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It was an estate sale. Plenty of photos of it on worthless Zillow. He had replaced HVAC and all windows. Carpet was old. The Ecuadorans next door had done a good bit of work on it in exchange for use of his second parking space.
How many Federal Workers or Employees of Fairfax County Government do you know, who have ever been laid off?
I am a federal worker. And the fed workforce is loosing jobs every month - about 1000/month locally over the prior year.
(1) many people are retiring. The combo of no raises, furloughs, and the stock market recovering has convinced many to leave. That probably doesn't effect housing - people who retire often keep living in their home, especially when on the lower end of the pay scale which most Feds are. It may, however, skew the job market stats if they report net job gain or loss. The fed loses workers, but private jobs are created, so parity is the net.
(2) young people are leaving. The combo of no raises, furloughs, benefits being less than what the boomers enjoy, and low relative salaries are pushing people out. Of course, with the govt experience young workers can land better salaries in the private sector and may not leave the area, which doesn't turn over housing, well maybe upgrades. No net gain or loss of job in that case, either, though I think young people are much more likely to leave the area for a new job, which then would be a loss.
There have been articles written about the worker crisis inside the fed - you should google it. But yeah, half the country wants no fed govt, and they are getting what they voted for. I think those states really should be allowed to have autonomy, but I've always been more of a states rights proponent.
Why are extremely high home prices something people want. Entrenched home owner positions like this are so short sighted. You want healthy growth, run ups or drop offs in any direction of 10% or more per year should make you raise eyebrows not praise them and expect them to continue.
I expect home values will plateau when new inventory comes up and grow at 1-3% per year for the forseeable future if viewed with a 5-year trend line. Thats all that really matters because houses shouldn't be investments, they should be shelter. For the most part I think the 2006 levels have been recouped, and I expect anyone who is still under water on their mortgage has atleast found some stability in that situation by now.
I agree with you. In south fairfax co we have some THs near our place that are suddenly coming on the market, I suspect that people are now close enough to their prior purchase price. The problem is that there have been 2 on the market already that haven't sold, because yeah, no one wants to pay $450k+ for a town home. The prior bubble prices are too high, even now. So people can sit on their properties and continue the housing shortage (affordable housing, that is).
Maybe in Fairfax, Arlington, Alexandria...not so much in Prince William. My Lake Ridge townhouse is still a good $60k underwater (too much for us to afford to sell), and the rent we can get doesn't cover the mortgage + escrow + HOA, so we take a monthly loss. Two years and counting...we purchased in 2007.
As a potential buyer I'll give my opinion. The problem with that area is 95 - it's a zoo. I know people think 66 is worse, maybe. The question I ask myself is whether I can get better schools someplace else for the same price. People with kids are the right market for town homes - they have less money but they need space. Schools are clearly driving prices in fairfax, probably true everywhere else.
I think some of the above responses demonstrate just how local the real estate market can be. The houses in my neighborhood of Fairfax County have recovered greatly from where they were at the peak of the housing boom, but I don't think they are quite as high as their highest point. I have seen several homes to on the market in the past couple of months - while they have all gone pending within several weeks, I do not see homes going pending the very next day. I know of at least one house in the neighborhood that closed with a short sale last week (although that doesn't always tell you that much because they could have been underwater on account of taking out too much home equity). Homes seem to be selling very close to their asking price, which seems to be $10k-$20k higher than they were last year. I know the Fairfax County schools for which I am zoned are not considered some of the more desirable schools on the county, so that probably holds things back a little more in my part of Fairfax a County than some other areas.
So, are some areas inflated? Probably. Are other areas undervalued? Probably. On the whole, I think the real estate market in NoVA is probably right where it should be given the robust economy in this area and the constant inflow and outflow of people. I'm not worried about a bubble, but I'm also not looking to get rich quick by owning a home. I bought my home to live in for at least the next 5 years and probably longer.
Median sale price has gone up $50k in 2 years in DC metro, or about 16%. I guess one should ask whether median incomes have gone up 16% in 2 years. Fed salaries have fallen (without promotion), but I think the private sector is driving the market in DC at this stage. Would be really interesting to see private salary appreciation.
The Washington Post real estate section says NOVA has a shortage of SFH on the market. The house next door to me is under contract without officially going on the market (previously a coming soon sign) and no open house. Houses in my neighborhood are still $100k below their peek value. And folks that were waiting for the market to improve before selling, sold last spring. While few folks in my neighborhood paid the peak price for their house, unless one has to move, there is no motivation to sell. Folks nearing retirement can wait another year or two or three. Likewise empty nesters can wait. Unless prices rise significantly, I doubt many houses in my neighborhood will be in the market.
