| Inventory for March 21, 2007 | >> |
| County Name | Available Listings | Total Listings |
| Alexandria City | 701 | 977 |
| Arlington County | 670 | 1088 |
| Fairfax City | 105 | 145 |
| Fairfax County | 5131 | 6877 |
| Falls Church City | 44 | 62 |
| Loudoun County | 2863 | 3537 |
| Manassas City | 379 | 436 |
| Manassas Park City | 139 | 152 |
| Prince William County | 4031 | 4692 |
| TOTAL LISTINGS | 14063 | 17966 |
| Inventory for March 21, 2006 |
| County Name | Available Listings | Total Listings |
| Alexandria City | 780 | 1077 |
| Arlington County | 767 | 1152 |
| Fairfax City | 87 | 119 |
| Fairfax County | 5189 | 7248 |
| Falls Church City | 41 | 59 |
| Loudoun County | 3169 | 3906 |
| Manassas City | 242 | 333 |
| Manassas Park City | 109 | 145 |
| Prince William County | 3486 | 4397 |
| TOTAL LISTINGS | 13870 | 18436 |
Last year at this time the available inventory on the MLS in Northern Virginia was about the same as today. Last year the available inventory on the MLS was 13,870 vs. today's 14,063. This is basically the same (there is 1.3% more available inventory this year then last).
Posts
Total Listings Are Down by Over 500 units.
ReplyDeleteYou're really reaching on this one.
Inventory is down, interest rates remain low, and the job market in the greater DC area remains strong.
None of that is in dispute. So what's your point with this post?
First you say: "The amount of inventory for sales in Northern Virginia has increased .."
ReplyDeleteThen you show numbers which indicate that total listings have declined.
Then you say: "Last year at this time the available inventory on the MLS in Northern Virginia was about the same as today."
You contradict yourself and the numbers.
Available inventory is less than 1% higher than last year, according to the numbers. Your math is incorrect as is your deductive reasoning.
ReplyDeleteBefore Lance complains that this isn't a big enough increase... he needs to remember that inventory was already inflated by this time last year. If we continue to beat last year's numbers through the busiest part of the year then there are going to be a LOT of houses on the market.
ReplyDeletegood find, DJ.
ReplyDeletedid you see the story in today's Post on population in the area?
Arlington County's population increase from 2004-2005: 1,806, from 2005-2006: 15!
Fairfax County's 04-05: 6,519, 05-06: 428!
DC's 04-05: 2,329, 05-06: -519!!
Suck it!
Well from what I can see while the total listings are down ~2.5%, this doesn't tell the whole story. I am assuming that available listings = total - pending/under contract. Therefore, if find the total pending/under contract (i.e. pending=total-available) and then take the YOY change (pending07/pending06) you find that YOY contract/pending activity is DOWN ~15.5%. So while you might have slightly higher/lower (depending on whether you look at total or available) inventory, YOY the # of months of supply has increased.
ReplyDeleteAnon said:
ReplyDelete"Available inventory is less than 1% higher than last year, according to the numbers. Your math is incorrect as is your deductive reasoning."
(14,063-13,870)/13,870 * 100 = 1.3914924297043979812545061283345%
Signed. Not a math whiz.
For the numerically challenged:
ReplyDelete( ( 14063 - 13870 ) / 13870 ) x 100 = 1.39%
1.39% is greater than 1%.
The numbers here mean the market seems to be stabilized now based on one month YoY comparison. If the trending keeps like this for consecutive 3+ months, it would mean the market is definitely stabilized and the house prices will not drop significantly, but it doesn't mean house prices will grow significantly either. The market may be just flat for a while.
ReplyDeleteWhy haven't the prices fallen then?
ReplyDeleteEssentially the same amount of inventory as last year, and yet, this time around, no subprime buyers.
ReplyDeleteYeah, I'm sure this will end well.
million said...
ReplyDelete"did you see the story in today's Post on population in the area?"
Yep! I was jumping for joy when I read that story ... It is further proof of the accuracy of my predictions that the DC area is one of those cities benefiting from the changing paradigms associated with the shift to a pan-global economy. Not following? Ok. So what happened to DC proper as it emerged from the white-flight slump of several decades and became re-invigorated?
