U r b a n T r e k k e r

DC April Home Sales Struggles

Yesterday, we talked about April home sales for Northern Virginia. DC sales activity follows the same trend to a certain extent. Certainly, price has something to do with the volume of homes sold.

Take a look at the stats.The total number of homes sold for April declined 43.03% from 646 to 368 homes. The two price indicators ticked up 6.77% for ave. sold price from $543,333 in 2007 to $582,266, and 4.53% for ave. median price $419,000 to $438,000 in 2008.

The median price for condos declined from $405,271 to $398,664 - big deal. Yeah right. It's less than 1% drop. While ave. sold price ticked up from $350,000 to $361,000. On the single home front (includes townhouses), ave. median stays flat on the $680's range while ave. sold picked up 1%.

More importantly for the last 4 months (YTD), inventory of homes have been trending up. Inventories of homes: All types at 7.9 mos. of home supply. This just show a strong buyers market!

CONDOMINIUM

SINGLE FAMILY & TOWNHOUSE

image: GCAAR

The total number of condos on the market up 14.1% from 1,352 to 1,543 units while sales declined 42% since January! More than 50% of condos for sale are listed under $600,000. This is not good, especially with more lower end condos are flooding the market. When I pulled listings through MRIS for DC for condos under $300,000, I found that there are more than 452 condos for sale or approximately about 30% of condo listings!

That means, like N. Va April home sales for DC is no spring, either.   

On the financing front, FHA and VA catching up with conventional loan. There were 32 homes sold financed by FHA and VA in 2008 which represents 11% of the total homes sold. For a comparison, there were only 4 homes financed by FHA last year. We'll probably see more FHA and VA loans play bigger role in the days to come.

If April home sales is any indicator, DC sales won't pick up until probably late in the year or early next year until prices drop a little bit more. (Take this with a grain of salt). Because the volume of homes sold has something to do with prices. Some buyers are still waiting on for prices to go down a little bit more - before making a move.

Data: MRIS

No Spring for N.Va April Home Sales

Traditionally, Spring supposedly the strongest season for housing. After analyzing the numbers, it didn't look that way. When looking at April's numbers you have to realize that these homes probably went other contract (or consider pending sales) some 30-60 days ago. So technically the real sales in April won't be realized until June or July.

For the same period, the average sold price declined 8.59% from $529,943 to $484,432. The total number of homes sold declined 10.79% from 1,631 units to 1,455 units - making it the lowest sales of the month - since 2000.

Between the ave. list price for sold of $521,676 (-5.52%) and ave. sales price as percentage of ave. list price declined from 95.98% to 92.86%. What it means basically sellers were more realistic in pricing their homes because buyers know that we're in a buyers' market, therefore, they're offering much lower price than last year. It's not known if what percentage of homes sold is bank-owned. (This deserves another post).

What's interesting is to see the type of financing and median prices. Ave. median price declined 12.02% from $470,000 to $413,500. Median price is when 50% of homes sold above the average and 50% below. The number just tells one thing - there were more homes sold 'under' $413,500 than above it. In N.Va, conventional loans still make the bulk of financing part with 1021 homes sold financed using conventional loans. However, other loan types like VA and FHA catching up - it financed about 18.28% of the total homes sold. For comparison, last year less than 1% of homes sold financed by FHA or VA. That is something!

Other data worth watching: The supply of homes. From January to April the supply of homes (or inventories) declined from 12.48 months to 7.35 months. Still buyers' market - it's tightening, though.

Data: MRIS

Va. HOT Lanes

Virginia congestion management plan for the future. The Capital Beltway HOT (high occupancy) toll lanes is a collaboration between Virginia Dept. of Transportation and Fluor-Suburban. This HOT lanes are four new tolled lanes (two in each direction) alongside the existing highway lanes. The toll lanes supposed to cut commuting time from Springfield to Tysons Corner (major employment center) during rush hour, saving an average 24 minutes a day.

The toll rates based on 'congestion pricing.' Cc's of NYC, Singapore & London road management plans.  Milan calls it 'pollution tax.' Whatever. They're all have the same effect. A month after Milan's implemented Eco-Pass, traffic figures down by 22.7%. It increases bus riderships and subways.

In pure economical sense and benefits, it encourages everyone to go car pooling, ride mass transit or avoid the traffic during rush hour all together. The mission is to take hundred of cars off the roads. Telecommute does look good.

Here is how it works. When it opens for business in 2013, buses, carpools (HOV-3) and motorcycles and emergency vehicles have free access to HOT lanes. However, drivers with fewer than 3 passengers in the car can choose to pay to access the lanes. The pricing goes up and down depending on how much traffic on the road to keep the lanes congestion free. So when traffic increases, tolls will go up, and vice versa. You can pay tolls with E-Z pass. And there will be signs that display toll rates to help you, the driver, decide whether it's worth your money (and time) to use the toll lanes.

