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Old 11-19-2007, 07:39 AM
 
238 posts, read 1,038,089 times
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If the prices really drop 35% this would cause a crisis in local government and schools. To keep current county services the same they would have to raise the property tax rate 35% also. People are not going to go for that in a period of falling home prices. So get use to a period of underfunded schools, police, libraries, and other county services.
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Old 11-19-2007, 08:15 AM
 
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W/ regard to real estate tax: The only thing the municipalities would have to do is NOT re-appraise the property value. This would keep the assessment value the same and if they didn't change the tax rate the RE tax revenue would be the same as well. Of course everyone would be upset b/c the appraised value of their property would be more than the market value. I guess they could increase local sales tax by 1%!
People's Republic of Fairfax I guess. . .
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Old 11-19-2007, 09:57 AM
 
Location: McLean, VA
4 posts, read 14,244 times
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Default Re: Market Predictions

Hi, I'm new here, and mostly have been reading, but had to chime in because this is such a serious topic.

As a Realtor, I have to attend all sorts of forums and seminars where lots of people from the "industry" play fortuneteller about what the market's going to do. While it can be helpful, I prefer to look at the market trends in each specific neighborhood (important for around here), and what buyers are telling me when they look at houses. I can bore y'all to death with all the different trends in the market, but yes, prices are starting to stabilize to a more normal place (pre-2004) which means if you bought during "the bubble," you probably won't get a return on your investment. It's much more of a buyers market now, but because of the strictures in the mortgage areas and the sub-prime fallout in general, it's more difficult for buyers to get the financing they want. Realtor practices have had to change, and buyer & seller practices have to too.

As for improvements on a home, and whether that'll help resale value, what might help your decision is to find out what IS selling in your area, and what improvements they made at what price points. That way you're not falling prey to people who are trying to get rid of inventory (happened to an elder lady who invested in green shag wall-to-wall carpeting because the carpet man told her it was the "new trend"), nor are you putting money into an area that won't help when you're trying to sell.

I have noticed lately that buyers are very focused on getting a house that shows supremely well - is well staged, doesn't seem to have evident problems, doesn't have old appliances, etc. Before you buy granite countertops, make sure there are no holes in the wall, bent gutters, rotted wood, broken doors...things that add to buyers' costs in their head. Landscaping helps curb appeal, and sometimes the most difficult thing is to get someone's foot in the door!

Hope this helps!
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Old 11-19-2007, 10:09 AM
 
122 posts, read 307,325 times
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Thanks, HomesWithTLC.

I suspect that while "improvements" may not be fully recoverable in terms of cost, done wisely they may actually help to sell the house. I'd rather invest a modest amount in improvements if it will help move my house now, even if I lose money.
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Old 11-19-2007, 11:32 AM
LLD
 
Location: Fairfax County, VA
654 posts, read 2,817,214 times
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I think adjustments are good things. I'm dealing with declining prices where I live and I'm not happy about it since I have a house on the market, but I'm realistic. At least I know that when I buy in the DC area some of the outrageous prices have come down a little. For people that bought when things were high -- that's the real estate world. I've bought, sold, built etc..... mostly made money on real estate and once lost money because I needed to sell at a time when the market wasn't that great (that was in Austin, TX). Real estate, just like the stock market, is usually a good long term investment -- and that's the key. Over time things usually appreciate. Some people get lucky in the short term and buy low and sell high. But that isn't the norm.

Your house is only worth what someone will pay for it. And when there is a glut on the market -- it sucks to be a seller -- I know. I'm one where I live. But I'm a buyer for the DC market. And to my mind the prices are still way too high even after coming down. I've lived in the DC area three times now and when I look at what prices were the first time I moved them compared to now (even including the current decline), there are still too high IMO. And I'm saying that from an comparative observation of various markets over time, not as a buyer. Looking at various markets across the country and thinking of the different places I've lived and how things have gone up and down in those various places -- I think the DC area when a bit crazy frankly.

