“A Suspicion The Market Is Still Overpriced” In DC
A Washington Post from the Washington Post. “A dramatically slowed housing market has disappointed home sellers and left real estate agents waiting for the phone to ring. The Washington area remains one of the most expensive places in the nation to buy a home. Still, over the past year, as the number of available homes for sale has climbed, prices have flattened or fallen.”
“The decline in prices is most evident in the District and Northern Virginia, according to figures released last week. The median price of all types of houses and condominiums sold in the District dropped 12 percent in October from the same month a year earlier, dropping from $425,000 to $375,000, according to the region’s MLS.”
“Prices fell 6 percent in the same period in the close-in Northern Virginia suburbs, dropping to $458,850 from $490,000, according to MRIS. ‘The shoe is on a different foot,’ said Diana Whitfield, an agent in Burke. ‘Buyers are realizing they are more in control.’”
“Daniel Moshinsky still can’t afford the home he would like. Now, though, he is ‘hopeful,’ he said. ‘I hope prices keep falling a little bit longer. So far they haven’t fallen enough to be affordable.’”
“The decline in prices is making other buyers wary. Scott McCrimmon has been studying the market for a year, since he and his wife moved to the Washington area from Miami. They are renting a house in Germantown and will wait to see what happens in the spring. ‘I have a strong suspicion the market is still a bit overpriced,’ McCrimmon said. ‘There may be some basis for why others are not buying, so I’m holding back, too.’”
The Baltimore Examiner. “Data from MRIS show the number of houses sold in the region fell 22.29 percent. ‘Carroll and Howard counties showed a downturn,’ said John McClain, an economist at George Mason University. That downward movement, he said, is ‘most likely due to the fact that those areas feature higher-priced homes.’”
“‘High-priced homes are taking longer to sell, as buyers proceed cautiously in light of the softening market nationwide,’ McClain said.”
“In the region, the number of days a house stayed on the market climbed to 70, a 79.49 percent jump from the same month in 2005, according to MRIS data. In Anne Arundel County, it’s 81 days, up 97.56 percent.”
“The average selling price in Carroll County in October was $352,995, down 4.76 percent from October 2005. In Howard, it was $416,736, down 2.11 percent for the same month a year ago.”
“In the popular Baltimore City neighborhood of Federal Hill, the numbers are staggering. The average sale price of a home fell 3.11 percent in October, to $246,261 from $254,163 the same month a year ago.”
“The total number of homes sold during the month — 71 — was down 26.04 percent from October 2005. And the average number of days on the market skyrocketed 238.24 percent to 115 days.”
“Local governments across the region are considering cutting spending or raising taxes in the coming year because of a decline in revenue growth caused by the housing downturn. Officials in Arlington and Prince William counties and Alexandria said yesterday that they are projecting budget shortfalls.”
“Maryland officials said they are seeing sharp declines in recordation and other tax revenue connected to the housing market.”
“Local governments in Virginia by law cannot run budget deficits, so to balance their budgets for the fiscal year that begins July 1, officials must make up millions of dollars in shortfalls by cutting spending or raising taxes.”
“In Loudoun, officials are warning of spending cuts, likely in schools, or an increase in the tax rate…for such public projects as schools, firehouses and roads. Loudoun led the region this year in the growth of property assessments at 28 percent, but housing assessments are forecast to plummet to negative figures during the 2008 budget year, officials said.”
“‘The situation has deteriorated a little bit and is expected to deteriorate further,’ said Loudoun budget manager Ari Sky.”
“Houses are taking more than twice as long to sell, and the average price of a home in Northern Virginia last month was $524,236, a 4.7 percent drop from the previous year.”
“Because of the steep drop in taxes linked to home sales, council member Marilyn Praisner said she warned the school system and the public works department to be ‘cautious about asking for anything new’ in next year’s capital budget.”
It’s a bit disappointing that the WP made this into a ‘great time to buy’ story and put the price skeptics at the end of the article. Consider this:
‘The median home price in the region was $181,600 in the second quarter of 2000 and $443,000 in the same quarter of 2006, an increase of 144 percent, according to the National Association of Realtors.’
But what was the high in 2005 and what would 12% of that be? Again, the local governments have run around putting in costly infrastructure to support all the artificial demand.
