Have prices the last month jumped the shark?

[Anonymous]

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Anonymous wrote:I grew up near both of those 600 K range homes--- those are total bargains for what they are. Mature landscaping, great schools, great communities. I'll be curious to see what they go for because where I live now you can't find a SFH for that pirce.

This makes it extra hard - if they being listed low, a buyer just has no idea what to bid for the house if appraisal is an issue. If I'm waiving appraisal and offering over 100K over ask, that's a huge chunk of cash.

Okay, so this is an additional question I have. I am the (naively?) optimistic buyer trying to buy this summer without all cash. We have enough cash to put 30% down on a purchase price of 1 million, in a normal market (averaging numbers for simplicity). But let's say I actually buy a house that appraises at 900, but sells for 1 million. Is my 300k in cash at all helpful in this situation? Can I use some of it to make up the difference between appraisal and actual price? I'm not a first time homebuyer, but this is a new situation for me.

If I were you, I would only offer 200K down and hold on to an extra 100K. Then if it appraises at the K price, or not significantly over, just put the rest of 100K into the downpayment.

Why couldn’t you offer $300K down in this situation? Why hold the $100K back? This wasn’t my post, but in this situation, if the $1M sales price house only appraises for $900K and a down payment of $300K is offered, the buyer doesn’t have to come up with any other funds even though the house didn’t appraise at the sales price, right? IOW, the $300K down payment is enough to cover the appraisal shortfall, right?

I'm the poster asking this additional question. I don't understand what you mean, but I'm going to read it out loud to my mortgage broker and see if it's a thing We'd love to have a lower monthly payment (daycare poor).

I am not an expert, but I don't think so? If you are offering 300k on a 1M house, you are financing 700k, the difference between the price and the down payment. If the house appraises at 900K, the lender will only cover the difference between the appraisal price (900) and the down payment (300). In other words, you get a loan of 600k instead of 700k, so you have to come up with the additional 100k.

All this being said, maybe the lender can get an appraisal waiver with that large a dp.

[Anonymous]

NP - I own a SFH in 22032 and keeping an eye on inventory, list prices, and sales prices. I’ve been considering buying a larger SFH in 22032 or 22039.

I agree that prices jumped the shark this spring. We are sitting out this nonsense. We’ll see where things are at in a year. I don’t think it will be pretty for those who bought this spring and paid $100-150 over 2020 prices.

Good luck to you!

[Anonymous]

Prices still seem to be climbing? House below had a price increase by $100k? Nice house, but seems much.


https://www.redfin.com/VA/Arlington/5513-33rd-St-N-22207/home/11226977?&utm_source=google&utm_medium=ppc&utm_campaign=1024164&utm_term=aud-299174632494:dsa-401190456378&utm_content=454669095006&adgid=111663036888&gclid=CjwKCAjwv_iEBhASEiwARoemvDHnmANzZwlcbau3vJmL98iSmseoOVlASvbuafhNmk4bWB1SPl-nExoC_KAQAvD_BwE&gclsrc=aw.ds

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I grew up near both of those 600 K range homes--- those are total bargains for what they are. Mature landscaping, great schools, great communities. I'll be curious to see what they go for because where I live now you can't find a SFH for that pirce.

This makes it extra hard - if they being listed low, a buyer just has no idea what to bid for the house if appraisal is an issue. If I'm waiving appraisal and offering over 100K over ask, that's a huge chunk of cash.

Okay, so this is an additional question I have. I am the (naively?) optimistic buyer trying to buy this summer without all cash. We have enough cash to put 30% down on a purchase price of 1 million, in a normal market (averaging numbers for simplicity). But let's say I actually buy a house that appraises at 900, but sells for 1 million. Is my 300k in cash at all helpful in this situation? Can I use some of it to make up the difference between appraisal and actual price? I'm not a first time homebuyer, but this is a new situation for me.

If I were you, I would only offer 200K down and hold on to an extra 100K. Then if it appraises at the K price, or not significantly over, just put the rest of 100K into the downpayment.

