Sunday, April 23, 2006

Weekend Reports & Open Houses

Any citizen reporters want to report on their real estate observations. What is happening on the ground?

Anyone attend open houses this weekend? How was traffic?

Open Discussion. :-)


  1. Went to several open houses today in Boston suburbs. The first one was a condo at 48 Quimby Street in Watertown (MLS#70369381). A flipper/renovator purchased a two family in March 2004 for 510k, spent a year plus rehabbing it, and then put it on the mkt as 2 condos in Aug 2005. He wanted 479k for EACH condo, A TOTAL SALE PRICE OF 958k for both combined!! This means he was looking for a 448k profit (less rehabbing costs of course) for rehabbing two condos! There was obviously minimal interest because the property sat and sat, and then was reduced from 479k to 459k. Then in Feb 2006 it was taken off the mkt. Big surprise - it reappeared in April 2006, a re-list at 459k. Both condos are for sale now. I asked the realtor how long it had been on the mkt. He said "Only 1 week". Yeah right! Try 8 months for a real answer. The condo was nice and I am glad that these flippers are rehabbing the neighborhood, but they should not expect make 400k or whatever for just rehabbing a place, expecially when it is right down the street from some slum apt buildings. The open house was empty except for us. I kind of felt sorry for the realtor to be honest. All work and no pay these days for them. We'll see what happens next....

    We also some starter houses in suburbs north of boston. One was for 420k and was conveniently located right next to a railroad track. It was kind of small and old, basically a starter house. We also looked at another similar small old house for 439k, conveniently located right next to a cemetery. I would describe them both as small undesirable starter houses that are worth (actual worth) about 250k in my opinion. If we bought one of those crap cemetery/train track starter houses, we would more than double our current monthly housing cost compared to our rent. Hmmmm, I can rent a really nice apt or pay double the amount for a crappy house with a view of a cemetery?
    Frustration anyone??

  2. We are looking to rent in Clarksburg, MD. My wife and I were driving around and saw an open house. The owners are anxious to do something, the agent said. They will rent or sell. The house has been on the market since December, the agent told us.

    There was another single family house for rent around the corner and two townhouses for rent nearby.

    The open house was from 12-3. We got there at around 1:15 and were the first to sign the broker's sheet.

  3. From my perspective, the current market seems to be very localized, like micro-climates. I've heard lots of anecdotes about sales below asking price within my zip code, yet the three houses that came up for sale in my neighborhood this spring all sold within a week. I don't know the specifics about the other transactions but our house went at asking price on the first day it was shown.

    Likewise, I hear lots about high inventory levels but we're having trouble finding a house in the neighborhood where we want to purchase (in a different metro area). There seems to be plenty of inventory within that town but relatively little in the locales that seem most desirable to me.

  4. My wife and I looked at several condos in NW Washington, D.C. this weekend. There were open house signs *everywhere.* Literally, there were 3 and 4 signs on corners.
    Traffic was pretty good at all the open houses, but the prices were still pretty serious, e.g. $550,000 for a 2 BR with no parking.

  5. Over the past six months, on my drive to work, I've watched a townhouse development under construction in Herndon, VA (Washington,DC suburbs). The builders have just completed work within the past few weeks.

    Out of 12 townhouses, at least 6 of them are for sale or rent now. My girlfriend and I toured two identical models. One for rent @ $2200/month, the other selling for $680,000 (this, we were told, was the contract price from the builder... the family was moving to India, and wanted out of the property ASAP).

    I highly doubt the market will increase enough to support the negative cash flow for those investors/landlords like the guy that was renting his TH. PITI, even with tax breaks, probably runs around $4200/month assuming he carries a mortgage (even if he doesn't, he sunk the cash and faces lost opportunity costs). So this leads to my question... how could the market possibly flatten? To me, it looks like it has to go UP or DOWN. If the price increases are flat this year, won't investors (a huge part of the market around here) unleash a flood of properties like these where they see no future upside to carrying the negative cash flow?

    I suppose my rent could increase to close the gap, but I think there's a ceiling on how much the market will bear (like a de facto rent control).

  6. I went to an open house in Dupont Circle in Washington DC. It was a spur of the moment thing. Compared to this time last year, there weren't very many people there. They had reduced the prices already and seemed more eager than before. When we told the guy, we were looking to buy, the guy was practically salivating, even when my wife said, this place is really too small.

  7. U Street: Open houses everywhere. In sight of my front door the Beuregard (11th/V) is lowering prices with 6 months to go before they're done building. Open houses every week at the Fillmore. The Terraza pulled their units off the market and relisted them -- now starting at $479, down from $539-ish (still nuts: the units are 950 sqft.) At 10th/W, the penthouse is on the market, listed at around the price it was originally bought for (I guess the owner wants out!).

    And the 2020 Lofts still have multiple open house signs every Saturday and Sunday.

    Also, two more 100+ buildings are opening in 2006, plus dozens of smaller ones.

    Holy overbuild, Batman.

  8. Clarksburg: The developer was able to get more out of buyers by selling new urbanism. There are dozens of brand new houses for sale or rent. But the only one fooled was investors, few resident owners were willing to pay more for one exit past Germantown. Now that the media is making public that it is nothing more than a conventional condo-townhouse-sfh community with much higher density, prices should fall below levels of similar houses in Germantown once the carpet gets dirty and the mold grows in the shower.