A Storm That Almost Nobody Can Fix
The Baltimore Sun reports from Maryland. “It’s not an easy time for sellers with homes aimed at the move-up crowd. Lois Hanson, who’s asking $539,000 for her Monkton rancher, said the house has been on the market since September with no offers. Two couples were very interested - each returned three times after an open house. But both couples have homes, homes that haven’t sold yet. ‘I can’t hang by my thumbs waiting for someone else to sell a property and take mine off the market,’ said Hanson, who wants something smaller than the four-bedroom house on more than 2 acres.”
“Hanson’s updates since her 2005 purchase include hardwood floors, a laundry room overhaul and porch improvements to enhance views of a neighboring horse farm. ‘It’s a matter of waiting it out. I’m not going to start feeling anxious or disappointed unless we get to next fall,’ she said.”
“The problem for a number of potential first-time buyers - and thus for all sellers - is that prices are still high compared with incomes. After doubling between 2000 and 2007, the average metro-area home price dropped to $306,000 last year. To swing that, a first-time buyer with a 10 percent down payment would need a salary of about $70,000. And $306,000 was the average for all homes, from condos to Colonials. Most single-family homes are more expensive.”
“People who can’t sell their starter homes can’t buy a bigger place, and the owners of those bigger places can’t go anywhere, either. That’s why economists say home sales probably won’t increase until prices fall even more, as they have in other parts of the nation. ‘The buyer’s going to win this game of chicken,’ said Anirban Basu, a Baltimore economist.”
The Southern Maryland News. “Foreclosures continue to rise in Southern Maryland and in the state. By the end of 2008, foreclosures were up 26 percent in Calvert, 29 percent in Charles, and 60 percent in St. Mary’s. They were up 71 percent statewide, ranking Maryland as 18 in the country by percentage of total homes sold.”
“‘The prices are coming down and affordability is at a five- or six-year high. I think affordability will climb much more. They can only get so bad,’ said Jonathan Benya, a real-estate agent in La Plata.”
“‘Truthfully, the good news is houses are very cheap, interest rates are great and there’s a huge amount of selection,’ said Steve Meszaros, president-elect of the Maryland Association of Realtors. ‘Real estate is really local. Foreclosures have a lot to do with it. I think the biggest reason our volume is down so drastically is because they think they’re going to pay too much for a house and they think we haven’t hit bottom yet. My personal opinion is we may not be at the bottom. But I would bet we’re pretty close. The problem is the confidence of the buying public. I don’t know what you do to fix that’”
The Washington Post. “Just three years ago, the Washington area’s housing market was so overheated that bidding wars — sometimes more than 20 bids on a single house — and price-escalation clauses were commonplace. Now the area is awash in unsold homes that sit for months amid an ever-growing inventory of foreclosed properties.”
“The economy is a mess, but newlyweds Jessalynn and Diego Gomez are ready to buy their first home — and are hoping it’s worth the risk. The first home the couple looks at in Hidden Creek is an empty, 1,850-square-foot townhouse built in 2005 and priced at $349,000. The Gomezes know from the listing that it’s a short sale. They would have to check the Montgomery County real estate records to learn the unpleasant truth about its history: Some poor soul bought this place for $514,595 and then watched its value plunge more than $150,000 in three years.”
“The Gomezes, of course, are well aware that there’s some risk in buying a home in a suburb where prices may continue to decline. ‘Yes, it is definitely scary,’ Diego concedes. ‘We know we’re going to lose money right off the bat.’”
“But it’s also starting to seem risky not to buy right now, Jessalynn adds. ‘I don’t want to wait any longer, because I’m actually scared that the market is going to take that turn, and then we’ll have missed the rock bottom.’”
“Today they hand over the $10,000 deposit, and Jessalynn gives sales consultant Julie Beahm a big hug. Beahm hands them a red SOLD sticker, which they’ll later happily slap onto the “For Sale” sign posted in front of their home-to-be. ‘This feels kind of neat,’ Diego says, with a smile. ‘For the first time I’ll be able to touch the wall and say, ‘This is mine.’”
“As far as worrying about whether prices in Hidden Creek might continue to fall, Diego says they aren’t necessarily expecting to make money on the house. ‘If we can at least walk out and sell it and not be upside down,’ he says, ‘then we’re fine with that.’”
The Midlothian Exchange from Virginia. “Laura Lafayette, senior VP for public affairs for the Richmond Association of Realtors, said that area homes saw double-digit appreciation for two or three years earlier in the decade, so the slight declines in value are to be expected. Markets like Northern Virginia are experiencing ‘drastic depreciation’ because of the ‘irrational exuberance’ of the rise of prices in that area earlier in the decade.”
“Real estate agents and brokers are generally optimistic that the market will bottom out this year, if it has not done so already, and are looking forward to a better 2010 and more responsible homeowners. ‘Time will heal these wounds,’ Lafayette said. ‘But we have got to stop thinking about our homes as banks.’”
From CBS News. “The crash in the housing market was the beginning of the economic downturn. But now some experts believe we’re seeing the first signs of a real estate revival. Home prices in one Virginia suburb of Washington, DC have fallen so far, there seems nowhere to go but up, reports CBS news correspondent Thalia Assuras.”
“Susan Jacobs is a real estate agent in Manassas County, Virginia with more than 20 years experience. Most of the houses she’s showing these days belong to banks - foreclosure properties on the market for bargain basement prices. She shows a large house that she plans to put on the market for somewhere between $60,000 and $70,000.”
“The price of that same house a few years ago? ‘In ‘05 or ‘06 this property could have sold for $300 [thousand],’ Jacobs says.”
“In 2005 there were just two foreclosures in the city of Manassas. in 2007, 313. And in 2008, a whopping 922. Ninety-two percent of real estate sales in Manassas last year were bank sales. That means opportunity for some people, like Brandon Hughes, who snapped up a four bedroom house for $135,000.”
“‘A few years ago his house would have cost ‘$300, $350,000,’ Hughes says. ‘I thought I would never buy a house. It was way out of my price range.’”
“So is Manassas at the forefront of a housing turn-around? Ranny Isenberg, a local home appraiser, thinks so. ‘Real estate’s on sale. And i don’t think it is going to get any cheaper,’ he says. ‘And for someone who is investing it is instant money.’”
The Virginian Pilot. “For many military families, the prospect of moving and selling a home amid the biggest housing decline in decades is daunting, but a little-touted provision in Congress’ economic recovery package could throw some a lifeline. However, many families who qualify for the program are in a holding pattern until the department clarifies whether it will use the value of the home at the time of purchase or the value in today’s market.”
“The program could allow Lorelei Redmond, whose husband is a master gunnery sergeant in the Marines, to sell for a loss without incurring massive debt or dipping into savings. It could help the family avoid a short-sell. The couple bought their home in Salem Village in August 2005 for $215,000. Last month, Mark Redmond received orders to a base in Twentynine Palms, Calif. The couple have until July to sell their home.”
