Question in regular font, answers in purple bold. This is just a typical email. I thought I'd share with you my typical reponse.
Hi, Frank, I'm just an average Arlingtonian (XXXfair housing details removedXXX, owner of a 2br/1ba condo near Court House) who reads your blog from time to time and likes to think he is learning a little something about owning/selling/buying a home. (When it's time to list, you're definitely the guy I'm gonna talk to, by the way.)
Thanks, sometimes I wonder if anybody is reading. Kinda like Seinfeld's "Is this thing on"
I'm finding out that I'm not much suited for living in a multifloor building -- what with all the neighbor sounds, smells, sights, etc. And in fact, I'm not much suited for *owning* in a multifloor building -- what with all the condo association drama that can go on.
I can see that being a drawback for some. Some buildings have less than others of course.
So I'm not even keen on continuing to own while renting it out.
Yes, it can be harder to be a landlord then many people think. If the toilet has a problem, guess who they are gonna call? And it ain't ghostbusters.
You see where this is going, right?: I look forward to the day when I can sell this thing and move on to greener pastures -- like, maybe, Fairfax County.
You can get a ton of green grass for the price of a condo.
The sticky thing is that I bought about two years ago
You are F-ed.
-- when things were starting to topple off their peak a little bit, but still pretty high.
At least somebody bought for more than you, so that is a little consolation. Like me, I bought in 2005, aka, at the top!
And I put down a big down payment. So I'm thinking that if I were to try to sell any time soon, I'd be selling at a loss. (Bye-bye, down payment -- or a big chunk of it.)
Yes, a big loss. How much you put down has nothing to do with how much you lose. It has to do with how much you bring to the table.
So I guess my question(s) to you is: What's a guy near the Orange Line to do?
Rent a place with a yard in Fairfax, and rent out your place. If you buy and keep your condo, I call that "doubling down" like in Vegas. Very high risk. If you are up for it, great, but if the market keeps going down, you are double hosed. If it goes up, you are a genius.
Just wait it out?
The other problem with renting it out is you will lose money per month (remove from the equation the big down payment, that is like a TARP bail out and that should not go into your equation. Calculate your mortgage assuming 5-10% down. The difference between rent and your mortgage at 90%, is your true loss per month)
I know some condo owners that waited 12 years to break even!
(And for how long do you suspect that those of us on/near the Orange Line will have to tough it out?
Dunno. Equal numbers of signs going in each direction.
I thought that this corridor was supposed to be somewhat immune (an easier sell) than other places in the DC area -- and in the rest of the country.)
Yes and no. People that tell you a great location will never go down... those are called... Realtors! Times Square... the #1 location in the USA. Probably went down. The higher you go, the more you can fall. So really, that is just brainwashing.
But yes, we did MUCH better than Prince William county which dropped 50-60% overnight.
I'm OK selling at zero profit or at a loss of a couple grand.
You should not only be OK<>But how likely is that scenario in the near term?
Nothing immediate. Still have short sales and bank units hitting. For a moment I think it slows down, and then BANG, four more hit. THe key is stopped those from hitting the MLS.
Are things picking up along the Orange Line?
For the right price, there are 5-10 offers on places. But that price is $50k under resellers.
Is there a silver lining for this neck of the woods?
Yes, and you heard it here first... a buyer said to me the other day "I feel like I need to hurry up, or I might miss the boat and miss the bottom." It was the first sense of panic that I have heard.
Or do I just need to keep owning until my condo's value gets back to near-2007 levels?
(Another three years or more?)
I would be surprised if it rocketed up in under 2 years, but if Obama can freeze foreclosures and let the Short Sellers refi, it actually is very possible. Real Estate is supply and demand. Cut off the bank units and you will have a couple months of NO sales, but then the buyers will say "screw it, I'll just take one of these 'break even' resellers."
And does having a 2br within walking distance to the Metro change the equation?
***I realize my question might make good fodder for your blog. If you want to use my question/scenario, please don't use my real name.***
Great Idea. Please add your reply as a comment... "George".
Hopefully I could be of help. Hope you will spread my blog around, and make sure you subscribe to the main blog.