A Lot To Look At And The Prices Have Come Down
A report from the Washington Post. “Two years ago, during the giddy real estate frenzy, some investors bought 300-plus garden-style apartment units in Fairfax County to convert to condominiums. Yesterday, a California bank foreclosed on the group’s loan and bought the property, minus about 45 units that had been sold. The bank, Fremont Investment and Loan, said it hoped to resell the property.”
“‘It’s part of the slowing housing market,’ said Scott MacIntosh, senior economist for the National Association of Realtors. ‘Fewer first-time buyers are willing to take that risk and go out and buy.’”
“In the first quarter of the year, 3,472 condo units that were either in the planning stage or about to come on line in the Washington area were changed to apartments and another 790 were simply canceled, according to a report by Delta Associates.”
“In 2005, there were about 13,000 condos sold in the Washington area, compared with 6,600 last year, according to Delta. The market has a bloated, 3.4-year supply of condos.”
“William Rich, a VP of Delta, said some condo projects are moving forward. ‘Some developers are just going to plug ahead and wait it out because they think their project is better than what’s out there,’ he said.”
“Yesterday, at 1 p.m., the foreclosure was announced, and one of two substitute trustees, read a dry description of the property in front of the steps of the Fairfax County Judicial Center. The first bid, $50 million, came from Eron Sodie, the lending bank’s vice president and regional manager in Bethesda.”
“Portfolio manager Chris Beaulieu of Ritchie Capital. He bid $51 million. The bank went to $55 million. The Illinois man bid $55.5 million. The bank came back with $60 million. The Illinois man backed off. The bidding ended.”
“Afterward, Beaulieu was asked whether his firm would have stuck with the condo plan. Citing the uncertain market, he said: ‘We were going to take a fresh look. We were looking at different options given the deteriorating market.’”
The Baltimore Messenger from Maryland. “Lagging condominium sales and uncertain prospects for public financing have stalled The Olmsted, a planned condo and retail building on the west side of St. Paul Street in Charles Village.”
“Struever Bros. Eccles & Rouse has sold only about 25 percent of the 68 condos that it built in the Village Lofts building. Now, the developer is seeking the city’s approval to redesign The Olmsted, by increasing the number of stores and condos and making the condos smaller than originally planned.”
“Right now, the project doesn’t look like anything. It’s a bulldozed lot where University Minimart used to be.” “Another problem is that investors so far are unwilling to buy Tax Increment Financing bonds that the city agreed to sell to finance 400 public parking spaces and streetscape improvements, such as crosswalks that are half built.”
“Investors are reluctant to buy TIF bonds because the condo market is soft and Struever Bros. is having difficulty selling Village Lofts condos, said Councilwoman Mary Pat Clarke.”
“‘We’re not getting the speed of sales we’re looking for,’ said Joshua Neiman, senior development director for Struever Bros.”
“Original plans for The Olmsted called for 119 condos up to 1,200 square feet and starting at more than $400,000. The need for smaller, less-expensive condos became evident because of slow sales in the Lofts, Neiman said.”
“Rough plans now call for The Olmsted to have as many as 252 condos that could be as small as 700 feet and would be priced as low as $250,000, Neiman said.”
“No one blames Struever for the downturn in the housing market. ‘They missed the bubble,’ Clarke said. ‘We’re all in the same boat. We didn’t create the economy.’”
From Your4State.com in Maryland. “Washington County has more than 1,300 homes with for sale signs, but with a buyer’s market how difficult is it to sell a home and get the price you want?”
“A year ago, homes in Washington County stayed on the market for an average of 86 days. Today, that number’s changed. Realtors say a home can take up to 176 days to sell. ”
“‘If you’re a buyer it’s a big advantage right now because you can be kind of picky. There’s a lot to look at and the prices have come down since last year,’ says Dan Plombon of MackIntosh Realtors.”
“Plombon says that sellers need to be realistic in setting the price for their home, be flexible, consider all offers and be sure to make all the necessary upgrades.”
The News & Advance from Virginia. “Changes in the mortgage market are starting to affect the Lynchburg real estate market. Financing homes recently became more difficult for people with less than perfect credit, said Wayne Ramsey, Lynchburg Association of Realtors president. Especially since lenders stopped approving subprime loans. Ramsey said lenders were approving these loans one day, and stopped the next.”
“Local mortgage brokers in Lynchburg say the lenders they work with are becoming pickier everyday. Jay Brown, a mortgage officer for American National Bank and Trust Company, said one lender the bank deals with accepted a 600 credit score for a 100 percent mortgage just a few months ago. Now, the company will only accept a score of 660.”