A couple of days ago, the Washington Post ran an article about Clarendon, a close-in town in Arlington County (just outside of DC). The article says that from 2000 to 2006 the median household income in Clarendon rose 29% while the median home price rose 123%.
Similarly, the median household income in Arlington County rose 27% while the median home price rose 109% (for the U.S., the increases are 22% and 62%, respectively). Do these figures make sense? Of course not! But that doesn’t stop realtors from saying we are now in a “buyers’ market.” What rubbish! Decent selection, absent good/affordable prices, does not constitute a buyers market.
“It’s a bit disappointing that the WP made this into a ‘great time to buy’ story and put the price skeptics at the end of the article”
That’s why with a cup a joe in hand I go straight to your blog in the morning…kudos
Ben, the RE market in DC was already rockin’ and rollin’ in 2000. In fact, I vividly remember a conversation I had with a real estate agent in the summer of ‘00 whose experience in the business went back to the early ’70’s. I barely knew the guy, but he questioned “how long this could go on.”
Point is, I would like to know what the median’s were in, say, 1996 or 1997. Prices before 2000 are not available in DC’s on-line property records, unfortunately. Those numbers, particularly in select neighborhoods, would likely reveal a run-up in the 600% range - I am not exxagerating.
144%, my foot. I was there, I watched, I remember.
I didn’t know that, thanks!
If you want to get a bead on how Northern VA prices climbed prior to 2000 a good place to start is the tax assessment database that lists prior sales. Free access is provided to Fairfax and Loudoun counties below.
http://icare.fairfaxcounty.gov/Search/GenericSearch.aspx?mode=ADDRESS
http://inter1.loudoun.gov/webpdbs/default.htm
my house in N VA was 200k from 1992 to 1996
now 520k
580k peak may 05
I was talking DC proper - but your 260% is still a heck of a lot. I also remember a friend of mine buying a HUD forclosure townhouse in Montgomery Village, MD, for about 65K in ‘97. Was at $335,000 spring ‘05.
Our 4/3 colonial in Vienna went up about 90% from 1985 to 1992, which is when we sold it. Between 1992 to 2005 the increase of house prices in our old neighborhood was about 120% (somewhat more than double). It appears that asking prices have dropped less than 10% from the peak. I wonder how much further they’ll fall.
DC_Too,
Thanks for bringing that to light. So many people make the mistake (in many cases) of strictly associating the “boom” as a post 9/11 event. In ways and in certain markets that may be true but the ground work was laid in the mid-late 90’s. Funny that a guy that had been in the biz since the 70’s would make a comment like that in 2000!
Not sure what the median was, but I can tell you that I bought a 613 sq. ft. one bedroom in the center of Dupont Circle in September 1997 for 63K (with a little bit of used furniture as an “incentive”). So, in 1997, prices in good parts of DC were about $100/sq ft. I remember prices starting to tick up substantially by the end of 1998. Even now, with some slight reduction, average prices are still around $600/sq ft at the end of 2006. There’s a long way to go before we hit bottom.
This is not good analysis. I have done detailed comparisons of identical townhouses in McLean and Falls Church. In nominal terms you did not get your money back from a ~1990 purchase until year 2000. In real terms maybe late 2001 using CPI deflator. The market was moving much faster in Boston, for example, in 1997-2000. The DC market really didn’t blow a gasket until 2001 and beyond. W Bush and his wild spending, especially on so-called “homeland security”, added fuel to the fire. Actually, it’s the other way around. That’s more the kindling for high intrinsic demand; the fuel is from that place on Constitution Ave that opened the easy credit floodgates.
http://www.mris.com has data all the way back to 1997.
http://www.mris.com has data back to 1997.
Personal anecdote:
A friend has been trying to sell a house in Loudon county for 8 months. He moved into a new house that was bought with a clause stating the sale was not final until his old house was sold. Old house doesn’t sell, even after dropping the price 10% from 2005 prices.
It turns out he’s moving back into his old house.
Wow! That’s all I can say. Wow!
Just as many here predicted, local governments have been spending like drunken sailors during this bubble. They should all have record tax receipts due to the ever increasing number of overpriced homes being built and sold. Where did all the money go? Even with Prop 13 here in CA, there have been so many homes exchanging hands that the assessed value at transfers should amount to a significant revenue bump for the counties. And government wonders why they are so despised. Ever hear of a thing called a rainy day fund? The more things change, the more they stay the same.
