgage is a debt).
So, now that we have all refreshed the facts you can see why he is figthing tooth and nail to convince himself that he didnt just make a very bad decision.
He has only been right about one thing. 20 years from now he will be able to sell it for what he paid, not one year earlier! So what does that make you, 70?
sad.
Bob
Good 'ol Lance. Now this is funny...
ReplyDelete"It is being offered by Coldwell Banker (www.ColdwellBankerMove.com)
Price: $2,095,000
MLS#: DC6535856"
In the exact same comment thread where Lance said...
"As bubbleheads have themselves said, "asking price" doesn't mean much. Most intelligent people realize that anyone can ask anything they want for a property. What it actually sells for is what counts."
Dude, you are a classic.
"Below is a restored property around the corner from the one being discussed.
ReplyDeleteIt is being offered by Coldwell Banker (www.ColdwellBankerMove.com)
Price: $2,095,000"
LOL!
It is another boarding house!
Check it out!
http://flag.blackened.net/atb/en/housing.html
Are you also an anti-capitalist lance?
$45/per night... including meals...
On second thought maybe your house isn't the anchor that is holding the neighborhood down. I can't imagine your boarders are worse than a bunch of out of town anti-capitalists...
Oh yeah, and that house is not only far nicer than the one on your street, it is completely imcomparable to yours.
As if that wasn't enough... it last sold for ~$1.2 million in 2001, so it also does nothing to support your earlier BS assertion that "average rowhouses" in the district have gone from $1 million to $2 million in the last 12 months.
Can you get ANYTHING right?
"He recently bought a row house for something like 800k "
ReplyDeleteIt was 900k.(50k more than it is currently assessed for) Just look at the DC sales records on the tax assessor's page.
David,
ReplyDeleteAre you now allowing anonymouses to identify people posting on your blog?
Perhaps comment moderation is needed afterall.
better yet ... registration with blogger (like the northern virginian blog does) should be required.
ReplyDelete"Right, and nothing has changed in DC since then."
ReplyDeletesure things have changed. the population has increased about 1% a year (less than 7% cumulatively), wages have climbed about 1.5% a year (about 11% cumulatively, and house prices climbed 160% cumulative.
yep, that makes total sense.
What's the matter lance? You only like playing the part of an arrogant but surprisingly ignorant jerk when you think you can't be identified?
ReplyDeleteThe fact is you are scared to death of being unmasked because your elaborate online persona will fall to pieces once people are able to see the truth.
Say what you will about Lance, but there is a nice sliver of irony when renters are making fun of someone renting out an english basement.
ReplyDeleteLance said
ReplyDelete"Perhaps comment moderation is needed afterall"
Typical. You can be anyone you want to be on the net. The moment you are found out to be the fraud that you are, you want to be protected...
Seriously, I cant believe you are 50. You have been proven wrong for over a year now, and still are in denial. You are in denial even when realators and homebuilders are fessing up. Banks are fessing up. Yet loan lance still proceeds to try and defend a very bad decision.....
If you can just be honest with yourself and admit that you bought at a bad time, the healing process can begin!
"Say what you will about Lance, but there is a nice sliver of irony when renters are making fun of someone renting out an english basement."
ReplyDeleteOh we don't have any problem with people renting, like you said, that wouldn't make much sense.
What we find amusing is that arrogant lance, the same guy who continually lies about the value of his house and how expensive his neighborhood is, can only just barely afford to live where he does by dividing his house into multiple units and renting them out.
Lance likes to pretend to be an expert. He is quick to insult anyone who didn't leverage themself up to their eyeballs to buy at the top like he did. He LOVES to make up stories about how expensive his neighborhood is and brag about how much his "equity" has grown...
...that is why he doesn't want anyone to know who he really is. He will have to deal with the truth and he doesn't want to do that.
Lance said:
ReplyDeletebetter yet ... registration with blogger (like the northern virginian blog does) should be required.
I'm going to agree with Lance on this bit. May I recommend a certain anon adopt the user name of "Rabid chihuahua." ;)
Did everyone see the Moody's downgrade of MBS securities today? Ouch, the MBX index is way down. Ouch... no wonder mortgage credit is getting tougher. 69% loss in very little time. The 2007 subprime loans look to be the worst ever. Oops.
