8503 2nd Ave, Silver SPring, MD is located right across the street from the Silver Spring metro station in a desirable location. Its is 2br, 2.5 bath townhouse, 1,216 SF. This is located in the metropolitan Washington, DC area.
Property Bought from Original Owner: 10/13/2005 $661,000
The previous owner kept on chasing the falling housing market without success.
Please note this property was bought originally from the developer for 279,915 on 06/21/2000. So in about 5 years the property went up 136% for a sale of 661,000 in late 2005. If it had appreciated by 6% a year (compounded) the price would be 375K in late 2005. If that theoretical 6% had continued for another two years it would be valued at 421K today.
It just sold for 565,000 on 11/27/07. Which is 14.5% less then the previous price paid in October 2005. In real dollars the current owner paid about 20% less then the 2005 price.
Prices are falling in the Washington area. This is a prime location across the street from the Silver Spring Metro station and inside the Washington Beltway.
Property Bought from Original Owner: 10/13/2005 $661,000
The previous owner kept on chasing the falling housing market without success.
Please note this property was bought originally from the developer for 279,915 on 06/21/2000. So in about 5 years the property went up 136% for a sale of 661,000 in late 2005. If it had appreciated by 6% a year (compounded) the price would be 375K in late 2005. If that theoretical 6% had continued for another two years it would be valued at 421K today.
It just sold for 565,000 on 11/27/07. Which is 14.5% less then the previous price paid in October 2005. In real dollars the current owner paid about 20% less then the 2005 price.
Prices are falling in the Washington area. This is a prime location across the street from the Silver Spring Metro station and inside the Washington Beltway.
Posts
right behind the McDonald's where the homeless sleep on the wooden benches in that little grassy area between the development and Colesville Rd? yep, that's what i think of when i hear the word "prime."
ReplyDelete:-)
I'm seeing pretty some pretty amazing price drops in my target area.
ReplyDeleteCheck out 11302 SCHUYLKILL RD, Rockville, MD 20852. From $505,000 paid for it just a year ago to $380,000. Not the zip we're looking at, and not close enough to the metro to suit me, but it's getting to the point where we could put back about a third to a half of our equity from our old house and end up with a mortgage payment not much larger than our old one.
Unfortunately we won't be in a position to buy this spring-- family problems take us out of country for the next 6 months to a year. I'm just back briefly to close up the apartment and put a few things in storage.
I'm more thankful than ever I listened to my own common sense and sold in 2005. I'd hate to have to be dealing with selling the house in this market-- or trying to find and pay for a reliable rental manager, while wondering where we'd come up with the money to pay for any shortfall.
I'm sorry to have to put my grad school plans on hold, but having to wait another year to buy is probably all to the good.
Silver Spring is a prime location? lol
ReplyDelete"the washington area". right!
ReplyDeleteSEEDY SUBURB BUBBLE BLOG!
Hey-
ReplyDeleteIt's inside the Beltway-
CRASHING INWARD
Sorry inner beltway gang!! :)
So much for it "won't happen here"
NOT!
Anonymous said...
ReplyDelete"the washington area". right!
SEEDY SUBURB BUBBLE BLOG!
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U Street crapahola is selling for less than that.
Hey, I just wanted to say Happy New Year and thanks for an excellent real estate blog. Please don't stop writing this stuff it is excellent. By the way, there is an excellent article on real estate at the New York Times here is the link: http://www.nytimes.com/pages/realestate/index.html
ReplyDeleteGod Bless!
Real Estate Professional Websites and Marketing
I agree with the other Anonys that Silver Spring is indeed a seedy suburb. That only exacerbates the ridiculousness of these prices.
ReplyDeleteOne flag should be raised on this - we now know that mortgage fraud was rampant towards The End of the bubble. "Cash back" to buyers at closing was very common and is reflected but not noted in property records as part of sales price.
Therefor, we have to be very careful about "comps" at the peak. It is possible that in David's posted example, the recent buyer is actually paying the same, real price as the guy in 2005, who may have got "cash back" at closing.
Simply put, it will be another year or so before we have "real" comps with which to make judgements about prices. You are crazy to even think about buying a house in the DC-area before then.
Silver Spring is a prime location? lol
ReplyDeleteActually, with the media and entertainment facilities downtown, the access to public transit, and the good public schools, yeah, Silver Spring IS one of the finer places to live in the entire country. I'd love to hear your arguments for why it isn't a desirable location. I've got a hunch that they're extremely persuasive to you only.
-- sglover
Anonymous said...
ReplyDelete"Silver Spring is a prime location? lol
Actually, with the media and entertainment facilities downtown, the access to public transit, and the good public schools, yeah, Silver Spring IS one of the finer places to live in the entire country. I'd love to hear your arguments for why it isn't a desirable location."
I used to live there. The place wouldn't be bad ... were it not for the seedy people who call it home. Maybe now that it has all the things you wrote about, these people will sell out to more normal types.
If you don't live in a DC slum then you MUST live in a slum somewhere else!
ReplyDeleteThat is all there is to it.
anon @ 6:31 a.m. posted:
ReplyDelete" agree with the other Anonys that Silver Spring is indeed a seedy suburb. That only exacerbates the ridiculousness of these prices."
I completely agree with your entire post. I am a bubblehead and DC native who bought a SFH in Chevy Chase in 1999. Silver Spring is nothing more than a strip mall along Georgia Avenue as it goes out of the city. It does not have, and by definition it cannot have, a "downtown." I want to slap RE scum who try to pitch that crap. That said, the townhome David posted could be OK as a habitation, but only at a minute fraction of the current pricing.
Simply put, it will be another year or so before we have "real" comps with which to make judgements about prices. You are crazy to even think about buying a house in the DC-area before then.