Don’t you just love it when they start snookering voters by threatening to cut expenses on essential services like firehouses and schools.
Exactly Maven. How about going back the past 5 years and undoing every expenditure/payraise/pension plan/program introduced or expanded since then. If it happens to hit an unmet school/firehouse need, I would be surprised.
How the heck can so many dolts be in charge of our nation’s finances?
“How the heck can so many dolts be in charge of our nation’s finances?” The answer is right in front of all of us. It is the same Joe Sixpac and Soccermom who are in charge. It is these same people who have giant mortgages and 50K in credit card debt and 2 escalades leases or payments every month while putting Hailey and Tyler through private school and karate lessons. These types of people are the ones holding the local gov’t purse strings. The real people with any sense have bailed and don’t want anything to do with thses local yocals. Heck, why do think you see so much corruption? I bet there is a lot more of it going on than you think. Joe Sixpac need Hailey’s karate lesson paid for. Heck, add it on to some other local expenditure and hide the bill/receipt. Couldn’t happen. Just wait and see. There will be a few nutcases
Don’t get me wrong, either. I work for local gov’t. I won’t say becasue you never know who is lurking. Anyway, we have an emergency fund, but you think they would increase the percentage of savings? NAHHHHHH! Why do that? Let’s just spend more and justify our existence.
I won’t say which one because…
Just a guess, but could it be in the OC?
“Exactly Maven. How about going back the past 5 years and undoing every expenditure/payraise/pension plan/program introduced or expanded since then. If it happens to hit an unmet school/firehouse need, I would be surprised.
How the heck can so many dolts be in charge of our nation’s finances?”
It’s because government bureaucrats have no incentive to economize. Their power comes from increasing their budgets. Therefore, anything that increases their budget is good, anything that decreases it is bad. The one thing they’d never do is say we’ve got all of this wasteful spending boss so let’s get rid of it and we only need 70% of last years money in next year’s budget. Plus, that way you don’t make enemies because you don’t have to make hard decisions.
Local governments better get used to cutting everything. Raising taxes and cutting services both negatively impact consumer spending. Coupled with the never ending housing implosion, it is a vicious cycle with NO END in sight. Already, consumer credit is falling. Seriously, this is so severe and seemingly has but one outcome in the foreseeable future. We are going to be blogging, blogging and still blogging until the inevitable 30% unemployment, bread lines, and falling home values, bottoming at pennies on the $ are revisited Any Great Depression history buffs care to elucidate for us?
We are going to be blogging, blogging and still blogging until the inevitable 30% unemployment, bread lines, and falling home values, bottoming at pennies on the $ are revisited. Any Great Depression history bluffs care to elucidate for us? Any suggestions on preparing for this time? Why is it that they spin so rosy when our darkest days lie ahead of us?
my county has embassies in 5 foriegn countries now !
Sounds like San Francisco…. Correct?
Of course, they don’t call them “embassies” … they call them “trade missions” or something similar. It gives mayors from cities like San Francisco an opportunity to go on luxurious trips to Paris, Rome, Tokyo, etc…
If you actually met anyone who has been on one of these trade missions, a lot of them would tell you that they would rather just stay home, just like business people who do a lot of travel. Those trips are hard work.
I agree with you CA Guy. As I read this I could not help but think that it is someones job to look ahead and get a clue about what the tax revenue is going to be in the next 12 to 48 months. What are these folks doing with their time? They sure as hell aren’t spending it here on this blog or reading “The Economist” housing articles. I guess they get all of their forecasting info from NAR and other REIC data sources. Perhaps local gov can take those miscreant REIC data sources to the woodshed for bogus data.
Speaking of bogus data, I have seen some discussion of how the price data is not as accurate as it could be due to exclusion of incentives as reductions. I am also questioning the sales numbers. It seems to me that a mere 22% drop in sales is somehow a number that is not accurate. I cannot believe that sales are at 78% of last year’s level right now. Are there truly that many GFs out there? I would expect sales to be much lower given the MSM exposure at this point. I know this has only begun and I know that many many people do zero due diligence when they look to buy, but this just seems wrong.
Italicsoff!