“‘At the end of the day, we can’t afford to be sitting on a house with a mortgage while we’re in California,’ said Lorelei Redmond. ‘The primary reason we bought is because we had a teenager in high school and didn’t want to move around. But we bought within our means, and we didn’t get any of that crazy financing.’”
“The Redmonds listed the home last month for $226,000 — with closing costs and other fees, just enough to break even. Though a few people have stopped by to look at the house, no offers. ‘We wouldn’t want to profit off the government here,’ Redmond said. ‘But we go at the whim of the military. So I think there should be some help just to get us out from underneath this.’”
The Philadelphia Inquirer. “Any effort to change the tax-deduction rules for mortgage interest, as President Obama has proposed in his budget, is guaranteed to bring the housing industry to its feet, shaking its fists. ‘This proposal could have an adverse effect on a market that is already in trouble, and this is not the time to reduce incentives for buying or refinancing a home,’ Mortgage Bankers Association CEO David G. Kittle said.”
“Deducting mortgage interest, the real estate industry has perennially argued, is a major reason to buy one’s first home. ‘It is an important part of the . . . process to remind potential buyers that, unlike paying rent, the interest on a mortgage payment has a tax advantage,’ said Noelle Barbone, Delaware Valley operations manager for Weichert Realtors.”
“Developer Carl Dranoff, while not disputing the value of the mortgage-interest deduction, said that instead, pricing and confidence were driving today’s home purchases. ‘Will a purchase hold its value?’ is the key question buyers ask,’ he said.”
The Charleston Gazette from West Virginia. “Attorney General Darrell McGraw wants the Legislature to fund a satellite office in Martinsburg to address an explosion in consumer complaints in the Eastern Panhandle over the past four years. Joe Clay, fiscal affairs director for the attorney general’s office, said…complaints from Eastern Panhandle residents to the office’s consumer protection division have jumped from 257 in 2005 to 583 last year.”
“Most of the cases involving predatory mortgage complaints are from the Eastern Panhandle, which was one of the few areas of the state to experience a housing boom, he said. ‘It was a hot real estate market for a time,’ Clay said. ‘Most of West Virginia was sheltered from that.’”
The Journal from West Virginia. “Fran Hughes, chief deputy attorney general, said predatory lending is on the rise locally, and that is the main reason why a satellite office is needed for the tri-county area. ‘In the Eastern Panhandle, (predatory lending) has almost doubled. There is more in the Eastern Panhandle than elsewhere in the state,’ Hughes said.”
“Senate Finance Committee Chairman Walt Helmick, D-Pocahontas, said in a telephone interview that McGraw’s request was taken very seriously. ‘When it comes to the Eastern Panhandle, we handle it a little differently because we know it’s been growing,’ said Helmick. He agreed that with the phenomenal population growth and housing development experienced by the tri-county over the past decade, there comes certain problems and when the housing bubble burst, other problems followed.”
“There were 824 complaints from the Eastern Panhandle in 2007 and 2008 combined - just on issues of excessive fees and financing, which include mortgages, payday loans, credit cards and other financial matters. That is because the rest of West Virginia ’saw no appreciable asset inflation,’ meaning the housing bubble that burst here in 2008, she said. People were told their houses were worth more than they really were, Hughes said. As appraisals went up, people got into ‘exotic’ loans and home equity loans for more than they could afford, she said.”
“Between 1991 and 2002, West Virginians were less likely than the average American to be more than one month late on their mortgage payments. ‘People would fall behind a month for one reason or another, then catch up,’ said Doug Duncan, former chief economist of the Mortgage Bankers Association. ‘West Virginia was one of a handful of states where you’d see that.’”
“But now, West Virginia, like most states, is facing rising number of delinquencies at foreclosure stage. The Mortgage Bankers’ third-quarter statistics show that, among mortgages held by national lenders:
West Virginia’s three-month delinquencies were the 14th highest in the nation. The state had the nation’s seventh highest prime mortgage delinquency rate and the seventh highest subprime delinquency rate.
“In the third quarter of 2008 alone, MBA figures show, there were 4,868 seriously delinquent West Virginia mortgages, compared with 3,529 the year before, a 38 percent increase. In 2006, there were 2,852.”
“Prime mortgage delinquencies are rising nationwide, said Mortgage Bankers chief economist Jay Brinkman. His staff expected delinquencies to level off in 2009, he said. ‘But we can pretty much throw that out the window now, because now we have to factor in the effects of job loss due to recession.’”
“In 2003, four top Bush administration mortgage regulators posed in Washington in front of a pile of banking regulations wrapped in red tape, holding a chain saw and shears, to show their determination to cut through ‘red tape’ they said was hampering mortgage lenders. That same year, West Virginia’s three-month delinquencies rose above the national average.”
“‘You started seeing those tricky mortgage ads on national TV and the Internet, saying ‘Come refinance, we’ll give you a good rate,’ said Joe Hatfield, Housing Development Fund director.”
“In the Eastern Panhandle, ‘a horde of mortgage brokers arrived from out of state,’ said Charles Town bankruptcy attorney Aaron Amore. They targeted affluent people, he said, and ‘prices of homes doubled in many cases.’”
“In the coalfields, subprime mortgage brokers went door to door, targeting low-income people who needed money, said Dan Hedges, Mountain State Justice attorney. ‘Wall Street had let it be known that they’d buy all the mortgages those brokers could send them,’ he said.”
“In 2005, West Virginia homeownership hit an all-time high of 81 percent. And the state’s three-month delinquencies rose well above the national average, MBA statistics show. By 2008, national lenders owned almost twice as many West Virginia mortgages as they had owned in 2000, according to MBA statistics. At that point, they held the great majority of state mortgages.”
“The rising cost of food, utilities and other necessities squeezes people’s budgets and affects their ability to make mortgage payments, said Hatfield. ‘People’s disposable income has dropped to the point where they struggle with a payment they could easily afford three years ago. So when the transmission goes out or the water heater quits working, what do they not pay?’”
“‘Our concern is that we made [prime] loans that were very affordable to folks a few years ago, but now they do not have the disposable income to keep everything current,’ he said. ‘All we need is one more problem with unemployment or the auto breakdown or the health issue, and we’ve got a storm that almost nobody can fix.’”
‘If we can at least walk out and sell it and not be upside down,’ he says, ‘then we’re fine with that.’
Yes, but this is the rub isn’t it. If this couple finds themselves upside down, it’s likely that away they’ll go.
The WP has always perplexed me. Sometimes it seems like they really get it. But they also run some of the most ridiculous boosterism pieces I have found. (Like this one)
The P., just like its cousin, the NYT, is a huge cheerleader, for sure. I said in here years ago they would not speak ill of RE until it was so blatantly obvious things were bad that they would have no choice but to “get it.”
