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

Real Estate News Roundup

Image: Real Estate Journal

* Limiting the Headaches of Co-Ownership [Washington Post]
" Q: My wife and I and another couple are buying a condo together, and we should be closing this month. The other couple has already been preapproved for 100 percent financing. We have been told that because they are already approved, they should go ahead and buy the condo, and then during the closing amend the title to add my wife and me. I was curious whether this would work."

* Hot Markets: Washington, DC 20015 [Realty Times]
"In the shadow of the White House and Washington Monument is a Zip Code that houses a community unlike many across the country. The median household income runs near $100,000 for these 15,000-plus residents."

* Supply of Homes at 22-Year High [Market Watch]
"Sales of existing homes fell for an eighth straight month in October even as more properties came on the U.S. housing market, driving the supply of homes up for sale to the highest level in 22 years, the National Association of Realtors reported Wednesday."

* Time to Hedge Your Home [Business Week]
"In the housing market, the bad news just keeps coming. Nov. 27 gave us the latest release of one leading index which shows that home prices are falling at their steepest rate in 21 years."

* Where Mansions Go Begging [NYT]
"WHAT is striking about the mansions and tree-lined roads of this exclusive suburb of Detroit is not the elegance and wealth — it’s the real estate signs."

* Can You Recommend a Healthy Flooring for a Home with Kids and Pets? [Greenhome Guide]
"Question: We're building an addition to our home and I need to choose the flooring materials. We have kids and a small dog, so I know these will determine what is right for us. Can you recommend flooring that is safe and easy to maintain?"

* Housing Slump Prods Employers to Buy Some of 'Employees' Houses [Real Estate Journal]
"The fallout from the housing bust is making it more expensive for workers to relocate for jobs, and that's putting pressure on employers to offset housing-related losses for transferring employees."

* The Most Bike-Friendly Cities in the World [CoolTown Studios]
"I don't know what it is, but this seems to be the year of the bicycle..."

* Your Real Estate Problems Solved [Kiplinger]
"Real estate is a hot topic, given the subprime mortgage mess and housing downturn. So we get lets of questions about this topic."

What Slow Market?

Who says it's a slow market. Apparently not so, according to a multi million dollar (luxury) homes developer in Northern Virginia.

“Our goal this year was to sell 30 lots, and we’ve sold 26 so far,” said Robert Shiels, vice president of sales and marketing for Creighton Farms, which sits on 906 acres just west of Leesburg. An additional five home sites have been reserved, he said.

via Examiner

Things must be selling like 'hot cakes' over there, because report from the S&P Case-Shiller index released today shows that prices continue to drop.  For the first time in this housing cycle, home prices are falling everywhere. Yes, everywhere. Including our own backyard, the Metropolitan Washington DC region! Prices in all 20 major cities fell a record 4.9% year-over-year. And prices were down in 10 city-index 5.5% year-over-year, the largest drop for the index since 1991. Furthermore, prices in Washington DC declined by 6.6%.

So what sells? Okay, for one Creighton Farms is about serving the upper crust market. We're talking about the $2-3 million market and up. It's a combination of Ritz-Carlton, Jack Nicklaus signature golf course, and concierge services. The community sits on 900 acres of land for 180 homes with access to Ritz and Nicklaus golf course from $850k to $2M before monthly dues that excludes the cost for the house. This will be a separate cost. The information on Ritz-Carlton website states for 'privacy and privilege' the number of homes build will be limited to 146. While Creighton Farms website states a total of 181 homes. Which one is correct now?

The VP of sales as quoted by Examiner says that "..the housing market doesn't affect the the $3 million homes and up." Something, isn't it? Out of my curiosity, I decided to check and verify how true of a statement that was.