“Because of the steep drop in taxes linked to home sales, council member Marilyn Praisner said she warned the school system and the public works department to be ‘cautious about asking for anything new’ in next year’s capital budget.”
These people chap me. That same council member was probably taking all those windfall tax receipts nicely in stride as house prices and assessments soared, perhaps even telling her constituentts about all the new cap-expenditure projects she and cohorts were pushing.
Now that the prices (and assessments) might return to normal, will the pollies be insisting we raise the tax rates? They didn’t seem too eager about lowering them to compensate for the inflated assessment changes on the way up. Arrghhhh!
Most counties did lower rates in the last couple of years. Not enough to keep your actual tax bill from going up, but tax bills would have been even higher without that relief. Now they will be in the politically suicidal position of raising the rate in the middle of a housing bust led recession.
“… tax bills would have been even higher without that relief.”
What relief?? When my assessment goes up 50% in two years, but they cut the tax rate by 10%, how is that “relief”?? The bottom line is, the dollars I pay in property taxes for 2007 will be 46% more than what I paid in 2005. It’s absolutely outrageous to hear the morons in local government tell me they “cut property taxes” under this scenario!
“Local governments across the region are considering cutting spending or raising taxes in the coming year because of a decline in revenue growth caused by the housing downturn…”
No sign of a storm on the horizon. Good thing this downturn won’t feed on itself.
Definately a good thing that this downturn won’t result in anything but minor layoffs or any slowdown in the job market. In fact, everyone seems to be doing so well.
Ghad… when this downturn is noted, its going to come across like a sudden tidal wave. It won’t be… but that’s how the press will portray it.
Neil
Any volunteers?
http://dallas.craigslist.org/tfr/235168070.html
Looks to me like a typical desperate realtor trick to bring in clients. I doubt any such TV show is being prepared. It would be as amusing as watching some Iraqis children being led into a crossfire.
Nope, it’s for real–it’s already on the air:
http://www.hgtv.ca/ontv/titledetails.aspx?titleid=101050
Oh my gawd, a set of disasters waiting to happen: Young dreamy-eyed fools looking for a hot condos, or maybe just get into the market somehow, anyhow. Down payments that barely cover closing costs. This upcoming episode looks set to be tragicomic:
Katie and Ryan’s whirlwind romance has gone from great to even better since they met two years ago and now they’ve decided to take things to the next level by buying their first home together.
Next level! Ha! Next level of financial stupidity! I’ll take a guess here that they’re not married, and I can tell you from (friends’) bitter experience how much of a mess it is to get into an overpriced property market with a hot boy/girlfriend.
One prime example (friend of mine) and his girlfriend lost the equivalent of 1 year’s take home pay EACH in the previous California housing bust. They had their own “bust” as in bust-up and tried to sell out to split up the house asset, which was really the only asset they had. Some asset! They couldn’t make a sale, and then decided to try to live together in the teeny bungalow while dating other people — in a 1-bath place! Needless to say, it all ended very badly.
By the time they REALLY had to sell (either that or kill each other) the market had seriously tanked. Not only did their down payments go away, but they had to borrow money on their credit cards just to bring to the table to sell the house at a loss. And they’re not the only ones.
Maybe the same thing applies to newlyweds who never lived together buying a house ASAP, though the legal strings holding the couple together in that case might be stronger.
HGTV is hilarious. I have not seen this Property Virgins show yet. The comments coming out of the mouths of buyers and agents on their other programs is surreal. They all heavily drank the Kool-Aid. Their website says that a “real estate expert” will help the first time buyers navigate the challenging task before them. I wonder if their advice will include low-balling the seller?
It has been so long since there has been a decline in RE prices, and frankly many easily forgot how things declined in the early 90s, and others have only experienced an increase in the last 10 years.
So I would argue most do not know what a down cycle is, and the fact that home sales have declined drastically does not register as the first step to a decline in price.
I would also argue that the general population is not as “smart” as the previous generation. So perhaps that is why they don’t get it. Any other ideas?
An event doesn’t occur for ten years and a population forgets the event exists? What ever happened to education?
If the NAR was a real ‘professional’ organization, they would have been the ones to sound the alarm bells years ago.
I wonder if some of what we attribute to a short attention span might just be youth–many of the purchasers may not have been financially conscious when the last bust happened.