The real howl in this story was the commute discussion. Gomez “mapquested” his new address and figures it will take him 37 minutes to drive to work in downtown DC.
BWAHAHAHAHAHA
Ninety minutes, if he’s lucky. Every, single dang day of the week.
Twice. Often longer. Very often. 270 is a mess and that is the easy part.
Yes, 270 is awful. When I lived in DC I did the reverse commute up to Gaithersburg and it was still a nightmare — going the other way was more than 37 minutes and as I drove north, southbound 270 often looked like a parking lot.
This story reminds me of acquaintances of mine who used to live near the Wheaton metro and loved the walkability, the restaurants etc. and were going to buy there a few years ago. But as soon as they saw they could get a bigger, fancier house out in Gaithersburg they jumped.
Now they are sad and regretful — their house has lost “value” and they are stuck with a horrendous commute.
Now a Wheaton house would surely have come down in price as well, but you’d still be walking distance to the metro and great Thai food.
I’ve long since realized its way too expensive to live in walking distance of great Thai food.
Great Pizza was also a substantial expense too.
A great ribs/BBQ place doesn’t help either.
Now that I’ve started making pizza from scratch I won’t go back - I really love the cost savings. I got a 25 lb. bag of bread flour from Sams Club tonight for $7. That makes 75 medium pizzas.
Good for you, Dennis. I’ve always loved home-made pizza better than restaurant … for one thing, I can make my own sauce–with garlic and green peppers. Tasty!
He wants to commute from Gaithersburg to DC?!? Get ready for that 3:30AM wakeup call, bro! Ai ai ai.
My father used to HATE being sent to Laurel, MD (er… I THINK that was the one) by his employers when we lived in Rockville. He worked most of the week in Silver Spring and took the Metrobus or MARC Rail. 270 sux. When I was in driving school they took me out there and I figured I was going straight into the Jersey barriers… oh, and forget about “min safe following distance”. Don’t you love on 270 how everyone speeds 15 above and is 1 sec behind the guy in front? Mass suicide if something goes wrong. Try to keep an appropriate distance and they just jump in front of you, so you tap the brakes again … and again … and again.
Hey, tell your Wheaton-scorning friends the good news: Rockville (hello, closer in to Union Station) used to be the CHEAPER suburb! And Silver Springs used to be the ghetto!
I know Rockville went loony over the last few years, but, fortunately, with that went a wave of overbuilding. Foreclosed condos for sale … and old houses, only getting older. C’mon, fall baby, fall. They are going DOWN. Rockville’s HS’s are not considered “the best” in Montgy Cty. In mid-1990’s it was the bargain vs. the Walt Whitman district or Bethesda. King Farm should be heading for the toilet soon–flooding, poor road access, too far from Metro. (Never should have been built: THANKS, IRS!)
Seriously, hang in there, and you should be able to get digs near Poe’s grave AND the rail station. Well, within 1mi … c’mon, in 1997 there were slumlord multifamilies with no heat within walking distance of Metro. These jokers can pretend all they want…
“But it’s also starting to seem risky not to buy right now, Jessalynn adds. ‘I don’t want to wait any longer, because I’m actually scared that the market is going to take that turn, and then we’ll have missed the rock bottom.’”
Reminds me of my GF. I posted late last fall that she kept calling me at work about a nice single family home in Arlington that had a great price point. I think I called her my “living” girlfriend at the point. I wish them the best of luck with their new purchase.
Thanks for the Mid-Atlantic thread.
The complete lack of balance in this piece of “journalism” reflects much of the DC area’s mentality precisely.
The Wash Post never applies the same skepticism to the real estate industry that they do to government bodies etc., it always reminded me more of a community-paper in its boosterism than a real newspaper.
Their twice-monthly live chat with real estate “experts” Maryann Hagerty and Elizabeth Razzi are a case in point, they are continual cheerleaders for high real estate prices even tho they claim objectivity.
http://tinyurl.com/adnmo6
RE: Banking: I am not nearly as burned by the small number of bankers as I am by the massive number of people who intentionally bought houses they couldn’t afford without using common sense. Now I (as a renter who was bright enough not to buy something I couldn’t afford) am supposed to put my tax dollars into bailing them out of their irresponsible behavior so they can build equity. This effect me far more than whether some executive I will never meet get a couple of extra million from a 800 billion package.
Maryann Haggerty: I think back 4 or 5 years ago, to these same chats, and I don’t recall a lot of people saying, “whoopee!! I’m going to irresponsibly buy a house I know I can’t afford!” What I recall are a lot of people saying, “I know this house is a stretch, but I think I can make it as long as my health holds up. And with luck, my income will improve as I move along in my career.”
Elizabeth Razzi: And I’m assuming you’re not one of those renters who ends up getting booted from your place because the landlord lost it to foreclosure.
“What I recall are a lot of people saying, “I know this house is a stretch, but I think I can make it as long as my health holds up. And with luck, my income will improve as I move along in my career.””
Like this ISN’T irresponsible thinking?!
No kidding. Staking your financial future on a wing and a prayer? Good grief, it’s just a house.
Exactly.
The Kool-aid is still flowing strong in the Never-Never-Land of Maryland, DC, and NoVa. People are so clueless. They will admit to a Housing Bubble, but deny that it exists here - it’s just a “thing in California and Florida.” Then, they prattle away about new, “affordable” $300,000+ and $400,000 townhouses, etc. in a state with a median household income of only $80,000. Idiots! But there cannot be a Bubble here because, “We’re near DC and everyone is rich” and “BRAC will make lots of people move here.” who will all, somehow, magically buy houses they cannot afford, I assume! Argh!
The state median household income might ‘only’ be $80K, but the household income in many of the counties in the DC Metro area (Howard, Montgomery, Fairfax, etc) is +/- $100K. So the 3x to 4x range is pretty reasonable IMO. There’s definitely been some price decines, esp. in the condo market, but SFHs and newer THs seem to be holding up pretty well. My guess is the 2% or so unemployment in the area is helping quite a bit.
‘The buyer’s going to win this game of chicken,’ said Anirban Basu, a Baltimore economist.”
Lol. Thanks for a great quote Ben.
Thanks to the bubble, ’safe as houses’ is a joke.
I’m watching rents crash in the South Bay portion of LA. Too many people are moving back in with mom and dad (or the properties were empty ’spec homes’ anyway)… Rents have dropped slower than housing prices… My estimate is we’re at 80% of the cost of owning (excluding the liablity of fixing everything). But rents are dropping… vacant properties for sale/rent are at an extreame.
A flip at Torrance beach has my wife and I very curious. No, we’ll never afford it even once it gets to a fair market price (post foreclosure). But ‘the great squishdown’ won’t be over until the higher end properties clear.
For some reason, as I see the national (and global) nature of this bubble reading through the articles of this thread, the ‘People are smart’ tagline keeps popping into my head. Talk about irony…
Got Popcorn?