Data from MRIS, it shows that there are 451 homes on the market from the low $2 million to high $14 million. These are existing single homes, not counting the new constructions. With 71 homes 'under contracts' with highest price listed at $9.75M. Eighteen homes went under contract for the month of October alone. Year-to-date, there were 331 homes sold for an average price of $3M. It's on track for a total of above 400 range homes sold (or maybe more?) for this year compared to 365 homes sold last year.  Uptick for above $2M homes?

Meanwhile, the total number active listings for under $2M is 5,000 homes. The number of homes with pending sales or under contract is 1,813 homes. With year-to-date sales of 17,033 homes down from 22,585 homes sold in 2006.

Data comparison from above shows how sales for existing homes segment (not new constructions) above $2M market still a breeze. And it's the market under the $ 2 million mark that hits bumpy road.

Technorati Tags:  home sales ,  million dollar homes ,  luxury homes ,  golf course ,  jack nicklaus ,  leesburg ,  transportation ,  custom build ,  mortgage crisis ,  mris ,  nvar ,  absorption rate ,  ritz-carlton ,  new homes ,  washington dc region ,  mid-atlantic ,  S&P case-shiller ,  10-city index

 

The Greening of Arlington

Arlington is the forefront leader for Virginia when it comes to going green. Things are still slow-mo at the state level. In fact, Virginia is not part of RGGI. Haven't seen the light yet, Virginia?

At least for now, it's good to know that Arlington can be (and should be) the model or prototype for the state if Richmond seriously put heavy pressure into green economy.

The county has two initiatives going: Think Arlington and AIRE.

Think Arlington, is more of a program to attract businesses into the area to grow the local economy. The county got to think and move fast to attract other than defense related businesses in order to sustain its vibrant economy from going bust after BRAC. Because if everything goes according to 'Rumsfeld plan' then Sec. of Defense, BRAC takes away some 20,000 plus workers who've already contributed to the growing of Arlington-Alexandria corridor economy and move them to Ft. Belvoir in Fairfax.

The selling points.

• Arlington is the most highly educated community in the Washington, D.C. region: over 60% of us hold bachelor degrees or higher.
• Arlington is the epicenter of scientific research for the defense and homeland security industries. The Ballston area has the highest concentration of scientific research agencies, anchored by the National Science Foundation, DARPA, ONR and several top university-related research institutes.

via Arlington EDA

The first clean tech accomplishment came, when the county announced that it snatched GridPoint to relocate their HQ from the District to across the river in Arlington along with the promise to bring 250 new jobs and $5 million of investments. Of course it comes because of the whole package offered by county and state -- $500k from the Gov Opportunity Fund and major business tax credit -- incentives that effectively 'sealed' the deal.

AIRE, comes in to complement the business initiatives. The goal: Reduce Arlington's GHG emission 10% from 2000 to 2012 from local government, businesses and residential homes. The first five years (2000-2005) it has reduced 2.6% of GHG emissions. For green building, Arlington already have 6 LEED certified buildings with 14 in the pipeline.

Arlington also has their way of 'taxing builders' who won't commit to LEED. The builders are required to make contribution to the County's Green Building Fund, at a rate of $0.30 per s.f. The fund is then use for education and outreach.

What's more? They've got a whole range of programs going to reducing carbon footprint --from large green fleet, waste-to-energy plant, clean renewable power (3% mix), retrofitting county's buildings, trees -- all the way to pushing businesses and residents to go green.

Okay, it takes years for the county to transform itself into Urban Arlington. The same thing is true with greening Arlington. There's no short cut if we want to live in a clean and healthy environment. It's a process.

After Washington BOT jumping the bandwagon of "Going Green," there shouldn't be anymore doubt that going-green is good for the economy. Got that miss Virginia?

Cross-posted with Shades of Green

UPDATE: TONIGHT Arlington is hosting "Green Living Gala" -- for the premier of its documentary "Fresh Aire" and presenting the "Green Living Challenge" awards to the greenest neighborhoods and residents -- from 7 to 8:30pm at Courthouse Plaza. Event is OPEN to the public. Everyone is invited. View the invitation...

