Real Estate Live
Daniela Deane
Washington Post staff writer
Thursday, August 26, 2004; 2:00 p.m. ET
Welcome to Real Estate Live, an online discussion of the Washington area housing market, featuring Post staff writer Daniela Deane. In her Live Online discussions with the audience, Deane discusses the specifics of the market, from condos and investment properties to contracts and mortgages. Deane has covered real estate for The Washington Post since 1999 and has worked as a reporter for more than 20 years.
The transcript follows.
Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.
Editor's Note: washingtonpost.com moderators retain editorial control
over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.
Daniela Deane: Hi folks! Nice to read you on this beautiful day in Washington...(finally some nice weather, huh!) I've got questions from places like Kenya, Ireland and England. How cool! And thousands from right around here, of course! So without further ado, I'll get started.
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Chevy Chase, Md.:
Just wanted to convey our experience that -pricing- is almost the most important factor in this apparently slowing market. A seller tried to be greedy, and got no interest for 2 weeks on the MLS. They cut the price by 4% or 15K...and voila - multiple offers.
Daniela Deane: Yes, yes, yes. Pricing is the most important factor when selling....What's that old saying about how any piece of property will sell as long as you find its correct price?
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Alexandria, Va.:
Daniela -
A good story for you. We're a young couple with a (by D.C. standards) modest income. We both hated the idea of long commutes - but despaired of finding a nice home with a decent lawn inside the beltway. Luckily, our wonderful real estate agent pointed us to a beautiful neighborhood in Alexandria called Parklawn where solid 50's ALL brick ramblers on lots that are over a quarter acre were selling for UNDER $300K. We bought one, and are so happy with our home and our neighbors (most of whom are over 70 and original owners - one reason why prices hadn't escalated). The houses have gone up in price - but are still very reasonable for the area (well under $400K).
Just wanted to share a success story - and a reminder that there are still affordable homes out there.
Daniela Deane: Yey! A good story. Thanks for sharing! (Getting off on an optimistic note, here folks, I've hope you've noticed...)
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Frederick, Md.:
Daniela:
Has the housing market suddenly flat-lined in the last month? Earlier this summer, houses in our neighborhood were selling in less than a week. Now, it seems homes are sitting on the market much longer. We listed our house with a realtor recently and priced it very reasonably. We have had very little activity. It's on the MLS and advertised extensively. What's going on? Are there simply no buyers all of a sudden? If we had a lot of activity, but no offers, then I might say our house was over-priced. But we're not even getting calls on the house. What's your view? Thanks.
Daniela Deane: Hi Frederick....I'm sorry to hear you're having trouble selling. Yes, everything I've heard indicates the market is slowing down a bit. BUT...it's hard to gauge exactly what's happening because it's AUGUST...and so many people are away or thinking about other things than real estate (notice that great drive in these days?)...I think we'll be able to better gauge how much the market has slowed by mid-to-late September. Are you sure you have a reasonable price on it? (Sellers routinely overvalue their properties, agents tell me.). If you are really reasonably priced, I bet you'll get more action after Labor Day. I hope so anyway. Let me know.
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Frederick, Md.:
Daniela,
I read an article yesterday that said the housing market is cooling down. I also spoke to two real estate agents who said the same thing. Given that I just signed a contract to build a house that will be completed in June, I was looking at putting our house on the market next spring.
Is that too late or should I look to sell earlier?
Daniela Deane: Are you building this house for yourself to live in? If so, why would you want to sell it before you get to live in it? Let's take all this market slowing stuff with a grain of salt. Yes, the market does seem to be slowing from the insanity of the spring, and yes, most analysts are predicting a slowing of price appreciation (but still a moderate amount of appreciation). But basically, what local economists and housing market watchers are saying is that our local real estate market will stay healthy BECAUSE of job and population growth in this area and continued low interest rates. AVerage 30-year rates closed this week at 5.82 percent, virtually unchanged from last week. Economists predict they'll rise only gradually through the year. (If the economy picks up a lot, they'll rise quicker). Job growth and population growth is what local housing watchers are basing this on. And risking everyone coming down on me like a ton of bricks, I still repeat my belief that if you're looking for a place to live, you should still buy.
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Another fairly priced neighborhood...:
is Fairchester Woods in Fairfax city. If you are willing to forgo marble countertops and cathedral ceilings, there are some great houses out there! We got a 2300 sq. ft house here on a quarter acre for less than 400k and are thrilled!