ReplyDeleteGood point. It will be over a year until we start seeing honest comps. But their is a point that some bank lost those funds in the original transaction (if it was cash back). Hence the need to return to sensible down payment and income verification requirements. That is still in process.
Got popcorn?
Neil
Silver Spring used to be one of the finer places to live but it has taken a turn for the worse in the last 10 years. Their is more crime and more lower income in the entire Silver Spring area. You have to come over towards Connecticut ave. to get away from the rifraf that goes on in SS. It had it's day in the sun a long time ago.
ReplyDelete"Silver Spring IS one of the finer places to live in the entire country.''
ReplyDeleteSilver Spring, a town so rockin' its local paper comes out once a month.
My nomination for the funniest post of the year.
"One flag should be raised on this - we now know that mortgage fraud was rampant towards The End of the bubble. "Cash back" to buyers at closing was very common and is reflected but not noted in property records as part of sales price. Therefor, we have to be very careful about "comps" at the peak. It is possible that in David's posted example, the recent buyer is actually paying the same, real price as the guy in 2005, who may have got "cash back" at closing."
ReplyDeleteWell, agreed that cash back was not a thing unheard of in 2005. But I think I'd be a bit of an exaggeration to bet that the cash back for this property **at the peak of the market** could have amounted to 96k (the difference between 661k and 565k).
Onto another not so important point....Is it me or is this house more of a **three** story TH without a basement, and possibly with an attic (according to the pictures)? I saw the property records David posted as a link, and in it the property is listed as a 2 story WITH a basement.
If it really is a 2 story TH, with only 1216 SF of enclosed area, even the discounted price of 565k is way too much imo.
--SSH Anon
Where the hell is Lance? C'mon pump up Silver Spring! And not as one of the "finer places to live in the entire country" but as someplace with FUNDAMENTALS that warrant an absurdly high price for a really crappy place.
ReplyDeleteI'm the guy who said that Silver Spring is one of the finer places in the country, and I used to live there until just recently, when the apartment building that I was living in got demolished. I've lived in the Bethesda/SS/TP area for about 16-17 years now. Before that, I lived in Detroit, then the Detroit suburbs, then the Twin Cities, and for a little while, San Diego.
ReplyDeleteSo it amuses me no end to watch you folks disparage Silver Spring because it isn't "rockin'" enough, or because of the "rifraf" that supposedly infests it, or because it supposedly "cannot" have a downtown area. I can't believe that you people have seen very much of the U.S., let alone the world. (I'm really puzzled by the wannabe "rockin'" comment: Which newspaper are you talking about? There are at least two well-subscribed locals that serve Silver Spring directly. Try to know a little about what you're talking about, before you try the smug act. And to the guy who's down on Silver Spring because it doesn't measure up to his Chevy Chase property: I suggest you take a quick tutorial on things like "median income". I'm sure there's some yahoo in, say, Potomac or Kalorama who's just as disappointed at the nouveau riche in Chevy Chase.)
I'm not saying that a SS zip code warrants a million dollar sale price. We've just lived through a classic speculative mania, and the only good that can come out of it is if the real estate and finance maggots suffer their share of pain. But none of this is unique to Silver Spring. All things being equal, Silver Spring offers its residents a combination of advantages that is very rare among U.S. urban communities.
-- sglover
1. new construction of a 13 story building just started right behind this buidling. Construction noise can be heard at 7am till sunset.
ReplyDelete2. A few townhouse have for rent signs.
3. Who bought it?
4. I've seen homeless sleep within 50 feet of 8503's front door. I've seen homeless use the bushes as their, well, bathroom.
5. Great commute location.
6. zero privacy. zero safety
6. 3 level 1200 sq ft
7. previous owner was ???
PAY CENTER LLC
8503 2nd Ave
Silver Spring, MD 20910
(800) 394-7741
8. I smell something fishy. No wonder why all the traffic
What would this townhouse rent for? How much would it cost to own including opportunity cost, taxes, insurance and maintenance? In today’s market renting is much cheaper than owning, especially when owning a depreciating asset. When you add up all the costs, it’s shocking how much it actually cost to own. Now that the illusion that real estate always goes up has disappeared people will realize that these prices are unsustainable. You also hear that “renting is just throwing your money away.” But people who say this fail to realize that you are always renting in that you occupy something that you could rent out. So in effect you are paying rent. Suppose you occupy a 5,000 square foot house, but you really don’t need that much space. You are much better off renting it some who does need that amount of space and getting a smaller place.
ReplyDeleteI completely agree with the guy that said SS is one of the finer places to live. The commercialization of the town center has really sparked the interest of other developers there. It's really a fast growing city. It may not be D.C. or Bmore, but I don't see how it's the shoddy place that many posters say it is.
ReplyDeleteOf all the prissy comments here, "bucks vault" might be the most amusing. He seems to be implying that just about every urban residence is some kind of uninhabitable menace.
ReplyDelete-- sglover
I think it's just fine for folks to be snotty about Silver Spring - that means they won't move here and make it even more crowded than it already is. Plus you can see many homeless on display doing the same things in the "upscale" streets of downtown Bethesda - actually more of them since there is better security in downtown Silver Spring. You can't walk more than a few feet in Bethesda without having a homeless person hit you up for money.
ReplyDeleteprissy? huh?
ReplyDelete"every urban residence"??? huh? I only spoke of this one in paticular.
And for that matter, I never said that the area was a uninhabitable menace, rather I stated that facts. In case you missed my point, I question the validity of previous sale prices for these units. Then again "Pay Center" is a well respected (sic) business that worked out of a residentally zoned dwelling.