Why couldn’t you offer $300K down in this situation? Why hold the $100K back? This wasn’t my post, but in this situation, if the $1M sales price house only appraises for $900K and a down payment of $300K is offered, the buyer doesn’t have to come up with any other funds even though the house didn’t appraise at the sales price, right? IOW, the $300K down payment is enough to cover the appraisal shortfall, right?

I'm the poster asking this additional question. I don't understand what you mean, but I'm going to read it out loud to my mortgage broker and see if it's a thing We'd love to have a lower monthly payment (daycare poor).

I am not an expert, but I don't think so? If you are offering 300k on a 1M house, you are financing 700k, the difference between the price and the down payment. If the house appraises at 900K, the lender will only cover the difference between the appraisal price (900) and the down payment (300). In other words, you get a loan of 600k instead of 700k, so you have to come up with the additional 100k.

All this being said, maybe the lender can get an appraisal waiver with that large a dp.

The point is that the bank will only lend against appraised value (900k in this example). Most banks require at least 20% down (180k). If you have 300k in cash you could theoretically cover an appraisal shortfall of up to 120k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I grew up near both of those 600 K range homes--- those are total bargains for what they are. Mature landscaping, great schools, great communities. I'll be curious to see what they go for because where I live now you can't find a SFH for that pirce.

This makes it extra hard - if they being listed low, a buyer just has no idea what to bid for the house if appraisal is an issue. If I'm waiving appraisal and offering over 100K over ask, that's a huge chunk of cash.

Okay, so this is an additional question I have. I am the (naively?) optimistic buyer trying to buy this summer without all cash. We have enough cash to put 30% down on a purchase price of 1 million, in a normal market (averaging numbers for simplicity). But let's say I actually buy a house that appraises at 900, but sells for 1 million. Is my 300k in cash at all helpful in this situation? Can I use some of it to make up the difference between appraisal and actual price? I'm not a first time homebuyer, but this is a new situation for me.

If I were you, I would only offer 200K down and hold on to an extra 100K. Then if it appraises at the K price, or not significantly over, just put the rest of 100K into the downpayment.

Why couldn’t you offer $300K down in this situation? Why hold the $100K back? This wasn’t my post, but in this situation, if the $1M sales price house only appraises for $900K and a down payment of $300K is offered, the buyer doesn’t have to come up with any other funds even though the house didn’t appraise at the sales price, right? IOW, the $300K down payment is enough to cover the appraisal shortfall, right?

I'm the poster asking this additional question. I don't understand what you mean, but I'm going to read it out loud to my mortgage broker and see if it's a thing We'd love to have a lower monthly payment (daycare poor).

I am not an expert, but I don't think so? If you are offering 300k on a 1M house, you are financing 700k, the difference between the price and the down payment. If the house appraises at 900K, the lender will only cover the difference between the appraisal price (900) and the down payment (300). In other words, you get a loan of 600k instead of 700k, so you have to come up with the additional 100k.

All this being said, maybe the lender can get an appraisal waiver with that large a dp.

The point is that the bank will only lend against appraised value (900k in this example). Most banks require at least 20% down (180k). If you have 300k in cash you could theoretically cover an appraisal shortfall of up to 120k.

Also most banks don’t require 20% down.

[Anonymous]

I’ve been looking for a while in the neighborhood where we are renting (Bethesda) and I am seeing houses sell for about $150-200k more than a year ago. I don’t see how these prices can be sustainable - but I’ve been wrong before!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I grew up near both of those 600 K range homes--- those are total bargains for what they are. Mature landscaping, great schools, great communities. I'll be curious to see what they go for because where I live now you can't find a SFH for that pirce.

This makes it extra hard - if they being listed low, a buyer just has no idea what to bid for the house if appraisal is an issue. If I'm waiving appraisal and offering over 100K over ask, that's a huge chunk of cash.

Okay, so this is an additional question I have. I am the (naively?) optimistic buyer trying to buy this summer without all cash. We have enough cash to put 30% down on a purchase price of 1 million, in a normal market (averaging numbers for simplicity). But let's say I actually buy a house that appraises at 900, but sells for 1 million. Is my 300k in cash at all helpful in this situation? Can I use some of it to make up the difference between appraisal and actual price? I'm not a first time homebuyer, but this is a new situation for me.