Median sale price has gone up $50k in 2 years in DC metro, or about 16%. I guess one should ask whether median incomes have gone up 16% in 2 years. Fed salaries have fallen (without promotion), but I think the private sector is driving the market in DC at this stage. Would be really interesting to see private salary appreciation.
Not sure how you're getting 16% with a $50k increase. By my math, that would mean the median home price 2 years ago was about $312,500, but is now $362,500. That seems pretty low to me - certainly much lower than the median sale price anywhere in most, if not all, of NoVA. Moreover, comparing median income with median home price is not really the best metric to use because it does not account for interest rates. Interest rates the past few years have been at historic lows. That allows people to buy a more expensive house, yet have their housing payment remain the same. Another important metric is the rent vs. buy calculation - typically, if rents and housing payments are close to one another, that is a good thing for housing values. If rents are much lower than housing payments, that will put downward pressure on housing values. I guess my main point would be that there are a lot of factors that drive housing values. Wage growth is certainly one thing that, if it remains stagnant for long periods of time, will put downward pressure on home values, but I'm not sure that is really occurring in this area (putting federal employees aside).
On federal employees (of which I am one), again, I think the whole picture is a little more complicated. Plenty of employees get grade or step increases every year. I believe most FEHB plans had relatively modest increases last year. Feds invested in the TSP are seeing some pretty good growth. Last year, feds got an increased transit benefit, which went back down this year and will probably go back up once Congress gets around to passing a tax extenders bill. I also seem to recall reading several articles recently about how many of the lower GS positions are disappearing in favor or higher GS positions. FERS pension contbutions have been increased, but only for new employees. Sure, there were furloughs last year, and as people retire, many agencies are not replacing them. I believe my own agency is at its lowest level of employment in about 10 years. All of that said, federal employment remains attractive to many people and is still viewed by many as very stable employment. Of course, many federal employees, such as myself, are married to someone who is not a federal employee. Don't get me wrong - I think the way federal employees have been treated by Congress the past few years is pathetic and not good for the morale - but, I just don't think the current plight of federal employees is really putting much downward pressure on home values, at least not yet. It is certainly a possibility if Congress continues to chip away at their pay and benefits.
Airjay75 - I take most of your point on fed employees, with some exception. I'm a young fed watching people retire in my agency, and we are trying to get other young people to stay but it is hard. I think the jury is still out on whether my current "class" of peers will stay. I'm in a tech oriented place, though, so most of us can get 50-70% more money in the private sector. Obviously there are perks, but if you are in a situation like me where your partner picked the wrong field and can only get part time or unskilled work, the fed salary barely pays enough to buy a 2 bed condo. Even with a tech degree. And I'm in the majority of the young Feds I know - based on my experience the probability of a couple in the under-35 crowd *both* having full time employment here is worse than 50/50.
I disagree with your assessment on the home prices a bit more. I was quoting a figure on the entire DC metro area for the 16% increase, not just nova. So yes, the median price has changed from around $300k to $350k according to GMU:
cra.gmu.edu
Also in terms of interest rates, the change in rates is what matters. No one doubts that they are at historic lows, that is likely why the DC market is as high as it is. But over the last year, the rates went up almost a full percentage point, or about 25%. That should put downward pressure on prices. But prices rose close to 10%, which is odd in a "normal" market. I suppose there likely is some lag between these effects, as people waiting to buy on the sidelines jump in out of fear that rates will rise farther. This would create a temporary increase in prices, but there will be hell to pay later as rising rates + rising pricing create a double hit to affordability. Something has to give, either banks will have to let riskier loans (here we go bubble) or the buyers will suddenly disappear.
I agree with your rental price vs mortgage payment assessment. I am currently renting for *more* than what I would pay if I bought my rental at what similar condos are going for in my area, even accounting for all fees. That's one reason I'm looking to buy, just had to wait long enough to save some down payment. So perhaps we've solved it - the ridiculous rents are driving up home prices. And I doubt that will change quickly without rent controls. In nova? Hahahahaha, too funny.
Also, many young people I know are leaving the area. Maybe this place has always been transient, haven't been here that long. But folks I know come here, realize the housing cost is not commensurate with the salaries, and leave. Maybe DC will become a double bell curve city - young 20-something's crammed 5 to an apartment who haven't yet realized they won't be able to afford to live here once they have a family and can no longer share space, and the retirement community.
Oh, and when you get furloughed, and you can barely make your rent and student loans even before the furlough, and you are the sole income for your spouse and child, changing jobs looks really really good. I would be careful how little weight you put on furloughs.
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