Neil
A lot of people fail to realize that the larger a house gets the less you can afford to pay for it. There is a break-even point at which even a “free” house is unaffordable because heat, maintenance and taxes consume all your available housing budget.
Exactly. So many people fail to plan for that. They won’t even ask to see utility bills or previous property tax bills; they just kind of wing it. Stunning.
I forget where I saw a no bid (Jim the Realtor’s site?) on a $2.27M home that cost $10M to build in San Diego.
Funny on the ‘no utility bills.’ I sold a home in Florida, pre-bubble, for a loss. One of my selling points was the low utility bills!
80%+ of the ‘upper middle class’ people I know are over-invested in real estate. Until that unwinds and they free up some liquid cash… this market has trouble.
Oh, the flip by Torrance beach should be affordable to own (ex-mortgage/taxes). Its small. The flippers paid a fortune for the land. The new home looks nice from the outside. I think it will sell for more than a million. The current asking price is north of $2.5M. While we will not be able to afford it… its still a nice home.
Got Popcorn?
Neil
The property taxes in my hood include Mello-Roos which are not related to the “value” of the home. This is interesting to me because when the homes were sold new (~3 years ago), many of the homes went for upper 500k to mid-600k. The flat fees are ~$4500 so with a 1% property tax the total taxes were ~10k a year. This came to ~ 2% total tax rate. Now that prices have dropped into the mid 200k range, the total taxes are ~ $7000 a year (and that is only if the assessor’s office actually values your home correctly) which on a $235k home would be 3%. The chances of someone buying a home with a 3% tax rate are slim to none in my opinion.
The tax rate in FL is 2%, plus another 1-2% for insurance. How’s that for “slim to none” chance.
Oh, and, on top of that, most new homes in FL are in high HOA communities. The home I rent (~2K a month) right now has a 10K/yr tax bill, 6K/yr insurance, and HOA of ~4K/yr. 20K before you look at the MTG. Currently renting at ~24K/yr.
The house is worth (using those numbers) about 50K.
In Texas 3% is an average rate for property taxes.
Those rates are crazy in Texas and Florida, but the homes in TX (I don’t know about FL) are much cheaper so the total tax bill is not as bad as CA. Still, 3% is ridiculous.
Both Texas and Florida have no state personal income taxes. In the absence of wild herds of candy cr*pping unicorns, the governments need some source of revenue.
My Md tax is 1.25% and insurance is 0.25%
Neither TX nor FL has a state income tax. The money ultimately comes from somewhere in some form of taxation. Property tax rates are also often a function of property values. Values in Detroit are dirt cheap, but isn’t the property tax rate there around 10 percent. In California, it’s the reverse of Detroit with higher values and lower rates.
But yeah, that overhead in Florida is eye-popping if you own.
The insurance is insane b/c Charlie (and many residents) seem to think that tanking the entire state insurance system is a fair price to pay to keep the coastal dwellers in insurance. Heck, you don’t even have to be on the coasts to have major damage, thanks to the crazy hurricanes and lax building codes. But that aside, too many built on the coasts, they can’t afford the true cost of their insurance (really, they’re uninsurable and need to be rich enough to take the hit when their house is a total loss in 7 years), so all these po’ folks statewide are forced to pay for it. Co’s, po’ folks ain’t jes’ DUMB, they let their insurance lapse when they live inland, which is fine, until they have a drought and lose the house to fire. Oops.
“For the first time I’ll be able to touch a wall and say, ‘This is mine’ ”
No Gomez, reach down past your belt buckle with a firm tug. ‘That’ is “your’s”.
Dang, DinOR:
I laughed at the package pull comment and my daughter, late elementary school, says, “What’s so funny.”
“Oh, just something.”
Firm tug. Yeah, we do have to get back to basics.
LOL. Yes, Gomez, until you make the final payment, it ain’t yours. And as you’re about to learn the hard way, ain’t nothing as expensive as regret.
Whatever you have to pay taxes on, AIN’T YOURS.
“Jessalynn adds. ‘I don’t want to wait any longer, because I’m actually scared that the market is going to take that turn, and then we’ll have missed the rock bottom.’”
At some point there’s no excuse for ignorance. If the only advice you consider is coming from salesmen, maybe you deserve to get burned.
We’ll know that the “Real Estate always goes up” crowd is officially gone when we stop reading quotes like that one. The myths that contributed to the building of this bubble haven’t been killed, yet.
“The myths that contributed to the building of this bubble haven’t been killed, yet.”
You got that right. Most of the folks I know (in Northern Virginia) are still in denial. They still expect the market to return to normal in “a year or two” and they define “normal” as double-digit annual increases.
I got a flyer in the mail the other day from a RE agent. They’re seeing signs of bidding wars starting again! So you better hurry! Hurry! Hurry! Hurry! They just keep recycling the same tired old sales pitches.
All this denial is one of the reasons why this thing is unwinding so very slowly.
Creating a sense of urgency is a time-honored sales tactic. Even in my neighborhood Realtors are pumping this $8K tax credit for all it’s worth — even though against California prices it ain’t worth much.
Too many of my coworkers are catching this sense of urgency. Don’t worry… its only going to flush out the last solvent ‘panic ready’ buyers. I’m expecting the home price decline to moderate March through August. Then look out below.
Got Popcorn?
Neil
I was born in a trunk.
Mama died and my daddy got drunk.
Left me here to die alone
In the middle of Tobacco Road.
Growin’ up rusty shack,
All I had was hangin’ on my back.
Only you know how I loathe
This place called Tobacco Road.
But it’s home, the only life I ever known.
Only you know how I loathe Tobacco Road.
Gonna leave, get a job
With the help and the grace from above.
Save some money, get rich and old,
Bring it back to Tobacco Road.
But it’s home, the only life I ever known.
Only you know how I loathe Tobacco Road.
Bring that dynamite and a crane,
Blow it up, start all over again.
Build a town, be proud to show.
Gives the name Tobacco Road
mikey,
While there ‘were’ some great British Blues covers, my favorite will -always- be Edgar Winter’s w/ Ronnie Montrose. The version on “White Trash” was excellent too!
Rick Derringer was w/ the band back then.
A remarkably pretty girl took me to a place somewhere near Port Tobacco, Md for a pinic many years ago, before the big DC area build-ups. All that I remember was her long brown hair and amazing eyes and us singing “Tobacco Road ” coming and going through backroads in a seemingly rural depressed area. The rest was a blur but I was always a good boy.
That’s my story and I’m sticking to it DinOR
Everyone will be glad to know that “Tobacco Road” is a prime example of housing bubble prices. Shockingly, not the greatest of areas, but plenty of recent builds in this area. I am not sure if the bars for the windows come with purchase and if they are sold separately.
