Berkeley CSUA MOTD:Entry 40547
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2025/07/08 [General] UID:1000 Activity:popular
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2005/11/11-13 [Reference/RealEstate] UID:40547 Activity:high
11/11   http://csua.org/u/dzn (Washington Post)
        Oops, a couple bought a townhouse under construction for $796K in May,
        but equivalent places are now selling for $699K, and their house isn't
        even done yet!
        \_ Here's the full context strongly implying the eager beavers did no
           research:
   "Lynn Edmonds and his wife, Sebnem, could barely wait to sign on the dotted
   line back in May when they committed themselves to pay $796,000 for a
   three-floor townhouse under construction in Alexandria's Cameron Station.
   But since May, the sales prices for the development have fallen -- and
   units like the one the Edmonds bought are now being sold for $699,900. The
   Edmonds are facing the prospect of a $100,000 loss in value before they
   even walk through the front door."
                "Lynn Edmonds and his wife, Sebnem, could barely wait to
                 sign on the dotted line back in May when they committed
                 themselves to pay $796,000 for a three-floor townhouse
                 under construction in Alexandria's Cameron Station. But
                 since May, the sales prices for the development have
                 fallen -- and units like the one the Edmonds bought are
                 now being sold for $699,900. The Edmonds are facing the
                 prospect of a $100,000 loss in value before they even
                 walk through the front door."
                [ reformatted - formatd ]
           Even though their on paper value has dropped, they apparently plan
           to live in it so the important thing is the interest rate they're
           paying, what would their costs be to live somewhere else for the
           additional time they didn't have this house to be in the same area,
           and what will the final selling price be years from now when they
           eventually do leave that house?  Being overly concerned about a
           single number without context is like saying you're a google ipo
           millionaire based on your unsold options.  Anything can happen
           between now and the sale date.
        \_ "... Sandra Cabral, a real estate agent with Re/Max Pros ...
           'Within two or three years, there's going to be a whole lot of
           foreclosures, because with all of the interest-only loans ...'"
           \_ Axiom 1: people are stupid.
        \_ ouch! that's a fast way to throw 100k down the drain.  well,
           maybe they got a consolation prize in a lower interest rate.
        \_ For reference:
           $796k @ 5.25% for 30 years: $4,395.54/month,
           total principle + interest paid over life of the loan: $1,582,394.93
           $699k @ 6.5% for 30 years: $4,418.16/month, total P+I: $1,590,535.97
           \_ For reference:
              - average length of time americans stay at a home: 5 years
              For reference:
              - 30 year fixed interest rate: current rate - lowest rate in last
                2 years: 0.9%
              For reference:
              - The additional $20k downpayment if put in the stock market and
              assuming a return of 8% per year, in 30 years, would earn: $200,000
              assuming a return of 8% per year, in 30 years, would earn: $200k
              For reference:
                assuming a return of 8% per year, in 30 years, would earn:
                $200k
              - Did you forget mortgage interest tax deduction?
              \_ between ~ June 1 and today, the difference is 0.8%
                 don't need to go back 2 years
                 not as big as the 6.5 - 5.25 = 1.25% that other guy posted
           \_ that's pretty interesting!
              \_ 8%/yr for 30 years?  Really.  Now if you had stuck $20k in
                 the stock market, say, 2 years ago...  How would that 8% be
                 looking?
                 \_ S&P500 was 1060 two years ago, and 1235 now, almost
                    exactly 8% per year.
              \_ None of these numbers take into account their current cost
                 of living somewhere else for 8-9 months if they had bought
                 now instead of in spring.  Are they in a house?  Probably
                 not or they'd be less desperate.  So what's their rent cost/
                 month?  Either way we just don't have enough info to know
                 if they got hosed or not.  The average person may stay in
                 a house 5 years but these people may stay 30.  And does that
                 5 year ownership number include all the speculator flips
                 which would drag the number down by some other unknown
                 number?  Basically, it looks like a scare article intro.
                 The people who are going to get hurt are those who paid $X
                 in the past and are now forced for some personal reason to
                 sell now at $X - $Y.  Everyone else can sit tight.  Anyway,
                 I wouldn't mind a huge housing crash.  I'd snap up a few
                 houses if prices dropped enough and rent em out for a few
                 years until prices recovered again but I fear they'll never
                 drop enough to fall back into my investment price range.
2025/07/08 [General] UID:1000 Activity:popular
7/8     

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Cache (3412 bytes)
csua.org/u/dzn -> www.washingtonpost.com/wp-dyn/content/article/2005/11/10/AR2005111002241.html
Manage Your Newsletters Housing Market Cooling, Data Say In Washington, Sales Are Down, Inventory Is Up By Kirstin Downey and Sandra Fleishman Washington Post Staff Writers Friday, November 11, 2005; Page A01 Lynn Edmonds and his wife, Sebnem, could barely wait to sign on the dotte d line back in May when they committed themselves to pay $796,000 for a three-floor townhouse under construction in Alexandria's Cameron Station . But since May, the sales prices for the development have fallen -- and un its like the one the Edmonds bought are now being sold for $699,900. The Edmonds are facing the prospect of a $100,000 loss in value before they even walk through the front door. Surviving the Housing Market Shift It's the question every homeowner and prospective homebuyer has: Is this the right time to act? Real-estate journalist and author June Fletcher w ill be online to discuss the future of the housing market. Washington Post staf f writer Kirstin Downey will be online to talk about the drop in home sa les and wants to know what you're expeirencing in you're own communities . Market Slowdown, Regional Housing Snapshot Home sales have declined sharply in the Washington area in the past year, while the inventory of unsold homes is dramatically up. Share Your Thoughts "We blithely stepped into the contract, thinking it would hold its value -- but that's not the case," said Edmonds, 46, a program analyst and Air Force veteran. It's real esta te -- I knew on a theoretical basis that it might go up and it might go down, but now I know it on a practical level." New data released yesterday show that in the past year, home sales in the Washington region have declined sharply, the inventory of unsold homes is up significantly, and prices have flattened and, in some cases, falle n The trend is most striking in Northern Virginia, where most of the region 's growth has occurred, but it is evident almost everywhere. Statistics on home sales released by Metropolitan Regional Information Systems Inc. In the District, listings are up 62 percent and sales are down 28 percent . In Montgomery County, listings are up 49 percent and sales are down 8 per cent. In Prince George's County, the listings are up 45 percent. But home sales have remained fairly stable, dropping only 26 percent. The last time the region had this many houses for sale was the late 1990s , the MRIS figures show . With housing supply higher and demand lower, prices have fallen from thei r summertime peaks -- though prices fluctuate every month and often decl ine in the fall because summer is the busiest home-buying season. Nevert heless, some slides are evident almost everywhere: In the District, the median price -- the point at which half the houses cost more and half co st less -- was $425,000 in October, down from a high in August of $435,0 88. In Fairfax County, the peak was in July, when the median price was $ 503,000; The peak in Montgomery County was also in July, when prices hit $460,000; The notable exception in the region was Prince George's County, where Oct ober's price was an all-time high of $315,000 -- possibly because demand , spurred by prices that are still less expensive than elsewhere in the region, has remained high. Next > Market Slowdown Market Slowdown Home sales have declined sharply in the Washington area in the past year, while the inventory of unsold homes is dramatically up.