“‘Four months ago, it was hard not to get a loan,’ Brown said. ‘You could have bad credit and no documental income.’”
“Brown said now he gets a rate sheet from lenders, who purchase the mortgages from the bank, detailing what the acceptable credit scores are for that day. ‘The people we work with have changed their lending practices,’ he said.”
“Both Brian Cash, VP of the Bank of the James mortgage division, and Brown said the market started to slump because people weren’t paying back their loans. ‘It is all driven by the foreclosure rate,’ Brown said. ‘There is nothing we can do about it. It is what it is.’”
“Brown said the decline of the subprime market hasn’t hit Lynchburg the same way it will Northern Virginia. ‘Over the past couple of years when you put people in a house they couldn’t afford, chances are they aren’t going to pay it back,’ he said. ‘The companies have been forced to cut back.’”
“Lenders are now requiring high down payments from people with low credit scores, Brown said. ‘People are less likely to walk away from something they’ve put their own money into,’ he said.”
‘Nationally, lenders foreclosed on 1 in every 783 homes in April, according to a report released yesterday by RealtyTrac Inc. Virginia fared better. Only 1 in every 1,984 households filed for foreclosure last month, the data shows.’
‘But borrowers in Virginia are struggling to make mortgage payments as the number of foreclosures rises. A year ago, 1 in every 9,817 Virginia households filed for foreclosure, the research firm said. ‘Foreclosures in areas like Virginia are not at a point where they are alarming,’ Daren Blomquist, spokesman for RealtyTrac. ‘But they are rising at such a fast rate that they could become an issue for the housing market there.’
“Households filed for foreclosure” ??? No wonder it was only one in 10,000 households. What did they do, go down to the courthouse and insist that their creditors foreclose?
Just found out yesterday a co-worker who had planned on buying a $320K home in N. Las Vegas no longer qualified for the loan. He had planned no down, interest only and he’s 25 years old. Apparently his debt ratio was too high and he was pretty upset over the matter.
He woulda been most if not all of his monthly pay to afford his mortgage I figure.
upset over NOT getting in over his head?
The finance company did him a favor, he should thank them.
SPANK! Thank you sir may I have another….
Yes, tell your friend not to stress out. They did him a big favorita, and later on he’ll be very thankful.
Good point.
First!
Actually, no.
lol..
“$320K home… He had planned no down, interest only and he’s 25 years old.”
They call this generation ‘y’ - how about generation ‘entitled’.
Not to worry - we are currently working on the next generation of “Depression-era kids” IMO. It’ll be a complete flip.
You watch.
I only hope I can insulate my kids (one is 2+, the other is -4 months) from most of the financial pain, while still teaching them the lesson it provides.
Unfortunately I concur.
- 4 months
is that still one boinger away ?
OK you lost me on that phrase. To answer your question (I think) - we’re expecting in 4 months.
I have a 5yo and a 3 yo and I am starting to see some problems their generation may have. Its all about instant gratification. If my 5yo asks “I want to see a picture of a T-rex”, my dh goes to the computer, types it in and poof the picture appears. If I had asked my dad he would have told me to wait for library day at school and look it up when you get there.
Some things like that though will never change. Kind of like running water - I’m sure lots of grandparents in the late 1800’s / early 1900’s said stuff like “In my day, we had to crap in a hole in the ground“. Well, yeah - eventually there’s progress and we never have to go back to crapping in a hole in the ground (unless we want to).
Finances are different though - we can go back to dire financial situations, thus removing (to some extent at least) the entitlement philosophy of today’s youth (and some not-so-youth).
That being said though - I don’t think we’ll ever go back to true 30’s-ish conditions. The main reason is that we’ve simply gotten way more efficient at doing work, due mainly to technology - robots, computers, etc. We’re able to produce more goods with less effort, and as a result a much higher percentage of our net worth’s are luxury $$$, rather than $$$ to survive on.
packman,
Hate to tell you this, but a lot of that is based upon the availability of cheap energy (which will no longer be a given).
Yesterday they had this author of a book about Gen-Y on TV.
Well, I was worried about not being able to work into my 70s as employeers would want to hire younger poeple to save on healthcare and such. If that book is an accurate representation of Gen-Y, I no longer need fear.