Daniela Deane: Thanks!
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Washington, D.C.:
Looking to buy my first house in Arlington or Alexandria this fall. Really nervous about bidding wars and crazy escalation. When is the best time to look, when no one else will be? Thanksgiving? Christmas? Tax time (next April)?
Daniela Deane: Well, here's someone still worried about insanity....I would say right now doesn't seem like a bad time, judging from what posters are saying....Any time others aren't looking is good. So now, and yeah, the holiday period from Thanksgiving thru New Year...Recent posters have had luck on holiday weekends too. But maybe we'll find come September that our market just isn't as crazy as it was anymore, which frankly, might be a welcome reprieve...
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Clarendon, Va.:
Help! I am renting in Clarendon's Lyon Village neighborhood, where the house across the street (which would be considered a fixer-upper in any other market), just sold for more than a million dollars. Is there a comparable neighborhood anywhere in the Washington area where prices aren't so astronomical?
Daniela Deane: Clarendon has seen soooo much development and Lyon Village has benefitted tremendously...And why not? It's an adorable neighborhood of charming single-family homes near Metro and near a whole lot of great shopping and restaurants now. And close to town...Let's see, what other neighobrhoods have charming houses near Metro, near shopping and close-in....parts of Bethesda, certainly. Chevy Chase, Cleveland Park, Woodley, AU Park...They're our most sought-after areas these days....
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Maryland:
Slow Down? Depends on the deisre and price. Three townhomes went on the market in my neighborhood - an affordable and good neighborhood. Two were priced right and sold in 2 weeks (slower than before, but still good). One was priced high and it's sat for 4 weeks. He had to drop the price twice. People want an affordable home and people want an affordable home that's priced adequately.
btw, the two that sold quickly are still $65,000 more than I paid last summer!
Daniela Deane: It's not a completely clear picture yet, is it?
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RE: Frederick New Construction Buyer:
I think the Frederick, Md. question was that if the new house will be done in June, when should he put his current house on the market. I don't think he said he was planning on selling the house that's being built.
Daniela Deane: Ah!!!! Sorry.....(gosh, I am dense sometimes...)...I would think that early next spring would be a good time to sell his current home...Priced right, of course!!
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RE: Slowing market:
We're planning to put our Old Town townhome on the market in Sept. FSBO, but a neighbor who's also putting their's up told us their realtor said there's a distinct "fall" market that starts the week after Labor Day. He told them it's not worth it to put it on before labor day (even if they're ready to sell), b/c everyone's vacationing and wrapping up summer plans. We also had a couple interested in our house that were looking late July tell us they are waiting until after Labor Day to resume looking, because there will be more homes on the market then.
Daniela Deane: Right...This is the time to be out there as a buyer, yes, but probably not a great time to be a seller! (wow...not a great time to be a seller in the Washington area??? what a revolutionary thought!!!)
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Frederick, Md.:
Daniela,
I wrote earlier about the signing a contract for a house that will be ready in June and when to put my house up for sale now or in the spring based on how the market is doing. Just want to clarify, the house I'm talking about selling is the one I currently live in not the one being built. Thanks for your answer it appears that the D.C. market should be fine over the next year.
Daniela Deane: Have I answered now? Sorry I'm so obtuse...My feeling is put it on the market in the early spring of next year...not at an inflated price!
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Woodbridge, Va.:
Do you know of a resource for finding out how much a property has sold for? I know the Post has a database online that you can use, but it takes several months for a sale to show up there. I'd like to know how much houses in my neighborhood went for this summer.
Daniela Deane: You can look at your county's public records online...But they also lag...When I'm absolutely dying to know, I just call the agent who listed it..and try my luck!
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Pricing:
Just because the market is slowing doesn't mean the price need to be cut "only after 2 weeks"! It took me a month to get full price offers on my places. (a month is not that long).
Just my humble opinion.
Daniela Deane: Thanks for your humble -- and wise -- opinion!
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Washington, D.C.:
Daniela,
I currently rent a townhouse with a friend of mine at 16th & S and love the area. I graduated college 3 years ago and just saved up enough for a downpayment (almost 20%) for a place of my own. I get pre-approved and I'm ready to go.
