s/o How far will prices drop in MoCO?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are in Bethesda and aren't seeing prices drop. MoCo is a big place - where are you looking?

I've seen houses sitting for forever in areas like SS and R'ville. Everyone talks a big game about how awesome home ownership is and how it'll lead you to a path towards wealth. The one house I just got done looking at near King Farm has been sitting on the market for almost 365 days and is priced around $720k now down from $930k they were asking for originally. Poor saps. They bought at $825k back in 2008. What a terrible investment. Losing $100k over 11 years. S and P 500 alone could have probably tripled your money over that time. Real estate in MoCo is no longer a guarantee for financial gains.

They did fine. In 11 years they would have sunk half a million dollars into rent.

[Anonymous]

Anonymous wrote:Based on the anecdotes here, maybe just the high end of the market is falling?

Not many couples can afford anything over $800,000 unless they got lucky on a first home appreciating, have an inheritance, or have family helping out.

Agreed. I would also posit that close-in Takoma Park and Silver Spring are going to continue to benefit from the gentrification of DC. As some folks get priced out of what they want, and others "strike out" in the DC lottery, but don't have $1.5m to buy in-bounds for JKLM, they are going to start looking one or two stops north.

[Anonymous]

You primary residence should not be a path to wealth.

[Anonymous]

I would buy in Arlington. I bought my first house there in 98 for 450k. Sold it in 2012 for 1m. Just sold my house I bought for 1.2 for 1.6.
I am taking my money and running to the suburbs in fairfax for better high schools.

[Anonymous]

Anonymous wrote:You primary residence should not be a path to wealth.

THIS THIS THIS.

If you dont see the value in "buying" property, and it isnt always there, find somewhere nice to rent. Many places rent for quite a bit less than "owning" it would cost, around here.

Its a personal decision, not one the internet can make for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in Bethesda and aren't seeing prices drop. MoCo is a big place - where are you looking?

I've seen houses sitting for forever in areas like SS and R'ville. Everyone talks a big game about how awesome home ownership is and how it'll lead you to a path towards wealth. The one house I just got done looking at near King Farm has been sitting on the market for almost 365 days and is priced around $720k now down from $930k they were asking for originally. Poor saps. They bought at $825k back in 2008. What a terrible investment. Losing $100k over 11 years. S and P 500 alone could have probably tripled your money over that time. Real estate in MoCo is no longer a guarantee for financial gains.

They did fine. In 11 years they would have sunk half a million dollars into rent.

They probably also sunk a half million into taxes, maintenance and interest and now lose $100k (ok, less than that since the purchase is leveraged) plus transaction costs.

[Anonymous]

Montgomery County is more than 5 times the size of DC and Arlington - combined. There are parts of it where I think it would be absolute lunacy to commute downtown (yet people still do, just like they commute from Leesburg).

My zip code is immediately adjacent to DC. According to Redfin, there have been 73 sales in the past 3 months, 37 of which were for more than $1m.

I think we'll be fine for a while.

[Anonymous]

Anonymous wrote:You primary residence should not be a path to wealth.

All of this "economic anxiety" is making me chuckle.

[Anonymous]

Anonymous wrote:Montgomery County is more than 5 times the size of DC and Arlington - combined. There are parts of it where I think it would be absolute lunacy to commute downtown (yet people still do, just like they commute from Leesburg).

My zip code is immediately adjacent to DC. According to Redfin, there have been 73 sales in the past 3 months, 37 of which were for more than $1m.

I think we'll be fine for a while.

We're relocating fand just sold our MoCo home for a profit (having bought 3 years ago). There's always going to be a market for well located homes (well located to commutes/good schools etc.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in Bethesda and aren't seeing prices drop. MoCo is a big place - where are you looking?

I've seen houses sitting for forever in areas like SS and R'ville. Everyone talks a big game about how awesome home ownership is and how it'll lead you to a path towards wealth. The one house I just got done looking at near King Farm has been sitting on the market for almost 365 days and is priced around $720k now down from $930k they were asking for originally. Poor saps. They bought at $825k back in 2008. What a terrible investment. Losing $100k over 11 years. S and P 500 alone could have probably tripled your money over that time. Real estate in MoCo is no longer a guarantee for financial gains.

