When do I take a decision to buy home in VA/MD. (for sale, real estate market)

[SSAAMM]

I am thinking to buy either single family or townhouse in MD or VA. I am holding my decision since July 2006 to see real estate market is getting stable. I visited only twice in last six months myself because out of state residence.

I would like to get the sense of the real state market in Northern Virginia. I am looking all kinds of sources from TV to Newspaper regarding real state market indicating very week and loosing ground. Despite all information’s, don’t see very much different in new home prices. The prices are more or less same. Some builders are offering little discounts in Single-family homes but Town homes price stand still the same.

Is someone let me know how things are in MD/VA or do you see any price deduction any community.

I am also interesting to know what do you think about the real estate market trend around VA/DC.

Thanks.

[DavidS827]

In my opinion...The prices here are starting to stabalize. Many people in the business think we are either very close to, or are at the bottom of, the local market. Even the washington post wrote an article a few weeks back about how good the "buyers market" is right now. Rates are the lowest they have been all year and inventory is dipping in many areas. Toll Brothers (one of the largest buildersin the US) even came out last week and specifically mentioned Northern Va as one of the first home markets in the country to see signs of improvement.

Welcome to VA and good luck with your search.

[new_to_va]

Well I was a potential home buyer like you and I did visit few builders in the past few months and I saw lot of homes being sold in last few weeks and decided to buy one for myself before the lots went off in the particular community I was looking at. I personally feel we are at bottom and rates will stablize in Jan. Builders wont give space to negotiate come Jan as they have a full year to see. So I suggest you buy in Dec or else you will lose your negotiating power next year. Good luck for your home buying.

[calredd]

I would prefer VA to MD. And regarding timings, its good to buy now as I am seeing builders decreasing their incentives (ofcourse they never reduced their base prices) and they are hopeing to remove the incentives altogether next year.

[HEATHER72]

In my opinion, NOW is the time to buy a home. Builders are trying to sell as many homes as possible before the end of the year. Then you can say bye bye to the incentives they are currrently offering.

I've been watching the prices of homes in one neighborhood for the past 6 months or so. They seem to have hit their lowest price possible. We just bought a home for $510K that was priced at around $600K in July.

Good luck!

[Mike from back east]

....you're right on the money. We sold our house in zip 20151 last June for $505k (aka an "Ambergate" model in Brookfield). My neighbor, with an identical house, listed her's this spring, initial price was $639k. It's been on the market for 9 months now. She dropped it to $589k several months ago, but still no sale. It's way overpriced for today's market. The market in the DC area seemed to come to a screeching halt about mid-August 2005.

Today, another Ambergate is for sale in the same exact neighborhood for $480k, that's $100k less than my former neighbor's house. This decline in prices fits right into the same amount of price drop you mentioned, and supports the validity of your remarks.

The $480k home has all new stainless steel appliances, has been notably remodeled, is vacant, and ready for a buyer to move in. This house listed two months ago at $500k. One month ago it dropped to $490k. Yesterday it dropped to $480k. I consider it priced right and it should sell. For sure my former neighbor isn't going to sell her house for anything close to $589k, if she sells it at all.

Seems that sanity is returning to housing prices in that region. We were lucky and got out in June 2005 very near the peak of the market, when houses were being snapped up in days....took us 4 days, had 4 offers, all above listing of $489k.

The houses in Brookfield were built by Carey and are very solidly built.

s/Mike
I'm not a realtor, nor in any way associated with the housing business.

[HEATHER72]

Mike -

You described the market perfectly. The bubble has burst, not only in DC, but also in Albuquerque where I currently live for another 9 days.

We sold our home here of course. Now in a good market, we probably could have gotten say $240k for it this past spring. We wound up selling it for $210k in November. I knew the market was down, lots of homes for sale thanks to all the investors. The key to getting it sold was the price. We sold it within a month of it being listed because we stayed on top of the situation.

Now on the flip side, you still have those people out there that think they are going to sell their home at inflated prices. The neighbor across the street has had their home on the market going on 4 months now. It was originally priced at $240k and is currently priced at $224k. It's 400 sq ft smaller than our house (and the ceilings are chocolate brown... yuck!) Needless to say they aren't going to get $224k for it.

And then there is the guy that came by our house one day, we thought he was interested in buying it... oh no, we were wrong. He had the same house (2132 sq ft, but withless upgrades than ours) in the same neighborhood that he wanted to sell. His "friends" told him they were selling homes in the 1600 sq ft range for $240k. *shakes head* Not possible! So, last week he put his home on the market... priced at $275,000! I just can't believe a realtor would price it that high. What a disgrace!