Its net population went DOWN as buildings and houses that had once housed multiple low income (or even "no" income) families were renovated and became instead single family (or even single individual) homes for wealthier, better educated individuals with more income to spend and tax dollars to provide. Now a similar change is occuring around the DC area in genera ... due to the area's growing importance in the new pan-global economy. For example, Neils co-workers are moving out to Atlanta and Peoria while higher paid folks are moving in ... And these higher paid folks can afford to keep more square footage to themselves. That 2 family house in Arlington that 2 of Neil's co-workers families shared? Gone! ... Now it's a single family residence all built out as a McMansion! Less people ... BUT more disposable income AND more taxes flowing in to city coffers ... It's an ideal situation as far as municipal budgets go!
Mojo said...
ReplyDelete"Essentially the same amount of inventory as last year, and yet, this time around, no subprime buyers.
Yeah, I'm sure this will end well."
That's right that's right ... That tiny speck of the market that was only buying the cheapest of places to begin with is going to be soooo missed ... You bubbleheads will grasp at any straw, won't you. Your theory is over. It was debunked the minute the big investment firms revealed how very little the default of a few subprimes was going to affect them. The entire BH theory was predicated on the assumption that defaulting mortgages would cause a surge in supply and a corresponding plunge in prices. Well, the catalyst for that surge has been debunked and your theory exposes as fraudulent. Admit you were wrong. It's over. It's just a regular business cycle. And we've indisputably aready bottomed out. Where does that leave you with your far fetched theory?
Okay, Lance is still great satire. He used to argue that rising population was a factor that drove housing prices, now he says falling population will drive housing prices up. Further proof that Lance will just say anything to reach his preferred conclusion, not actually weigh the evidence.
ReplyDeleteOf course, population in DC rose during 2004-2005. According to Lance's "new logic", that should have caused housing prices to fall.
Look, it's easy to do a Lance post. Spew crap, contradict yourself, and think that the phrase "pan-global economy" can substitute for actual thought. Voila.
Looks like prices have dropped but inventory is roughly the same. Probably indicates that futher price drops are necessary.
ReplyDeleteNOVA Fence Sitter
"now he says falling population will drive housing prices up."
ReplyDeletehe never said that. the fact that you say he said that underscores that you are, in fact, grasping at straws.
Keith said...
ReplyDelete"Okay, Lance is still great satire. He used to argue that rising population was a factor that drove housing prices, now he says falling population will drive housing prices up."
Keith, I never said falling population would drive prices up. I said that higher income households take up more housing space than lower income households ... thus ADDING to the pressure on the limited land available. I.e., it's effects are the same as rising population. Do you have a problem with deductive reasoning?
Lance said...
ReplyDelete“thus ADDING to the pressure on the limited land available.”
Ah, there it is. “therenotmakinganymore” what is it now “Lance”? Oh yea, (sub-prime) loans.
And Keith, an example of that is Dave's group home. When the owner of that house someday decides it's time to cash in, it'll most likely not be bought by a group of unrelated individuals looking to share their house.
ReplyDeleteKeith, I never said falling population would drive prices up. I said that higher income households take up more housing space than lower income households ... thus ADDING to the pressure on the limited land available. I.e., it's effects are the same as rising population. Do you have a problem with deductive reasoning?
ReplyDeleteDeductive reasoning? Can you explain this again? I lost you there, as I do most of the time.
I didn't read the article, but from what I gathered from the post, the population (or atleast the rate of growth) in the area is decreasing.
Assuming this was the article, how did you make the leap that this means higher income households are moving in to the area. Care to provide data/statistics/anything to substantiate that? I can understand that this what you wish to believe, but please explain to us why you believe this.
I said that higher income households take up more housing space than lower income households ... thus ADDING to the pressure on the limited land available. . I.e., it's effects are the same as rising population.
ReplyDeleteSooo... People at the top of the pyramid will acquire more and more land until nobody at the bottom will have any land left? By following this argument to its logical conclusion, Bill Gates should have acquired all of Seattle or atleast a few small countries by now. I wonder why he is waiting. Maybe we should put him touch with Lance the Genius.
Guys! These comments look like kids fighting. Prices have gone up in this area like 300%/400% or more in few years. This is not normal under any condition and in any market. Check financial bubbles in history. Prices have to come down and will come down. For a 1bd room I predict the price will be around $170K. Which is almost double the price of a 1 bd room just few years ago!!