Spoiled brats with a serious entitlement complex. “Great energy and creativity, but no so interested in being just a cog in the engine, so if a manager can properly direct “babysit” them…”
Blah, blah, blah……
Reminds me of a 20-something I worked with a few years ago. Got a job out of college becuase of his daddy, then switched after a few years. I kept trying to get him to actually do some work…. He got so frustrated with my expectations that he actually came out and said it…. “I don’t like to work hard, I just want to be important.”
1) He assumed he could jump right into being the boss.
2) He expected to be able to tell people what to do, without actually having to do anything himself.
The last half of Gen-X and all of Gen-Y are in for a SERIOUS Be-atch slap by reality!!!!
They will Darrell_in_PHX in short order with a lot of the ex-Aquarius Generation…..those who born from ‘57-60 and matured in late 70’s-early 80’s always seem to be the “sandwich generation” between the aging hippies nutters and the Gen Y and some X-ers who have had to do all the work of cleaning up their hedonistic messes….left by a lot of Peace and Love, GenX and GenY types….guess the Millenium kiddies are even more spoiled than these.
A little 30’s reality will make hipness, cool and trendy got the way of the dodo….
I was born in ‘67. Class of ‘85. I think there are quite a few of us that are technically post Baby Boom, that aren’t quite Gen-X.
We see the attitude of the youngers and just shake our heads. They didn’t work at McDonalds in high school, flipping burgers, mopping floors, etc. They didn’t work their way through college as a cook or waiter, they borrowed their way through and come out oweing what should be half-a-house.
Somehow, they think they’re going to jumping into manager roles, making $100K a year.
Heck, my duaghter was engaged to a guy with a degree that did work as a bartender in college. He got a couple job offers, but didn’t take any. Turns out the starting jobs out of college with a business degree didn’t pay as much as he made tending bar, and they actually expected him to get up before noon. Imagine.
But, says I, where will you be 15-20 years from now if you take an entry level professional career vs. staying as a bartender. He’s still a bartender.
I was born in 1957, and I really, really, REALLY resent being lumped in with the Baby Boomers. (Isn’t it interesting that these people are now heading into their sixties, and they’re still called BABY Boomers? Says something about their maturity, doesn’t it?)
Fact is, I grew up in a very conservative neighborhood where our preferred objects of ridicule were the long-haired hippies who attended a nearby private boarding school. And I can recall being appalled at the college kids who were tearing their campuses apart during all those riots.
I’m 54 and I was an wannabe long-hair hippy against the VietNam war, of course I didn’t know why I was against the war, I was really in it for the “free love” and drugs and the like, mostly the free love(the good old days he he he). Look what we created….
in debt 25 year old woman 225lbs fat, driving 6000lb SUV’s, tailgating everyone while talking on their cell phones.
The young people who were forced to take loans on homes they couldn’t afford will be hurt, but their obesity will kill them. No wonder clinical depression is a huge problem in the US, I would be depressed too if I was forced to take out bad home loans and forced to be FAT by Wendy’s and Dairy Queen.
Darryl, I’m still trying to figure out how you were born 6 years after me and have a daughter who WAS engaged to someone.
My daughter is 8….and if I get my way, it’ll be 20 more years before she’s engaged to anyone.
LOL!
And I can recall being appalled at the college kids who were tearing their campuses apart during all those riots.
Those college kids were rioting because they didn’t want to be sent off to fight an unwinnable war on the other side of the world.
College kids aren’t rioting today because the current unwinnable war is being fought by poor people, not them. If there were a draft today you can bet your socks middle class kids would be rioting. And their parents too.
As a 30-year old, I’m loathe to criticize my generation, but I know what you mean about the feeling of entitlement. I do not have that attitude, but I see it all the time amongst my peers. Take my ex-girlfriend, for example.
She owns a condo and decided she wanted to redecorate it. So, she hired a “design consultant” to tell her what colors she might want to paint the walls and the kind of furniture that might look nice. The cost of the consultant’s two hours of work? $350!
My ex payed $350 for some woman’s opinion despite having more than $10,000 in credit card debt. I should have kept my opinion to myself because it wasn’t my money, but I could help letting her know how idiotic it was.
5 years ago I got divorced (I was 35 then). Lots of 20-something ladies wanted to date me. I did date a couple.
Holy crap. $20K in credit card debt on a $40K a year income, and everytime the paycheck came they were at the shoe store or the Victoria’s Secret. One dropped $200 on a purse that was out-of-style in 3 months.
It was nice dating attractive young women that looked good in Victoria Secret underwear… but NO WAY was I going to marry one of them.