I gather that one new feature of this housing bubble was people buying houses at younger ages then previously. I bought one, and I wasn’t even a teenager in the early 90’s–I wasn’t exactly keeping up on current events back then. I don’t remember the last bust at all. And looking around at my friends and co-workers, I don’t think I’m unique.
Not to be too harsh on you Ben, but do you really need to ask what happened to education? I am not even talking about morality issues in school. How about some basic home econ. Instead of learning how to balance a check book or your monthly expenses w/your monthly income we now have kids who can do calculus. Great, but how many of the regular people use calculus every day in way that we are taught in school. Yes, I know physics and chemistry are all around us. That’s fine, but you better know how that check book works and you better understand at least some of the major points of a contract to lease or buy a new card with financing. Nahhhh! That’s too boring. Then we wonder why this country is so economically bankrupt.
Instead of learning how to balance a check book or your monthly expenses w/your monthly income we now have kids who can do calculus.
Or create video games. That seems to be what a lot of younger kids I talk to want to do for a living some day. We’ll have a whole generation of adult zombies that sit around in front of a gaming system in their underwear day in and day out. Nice.
Sorry to say, but creating compelling video games requires programming. Lots of programming. And a good understanding of how math and logic work is an essential tool for the programmer.
Yeah, I get that. I substituted that in place of calculus (which isn’t exactly easy math). My point being that they’ll be a lot of gamers with no knowledge of economics/history/etc.
http://www.literacyvolunteers.org/media_room/literacy_facts.asp
“In the United States, the National Adult Literacy Survey (NALS) of 1992 estimated that 40-44 million adults - 21-23 percent of the adult population - function at the lowest level of literacy skill.”
I used to work at a big box home improvement center and found that most college-student employees and even college-grad management were unable to write a coherent, error-free memo with correct spelling. I was a freak because I liked to–God forbid–read during my breaks.
We live in a culture of diminished/lowered expectations.
> Instead of learning how to balance a check book or your monthly expenses w/your monthly income we now have kids who can do calculus.
Everthing has its place. Calculus should be a must in high school for everybody intending to study technical subjects in college.
I’m not talking about public schools but an education of the buying public about what is a normal versus abnormal rise in home prices. I was talking to a broker the other day and I mentioned a $600k house listed ‘below appraisal’ in Prescott, AZ. I asked him, is there any reason a house should cost so much in little Prescott? He didn’t have an answer.
There are a lot of organizations that stood by and let the industry run wild with this thing. Governmental and private.
This is a false tradeoff. Students in places like Japan, Singapore, and South Korea learn calculus at an earlier age and in greater numbers than in the US, and I assure you that they have no problems balancing checkbooks.
Financial responsibility is a life skill, and life skills are supposed to be taught by parents. That’s the real problem. People expect the schools to raise their kids for them.
> If the NAR was a real ‘professional’ organization, they would have been the ones to sound the alarm bells years ago.
I agree. If the rate of cavities in teeth in the average person increases by 100% in a few years, do we expect the dentist’s organization to write “It’s a great time to go to or to become a dentist” or do we not rather expect them to sound the public alarm?
In defense of the NAR (yes, I know, a strange position to take on here), I would not ever expect any unbiased information from them. They are a trade organization that exists for the betterment of their members - realtors. So anything they can do that pumps up take-home pay for realtors is what will be on their agenda.
Dentists, on the other hand, are part of a profession that’s required to take an oath for the public good… and I would argue that dentists are by nature more altruistic than realtors. What is a realtor, anyway, but a glorified salesman? Would you expect the guy selling you a new car to let you know that it’s 30% overpriced?
Dentists have been poisoning the general population for decades. Do you realize those ugly silver fillings in your mouth are 50% mercury? Those mercury fillings can cause all sorts of debilitating diseases (MS,Depression,Parkinsons, etc) but most people never make the connection. http://www.toxicteeth.org
That “the financial memory is short” is one on the tenats of Ken Galbraith’s Short History of Financial Euphoria. People will generaly fall for the same load of baloney, over and over and over, as history demonstrates.
Don’t forget either, that the very well educated are not immune to the Kool Aid. There’s no shortage of learned professors who buy (bought) into today’s (last year’s) mania.
And remember Irving Fisher of Yale, in 1929? “Stock prices have reached a permanently high plateau.” RFLMAO.