ReplyDeleteAnd Keith, an example of that is Dave's group home. When the owner of that house someday decides it's time to cash in, it'll most likely not be bought by a group of unrelated individuals looking to share their house.
ReplyDeleteWhy? The owner of Dave's group home is renting it out. Why do you say the next buyer will not rent the unit out? Is something going to be different in 2008 than it was in say 2005? Can you please post sane arguments instead of nonsense?
lance said . . .
ReplyDeletegroup of unrelated individuals looking to share their house.
. . .
while it is only anecdotal, I do know several individuals who have gone in with other individuals from work or relatives to buy a house and then share the house as if they are renting, so that's not necessarily true.
Lance,
ReplyDeleteI don't claim to be an expert investor of any sort. But one of the cardinal rules you hear over and over is that any time you hear "It's different this time" or "paradigm shift", be *very* careful.
Now look at the fundamentals -- why did the housing market go up?
1) pent-up growth - prices were flat through the 90s.
2) much more available credit - money came out of stocks and into bonds in the early 2000's.
3) lower overall interest rates (see #2 and the fed's credit policy.)
4) income & population growth in DC post 9/11.
5) speculation by investors looking to make easy money by flipping.
Well, #1 has finished.
#2 is going away in a big way with the resurgence of stocks.
#3 is going away in a big way with the subprime collapse. (They're already at 15% default rates on subprime mortgages and rising. That's pretty bad, no matter how you want to spin it.) Read around a bit and you'll see lots of worrying on Alt-A as well. Sooner or later, some non-trivial percentage of people with not-so-bad credit will have random crap happen - job loss, divorce, disability, whatever, just after their ARM resets, and they're in over their heads. Sure, that's a calculated risk, but the real hand-wringing in subprime has been that the risk was heavily underestimated. The real, large, and unknown-how-large risk is the alt-A (and A) borrowers who stretched to buy a house, feeling that they'd get a piece of the action, or bought because they thought they'd be "priced out forever", when really, buying a house requires a lot of careful risk analysis rather than pressured decision-making.
#4, I'll concede, is still going strong.
#5 Nobody really tracks speculation, but judging by how many vacant places are for sale, which are apparently at record highs, the speculators have turned from buyers to sellers.
Now, in the other column:
1) Lots and lots of new housing inventory is coming on to the market. You know the drill, demand/supply = price. I live in shirlington where there are, within 1 mile of me, 4 big condo developments just finishing and 2 more just starting. Where are those buyers? They can't all be in Oklahoma looking to work for the DoD.
2) tighter credit. That means the demand for housing (or at least the funded demand for housing) drops.
3) lots of foreclosures and increased pressure to sell from financially-strapped people increases supply and reduces their ability to wait out the decrease.
4) speculators switching from buyers to sellers.
5) as developers face their own payments (and have big margins to eat) they'll start selling cheaper because they can do it and still make a profit, driving down the comps and setting the market lower.
Now, what's the positive spin on all this? Once this all shakes out, I've *LOVE* the idea of being able to get a 2-br condo for $175K. That's fair. That's what someone moving here after college should be able to afford. And really, since there are now homes for, what, another quarter-million people around here, we might actually have that. And I think that's a good thing. The downside is that's a whole lot of money the current owners of those houses won't get. *if* we get from here to there, which I don't know if we will, but if, that's going to be really painful.
There's a lot of hyperbolae on this board, on both sides. Shoot, once you spend 2 years arguing one point or another, you get pretty attached to it. But really, if this weren't your home and your investment, but, say, tulips or internet stocks, and you took a cold, hard look at it, you'd have to see that the reasons for lower prices drastically outweigh the reasons for higher prices.
just a thought.
My fear is that when the FED raises interest rates at the end of the year if prices don't decline we are still screwed with high prices and now with high interest rates. I won't jump into the market until prices get back down to normal i.e. a townhouse for $200,000 or $250,000 tops. Anything higher is outrageous. These were the prices in 2002 in NOVA/Vienna area.
ReplyDelete"Once this all shakes out, I've *LOVE* the idea of being able to get a 2-br condo for $175K. That's fair. "
ReplyDeletehahahahaha! yeah, college kids are the ones who deserve 2-br condos in metropoli. why stop at that? new college grads should be able to afford those 6-br homes in Glen Echo for the weekend, and a 4-br ped a terre in Gallery Place for during the week. After all, they worked hard for those college degrees!