In July I’m marrying a woman much closer to my age.
Gosh, Darrell, it’s not like women closer to your age don’t look good in VS undies, now…
I’m in better shape than some little girlies half my age.
Yes, but, women my age new better than to hook up with a guy with kids, in the middle of a divorce from a long-term marriage. I was making $70K, but got hit with $10K a year alimony, $12K a year child support, and with $3K taxes on that $12K child support, and other expenses for the kids like medical and travel. My disposable income was about the same as someone making $40K. Oh, should I mention no assets, all the marital debts, and something close to $10K in lawyer fees?
No…. no 30-something was looking to hook up with THAT!!!
Darrell_in_PHX, yeah, I see this all the time. They want to be treated special & if you don’t realize their specialness it just completely bemuses them. I had one of these types that went out and bought a higher end condo, mortgaged to the hilt of course, & then had to sell it because of the payments. Next, he went out and bought a house and poured a ton of money into it with the intention to flip it later(in Michigan!). When he got into his house I said “Hey you’re going to be mowing the grass now.” He looked at me and said “Oh, no I don’t mow grass.” Too damn good to mow the grass, no doubt.
A guy who used to work for me (Gen X, then about 23 yo) came in asking for a raise one day; felt that he should be earning more because he wasn’t able to keep up with the payments on his BMW. True story.
More kids going to grad school now: expect to jump right into management.
My friend keeps bugging me to help her get a job for her soon to be son-in-law. Meantime the boy’s mom is some hot-shot exec at a big pharma firm. I asked her why son-in-law’s mom can’t just get him a job in the mail room. Nope, not good enough. He wants to start right out of college with some kind of impressive title. I reminded my friend that it is no longer 1999 when college grads were walking into $60k/yr. jobs. It’s a whole ‘nother world out there.
Sounds like his own mother wouldn’t trust him to work for her company and risk ruining her reputation.
I interviewed someone in their mid 20s last year. Asked her why she was looking for a new job, and she replied that she needed to make more money so she could make her mortgage payment. I am in my late 20s, but I still wanted to lean across the table and smack her! The interview ended there….
Interesting moniker, given the subject matter…
“He expected to be able to tell people what to do, without actually having to do anything himself.”
SUCCESSFULLY “telling people what to do” (ie being a boss) actually take a lot of hard work. Unfortunately, a lot (most?) bosses recieve very little training, and are very bad at it. This is actually a good thing, as without bad bosses, we probably wouldn’t have Dilbert comic strips.
“They call this generation ‘y’ ”
It fits. Why (y) can’t I have it, I want it, I’m entitled to it !
I don’t want to be rude, or start another argument here, but these age-based generalizations (which crop up on this blog regularly) are about as offensive as racial or ethnic generalizations.
Here’s a couple of facts we should all keep in mind:
1] The readers/posters on this blog span the age gamut, boomers, X’ers, Y’ers, etc., so your sweeping generalization is sure to offend someone.
2] We probably all have more in common with each other than we do with many members of our “generation” - maybe not politically, but in terms of critical thinking, independence, self-reliance, financial prudence, etc.
So. let’s avoid pissing each other off, eh?
Thanks.
I understand that every generation complains about the younger generation, but it gets annoying.
As for the sense of “entitlement”, I’m betting most of the homeowners in America are not from Generation Y.
So. let’s avoid pissing each other off, eh?
You need to get a thicker skin and toughen up the ego.
If you just want pablum, maybe you should stick to watching network TV news shows and avoid the internet.
1) I’m surprised they got anyone to show up at a Fairfax foreclosure. Investors have evaporated and aren’t generally interested in any loans less than four or five years old. Nothing more recent has any equity for an investor or even for a bargain-hunter.
2) I can’t tell you how many deals are falling apart right now due to suddenly increased lending standards. Many people planned to get out of trouble through price increases which just aren’t happening. Others intended to sell at decent prices, but buyers are being disapproved in droves. It sure would be nice to get accurate NAR data on contract cancellations. As it is, we’ll need to wait and see what the builders report. It’s not looking good so far.
3) REO inventories are not being disclosed by banks - yet. They will need to do this in their 2q disclosures which should start appearing in July. Watch for warnings in the holiday week of July 4 (when they think nobody is paying attention) and actual announcements late in the month. I also wouldn’t be at all surprised to see a lot of lenders take the “delay” approach and claim that they need more time to make their 2q reports. This will push the problem back through the summer into fall and the traditional crisis period of September-October. If this occurs, expect that the 3q results (July-September) announced in October will be absolutely dismal. The combination of delayed results and a dreadful summer creating bad 3q will be brutal.
