Posted by Wayne-NC on March 23, 2005 at 11:39:12:
Very interesting. Now, everyone lives in BIG houses NEXT to the water! My how times have changed. And boy what a price for that life!
Fairfax County VA 4bd 3ba SFH $770,000 !!!? GOSH! - Posted by Forceequalsmasstimesacc
Posted by Forceequalsmasstimesacc on March 22, 2005 at 09:42:33:
How can a 4 bedroom 3 bath 3600 sqft single family house cost $770,000? Fairfax County market was appreciating crazy for the last few years and it’s still going strong.
Last year I have heard experts say that this region will experience the greatest realestate bubble burst in the history United States, but it seems that prices have appreciated even higher.
The president of TOLL BROTHERS explained that these metropolitan areas of United States are turning into those of Europe where kids must live with their parents for a while after college in order to afford buying a house for themselves. I really don’t know what to make of all this anymore.
The median income for the local neighborhood seems to be about $83,000~$88,000ish and job growth is not as strong as the number of people moving in although it’s been boasted that fairfax county job growth is the strongest in the nation.
Worse yet builders are inflating the prices by $20k ~ $30k per lot release. I’m not sure how so many people with roughly $90k income are actually crazy enough to buy those extremely artificially overinflated MILLION dollar homes that costs probably less than $200k to build.
When lenders are lending money at 8 to 9 times your income, you know there’s something deeply wrong waiting to happen.
But to make matters make LESS sense, I hear left and right that people who bought those new construction homes have experienced even greater appreciation… sometimes $300k per one year.
With all this illogical exGUBERance, I wonder if there’s an effective scientific method to figure out whether or not a local market is overinflated or justified?? Does anyone know of a real-estate forecast related economics system?
Virginia SFH days on the market? - Posted by jon
Posted by jon on March 26, 2005 at 16:09:18:
What is the average days on the market
for Virginia single family homes in the $800,000 range?
Lets put this in perspective! - Posted by Wayne-NC
Posted by Wayne-NC on March 22, 2005 at 21:04:57:
First of all, there are many great analysis’ below. Lets just add the fact that $770K is only as high (or low) as compared to something else. This was briefly mentioned with NY, Boston and San Fran etc. There are still lots of people that think a 4/3 at that price is a bargain and others who see it as sky high. What perch are you looking from? Until we reach an equilibrium, prices will continue to adjust (key word) with comparable areas. I experienced this phenomenon in my area. People would come here from the NJ shore and the Florida coasts and brag about their purchase. I responded in disbelief, “You paid what for that house!!” As they proudly followed with, “Yea, what a bargain!” I now understand that we have some more upside potential. The equilibrium in prices may never happen but one thing is for sure, the ebb and flow will always be there between such areas.
Fairfax County VA 4bd 3ba SFH $770,000 !!!? - Posted by rehabber
Posted by rehabber on March 22, 2005 at 19:01:03:
How does it keep going up?
Demand AND irresponsible financing.
The greatest employer in the DC area is the federal
govt. system, including all the private firms that
support the govt. The federal govt. ain’t getting
smaller- it’s like a bad wart- it just keeps growing
and growing. Just look at the federal budget each
year- it NEVER goes down. All of that govt. spending
is helping keep the DC market rolling, and will for
some time. It’s a recession resistant business- the
govt. will always spend- in good times and in bad.
So, that’s the good news for DC real estate.
The bad part is, a large % of people in these $700k
homes are doing irrespoinsible 3/1 ARMs or worse,
NEGATIVE amortizing loans just so they can keep up with
the Jones and live in the right house in the right
neighborhood. THis part will come back to bite the
DC market in 2-3 years when those ARMs change and their
mtg. payments come close to doubling. They can barely
afford the mtg. now, how will they be able to afford
twice the mtg. in a short 2-3 years.
I’ll go out on a limb… and make a wild-assed
prediction…but…the banks will not want to
get stuck with alot of over mortgaged homes when the
ARMS come due, so I see the banks creating 40-50 year
mortgages so people can afford expensive areas like
DC, san fran, etc. I heard this is common in Japan
and some other areas -you hand your mtg. over to your
kids since the period is so long that you’ll die before
you pay it off. I could be way, way off, but look
for this in the future.
A couple of observations - Posted by Trevor
Posted by Trevor on March 22, 2005 at 18:23:53:
First, I live in neighboring Prince William County. I bought a new construction SFH last year and it went up 175K in 9 months. It’s insane. Two years ago I thought it was outrageous to spend 300K on a condo. Now I think that’s a bargain.
There will be no bursting in this area. Things may flatten out, but that’s it.
-
Tons of new high-paying jobs are expected over the next decade. This area has phenomenal job growth right now. One of the best areas for jobs in the country.
