Its been a while since I’ve updated this series, but here’s the latest batch of mansions in Northern Virginia. If you haven’t seen the older articles, take a look at part 1, part 2, and part 3.

I love the stone wall:

Once you look at the back of the houses, you realize how big it really is:

Couldn’t get a good shot of this house, but I heard it was owned by some sort of prince:

Couldn’t get a good shot, but this was actually one of the biggest houses I found:

This is all part of one house, and was one of the most extravagant one I found. The guest house was a big house in tself. This is still being built, and I hear it’s owned by the president of AAA.

This is two different houses, the one on the right is owned by a friend of a friends:

As we all have pretty much witnessed, real estate has been on a crazy roller coaster over the past 10 years. Prices spiked up, and now they’re dropping. The county I live in, Fairfax County in Northern VA, has been somewhat “recession-proof”, so we haven’t seen as much of a drop as other parts of the country. There is still a drastic difference in pricing over the past 10 years, and some clues as to what to expect in the next few years. Lets take a look at the raw data:

Now lets take a look at the important charts that we take away from the data:

We can see here that from 1999-2006, the housing market skyrocketed up, going from about $195,000 to about $480,000 for the median selling price. That’s almost a 250% gain in prices in just 8 years! Then over the past 2 years, especially the last one, we see it start to come down from $480,000 to around $400,000…about 17%. The decline is happening pretty rapidly, so it doesn’t look like it would just start to flatten out anytime soon. The interesting thing to note in the first chart is the amount of units actually sold. From 1999-2004 there was a slight rise in the units sold (keep in mind this is just the April of each year), but a large decline after that through today. It took a couple years for the prices to start following the lower demand in units.

The even more interesting thing is in the 2nd chart, where it shows how many houses are actively listed for sale. Look at what happened from the middle of 2005 through today. The amount of active listings on MRIS skyrocketed up from about 2,000 units to over 8,000…over 4 times as many listings. With way more listings on the market, and way less demand, I can only predict that the market will continue to rapidly drive prices down much further. Although prices have come down a bit, I still feel like they are drastically inflated. Let’s take a look at the townhouse I live in now:

Using valuation data from Zillow, we can see that the house was purchased for $314,000 in 2003. The price peaked at $543,000 in just 2 years…a 73% gain! Just 2.5 years later, it has dropped down to about $400,000…still giving it an overall gain of about 27% in 5 years. I think it was already overpriced by 2003, but it was newly built, so I can’t look back any further. I’ll bet if the house was built and sold in 1999 or 2000, it would have been under $200,000.

It’s a crazy crazy market right now. Since I’m not a homeowner (I’m renting the above exemplified house), I hope that the prices continue to get driven down so that they are actually affordable to the majority of people. On a $100,000 salary, you realistically can only afford a mortgage for a $300,000-$350,000 house based on the figures I’ve seen. That means you can’t even buy the basic run of the mill townhouse that I live in. That’s pretty pitiful.

How is your local market?

I’ve been looking at some houses from time to time, and I’ve really seen a dramatic change in what you can get for the price in this area. Back in July I looked at a house in Sterling that was a foreclosure priced at $365,000. I wasn’t all impressed with the house. One of my friends owns a few Champion real estate offices in this area, and sent me a listing for a house in South Riding, VA that seemed like a great deal. It was listed as a short sale, not exactly a foreclosure just yet, but getting there. We had found that houses that were much smaller in the area were going for more than this house was listed for. I decided to go take a look. The house was listed for $350,000, but although never 100% accurate, a Zillow.com search found it valued well over $400,000. Here’s some pictures I took:

It’s a pretty wide 2-car garage townhouse with I believe 2,600 sq/ft of living space. It was built in 2001, so it’s fairly new.

The colors are horrendous, but you can see the living and dining room when you walk in. The little walkway that I’m standing on has wood flooring. There is an ample amount of space here, and I like the column separating the dining room, as well as the step up to that level. The trimming everywhere also looks nice. There is also a bathroom on the right which you cannot see.

The kitchen is pretty nice, and was quite big. The countertops are granite, although looked a little cheap I guess due to unbeveled edges. Also, you can see the columns look a little cheesy, and needed to be repainted or something. While you can’t see it in the first picture, to the right there is a space for a some sort of deak, as well as a double door out to the deck. There is room here for another table or something, with a fireplace (kinda akward place to put one).

Here we can see the deck, pretty nice size (looks a lot bigger in person).

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According to an article published by CNN Money, there will be some major price drops throughout the next couple years in the majority of the nation. Declines are expected to exceed 10 percent in 86 of the 379 largest housing markets. And 290 of the cities will experience price drops of 1 percent or more.

