Well, the first bit of fall out has occurred. A client who was a government employee has decided to delay for a bit. Although promised that he would be paid, no paycheck is yet forthcoming from the powers-that-be. And, I understand and support his decision. Lenders are going to be leery about loaning, not only to government employees, contractors, etc, but also, I fear, they may require more and more stringent hoops for borrowers to jump through, AND for the homes to qualify for the loans. I expect that greater amounts down will be the next step, or greater reserves for a loan. If it hits the wall Thursday, then I expect the worst. Hold onto your hats, folks. It may be a rough ride.
Now, I am weirdly optimistic about our country. I think our forefathers created one of the very best systems of government in the world, a government in which it is difficult for power to get concentrated into any one person or groups hands, and one in which the iron fist of tyranny rule <of either the majority or minority> is softenened by taking time to get implemented, funded, and still can be challenged before the courts. But, the rules have been changed, and, now, the minority (and don't fool yourself, it IS a minority, and a fairly small, if vociferous and extremely well funded one.) is holding the government hostage until it has its way. As mature a reaction as a 2 year old not wanting to eat his vegetables.
Tuesday, October 15, 2013
Sunday, October 13, 2013
Price vs. Value - musings on sur-realty.
In the USA, we tend to buy based on price. We go into a grocery store, a gas station, even a doctor's office and we tend to decide to buy based upon a posted price. We don't haggle with the cashier, the pump jockey, or the doctor either. If we don't have it, we don't buy it. Oh, we shop around, but we don't try to negotiate at the retail level.
Except for a few things. One of those is Real Estate. And, its the reason why the terms 'price', 'value', "appraised value", "assessed value", and other terms lead to a certain amount of confusion and/or hard feelings. Is there an OBJECTIVE value for Real Estate?
Well, we keep trying. People like Objectivity. It means we didn't overpay for something. One of the ways that appraisers evaluate the 'price' of a property, is by figuring out, how much it would take to DUPLICATE the home, starting with a bare lot, and building from scratch (or near scratch). But, that is hard to do, in a limited area like the District, where there are few, if any, bare lots to build from. And, to duplicate a home, does that include the costs to build it to Today's building codes, as opposed to the codes of yesteryear?
See the problem? Another way that appraisers determine 'value' is to look at other properties, hopefully identical in terms of location, condition, quality, size, etc. that sold recently, making adjustments for any differences, and using those sales to get an 'objective' value. See the qualifiers there? 'Location', 'condition', 'quality', 'size', 'recently', and 'adjustments' ALL require the appraiser to make a subjective decision. <Yes, even size: to wit; is a house that has a certain square footage, with x bedrooms, equate to one that has the same square footage, but x+1 bedrooms?> There are some rules about this, but they flex. A garage next to the Capitol, seems to me, is obviously of more utility, than one out in the wilds. For one thing, you can actually park your car!
Personally, I would prefer to have to criticize a teenagers poetry, than be an appraiser. They are brave and hardy souls, with an impossibly difficult task. Because, in my humble opinion, <and it is humble. I know how little I know.> The Value of a property is more than 50% Subjective criteria, and applies individually to the buyers involved. Buyer A is looking for a money-making investment; Buyer B, a home in a certain location or district, Buyer C found her dream house, Buyer D is so tired of paying rent, etc.
The only real objective value for a home, is what someone is willing to pay for it. If someone is ready, willing, and able to pay for it, then Adam Smith rules! <no relation> Thus, the value of a home may be anywhere from Nil, to Gazillions, all for the same home. The only real question is; how much is it worth to YOU; and, if forced to sell, could you recoup your investment. Since markets change, styles change, NEEDS of the Market Change, at best, all you can get is a guess, an educated one, to be sure, but just a guess. Crystal Balls are cloudy, Fortunes are obscure, and the Future is unwritten. All Real Estate is a Gamble. Don't forget that. ~aws
Except for a few things. One of those is Real Estate. And, its the reason why the terms 'price', 'value', "appraised value", "assessed value", and other terms lead to a certain amount of confusion and/or hard feelings. Is there an OBJECTIVE value for Real Estate?