Got popcorn?
Neil
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ReplyDeleteNeil said:
ReplyDelete"I'm going to agree with Lance on this bit."
Thanks Neil. It's funny how an anon who can't even bring himself to have a blogger name feels he has a right to be identifying people. What's not funny is that this guy is bordering on being a stalker.
The other day while walking my dog I had a guy approach me in the park for no apparent reason other than to tell me that "with the coming mortgage foreclosures there are going to be 200,000 more homeless people out in the streets of DC.! It's all the mortgagor peoples' fault!"
Could this be our "Rabid chihuahua."? I certainly hope not since his eyes were pretty glazed over ... But from the incongruencies of the statements made by Rabid chihuahua, I have to wonder ...
I'd email David but he no longer has an email link to the blog.
Interesting thread. There is irony that renters hoping to score someday are net-stalking Lance, a fellow who has "made it".
ReplyDeleteNot very classy.
You don't build yourself up by knocking someone down.
I looked at the pictures of 1623. The fireplaces, stone, and wood work are stunning.
Lance is half right about the kitchen. Those cabinets, dishwasher, microwave simply will not do. If the cabinets go, so does the stainless steel counter. I'd keep the ceiling and the stove. The classic stainless steel Vulcan is fine with me.
Lance is right about the electrical. I can see "old" switches and in one picture, could it be, extension cords? Three wire outlets in the bathroom but not GFCI?
If your going to upgrade, you may as well bring it up to code and in a house that size, that's two breaker panels, upgraded service, and probably complete rewiring. While doing that work, it'd be time to run fibre, CAT6, for today through a cable run installed for future generations.
I'm sensitive to this because my place has ancient electrical service, probably as bad as 1623.
The bathrooms? I'd leave them alone, I see the same shortcomings in 1623 as my place. I can put up with it.
All that work does not have to be done. Of the half million, 250K are shoulds, the other 250K are nice-to-haves, maybe some day.
It worth noting that owners who have to write the checks, see the project scope differently from renters.
"Interesting thread. There is irony that renters hoping to score someday are net-stalking Lance, a fellow who has "made it". "
ReplyDeleteYou think lance has "made it?"
He is a running joke around here. He spends all day trying to pass himself off as an expert on a real estate blog because he thinks by giving bad advice he can prop up the housing market. Nobody takes him seriously because he isn't the kind of person that warrants it.
For just one example take a look at the house he claims represents the norm in his neighborhood.
It is listed for $2.1 million.
He also doesn't mention that in his ENTIRE ZIPCODE there are only 7 properties listed for $2+ million.
Of those 7 properties 4 are described in their listing as multi-unit buildings and one of the remaining ones(the one he listed) is being used as such.
Lance wants people to believe he has "made it." He spends a great deal of time on this blog playing he is something he isn't.
He happily spouts off things like he did earlier where he said that 1623 would easily fetch $2 million if renovated, but he doesn't have a clue. Lance isn't a player in that price bracket and has no insight whatsoever to offer. There are only three $2 million houses for sale in his entire zipcode!
Lance's posts are about 80% BS and wishful thinking. If he were a run of the mill idiot I don't think most people would have a problem with him. The real issue is that he is an arrogant and obnoxious jerk who tries to put down anyone that hasn't made the exact same decisions as he has.
I think it is hilarious that someone found out where he actually lives. I notice that he has deleted most of his own posts in this thread now. The stalker must have hit close to home, pun intended.
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ReplyDeleteAnon 6:51 said:
ReplyDelete"He spends all day trying to pass himself off as an expert on a real estate blog because he thinks by giving bad advice he can prop up the housing market."
Only a paranoid idiot would actually believe that somone can actually "prop up" a housing market via posting on a bubblehead-oriented blog.
Lance said...
ReplyDelete“Only a paranoid idiot would actually believe that somone can actually "prop up" a housing market via posting on a bubblehead-oriented blog.”
Hold on there Lance. Just a few months ago you were blaming the bloggers for the housing downturn, “self fulfilling prophecy” and all that. Are you a paranoid idiot? Was it the Toxic mortgages, re-setting ARMs, rising inventory and foreclosures, lenders folding and tightened lending standards? Noooo, it was the bloggers.
