Housing market slump?

[HAULN-SS]

oh ok. well, in that case, more power to ya =) Botetourt county is an awesome place to live near roanoke by the way, the southern part of the county is like 10 miles east of downtown roanoke

[WRXtranceformed]

Well prices in Falls Church and Fairfax County as a whole are already down about 10% this year (according to Zillow) so its probably going to get to 20% easily, if not more. Homes gained about 70-100% in value in about 5 years so naturally that is not sustainable and prices will have to correct themselves as interest rates come back into line and the glut of people buying homes they couldn't afford eases. Judging from recent news and rising rates prices definitely haven't hit bottom yet.

Where did you hear that interest rates are rising? Leading up to an election year, the economy and rates in general tend to stay pretty stable. There has been word of a further drop in rates:

"Despite concerns about possible spillovers from the troubles in the subprime market, rates on 30-year fixed-rate mortgages remained stable. The ample liquidity provided by Freddie Mac in the conventional conforming mortgage market has helped keep rates down, supporting affordability and aiding in the ultimate recovery of the housing market."

Freddie Mac said the 15-year rate eased to an average of 5.86 percent from 5.90 percent the previous week. A year ago, the 15-year rate averaged 6 percent.

Five-year adjustable-rate mortgages edged lower to 5.88 percent from 5.91 percent last week. The five-year ARM averaged 6.02 percent a year ago."

The average current rate for a 5/1 ARM is 5.45%. Do you have any idea how low that is? Do you know that at one point, even just 15 years ago, the rates were as high as like 17%?

Don't believe everything you hear from the media; they are all "doom and gloom" as they are when reporting about any subject.

[bassmangrammy]

I hear that Bernanke may raise target rates slightly one day, and then decrease the next. My reaction is that WSJ writers have to write, but none of them have any idea where it's going.

And I might add that the NIX volatility index is low, and the stock markets are functioning with enough liquidity to sustain current growth. In other words, I don't think the fed should change the target rate.

[.paul]

IMHO anyone who thinks the market is in a slump is right and wrong.

You are right if the house does not show well, and just looks like absolute poop. Now if it shows well, it will sell. Maybe not as much as last year, but still a decent amount.

I have been actively looking for the past 6 months. The area I have been looking at is Fairfax, and of the 6 houses I have liked. I have put offers on them, and have failed everytime. I am not asking but less than 5% off the asking price, or will do full price offer with 5k to closing costs, which is not a ridiculous thing to ask. Some of the houses I have seen and liked had been on the market for 200+ days. But lately it seems like things are selling like hotcakes.

Currently the market is pretty dry, there are not a lot of quality homes in the area I am looking. In fact the last decent house I looked at, had two contracts with escalation clauses. I am shocked anyone would do escalation clauses in this time.

At any rate, It is all relative to area. Lorton, Springfield, Alexandria is the new hot spot, closer to 95 and DC. Man are these houses over priced in the area.

[white_2kgt]

Well prices in Falls Church and Fairfax County as a whole are already down about 10% this year (according to Zillow) so its probably going to get to 20% easily, if not more. Homes gained about 70-100% in value in about 5 years so naturally that is not sustainable and prices will have to correct themselves as interest rates come back into line and the glut of people buying homes they couldn't afford eases. Judging from recent news and rising rates prices definitely haven't hit bottom yet.

Where did you hear that interest rates are rising? Leading up to an election year, the economy and rates in general tend to stay pretty stable. There has been word of a further drop in rates:

I think he's talking on average from the past 5 years or so. When we bought 3 years ago we got a 30yr fixed @ 4.25, that's not going to happen today.

[Mike]

IMHO anyone who thinks the market is in a slump is right and wrong.

You are right if the house does not show well, and just looks like absolute poop. Now if it shows well, it will sell. Maybe not as much as last year, but still a decent amount.

:?:

[Apoc]

I don't think that's deserving of a :?:.

The better showing homes have a greater likelihood of selling in a market like this and that's what he was saying.

[Mike]

i don't think that is related to the market at all.

[Apoc]

i don't think that is related to the market at all.

It's absolutely related. When the market is hot, people are willing to "settle for less" because they just want to get in. When it cools down, as it has now, people wait it out and make sure they get what they're looking for.