 

THE WORKS. Project is divided into 4 construction areas: 1) North of I-66, 2) South of I-66, 3) I-66 interchange, 4) Springfield interchange (mixing bowl).

The timeline for construction. It starts in spring 2008 (supposedly) and schedule to open in 2013 divided into 3 phases. Phase 1: 2008-2010 build outer 2 lanes. Phase 2: 2009-2012 build inner 2 lanes and 2013- open for business.

When I asked the VDOT rep if the works going to interfere with traffic. He assures me that there will be no closure of beltway lane during peak rush hours. If there are closures it will be communicated in advance, i.e. those who don't pay attention - will get stuck in traffic. Take it for what is worth.

Message to you: Plan ahead for your travel.

For more info: Capital Beltway HOT Lanes, Pre-constructions staging areas: Georgetown, Chain Bridge, Braddock, I-66 (.pdf)

Weekly Real Estate News Roundup

Seller as Lender
Q: I have a house with no mortgage. With the market the way it is, to sell fast is it good for me to hold a mortgage?

Why Homeowners Aren't Getting Any Help
Drowning in a mortgage you can't afford? Whether or not you get a new one will be decided by someone you've probably never met at a company whose role is barely visible: the mortgage servicer.

Cities Sue Home Lenders
Valeria Golebiowski moved to the Hawthorne neighborhood 45 years ago, and she's staying even as it crumbles around her.

Canadian Flock to Hawaii Real Estate
Andrew Lambden of Ontario fell in love with Hawaii 20 years ago, but it took a favorable exchange rate to entice him to buy four acres in Kealanani, a luxury development on the northeastern shore of Kauai.

Lenders Raise the Bar
IF you have a mortgage, consider yourself lucky.

Collateral Foreclosure Damage for Condo Owners
Barbara Sanz has never missed a mortgage payment, but the plunge in real estate is punishing condominium owners like her anyway.

Rebates and  Tax Credits  can Lower Appliance Costs
While you might have back-burnered your plans for a kitchen remodel or a new laundry room, you can’t ignore an ailing dishwasher, a struggling refrigerator, or a washed-up clothes washer.

In California, Building a Town with Gentle Footprint
Can a new house reduce your ecological footprint? An ecological footprint is a way of quantifying human impact on the earth.

The First 100% Fully Wind-Powered  Town in the U.S.
Rock Port, Missouri may only have a population of 1300, but it claims a title that no other community in the U.S. can - all of its energy is generated by a renewable resource. In fact, its four $90 million 1.25 MW wind turbines producing 16 million kilowatt hours annually leaves 3 million kilowatt hours in excess.

How to Default on Your Mortgage and Stay in Your House
Floyd Norris today finds one of the worst bonds ever underwritten: a securitization, by Merrill Lynch (MER), of second-lien mortgages mostly originated by Ownit. The kicker? When the bond was sold, Ownit had already gone bust, a victim of the fact that far too many of its loans were delinquent out of the gate.

HELOCs: There's Something Happening Here
I've reviewed a copy of a memo from Sun Trust concerning HELOCs (Home Equity Line of Credit) that I believe to be authentic. In the memo, dated yesterday, Sun Trust announced new HTLTV ("HELOC Total Loan To Value") restrictions in certain circumstances (like declining markets, new condominiums, 2nd homes), and they are apparently even eliminating their Flex Equity program completely in several key states (like Arizona, California and Nevada).

Philadelphia and Boston Firms Seek to Build the Most Energy Efficient, Green Home for $100,000
Postgreen of Philadelphia has contracted ZeroEnergy Design of Boston to perform energy consulting on the 100K House project in order to design the most energy efficient home possible on a small budget of $100,000 in the Delaware Valley region of the US.

Forget AC! Cool Your Home Naturally
Space cooling and heating can account for up to 45 percent of your total home energy use every year, but there are numerous strategies you can employ to reduce cooling costs.

Gas Prices and Real Estate
Interesting piece picked up by The Oil Drum on the relationship between gas prices and real estate in Australia.

FROM AROUND THE REGION: DC-MD-VA

A New Lease Purchase on Life
The timing was all off for Catherine McAlpine and her family. She and her husband, Richard Eig, bought a house on a double lot in their Rockville neighborhood in September 2006, at the high-water mark for prices.

Why Seller Financing Should be the Last Resort
Q: Five years ago this August, we sold our house. We provided owner financing by taking back a first deed of trust for $275,000. The borrower gave us a $25,000 down payment. This was an interest-only five-year balloon loan with a monthly payment of $1,200. We do not plan to renew this loan because we want to buy another property this year.

Firms Bringing New Jobs to County
Businesses offering information technology and professional services lead the 17 firms that used Fairfax County Economic Development Authority services in the first quarter of 2008 and will create 296 jobs in Fairfax County.

