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The numbers given by me (via The Post), are MEDIAN not Average. Many areas have been able to keep the average up by selling fewer entry level homes. The higher end market was the last to completely deteriorate.
OK, agreed, but this poster's point about his/her particular neighborhood is valid - these are two comparable homes, same street, same size, same condition, same upgrades (I presume) and this poster is demonstrating that prices have gone up from 2004 to 2007.
We could debate endlessly over median, average, and all other statistics in zip codes. These could be affected greatly by, say, a new neighborhood being built of more/less expensive homes, etc., etc., etc. So, a very specific comparison as we've been given here can tell us a lot.
I think what you've got going in Vienna is residual benefit from the Money Magazine story from 2005 or 2006. There was an absolute firestorm in sales after that survey came out, and people who are new to the area (2007 vintage) still talk about the article - despite the fact that the ranking has fallen quite a ways.
I also think you're seeing a solidification of housing values in areas near metro stations. With gas prices on the rise ($3.00+ currently), homes within 3 to 5 miles of the Metro carry a premium.
Clearly, homes in Oak Hill, Herndon, and Chantilly are taking it in the face, but in general here in the Vienna area we're seeing a holding. We may be off the historic highs encountered in early to mid 2006, but when you compare it to 2003 and 2004, we're way, way above those figures in single family homes. I would say that a large part of any perceived erosion in values in the area is a result of the condo and townhouse markets which have fallen apart owing to 1) speculative investments that failed and 2) marginal buyers whou couldn't meet the mortgage payments when the ARM went fixed.
When you look at the foreclosure listings, the condos around Vienna metro bear this out. There has yet to be significant foreclosure on homes elsewhere in 22181 or 22182.
I think what you've got going in Vienna is residual benefit from the Money Magazine story from 2005 or 2006. There was an absolute firestorm in sales after that survey came out, and people who are new to the area (2007 vintage) still talk about the article - despite the fact that the ranking has fallen quite a ways.
I also think you're seeing a solidification of housing values in areas near metro stations. With gas prices on the rise ($3.00+ currently), homes within 3 to 5 miles of the Metro carry a premium.
Clearly, homes in Oak Hill, Herndon, and Chantilly are taking it in the face, but in general here in the Vienna area we're seeing a holding. We may be off the historic highs encountered in early to mid 2006, but when you compare it to 2003 and 2004, we're way, way above those figures in single family homes. I would say that a large part of any perceived erosion in values in the area is a result of the condo and townhouse markets which have fallen apart owing to 1) speculative investments that failed and 2) marginal buyers whou couldn't meet the mortgage payments when the ARM went fixed.
When you look at the foreclosure listings, the condos around Vienna metro bear this out. There has yet to be significant foreclosure on homes elsewhere in 22181 or 22182.
Your points are well made Itrade. Countrywide credit only has three foreclosures listed in Vienna at this time. Vienna tends to be a quality area, accessible to just about everywhere. Homes there WILL hold their values better than Woodbridge or Culpeper, however, there is no denying that prices are on their way down, just like they are in Mclean, North Arlington, and Great Falls. Did the President of the National Association of Realtors ever sell his house in Great? Last I heard, it had been on the market for about two years.
Well, Money Magazine is a non-factor in my view. They've given excellent ratings to other areas as well, both before and since the Vienna piece. Unless there were a pattern across these communities showing that a Seal of Approval from them establishes some sort of repellant coating against the harsh chemicals of housing market up's-and-down's, I'd dismiss that piece as having been anything more than another bit of advertising and promotional fluff. The Metro has meanwhile been in Vienna since 1986. It was factored into the market long ago, and it primarily affects only that segment of the market that also works near a Metro station.
Everything I see going on here is credit-market related. The increases in interest rates since 2004 have put downward pressure on home prices. That's the effect that such increases have on the price of all long-term assets. Holders of recently written non-traditional mortgages have a high degree of exposure on the interest rate front, and they've been hit in part because there hasn't been enough time for the financial situations that they were in when they signed their contracts to improve any, and the whole idea of these instruments is to provide a pathway from a point of not really being able to qualify for a traditional mortgage to a point where one can. There was plenty of talk back in 2003 or so of the damage that a hypothetical increase of 2% in interest rates might do to holders of adjustable-rate financing, but nobody decided to do much of anything about it. Once such an increase became reality as expected, the markets have essentially reacted by tightening up on their underwriting. The result is a pool of people who are in month-to-month trouble, along with a pool of prospective people to off-load onto that is empty. You're going to start getting foreclosures in that scenario. To bring this back to the Vienna situation, most of this affects lower-end buyers of lower-end properties, and there aren't very many of either one of those in 22180, 22181, or 22182. The situation in say Woodbridge or Manassas might be expected to look different, and it does.
Meanwhile, prices in the Vienna area, which is almost entirely mid- and high-end owners and properties, are holding against the ripple-effects of a down-scale tide in part because owners who otherwise might have, simply aren't putting their properties on the market. No one who doesn't have to sell at the moment is itching to. As the DC area continues to produce roughly the same army of well-qualified buyers as it did three to four years ago, the dampening of willingness to supply comes against a relatively stable demand, and that puts a countervailing upward pressure on prices.
