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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?
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.
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.
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.
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).
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.
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.
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.
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.
ReplyDeleteThere 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.
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.
ReplyDeleteLikewise, 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.
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.
ReplyDeleteTraffic 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.
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.
ReplyDeleteOut 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).
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.
ReplyDeleteU 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!).
ReplyDeleteAnd 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.
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.
ReplyDelete