-
During the 90s when we had high rates, places like San Jose were experiencing great growth. DC is today’s San Jose.
-
The Mortgage Banker Association predicts 30-year fixed rates of 6.6 by the end of this year and 6.9 at the middle of next year. Still historically low rates!
-
We are getting closer, but DC is STILL behind NYC/Boston prices, which is where we really should be. Before 2001, the DC home market was extremely underpriced. With the high salaries here, it was a great place to live. The most bang for your buck I had ever seen. But now we are edging closer to NYC. Young people are buying into co-op buildings as even the smallest condos are beyond their reach. We still have room to go though.
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I predict rental units will be scarce in a year. So many apartment buildings have been or will be converted to condos. Few new apartment buildings are constructed, as condo construction is more lucrative and easier. It’s not just high paid white-collar workers who are flocking to this area. It’s also immigrants. They need the rental units. So I think it’s a great market to be holding rentals right now. When I moved here in 2001, most apartment buildings had waiting lists. When rates dove, people bought and there were tons of rental vacancies. Things are about to swing the other way.
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Traffic. People are willing to pay the premium to live near a metro stop or closer to their place of work. High interest rates are not going to stop this. Traffic is such an issue here and is really the sword that could kill this city.
Re: Fairfax County VA - Posted by Michael
Posted by Michael on March 22, 2005 at 09:57:03:
The appreciation in that area is amazing. A friend of mine bought a house in Maryland in 1997 for $170,000 that same house would now be a steal at $450,000. Unfortunately he sold it at $225,000 around 2000/2001 when he was transfered. Now he is getting transfered back to the D.C. area and has to move WAY out just to afford a home.
I don’t think there will be a crash but the appreciation will be flat before too long.
Re: Lets put this in perspective! - Posted by Natalie-VA
Posted by Natalie-VA on March 23, 2005 at 07:36:44:
Sounds like you’re in the Outer Banks?
BUBBLE WILL BURST THIS YEAR!! - Posted by DoomGloomGuy
Posted by DoomGloomGuy on March 22, 2005 at 17:20:04:
How do I know?
Just take a look at all the unsold inventories for those $700K+ homes… and the days on the market exceeding 3 weeks. The sellers are even resorting to reducing the price.
THE BUBBLE WILL BURST THIS YEAR FOR FAIRFAX VIRGINIA!
Re: Lets put this in perspective! - Posted by Wayne-NC
Posted by Wayne-NC on March 23, 2005 at 09:34:46:
That’s right. Sounds like you know what I’m talking about, especially being from Va. Many vacation here and eventually buy. I have a neighbor from there that bought last year and thought he paid too much at full price. Five months later he realized what a bargain he got!
Re: Lets put this in perspective! - Posted by David Krulac
Posted by David Krulac on March 23, 2005 at 10:20:08:
I’ve been going to the Banks since the early 70’s. at that time the road to Corrolla Lighthouse was dirt and there were no houses that far north. Look at it today.
I went to Las Vegas on an organized house buying trip. Most of the people on the trip were from CA and thought that everything was a bargain because it was 50% of CA prices.
Re: Lets put this in perspective! - Posted by Natalie-VA
Posted by Natalie-VA on March 23, 2005 at 10:03:04:
My husband’s family has owned property in Kitty Hawk (near the Black Pelican) for many decades. I am originally from NJ and still spend time at the Jersey Shore, so I can see the value that the Yankees, oops I mean Northerners, are seeing in the Outer Banks.
Re: Lets put this in perspective! - Posted by Wayne-NC
Posted by Wayne-NC on March 23, 2005 at 11:43:01:
A friend of mine just sold 5 lots that he owned for a year on a canal up in Corova (4 wheel drive area) for $550,000 cash! He paid $260K for those. Look for me at the convention.
Re: Lets put this in perspective! - Posted by Natalie-VA
Posted by Natalie-VA on March 23, 2005 at 10:35:07:
My husband’s great grandfather was the bridge keeper on the bridge from Currituck over to Kitty Hawk. I think this was in the 30s. Anyway, their family (husband, wife and 4 kids) actually lived in a little house on the bridge out in the middle of the water. Times have changed!
Re: Lets put this in perspective! - Posted by Wayne-NC
Posted by Wayne-NC on March 23, 2005 at 11:50:43:
Jersey Shore? Would that be in Lavallette, Ortley Beach, Seaside Heights, or Pt. Pleasant Beach? Check real estate there now! Your honor, the defense rests (from my original point). Oh, and that resturant is 2 miles north of me and I like the Yankees. Best team ever!
Re: Lets put this in perspective! - Posted by David Krulac
Posted by David Krulac on March 23, 2005 at 17:26:11:
would love to be there but will not.