Actually the bars for the windows come with purchase…however most people go for the option of bars for the bars.
I’ve hung tobaccy in an Adams County, Ohio, drying barn to help a friend’s dad. Backbreaking, dusty work.
I remember this cute young couple from yesterday’s posts. Didn’t dear Diego do “research” by watching HGTV? His fantasy jones would have been better satisfied by plugging in Lord of the Rings.
Are lenders even pursuing foreclosure at this point? I ask this seriously because I have neighbors who have not paid in 18 months and have yet to receive a NOD. Our SoCal subdivision is about 50% down from early 2006 prices and has a tax rate over 2%. With the prices which were paid, the steep loss of equity (for those who put money down) and the massive loss of jobs, half of the people on our street have stopped paying and the other half are seriously considering it. Even as the number of vacancies and non-paying occupants in our subdivision increases, it seems as if the foreclosures have just stopped happening. I have read that lenders want the homes to remain occupied to prevent rapid deterioration and/or vandalism of the homes, but it looks like they have just given up trying to collect payments altogether with no action to take back the houses. Can anyone comment on this with some insight? Thanks.
I can only confirm your observation. I have a neighbor I know for a fact hasn’t made a mortgage payment in 14-18 months and is still living in the place.
Then why am I still paying my mortgage here!? I am starting to feel like a chump that is being taken to the cleaners here.
This is really getting me very angry.
Stop paying dude! The govt will pick up the tab. /wink
Believe me, I am very upset about this.
Where we are doing all the right things, and the irresponsible set gets away with this!!!
I guess I need to be a member of the administration and pay no taxes or mortgages or pull a Rangel rule here.
This is very crazy, how am I going to teach my children to be responsible citizens when this is happenning!!!
I strongly like 92% of America are starting to look like chumps to the other 8%.
Live within your means…
/rant off
“Stop paying your mortgage.
If you pay taxes, your making a mortgage payment already - to Unk Sam.”
So many people will come to this conclusion the Feds will have to mandate legislation that nothing “housing” or “foreclosure” related can appear on a credit score anyway.
‘wink’
The way things are going these days.
I don’t think our current leaders want you to teach your children anything except “Bush was worst”.
Lets give Bush credit where due He was the best president for creating UNDERGROUND JOBS…..
———————————————————–
I don’t think our current leaders want you to teach your children anything except “Bush was worst”.
join Rick’s rebellion
(Santelli)
I have already, but there is always somebody coming with hand out for more of hard-earned money.
Taxes going up everywhere…
Right now, I am trying to make sure that I remain employed.
It’s gotta be a real kick in the balls for the lenders who issued (or bought) these toxic loans to not only take a beating on the foreclosure sale price, but then to find out that they have to pay the outstanding property taxes as well. I am sure that no one who has stopped paying on the house is still paying their property taxes. Even if the lender decides to leave the property taxes alone and force potential buyers to pay off the tax lien, they will get that much less for the house. The banks’ failure to perform some due diligence during the past five years is going to be a gift that keeps on giving for a while. And I guess since all of us taxpayers end up getting the bill for it in the end, we might as well walk from our houses and save as much as possible while we wait for the sheriff to come knocking. . .
I guess they all get to save their money so they can buy again in 7 years. That’s how long its likely going to take before they have to leave anyway.
10-4.
I know of several homes in my hood where there has been no official NOD but owners have either fled, or are “offering” short sales. So the pace of foreclosures shown on RealtyTrac is more rapid than its data indicates, at least in the area I eyeball. It’s not a stretch that would be true across a wide swath of California.
But to the other point, how many people may be squatting not paying mortgage, I can’t add any additional info. Might be considerable, as you suggest.
Its another kick in da nutz to renters like me. These scummy homeohnazs get to pay down their CC Student Loan debt for 18 months or longer boost their credit score to compensate for the eventual foreclosure and he i am stuck having to pay my landlord tomorrow and my CC bills
Its not fair!
Even in NYC they have legal term “use and occupancy”, you have to pay something for living in the house/apartment.
Three things about the Post story:
-This thing reads like a novel. It’s long and full of drama.
- This Gomez couple just can’t wait to throw their money at a house in a falling market. thet even admit they’re going to lose money if they buy now.
-Reading the comments of all the buyers, sellers and real estate agents in this article explains how we got into the mess we’re in.
Last month, Mark Redmond received orders to a base in Twentynine Palms, Calif. The couple have until July to sell their home.” … “‘At the end of the day, we can’t afford to be sitting on a house with a mortgage while we’re in California,’ said Lorelei Redmond.
Seems whenever you all get to taking jabs at poor folks who got in over their financial heads, all I read on this blog is “Joshua Tree” this and “JT” that. So today Ben Jones tosses you a softball, and nothing. No Joshua Tree. No JT. Nothing about where the sun don’t shine. No analogies to proctology. No allusions to anal fissures. No hemorrhoid metaphors. Nothing. Do you all need a California geography lesson, or what? Honestly, I’m tired of carrying the enema bag for you people.
Luv,
Jen
well if they’re smart they won’t buy there.
How’s this:
They have a JT now, wait until Twenty-Nine Palms. They ain’t seen or felt nothing yet.
BTW,
I don’t get it. Why would you buy a house when you are in the military? The military transfers people all over the US and the world. Did the husband and wife actually believe they would never be transferred? What planet or what Joshua Tree are they from?
Sadly, you’d be shocked at the number of military who thought owning real estate was the ticket to being independently wealthy, just like so many others.
What they more than likely meant to say, based on anecdotal evidence, was: “I thought we’d be able to move in three years and make another killing like we’d done in the past in real estate. The military will pay for my rent, but why shouldn’t I be able to build ‘equity’ in a home instead of throwing it away on rent? That is just foolish. Huh? You mean the largest credit bubble in potentially the history of the world popped, and I am now stuck with this huge speculation/risk I took?”
Yes, she knew what she was doing. There are a myriad of options available for a military member besides buying. She gambled and lost, and is quite happy to know that someone else may be picking up her tab.
“The Redmonds listed the home last month for $226,000 — with closing costs and other fees, just enough to break even. Though a few people have stopped by to look at the house, no offers. ‘We wouldn’t want to profit off the government here,’ Redmond said. ‘But we go at the whim of the military. So I think there should be some help just to get us out from underneath this.’”
I grew up in a military family. What a bunch of losers…if they want the military to rescue them from their own stupid decisions, then they should let the military choose their housing. They could have almost certainly qualified for base housing, but I’m sure Ms. Redmond felt she was too good for that at the time.
You knew what you were in for when you (or hubby) signed up, missy.
NoSingleOne,
I couldn’t agree with you more. I was in the military and understand that your duty station is in fact at the whim of the govt. But unlike many other industries, people in the military KNOW that they may be transferred. Base housing is always an option and although maybe not the most glorious of options, it is a stable place to live with no impact from a positive or negative housing market. The consequences of decisions, good or bad, should be felt equally by everyone, military servant or not.