Then add the factors of the sub prime stuff, the foreclosures, the glut of houses on the market, people moving away because they can get so much more house for their money in other places etc... and it was inevitable that an adjustment was going to occur.
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Old 11-21-2007, 08:17 PM
 
19,183 posts, read 28,313,751 times
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Quote:
Originally Posted by El General View Post
Prices have already fallen more than 25% in this area. 510K two years ago, is now 360K. Don't let the realtors tell you any differently.
Median sales price for an existing SFH in Fairfax County...
2004 = $505,000
2005 = $615,000
2006 = $625,000
2007 = $620,000 (thru Sep)

Median sales price for a new SFH in Fairfax County...
2004 = $669,000
2005 = $805,000
2006 = $939,000
2007 = $985,000 (thru Sep)

[Source: Fairfax County Department of Tax Administration]
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Old 11-21-2007, 08:44 PM
 
19,183 posts, read 28,313,751 times
Reputation: 4002
Quote:
Originally Posted by car54 View Post
And then you have all the idiots that bought before the boom but then went wild buying Hummers and Caribbean vacations with those home equity dollars....and they're WAY upside-down now...and we'll be seeing them walking away from those loans too.
Why? The only time the market value of a home enters into an equity-line equation is when you qualify for one. Even if you'd max'd a $100K equity-line, the entire increase in interest rates since November 2004 would have cost you a whole $150 a month after taxes. People are going to walk away from their homes over that?

Quote:
Originally Posted by car54 View Post
The scariest thing is that the Chinese and others are starting to prefer other currencies to the dollar....and when that happens, we will have finally maxed out the national credit card.
Dollars are on sale. They are selling at 30% below par. The medium- to long-term potential for exchange rate gains for holders of dollars is significant. Why would anyone want to avoid dollars? On the other hand, many foreign countries hold US dollars as reserve currencies. The low value of the dollar dimishes their reserves, and hence their fiscal and monetary flexibility. Maybe it's in their interest to make some noise, hoping that the US will be encouraged to take steps to prop up the dollar...
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Old 11-21-2007, 08:57 PM
 
19,183 posts, read 28,313,751 times
Reputation: 4002
Quote:
Originally Posted by goodtype View Post
If the prices really drop 35% this would cause a crisis in local government and schools. To keep current county services the same they would have to raise the property tax rate 35% also. People are not going to go for that in a period of falling home prices. So get use to a period of underfunded schools, police, libraries, and other county services.
People care about their tax bills...the actual dollars they have to pay each year. Who would freak if his assessment went from $500K to $400K while the tax rate went from $1.00 per hundred to $1.25 per hundred. In Year-1, he'd owe $5,000. In Year-2, he'd owe $5,000. Salary stays the same, investment income goes up, given rising interest rates. How are schools, police, libraries, etc. going to go out of business out of all this?
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Old 11-25-2007, 09:34 AM
 
192 posts, read 193,434 times
Reputation: 21
According to yesterday's Post, page F-8, Real Estate Trends: Fairfax County: January-June 2006 median resale price was 530,000, January-June 2007 median resale price was 500,000. Let's look closer at Springfield:

ZIP****06 *****07 **Change
22150 525,000 471,125 -53,875
22151 507,500 467,000 -40,500
22152 470,000 440,000 -30,000
22153 466,000 438,000 -28,000

Keep in mind that for 06, there were 731 homes sold. In 07 that number shrank to 360; more than a 50% decline! Also, we know that there were many more buyer incentives in 2007. Since June, the market has accelerated it's downward trend. If you bought at the 2005 high, you probably made the worst financial decision of your life.
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Old 11-25-2007, 10:12 AM
 
7,903 posts, read 7,238,587 times
Reputation: 6258
Quote:
Originally Posted by saganista View Post
Median sales price for an existing SFH in Fairfax County...
2004 = $505,000
2005 = $615,000
2006 = $625,000
2007 = $620,000 (thru Sep)

Median sales price for a new SFH in Fairfax County...
2004 = $669,000
2005 = $805,000
2006 = $939,000
2007 = $985,000 (thru Sep)

[Source: Fairfax County Department of Tax Administration]
Sales of SFRs above the FHA conforming loan limit of $417K have collapsed in the last year. If you look in the MRIS database, the number of transactions for those homes have dropped by one-third. The number of sales for multi-million dollar estates has essentially stayed the same as many of the buyers can afford to buy without mortgage financing. If you exclude the sales of the multi-million dollar estates, the median sales price for detached homes shows a declining trend from $670K to $570K in the past year. (source: Mervyn realtor NoVa database)
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