When should I sell?

Asked by Kj, Fairfax, VA Sun Mar 23, 2008

I bought a condo in the Fair Oaks area (Fairfax Ridge condo development) in early summer of 2006 for about 400K with approximately 10% down (7 year arm). It is a townhome style condo w/garage and extra parking space. What is the current market like for such a property? At what point would I be able to resell and recoup at least my downpayment?

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Irina LaMar, , Fairfax, VA
Sat Mar 21, 2009
Dear Kj:

Unfortunately the condo market was affected the most. Fairfax Ridge and a similar condo development across from Rte 50 called Random Hills are selling for 1.5-1.7 times less than in 2006. I just sold one short sale in Random Hills when the bank accepted around 40% loss on the loan. I am enclosing a link to a CMA of 2+BR Fairfax Ridge condos listed since August 2008, it will give you an idea of today's prices. You can see that the average sale price is around 240,000. The link would stay active for 30 days.
It is really impossible at this point to say when the prices would go back to higher 350s. If you have a difficulty paying your mortgage, loan modification or a short sale could be a solution.
If you need more details or information please let me know.
All the best!
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Joshua Stear…, , Arlington, TX
Sun Mar 23, 2008
As you probably already realize, it sounds like you are in a tough situation. If your loan balance is approximately $350000, then you'd be very close to the average asking price for 2 br units with garages in Fairfax Ridge. Obviously, with transaction costs, you'd be in a losing situation trying to sell now.

The sales price for units that have recently sold there is really even more discouraging.

Current rental prices for the same type of unit are around $1900 a month, which I'm guessing means you'd be about able to break even on your mortgage payment should this be an option.

It is highly unlikely that prices will rebound enough in 2008 to allow you to recoup your down payment. There is no way to predict beyond that. On average, over many many years, real estate appreciates at about 6-7% a year. Should that hold true beyond 2008, you'd be looking at 2011 or so before sale values got back to $400000. Assuming $350K is fair market value right now.

All of this is nothing more than back of the envelope calculation on my part. All advice given here by myself or anyone else must be taken with a grain of salt.
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