County Home Sales Still Soft, But Prices Stable
Home sales across Arlington started off springtime in a soft frame of mind, but it's possible that the worst may be over, at least in terms of price declines.

Warming Up to Small Kitchens
Surviving a kitchen renovation is never easy, as any homeowner who’s been through one will attest. When the kitchen space is small, however, the remodeling process can be even trickier. But with the right blend of creativity and smart design, small spaces can serve up style, seating, storage, and more.

DC Announces Mixed-Use Development Plan for Hill East
More than 60 acres along the Anacostia River -- the site of the former D.C. General Hospital -- are set to become a new mixed-use neighborhood known as Hill East.

Early Briefing: Foreclosures and Freddie Mac
*Once-popular and riskier mortgages, such as adjustable-rate and interest-only, are beginning to take their toll on affluent neighborhoods, economists and real estate agents said, leading to an increase in foreclosures.

Prince William Tries to Tackle Foreclosure Nightmare
  Prince William County will introduce a plan next week to confront its huge foreclosure rate — the highest in Virginia — without spending any money. The proposal relies on diverting at least $20 million of the county's investment pool as leverage to win hundreds of low-interest home loans for county employees.

WHS Lease Extended
While the likelihood diminishes that the Army will meet its Sept. 15, 2011, deadline for moving thousands of federal workers into new offices in Northern Virginia, one agency set to move has renewed its lease in Crystal City through 2013.

Staff OKs Spectrum Plan in Reston
Plans to significantly transform the Spectrum shopping center in Reston moved forward last week as a county staff report recommended approval of the project.

Intersection Upgrade Propose
The National Counterterrorism Center, a government agency affiliated with the Department of Homeland Security, is coming to McLean, bringing a bevy of new federal workers – and new commuters – to the Liberty Crossing area, near the already troubled intersection of Balls Hill Road and Lewinsville Road.

W'end Natl. Harbor Food & Wine + Live Music

This weekend, Saturday and Sunday, there's going to be 'Food & Wine' festival and live musical performance at the National Harbor. The food and wine fest is a ticketed event starts at $65 for one day pass to $100 for both days. Here is the kicker - designated driver gets discount - pays only $50 per event!

The live music entertainment is FREE. It's going to be at the Plaza, by the waterfront. The first band will go on stage at noon, 2pm, 4pm for both days.

For more info, here and here.

Fannie Deletes Higher Payment

Months ago, Fannie Mae decided that buyers should come up with higher down payment (DP)  in what they call 'declining markets.' (Read about it here). Maybe it's such a bad decision because it helps put on the brakes home buying especially for first-time buyers.

According to AP, Fannie decided to scrap the plan. So now only 3%-5% down is needed regardless of local market conditions (declining or not) which our area, DC metro region, is one of the 'declining markets.' We're now back to 97% or 95% loan-to-value ratio.

Via Fannie Mae.

"... Starting June 1, 2008, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter^® (DU^®) automated underwriting system, and 95 percent loan-to-value ratios for loans underwritten outside of DU, in all geographic locations in the United States. The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining.

"As another part of our 'Keys to Recovery^TM' initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions," Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management, said. "This new down payment policy reinforces our goal to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover."

The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences. Down payment requirements will vary for other occupancy, property and transaction types. The company will implement systems and operational changes over the summer to accommodate the new national policy. [emphasis added]

That's just the down payment part. Other restrictions still apply.

UPDATE: This announcement was so 'new' (announced this am) that even the loan guy in my office was not aware of this :-)

FURTHER UPDATE: Not clear if condo included in the new policy? It doesn't say about it anywhere in the context, it refers only to "..single family, primary residences." Does primary residence extends to condo? We have yet to see how this going to play out soon.

 

On the Pipeline: Route 1 SE Fairfax Developments

Route 1 or commonly known as Richmond Highway serves as the artery road connecting the military base at Fort Belvoir to the outside world. When BRAC (Base Realignment and Closure) workers relocate to Fort Belvoir in 2011 (3 years from now), the function of Route 1 becomes more important than ever.

GMap

According to Southeast Fairfax Development Corporation information, currently there are 16 developments (.pdf) slated for Richmond Highway with different stages from planned, rezoned to completion a few of the projects. In 2006-2007 period 33 projects (.pdf) slated for Richmond Hwy in which some of them were completed, i.e. projects like Midtown Alexandria Station (residential), Safeway Center, Mount Vernon Plaza  (.pdf) and shopping center renovation, etc. Its revitalization plan stretches from Huntington Metro all the way down to around Woodlawn area, a combination of residential density, offices, and retail spaces worth $1 billion in 25 years of investment from the private sectors.

image: SFDC

A few interesting projects.