We have a wise investor in our midst, very good post, IMO
“Struever Bros. Eccles & Rouse has sold only about 25 percent of the 68 condos that it built in the Village Lofts building.”
According to the MD tax site, only two condos have sold. The commericial areas at street level appear to be full (Starbucks, Chipolte, Cloud Nine), but it doesn’t look like much else is going on. I suspected that some of the Hopkins parents would start to buy in the spring/summer- once acceptance letters were sent out. Glad to see that so far, at least, that doesn’t appear to be happening. The asking prices are ridiculous- $300k, cripes, you can buy an entire rowhouse in the same neighborhood for that. This is “Smalltimore”, hon, not DC!
“The asking prices are ridiculous- $300k.”
You just see this time and time again where these prices are completely disconnected from the reality of wages in the given area. It’s like there are millionares coming out the damn woodwork. What a joke.
Many of the parents of Johns Hopkins students could be well-heeled, but they might also be well educated, and they may have got the message that the resale of Junior’s condo after his studies are over would not be so easy as in the past.
Yes, I think (hope!) that is true. Baltimore’s prices have been very sticky; the Sun ran an article this weekend on how this area is one of the few that continues to appreciate (albeit at an anemic
Got cut off somehow. Anyway, Baltimore did have a little bit of appreciation (
Water-front condos in Scottsdale going for $1 million+, with penthouse $2.2 million.
Sure, you can buy a house a mile away for $500K. Or you can rent down the street for $600 a month. And that “water-front” is just an irrigations canal that you’re not allowed to do anything with except look at.
Total insanity!
“Waterfront” - Amazing what people will pay a premium for. The irony is that people paying for unusable waterfront rarely get to take advantage of the only other benefit of waterfront property: the view. Working for a place to sleep.
“Water-front” in a desert? LOL!
IT WAS ONLY 5 years ago I bought a 3/2 1500sq ft almost new in an OK hood for 135k in Stockton,CA-average family income is 40k, things were cool- I came up with 15k down on a 30 year conv. and PITI was about 1,300 a month. I sold it in 2004 for 275k and in 2005 it was sold again for 325k!!
Now Stockton has the most foreclosures in the Nation, and it is far worse than is being reported. You can drive through the New Home projects where all the builders are still building and not selling, and you can see 1/2 of the homes already sold once are now see-throughs. People have no idea how bad it is now or how bad it will get, including me. It will be bad
“Realtors say a home can take up to 176 days to sell.”
Oh great. So all I have to do is list a house for $1,000,000 and wait 176 days and it’ll be sure to be sold. Right?
Yeah, that’s some crap journalism, probably, and either misquoted or too dumb to call the realtor on it. They mean, of course, average time (based on the previous statements), but it does make me wonder who teaches these journalists to write.
Notice she did no comparison of how many homes were on the market in previous years? I looked at 2004 in the MLS data for that county. There were 1/3 the amount of homes for sale as compared to now…
“Realtors say a home can take up to 176 days to sell.”
Oh great. So all I have to do is list a house for $1,000,000 and wait 176 days and it’ll be sure to be sold. Right?
sorry, accidental repeat
176 is when they get tired of it sitting there and cut the price.
NO. It is when the person drops his listing with one broker and takes it to another broker, where it is a new listing.
Good point. Many make the seller sign a 6 month contract. Happened to my Uncle about 5 years ago before the RE market started heating up. The broker touted how she was the #1 agent but after getting the contract signed, she did a horrible job, didnt return calls. All she did was tried to find listings. I guess that is how she got to be #1. Towards the end she started coming around, wanting him to resign another contract. He went with another realtor and sold the house in about a month.
Bernanke: Mortgage Crackdown Coming
http://biz.yahoo.com/ap/070517/bernanke_mortgages.html?.v=8
too little, too late.
Barn Door Open?
Check
Horses Gone?
Check
OK, boys, let’s close her up!
Bernanke was speaking directly to GerStucco: Subprime is contained!
Here is The Fed story on Helicopter Ben over from Marketwatch.
Enjoy!!
——————————————–
THE FED
Bernanke sees limited impact from subprime
Fed looking at new rules, but favors market forces to fix problems
By Rex Nutting, MarketWatch
Last Update: 9:43 AM ET May 17, 2007
WASHINGTON (MarketWatch) — The slowdown in the housing market probably has further to run, but it won’t have a significant impact on the rest of the economy, Federal Reserve Chairman Ben Bernanke said Thursday.
