Is the DC housing market nearing the peak set back in 2005-2006? (Arlington: real estate, condos)

[BT Lover]

This is what we are concerned about with buying a house right now. Some areas are extremely overpriced, but buyers are willing to pay it, so it makes it more difficult for everyone else. I don't like the idea of buying a house and not seeing it appreciate. But, if I buy an older house that is a deal right now, is it going to appreciate any differently? Townhouses nearly at the 500K mark seem to be so overpriced that I can't see buying one and getting anything over what we pay for it ever. This isn't New York City.

[FCNova]

Originally Posted by BT Lover

This is what we are concerned about with buying a house right now. Some areas are extremely overpriced, but buyers are willing to pay it, so it makes it more difficult for everyone else. I don't like the idea of buying a house and not seeing it appreciate. But, if I buy an older house that is a deal right now, is it going to appreciate any differently? Townhouses nearly at the 500K mark seem to be so overpriced that I can't see buying one and getting anything over what we pay for it ever. This isn't New York City.

Ever? I don't think townhouses in the 500k range are any more overpriced right now than houses or condos. I agree though that prices in general are a little inflated due to low inventory and low interest rates, both of which are temporary. I wouldn't worry about it though, as long as you're planning on living there for awhile. I doubt prices will drop much(if they even do).

[NovaOne]

Originally Posted by LuvVA

Is the DC housing market nearing the peak set back in 2005-2006? So, what's next? Keep going up or going to slow down or take a downhill?

I think since Interest rate is going up slowly, house price might come down a bit, stabilize and may not go up as fast as in the last 12 months.

No, not even close to the peak. But I guess it depends on the market segment you are looking at. For lower priced homes, such as those less than a million, the market has not recovered. Higher price homes never saw that much volatility to begin with so they are definitely back to 2006 levels already.

Price increase should slow somewhat. I am hoping for stability.

[NovaOne]

Originally Posted by Fallout Zone

I'd say yes in my neighborhood, and I agree with the OP's assessment of what's next. The run can't continue, but it isn't like there is a large glut of listings and foreclosures to drive prices back down.

I keep hearing this, but they are just not there. Maybe in other cities this is true, such as in Phoenix or Vegas - I don't know enough about these other markets to say for certain. But in Nova, the banks know the value of the properties here and there is no massive backlog of foreclosures. When bank owned properties do come on line, they are sold at market price, not fire-sales. Banks a much more patient these days about getting the most out of their property.

I will say that as prices go up, more people who are thinking of selling will sell as they come out from being under water. But this pressure is not significant since these people are feeling just fine where they are. The need to buy something is much stronger of an emotion than the need to sell something. This is why people end up with tons of stuff that they would rather pay storage for than sell off.

[BT Lover]

Originally Posted by FCNova

Ever? I don't think townhouses in the 500k range are any more overpriced right now than houses or condos. I agree though that prices in general are a little inflated due to low inventory and low interest rates, both of which are temporary. I wouldn't worry about it though, as long as you're planning on living there for awhile. I doubt prices will drop much(if they even do).

Yes. When SFH's are going for $500K and ones around the same age and size, then yes, TH are overpriced. There are still many foreclosures and short sales even in this market. The bad thing about those is that they take time. They are rarely quick to close on.

One thing I have noticed a lot of in this market are those people who you can buy out of their houses. They aren't selling per se, but if you meet their price, they will move tomorrow. Well...you know what I mean.

[FCNova]

Originally Posted by BT Lover

Yes. When SFH's are going for $500K and ones around the same age and size, then yes, TH are overpriced. There are still many foreclosures and short sales even in this market. The bad thing about those is that they take time. They are rarely quick to close on.

One thing I have noticed a lot of in this market are those people who you can buy out of their houses. They aren't selling per se, but if you meet their price, they will move tomorrow. Well...you know what I mean.

What zip code are you seeing townhouses priced identically to SFHs, with same age, size,etc? I hope you're not comparing a regular sale TH in decent shape to a short sale SFH nearby which probably isn't in great shape. That doesn't mean the TH is overpriced.