This is great news for me, somebody that has been semi-house hunting, but still renting. I unfortunately graduated from college at the wrong time, and came into a crazily-priced housing market in which I can’t afford anything…especially here in Northern Virginia. The townhouse I live in when I moved in was priced over $500,000, and the owner had purchased it just a few years earlier for around $300,000. I knew a housing bubble was about to burst as there is no way these prices could be sustained. Now with foreclosures on the ride, prices are coming down…and hard.

CNN Money has a list of top top 100 locations that are expected to get hit the worst, my area is number 35 with an expected 11.5% drop by Q4 of 2009. ? I’m going to make this prediction now, but I think it’s going to be a lot more than 11.5%. We’ll see in a couple of years when I refer back to this post :)? Here’s a list of the top 10:

1. Stockton, CA - 25% by Q4 2008
2. Palm Bay/Melbourne/Titusville, FL - 24.9% by Q4 2008
3. Sarasota/Bradenton/Venice, FL- 24.8% by Q3 2008
4. Reno/Sparks, NV - 22.4% by Q1 2009
5. Modesto, CA - 22.3% by Q3 2008
6. Detroit/Livonia/Dearborn, MI - 21.3% by Q1 2009
7. Fresno, CA - 20% by Q1 2009
8. Oxnard/Thousand Oaks/Ventura, CA - 19.2% by Q3 2008
9. Sacramento/Arden/Arcade/Roseville, CA - 19.1% by Q4 2008
10. Las Vegas/Paradise, NV - 18.7% by Q4 2008

As you can see, the west coast is going to be hit pretty hard. If you’re a potential buyer, what do you think about all this?? At one point do you think you can feel safe about actually buying?? The dates given above are rock bottom price estimates, so according to that, you should buy around that time in those areas. Do you agree?? As a home owner, have you been feeling the hit on this?? I’d especially like to hear from people that are real estate investors that got caught up in the wrong time.

Back in May I went released the second series of my “Mansion Hunting in Northern Virginia”. Here is now the third part, and I will definitely be posting at least one more in the future. The majority of these pictures are from the Great Falls/Tysons Corner/McLean area:

I love the archway in the middle of the house, the garage is located after that.

More pics after the jump!

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As I mentioned last week, I looked at a townhouse in Sterling, VA on Saturday. The price was set at $365,000 which seemed like a bargain based on the picture and compared to everything else in the area. Even Zillow.com says the house is worth over $400,000. I was worried that there would be something wrong, but I figured that it was just built in 2000, what could happen in just 7 years?

I met with the realtor, and found out that the house was a foreclosure, something I was unaware of previously. This also means that it was not really maintained very well, and I basically left pretty disappointed at what $365,000 gets you…Especially after JD showed me what it gets you in Memphis, TN! I’ll go through the pics and explain my gripes:

Here’s the front of the house. It’s hard to tell, but the stairs just seem like really ugly dirty cement, and the rails along the stairs were all rusting. That is also a huge weed in front of my car by the garage!

You can see by the door there was water damage on the wood here. On top of that, the neighbor also had water damage, but it didn’t seem like anything was being done about it. That worried me a lot…and I’m not the most handy person out there.

This was the dining room area looking back towards the front of the house. This was probably the best part of the house because it was all pretty open. The wood floor was creaking a lot though.

Here was the living room. I really didn’t like the built in cabinet, so that was a huge turn off for me. I’m not a huge fan of dark wood, and I prefer the modern look.

This is the dining room. It had some pretty cheap linoleum flooring.

Here is the kitchen, just very basic and cheap in my opinion. The owner took the refrigerator, so that would have to be put in. You can also see all the realtor cards (there were many more on the other side of the counter), which means the house was showed a lot.

This is the master bedroom. Very small for a master, and I didn’t even realize it was until I saw the bathroom had two sinks:

The other rooms were slightly smaller, and there were two of them with another bathroom in the hallway. Downstairs was a small finished basement area with a door to the garage:

Basically everything in the house seemed to be done as cheap as possible, and I didn’t like that. Another major gripe I had was there was no backyard or deck as the house is back to back with another townhouse. That also means there were only windows on one side of the house. I would rather save more and spend in the $400k range for something much nicer then settle for something like this. Keep in mind, I’m looking for a place to live, not just an investment property. It’s possible that this house could be negotiated down, a little work be done, and flipped for some profit due to the foreclosure status. That makes me conclude that is in fact still a pretty good deal, just not for me.

What did you think based on the pictures? I can tell you that the pictures do make it look better than it looked in person I think.

It’s been a while since I’ve looked at any houses, but I gave a quick look through RealtyWatch.com, and found something I had to go look at. From what I’ve seen, this looks to be the best townhouse in this are for the money. There is only picture of the outside, so I’ll have to see what sort of condition the inside is in…but it was just built in 2,000, so hopefully nothing too bad. For $365,000 it seems like a bargain, considering I was looking at smaller townhouses in further areas for more money just a few months ago. I know this area well, and it’s a prime location in my opinion.