Then all these housing reports come out. New home sales down, existing home sales down, mortgage applications fall, housing inventory up. Well I'm getting cold feet. I understand not wanting to throw my money away on rent but I currently pay $650/month for my half of a townhouse with a parking space. The house if sold today would fetch the upper 600s.
I'm now tempted to keep saving and keep the $650 rent than exchanging it for a $1800/month mortgage with out parking. In addition I plan to stay in the area for between 2-4 years. What would you advice? What have you seen in terms of DC inventory?
Daniela Deane: In general, my advice (as everyone knows I think) is to try and buy your primary residence rather than rent. In my defense, I want to say that I'm not that far out there with this advice: Most finacial planners I've ever read or talked to advise the same thing. Real estate equity is the main form of wealth in this country for the vast majority of Americans. So in general, I believe that holds true for you too. That if you buy, you will start building up equity and that after a few years (real estate is a long-term hold remember), you will start to feel those rewards in appreciation. But you have a strong counter-argument in that your rent payment is low and certainly lower than a mortgage payment would be with today's prices. Bottom line: IF it were me (and it isn't) I would still buy. But I understand if you don't....
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RE: Clarendon, Va.:
You forgot about Silver Spring. It's close in, has a Metro and great older homes!
Daniela Deane: Silver Spring is certainly heading towards the Clarendon way....
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Washington, D.C.:
A couple of basic questions about new construction condos--Can you help me out?
First, how does a real estate agent apply when buying anything new construction? What is their role, and do you really need an agent?
Second, when purchasing a new construction home, when are you expected to actually pay the down payment? Do you wait until its done and inspected or do you pay earlier, when "reserving" your home?
Thanks, from someone who's just starting out in all this.
Daniela Deane: Hey there....I can't swear that I speak for every new condo construction project out there, but in general, this is how I've seen it work: An in-house sales person from the development company handles the sales of the condos pre-construction, not usually an agent (although some developers do use agents). So, no, you don't need an agent to buy one. They get their commission from the builder/developer. You sign a sales agreement with that in-house person and put down a deposit fee to hold the unit you want. I've seen a $10,000 fee quite a few times. Then you usually have to pay about 5% of the purchase amount (some of that can come in options), before completion. Then, when the condo is ready (1.5-2 years down the line), you go to closing and pay the rest (i.e. get the mortgage, put down the deposit, etc, like a regular closing) and they give you the unit. So you don't go to closing until they're ready to deliver the unit. Does that make sense?
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Washington, D.C.:
Daniela,
I'm in the process of getting pre-approved - just waiting for the lender letter. Is it too early to go out and look at places? Do I need to wait for my letter?
Also, what fees on the mortagage are negotiable?
Thanks!
Daniela Deane: You should be able to get a letter within a day...So yes, go out and look at places. You might be able to snag something before Labor Day! Very few closing or settlement fees are negotiable. Look for a recent story I wrote on "How much will this house really cost?" ... Should be online...I'll get my producer to look for it too.
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Bethesda, Md.:
Re: Recent sale prices. In Maryland, there's an on-line database, SDAT, (at http://www.dat.state.md.us/). Lots of interesting info.
Daniela Deane: Great!
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University Park, Md.:
To add to the first posters comment on affordable housing inside the beltway, I highly recommend University Park, Md. located just below College Park, Md. Wife and I moved there 3 years ago and love it. Sturdy houses and great neighborhood with free bus shuttle to and from PG Plaza Metro. Just my two cents. Thanks
Daniela Deane: Thanks for those two cents! There are lots of nice neighborhoods in this area, aren't there?
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Alexandria:
RE: Finding out house price...After closing, the sale price is public information. I find that there is a lag on Alexandria's assessment webpage, but I would think if you go down to the records dept in person you could get the price, or give them a call.
Daniela Deane: Thanks!
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Woodbridge, Va.:
I used to think that real estate was about buying a home - you buy what you want to live in for the purpose of living. But in the time it's taken me to get my finances in order, real estate has escalated so wildly that I can't afford anything but a condo. Heck, I could've bought a condo three years ago, but I don't want to live in an apartment (now I don't seem to have a choice).
Is it more appropriate to be completely mercenary about real estate, and buy on the financing and investment side of it, as opposed to buying a home? Or would that only be true for the awful DC metro market?