Robert said:
ReplyDelete"Noooo, it was the bloggers."
A single person attempting to enlighten bubbleheads on bubblehead turf is NOT analogous to bubbleheads broadcasting their views of armagedon via blogs that eventually got some mainstream media news coverage. I.e, I didn't see me or my views in the news ... Just David and his views.
Lance said...
ReplyDelete“I didn't see me or my views in the news ...”
That’s funny. The REI spends millions of dollars in ad campaigns representing your view. Every quote made to the MSM by the REI represents your view. There’s an entire commission based industry that publishes talking points based on your view. And still, somehow, the drop in housing prices are not a result of foreclosures, toxic mortgages, tightened lending standards, or increased inventory,…………but bloggers?
Yeeaa, that’s the ticket.
Robert said:
ReplyDelete"The REI spends millions of dollars in ad campaigns representing your view. Every quote made to the MSM by the REI represents your view. There’s an entire commission based industry that publishes talking points based on your view."
Wow, I'm honored! Next time you see where those all those ad campaigns and quotes are a result of my participating in this blog, would you please be so kind as to cut and paste the article here?
Again, my participation on this blog does nothing in the way of influencing prices one way or the other. However, the existence of this blog and the views it broadcasts (i.e., your views Robert) do indeed get spread and eventually make it to the main stream media causing unsubstantiated panic that otherwise wouldn't have occured where there not people inappropriately "crying wolf." Since my comments on this blog go nowhere but to you dear bubbleheads, I can hardly be fairly accused of "propping up prices". The scare created on the whole though by lots of people "crying wolf" in concert has had a temporary effect on what is on the whole a normal real estate downcycle. The news stories in the mainstream media whose ultimate sources were the bubbleheads show this to be true. I doubt you could credit me with influencing the real estate industry in the same way you have influenced the mainstream news media ... and subsequently the public. Though if you can, I'd be honored!
and additionally, the thought that I could be "propping up property values" through my participation on this blog is ludicrous if for no other reason than that the assumption therin would be that there are enough bubbleheads participating on this blog that if I convinced all 15 of you to buy, house prices would suddenly surge up due to the increased demand caused by the mighty 15 bloggers on here regularly ...
ReplyDeleteLance said...
ReplyDelete“Wow, I'm honored! Next time you see where those all those ad campaigns and quotes are a result of my participating in this blog”
Who said results of? Your views are mirrored by the REI. “No bad time to buy, there is no bubble, by now or forever be priced out”, the REI is covering every one of your angles.
“Again, my participation on this blog does nothing in the way of influencing prices one way or the other. However, the existence of this blog and the views it broadcasts (i.e., your views Robert) do indeed get spread”
Well then, I am honored! I don’t have a multi million dollar ad campaign, and my views are making it to the MSM? While those who support your views (the REI) spend millions trying to prop up housing prices by mirroring what you have said on this blog.
“The scare created on the whole though by lots of people "crying wolf" in concert has had a temporary effect on what is on the whole a normal real estate downcycle.”
And here we go again. Lance is calling this a normal cycle. So, a reversion to the mean huh Lance? That’s a mighty big drop you’re calling for! Sure you’re not a bubble head?
Robert said:
ReplyDelete"Lance is calling this a normal cycle. So, a reversion to the mean huh Lance? That’s a mighty big drop you’re calling for! Sure you’re not a bubble head?"
Why would I be calling for a big drop by being on the downside of the cycle? Over time, this cycle (like any cycle)fluctuates around a rising mean. Because of a number of factors the mean has been rising faster than usual ... especially around DC where more has changed than usual. Just look around you ... this isn't the same city we had here 10 or 15 years ago. There's been a lot of real value added ... and the prices reflect that.
"Over time, this cycle (like any cycle)fluctuates around a rising mean. Because of a number of factors the mean has been rising faster than usual"
ReplyDeletelol...
Just for the record lance, I really do pity you if that is the best you can come up with.
You realize you aren't convincing anyone right? People just read your moronic posts and shake their heads and laugh.
Watch out everyone! there may be a bubble all across America, but not in DC. In DC the mean is simply "rising faster than usual."