Well, we keep trying. People like Objectivity. It means we didn't overpay for something. One of the ways that appraisers evaluate the 'price' of a property, is by figuring out, how much it would take to DUPLICATE the home, starting with a bare lot, and building from scratch (or near scratch). But, that is hard to do, in a limited area like the District, where there are few, if any, bare lots to build from. And, to duplicate a home, does that include the costs to build it to Today's building codes, as opposed to the codes of yesteryear?
See the problem? Another way that appraisers determine 'value' is to look at other properties, hopefully identical in terms of location, condition, quality, size, etc. that sold recently, making adjustments for any differences, and using those sales to get an 'objective' value. See the qualifiers there? 'Location', 'condition', 'quality', 'size', 'recently', and 'adjustments' ALL require the appraiser to make a subjective decision. <Yes, even size: to wit; is a house that has a certain square footage, with x bedrooms, equate to one that has the same square footage, but x+1 bedrooms?> There are some rules about this, but they flex. A garage next to the Capitol, seems to me, is obviously of more utility, than one out in the wilds. For one thing, you can actually park your car!
Personally, I would prefer to have to criticize a teenagers poetry, than be an appraiser. They are brave and hardy souls, with an impossibly difficult task. Because, in my humble opinion, <and it is humble. I know how little I know.> The Value of a property is more than 50% Subjective criteria, and applies individually to the buyers involved. Buyer A is looking for a money-making investment; Buyer B, a home in a certain location or district, Buyer C found her dream house, Buyer D is so tired of paying rent, etc.
The only real objective value for a home, is what someone is willing to pay for it. If someone is ready, willing, and able to pay for it, then Adam Smith rules! <no relation> Thus, the value of a home may be anywhere from Nil, to Gazillions, all for the same home. The only real question is; how much is it worth to YOU; and, if forced to sell, could you recoup your investment. Since markets change, styles change, NEEDS of the Market Change, at best, all you can get is a guess, an educated one, to be sure, but just a guess. Crystal Balls are cloudy, Fortunes are obscure, and the Future is unwritten. All Real Estate is a Gamble. Don't forget that. ~aws
Friday, October 11, 2013
Now would be a goods time to buy that second home. Lots off aging baby boomers moving closer to civilization (medical support) .
DC may be one of the more interest Real Estate markets. Extremely good, relatively stable, but still exhibiting extreme sensitivity to the political & economic zeitgeist, even if the results of change is less likely than ever to prognostication. For example, this political game of chicken being played out on the Hill has had an unfortunate affect on many individuals, some being furloughed, some being sent home, and i am sure, some being fired. Certainly a hiring freeze has occurred for many contractors and sub-contractors; in addition, pubs, restaurants, retail, etc. must be feeling, if nought else, the lack of 'bodies' no longer at their accustomed locations. My guess is, a net cooling of the market, as people swing from the bullish "He who hesitates is Lost!" towards the bearish "Look before you leap!". Look for an increase on Days on Market; and, a slow down and decrease on sales prices. How much? ah, there's the rub. It depends upon how long this goes on! and on! and on! An appropos cartoon on xkcd.com is here: http://xkcd.com/1274/
Sunday, June 10, 2012
Mind Meanderings
I'm on a deathwatch. I never really understood what that meant before, but, now, I do. I'm watching the love of my life go away. I don't know how the universe dates go on. why doesn't the whole world cry?
Carpe diem.
Tuesday, October 12, 2010
Vacant vs Blighted!