Daniela Deane: I'm not sure I understand the question....I think for many people it's now come down to: Buy what they can afford. That's the reason the condo market has exploded in the past few years. A lot of people are seeing that a condo is all they can afford...If you want to buy and own, then buy what you can and start building equity, that's how the argument goes...
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Rosslyn, Va.:
We got very little activity on our house we sold too. We listed early August and less than 10 people came by to look. We did get a full-price contract on day 5 but only 1 contract. I've been told that August buyers are few but are serious about buying.
Daniela Deane: Yes, people who are looking in dead times (Thanksgiving, August, Christmas)are usually pretty serious about buying. I'm glad you sold.
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Great close-in neighborhood:
The neighborhoods near Crystal City (bordered by Army-Navy Drive, Route 1, Ridge Road and Glebe Rd) are lovely and have great access to shopping and dining and Metro (particularly with the redevelopment of Crystal Drive).
Daniela Deane: I'm doing a story now on Parkfairfax and Fairlington, two great little condo neighborhoods as far as I can tell...
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Springfield, Va.:
We submitted a contract for a house we really, truly loved but the selling agent is a total dud - would not return our agent's phone calls promptly, etc. Should we contact the seller directly? Is this unethical?
Daniela Deane: What, you haven't heard anything back about your contract presentation?? .. Get your agent to call again, and again...Maybe put a time limit on your contract? .. Don't be too heavy though if you want the property...Pressure, yes, but don't turn the seller off completely...Good luck! Your agent should be working on this pretty diligently now...
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Washington, D.C.:
Equity Line Hard Sell? I know you've mentioned your own home-equity line. We recently applied for a home equity line for some cash for renovations of our home. We're planning to finance about half the cost. Then the bank did the appraisal and called us up offering us a much larger line - larger than we need for this project by far. Assuming we'll only use a portion of it, is there a disadvantage to having a larger line open? There are no costs associated with the unused funds, so it appears to be a no-brainer to accept the increased line, but I feel like I might be missing something. The bank would require us to keep the line open for three years to avoid closing costs, but we don't have to ever use any funds, they say.
Are we missing something?
Daniela Deane: I don't see an immediate disadvantage to having more credit available to you than you need....Some banks make you pay an annual maintenance fee if you haven't borrowed anything, but it's usually minimal...Ask them if there are any fees if you don't use it...Otherwise, just enjoy you've got all that money there IF you need it! .. (Don't start using it to run off to Tahiti, though...).
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Arlington, Va.:
Hi Daniela -- I missed you! A question about additions and re-sale-ability -- we live within walking distance to East Falls Church metro, in a 4 bedroom cape (with a garage!) -- we've recently experienced severe water damage in our kitchen which will require ripping up our wood floors, the cabinets and possibly the subflooring as well. So, we've been thinking that as long as we're going to have to re-do our kitchen anyway, we should do an addition on our house at the same time, killing two birds with one stone. However, my dad called me yesterday and warned me about pricing myself out of the market with an addition. I explained to him that our house is probably worth $650k and that many people are tearing down and rebuilding huge million dollar homes...and to top it all off, we probably couldn't afford to re-buy in Arlington as it is. So, I'm coming to you, the expert, for an opinion about putting an addition and what the impact may be for future reselling. Thanks so much!
Daniela Deane: Hey! I missed you too! Your dad has a point in that you don't want to over-improve your house compared to the houses around you, so you don't want to end up with a 7-br house on a street with all 3 br houses...Or a humongous house on a street with modest ramblers...Or a house that you think should be worth a million dollars on a street of 650K houses...But as long as you don't go overboard, I don't see that you can lose with a nice, tastefully done (not humongous) addition that adds value to your house. What are you thinking of adding? Just a new kitchen? Kitchen and bathrooms are good places to spend your remodeling money, even though Remodeling magazine still says you won't get dollar for dollar back. And do what you want done to the house, not just what you think will get you more money when you sell.
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RE: The equity liner:
A higher equity line of credit may affect your borrowing ability -- some lenders see it as potential debt and take it into consideration when evaluating loan or credit applications. So a higher line might have a down side for you even if you don't use it.
Daniela Deane: That's something to keep in mind....
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Re: (Beautiful) Silver Spring:
Silver Spring is not as expensive a neighborhood
as Clarendon, Bethesda, Chevy Chase, et al.--yet.