Addressing a conference on bank structure at the Chicago Federal Reserve Bank, Bernanke promised that the Fed and other federal bank regulators have been actively looking at tightening up the rules for mortgage lending to prevent the kinds of abuses that have been seen in the past few years.
“Combating bad lending practices, including deliberate fraud or abuse, may require additional measures,” he said.
“Markets can overshoot, but, ultimately, market forces also work to rein in excesses,” the top central banker said. “In the long run, markets are better than regulators at allocating credit.”
A copy of his remarks was made available in Washington.
“Move along, nothing to see here, return to your homes. All is well”
You mean “Nutting” to see here, obviously!
“Lenders are now requiring high down payments from people with low credit scores, Brown said. ‘People are less likely to walk away from something they’ve put their own money into,’ he said.”
Brilliant………simply brilliant!
Sheer financial genius.
makes me proud to be an American.
makes me proud to have one in the family!
Einstein has nothing on these lenders.
“Better listen to him, Flounder, he’s in pre-med.”
“I thought you were pre-law?”
Pre-med, Pre-law, what’s the difference!!
“If I was you I’d be…..”
“Leaving!!!”
Next month’s astounding revelation:
“People who have instalments less than 30% of their income are more likely to keep paying.”
In other news,
The sky is blue.
Thanks, financial journalists… if you handn’t told us, I don’t know where we’d be.
Local mortgage brokers in Lynchburg say the lenders they work with are becoming pickier everyday.
If you think the lender’s are “picky”, I couldn’t even imagine what it
must now take to get a property appraisal thru underwriting.
Everything under the sun will be reviewed to death by legions of remote hirlings who haven’t a clue about local market conditons.
The reports which were largely canned comment trash before, will now become novels of pure fiction.
Using more than one set of log-in info gets flagged as spam.
Does anyone know about housing price declines for DC suburbs like Hagerstown, Frederick, Urbana, Leesburg, Charlestown and Martinsburg.
Yep, my favorite: Hagerstown. It’s close enough to DC so that it rode the bubble, but far enough to really take a hammering once people realise they don’t like the long commute.
And my favorite development there is a Hovnonian development there, a bunch of rather nice but initially very overpriced duplexes. They sold for >300k back in late 2005. One year later, down to $235-260k. (Lower if you get your own financing, higher if you 100% via Hovnanian.)
That’s big price decline for what is the very same model they sold a year before, and on the same street! Oh, did I mention that the latest ads from Hovnanian say move in now and don’t pay anything till 2008?!? They seem desperate to move this things.
As for Charlestown (WV), friend of mine wanted to buy there in 2005. The new model he wanted outside of Shepherdstown was $475k, but without selling his current house, he couldn’t raise the 10% deposit — lucky for him, in retrospect. Those houses are now around $400k for what he wanted.
I expect that $3+ gasoline is putting the hurt on people there who are commuting in to DC or the close-in ‘burbs like Bethesda or Alexandria.
I’ve a friend in Martinsburg who said that builders like Ryan, Hovnanian and Drees have all lowered the base prices of their houses and Options 50% off. He said that these builders are targetting people who commute to DC area for work to buy as you can get twice the house in Martinsburg than in DC area in the same price. As you have pointed out about the gas prices, and prices already going down in DC area, who would buy all these mansions in these areas. Sellers are stuck with huge mortgages and builders have lowered the prices by 100K. People who bought in 2005/6 are getting screwed royally.
I live in Kearneysville, WV, just outside of Charlestown. The market here has stalled and is starting to roll back down the hill. Prices peaked in 2006 at around $525,000 for a new 3000-sq. ft. home on 2-3 acres. This year so far only 3 houses in the whole county have sold for above $500,000.
In my neighborhood we now have 5 homes on the market, and the wishing price for atleast one has dipped below $500,000, in contrast to a few sales in 2006 for around $525,000. Several of the homes have been sitting 3+ months now.
New developments are very slowly building houses, and I have not seen any new developments started in the last year.
I expect my neighborhood to see prices in the $375 - $400 range within the next year or 2 before stabilizing. I am in at $450, but I put lots of the funny money from my previous house down when I bought so I will not be upside down unless my house falls into a sink hole. And I hope to stay put for many years, god willing.