Rising property values? Nope. Go to an open house. Look at the realtors (tm) face. We're almost at desperation. Why? Affordability. We've been through 9 months of resets. Guess what, the next 9 months are far worse. And builders still build faster than the natural absorption rate.
ReplyDeleteI'll be curious with today's jobs report.
Got popcorn?
Neil
anon says"You realize you aren't convincing anyone right? People just read your moronic posts and shake their heads and laugh."
ReplyDeleteexactly. I laugh at his posts. I find it very unusual that he wont admit he was wrong though... Human nature I guess, no one is ever wrong, they misunderstood.
Lance is arguing that 1+1=3. We tell him, now, its two. Everyone says its two, why are you saying its three. Yet, he still says its three and we are all dumb.
Lance read the damn papers, the real estate industry is crashing all around you, and yes even in DC! Let it go. Lets start talking about how far this bubble is going to burst not if. The is it a bubble question is done, it was. Everyone in the world except the deluded now agree it was.
I am still thinking we are going to have a scattered market for the next 2 years then prices will stablize to comps. By scattered I mean, similar houses will be asking drastically different prices because one owner may have leveraged more then the other.
And for robert,
"Just a few months ago you were blaming the bloggers for the housing downturn, “self fulfilling prophecy” "
NICE POST!!!!!
"For just one example take a look at the house he claims represents the norm in his neighborhood.
ReplyDeleteIt is listed for $2.1 million.
He also doesn't mention that in his ENTIRE ZIPCODE there are only 7 properties listed for $2+ million."
I did look at the listings and a map of the area. That's northwest central DC near Georgetown, K Street, Dupont Circle.
Way above my paygrade? Yours?
25 years ago, I knew a couple guys who went in on a house on Swann Street. It needed work, more than the example but it was big and beautiful. 4 floors and a basement, huge kitchen, stone turret, widows walk.
They paid $85,000 for it, probably paid too much... haha. What's it worth today?
People like us, who are priced out of that market, can't fathom how anyone can afford it.
New York City prices seem crazy to me. London too.
I cannot imagine paying a million dollars for a house, twenty thousand for a stove, or as someone said, "$10,000 sportcoats" at Neiman Marcus.
Who has so much money that they don't shop at Target?
Apparently some people do.
If Lance is one of those, then more power to him. I'm just glad that I could afford gasoline this week.
I'm near DC so I might swing through Lance's neighborhood, see how Swann Street has changed in 25 years.
I'll bet it's a lot fancier than I remember. I saw it pre-gentrification, some of the houses were boarded up.
I wonder if it looks like a movie set now.
"They paid $85,000 for it, probably paid too much... haha. What's it worth today?"
ReplyDeleteSounds like they got into the right location at the right time.
The problem is that unlike your friends, lance bought at the top of a huge bubble and is now hoping that his gamble will pay off. It isn't looking good though.
"If Lance is one of those, then more power to him. I'm just glad that I could afford gasoline this week."
He isn't, that is what makes the whole situation so sad. He tries to play the part and continually finds ways to mention how expensive his neighborhood is. (and grossly inflates it in his claims)
The problem is that the only way lance could find a way to buy was to leverage himself up to his eyeballs with an interest only loan and subdivide his house into apartments...
He is a lot like a guy that leases a luxury car and then seeks out opportunities to be seen in it. To the average guy on the street he might look like a high roller-which is exactly what he is shooting for- but it is all a front.
If Lance holds onto the asset long enough, it will appreciate. I don't think anyone can argue with that. If he did buy at the height of the bubble, then so be it. But I don't see it as a bad long term investment, just a place to live.
ReplyDeleteIf he did buy at the height of the bubble, then so be it. But I don't see it as a bad long term investment, just a place to live.
ReplyDeleteROI and time value of money elude you? If I can save $300k on a home and invest it, that means I can live better (e.g., nicer car, eat out more, college tuition, etc.) as well as retire earlier.
"So be it?"
Think about this. For the last three years everyone has put a push on buying Real estate like never before? You honestly expect an investment mania like that not to turn south? All investment manias turn for the worst.