You people kill me.
kevinr says interest rates are going up. kevinr should read a newspaper once in a while.
ReplyDelete"Guys! These comments look like kids fighting. Prices have gone up in this area like 300%/400% or more in few years. This is not normal under any condition and in any market. Check financial bubbles in history. Prices have to come down and will come down. For a 1bd room I predict the price will be around $170K. Which is almost double the price of a 1 bd room just few years ago!! "
ReplyDeleteYou are TOTALLY WRONG about this. The average prices had only gone up a little more than 100% from last peak (early 90s) to 2005 peak in this area. The circle is about 12-14 years. Between 1992 and 1997, the market was almost flat. Between 1997 and 1999, the annual gain was only limited about 6%-9%. The real HUGE price jumps (about 100%) were happed between 2000 and 2005 peak. Considering the entire circle, the average price gains are just normal.
Since 2005 peak, the prices in this area have dropped 10%-25% depending on the locations. For examples, Loudon County dropped 20%-25%, and McLean/Vienna area only dropped about 10%.
Based on the current sale volumes and inventory level, it seems the market has stabilized, and it may just remain flat for quite a few years depending on overall economic conditions here.
DON”T DREAM THE MARKET WILL DROP ANOTHER 30%-50%, AND IT IS REALLY NOT REALISTIC.
WAKE UP, THE BUBLEHEADS.
KEVINR SAID:
ReplyDelete" I've *LOVE* the idea of being able to get a 2-br condo for $175K. That's fair."
Well, you may think that is fair and you may think that the factors you present and their weighting is how it should be, but in the end, none of us individually get to choose the factors, their weighting, or what is fair. In the end, all of us acting collectively in a free market system determine what is fair market value. And acting collectively we have determined that 2 bedroom condos in the areas you are hoping to buy are worth far more than $175K. Now, you can go home and pout (bad idea) or try to do something as you are doing (good idea), but you must realise your constraints .. AND instead of pounding your head against that which you cannot change, learn instead to discover your available options and make the best of them. For example, rather than blaming creative financing for raising prices (which even you acknowledge they didn't do singlehandedly), learn to use it to your advantage. Not every loan is right for every person, but conversely not every (creative financing) loan is bad for every person. Recognising that which you cannot change and accepting to work within real life constraints is the first step.
lance said . ..
ReplyDeleteRecognising that which you cannot change and accepting to work within real life constraints is the first step. . .
Umm, that's why I rent . . . hmm pay 300k for some dump of a condo where my payments would be 2000+ or rent for <1000. . . .
Prices have gone up a whopping 300%. The 1bd room condo in my bldg. used to sell for $95k in 2001. At the height of the real estate mania, people in the same bldg. were asking $350k for the same 1bd room. How can this be a 20% appreciation only!? The bldg is in a good area but the construction is very shoddy. It was rentals and converted to condos in late 80s. I am still predicting that the 1bd room price will be around $175k or $185k. Time will tell. It always does.
ReplyDelete"You are TOTALLY WRONG about this. The average prices had only gone up a little more than 100% from last peak (early 90s) to 2005 peak in this area. The circle is about 12-14 years. Between 1992 and 1997, the market was almost flat. Between 1997 and 1999, the annual gain was only limited about 6%-9%. The real HUGE price jumps (about 100%) were happed between 2000 and 2005 peak. Considering the entire circle, the average price gains are just normal."
ReplyDeleteWhat is normal about a 450k condos with shoddy quality?
Would you pay that much for a 650 square feet unit that is a condo conversion? These are the prices that I see listed. If you are willing to pay these prices, then go ahead be my guest. You can even buy two. If you had that kind of money, you should be in southern France or Italy not DC!!!
Lance said,
ReplyDelete"AND instead of pounding your head against that which you cannot change, learn instead to discover your available options and make the best of them."
OH, but you can change things, collectively, by Just Saying NO!
"WASHINGTON - Roughly 20 percent of the mortgages issued to homeowners in the greater Washington area in 2005 were issued by subprime lenders, with nearly a third of homeowners opting for these higher-risk loans in some jurisdictions, new data shows.
