Local Housing Party Is over!!

I spoke to someone from Van Metre a few days ago and we were talking about the current market. He mentioned that several people who put contracts on homes several months ago are now cancelling their contracts and walking away from the deal, forfeiting their deposits that in many cases were in the tens of thousands of dollars.

 

Did he say why? maybe they just talked to digruntled VM homeowners, mybe the delivery date got pushed out past what they considered reasonable, there are too many variables there to say that it is the result of housing market.

 

Maybe they couldn't sell their existing home......

 

Or their mortgage option was not viable anymore .. ( interest only / ARM ... )

 

Lee,
I bet you enjoy telling children there is no Santa Claus just see if you can make them cry.
Your "fortune telling" is very short sighted. Real estate investment value is measured in two ways, cycles and trends. In other words short term and long term investment. It's true that if you purchased a house last spring and try to sell it today you will take a loss. The main reason behind this is the dramatic increase in the number of homes on the market. The number of actual sales (closings) has dropped only slightly but the number of available homes has nearly doubled from this time last year. There are several theories as to why but the consensus is that many of the short term investors (flippers) are selling out. A good example of this are the town homes in Faulkner's Landing on Waxpool near Ashburn Village Blvd. There are at least a dozen homes for sale in that development. Never lived in. All from short term investors attempting to flip them for a quick profit. For the past couple of years there were many flippers in the market. They are now taking a beating just as the Day Traders did after the tech stock boom. Those are the short sighted investors. That's what happens when you base your investment decisions on cycles. On the other hand when you look at the long term trend, real estate always pays - ALWAYS. You like to mention the "crashes" but I defy you to show me ANY house in ANY market that did not increase in value higher than the annual inflation rate in ANY 10 year time period. The last real estate "peak" in this area was 1993. At that time you could buy a 3000sq ft in home on 1/3 acre for what was then considered a ridiculously high price of $350,000. Two years later you could only get about $320,000 but, today that house will sell for at least $750,000. Get rich quick schemes rarely work but time and patience alway pays off in real estate. If you buy a home today looking to make a quick profit that's not going to happen but if you are looking for a true long term investment there has never been a better time to buy. The advantage has shifted to the buyer and there are some good bargains to be had out there.

 

Lee,

Are you hoping to sell your house short?

 

Just like a Wall Street market maker who says your stock's dog, it's gonna dive, gets you to sell it, and he steals it.

 

ignore Lee. Hes has always had an ugly outlook on the real estate market. Obviously the prices got out of hand, but what is going to happen is stabilization. We will some decline but not this crash he has been predicting for the last yr and a half. The DC market is too big with tech, defense and govt. Unless the US govt wants to move out of DC prices will stay on the expensive end.

 

Zansu, a lot of those houses had contracts put on them many months ago. The contracts are at a much higher price than they are today. This has happened to several of our friends. One of them is buying a townhouse (new construction) in Leesburg. The same exact model went on sale for about $40K less than their contract, so they called the builder. Builder originally said tough, but recently took that $40K off the existing contracts (for other buyers too). Shocked me!

And, I agree with what DAD4 said. People aren't selling their homes as fast, and they are selling them for less than they expected. So moving (in most cases up!) has a much higher price tag.

Do I think it's as doomed as Lee always paints the picture to be? No. The DC market will always have fluctuations but usually in line with the rest of the country because of the infrastructure here. I think things are just leveling off from the high for the past few years.