Friday Funny

$1.3M Alexandria Investment for National Harbor

Speaking about economic opportunity. The National Harbor is scheduled to open sometime in 2008. Think about the potentials for the City. With 4000 hotel rooms, 1M s.f. of retail and restaurant space, 500k s.f. of office space, condos and convention center -- there will be lots of 'economic opportunities' from tourism -- for the City of Alexandria to capture. This National Harbor Fact Sheet shows the city's potential to earn lotsa dough.

So- in preparation for the opening of National Harbor, the City of Alexandria approved $1.3M funding for a three-tiered initiatives: 1) Expanded marketing initiatives to attract visitors to Alexandria. 2) City marina improvements, and 3) Supporting businesses.

Parking? Shouldn't be a problem. Because water taxi is the answer to transporting tourists. PG county will eventually benefit from city's efforts, too. If it's easy, more folks from Virginia side will go across the river.

In short, this tourism thing will be an 'income booster' for Alexandria. Alright, bring 'em on.

Happy Turkey Day

Drive Safely. Have a good time with your family and friends!

And I also want thank YOU for reading my blog...

- dewita :-)

Regional Community News Roundup

* Luxury Homes Selling As Briskly As Ever? [DC Examiner]
"What housing market crash? That’s what the developers of a spectacular — and spectacularly expensive — luxury home community in Loudoun County are saying when they look at their sales log."

* Montgomery Mansion to be Sold to School [Washington Post]
" It started as little more than neighborhood rumor: The old Grosvenor Estate was up for sale. But in Bethesda's development-wary neighborhoods, a juicy real-estate rumor can hit like a molotov cocktail."

* $700M Project Moves First Under JBG Urban [Cityfeet.com]
"One of the first projects in a previously announced joint venture between local developer JBG Cos and San Francisco-based MacFarlane Partners is under way. JBG and the Washington Metropolitan Area Transit Authority have broken ground on the first phase of Twinbrook Station, a $700-million mixed-use project at full build-out."

* Haymarket at Odds with County Over Developments [The Gainsville Times]
"Haymarket Landing, which would be located near the intersection of Old Carolina Road and Haymarket Drive and which would be partially within the town's borders, would add a maximum of 60 single-family homes."

* Downtown Hotels Get Elegant Makeover [Baltimore Sun]
"Bulky televisions - gone. Floral bedspreads - out of the picture. Desks where you plug in your laptop - so yesterday. Touches once found in the best hotels are going by the wayside in downtown Baltimore. The biggest hotels are spending millions of dollars to update and upgrade, to cater to tech-savvy guests and compete in a radically shifting hotel landscape."

* The Greening of My Condo Building [AIRE]
"The AIRE team's "Greening Your Condo Association" seminars and outreach are bearing fruit! Some enterprising folks from my condo building in Clarendon organized a Green Fair, held last night."

* Some of McLean's Finest Homes to be Open for Touring [Sun Gazette]
"Peruse four of McLean's most interesting and well-decorated houses at the Woman's Club of McLean's 41st annual Holiday Homes Tour."

* Fairfax Home Sales Continue Anemic Runs [Sun Gazette]
"When is a nearly 27-percent decline in home sales a reason to celebrate? Perhaps when, the month before, the decline had been 35 percent."

* Supervisor May Vote to Annex Land to Leesburg [Loudoun-Times Mirror]
"The Board of Supervisors could vote Nov. 20 in favor of annexing 2,500 acres of land into Leesburg's town limits."

$2 Trillion of Mortgage Slashed?

Every single day you turn around, another bank writes off some multi billion dollar from their subprime assets because of the value of their complicated asset-backed securities [SIVs] plummeted. At first, it is estimated that banks would write-downs $400 billion from their assets.

Then this one: The possibility of banks cutting back $2 trillion of mortgage.