ReplyDeleteThe data, obtained by The Examiner, reveals the number of loans issued by subprime lenders, particularly to homeowners in affluent counties like Fairfax and Montgomery, rose sharply during 2005, the most recent year for which data is available."
http://www.examiner.com/printa-634765~Alarming_rate_of_risky_mortgages_in_region.html
20% subprime in 2005... ouch, plus it is likely that the percentage of subprime mortgages used continued to climb through 2006, right up to about a month ago.
Anyone who doesn't think the subprime meltdown isn't going to affect the DC area isn't being rational. 20% or more of the region's buyers have just exited the market...
U.S. housing sales make surprise upswing
ReplyDeletePeter Morton, CanWest News Service; Financial Post
Published: Saturday, March 24, 2007
WASHINGTON -The struggling U.S. housing market took an unexpected bounce last month as sales of previously owned homes jumped the most in three years.
In what analysts say could be a key turning point, the U.S. National Association of Realtors said sales of homes jumped 3.9 per cent in February to an annual rate of 6.7 million, thanks largely to low interest rates on mortgages and pent-up demand.
"We expect the drag on the economy from housing will be gone by mid-year," said Dean Maki, chief U.S. economist at Barclays Capital in New York. He said the rebound is "an important development."
There were worries that huge unsold inventories and the continued deterioration in the subprime mortgage market would drag out the recovery in the housing market for months to come.
But February's sales figures seem to have put some of those worries to rest.
"Most of the housing adjustment is completed," said Eric Green, chief market economist at Countrywide Securities in Calabasas, Calif. "We're just not seeing the subprime problem in these numbers yet."
Analysts had expected February sales to fall by 2.5 per cent to 6.3 million from January's sales of 6.46 million.
Other economists are not convinced the worst is over.
"Sales cannot be sustained at this level, which is way above the pace implied by mortgage applications," said Ian Shepherdson, chief economist at High Frequency Economics.
Other economists said a return to warmer weather would be needed before the underlying health of the housing sector would become apparent.
"You will have to roll into March and April to get a good feel for the strength of the housing market," said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.
However, the build-up in unsold homes - up nearly six per cent in February to 3.8 million homes or a 6.7-month supply - will continue to weigh on the market.
"We think the housing market will be a drag on the economy for most of this year," said Gary Thayer, chief economist, A.G. Edwards and Sons in St. Louis.
David Lereah, the Realtors' chief economist, said the problems in the subprime market could limit house sales by as many as 250,000 homes over the next two years.
"It will spill over into the overall housing sector, but will be somewhat contained," Lereah said. "With the economy being healthy, this is a problem, not a crisis."
Meanwhile, the median price of an existing home fell 1.3 per cent last month from a year ago to $212,800 US, the Realtors group said.
Financial Post
pmorton@nationalpost.com
© CanWest News Service 2007
Great post from Craigslist:
ReplyDeletere -Landlords and rent
Awwww...sounds like someone from Idaho thought they could move to the "big city" on a dollar and a dream. Grow the fuck up.
It is interesting that you pick the Penn Qtr to find cheap rental accomodations. Hell...why not try to find a 300K house in Georgetown because it makes just as much sense.
In the event you haven't noticed, DC is not only the nations capital but a huge economic powerhouse. The dc area makes the highest incomes in the nation and has the lowest metro unemployment rate in the nation, currently half the national unemployment rate.
Here is a clue. Prices are what they are because the market supports it. That place you brush off as "too expensive" is swiped up the next day so there is no need for people to lower their rentals.
Here is some more, non-realtor info for you.
Yhe vacancy rate of apartments in the dc metropolitan region are at 2.9%, while nationally it is 5.6%
http://www.deltaassociates.com/content/marketinformation/marketinformation.php#multi
I suggest you take your cheap ass back to Idaho.
re:
Ok, here's the deal... I'm real sorry that the housing market tanked, particularly the condo market, in D.C. I know, I know, they told you that there was no D.C. bubble and that the good times would roll forever, but landlords and Realtors, please... It's happened. And what's worse, the fact that the Condo market tanked means that more and more new constructions are facing cancellation of pre-sales, foreclosures, and out and out just not selling.
How does that affect landlords and rental agents, you ask? Here's what the condo folks are doing... they're turning their buildings into apartments. This means that you landlords and rental agents are facing unprecedented competition in an already somewhat soft market. This means that the prices should be coming down. But they aren't. Just check the apts/housing tab on CL. The same people posting the same converted condo buildings and coming down approximately 10 bucks after a month.