Partyboy,
Well, true, but G.I’s deserve some of the same freedoms everyone else in this country takes for granted, no? The big difference is the branch in which you serve.
I knew AF guys that went from boot camp to retired and never left TX! Navy guys -try- to stay in San Diego. ‘Try’. Even Marines have the right to at least attempt to have a home that’s paid for by the time they retire.
Many will buy a home in their home town and rent it out for years before they come home to retire. Very common. Still others buy raw land and will build on it when they get out.
My old Sgt. used to address the troops and say…”If the Army wanted YOU to have a wife, house or a personal car, it would have issued you one!”
Needless to say..we ran and walked a lot
A soldier does not have some of the same freedoms as the average citizen.
You are a G.I. which means government issued. You are a solider 24 hours a day. That means they can wake you up at 2 am in the morning, put you on a plane heading for Korea, search your rooms and cars, tell you how long you can wear your hair, what color T-shirt to wear, etc..
You are subject to the Uniform Code of Military Justice as a service member.
Nitpick:
There has been a push to get military personel out of base housing for the last few years. Sadly, I know of quite a few military personel in a bind due to the standard transfers.
But you are right Partyboy, base housing is always an option.
Got Popcorn?
Neil
Neil,
Perhaps it is ‘now’ but I recall in the mid/late 80’s there was a “waiting list” and… it was based on rank and your orders and whether or not you were “command sponsored” etc.
I knew guys that had been on the list for years… In fact, were just getting in and they were coming up for transfer? The Navy had a very definite pecking order and a lot us looked for homes/land as far east as Jamul!
The military has a lot of sham marriages by junior enlisted troops who have a better shot at living off base and collecting HOLA (housing allowance) than the single pogues living in the barracks (or dormitories if you’re Air Force). The military also has a tremendously high percentage of young people who can’t manage their money and get deeply into debt. Look at all the pawn shops and payday joints around every military base. And far too often, while hubby is away earning tax-free money in Iraq, wifey goes hog wild with the credit cards and often cleans out GI Joe’s bank account prior to running off with her boyfriend or lover. Financial predators and scam artists of every stripe, especially realtors, find these guys and girls easy marks.
Renting in the military is also a fine option. Some places have laws that state the landlord is obligated to allow the tenent to break the lease free and clear if they get transferred.
Not only that, but every military base that I’ve been stationed at had scads of rentals just off post. The landlords liked the soldiers because they knew if the rent didn’t show up on time a phone call to the commanding officer would get results. The military frowns on their soldiers running up bad debts - it’ll torpedo your security clearance for one thing.
“ ‘This feels kind of neat,’ Diego says, with a smile. ‘For the first time I’ll be able to touch the wall and say, ‘This is mine.’”
I’ll wager at some point that those gyp board walls are gonna feel like 3/4″ round bar stock….. installed vertically at a 4″ interval.
Anybody want to bet against me?
If the walls WERE round bar stock, the couple might feel safer. I don’t think anyone has mentioned it yet, but the neighborhood where they are buying (2 blocks from LakeForest mall) is not exactly the greatest. Lots of crime, and if the economy continues to plunge, I imagine there will be even more.
Jeeez…. BJ is swattin’ the nest today. These articles have the same puke inducing lexicon of 2005…. “snap up” and “home” instead of house among other garbage expressions.
grrrrrrrr.
Prince William County (not “Manassas County” - does CBS News actually have fact checkers anymore?) out in the boonies might be pretty close to the bottom in some neighborhoods, where prices seem to be lower than they were 10 years ago. The problem is, you are then stuck in Woodbridge or Manassas with nightmarish commutes and long drives to most cultural amenities (if those things matter to you).
Everything in the Washington DC region inside the Beltway has a LONG way to go still, which the WashPost story basically indicates. Sellers in Arlington County are still trying to get $500k or more for anonymous 50-year-old colonials and ranch houses with window-unit air conditioners. The foreclosures in Arlington have listing prices much less than that, but I think even those prices are probably going to be beaten in the next couple of years. A lot of the RE industry yutzes are trying to talk up the closer-in areas of DC as innoculated against the recession and the bursting of the RE bubble. It’s going to be fun watching the pain spread inward in this area.
I’ve been here in DC since January for the Inauguration, and will be heading out soon. One thing I noticed is that the bars this weekend were basically only half full. I guess the workers at the trade associations and non-profits are starting to run scared. Still, Federal workers and the Beltway Bandits (private contractors) feeding at the Federal teat haven’t gotten that message yet.
When the Feds notice the tax receipt shortfall on April 15, even they may wake up and freeze Federal salaries, pensions, and maybe even Social Security.
If and when that happens, the proverbial sh*t will really hit the fan in the DC area.
Yeah, I hear you. With that 10% meal tax, those DC restaurants and bars will be feelin’ the hurt.
Huh, I avoided DC restaurants and bars not because of the taxes, but because I was afraid of being mugged on my way out!
I always listen to my spidey senses–haven’t been raped yet! (crosses fingers)
Oh, but Woodbridge has the Lazy Susan Dinner Theatre! How can you say Woodbridge has no culture when it has dinner theatre?
Manassas County–well, that was stupid, but as an incorporated City, it technically is not part of PWC. Though the County seat is there. VA is weird.
We’ve got 90+ year old, barely remodeled farm houses on FLOODPLAINS selling for close to $300,000 here in Maryland. But, you know, “housing only goes up!” so snap up those alligators now!
A long way to go to the bottom…
What’s bad in Nova is now the Bank REO’s are encouraging “bidding wars”.
REO’s are being listed at dream prices ( especially in Prince William & Loudoun Co) so that buyers will flock to them.
Then it’s sold to the highest bidders, after several weeks on the Market (and after many offers have been submitted)
If the Banks would dump all of their REO / Shadow Inventory (not MLS listed) there would be a huge glut of inventory in this Market.
At this point, dealing with/lowballing a desperate seller/Builder appears to be the best way to go.
Most resellers are asking dream pricing & trying to ignore/deny the lower Foreclosure Comps in their neighborhoods.
Yeah, good luck with that, we’ll see where you are at with the price next Fall when it doesn’t sell this Spring/Summer (more newer, better homes coming on daily
I can wait…
How about that stock market, eh? 300 pts. down on the Dow. Bada-BING!
S&P closes at 701
BWHAHAHAHAHAHAH.
650 floor is next?
Dow 5000, here we come. I see this as a positive. This US was a much better place in the days of the lower Dow.
The “Buy and Hold” strategy sounds good until somebody flushes the toilet
I point out to my wife that two years ago we could have bought X shares of GE stock with the “investment” portion of our capital. Now we could buy over 4X shares, and it ain’t because we had a fabulous two years of returns.
Cash IS king!
“This US was a much better place in the days of the lower Dow.”
