Housing market prediction (Fairfax, Washington: for sale, real estate market, rental)

[lqda4]

25 real estate markets poised to fall - Greater Washington, D.C. (10) - FORTUNE

[jgrfan]

Interesting. For anyone that has owned for the last few years, where would a 25% drop put you? Is that about where prices were 2 or 3 years ago? a 25% drop might make the housing stock relatively affordable.

I don't imagine the prices will drop all 25%, I think the rent portion of that ratio will also climb, especially as potential buyers defer purchasing a depreciating asset (they'll just continue to rent driving up rental rates until rents and mortgage payments get more in line).

I guess a big recession resulting from the housing bust would drive more people to Washington to suckle from the Government and could drive up rents / housing prices.

Who knows. Its going to be at least spring 2009 before anyone knows how long this will take.

[goldenmom7500]

It's funny - from 99 to 2005 (ish?) we made more than 100% on paper. Still, it hurts to see that fall. But it was very, very predictable.

[normie]

Houses in my neighborhood were selling in the 800's 2 years ago. They are now selling in the $650-725 range, so if they drop just a little bit more I guess that would be a 25% drop. They still seem over priced to me--just 2-3 years before that they were $350-450. Turnover still seems surprisingly quick in my neighborhood. Only one house on the market in my neighborhood right now. It's been for sale for 7 weeks. The rest of the homes all sold in 4-6 weeks.

[jgrfan]

I actually interpreted the 25% drop to be five years from this past summer / fall. So think about what a 600K home would run you (let's say w/ 20% down so a $480K mortgage) Excluding tax and insurance you're talking maybe $3,000? I don't know if you have a big rental market in your area but could you rent for $3,000 per month? If you can then maybe $600K is the bottom.

I'm just seeing $400K townhomes rent for $1800 which translates into maybe $300K? That's about 25% of the value.

Again, who knows. I just think about what I could rent my house for and its nowhere near the mortgage (just principal and interest mind you) payment.

[bels7]

Whoa. I suppose I shouldn't be surprised at these predictions and prices.

I'm one of the lucky ones. Bought in Loudoun County in 1997 for $290K, sold in 2004 for $620K. Fellow who bought my house sold it three months later for $750K. Anyway, moved to NC and bought a bigger, better house in a very nice neighborhood. Houses here cost about half of what they sell for in NOVA. Cost of living here is very modest. And traffic congestion is defined as two cars passing through the same intersection 30 minutes apart. Only reason I come back to NOVA is to visit my daughter in Fairfax.

The market here ( Greensboro area ) is nowhere near as inflated as the DC area, but even so it's a bit slow. Now selling my place here and moving to Raleigh. Maybe rent for a couple of years until things get sorted out. The Raleigh market is bigger, and most houses are moving faster there than here, but prices are dropping a bit too.

My daughter is renting in Fairfax, can't afford to buy there. But she could easily afford a very nice place in NC and improve her quality of life.

[goldenmom7500]

I considered Greensboro (and Raleigh). Looked wonderful. I had some family elsewhere so I moved there (elsewhere), but yes, you have to wonder why people put up with the DC area when there is an alternative out there.

{But if you are going to DC for employment, forget what I have said, Northern VA is great and it is what it is, as a friend of mine likes to say}.

[bels7]

I lived in the DC area from 1979 until 2005. Trapped by my profession, as the only really good jobs in my field were in the DC area. But when I retired early and discovered that NC doesn't tax federal pensions, it was a no-brainer for me.

But, yes, I enjoyed living in NOVA. I just didn't like the commute. And now I realize how debilitating it was ( I'm a much nicer person now ).

[Flamingo13]

I HOPE this isn't true, we've been debating about selling for a few years (realize we missed the "bubble") - but we have spent those yrs. in upgrading the house as we could afford, landscaping, etc. Guess we blew it and should have sold 2 yrs. ago? We want to move to the NC area but "things" come up and we put it off. : (

[bels7]

Well, I suppose I benefited from "the bubble" though I didn't think of it like that. But I have never bought a house as an investment, just as a place to live comfortably. The market comes and goes. If you keep a house long enough, and keep it well-maintained, you will probably make a profit on paper.

Now I'm faced with the dilemna of buying or renting. If I rent and invest the money from selling my home, I'll earn much more in interest than it will cost to rent. And if I move in two years I won't have to pay a commission on a house that probably won't be worth much more then than it is now.

I've done a "serious" spreadsheet comparison of rent vs. buying, interest income, tax deductions, cost of maintaining a home, etc., and for me, right now, it makes more sense to rent. Of course I am single and very comfortable financially, not working, just living off my investments. If I were married it would be different. I'd want to live as she would want to.

And, sorry to say, in my opinion, making improvements to a home are rarely recoverable. I've made considerable improvements here, maybe $80K worth, and I'll probably lose all of that. But I won't think of it as "losing" because I have enjoyed living here. So if you have enjoyed your home, those improvements will have been worth it. And even if you sell now at a loss, you'll probably still be better off living somewhere nice but with a more modest cost of living.