Gas prices, plus the lowering of prices in NoVa, will adversly affect the prices in the exburbs for years to come.
Lots of detailed data right here:
http://www.mris.com/reports/stats/monthly_reti.cfm
I live in Loudoun Co., so keep track of the Loudoun #’s in detail. Generally we’re running about 12% off-peak right now.
P.S. If you consider all those DC suburbs - you must have quite a tolerance for hellish commutes.
I guess I call them all DC suburbs because they are full of people who work in the DC metro area, and that’s a lot of who have been feeding the boom in those towns. I’ve got a lot of friends who drive in from Culpepper, Lovettsville, Leesburg, Kearneysville (even!!), Frederick, Hagerstown. One of my friends in Maryland drives from Frederick to Fort Belvoir, every day — sheer madness.
As for tolerance for hellish commutes, they sure do have it. Funny how they whinge about the price of gasoline adding $6 per day to their commuting costs, when I tend instead to think what about wasting three hours a day of my life in a car. That would bother me more than the gasoline at even if we got to $6/gallon European prices.
IYR (Reits) breaking down. There’s a short for you bubbleheads.
“Yesterday, at 1 p.m., the foreclosure was announced, and one of two substitute trustees, read a dry description of the property in front of the steps of the Fairfax County Judicial Center. The first bid, $50 million, came from Eron Sodie, the lending bank’s vice president and regional manager in Bethesda.”
“Portfolio manager Chris Beaulieu of Ritchie Capital. He bid $51 million. The bank went to $55 million. The Illinois man bid $55.5 million. The bank came back with $60 million. The Illinois man backed off. The bidding ended.”
Wow. It is good to know that Fremont wants to be a FB. How much you want to bet that about a year from now they wish they had let Chris catch the proverbial falling knife.
I dunno if that’s such a terrible deal, it’s under 200,000/unit. Which is pretty cheap for stuff that’s close to Metro in DC. Unless they are all efficiencies, you can rent those for north of $1100/mo now, which is about a 5% cap. It’s high but not screaming sky high that they’ve been.
HeeHeeHee.
I looked at the site for The Ridgeleigh at Van Dorn Metro (the condo conversion that Fremont just held onto). They have a section title The Ridgeleigh in The News. First two items:
THE RIDGELEIGH IN THE NEWS
Affordable housing debate moves back, forward
By Sean Madigan, Washington Business Journal, October 13 - 19, 2006.
Fed’s Kohn Sees Housing Correction, Not Crash
By Kenneth R. Harney
=====================
Pretty sad when the top news items addressing your RE investment are articles on the housing crash. Good move, webmaster…
“Original plans for The Olmsted called for 119 condos up to 1,200 square feet and starting at more than $400,000″
“Rough plans now call for The Olmsted to have as many as 252 condos that could be as small as 700 feet and would be priced as low as $250,000″
My god, did Baltimore get that expensive! $250,000 for 700 sq foot condo? That’s $350/sq ft!
Or is this in a Ritzy neighborhood in Baltimore? (I’m not a native).
when I was last out there (early 90’s) interviewing at Johns Hopkins Medical School, there were tons of LARGE and VERY CHEAP houses around the medical center (although I know that’s a very bad hood) but also further away where all the Medical Residents lived (so it wasn’t THAT bad of neighborhood).
Pert of the problem is that somewhere in the past 3-5 years, people thought that these sort of prices were “normal”. In the big cicites of Cali, and along the coast, people (even those classified as “working class”) wouldn’t even blink at paying a half a million dollars…or even $600,000. People became desensitized to extreme values, so when you tell them where you expect prices to revert to, they look at you like:
a. you are from mars
or
b. you should take the “short bus” back to school before you hurt yourself.
Or mention that it could easily be 10 years or more before houses return to the peak…
Are you on crack?
For a minute I thought you actually wanted to be taken seriosly, but now it is clear you’re just a joke!
10-years to recover? Where is the punch line?
????
my thoughts exactly
It’s just east of JHU undergrad campus. When I attended (88-92) it was standard run-down student housing - not unsafe, but not expensive, either. The expensive area where professors, etc., live is north of campus.
I visited last year and it looked like everything was yuppifying in every direction from campus. The school’s bought up a lot of real estate in that area, so I’m sure it’s a prime location for students and recent grads. You’d have to put up with students, though.
‘It’s part of the slowing housing market,’ said Scott MacIntosh, senior economist for the National Association of Realtors.