[NovaOne]

Originally Posted by BT Lover

This is what we are concerned about with buying a house right now. Some areas are extremely overpriced, but buyers are willing to pay it, so it makes it more difficult for everyone else.

That's the very definition of market pricing: x amount of supply sold to approximately x highest bidders. Why should it be easy for everyone else?

Originally Posted by BT Lover

I don't like the idea of buying a house and not seeing it appreciate. But, if I buy an older house that is a deal right now, is it going to appreciate any differently? Townhouses nearly at the 500K mark seem to be so overpriced that I can't see buying one and getting anything over what we pay for it ever. This isn't New York City.

You shouldn't let personal bias cloud your assessment of the market. Due to shortage of land, a larger townhome in NoVA is not viewed as a starter home. A starter home in Northern Virginia is either a condo, or a smaller/older townhome. People's valuation of properties in this area is congruent with these facts. This is the reality of the region and it's irrational to feel that this reality is somehow incorrect.

I do understand that individual properties may be over valued, and people do over pay for things on an anecdotal basis. Prices do come down, they don't always go up, but they do go up sometimes, which is an intrinsic characteristic of a cyclical market.

[BT Lover]

Originally Posted by FCNova

What zip code are you seeing townhouses priced identically to SFHs, with same age, size,etc? I hope you're not comparing a regular sale TH in decent shape to a short sale SFH nearby which probably isn't in great shape. That doesn't mean the TH is overpriced.

Nope, I am not misunderstanding, it is Leesburg and surrounding areas. What makes me even more furious about some of the listings is when you look at the sale history. I am sorry, but there are some on the market right now that actually doubled or in a couple cases tripled the price in less than five years. Does it mean that all these houses are going sell? Probably not, which is why I keep getting alerts about price changes. But, there are instances where buyers didn't know better and bought recently only for houses nearby selling for much less weeks later in the same condition, or even better condition. I see more foreclosures than short sales personally if you are comparing the two.

[BT Lover]

Originally Posted by NovaOne

That's the very definition of market pricing: x amount of supply sold to approximately x highest bidders. Why should it be easy for everyone else?

You shouldn't let personal bias cloud your assessment of the market. Due to shortage of land, a larger townhome in NoVA is not viewed as a starter home. A starter home in Northern Virginia is either a condo, or a smaller/older townhome. People's valuation of properties in this area is congruent with these facts. This is the reality of the region and it's irrational to feel that this reality is somehow incorrect.

I do understand that individual properties may be over valued, and people do over pay for things on an anecdotal basis. Prices do come down, they don't always go up, but they do go up sometimes, which is an intrinsic characteristic of a cyclical market.

What personal bias? There is no shortage of land out by Dulles, so I am not sure where you live. Drive from Leesburg to say Brambleton and tell me how many empty fields you drive by. I can see shortage of land for DC, Arlington, other areas close to metro stops, but out to Leesburg? You have to be kidding me. They just treat the areas as being like Arlington because as a builder or investor, you make more money. A starter home in NOVA is only a condo and older townhome, fixer upper because people allow it to be. I fully understand supply and demand, but accepting things because others have and are in bad investments doesn't make sense. If others lose money on their investment, it is their issue to deal with. But, I don't want to repeat the same mistakes.

[FCNova]

Originally Posted by BT Lover

Nope, I am not misunderstanding, it is Leesburg and surrounding areas. What makes me even more furious about some of the listings is when you look at the sale history. I am sorry, but there are some on the market right now that actually doubled or in a couple cases tripled the price in less than five years. Does it mean that all these houses are going sell? Probably not, which is why I keep getting alerts about price changes. But, there are instances where buyers didn't know better and bought recently only for houses nearby selling for much less weeks later in the same condition, or even better condition. I see more foreclosures than short sales personally if you are comparing the two.

I see. I'm not really familiar with Leesburg prices. It wouldn't surprise me at all if people were being way too aggressive with their pricing right now. I know in my neighborhood in Tysons Corner you have your smaller townhouses(350-low 400s), large older townhouses(450-500), large newer townhouses w/ garages(550-700), and single familys which start at like 700 for a decent one go as high as you want. Pricing seems to be pretty consistent. If you've got a 500k budget around there you're looking at a townhouse, and they will appreciate.