I’ll be posting pictures and opinions next week after I take a look at it, so stay tuned. For anybody in the Northern Virginia area that knows their real estate, check out the listing and let me know what you think. For those not in this area, what does $365,000 get you in your area?

Update: See how the house tour went.

Last month I went mansion hunting in the South Riding and Clifton areas of Northern Virginia. After posting pictures, I got some feedback stating that I could find even better houses in the Falls Church and McLean areas, so I went out to see what I could find. I took a ton of pictures, so expect another 2 parts after this post. Bear with the first few pictures, I didn’t realize the lens was zoomed in. Also note that while the front of the houses are impressive, the rear of the house normally makes your realize the house is about 3 times bigger than it may actually look.

Post your comments and let me know what your favorite ones are!

Not a very good picture, but one of the more interesting style houses that I saw. A very modern look, and much bigger than it may seem. The rest of the house drops down the mountain we were on.

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The last decade in real estate has been a real crazy one! Check out this historical chart to see how prices have changed. AOL Real Estate posted an interesting article about a local couple that tried to sell their house for $600,000, only to actually sell it a year later for $400,000. Luckily the couple had bought the house originally for $250,000 before moving out and putting it up on the market….so they still ended up with a large gain, albeit $200,000 less than they ultimately wanted.

So what happened? They priced the house high at first, and kept lowering the price $10,000-$20,000 every month or so that it did not sell. It finally did sell when they had it priced at $450,000, but only for $395,000.

There are two lessons to learn here from both the buyer and seller perspectives. From the buyer perspective, it goes to show you that there are good deals out there, especially in todays market. It’s all about finding the right situation for the seller. In this situation the seller was sitting on the house for over a year, paying two mortgages. By selling the house for $395,000, they still profited a hefty amount, but the buyer also got a great deal for a house that was listed $200,000 higher just a year previously. The seller also learned an important lesson:

Still, Dave has plenty of regrets. “It’s your biggest investment and every seller wants to get the most they can out of their home. Frankly, I think what we chose to do in selling our house was to be greedy and to see how much we could get. It’s an emotional thing. It’s really emotional. Whenever you’re talking about that much money, sometimes it’s hard to think straight.”

Dave has gained perspective on his experience, and he’s worried for sellers new to the market. He says that when sellers price their homes, greed, emotion and sweat equity can all affect the decision making process. Dave warns that selling your home should be, “a more emotionally detached financial decision. You have to just say, ‘This is a transaction. It’s an investment.’ For a lot of us, our net worth and our retirement is tied up in our homes. So you just have to play it as unemotional as possible, and if you do, it seems you are unlikely to make a mistake.”

As a seller, Dave says, “You keep thinking, ‘I’ll hang onto this a little bit longer, it’ll sell.’ That was ultimately the fatal flaw of our experience. In the process, the market gets worse and worse and worse and the sellers continue to be optimistic. But the smart thing to do is to tighten your belt and say, ‘I’m going to lower this to a very aggressive price because I want to sell it now, because I don’t know what??s going to happen with the market.’ If you’re a seller and there isn’t a strong prognosis for a turnaround, then be aggressive and try to price under. Now we all have the benefit of hindsight of what this real estate market has been like nationwide. It??s always 20/20 in hindsight.”

Just some food for thought.

I found a neat tool that gauges whether you are paying too much for rent, it’s called RentOMeter. Simply enter your address, how many bedrooms you have, and how many units are in your building, and the tool will let you know what’s up.

I’m currently renting right now, and also looking to buy a house sometime in the next .5-2 years. I’m currently renting a newly-built townhouse with 3 bedrooms, den and 3.5 bathrooms. One of the bedrooms has been converted into an office that I use for ActiveTuning, and the den has been converted into a working office. It’s about 2,000 sq/ft with a 2-car garage in Northern Virginia (expensive area). Between my roommate and I, we’re paying $1,780/month. We started out at $1,730, and it was raised $50/month after the first year. A third year was just signed, and the rent has stayed the same. The location is great, it’s really in the middle of everything that I need, and it’s about 30 minutes from Washington DC and an hour from Baltimore. Comparing our rent prices from what I’ve seen, I feel that we’re getting a good deal for what we got…lets see what the RentOMeter thinks:

The reason I put 4 bedrooms in is because the den can actually be converted into a bedroom (in fact one of our neighbors rents it out). So it looks like my deal is pretty good. Give it a shot, and let me know if you’re overpaying (or charging!) or not.

Note: For those of you interested in integrating RentOMeter on your site, there is an API, so you can integrate it with a little work.