Hey, I thought it was a buyer's market (Burke, Reston: short sale, mortgage)

[JfromReston]

Originally Posted by lindy112

That second listing on Stirrup has some of the worst pictures I've seen in a long time.

Here is another listing with terrible pictures. I've been in this house when it was on the market a few years ago and it is a really nice house. These photos don't do it justice at all. Great kitchen and bath renovation, along with views of Snakeden branch that don't show well in the photos.
11439 TANBARK DR, RESTON, VA 20191 - HomesDatabase

[ChristineVA]

It's only a buyer's market because prices are down. That's good for the buyer, not good for the seller.

But because of all the foreclosures and resulting lower prices, there isn't much inventory on regular sales. When a regular sale comes up, which is desirable to buyers, they go real quick. This is good news for the seller, but not for the buyer. I don't think it has gotten to the point where home prices will increase but it will.

[mshan242709]

Realty Check with Diana Olick: News Headlines

I also suspect there is a lot of shadow inventory banks are keeping off market for now to try and boost prices.

If you need to buy soon, does sound like you are to some extent at mercy of seller.

But hopefully over time, reality will grind away at most sellers, and overeager buyers realize market isn't going up to where it was (peak prices were never real because interest rates got cut in half and people could get interest only mortgage, so house prices could double and monthly payment would stay the same).

May be too conservative for NoVA market, where employment has held up so well, but rule of thumb I previously read for what homes are really worth is something like actual sales prices in say 2003 - 2004 (pre-bubble prices) + inflation.

Perhaps NoVA prices stay elevated over actual intrinisic worth, especially if location is close into DC and near Metro, but bounce along bottom for many years so price eventually converges with actual worth (over very extended periods of time, housing, as a whole, will appreciate at the rate of inflation, i. e. replacement cost).

Old New York Times Rent vs. Buy article said after last housing crash in late 1980's, it took 10 years for prices to re-reach nominal peak prices (i. e. not adjusted for inflation, so you were still losing money in terms of real dollars).

Washington area Redfin blog: http://blog.redfin.com/washingtondc/

[michgc]

Where are you planning to move, Nancy?

Originally Posted by nancy707

We just signed a listing agreement for our house in Vienna We go on the market on or about April 1

I will let update everyone as we go along on this topic with real time information

[Hazel B.]

We also experienced this two years ago when we moved to the area. Just be patient. A lot of families with children who are looking to move after school gets out probably aren't going to list their homes before April first, especially if well priced homes are selling quickly.

I have heard of people submitting a short letter with their bid, describing why they would love to live in that particular home. Who knows, you might just luck into a sentimental seller where that sort of thing might make a difference.

This felt like a huge gamble two years ago, but we love our home and we love our neighborhood. It's by no means perfect, but it's perfect for us.

[nancy707]

Originally Posted by michgc

Where are you planning to move, Nancy?

Sunny Florida

[Margery]

[quote=mshan242700;18357166]Realty Check with Diana Olick: News Headlines

But hopefully over time, reality will grind away at most sellers, and overeager buyers realize market isn't going up to where it was (peak prices were never real because interest rates got cut in half and people could get interest only mortgage, so house prices could double and monthly payment would stay the same).



How do you figure that? $300,000 at 5% interest amortized over 30 years would have a monthly payment of $1610.46. Interest only payment would be $1250 per month, double that to $600,000 at 5% and the interest only payment would be $2500. I would be curious to see your calculations for this.

[mshan242709]

It was commentary from a John Burns Real Estate consulting newsletter in 2007. That edition of newsletter is no longer online but was titled "Resale Home Prices Likely to Fall in Many Markets" and was from summer of 2007, I think (I think it was June 2007 edition).

He said that interest rates were cut in half in early 2000s and mortgage rates dropped a lot as a result.

If someone had interest only mortgage, was comparing monthly payment now vs. a few years before bubble, and thinking that housing prices are going to go up forever, well real estate, even at absurdly overinflated prices, is still a great investment that will make me rich. Mortgage rates got cut in half and interest only loans were easily available, so suddenly people could buy twice the house for the same monthly payment. Add in housing prices are going up forever, and, voila, the mother of all housing bubbles.

He was on Diana Olick's CNBC clip Realty Check in 2007 when subprime crisis was just coming into force and I googled for his newsletter and subscribed.

I would ascert that anyone who is looking at discount from peak prices to determine how much of a deal they are getting are not getting accurate estimate of what house is really worth. Maybe NoVA is like Manhattan and is always overpriced, but those were some very loft prices to base how good a deal one is getting (i. e. percent discount from peak prices)

[Jesco White]

Originally Posted by mshan242700

Realty Check with Diana Olick: News Headlines

I also suspect there is a lot of shadow inventory banks are keeping off market for now to try and boost prices.

If you need to buy soon, does sound like you are to some extent at mercy of seller.

But hopefully over time, reality will grind away at most sellers, and overeager buyers realize market isn't going up to where it was (peak prices were never real because interest rates got cut in half and people could get interest only mortgage, so house prices could double and monthly payment would stay the same).

May be too conservative for NoVA market, where employment has held up so well, but rule of thumb I previously read for what homes are really worth is something like actual sales prices in say 2003 - 2004 (pre-bubble prices) + inflation.

Perhaps NoVA prices stay elevated over actual intrinisic worth, especially if location is close into DC and near Metro, but bounce along bottom for many years so price eventually converges with actual worth (over very extended periods of time, housing, as a whole, will appreciate at the rate of inflation, i. e. replacement cost).

Old New York Times Rent vs. Buy article said after last housing crash in late 1980's, it took 10 years for prices to re-reach nominal peak prices (i. e. not adjusted for inflation, so you were still losing money in terms of real dollars).

Washington area Redfin blog: Redfin Sweet Digs Washington, DC & Baltimore: Washington, DC & Baltimore real estate blog focusing on hot properties and current market trends.

Banks have been keeping them off the market for four years, only releasing a slow trickle. If we hadn't bailed the banks out, they would have been forced to sell these homes and prices would have plummeted. So it worked out well for idiots who overpaid for a 7 year period and the bank's shareholders, but poorly for everyone else who actually would like to buy a home around here at a reasonable cost.

[michgc]

Oooh, lucky you! I love Florida! We just came back from a visit a couple of weeks ago - my parents are snowbirds. Good luck with your move and your house sale.

Originally Posted by nancy707

Sunny Florida