The New DC Vacant or Blighted&Vacant Rules went into effect on October 1, 2010. This new law seems to be very well-crafted to help protect neighborhoods and citizens from the deleterious effects of neglected property. In addition, it punishes the property owner who allows a home or business to lay fallow in this increasingly tight market! The following information is my understanding of the way the Rules are written, and how they are to be interpreted. IT IS NOT LEGAL ADVICE. PLEASE CONSULT A LAWYER FOR PRECISE INTERPRETATION OF THESE RULES, AND CERTAINLY, BEFORE ACTING ON THIS INFORMATION. It is simply the way it has been explained to me. The new rules can be found here: "http://www.dc.gov/DC/DCRA/Inspections/Housing+Code+Inspections/Register+or+Report+a+Vacant+Property/Complete+Guide+to+Vacant+Property+Compliance+FY+2011"
VACANT
The New Vacancy Rules do not apply to Condos or Coops or Vacant Lots or Multi-Unit Properties (unless the entire property is vacant!) A property is considered vacant if someone is not living there. (Simple enough, although the city must verify this, with two visits within a 45 day period.) If it is determined to be vacant, the properties tax rate is changed to 5% (from the usual <1%) from the date it was vacant. In addition, the city may fine the property owner $2000 if they did not register it as vacant!
There are exceptions and exemptions, of course. You may get exemptions if your property or the title is subject to certain litigation; if it is pending certain zoning applications; if it is currently for rent or for sale; if it belongs to the city, or federal government; and, most commonly, if it is under active construction. But, they have closed the loophole of owners getting a $75 'permit' and not doing the work. The construction has to be active and have valid building permits, to make it fit for activity! Also, it is only good for a limited amount of time!
'
Even if the property is Vacant, it STILL MUST BE MAINTAINED. If not, it can be additionally cited as Blighted!
BLIGHTED&VACANT
What is New and Interesting, is the category of Blighted. There are no 'standard' exemptions for blighted properties, although the city does have charitable 'Hardship' exemptions on a case to case basis. This means that the vacant properties can no longer allow to decay. Graffiti, trash, broken windows, etc are some of the items the city looks for. If a property is determined to be 'Blighted & Vacant" then the tax rate goes up to 10% per annum!!
REPORTING A PROPERTY
Is as simple as dialing 311. Call, and report a property as vacant, and/or blighted.
Citizens are encouraged to call (202) 442-4332 for an update on a property's status or email vacantproperty@dc.gov.
People, whether you believe it 'takes a village to raise a child' or not, it certainly takes neighbors to raise a neighborhood up in value, value to you, to your property, to your family and city.
VACANT
The New Vacancy Rules do not apply to Condos or Coops or Vacant Lots or Multi-Unit Properties (unless the entire property is vacant!) A property is considered vacant if someone is not living there. (Simple enough, although the city must verify this, with two visits within a 45 day period.) If it is determined to be vacant, the properties tax rate is changed to 5% (from the usual <1%) from the date it was vacant. In addition, the city may fine the property owner $2000 if they did not register it as vacant!
There are exceptions and exemptions, of course. You may get exemptions if your property or the title is subject to certain litigation; if it is pending certain zoning applications; if it is currently for rent or for sale; if it belongs to the city, or federal government; and, most commonly, if it is under active construction. But, they have closed the loophole of owners getting a $75 'permit' and not doing the work. The construction has to be active and have valid building permits, to make it fit for activity! Also, it is only good for a limited amount of time!
'
Even if the property is Vacant, it STILL MUST BE MAINTAINED. If not, it can be additionally cited as Blighted!
BLIGHTED&VACANT
What is New and Interesting, is the category of Blighted. There are no 'standard' exemptions for blighted properties, although the city does have charitable 'Hardship' exemptions on a case to case basis. This means that the vacant properties can no longer allow to decay. Graffiti, trash, broken windows, etc are some of the items the city looks for. If a property is determined to be 'Blighted & Vacant" then the tax rate goes up to 10% per annum!!
REPORTING A PROPERTY
Is as simple as dialing 311. Call, and report a property as vacant, and/or blighted.
Citizens are encouraged to call (202) 442-4332 for an update on a property's status or email vacantproperty@dc.gov.
People, whether you believe it 'takes a village to raise a child' or not, it certainly takes neighbors to raise a neighborhood up in value, value to you, to your property, to your family and city.
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