I know what you jackasses are going to say "we can't charge less, if we do we won't cover the mortgage". Hey, jackasses, you're not going to be able to cover the mortgage with rent. Unfortunately fate has smiled on the buyers and renters for the first time in memorable history here in D.C. I know, that sucks... I'm sorry your golden goose has come to an end, but these are investment properties. Sometimes they lose money. This time they lost money. Ride it out. And, you know what would help riding it out? How about if you got some assistance with that mortgage in the form of rented units. In order to do that, though, you're going to have to be faithful to the same thing that brought you to the dance and made you millionaires in the first place -- market forces. Those market forces say lower rent or face foreclosure yourselves... Hell, maybe even if you do rent you'll get foreclosed upon, but at least you'd be trying.
End rant.
Please check my blog... I've posted an article on the February housing data that everyone should read for their own good. It's important to know how to read these figures.
ReplyDeleteAlso, the NAR revised the year-ago home price downward, FOR THE SECOND STRAIGHT MONTH! Doesn't it seem convenient that,when they tried to keep the gravy train rolling, the price was higher, and now when the current month suffers by comparison - "Oops! prices really weren't that high after all." - Seems a bit fishy to me.
Keep in mind that data are done by surveys (they take a sample and extrapolate to estimate what the whole population looks like). This means that there is room for interpretation... it's ok, as long as you use the same criteria... when things start changing over a year after the fact... that calls a lot into question.
You shouldn't miss this, check out my link below...
http://financeguru-eternitus.blogspot.com/
Surprising Jump for Existing-Home Sales
ReplyDeleteBy Nancy Trejos
Washington Post Staff Writer
Saturday, March 24, 2007; Page D01
Sales of previously owned homes rose last month at the steepest rate in three years, suggesting new life in the sluggish housing market.
www.washingtonpost.com/wp-dyn/content/article/2007/03/23/AR2007032300716.html
I'd say it's only surprising because the MSM (mainstream media) have bought on to the unfounded BH theory. Anyone with any experience knows this is just a normal business cycle, and the downside of the cycle was already ending a few months ago when David L. was making his accurate predictions and David J. was still putting out inacurate ones. I can't help but wonder how many people got hurt listening to the BHs ...
Well, Investor, I'll add up my anecdotes. I've cross-checked listings and sales in web-available assessment records.
ReplyDeleteFrom what I see, people sell their homes when they ask for assessed or less (and they sell at less than assessed), and don't sell when they ask for more, which is what happens in a declining market.
That house is listed at least 15% too high to sell.
And Lance shows what a moron he is by comparing David L favorably to David J.
ReplyDeleteDavid J has totally slapped David L and Lance around time in and time out. Hasn't David L predicted four different bottoms and been wrong every time? David L is a joke, and Lance is a joke for relying on David L.
Even Investor has shown Lance what a moron he is by slapping around David L.
"Prices have gone up a whopping 300%. The 1bd room condo in my bldg. used to sell for $95k in 2001. At the height of the real estate mania, people in the same bldg. were asking $350k for the same 1bd room. How can this be a 20% appreciation only!? The bldg is in a good area but the construction is very shoddy. It was rentals and converted to condos in late 80s. I am still predicting that the 1bd room price will be around $175k or $185k. Time will tell. It always does."
ReplyDeleteYou have to look at the stats or average price gains for all the SHs, THs and Condos, not just Condos, or a community, or just a few condos. It is absolutely correct that the price gains from last peak (early 90s) to 2005 peak are just between 100% and 150% (not 300%) depending on the locations and types of properties. I think 125% is the average gain in this area. Yes, you may find a single or a few examples that the prices have gone more than 150%. It is possible, but for majority of properties, I think 95+%, the gains are limited 100%-150%.
If you need an example, I can give you mine. I bought a SH at 329K in Vienna in Feb 1997 (price was almost flat between 1993 and 1997 after the price drops from the peak) and sold it at 762k in almost peak time. I also rented a condo in Reston in 1996, at that time, I knew the price was about 90k and the price right now is about 210k.
“What is normal about a 450k condos with shoddy quality?