They did fine. In 11 years they would have sunk half a million dollars into rent.

They probably also sunk a half million into taxes, maintenance and interest and now lose $100k (ok, less than that since the purchase is leveraged) plus transaction costs.

Yes. I think for these facts, the cost of renting would have been almost identical to the cost of buying. Let's do the math.

Bought for $850,000 in 2008, which was the end of the bubble so admittedly a bad time to buy. 20% down ($170K down payment and $680K loan @4% interest). Let's assume houshold income of $400,000 so around 35% margin tax bracket. Let's assume $20,000 closing costs upon purchase.
Interest of ~$260,000. Deductible so net cost is $170,000.
Maintenance of 1.5% per year for 11 year. Total cost $150,000 (should be a well-maintained home after this spend).
Property taxes of $8k/year or $88,000 total. Assume they pay AMT so not fully deductible. We'll assume zero deduction.
Sell house in 2019 for $750,000. Let's assume $50,000 in closing costs upon sale (about 7% of sale price of $750,000). There will be about 530,000 left on the mortgage, so our the seller should net about $170,000 on the sale.

So their total investment into the home would be $478,000, broken down into $170,000 down payment, $20,000 in closing costs upon purchase, $170,000 net interest, $150,000 maintenance, $88,000 in taxes and $50,000 in closing costs upon sale, with $170,000 in net proceeds from the sale of the house.

Let's assume $3,500/month rent for a similar house for 11 years. Would have spent $462,000 on rent during this time. So the rent/purchase value proposition would be pretty similar under these facts. But this assumes a pretty steep loss. Most people thankfully don't sell their houses for a 12% loss. Real estate is a terrible way to get rich, but it's also difficult to lose a significant amount of money if you stay long enough.

[Anonymous]

Anonymous wrote:They will go all the way to the bottom. Please leave now and let us buy your house.

[Anonymous]

You primary residence should not be a path to wealth.

Well yeah this is the case iIF you buy/bought in MOCO.

However, everyone HEARS that owning your own home is a path to wealth and financial stability. If you bought in DC or VA you have made a substantial amount of money. Many buyers in MOCO traditionally were bringing equity cash that they made from selling their DC home or condo. If they bought in VA that cash was protected while it was thrown out the window in MOCO.

[Anonymous]

Buy a house in Cleverly. In five years my friend's house doubled in price.

[Anonymous]

Anonymous wrote:

You primary residence should not be a path to wealth.

Well yeah this is the case iIF you buy/bought in MOCO.

However, everyone HEARS that owning your own home is a path to wealth and financial stability. If you bought in DC or VA you have made a substantial amount of money. Many buyers in MOCO traditionally were bringing equity cash that they made from selling their DC home or condo. If they bought in VA that cash was protected while it was thrown out the window in MOCO.

Are you seriously under the impression that NO real estate is appreciating in Montgomery County? Ir is this just part of your schtick?

My friends who have sold recently have made killings (in Bethesda).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in Bethesda and aren't seeing prices drop. MoCo is a big place - where are you looking?

I've seen houses sitting for forever in areas like SS and R'ville. Everyone talks a big game about how awesome home ownership is and how it'll lead you to a path towards wealth. The one house I just got done looking at near King Farm has been sitting on the market for almost 365 days and is priced around $720k now down from $930k they were asking for originally. Poor saps. They bought at $825k back in 2008. What a terrible investment. Losing $100k over 11 years. S and P 500 alone could have probably tripled your money over that time. Real estate in MoCo is no longer a guarantee for financial gains.

They did fine. In 11 years they would have sunk half a million dollars into rent.

They probably also sunk a half million into taxes, maintenance and interest and now lose $100k (ok, less than that since the purchase is leveraged) plus transaction costs.

They bought at the worst possible time. I bought near King Farm in 2000. My value has tripled!