Look at Florida Real estate 1925/1926. Japan during the 1990's, etc. Real estate is the most common investment mania. This one was the greatest mal-investment ever!
No one is excited about buying. We're in the traditional time of year of home price declines. Yes, traditionally people who sell this time of year (excluding Florida and a few other counter-seasonal markets) are usually desperate sellers. (e.g., already relocated and have to dispose of the home).
The greatest surplus in housing won't go away in a few years. Prices will continue to drop.
Oh, anyone else notice the employment report included 89,000 estimated jobs? Oh... the construction employment numbers and the construction dollars didn't match either. Hmmmm...
At least we don't need a rate cut now. ;)
Got popcorn?
Neil
Notice I included "place to live." Quality of life issues are at play as well. The Gov't encourages home ownership b/c people who own are more invested in their community. People care about the trash, the crime, the schools. Renters can pack up and go whenever they want.
ReplyDeleteSo if Lance buys a place, builds some equity (which he is not doing on an IO loan, but can if he makes extra payments -- maybe from his rental), and lives there for 20 years he should be fine.
Could you come up with a better way to invest your money? Sure -- but you could take a bath in the stock market as well. And most people have a real hard time saving -- but when you HAVE to pay your mortgage it is a type of forced savings.
If you are looking at buying a house as an investment tool, you are looking at it through the wrong lenses.
Yes, you can rent a house in a great school district, etc. But that loandlord can also terminate the lease, uproot your family, and ruin your quality of life. So while you might have more money for restaurants, etc. -- it my be worth some piece of mind knowing that you have substantial roots in a place. That the furniture you buy for certain rooms won't look terrible when you are forced to move again.
Anon, 7/7/07 11:36AM said:
ReplyDeleteNotice I included "place to live." Quality of life issues are at play as well.
-----------------------------------
Thanks for playing real estate agent shill/troll. Next.
"So if Lance buys a place, builds some equity (which he is not doing on an IO loan, but can if he makes extra payments -- maybe from his rental)"
ReplyDeleteDo you know what equity is? Equity is assets minus liabilities. Taking $500 out of your bank account to make an extra payment of principal does not build your equity. It simply moves $500 from a liquid asset (cash) to a non-liquid asset. It does not increase one's equity, or net worth.
ReplyDeleteIf you are looking at buying a house as an investment tool, you are looking at it through the wrong lenses.
But it is the greatest investment any of us make during our lives.
Just as a landlord can uproot someone, so can a job transfer. Right now my company is offering some pretty enticing incentives for people at my pay grade to transfer to another city. My wife and I are talking about it.
Why not, the cost of moving as a renter is nothing. The company will only cover the first $50k of documentable losses on a home transaction.
If I'm ahead $500k or more because I delay buying the *same home* in a few years, so be it. If my landlord kicks me out at the end of my lease, I'm ahead $1k/month compared to if I had bought in July of 2006. :)
So in terms of quality of life, its the wrong decision to buy right now. Do a spreadsheet. The math is very clear right now.
Got popcorn?
Neil
Replying to John: Yes, but if that $500 is in your bank account, you might spend it. In fact, most Americans would. The idea that the $500 is not liquid is exactally the point. It is forced savings.
ReplyDeleteMaybe ya'll make spreadsheets, but I assure you that you are in the minority compared to the rest of Americans. It's NFL season, there are budweisers to drink, and Nascar races to watch.
Maybe buying a home is a "bad idea" for you guys, but not for the majority. The air from where ya'll noses are sniffing up there must be awful satisfying, b/c you can'ty stop talking about it.
Not a real estate agent.
And if you want to uproot your family, go ahead. That is great that your employer pays for moving costs.
ReplyDeleteBut can you put a value on your kids changing schools, your wife making new friends, etc.
Life isn't a spreadsheet.
"Taking $500 out of your bank account to make an extra payment of principal does not build your equity. "
ReplyDeleteDid you mean to make the case for Lance's IO loan?
Whether that was your intention or not, you just did.
If that was your intent, you did not mention that taking $500 out of a savings account paying 4% and applying it to a IO mortgage costing 7% yields a net gain.
Which is the case against an IO mortgage.
I pointed out that it doesn't work the same in an IO loan, and that Lance would have to make additional principal payments in order to make it a safer long term investment.
