Local Real Estate on the upswing? (sale, foreclosed, loans)

[oneasterisk]

See for yourself: MRIS Statistics

In my zip, less number of homes have sold compared to last year but they are selling for more money and they are on the market for a shorter amount of time.

[athousandlogins]

There are two house in my immediate neighborhood that have been sitting for a while. One is priced in the upper 500s, one is priced in the upper 800s. Both have had price drops and still no buyers yet. So it's hardly a frenzy out there at all price points.

That said, anything around me that is priced below like, $525K, goes so fast they can barely get the listing up.

[elias9193]

I've got two homes in my neighborhood thats been listed for sale for over 5 months now. One was listed at 1.3 million and is down to $800,000 on short sale the other one is staying steady at 1.2 million and neither has sold so far. Thats why I'm not totally buying the article 100% especially in my neck of the woods and at these high prices.
Meanwhile the developer is definitely selling homes, there's at least 10 homes being built in my development while the two existing homes aren't moving.

[michgc]

My friend's neighbor's house in Vienna had an open house last Sunday. On Monday when my friend came home from work there was an "Under Contract" sign on it! They had basically put it on the market days earlier.

[Yankeesfan]

Originally Posted by CAVA1990

As to the statement about sub-prime foreclosures that's somewhat of a conservative urban legend. Only a very small percentage of first wave foreclosures were sub-prime loans. Almost all were to people on regular loans who got in over their heads or whose incomes dropped. There were a lot more defaults among Republican voting speculators than so called community reinvestment act (right wing code for minorities) borrowers.

Even the liberal Washington Post reported repeatedly about the high rate of foreclosures among minority-dominated neighborhoods. It says something about your own bias that YOU made the assumption that subprime = minority borrower.

If reading the entire article (from Friday) is too challenging, you can just read paragraphs nine and ten. Then you can let the Post ombudsman know that the paper is spreading an urban legend:

http://www.washingtonpost.com/wp-dyn...031104866.html

[flrnova]

Well, the Fed and the politicians are trying to reblow the bubble via quantitative easing and silly things like tax credits, using FHA to provide "government subprime" loans with 3.5% down (30% market share in 2009!), pumping up the zombies (Freddie and Fannie), etc. Ultimately, the will fail but what you are seeing now is a small bounce back in the lower end.

A key factor is that the QE has driven down the mortgage rates, so people are willing to take on huge debts (relative to their income) within the conforming limit. But a problem is that the extreme deficits and money printing is eventually going to pop the treasury bubble and mortgage rates will shoot up. Imagine the impact on this fragile market if 30 year fixed rates shoot up to 7-8%. This country is going down the toilet..... People need to read the work of Antal Fekete to understand how corrosive falling interests area, especially when not set by the free market. But I digress....

So once you get close to $1 million then the masses can't play because they don't have the cash to put down on top of the conforming limit. Beyond that, if you want a jumbo loan then you need to pony up 30%. Or $1 million with confirming means that you need to put down $280k. And now they are checking income so even a long term holder of a modest property with modest income that sells for $400k-$500k is not going to be able to lever up his capital gains to the $1+ million range like he could during the bubble.

An interesting local factor is that the "low end" extends to much higher prices because it is one of the few regions that maxes out with $728k conforming. I thought it was supposed to go down to $625, but apparently not. Demographics in other areas (e.g. Boston and Chicago) means that they have lower limits even though prices are high in the better areas. The better areas of Boston are more expensive than DC.

Another factor is Alt-A (and the hyper-toxic Option-ARM subset) loans are recasting (not reseting!) in huge volumes in 2010 and 2011. These loans were for people with good credit who borrowed more than they could afford for more expensive houses using no-doc loans, probably just below $1 million and up. A lot of these were interest only and neg-am in the Option-ARM case. In CA the default rate on Alt-A is 30%.

Calculated Risk: IMF: Mortgage Reset Chart

I made a a lot of money shorting two banks in CA that specialized in Option-ARMs, Downey Savings and Loan and FedFirst Financial in 2008.

I guess that a "good thing" is that many Option-ARM holders may already have defaulted in large numbers and not sure about the local impact.

[ngadude]

This may be an unusual case, but the Point of Woods neighborhood in Manassas actually really bottomed out about a year ago - and now sales prices have increased by a huge amount. I put my townhouse on the market and had an offer in 5 days - and that was right in the middle of all the blizzards in February believe it or not! I'm selling it for probably 40% more than what I could have gotten for it a year ago, and actually 22% above last year's tax assessment (City of Manassas still has not come out with this year's tax assessments). Now, that neighborhood was really hard hit by foreclosures, so it may be an outlier case. I am curious to see whether the real estate assessment is going to go up or down for it (my guess is up) this year.

[ngadude]

In my new neighborhood in Gainesville - a year ago things were really dead as far as construction activity. Now the building activity (number of lots being built on) is higher than I've seen since I moved here in October 2008. So sales in this neighborhood really have picked up - in the section of the neighborhood where I live where there's a lot of building activity - the average sales price is around $450K - just to give an idea of what kind of houses we are talking about.

[FLgirl367]

I'm not seeing as big of a bounce back in Stafford. I'm hoping that the spring will bring buyers that create low inventory, so when new houses go up this will happen here as well.

[arielmina]

my builder told me a month or so ago that there is no inventory out in my neck of the woods and his realtor wants him to get building asap. So at least out here in Western Loudoun it does appear that it's getting better. when we bought our house last fall we had two offers declined on houses that were eventually taken off the market because they'd be taking such a big cut off what they paid a few years ago. There's still alot of people out there who can't afford to sell at today's prices.