Rent CRASH in in Mclean, VA? - Posted by crashhater

Posted by Bryan-SactoCA on October 18, 2003 at 21:43:14:

Living on waterfront sandbars in hurricane country is for either the brave or the stupid.

Rent CRASH in in Mclean, VA? - Posted by crashhater

Posted by crashhater on October 17, 2003 at 13:12:35:

It looks like 2 bedroom 2bath condos in mclean, va
used to rent at $1700 ~ $1800 back even a few months ago,

but now they are all down to about $1300 ~ $1450 max

Does anyone have any good insight as to how the rent-rates in Mclean, VA is going to be a year from now?

How about in College Park, Maryland?

all because of a glutton named Crexxent Hexxhts - Posted by RobertVA

Posted by RobertVA on October 20, 2003 at 20:48:27:

They converted several apts into condos recently…
All of which aren’t worth half the price they are listed at.

Apparently, people would rather pay $300,000
with monthly payments of $2000 rather than $900 ~ $1300 in monthly rent.

Re: Rent CRASH in in Mclean, VA? - Posted by DanS

Posted by DanS on October 19, 2003 at 21:14:14:

That $1700-$1800 figure from a few months ago is a bit off (trust me, I just moved out here myself from LA and now live in one of those apts) :slight_smile:

Though the sticker price a few months ago is on target, the comps were amazing! I secured 2 free months on a 12 month rent.

Given this situation, it is my goal to be an owner before year two comes around.

DanS

Re: Rent CRASH in in Mclean, VA? - Posted by TomC (MD)

Posted by TomC (MD) on October 17, 2003 at 16:43:48:

I specialize in rental condos Mont & PG county in Maryland, and the market is getting a bit soft. I have 3 tenant turnovers in the past 3 months, and here are my rent results:

1BR in Beltsville: old rent=$790, new rent=$700
1BR in Silver Spring: old rent=$800, new rent= asked $850, got $800
1BR in Gaithersburg: old rent=$850, new rent=asked $850, now asking $800 and have gotten almost NO calls.

If the 1BR in G-burg does not go this weekend, the rent price will drop another $50. This is after several years of consistent increases and an abundance of candidates whenever a condo came available.

TomC

Re: Rent CRASH in in Mclean, VA? - Posted by Robert Campbell

Posted by Robert Campbell on October 17, 2003 at 14:40:21:

Dear Crash Hater,

Are you saying that residential rents have dropped 20 percent in two months?

That’s huge, especially if it happens that fast.

Real estate downturns normally take time to develop, and you can see the warning signs at least 3 to 6 months in advance.

What caused the drop? Has major businesses - or industry groups - started moving out of the area or laying off workers?

In other words, could this downturn be temporary … or has the real estate market made a cyclical (inevitable) reversal?

Have prices dropped yet? Normally that takes time as well before it happens.

I’d be grateful for the details because observing market behavior and trends is my foremost fascination.

Robert Campbell

Robert a possible explanation - Posted by John V, FL

Posted by John V, FL on October 18, 2003 at 01:22:03:

Could it be a large percentage of condos that were once owner-occupied have now become rentals as owners either moved up to more expensive single family homes and kept it as a rental or sold the unit to an ever increasing pool of investors.

apts being sold as condos… hot RE market… - Posted by crashhater

Posted by crashhater on October 17, 2003 at 15:50:44:

I think it’s mainly due to the hot DC area RE market.
There are at least 3 major apartment complexes in the Mclean,Tyson’s Corner area that went through a huge condo-conversion due to the big rent drops.

About 1500 new condos were purchased by previously-renting families, second home buyers, or investors in just one year from these 3 major complexes.
I hear more condo conversions are planned.

People pay something close to $260,000 ~ $350,000 for a dinky little 2 bedroom 2 bath condo.

Some of the fully upgraded 2 bedrooms easily cost $380,000…

Unbelievable.

How bizarre - Posted by rm

Posted by rm on October 18, 2003 at 09:32:27:

Can’t rent 'em out, but you can convert and sell 200k.

So much for the 1% rule.

Maybe the sensible thing would be to round up some serious capital and get into the conversion game while the getting’s good.

Re: apts being sold as condos… hot RE market… - Posted by Robert Campbell

Posted by Robert Campbell on October 17, 2003 at 17:38:21:

You wrote: “There are at least 3 major apartment complexes in the Mclean,Tyson’s Corner area that went through a huge condo-conversion due to the big rent drops.”

This doesn’t make sense to me.

Are you saying that apartments were converted to condominiums because residential rents were falling?

From a supply stand-point, condo conversions doesn’t change the housing stock.

The previous renters are now owners … so why should rents go down? Falling rents is usually a negative sign for a real estate market.

Robert Campbell

Re: apts being sold as condos… hot RE market… - Posted by RichV(FL)

Posted by RichV(FL) on October 17, 2003 at 16:51:33:

Wow…sound like whats happening here in Florida to anything waterfront or within a few miles to the water.

Condos popping up all over and people scooping them up like hot cakes. And paying top dollar!

Regards,

RichV(FL)

Re: apts being sold as condos… hot RE market… - Posted by E.Eka

Posted by E.Eka on October 17, 2003 at 16:04:15:

I hear you there. I live in Gaithersburg, but I’m looking to move to the Silver Spring Area. The housing prices here are utterly ridiculous. You can forget about Bethesda, Arlington or anywhere in the NW DC area, and points north of there.

Re: apts being sold as condos… hot RE market… - Posted by E.Eka

Posted by E.Eka on October 18, 2003 at 18:11:02:

I disagree. Falling rents signify that it’s a renter’s market. Renter’s control the rate of rents. Which also means that there are a lot more comparable properties for a prospective tenant to choose from. The main reason why that would be a possibility is because renters are now able to buy, through L/O, lower interest rates, no money down programs etc.

I’m a firm believer in the free market as well as market forces being driven by consumers. Rents are what they are because people are willing to pay that amount. People are willing to pay that amount due to a shortage of viable property in a relatively nice area or close proximity to the District of Columbia.

If former renters can now buy their own condos etc. The amount of rental units will increase and the amount of rent a tenant is willing to pay will decrease due to the excess amount of units. Flexible credit standards, buying/borrowing power is a huge factor in this current trend. As a result, you’ll see a lot more conversions from rental units to condos, because it’s EASIER to buy. People would rather be owner’s then renters, especially if they plan on being in the area for a while, they want some stability and pretty good tax deduction for mortgage interest and repairs.

My two cents, don’t spend it all in one place!

I think because… - Posted by crashhater

Posted by crashhater on October 18, 2003 at 24:41:19:

I heard on the news that they converted because they went as low as having only about 50% rental occupancy, therefore the condo-conversion.

Potential new tenants/renters turned into first-time home buyers…