Home buyers beware:

Home buyers beware: The Washington region is now one of the most precarious real estate markets in the nation, according to reports by economists, banks and industry analysts.

But wait a minute. Maybe it's one of the safest, according to reports by other economists, banks and industry analysts.

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/19/AR2006041902320.html

 

One friend just sold his house in Broadlands, in five days, at full asking price, and more than doubled what he paid for it. Not too precarious yet!

 

now if only my condo could sell that fast

 

If you RTA, the area that they are talking about is primarily downtown DC, Arlington, Alexandria. While a decline in these areas may signal a slow down in the suburbs, I really doubt that it is humanly possible to predict whats going on out here.

It sorta like gas prices, oil goes up, gas goes up. Oil goes down, gas goes up??? Refineries break down, gas goes up. Refineries get fixed, gas goes up....

As long as people continue to have money in this area, the Real Estate market will continue to find new and innovative ways of seperating it from us.

 

generally the suburbs slow the most and have the largest price drops.

The thing is the real slowdown has not even got into full swing yet. You will see that later this summer and especially next year.

also people are always buying homes no matter the market and are much much more selective. As Cliff says his friend sold his home in 5 days at full asking price double what he paid for it . It would be interseting to know when he bought the home and two was his asking price not outrageous and three the home must of showed well and a desirable location.

Last year just about anything sold no matter the condition and price within reason, those days are over. I also noticed a lot of new homes are sold in bramelton yet there are many used homes for sale over the place.

I also noticed toll is putting in loudoun county parkway through thier property wasn't that nice of them to sell and build the homes first then after they were done, they tear out the trees, and are now putting the loudoun parkway in. Even though those people new the parkway would go in eventually I wonder how they feel now with all the trees gone behind their homes and heavy equipment kicking up dust all day. I wonder how many would of paid those prices if the road went in first?????? Now the road noise is going to come and what then sound walls??? Yep is this really smart growth when you are starting from a clean slate as Loudoun county has???? The toll road is starting to turn into an abortion with all the new construction adjoining it and not even leaving existing trees as some buffer instead planting twiggs that will not be as full and tall as the trees the tore out in your grand kids lifetime.

Smart growth is showing it's ugly side as Loudoun grows.

Lee

 

So, your point Lee, is what exactly? We should all sell NOW and move to Arkansas? You offer this information on real estate for us, but I'm not sure what you think we should do with it? I'm not flaming here... just asking.

 

Careful now, Lee's got a lot of freinds. They all have great advice which he shares with us on how we should all live the rest of our lives.

 

Lets start here, and it has always been my opinion that the growth in Loudoun has been anything but smart. From the school problems with not enough money yet our taxes keep increasing the road problems and tearing down buufer zones of trees and replacing with twiggs. Putting major roads through residential when real smart thinking could of prevented that since Loudoun started with a clean slate. What needed is a wholesale replacement of our leaders with people that know how to have real smart growth and I think we are starting to see this and the next elections hopefully we get rid of the people in a goverment that want to get rich off the same policies that implemented when they were in office. Nothing wrong with making money in real estate as long as you don't destroy the natural beauty and quality life of the area, that attracted people in the first place. Which is happening in Loudoun right now.

Yes most of my friends are developers and builders and real estate people that I slam here at times and which they find quite amusing at my rants on how they at times are destroying the very beauty that has attracted people to the area in the first place. Yet they call call me to design for them when they want a very special in design from the same old cookie cutter junk we see sprouting up everywhere. Yes my work and designs has put a very small dent into making Norhern Virginia a better place to live. Don't even get me started on how those two new parking garages has destroyed the entrance of the dulles airport which was one of the most beautiful airports in the world and development has over time is slowly destroying that beauty. Hey you still can have development that is done beautifully in budget and works.
Yes I have a friend who was on the airport board in the early nineties while I was living in California and he has never heard the end of my opinions how he and the board in allowing those gargages to be built the way they are has destroyed the front entrance to dulles as other projects there have done also. Things can always look good and function when you hire the right designers and architects to do the job not most of these hacks we have designing around here. The redesign of National airport was a good example of combining aesthetics and function and again the parking garage and rail could of been better intergrated. Oh well what can I say when bureaucrats get involved in aesthetics and all they know how to do is make it cost 3 times as much take 5 times longer to build and end up with a product that is half ***.

Lee

 

Thanks for the doom and gloom report. We may possibly sell within the year and I'm getting completely stressed out!! I'm trying not to worry about it but it's hard not to.