If I were you, I would only offer 200K down and hold on to an extra 100K. Then if it appraises at the K price, or not significantly over, just put the rest of 100K into the downpayment.

Why couldn’t you offer $300K down in this situation? Why hold the $100K back? This wasn’t my post, but in this situation, if the $1M sales price house only appraises for $900K and a down payment of $300K is offered, the buyer doesn’t have to come up with any other funds even though the house didn’t appraise at the sales price, right? IOW, the $300K down payment is enough to cover the appraisal shortfall, right?

I'm the poster asking this additional question. I don't understand what you mean, but I'm going to read it out loud to my mortgage broker and see if it's a thing We'd love to have a lower monthly payment (daycare poor).

I am not an expert, but I don't think so? If you are offering 300k on a 1M house, you are financing 700k, the difference between the price and the down payment. If the house appraises at 900K, the lender will only cover the difference between the appraisal price (900) and the down payment (300). In other words, you get a loan of 600k instead of 700k, so you have to come up with the additional 100k.

All this being said, maybe the lender can get an appraisal waiver with that large a dp.

The point is that the bank will only lend against appraised value (900k in this example). Most banks require at least 20% down (180k). If you have 300k in cash you could theoretically cover an appraisal shortfall of up to 120k.

This is my understanding as well. And while banks don’t always require 20% down, my experience has been that if you put at least 15% down as a well-qualified buyer, they won’t charge PMI.

[Anonymous]

Is it possible that SFHs near DC were simply undervalued?

[Anonymous]

Anonymous wrote:Is it possible that SFHs near DC were simply undervalued?

Burke in particular has been undervalued for a long time. Not anymore!

[Anonymous]

Anonymous wrote:Is it possible that SFHs near DC were simply undervalued?

PG County is your last hope for finding a SFH with a nice yard and convenience for under $400k in this entire area.

[Anonymous]

In my neighborhood in 22033 prices are LUDICROUS! Vinyl sided 1982 houses selling for 850, 900K! This has been in the past month, 3 of them, under contract in less than a week for over ask. Prior to this year I think the record price in our neighborhood was around 750-780K$ for fully updated homes, with most averaging just under 700k$.

[Anonymous]

Anonymous wrote:Prices still seem to be climbing? House below had a price increase by $100k? Nice house, but seems much.


https://www.redfin.com/VA/Arlington/5513-33rd-St-N-22207/home/11226977?&utm_source=google&utm_medium=ppc&utm_campaign=1024164&utm_term=aud-299174632494:dsa-401190456378&utm_content=454669095006&adgid=111663036888&gclid=CjwKCAjwv_iEBhASEiwARoemvDHnmANzZwlcbau3vJmL98iSmseoOVlASvbuafhNmk4bWB1SPl-nExoC_KAQAvD_BwE&gclsrc=aw.ds

7 bedrooms, 7.5 baths on a 10k sf lot. I don’t get it. Who needs or even wants a house that big?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We've all seen the significant price jump from 2020 to 2021. But it seems that, in some areas at least, the prices the last few weeks have been extra bananas.

As an example, we are looking in Fairfax/Burke area. We have looked at a lot of houses and a lot of comps. Houses were consistently going about 6% above ask. But in the last month, some houses are going way above that. A house we saw that was listed at 775k just went for 900k! To be, these houses just can't hold that value, and it's made us decide to pause for a bit and wait until the desperation frenzy cools down a bit. I have no doubt that higher prices are here to stay, but I also am very suspicious of some of these homes going for the 900s in these areas.

Is anyone else seeing extra crazy purchases this last month?

New houses in these areas sell in the $1.2M+ range. It's close enough to the city, middle of Fairfax County so reasonable access to the jobs corridor there, decent schools.

I'm sorry but avg. homes in Burke don't go for 925, and these would have happily sold for 7-725 a year ago. over 200K appreciation in a year? And that is being generous for one of them.

They do now! Sorry your sorry. Will be > 1M next year.

[Anonymous]

Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income.

[Anonymous]

Anonymous wrote:Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income.

'

+1 I agree with you 100%

To what extent have people observed whether this is impacting the market for townhomes?