Anyway... back to the DC market. Like I previously said the home we bought was going for $600k not too long ago. There are several brand new empty homes on our street that were bought by investors. The house across the street is on the market for $614,000. So let's see... a person can come in and buy a house for $600k from an investor, or buy it new from the builder for $500k... hmm decisions decisions

[Cassie]

Originally Posted by DavidS827

In my opinion...The prices here are starting to stabalize. Many people in the business think we are either very close to, or are at the bottom of, the local market. Even the washington post wrote an article a few weeks back about how good the "buyers market" is right now. Rates are the lowest they have been all year and inventory is dipping in many areas. Toll Brothers (one of the largest buildersin the US) even came out last week and specifically mentioned Northern Va as one of the first home markets in the country to see signs of improvement.

Welcome to VA and good luck with your search.

IMO, housing prices in northern VA have neither hit bottom nor stabilized yet. What was most noteworthy to me about Mr. Toll's statements was the shallow reporting of them. What happened to the days of those hard hitting reporters like Van Atta, Woodward and Bernstein, Tracy Evans? It seems that what sells these days are sound bytes and pap. I do appreciate the efforts of Credit Suisse's Ivy Perlman who asked the only hard hitting questions including wanting to know which kool-aid Mr. Toll was drinking.

Among them:


“… Here you are Mr. ‘much more bullish’, talking about big pent up demand and clearly you were surprised on the spiral downward. And for the first time in 15 years you are going to be down versus 06 and I think that you seemed like a very broken man last time you were on the call, and here you are a new man and I’m wondering which Kool-Aid your'e drinking because I want some…”

Toll seemed a bit flustered by this line of questioning responding:

“I’ve just told the market what we have witnessed so that they have that information to deal with. I’m not making a prediction... “

In a follow up question Zellman asked:

“…you said the stock would continue to surge why only buy 12,000 shares of your stock why not buy a boat load of stock back if you really believe the stocks were headed north here?”

Toll responded somewhat oddly:

“… The answer is that I believe that I could make more money with my cash buying land and expanding the business than I believe that I could make by buying my stock. Buying stock is kind of a one time thing I think...”

To that Zellman concluded:

“I think a lot of people, if they ever follow you Bob, and you’re buying and selling, personally would have made a lot of money. And I'll leave it at that.”


Mr. Toll seemed to back significantly off of his original optismism if one takes the time to read the entire transcript.


http://usmarket.seekingalpha.com/article/21815

Regards,

Cassie

[DavidS827]

The problem with connecting the analyst call to the local market observation is that the analysts have a concern for the entire United States market, not just NOVA. So while Perlman's questions are relavent to Toll's investors they neither address nor have significant relevance to what's going on in our backyards. I can tell you from personal experience that every person I know in the industry has said that their "phones are ringing again and houses are finally selling" That is far from scientific, but intersting (IMO) nonetheless.

[Mike from back east]

If indeed the phones are ringing again...it may be certain current situations:
- Baby boomers are retiring (we did in 2003-04) and are taking their money out of high priced areas like DC, SoCAL, etc and fleeing to lower cost areas that allow a better, less crowded quality of life.
- People continue flowing out of CA due to the influx of illegals from all over reducing the quality of life (real or perceived). We get tons of CA people here in CO, and there are at least 5 other states where even more CA types are heading to then CO. The CA folks are some of the busiest posters here on the CO forums. A number of posters in the CO forums are DC-region ex-pats like us...we're joking about holding a re-union of sorts here....
- People are fleeing high tax states like NJ, NY, etc for lower tax states like NC, SC, VA, TX, etc.
- People are flowing out of FL due to high taxes and prices for homeowners insurance that is often $5-8k per year on older homes that lack the new anti-hurricane construction features....
- Increasing rate of foreclosures on risky loans may be forcing lenders and desperate debtors to seek a sale....
- Contact with people at the firm who built our new home indicate a slow year ahead for new construction. With less new construction, the backlog of unsold existing homes may dwindle as the demand catches up with supply. Selling off that backlog (vice new homes) may make realtor phones ring a bit. For a fact, new home starts here in 2006 were down at least 35% off the record-setting boom year of 2005.

All anecdotal evidence for sure....interesting....and may make phones ring....people are voting with their feet.

s/Mike
Colorado Springs