IMHO all you really need is the power of measured observation to see everyone around you gone berzerk over money, or anything else.
Ben, don’t be so naive!
Is it the ‘professional’ drug companies who warn us when studies show more adverse effects than originally seen? Was it the ‘professional’ tobacco companies that first raised the alarm about cigarettes and cancer? No. They try to cover up the bad news to maximize their revenue for as long as possible.
Of course, part of the challenge will be to identify if/when the numbers are being manipulated.
Here in Silicon Valley, y-o-y RE prices are, & figure to continue to be, actively manipulated. So far, the ruse seems to be holding but we are gradually exposing them, both in general:
http://www.viewfromsiliconvalley.com/id125.html
And in detail:
http://www.viewfromsiliconvalley.com/id277.html
Keep checking with us for the latest data:
http://www.viewfromsiliconvalley.com
Thanks!
Blech. I don’t even bother with the Baltimore Examiner, they’re so RE biased. With all the data in that article reflecting a Baltimore market that is on the edge and about to tip, they end it with a comment that consumer confidence and prices will start rising again once the change of power occurs in Washington. That’s a new one!
But if things are a little bit bad, then doing an “all-change!” will make things better. Has to work. Right? Er, right? Change ALWAYS makes things better!
OK, unless there’s some secret and radical agenda, it’s hard to imagine what either party could do about housing prices now, even if the party had free rein to implement its own agenda. With mixed-party government, it’s even harder — which is probably a good thing in a case like this housing bubble.
Countrywide CEO says housing slump has a year to go
November 14, 2006 (Reuters)
The slowdown of the U.S. housing market will last through 2007 as inventories are pared enough to prompt a change in consumer psychology, the chief executive officer of the nation’s biggest mortgage lender said on Tuesday.
Mortgage lending has slowed as rising inventories in the housing market led to a “hard landing” for the industry after a decade of strong growth, Countrywide Financial Corp. (CFC.N: Quote, Profile, Research) CEO Angelo Mozilo said at a Merrill Lynch & Co. conference in New York.
“We have another year of adjustment, or transition” in the industry until consumers believe home prices won’t decline, Mozilo said. “Various events will make the change take place and one of them is” a decline in available homes, he said.
Mozilo said he expects the industry will see lending volume grow progressively from 2008 to 2010 because of a build-up of demand. Until then, the industry will continue to consolidate and eliminate excess capacities.
AntiSpin: What a bunch of crap. Thankfully we have the iTulip WayBack Machine to instruct us on where we are in the denial cycle.
Mozillo says he expects the industry will see lending volume grow from ‘01-’10. Just who is he kidding and what is he thinking? Considering the boomerang generation is growing by leaps and bounds, if we assume home prices don’t drop, then where does he think all these buyers are going to come from? Now if the prices drop drastically and the fundmentals return, 20% down, 30 yr. fixed, then maybe we will see some growth. Otherwise, it ain’t happening.
I have lived in North Virginia since 1983. NVA has exploded into houseing central. I can’t wait till alot of the toxic mortgage start turining bad.
paygo and firing some gov deadwood would have to happen first- good luck
The best part is there are soon going to be thousands of Repug. staffers out on their rump where they’re soon get a lesson in real world economics. Have fun selling your houses!
Andy Card’s house in Arlington has been for sale for about 6 months now, IIRC. Its decorated quite hideously.
Looks like builders in Reno are requiring new buyers to sign confidentiality agreements to prevent them from disclosing their buying price to their neighbors who bought at much higher prices. How confidential can it be when it’s public record? Wonder what the penalty is for breeching the agreement? 10 Lashings with a wet noodle? I mean really, what can they do?
From http://dianecohn.blogs.com/reno/2006/11/guest_post_from.html#comments
“I too bought in Reno recently though I really had no choice. I sold my home in the North Valleys and moved to Washington DC for a 1 year job assignment. I was able to buy in the South part of town and am really happy with the purchase. This blog helped me a lot (great job, Diane) to see the market for what it was. And that definitely helped me position myself to make a fair offer on a new home. For it, I got a great house (which, by the way had a 500+ person waiting list and prices through the roof when I left) at a great price–so great, in fact, that I had to sign a confidentiality statement to ensure I didn’t offend my new neighbors. Suffice it to say, I saved about 17% off of the asking price.”