1. Owners of this property, the former Dairy Queen property located at the corner of Richmond Hwy and E. Lee Avenue, is looking for a buyer. The site has been rezoned for a three-story, 27,900 s.f. townhouse style retail and residential on 1.2 ac or property. It also includes 24 residential units and 8,700 s.f. retail space.
2. Walgreens have two stores slated here: at the corner of Richmond Hwy and Beacon Hill, and a 14,000 s.f. building corner of Richmond and Boswell Ave.
3. Three hotels: expansion of Hampton Inn, new Holiday Inn Express and Marriott Springhill Suites. Now completes and open.
4. K.B. Homes Huntington Mews with 94 new townhouses on 14 ac. along Huntington Ave.
5. Kings Crossing - a 42.2 ac. joint project of JPI and JBG Rosenfeld at near intersection of Kings and Richmond Hwy. Project includes 300,000 s.f. office, 285,000 s.f retail/ restaurants, 1280 residential units and 3932 parking spaces.  The current status of this project indicate that JPI bailed out from the project, but JPG Rosenfeld moves forward with a facade improvement (for now).
6. The big thing - Fort Belvoir. 19k employees will be relocated to work out of Ft. Belvoir. A new hospital and office space, and the National Museum of U.S. Army planned at Ffx County Pkwy and Kingman Road.

You can imagine how the traffic leading to Ft. Belvoir will be so congested with all the new developments coming on the pipeline and workers relocation. To solve the traffic challenge, the Army is even looking to consider monorail and water taxi which is an interesting combination.

Looking at the current market conditions, neighborhoods surrounding Richmond Hwy is loaded with foreclosures and short-sales properties. It has one of the highest foreclosure rates south of Alexandria. There are bank-owned townhouses in the 300's on the market which were selling in the $500's a couple years ago.

This is the thing. If the big businesses willing to take risks and invest some $1 billion for the area, that shows some serious money will be vested down the road. From an investment perspective, that's a good sign. Because that means ka-ching. There are opportunities (foreclosures, etc.) for those who are willing and able to wait - until the market swings back up. The potential is there. You just have to sit and wait for the turnaround. And be patient.

Lofts at Park Crest Turns Rental

You heard about condo to rental conversions before as market stay soft for the mid-to-upper condominium segment. Developer of Park Crest Lofts was banking on Dulles metrorail coming to Tysons Corner by building (aggressively) mid-to-high priced condominiums right in the heart of Tysons. Well, the rail is not a sure thing (it will be 2015 before you see them coming?) so they decided to change strategy...while waiting.

This was in 2006. [New Homes Trekker]

The Lofts still have good enough supply of homes available from 1BR to 2BR. What's unique about this loft is some of the homes will have raised bedroom. Living space ranges from 740 SF to 1600 SF. The lofts are priced from upper-$400's for 1BR to low-1M for 2BR (1600 SF). The Lofts at Park Crest scheduled for completion in 2008.

Sales may have been really show, it seems. Because here is what happens next. Convert those lofts to rentals.

 

When Foreclosures Hit Association Dues

One estimate puts less than 5% delinquency rates on dues in many markets. Not too shabby. However as dues dry up, the neighbors might have to pick up the tab, and association may cuts services, MarketWatch reports.

Some of the other ramifications when foreclosure hits a neighborhood, include: 1) cut services/ amenities, 2) putting a break on club house improvements, landscaping, shared amenities, 3) in a condo situation, may have to cut building services such as trash removal (and repairs).

Some of the hoods in the area don't have associations, so they're the exception. A lot of them do have some sort of 'home owners association' relationships.

If you do have HOA. Read the fine print. [via MarketWatch]

"That's why housing experts advise homeowners to read the bylaws thoroughly, asking what services are guaranteed and whether annual fees are capped. Still, since bylaws were drafted when the community was first built, few outline contingencies in the event of a wave of foreclosures." [emphasis added]

Seeing Green in Homes

U.S. Green Building Council has gone residential for their LEED (Leadership in Energy and Environmental Design) voluntary certification program.

LEED for homes defined. [via USGBC]

".. is a voluntary rating system that promotes the design and construction of high-performance green homes, including affordable housing, mass-production homes, custom designs, stand-alone single-family homes, duplexes and townhouses, suburban low-rise apartments, urban high-rise apartments and condominiums and lofts in historic buildings."

Living Home is a one of them, it is designed by Ray Kappe, FAIA. It's a LEED-Platinum certified, the highest of its kind. To reduce cost and waste, the home is manufactured in the factory (prefab). You'd be surprised when you see the design, because it doesn't look like 'typical' prefab home! In fact, its is style 'very' contemporary which gives the impression of clean simple modern looking design.

The best thing - installation took 2.5 days.

You'll see some pretty amazing stuffs inside the home. Gadgets etc. Fully automated and yet low energy. And using some eco-friendly products. This is cool: (wrap) insulation that uses recycled jeans. According to the designer, the home is competitively priced.