The impact of the U.S. mortgage market crisis on the underlying economy could be "dramatic" as leveraged investors may need to scale back lending by up to $2 trillion, according to investment bank Goldman Sachs (GS.N: Quote, Profile, Research).

via Reuters

"Honey, I shrink the buyers."

The impact would be what? Dramatic. That's an 'understatement.'   The impact will be huge! For the most part -- banks, the Fannie-Freddie of the world plus other quasi government organizations -- are the major source of funding.

Even with historically low interest rates, the market is not moving at the speed of light. There is that. Then $400 billion write-offs. And then, you take $2 T off from loaning it to the market. The outlook?

It would bring housing.. to its knees.

On the other hand, if I were a buyer today, I would run and get a loan approval. Start shopping and buy a home before the source of money dries up.

 

Image: Jumbo mortgages comps in pricey CA, via Market Watch

 

Real Estate Market News Roundup

* Mortgage Crisis May Slash Lending Up to $2 Trillion [CNBC]
"The mortgage crisis could have a "dramatic" impact on the overall economy by forcing banks and other financial institutions to cut back their lending by as much as $2 trillion, a Goldman Sachs economist said."

* The Money Machine Breaks Down [Fortune]
" Two things stand out about the credit crisis cascading through Wall Street: It is both totally shocking and utterly predictable. Shocking, because a pack of the highest-paid executives on the planet, lauded as the best minds in business and backed by cadres of math whizzes and computer geeks, managed to lose tens of billions of dollars on exotic instruments built on the shaky foundation of subprime mortgages."

* Foreclosure Filings, No Slow Down Yet [CNN/Money]
"Three states, California, Florida and Ohio, continue to dominate new foreclosure filings, as most of the nation saw increases in the third quarter, according to a new survey."

* New and Improved VA Mortgages Look Better in a Difficult Market [Washington Post]
"Veterans Day presents an opportunity to take a look at an important benefit available to military veterans and active-duty personnel, the zero-down payment VA mortgage."

* Housing: Why all the Huffing and Puffing? [Business Week]
"In the past few weeks, news and forecasts surrounding the housing decline—which began in 2005 and is projected by S&P Economics to bottom during the first half of 2008—appear to have renewed worries."

* After the Housing Bust [Smart Money]
"THERE'S A SAYING whispered among grizzled real estate vets: Don't try to catch a falling knife. It's a tricky move, and if it's not timed perfectly, the results can be bloody."

* Sweet Deals on New Homes [Kiplinger]
"During the housing boom, new-home builders were like the hosts with the hottest invitation in town. They could raise prices with every newly opened phase of a development and display a "take it or leave it" attitude toward buyers."

* When Home Builders Hit the Skids Consumers Deal with Uncertainties [Real Estate Journal]
"The tumbling housing market is claiming a new class of victim: customers of insolvent home builders."

Builders Profit

NV Homes, Cameron Station

Wondering how builders make their money? Via Market Watch.

Question: Can you provide any idea of what the average home-builder gross profit is on a square-foot basis right now here in the Northeast? I was getting ready to start negotiating the purchase of a townhouse here and I know the builder has a mortgage on the home for $286,000. I am trying to buy the home for around $340,000, which I think equates to a $12 per square foot profit. Just wondering if that seems reasonable.

Answer: I cannot give you a precise number, but I can extrapolate one from data provided by the National Association of Home Builders.

The average net profit before taxes of a typical home-building company was 9% in 2006, the latest year for which figures are available. The average price is now $300,000, give or take a few pesos, and the average size is roughly 2,500 square feet.

Now, 9% of $300K is $27,000. Divide that by 2,500, and you come up with a profit of $10.80 per square foot.

These days, builders are fighting for their own survival! Some of the big builders are in deep trouble financially. Their profit margin may be less than 9%, especially if they offer concessions either to buyers and/or agent bonuses. Incentives, price reductions, and overhead expenses could easily eat up their bottom line.

Somehow, a few of them would do it as 'a matter of survival.'