Good thing the stock market is not path dependent!
“Truthfully, the good news is houses are very cheap, interest rates are great and there’s a huge amount of selection”
Always good to hear that there is some positive news to report from Maryland. Let’s hope this “game of chicken” doesn’t last too long, even if buyers are the ones that are winning in the end.
No one had anything to say to the RE troll?? I’m disappointed.
‘The buyer’s going to win this game of chicken,’
That’s a curious metaphor, actually - if you look at it one way, the buyer has already lost… the previous buyer, that is.
Baaaak, buk, buk, bu…CRASH!
Hey lavi - I had the same reaction. The only one here playing chicken is the seller - with him(her)self. The buyer ain’t going to lose.
‘It’s a matter of waiting it out. I’m not going to start feeling anxious or disappointed unless we get to next fall,’ she said.
Haha. Anyone holding their price and waiting for the “right offer” or “the market to get better” better have a backup plan, like bankruptcy, and start making preparations for when that day comes. Fortune favors the prepared, not the intentionally irrationally ignorant hopeful.
‘The problem is the confidence of the buying public. I don’t know what you do to fix that’
I know how you fix that: wait until we get through the existing inventory, the shadow inventory, the alt-a defaults tidal wave, and government efforts to stretch out the downturn. When the market has gone through all the actual inventory, and prices have fallen down to the real market values, and we’re long past the government changing the rules every month in misguided attempts to “help”, then maybe the buying public will once again find their confidence. I know I’m not going to be very confident before then.
Steve Meszaros, president-elect of the Maryland Association of Realtors: ‘The problem is the confidence of the buying public. I don’t know what you do to fix that’
Resign.
““‘At the end of the day, we can’t afford to be sitting on a house with a mortgage while we’re in California,’ said Lorelei Redmond…. ‘We wouldn’t want to profit off the government here,’ Redmond said. ‘But we go at the whim of the military. So I think there should be some help just to get us out from underneath this.’”
Um, Loreliei, EVERYONE is at the whim of his or her employer. That’s life. So stop acting like you didn’t know that the military sometimes requires its personnel to move around.
Really, I respect the men and women who go out and defend our country. But the only free housing they’re entitled to is base housing.
“Really, I respect the men and women who go out and defend our country. But the only free housing they’re entitled to is base housing”
I kinda disagree with you there. Most people don’t have to put their lives on the line for their job. And most people don’t get rich working in the military. Plus the constant disruption to their family with all the moves - they deserve more.
Shaka Zulu and the Romans didn’t let their infantry marry until they retired. So our GIs have it good.
Oh, God. The Gomez story only gets worse. There was a live chat today on Washington Post.com.
http://tinyurl.com/bzp3va
This is a choice quote from the so-called reporter, and it pains me to use that descriptive:
Christina Ianzito: Diego can comment if he wants, but the reason most people get a “starter house,” is because they don’t want to wait the 5 or 10 years it might take to save enough for their big dream house. Renting, as any financial advisor will tell you, isn’t a good long term choice.
I read the original Gomez article that Ben linked to, and I’m about to read the chat transcript (assuming there is one), but before I go there (still recovering from the WaPo article)…
I gotta ask, since when is a 2500 sq ft brand new construction four story townhouse considered a “starter”? No, a starter is something that you can afford upon first embarking upon home ownership. Might be new construction in a tract neighborhood far out from city center. Might be a used house, possibly a fixer, that’s a little bit older but is in a better location than you could afford with new construction. Might be close-in in a “gentrifying” neighborhood where some of the houses still have bars on the windows.
And what is it with people thinking that they have to immediately buy a house after getting married? My parents, 50-something years ago, got married upon graduation, but waiting until they were in their early 30s with a school-aged kid and a toddler before buying their first house. Guess what, they rented before that, and we turned out okay.
The math is funny in this article too. Something about a $306K house being affordable if you make $70K. Um, no, a $70K salary affords a $150-175K house.
“I gotta ask, since when is a 2500 sq ft brand new construction four story townhouse considered a “starter”?”
That’s about twice as big as the biggest dwelling I’ve lived in during my entire life. Only in a world of bubble-era House Hunters or NAR propaganda should a 2500 sq ft dwelling be considered starter housing for any but the wealthy.
I bought my 1,040 square foot starter home when I was 28 years old. I was still stuck in that same house when I sold out to retire 25 years later.
That place didn’t even have central heat - it had a pair of gas wall heaters in the hallway.
You are not alone in your anger.
Previous for colomountains.
Ben’s server buried my angst at the bottom of queue.
Milkcrate,
I am still very upset, seen all my investments go up in smoke and have people in the present administration open up their mouths and the my investments go up in smoke every time, if you don’t good to say about the economy; just shut up.
Let the market take care of this, like it always does.
I am telling you, it is the rest of us that are paying and are going to be paying for this for years to come.
I still have not seen any perp walks here, when are people going to jail!? Instead of going to jail, they move up higher in the present administration or retire.
If it was me or anybody else, we would be looking at going to club fed for sure and be ruined at the same time.
I am tired of the double-standards that are present, where we are told that the law is sacrosant, and we have the people that are writing the rules, violate those rules!!!
/rant off.
So true. The corruption is just acidic these days. So many who should be indicted are running free.
~~“Today they hand over the $10,000 deposit, and Jessalynn gives sales consultant Julie Beahm a big hug. Beahm hands them a red SOLD sticker, which they’ll later happily slap onto the “For Sale” sign posted in front of their home-to-be. ‘This feels kind of neat,’ Diego says, with a smile. ‘For the first time I’ll be able to touch the wall and say, ‘This is mine.’”~~~
Hang on. They put 10K down on a 340K house? That’s not even 5%. Seems we learned squat from the boom.
And someone needs to tell Diego that until he pays what he owes and gets the deed in his name, he doesn’t own a damn thing. The bank owns it. 10K doesn’t buy his house. It buys him a chance at paying for one for the next 30 years.
And then after he’s got the title deed, he better pay his taxes, or he’ll find out who really owns what.
It was a deposit. Whether or not that will ne enough for the bank is another matter. 10K seems like a lot for a deposit.
I know that in places like the UK deposit is synoymous with down payment, but not necessarily so in the USA.
That $10K is the deposit, not the down payment.
I was shocked at the part where they didn’t even test drive the commute! Not even once. Insane.
Good riddance to one of the largest of the subprime mortgage lending kingpins. The bigger they are, the farther they fall!
latest news
[HK:5] HSBC shares plunge 18.9% in early Hong Kong trading
HSBC shares plunge, dragging Hong Kong down
By V. Phani Kumar, MarketWatch
Last update: 9:32 p.m. EST March 2, 2009
HONG KONG (MarketWatch) — Hong Kong shares were hit hard Tuesday, weighed down by a plunge in HSBC Holdings, a day after the market heavyweight said it will raise $17.7 billion from shareholders in the wake of a 70% drop in profit.