ReplyDeleteWould you pay that much for a 650 square feet unit that is a condo conversion? These are the prices that I see listed. If you are willing to pay these prices, then go ahead be my guest. You can even buy two. If you had that kind of money, you should be in southern France or Italy not DC!!!”
No, I never buy condos. I know condos do not have much value and community fee is a big disadvantage for the invest property. I did buy 2 big SHs, one in 1997 and second one in 2003. The first one was sold at almost peak time and the gain was about 125%. The second one has appreciated about 50% so far in a very good location. Again, I never buy condos.
Don’t get confused between the asking/listing prices and SOLD prices!!!
I DO agree with you that condo still have a lot room to drop because it has less value, but for the SH and TH, I believe they will remain flat for a while after 2005-2006 price drop.
va_investor said:
ReplyDelete"It is listed at 987K; assessed for 841K; and zillow says 876K. I guess we will see. It probably would have sold rather quickly in 2005. The people selling bought in 1997 for 428K. I viewed the online pictures and it appears no updates have occurred since the house was built in 1992.
I'll keep you posted. Can't wait to hear from those of you who will pay 500K."
If the house appreciated just slightly faster than inflation, then it would go for about $697K now. I don't know how you believe people on here want it for 500K if it wasn't bought at a peak. I would throw in an additional $100K, for convenience of purchasing now rather than waiting, and $50K for lack of supply. My fair market price is then about $850.
Keep us posted.
VA and Keith,
ReplyDelete428K in 1997 growing at 6% per year would be 766K right now. If the assessment is 841K and it were to sell at 93% of assessment (a reasonable basis for an offer in a declining market) you get an offer of 782K. That's maybe 2% higher than a steady long term growth rate.
So, I would think a fair offer is right around 780K today or 970K in 2011. In other words, I would expect the market to flounder sideways until inflation/long term growth catches up the under lying value to what the owners want today.
My $0.02.
mytwocents said:
ReplyDelete"If the assessment is 841K and it were to sell at 93% of assessment (a reasonable basis for an offer in a declining market) you get an offer of 782K."
I'm not sure why/how "assessment" is coming into your calculation. Individual assessments are anything but reliable. Over a given city or neighborhood you might make a case that total assessments equal X% of total fair market value, but that doesn't help you in determining the value of an individual property. I've always found that it is best to only look at individual assessments in light of the taxes you would be paying if you bought. For example, when I put a contract on my current home the assessment was rediculously low because the former owner was adept at getting increases stalled. It was incredibly valued at far less than a neighboring house that was just a shell at the time. To me that was an advantage because I knew that for at least the first year my taxes would be dirt cheap. Yes, they're finally climbing closer to where they should be, but in the meantime I saved thousands. But in any case I certainlky didn't rely on the assessment for estimating the value of the house. The market determines that. If this house in question is still on the market 24 months from now, then it might be wise to put in the "$200K under asking" offer you are contemplating. But I wouldn't do it now. There's only one thing worse than putting in an offer too low to be in the running, and that is puttin in an offer so low that it insults the seller. I've heard of many situations where people paid less for their home than the higher bidders simply because the sellers liked them. The reverse occurs when the sellers hate you. And, you also risk coming across as an unqualified buyer who is simply wasting everyone's time.
Lance said . . .
ReplyDeleteThere's only one thing worse than putting in an offer too low to be in the running, and that is puttin in an offer so low that it insults the seller. . . .
Hey sellers don't have a problem jacking up the price 100-200x the value of the house when they bought it. It insults me as a buyer to think someone lives in a house 4 years and thinks they can get a 200% increase, for what . . .living in it and the place is 4 years older!
I don't have a problem low-balling the crap out of them, 50% sure no problem. If it insults them . . . good, I'm insulted by them.
I'll give a fair-market value . . . 2001 prices + 5-6% appreciation a year--more than adequate--we can start talking from there.
Lance said . . .
ReplyDelete"The reverse occurs when the sellers hate you. And, you also risk coming across as an unqualified buyer who is simply wasting everyone's time."
unqualified my arse . . . I can put 20% down right now in cash-shoot I can bring it at closing and I have perfect credit-never missed a payment, never will. You don't like my low-ball offer, I don't care, I'll just wait out the market and buy it from you when you're really hurting.
(background music please. . . tiiimmmeeee is on my side, yes it is)