It will be though in the not too distant future, I
think. Suggestions for buyers: In addition to
looking in south Silver Spring (near DC border),
look in wider Silver Spring in 'hoods like
Springbrook, Hillandale, Colesville, Woodmoor.
Some of these areas are a few miles outside the
Beltway but still an easy commute to the city. If
you're interested in buying in DC near Silver
Spring look in Shepherd Park, Takoma and
Brightwood and if you have a lot of cash, Colonial
Village/North Portal Estates. These are very nice,
well-established older neighborhoods that feel
like the suburbs in the city, if that makes sense.
The homes in CV are quite stately...some are
mansions. But they cost way less than a
comparable house west of the Park or in MD or
VA. I'm not a real estate agent, just a native
Washingtonian who like to help people.
Daniela Deane: Yey! Silver Spring!
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Chantilly, Va.:
What is your opinion of Jeffreson County, West Virginia?
Daniela Deane: Cute...but really far....(that's just my opinion, I know...). I know myself: I do not like driving hours to and from work!
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Baltimore, Md.:
We've recently moved to the Charles Village area of Baltimore and love it passionately. It is astonishing what the dollar will buy up here -- and the commute is no worse than it is from what we consider the faceless Virginia suburbs. You can even take a train if you want to.
Why do you think Baltimore hasn't been colonized by Washingtonians long ago? We're simply amazed at our good fortune.
Daniela Deane: Baltimore does have some fabulous housing....Why hasn't it been colonized more? Because it's a whole 'nother city, so it feels far!! (farther than maybe it really is for some commuters, depending on where you work). Although we're moving farther and farther out, we're also balking at moving farther and farther out....(there's a trend for you!)
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Re: Parkfairfax and Fairlington:
When is your article coming out?! I live in Parkfairfax (happily, I might add), and I don't want to miss it!
Daniela Deane: Next Saturday, September 4! Thanks for reading...
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London:
Submitting very early because I'm out of the country. But I own a place in Logan Circle. And the recent crime wave in Dupont and Logan makes me a bit nervous. My neighbor was robbed a few weeks ago and my car was broken into this past June. I love D.C. but I also want to feel safe. I maybe moving overseas for a few years and wanted to rent my place but several people have advised me to sell. Oh and the BBC did a piece the other day about all the murdered children in D.C. this year. My British friends were amazed after viewing the story and think I'm crazy for staying. Any other posters in Logan and Dupont nervous about what the recent crime wave will do to housing prices?
Daniela Deane: You lucky dog that you own a place in Logan Circle! (How's that to counterract what your British friends are saying...) The appreciation you've seen...and the simply awesome development....there has been astounding. Yes, we've had some incidents, but generally, that is a very very cool and happening area of the city to own in these days. (I know better than them, I promise...). Now should you sell? If you're sure you're not going to come back, then maybe you should. If you might come back, my advice would be not to sell. But that's just me!!!!! (I wouldn't sell.) Have you been back recently? The transformation of 14th Street near Logan is amazing...
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Ireland:
I'm moving back to the D.C. area next fall, and am worried about affording a decent house in NoVA. Prices there are rising much faster than in our area of Ireland, so we're trying to think of a way to somehow counteract this.
One thought was to buy a new build (even after a very bad new build experience) that won't be ready until late 2006 (so as to lock in at current prices), but haven't had much luck finding anything yet, at least not in the areas we're interested in (Arlington, north or south; and Alexandria, city or county). Any ideas on where we could find out about new builds in those areas?
Or any other strategies for trying to offset rising prices?
It's a little sad that we have to worry about this when we'll probably be looking at $500k houses (SFH, no townhouses).
Daniela Deane: Hi Ireland! Thanks for checking in on me....I'm not sure how to counteract rising prices...if I could think of a way, I could become rich, huh?! I would look online for developments that are planned, like it sounds like you have been doing...You could also hook up with an agent who sells in Arlington or Alexandria here who would look out for new developments for you...If you're interested in a condo in a park-like setting, check out my story next Saturday on Parkfairfax and Fairlington developments in Arlington and Alexandria...Good luck!
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Daniela Deane: Folks! Thanks so much for joining me. It was fun. I'll be back in two weeks, on September 9. Please join me then. Until then, enjoy! Have a great Labor Day weekend...(Going to open houses?)
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