The Hang Seng Index was down 3.6% in early trade to 11,876.98, taking losses into a fourth-straight session, on top of Monday’s 3.9% slump.
Shares of HSBC (HBC 28.25, -6.55, -18.8%) plummeted 17.6% to HK$46.95 ($6.02) as trade resumed after being halted in Hong Kong at the company’s request, pending its announcements.
In addition to a reporting a sharp drop in 2008 profit and a large rights share issue, HSBC also slashed its dividend Monday and said it’ll shutter the branch network of its HSBC Finance arm in the U.S., leaving only the credit card business to continue operating.
“Home prices in one Virginia suburb of Washington, DC have fallen so far, there seems nowhere to go but up, reports CBS news correspondent Thalia Assuras.”
Good effing grief! Until the price hits ZERO, Thalia, it can still go down.
Southern California house prices need to go down a whole lot more before the economy turns around in this state. If prices don’t go down, the housing market will continue to drag the state down.
What’s stupid in CA is that our state govt thinks that TAXES on top of the bad housing market and high unemployment (10%) will help us? How stupid is that? Overpriced and overtaxed is what’s happening to Californians and it will be no surprise that there will be a great exodus this summer out of this state. You’re a fool to live here. It’s a nightmare, no longer a dream in CA
Hanson’s updates since her 2005 purchase include hardwood floors, a laundry room overhaul and porch improvements to enhance views of a neighboring horse farm.
You know, I would be putting up a line of trees and shrubs to block view of the neighboring horse farm. pee-yu! Although, honestly, I wouldn’t live in this portion of MD anyway.
I wonder if this lady has considered a house swap with her two sets of really, really interested buyers. Take over each other’s payments? It would be fair as long as neither side is heloced to the hilt, eh?
Here he comes, saying what no-one wants to hear:
‘The buyer’s going to win this game of chicken,’ said Anirban Basu, a Baltimore economist.”
I can’t begrudge these folks anything, as I saw first hand how hard they worked to get their foot in the door. Call centers, data entry, the most horrible work imaginable at breakneck speeds for little pay. Multiple generations in one house helping each other to get started.
But I must wonder–why Maryland? Ughhhhhh. And why Balto? I know there are Asians there b/c of UMBC, but I never see a single Asian when I’m in Balto, just whites and blacks (depending on ‘hood). (You could really get some tasty asian food in Montgy Cty, though… playing hooky and buying samosas, mmm…)
Seriously, Cali has more opportunity, Florida has nicer weather (if you’re into that tropical thing), NY and Bos have better culture … DC area is so depressing to walk around in you just want to take a gun to your head and end it all. NYC has a *rep* for looking like that and it doesn’t look as bad as Arlington, Bethesda, NW, etc…
Um, what? Let me guess, your familiarity with Baltimore is limited to the Inner Harbor, the evening news, and the Wire, because if you haven’t seen Asians in the city, you can’t have spent much time living or working here. While I’m by no means a Baltimore chearleader, pretending that there’s no reason for Asians to come here because there’s no opportunity is, frankly, idiotic. We have two major research universities in the city (Hopkins and University of Maryland, Baltimore), UMBC and Towson U. ten minutes away, a ton of federal government jobs and all the defense/other contracting that goes with it in commuting distance, a growing biotech industry, and a lower cost of living than most of the more desirable locales you list. Also, the purchase price of a small business is reasonable, which is probably why most of the dry cleaning, a good portion of the convenience stores, and a sizeable minority of the downtown lunch places are owned and operated by first-generation Asian immigrants. Likewise, the capital region of Maryland has more government jobs and contracting, including the NIH and the Naval Medical Center, a growing biotech industry, and several major research universities.
Good paying jobs, business opportunities, and major institutions of higher education that are leaders in biomedical science? Who’d think Asians would want that? Especially if we’re going to talk in stereotypes.
Where do I get my TALF check to go with my Obama check?
In 2005 there were just two foreclosures in the city of Manassas. in 2007, 313. And in 2008, a whopping 922. Ninety-two percent of real estate sales in Manassas last year were bank sales.
BWAAAAAHAHAHAHAAHAHA!!!
Manassas and Manassas Park drank the Kool-Aid like it was the elixir of life!
MP in particular had extraordinarily optimistic (giggle) growth projections, despite there being absolutely no reason to live there, once you were more than .75mi from the train station (and with the zoning regs, there could only be so many families within that happy circle). I can remember the recriminations and finger pointing going back as early as 2001. Surely now that the bubble has burst it’s back with a vengeance.
Manassas has two kinds of people: white, rabid Republicans*, and ignorant, in-and-out-of-welfare Hispanic laborers. What do you bet that a lot of these exploded loans were to min. wage to sub min. wage illegals trying to get in on the good life in America?
*-the right wing kind, not the libertarian kind–the authoritarian “I’m right and I’m telling you, and I’m going to make your life hell if you don’t toe the line” kind
i.e. “red necks”
“So is Manassas at the forefront of a housing turn-around? Ranny Isenberg, a local home appraiser, thinks so. ‘Real estate’s on sale. And i don’t think it is going to get any cheaper,’ he says. ‘And for someone who is investing it is instant money.’”
Well, it has fallen a lot. Perhaps it has even come within spitting distance of normal income/price metrics. So if I were shorting housing, I might move on to the next low hanging fruit. But I certainly wouldn’t go long Manassas. Expect slower … but inevitable … drops.
PWC overbuilt BIG TIME; prices are going LOWER than they were in 1999. Bet on it!
One thing I must mention: PWC was once an insanely beautiful place. Sprawl-style housing development ruined it. It is ugly and soul-less now. There are few traces of the natural beauty that once reigned.
Some places you build and they keep a lot of their charm. But some places … maybe it’s the exposed dirt, maybe it’s the weather … they just lose all sense of place, turn barren and uglified … like a strip-mined hillside. PWC was like that.
YES! You just made the single best point about the insanity that occured in the DC metro region. I’ve lived here 20 years and one of the things I used to love the most about DC was the fact that I could get OUT of DC and cycle or ride horses in the nearby countryside in less than 30 minutes. Those days are deader than disco. The rapacious builders and banksters and the lemmings they attracted have utterly destroyed what used to be a very pretty area (not to mention thousands of acres of very productive farmland). This place sickens me.
Since the late 70’s, builders have been building house after house after house. I grew up in Nottingdale when there was no Princedale, Orangedale, Queensdale, etc.
Not to mention that the wonderful mexican Gang - MS-13 is overtaking PWC / Manassas.
Wonderful place to be if you love Gang warfare.
One could say that the housing bubble is again alive and thriving in Miami. 57% of deals are cash in Miami Dade, driven by South American international investors. I know this article was posted in 2009, it is interesting witnessing history repeat itself.