ReplyDeleteObviously, with an IO, you are banking on appreciation. And with time, real estate will appreciate. But if you have to move in under 5 years, I wouldn't use an IO.
And frankly -- it'll appreciate a good bit where Lance bought, as opposed to say Herdon or something further out.
He'll be just fine, leave him alone.
Appreciate when? When he is 70? And leave him alone? He is the one who blows smoke on other people, saying things like those who didn't buy when he did don't deserve homes and now want something for nothing. Seems to me he wants something for nothing. "I bought at the top of what was clearly a financial bubble, yet I am entitled to have my purchase escalate in value by 25 percent or more every year."
ReplyDeleteAnonymous said...
ReplyDelete“Maybe buying a home is a "bad idea" for you guys, but not for the majority.”
So the “majority” is out buying homes? Then why the high inventory levels? Why the drop in sales?
"He'll be just fine, leave him alone."
ReplyDeleteI think he'll be fine too. There might be a year or three of little appreciation but Lance's tenants pay his mortgage, so, what's the harm.
Real estate doesn't rise in a smooth arc, it jumps 10, 15%, then goes dormant. The periods can be long or short.
No man can predict the short term but the long term is up.
We buy cars
ReplyDeleteThey drop in price
We buy computers
Oh boy do they drop in price
Guess what, for the next 3 years, homes are going to drop in price. It could be like Japan...
And Anon. The company is going to move. Life isn't a spreadsheet. But its amazing how many people cannot do math. There are plenty of properties to rent. You simply cannot get the bigger picture argument, can you? You're #1 comeback to arguments you do not understand is to tell people to be quiet. We will not. This is America. :) We're trying to prevent the problem from getting worse like the Tulip bubble (where they dropped rates and collapsed Dutch power... forever).
Get an argument that works beyond elementary school.
Got popcorn?
Neil
Look -- I am not agreeing 100% w/ Lance (whether he made wild claims to 25% gains per year or not -- I don't know). I pointed out that the IO loan wasn't going to be a safe thing to do for the short term in my first post. I do think however, that the close-in (read: desirable markets) are not tanking. Lance is only in trouble if he sells real soon -- the 1.45% transfer and rec tax from the City would kill any profit he might hope to make from the get go. And that would apply to almost any market sans 2002-2004.
ReplyDeleteBut for the majority of Americans, buying a home is a good life decision. I don't know how "inventory being up" makes buying a home a bad decision. Inventory being up means there are more homes for sale. I know ya'll on this site want the perfect time to buy, but life doesn't work that way. Otherwise, you will end up missing most of life. Some people don't want to buy (which is fine); some people can't qualify (which is a fact of life); and some people just can't decide.
Piss or get off the pot.
And Mr. Popcorn, I never told anyone to be quiet. I merely tried to imply that the redundancy of your argument makes this site borish. It has been going on for years now. Get on and live your life. Take the deal to be transfered or buy something -- for your wife's sake -- get off the computer and on with living.
Pop Secret: You can learn alot in elementary school.
ReplyDeleteEspecially what it feels like to come home to a stable home environment -- knowing that your parents can't pack up a leave every couple of months.
This side up.
Also, the fact of the matter is you can't always get the kind of place you want by renting. It's a totally different inventory.
ReplyDeleteI think a bubblehead posted the offensive message to gain suppport. It was to dry w/ no relationship to anything that was typed about. It came out of the blue, and it was not me. I hope it is removed.
ReplyDeleteAlso -- the IO is a good product b/c is allows one to make principle payments, but does not make it mandatory -- flexibility w/ maximum deduction. Maybe Lance wanted flexibility. Maybe he gets paid in large lump sums. Maybe he makes principle payments, but wanted the ability not to make them some months.
Also -- renters don't have the capability to open a HELOC. If a homeowner has built equity (they usually let you got 90% LTV, so if you put 20% you can open one when you close) in their house, opening a line of credit, in my opinion is a smart thing to do. You never know when you might need to write a check for $80K at a moments notice. In that regard, owning does allow for liquid borrowing. And you can get them set up for no fees nowdays, and most have fixed rate options. And yes, it is borrowed money -- but if your kid comes down with cancer or your wife gets hit by a car, you might want to stroke a check for some things you never contemplated and worry about paying it all back in ten years.