When we were looking to buy back in '03 we must have looked at 15 houses. Most were similar in layout, construction and age. The one we utimately chose was the one that showed the best, despite being out in Leesburg, because we felt like it would need less work than the others. The market was slowish and we didn't feel pressured to snap up the first thing regardless of how well it showed.

edit: We sold it about 2 months after peak hotness and ended up dropping a few grand into the house for it to show better. We got some early interest but all those people ended up putting contracts on other houses (with similar prices). A few weeks in we fixed 'er up with paint and landscaping and we got a contract within a week. I don't think that's coincidence.

[WRXtranceformed]

Well prices in Falls Church and Fairfax County as a whole are already down about 10% this year (according to Zillow) so its probably going to get to 20% easily, if not more. Homes gained about 70-100% in value in about 5 years so naturally that is not sustainable and prices will have to correct themselves as interest rates come back into line and the glut of people buying homes they couldn't afford eases. Judging from recent news and rising rates prices definitely haven't hit bottom yet.

Where did you hear that interest rates are rising? Leading up to an election year, the economy and rates in general tend to stay pretty stable. There has been word of a further drop in rates:

I think he's talking on average from the past 5 years or so. When we bought 3 years ago we got a 30yr fixed @ 4.25, that's not going to happen today.

Gotcha. I just assumed he was talking about the present based on the quote that I put in bold.

.paul is definitely right. It's important for any product you sell to stand out the best it can from every other one it's up against. House "staging" has become very popular and is almost mandatory to move a home quickly (2-3 weeks or less), but it's always been the case that better prepped homes are going to make them more desirable. 8)

[Mike]

i maintain that fixing a house up to sell is not related to the current market conditions.

if a house shows well, it'll a) sell or b) sell for more.
if a house doesn't show well, it'll a) not sell or b) sell for less.

i think we can define those as rules for all-time. obviously dumping a few grand in to paint, decor, whatever can result in a house looking a shit-ton better.

[.paul]

wow Apoc agrees with me <pass>

I am tempted to pack up and move to like nashville

[.RJ]

I am tempted to pack up and move to like nashville

I'll help pack

[white_2kgt]

i don't think that is related to the market at all.

It's absolutely related. When the market is hot, people are willing to "settle for less" because they just want to get in. When it cools down, as it has now, people wait it out and make sure they get what they're looking for.

Yea, I agree. When we were looking 3 years ago, people were putting in offers 40-50k over asking w/ no inspections, nothing within days of the house going on the market. A house went on the market Monday, we had an appt scheduled that night to go look at it the next day, but Tuesday AM it had sold, that doesn't happen anymore. Home prices are still high, people can still get well above their 'worth' it just takes longer to sell them.

[Apoc]

if a house doesn't show well, it'll a) not sell or b) get offers for less.

Fixed that. People will underoffer a house that doesn't show well but the sellers aren't likely to take it because they see what comparable (in spec) houses are getting. Comparative market analysis is done solely on how the house looks on paper and that's how housing prices are set. Just because it shows crappy doesn't mean the sellers are going to be willing to take less... and if they are, it will be after 180+ DOM... which speaks to Paul's point.

[Apoc]

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[G.Irish]

*ahem*

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[.RJ]

Sweet, keep it comin! I'll buy a house out there!

[WRXtranceformed]

Hey sweet, I live in Purcellville! Except my mom's townhouse has gained about $200,000 in equity since when she purchased it two years ago =P

It's all about what kind of deal you can find. If you pay over $500,000 for a house out here, you're going to have to wait a long ass time to get what you want out of it... people still view it as too far west.

You'll notice more and more homes coming up for foreclosure here within the next year. The terms of the dangerously aggressive mortgages that people jumped all over even though they couldn't afford it are starting to make their ugly change for the worse. Just drive by South Riding sometime in Chantilly... it's starting to turn into Foreclosure City, especially in the condo/townhome sections.

[Apoc]

That's what they get for financing what appears to be 100% of a halfa million dollar house.

We may end up selling for less than we paid but we put 20% down with what was essentially "free money" from the 90% return we got on the previous sale. I never saw that cash anyway and it's really no different than us staying in the old house and the price depreciating from it's peak.