Current Real Estate Data ** County by County Apreciation Rates ** May 2008 ** Nova Prices Continue to Slide

[mojo_1979]

Originally Posted by ACWhite

The homes may still be overpriced, but I don't agree about the availability of a $300K new home in Fairfax County.

1) The land alone that a SFH would be on (e.g., if you bought a tear-down) is valued at $300K and up in most places in Fairfax County. In Arlington, in most neighborhoods, the land is valued at >$420K.

2) Most builders here charged $200 - $250 per square foot to build on YOUR land, not including kitchen cabinets and appliances, architects' fees, etc., when I last got estimates. From what I've heard, they haven't dropped these prices even though the new home market has declined, I guess because materials costs have gone up and more people are renovating their current homes.

Fairfax County has among the highest personal and household income averages in the country, and people are willing (and mostly able) to pay a premium to live there due to proximity to DC, school quality, etc.

Costs of condos and townhouses would be a bit less, primarily due to the land costs' being lower, but they still aren't cheap.

So maybe you can get a new home for $300K in Charlotte, but not in a nice neighborhood in Fairfax County.

Currently, you can get a brand new single family home right outside of Fairfax County... in Loudoun, off route 50, just a couple of miles from the Fairfax County line and it will cost you roughly $400k. Prices are falling very sharply and I'm sure it won't be long until you see brand new $400k homes in Fairfax County too. At the rate of depreciation we're seeing, nice $300k homes in Fairfax County is not entirely out of the question at this point.

The economy continues to get weaker, gas continues to climb, the dollar continues to lose value... who knows how bad things can get before they start to get better.

To put things in perspective, the median price of a Fairfax County home was just $190k in January of 2000. If it weren't for the bubble, and we had "normal" appreciation of about 5% per year, that means in 2010 the median price should be about $310k. If things don't turn around in the next 12 months, we could very well be at that $310k median in 2010. I'm not making a prediction, I'm just being a realist about how bad things could get before they start to get better again.

Prepare for the worst, hope for the best... those are words that I like to live by.

[ACWhite]

Mojo, I agree that anything's possible in the future - prices could go down further, or they could start going up again. However, my post was dealing with the *present* conditions. I was replying to the person who asked why someone would pay $x NOW for an older home in Fairfax Co. when they could buy new for $300K. The answer is because they can't do that now - even per your post, they can't get one now for $400K (33% more than that poster asked about) even if we let them sneak a little OUTSIDE of FFX.

This also leaves out the complicated discussion of location and neighborhood for most older houses versus new, the quality of construction, etc., which often favors the older places versus the newer, at least in the DC metro area.

[mojo_1979]

Originally Posted by ACWhite

Mojo, I agree that anything's possible in the future - prices could go down further, or they could start going up again. However, my post was dealing with the *present* conditions. I was replying to the person who asked why someone would pay $x NOW for an older home in Fairfax Co. when they could buy new for $300K. The answer is because they can't do that now - even per your post, they can't get one now for $400K (33% more than that poster asked about) even if we let them sneak a little OUTSIDE of FFX.

This also leaves out the complicated discussion of location and neighborhood for most older houses versus new, the quality of construction, etc., which often favors the older places versus the newer, at least in the DC metro area.

Fair enough. I agree with you that right now, you cannot get a new SFH in Fairfax County for $300k.

[Shabba Doo]

Originally Posted by mojo_1979

To put things in perspective, the median price of a Fairfax County home was just $190k in January of 2000. If it weren't for the bubble, and we had "normal" appreciation of about 5% per year, that means in 2010 the median price should be about $310k. If things don't turn around in the next 12 months, we could very well be at that $310k median in 2010.

Actually, no need to stick with the rough inflation estimate. If you check CPI Inflation Calculator, you'll see that $190K back in 2000 is about $239K in 2008.

[mojo_1979]

Originally Posted by Shabba Doo

Actually, no need to stick with the rough inflation estimate. If you check CPI Inflation Calculator, you'll see that $190K back in 2000 is about $239K in 2008.

Very true indeed if you use the "official" inflation numbers. However, in my personal opinion, the "official" numbers are a joke. What was the price of an ounce of gold in 2000? Somewhere around $300? It's about $900 today. Same type of thing with oil and other commodities. The Euro and numerous other currencies have all posted tremendous gains against the Dollar since that time. Inflation is much, much higher than being reported by the government's "official" numbers. Anybody who shops at the grocery store can attest to this.

Nevertheless, even with more inflation than is currently reported, I believe housing has further to fall before the market finds a bottom.