And yes, you could pull all of your money out of your investments and have access to that tpe of cash -- however, I'd rather risk someone else's money than my own -- so long as they are willing to lend it, which they are.
And whoever made the point about availabilty of product stated a point I had forgotten about. When you own, you can replace the the appliances, paint, fixtures, etc. -- lord knows a crappy washer/dryer or dishwasher can cost you more in anxiety than it would be worth in dollars.
Hey 10:06, leave Neil alone.
ReplyDeleteHe's trying to save the world,
"We're trying to prevent the problem from getting worse like the Tulip bubble (where they dropped rates and collapsed Dutch power... forever)."
It's called megalomania.
I go by the title anti lance
ReplyDeleteNot "The anti lance"
I have no idea who
"The anti lance" is or where
"The anti lance" came from,
furthermore I do not want to be confused with "The anti lance" in order to avoid any confusion.
I prefer to argue my points with clear mided arguements, Not curse words or with a threatening tone.
As for the anonymous poster who is so quick to attack other posters on this blog using cuss words-
you have shown yourself to be what you truly are.
A Coward.
Yes you are a coward.
A Coward I say, a coward.
You prefer to hide behind in the shadows and insult others behind the title 'anonymous' rather than make up some name for yourself, even a fictional name, and say what you want and sign your name to your posts, but no, you prefer to hide behind the non name of anonymous to hurl your insults and think you are a big man for it.
In reality, you have proved yourself, by your acts and words, to be a coward of the lowest level.
I think it is best to ignore this Coward of a Troll and move on to other more important matters.
Er, vitriol aside. I went to the auction today in Crystal City.
ReplyDeleteI don't know the Woodbridge, VA market, but that was the bulk of the sales. Mostly under 200k. Some bigger SFRs went for more. Top price I saw was 290k for lot 152 - 12323 Colby Dr. 22192.
Properties that caught my interest:
18736 Walker's Choice Unit 3, 20886 went for 102.5k
2610 Evarts St. NE, 20018 went for 230k
802 West Side Dr., Gaithersburg, MD went for 210k
19818 Billings Ct, Mont. Village, MD went for 227.5k
9420 Vineyard Haven Dr., 20886 went for 301k (I understand the loan the bank foreclosed on was around 433k)
3911 Oliver St., Hyattsville, MD went for 261k
I didn't catch every sale, but I have most of the first half if anyone wants to know about a specific lot.
At the beginning of the auction the announcer mentioned another sale this year and at least two more next year.
Terrence,
ReplyDeleteYes, would you mind posting some more? Did you see the Ellery Circle, Arlington, VA townhouse and how much it went for?
Thanks much!
I think Lance is right on the money with regards to real value being added to DC. This town gets better every day. Logan is the new center point between Penn Quarter and Dupont/GTown.
ReplyDeleteSeveral friends snubbed their nose at DC and subsequently missed the boat. It used to be that people wouldn't live in DC and now many can't afford to.
Purchasing 2000 square feet on Logan in 1999 turned out to be a wise decision.
Guy,
ReplyDeletethat one of the last lots... I was curious about it, but we left around lot 213 out of 229.
One thing I forgot to mention and found hilarious was the German t.v. crew interviewing auction winners. "Ahn't you vorried daht youhl also foreclose? Vhy deed you bie into dee mahket aht deese point" It was awesome. I hope I get to see some of those on youtube.
Several friends snubbed their nose at DC and subsequently missed the boat. It used to be that people wouldn't live in DC and now many can't afford to.
ReplyDeleteExcept that if they bought anywhere in the DC metro area in 1999, they saw a huge increase in the price of their home.
I went to the last Hudson & Marshall Auction here in the Concord, Ca. 5 months back. The thing I didn't like about these auctions is that the auctioneer can arbitrarily set the starting bid price and the winning price has to be approved by the bank that owns it. So if you get a smoking deal but the bank thinks they can sell with an agent for more they may hold off and not sell it to you. Also, they charge a 5% fee on top of the auction price. I still think it too early to buy and the banks aren't desperate enough yet.
ReplyDelete