Bubble Fury Hits Silver Spring Twice
By Silver Springer • Feb 15th, 2007 • Category: Real Estate
A double post at the housing trend tracking blog, Bubble Meter, attacks two condominium buildings in downtown Silver Spring. This wouldn’t be the first time blog creator ‘David’, puts the spotlight on the Silver Spring condo market. The conversion taking place at the former Springwood Apartments, now turned MICA, has become a reoccurring ‘butt of jokes’ for the site. Now he’s thrown the Silverton condos into the mix, not forgetting the standard yet notorious photos of lockboxes latched onto anything that’s grounded to the earth.
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Yuppiehater: neither you nor anyone else has any way of knowing how it will take for condo values to rise again. Your assertion that he/she has to wait ten years is pure conjecture unless you can accurately predict the future. In that case, you would not still be a $60K per year yuppiehater.
As far as the Silverton developers losing their gamble–their only fault (like others) was bringing their product online too late. They certainly tried to get it built several years earlier, but they were tied up in silly lawsuits to “save” the “historically significant” Canada Dry building. The irony is that all that was saved was the curved entry facade and the Canada Dry sign. A very hollow victory for the hysteric preservationists who, while their cause is often worthwhile, in this case it was a huge waste of time and money.
I’ve been in the MICA several times last few months looking and really liked what I saw. Both the sales people I met with were very personable, nice and knew the market and their product very well. A friend of mine bought there and is VERY happy.
Anonymous 1:10 p.m.
You are clearly in the pro-development, anti-government camp.
Pinning the blame on planning agencies or historic preservation commissions is a convenient excuse for developers making a bad investment. There was considerable demand for housing in the Silver Spring area and the county gave the blessing for several condo developments. In fact, many locals are more opposed to high-density residential developments but the county has over-ruled the NIMBY’s on many fronts.
If anyone thinks they can “time” the market, they’re dumbasses.
Buying real-estate is a gamble whether or not you think you are buying on the top or the bottom. Did you think Google was a “bargain” at $200/share? How about $400/share…
Deducting mortgage interest from your taxes is HUGE! _ucking HUGE!
Exactly. And if you plan to be in a home for five years or more than the up-down cycle is generally irrelevant as you have time to ride out the cycle and ignore prices. If you don’t plan to be in a home for five years then you (generally) shouldn’t buy. Sure, there are exceptions but if you have to sell sooner rather than later, then you are taking a risk. For the short-termers who who bought in 2000-2004 and sold before last summer, the risk paid off handsomely.
Real estate is a market like all others, but it’s not completely unpredictable. One good indicator is median income for the area along with projected job/income growth.
With the recent insane increases in property value it’s plain to see, given the income of residents in this area, that prices simple cannot go up much further in the short term… unless everyone gets a $50,000 raise/yr, and if that happens you won’t hear me complaining. Also, you can look at desirability of area. With the down trend in the market (check days on markets for listings if you need proof). The “nicer” areas are going to get the most investment left and then the second tier silver springs will get a little of what is left over.
The next large “up-cycle” in the market is when we are going to see the full scale “yuppification” of silver spring in my opinion. This peak just laid the ground work and got the basic amenities in place. If you are investing long-term I think you’ll be fine, but the days of flipping for a quick buck are dead for now.
The DC real estate market continues to show significant disparities between renting and buying.
I pay $1,200 per month in rent including utilities. I would have to pay anywhere between $1,700-$2,300 per month if I got a 30-year fixed mortgage based on current 1-bedroom condo prices in Silver Spring. This is NOT including the condo fees which adds $300-$400 to your monthly budget. Ouch!!
Even if I factor the mortgage interest rate deduction…I still come out ahead by renting!
I would say the cost benefits of renting compared to buying in 2007 is Super F’ing HUGE.
All the “predictions” have home prices staying relatively stable, which sucks if you’re trying to get ahead by “flipping”.
So ihateyuppies… are you coming ahead by using dollar-cost averaging to invest your “saved” money in other things beside real estate?