So, Scott is the new NAR chicken licker. A replacement for Lereah so soon? Applicants for the “senior economist” position must be few.
get w LIErah and short MOVE
“Original plans for The Olmsted called for 119 condos up to 1,200 square feet and starting at more than $400,000. The need for smaller, less-expensive condos became evident because of slow sales in the Lofts, Neiman said.”
“Rough plans now call for The Olmsted to have as many as 252 condos that could be as small as 700 feet and would be priced as low as $250,000, Neiman said.”
I don’t think Nieman gets it. A 1200 sq/ft condo $75k and 700 sq/ft condo $35k, now thats more like it.
They should put you in charge of pricing
They should put you in charge of pricing, then they might actually sell some
If you all can’t see this, let me know, I’ll cut and paste.
http://www.minyanville.com/articles/Bernanke-Fed-Subprime-Mortgage/index/a/12861
txchick57
Are homes secured by FDIC.
It’s all there txchick, thanks for the link. Good info.
Rockville folks, tell me what you think.
We know someone who recently put his 4/3.5 colonial on the market for somewhat over $800K. House was built in early 90’s, and the basement is finished. Neighborhood was built out in two stages, and has a lot of smaller colonials that were built in the 70’s. There are three of these on the market, in the upper $500k range. One of those is being sold “as is” (a foreclosure?).
Are houses in ZIP 20853 selling well? There doesn’t seem to be much inventory on realtor.com. Is his newer, larger house worth over 30% more?
BTW, he bought his retirement home in Florida in the spring of 2006. Judging by asking prices in his neighborhood there now (on realtor.com), I’d say he’s already taken a 20% haircut.
You have a street name? Does it have easy access to 270? is he being very honest by calling it Rockville, but the listing agent is calling it North Bethesda?
I don’t know Md. as well as Va., but for $800k on anything less than a McMansion, I would at least want “Bethesda” on the mailing address, not “Rockville,” and I think even that is ridiculous.
Why don’t you Zillow it?
I’m a renter in Northwest DC. I’m moving to a new rental because the owner of the condo I’m currently renting has decided to sell. I had to keep myself from laughing out loud…his realtor boasted in front of the three of us that she could sell her condo in 1 day! What on earth are they smoking? I’ve got a hefty down payment saved up, and I’m still enjoying being a renter. No knife-catching here!
Good on ya! Keep an eye on that listing, will you, and keep us posted? Might be interesting to see how it goes — even if it does sell in one day. (HA! Magic Golden Realtor, or what? Believe that when we see it.)
‘Over the past couple of years when you put people in a house they couldn’t afford, chances are they aren’t going to pay it back,’ he said.
Another genius comment. Amazing how smart people have gotten since the beginning of the downturn. Never heard that comment two years ago…
250K for a condo? That used to buy a damn good house out here. I’m still amazed at how high prices have gotten (and how gullible the public really is). They built a condo tower here in the city, about maybe 30 - 40 units total, and I think 3 - 5 are sold. The place has a nice design but the place is mostly dark at night. They tried to sell these to the public for 200K - 320K and quite frankly, outside of the megacities condos aren’t worth anything. How in the hell did this country get so expensive? I don’t know how anyone can live on the coasts and be able to afford anything, or for that matter most of the country. I bet most of the people live off credit cards or something to that effect.
I think there’s a lot of people living beyond their means, running up major credit card debt. It’s scary.
“‘Four months ago, it was hard not to get a loan,’ Brown said. ‘You could have bad credit and no documental income.’”
When the boom was in a frenzy, I and couple of my sane friends couldn’t figure it out. People weren’t all of the sudden making more money. So, what was going on ?? Well, I’ve got the answer now. But it just leads to another question.. Why did the banks/mortgage companies place themselves at such a risk by loaning money to people who would never be able to pay them back? When did that become normal business practice?? And now there’s talk of a bailout?? My little conspiracy mind is wondering if there wasn’t some plan in the works before all the madnes started. This Sh*t is getting crazier and crazier.
Why did the banks/mortgage companies place themselves at such a risk by loaning money to people who would never be able to pay them back?
Because they were able to pass on the risks by selling the loans to Wall Street who packaged them into MBS’s and sold them to yield-chasing idiots like hedge funds and the Chinese.
Really easy to be free with the lending when it’s not your money.
The “Ridgeleigh at Van Dorn” was trying to sell condos for 275k - 445k. The former price only got you 580 sq ft.
Also interesting that the infamous Fremont (FMT)financed this disaster. The dumbass journalist had of course never heard of FMT.