The larger picture is that the housing-market depends on the credit-market, and by being somewhat short-sighted, the credit-market has itself tied up in knots at the moment over developments that were widely anticipated. There are various proposals for government assistance in righting these markets, but whether any of those materialize or are effective if they do, credit-markets will eventually stabilize and will return to providing services that are appropriate to demands. Downward pressure on prices will begin to abate, people's psychology (the other big driver at the moment) will start to improve, and real estate will once again seem to be the sane and safe investment that it has always been. The winners will be those who were able to take advantage of bargain basement prices, and the losers will be those who found no recourse other than to sell, and each will have a rather shoddy overall performance on the part of credit-market managers to thank for it.
There is a public site where you can check the market by county, area, or zip code. It is Metropolitan Regional Information Systems, Inc, click on news, then click on market statistics.
You're welcome.
Well, Money Magazine is a non-factor in my view. They've given excellent ratings to other areas as well, both before and since the Vienna piece. Unless there were a pattern across these communities showing that a Seal of Approval from them establishes some sort of repellant coating against the harsh chemicals of housing market up's-and-down's, I'd dismiss that piece as having been anything more than another bit of advertising and promotional fluff. The Metro has meanwhile been in Vienna since 1986. It was factored into the market long ago, and it primarily affects only that segment of the market that also works near a Metro station.
Everything I see going on here is credit-market related. The increases in interest rates since 2004 have put downward pressure on home prices. That's the effect that such increases have on the price of all long-term assets. Holders of recently written non-traditional mortgages have a high degree of exposure on the interest rate front, and they've been hit in part because there hasn't been enough time for the financial situations that they were in when they signed their contracts to improve any, and the whole idea of these instruments is to provide a pathway from a point of not really being able to qualify for a traditional mortgage to a point where one can. There was plenty of talk back in 2003 or so of the damage that a hypothetical increase of 2% in interest rates might do to holders of adjustable-rate financing, but nobody decided to do much of anything about it. Once such an increase became reality as expected, the markets have essentially reacted by tightening up on their underwriting. The result is a pool of people who are in month-to-month trouble, along with a pool of prospective people to off-load onto that is empty. You're going to start getting foreclosures in that scenario. To bring this back to the Vienna situation, most of this affects lower-end buyers of lower-end properties, and there aren't very many of either one of those in 22180, 22181, or 22182. The situation in say Woodbridge or Manassas might be expected to look different, and it does.
Meanwhile, prices in the Vienna area, which is almost entirely mid- and high-end owners and properties, are holding against the ripple-effects of a down-scale tide in part because owners who otherwise might have, simply aren't putting their properties on the market. No one who doesn't have to sell at the moment is itching to. As the DC area continues to produce roughly the same army of well-qualified buyers as it did three to four years ago, the dampening of willingness to supply comes against a relatively stable demand, and that puts a countervailing upward pressure on prices.
The larger picture is that the housing-market depends on the credit-market, and by being somewhat short-sighted, the credit-market has itself tied up in knots at the moment over developments that were widely anticipated. There are various proposals for government assistance in righting these markets, but whether any of those materialize or are effective if they do, credit-markets will eventually stabilize and will return to providing services that are appropriate to demands. Downward pressure on prices will begin to abate, people's psychology (the other big driver at the moment) will start to improve, and real estate will once again seem to be the sane and safe investment that it has always been. The winners will be those who were able to take advantage of bargain basement prices, and the losers will be those who found no recourse other than to sell, and each will have a rather shoddy overall performance on the part of credit-market managers to thank for it.
Well, OK, but anecdotally, areas that start to be mentioned frequently on various "best places to live" lists do see a lot of new interest. It could just be that they are indeed great places (and thus, the mention on the lists isn't itself the driver). People aren't going to pick a place solely because it is mentioned on a list, but they may hear of it, and then pursue it and like it. It may be that someone is already moving to the DC area and ends up buying in Vienna instead of Reston or Alexandria. There are also people who are just looking at a map of the US, saying "where should I go?". [Trust me, I know from personal experience!] I mention this based on things I have heard in other states, not so much Vienna per se. I mean, if this poster knows of people who are newcomers (I think that's what he/she was suggesting) and who are mentioning the article, that has to say something.
Margery, thanks so much for the link, that was actually very helpful. In looking at my area of Loudoun, the Potomac Falls area, 20165, I saw that we are in much better shape than I thought by listening to the news reports about Loudoun. Most properties are moving within 60-90 days. My thought is that the homes that are selling are either over priced, or have not been updated - this community is around 10-15 years old and some people have updated the kitchens/baths and some haven't. Those that haven't are sitting (based on my experience looking at homes sitting on the market in our neighborhood), seems that those that are updated move pretty quickly.
We have to remember that there are LOTS OF JOBS IN THIS AREA!! That is what drives the economy. We are in no way a recession here, as a recruiter I know we are always looking for qualified people, there is still a demand.
My opinion is that the correction has happened, the interest rates are low, we should be back to a normal market in 2008.
20165 is more like 24 years old. You can get a pretty good townhome there for 200K. There is a repo listed at 341K that has been sitting for a long time. Nice area, though. A good place to drive a bargain.
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Housing prices