Sure, I can buy a condo with sky-high mortgage payments, fees, and insurance. Sure. I would have to eat peanut & jelly sandwiches every night for dinner. Raman noodles for lunch every day. No money for dining out. No money for Christmas gifts. No money for clothes. No money for expensive car repairs. No money for saving for retirement. No money for expensive medical care co-pays and deductibles. No money for saving anything towards like a nice trip to some place outside of the Washington, DC area. How about no money for a social life period. But hey…I got my own condo with stainless steel appliances and granite counter tops. How cool is that?!
I would be financially chained to my property. Wonderful, I become a condo owner but then my bank account widdles down to nothing. I can HOPE that my property will increase in value over time. I can HOPE that someone will pay the highest price for my condo if I decide to sell. But you and I know that’s no guarantee. Wow…what a smart trade, huh?
Don’t worry about me, I make plenty of money for all of the above…
I have to side with Yuppie Hater on this one. If owning a home means living hand to mouth, then I’ll pass.
Of course, that’s not the case with all homeowners. I’m just saying that my “income” (and I use the term liberally) plus a big mortgage
wouldn’t work out.
SSBoricua:
Bless you for owning your home and having money left over at the end of the month.
Unfortunately, penguins don’t get paid much. If I can knock off my bills and still have change for the bus, then it was a good month.
Hilarious. Everyone wants to be a freakin economist! Some people buy (as was mentioned before) because of their life’s situation (steady job, perhaps family on the way). The ultimate reason to buy is to have a roof over your head. To have equity. Of course you will be putting money into someone else’s pocket whenever you buy anything, but you will also be paying into something that’s yours. If you get sick and end up in the hospital for a year, don’t count on your apartment to help you out with that! All of the chit chatter about the market this and the market that. . . unless if you are looking at buying a second home, sitting it out for 10 years hoping the market will turn around is unreasonable. In the meantime, as long as you rent, you are just just paying someone else’s mortgage. Peace, love, and hairgrease
We bought a single family house in Silver Spring in 1996, when downtown was nothing but shuttered stores and garbage blowing in the streets, and every person I know told me I was an idiot, it was a mess, it could never change, we’d lose money. Eleven years later, the house is worth more than double what we paid and I continue to love the neighborhood and Silver Spring. My kids would never want to move. I didn’t buy with the expectation of big profit, and if it goes down again in value, that’s life. I have no plans to sell so it’s somewhat irrelevant except for the much higher taxes. What I’ve gained is a wonderful place to live and raise my family. That’s the bottom line - what is best for you.
I don’t understand the fervor over the “lockboxes”…what are they there for? My boyfriend and I just bought at the Silverton, and that gate swings open with card access. I don’t really understand what the locks do.
Also, just to put my two cents into the discussion…buying at the Silverton was one of the biggest, but best, decisions we’ve ever had to make. Our combined income, a good mortgage thanks to good credit, plus a 20% down payment from savings is how we’re pulling it off. The Silverton is priced high for a condo, only if you’re looking at the low condo prices way out in the suburbs or in areas other than DC. It is a good deal when you are two blocks from the silver spring metro, a 5 minute walk from the downtown and a parking space is included. Also, we’re not throwing away our money every month on rent! ANY real estate is an investement. We are in our early 20s and do plan on being there for several years, so this is one of the best things we could do. A brand new condo in a beautiful building. Plus everyone at the Silverton (salespeople, developers, etc.) are very friendly and helpful. Their open house was a much nicer experience than the open house at Mica.
kgen, congrats on your purchase and I hope you will enjoy life in Silver Spring! If you plan on staying in your condo awhile, those lockboxes are nothing for you to worry about. They’re put there by realtors. Thus, it’s a clear sign that many of the units were purchased by investors/speculators/flippers (choose your term) who are now all trying to sell at the same time. Those are the people who are likely screwed in this market. You, on the other hand, are happily living in a new condo right next to the Silver Spring Metro and all the amenities of the new downtown Silver Spring. Enjoy!
What a lively conversation.
ihateyuppies said:
“…Silver Spring was never meant to be another Bethesda or Chevy Chase where you have an abundant and thriving Yuppie population. It just will not happen here. The developers made a risky bet that the Yuppies would come to Silver Spring and it turns out they made the wrong call.”
people hater: the fact is that the national housing market turned sour, not only the market in silver spring. this is a national trend that is affecting silver spring and 90% of america. some apartments might be overpriced, just like other segments of the housing sector, but once the birchmere is built and the georgia avenue and coleseville road cooridors are built up, people will again flock to silver spring.
kgen,
How are the train sounds at the Silverton? I lived at Blair East for a while and the Thursday night freight trains used to make me crazy. You’re closer to the tracks than I was. Can you hear them or does it fade into background noise?