Northern Virginia rental inventory, from the MLS:
5/8/05
Prince William ——- 383
Fairfax ————– 1,134
Loudoun ————— 318
5/26/06
Prince William ——- 533
Fairfax ————– 1,012
Loudoun ————— 403
08/08/06
Prince William ——- 795
Fairfax ————— 1,504
Loudoun ————— 571
Fauquier/Culpeper — 117
11/13/06
Prince William —— 1,018
Fairfax ————— 2,059
Loudoun ————— 714
Fauquier/Culpeper —- 180
Thank you for posting that Arwen. I keep hearing how rents are going to skyrocket now that flippers have to hold their properties. I looked at six new rentals last week, each has dropped from app. 2000 per month to 1800. Rents are falling not going up.
Should be interesting to see how things play out in the metro DC area.
In Prince William, luxury homes that were being marketed for $2,500 a month are now about $1,800-$2,000 and still sitting. Our former landlord didn’t adjust fast enough and so far has a 6-month vacancy. It’s a small subdivision, and I’m sure the neighbors of the new McMansions are just thrilled.
There’s a house in the next block that has been for sale AND for rent for several months now. And this is within a couple of miles of the University of Arizona in Tucson.
Arwen
Whats the best place to search for a rental? I am looking at Prince William County.
I like the MLS (I use http://www.fairfaxrealty.com) because it’s easy to compare prices and amenities. I’d also check out craigslist of course. Another good source for local listings is the local newspaper. http://tinyurl.com/yktw9d
this area is still rife w/ GFs and facilitators. Kirstin Downey is usually bearish, she must be taking heat from Maryann Haggarty and the RE section advertising sales team.
some realtor/flipper posted in the “comments” section that paying too much is alright if you’re in it for the long haul. this argument has never sat well w/ me. if you pay too much, you pay too much. sure, a long term scenario gives you time to recover but that doesn’t make your poor decision any less poor. if anything, it more clearly exposes the opportunity costs (i.e. college tuition, vacations, earnings on other investments).
From the front lines update…..
Took an app. from AZ this morning, bought 6 months ago with the Pay Option Arm. Purchase price 315k, put down 75k. Was suprised when i told him is loan balance was 3k higher than what he originaly borrowed. Started to approach him about the danger of that loan and he wanted to hear nothing of it. Said is was the only payment he could afford (oddly enough his DTI would qualify for a regular 30 mort).
Customer number 2. Winter Haven Florida, bought/built almost 1 year ago for 191k. Appraisal came back at 255k and was NOT pushed. I only asked for 200k for the loan to work. This seems contrary to everything we read about on Ben’s blog.
These two examples illustrate something. Even in two of the hottest markets, there are still buyers using toxic loans and house values are still holding (comps can be used as far as one year back).
This is going to take a long time to unwind. I think those of us that are calling for the big bang in 2007,08,09 are as bad as those asking for their “wishing prices”. There is a reason banks have different pricing for owner occupied vs. rental props. History shows that people will fight tooth and nail to save the house they live in. There will be far more resistance on the way down than there was on the way up. Just my opinion.
Eventually, the only fight left is with oneself. In spite of CPI down last month, credit is no longer expanding. Without it, the bubble is deflating. Credit being down for everything else is a harbinger for housing. When psychology changes and it FINALLY dawns on people, look out. That day is swiftly approaching. Then it will be too late as NO buyers will show up. They can only lie for so long. You can fool some of the people some of the time, but you cannot fool all of the people all of the time you can. The powers that be know this and are quaking in their boots. IMO it will come down like it went up. It is all psychology. 2007 will not be a happy new year.
I won’t argue, MDMORTGAGE, except to say that “history shows that people WHO PUT 20% DOWN will fight tooth and nail to save the house…”
The banks learnt that the hard way but have cast it aside, apparently. But I agree, there’ll be resistance to the slow grind downward.
I live in Montgomery County, MD. I hate to say this as I am a staunch supporter of a housing correction. Lately, I am seeing more and more under contract signs showing up in Bethesda, Potomac, and Rockville areas. I’m hoping these are selling for a lot less than the asking prices. Maybe it’s just a false bottom - anyone else seeing the same?
There are always dead cat bounces on the way down in every down market. Markets never go down in a strait line.