 

Lee - weren't you moving? With all the doom-and-gloom you preach, one would thought you would have sold long ago.

 

Well we just had the Doom Boom so I guess it is a natural progression to the doom gloom.

There are always going to be buyers and there many many things that can be done to make your home more special then the others on the market. Also selling a home has everything to do with getting the right buyers there not all your nosey neighbors which in a down market they will come out of the woodworks to check your home out and then tell everyone behind your back all about what they saw.

In a buyers market open houses don't work as well as in a sellers market because your neighbors, chances are not going to be buying or can't sell their home. What you need is a real estate agent that has real connections to the new guy moving here for a job or whatever. All agents say they have relocation connections but very few in reality have what it takes to get them to see your home.

Lee

 

I was going to move to Austin Texas but my kids have delayed that move for awhile. Personally I can move whenever it makes sense, last summer would of been perfect with this area booming and Austin in a down market. Since last summer Austin is now booming they expect a minimum of 16% rise in home prices and we all know what is happening here. Having said that I would have no problem selling my home at my price even in this market because one my price isn't over priced and it is far nicer then any home in its price range as I designed and built it myself and it has a lot of custom features you are not going to find at anyprice around here including a replica of John Maddens bar out in california. Besides I get people everyweek wanting to buy it even now.

Now I am going to landscape it in an unusual but tasteful way this year. I will say and strange as it is people don't even notice that I have planted nothing except grass which shows my exterior design stands on it's own extremely well. ;-) To be honest I like living here although I like Austin the hill country better, it just pains me to see so much stupidity in the way this county has and is growing when so much could of and can be done to have growth and beauty at the same time. It is out of the puds where the real problems are occuring and the way the dots are being connected.

Lee

Lee

I am not bragging but this is what I do for a living

 

I'd tend to agree w Lee on the aspects of RE in this area. Why?

1. Houses in my neighborhood have been sitting since November/December as the prices continue to be reduced. I know its a slow season, but....

2- there are exponentially more existing homes on the market and this in itself is going to depress homes. far far more homes than buyers....

3. Builders have a lot of room to lower prices, and a ton of local capacity to build them. Loudoun County has shown a willingness to give a building permit for any amount of homes on any amount of land with absolutely no regard. Consider then that the average profit Toll et al made in 2005 on a house is $200k - more on the biggies. They are also in the business of building homes, nothing else. Result: builders continue to buy land, of which there is a ton of it abutting Ashburn, especially here to the south, the county continues to throw building permits at them w reckless abandon, and finally the builders drop $150k off home prices for new homes bc a $50 k profit (or even a $25k) profit is just fine....and they gotta build houses.

BR

 

The house that was sold in 5 days, was done very easily.

Take a good look at the comparables, and forget the prices of last summer, they're not coming back for a while.

Price the home reasonably, and it will sell. The same exact model was on the market in Southern Walk. Built in 2005, they paid (I'm assuming) around $550K. They initially asked over $700k in December, its down to $650K now, and still unsold.

 

Lee

As and Ex-Austinite, good luck. Most homes in Austin are well under valued, however, unless your ready to make Austin or Central Texas home for a while, don't plan on selling and seeing any "major" returns on your home investment. My Parents are selling thier home to move out to Lake LBJ. They bought their home in 99, about $260K and are hoping to sell for $289K. It's a 2 Story 5200 sq Ft (yes 5200) home on 1/2 and acre in West Austin. It's been on the market for about 9 months and has had little movement.

As far as the economics in Austin, they are recovering, slowly. It has been on the down turn there for about 4 maybe 5 years.

As for the Hill Country in Texas, you can keep that cedar fever fire trap.

(if you don't know what cedar fever is, you will find out about 6 months after your arrival)

 

chsalas thanks for the correct advice, and I truely know what you are saying as I grew up in Texas and lived in Dallas until I finished high school then moved to houston for several years then I lived in austin on lake austin close to the 360 bridge and it was a wonderful life until the mid eighties when the whole real estate market crashed like we have never seen in this country in modern times I then moved to the northern virginia like half of texas in the late mid eighties and made a ton of money here the first time I lived here building and designing homes it was almost like stealing here compared to building and designing even in the good times in Texas. Decided in 1990 to follow my dream and become a filmaker out in southern california during the good part of the nineties instead I became a beach surf and snow ski bum living right on the beach and spending a small fortune just living my second childhood and my kids had the best life you could imagine except for the marine layer ha ha (southern californians know what I am talking about)and yes at least at my kids school they do get regular surf and beach breaks several times a week at school. Anyway Ran out of money, never made my film and reality check set in I had to make a living again. So I called my developer friends back here and said I was moving back and found a lot from an almost bankrupct builder instead of the bank getting it it he let me have it for almost nothing and he never did go bankrupct in fact the last several years he has made a fortune again. Built my house on it and like everyone else that built at that time can walk away with a ton of money even if the market totally crashes, but I am realistic what I can sell it for also.