Terry: I’m only just finishing closing now, so I’ll be moving in a few weeks. I haven’t spent a night yet. From what others in the building have said, they don’t hear much noise at all. I don’t hear the metro which is right next to the building at all when I’m in there. Mostly because the Silverton was built with the parking garage as a buffer between the tracks and the residences. That absorbs a lot of the sound. Also, the building is only 4 floors high, so the bigger buildings around absorb a lot of the sound too. hope this helped : )
thanks for the well wishes everyone!
IdiotAnonymous Poster 2:19,
BEEEEEP…Wrong. The housing slump has hit markets where there was a huge run-up in housing prices. This means a good chunk of the Northeast, Florida, California, Las Vegas, and the Pacific Northwest. Housing prices have barely fallen in the Midwest and the South. If anything, real estate prices outside of the Coasts have increased in this past year.
The Birchmere might not happen in Silver Spring. See archived posts of this blog.
Georgia Avenue might get revitalized inside the District around the Petworth Metro station area. Last time I checked, that location was pretty far from Silver Spring. Not much will happen along the southern end of GA Avenue in Silver Spring for a while.
Colesville Road corridor…what development? You probably mean College Park.
So only yuppies are people. I guess you don’t consider working-class, service-class, artisans, small business owners as people. Nice.
IHY…do you have anything positive to say about anything?
Seriously… get that chip off your shoulder.
Hey, I hate yuppies:
I don’t think you know your ass from your elbow when it comes to Real Estate, or personal finance.
You might want to start looking at dumpy rentals in P.G. county, cause Silver Spring is on its way to rival Bethesda!
I’d offer to rent one of my condos to you, but it sounds like you’re too cheap to keep up with the payments.
Regardless of what one thinks of the speculative prospects of Silverton or Mica, buying one of those one bedroom condos for $315,000 in a refurbished (NOT new) building makes no sense to me. Not when my wife and I were able to buy a three-bedroom townhouse-style condo within walking distance of the Forest Glen Metro for $345,000 over the summer, with a condo fee that is $150 less per month than the $400/month fee at Silverton.
Why look at dumpy rentals in PG County when there are tons of crappy places to rent in Silver Spring itself. You will find tons of cockroach, rodent infected apartments in downtown Silver Spring alone.
Oh yes…sure…Silver Spring is the center of suburban/urban hipness in the DC area. There are many other suburban areas that can make the same claim. Bethesda, Arlington, Alexandria, and many neighborhoods of the Distrct are also cool & hip.
Silver Spring will have economic development and residential competition from many surrounding districts. Look at College Park. If the Route 1 corridor has a successful makeover, you will see big time gentrification there.
Hyattsville is gentrying with new retail, restaurants and condos coming down the pike.
Wheaton is getting better with its new urbanism planning. It’s only a matter of time before immigrant groups get “gentifried” out of the Wheaton market.
Places like Wheaton, Hyattsville, and College Park have Metro stations just like Silver Spring. They will also have downtown cores where people can shop, dine, drink, and live in upscale apartments and condos…just like in Silver Spring.
Those places will have cultural and arts activities just like in Silver Spring.
So Mr. Condo Owner, if you think your property will appreciate because Silver Spring is the only cosmopolitan, hip, cool, creative community in the area, you will be in for a rude awakening. The double-digit annual housing price increases are ancient history for Silver Spring residents.
You’re right…if you are charging $2,000 per month for a 750 sq. foot, one-bedroom condo, I can’t keep up with the payments. Gee…$2,000 is chump change for the affluent peoples of Silver Spring. What a loser I am.
FireJimBowdon hits the nail perfectly with his post.
Have fun paying your sky-high mortgage, condo fees, and MontCo property tax while the value of your condo continues to slide for many years to come.
kgen wrote “I don’t understand the fervor over the “lockboxes”…what are they there for? My boyfriend and I just bought at the Silverton, and that gate swings open with card access. I don’t really understand what the locks do.”
That is why you should not have bought. You don’t know what a lockbox is!!!