Never would dream of buying specultive real estate for investment as so many did over the last couple of years unless I could turn it immediately even before I close on it. don't have the guts to and seen too many of my friends lose their shirts doing so over the years when things go bad.

Speculative investment real estate is a tough business even in good times because most that do it are not financially capable of handling the negative for a period of years when the market turns as it is doing now. A lot of people went bankrupt doing it here back in the nineties. Although Real estate around here always comes back bigger and better then ever but it could take many years to do that, so for me buying and flipping real estate is too risky. Toll brothers usually pays cash for all their real estate investments so they can withstand just about any down turn as well as the other big boys that is what the amateur investors never think about what if the worst case happens can I handle it??????
Well I do plan on making that movie in a few years no matter where I live so there you have half my life's history not that it matters and I will shut up now for at least a few minutes.. ;-)

Lee

Lee

 

Yo Lee,

What's your "insiders" with the crystal ball have to say about this:

http://www.breitbart.com/news/2006/04/26/D8H7Q0MGF.html

Just in the interest of "equal time".

 

Please note that prices fell year over year however. I read it as builders dumping a glut of new houses as fast as they can. I hope to be wrong as a homeowner, I really do, but imagine a year-over-year price decline in sales prices on new homes and be sure the same will happen for existing sales...

 

A 2.2% decline in price after years of double-digit increases is hardly something to fret over. It's a healthy correction. What, you were expecting to get $2 million for your Broadlands home in 5 years?

 

Well Dutchml I think the amount of homes on the market over last year tells the real story, at least around here.

I know for a fact Toll Brothers is designing new product which will sell for less then existing product and is nicer and more extras and sometimes larger. The old builder trick to quelch the existing homeowner complaints about selling their new homes for less then the older homes. They can tell the homeowner their new homes are not the same as their older ones which sold for more a year ago. Builders also can reduce profit as someone here said to reduce home price. They are also telling their subs to reduce their prices and as work drys up they have no choice or one of their favorite tricks is to hire the subs key people for less. Add continuous high gas prices and everyones party is over unless you live in Texas where homes sales are very strong, wonder why??????????

There has been a surge in new home sales nationaly last month why??? Because builders dropped their prices sooner then the economist predicted but that will work only for so long. My crystal ball says unless you live in Texas home sales especially existing homes are going to drop as soon as the builder record high profit margins get squeezed and they get every last ounce of blood out of their subs and suppliers, the existing homes hurt first then the new ones will in a few months down the road.

There are always home buyers just less of them and more homes for them to choose from.

The real nail in the coffin will be high energy prices and if they go higher say up to four dollars a gallon watch out. We have seen almost a two dollar increase in a gallon of gas in two years. People around here may be able to absorb it but the average american can't. Goverment spending will not substain itself at the present rate either could be a big disaster for the DC area.

Joseph Biden and Hilary Clinton our next President and VP are going to make some big changes in local goverment spending oops my crystal ball slipped that one out. ;-)

Anyway the WSJ today showed the amount of existing home inventory of existing homes has skyrocketed over this time last year 230% in the dc area alone. People are buying some now thinking they are buying a bargin, but are they really bargins yet.

This latest sales surge is really false thinking and by the end of the summer they will know this springs bargin may be no bargin at all.

Spikes in homes sales are to be expected as the price keeps notching it's way down. The real indicator will be what can you sell your home for now next year the year after and so on and so on. We have just gone thru the greatest expansion of home building in the history of the country and now people think that is normal and going to substain itself well then you really do believe in the tooth fairy and santa. If you are under 35 years old then you have probably never experienced a serious housing downturn so you will believe, more then likely in the tooth fairy and that is a wonderful place to be if you plan to hold on to your home for many years to come if you bought your home 5 or more years ago!!!

Lee J Buividas

Lee J Buividas