News and notes from Reston (tm).

Tuesday, January 14, 2014

Bummer: No Giant Wheelbarrows of Cash as Metro Arrives

It is another truth universally acknowledged that the imminenteventual arrival of Metro service will be good for one thing: gridlock developers midscale chain eateries our property values.

Since we live within "walking distance" of the new station, give or take a few miles, we keep expecting a developer -- ideally wearing a top hat and a Snidely Whiplash mustache -- to appear on the doorstep of Restonian World Headquarters with a couple of wheelbarrows full of cash to make us an offer we can't refuse.

Snidely
It would be a tough decision, but in the place of our lovely, if somewhat dated, manse would rise a very skinny 97-story condo with excellent exercise facilities whose vowel-free name would resemble a Welsh village. As for us, we'd adjust to writing our fancy new "web log," the Ashburnian (essentially the same thing, only with the incessant references to the Macaroni Grill replaced by incessant references to Wegmans), punctuated by the occasional caviar break and weekend in Gstaad.

But one Realtor has "harshed our buzz," as the kids no longer say (except maybe in Washington and Colorado). Lay it on us, Debbie Downer:

I hear things like "Should I wait for the Wiehle Metro Station to be completed before we sell?" or "How will the Metro effect [sic] my homes [sic] value when it opens?" These are all valid questions and deep down what I think they want me to tell them is that they’ve hit the Metro Lottery and their home’s value is going to spike, just like it did in 2005.

I can already hear it now "But my home is only a 1/2 or a mile from the metro!"; "It's going to double when the metro is done!" Sorry to burst your bubble, but it's not going to happen. Prices have already adjusted in those areas in anticipation of the Metro coming. It's true; homes close to the Metro will always trade at a premium relative to its competition and will hold their value better as the market fluctuates. But a Metro Lottery it is not.
The column's author argues that in general, property values have "returned to 2004 levels" but have not ascended back to the lofty heights of 2005 and 2006.
With continued home inventory remaining low, interest rates holding steady at low levels, and the continued growth that we will experience as the Metro opens in Reston, I foresee a 3-5 percent appreciation per year over the next 5 years.
Bo-ring. If we wanted a 3-5 percent return, we'd invest in tax-free municipal bonds or pork bellies. We want to be where the action is!

10 comments:

  1. I have to disagree with Ms. Downer. While I don't think that prices will double when the trains start rolling, I do believe that the entire area will see a higher than average price growth for the course of at least a couple of years.

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    1. Fact, people like to live near Metro. Fact, developers like to develop near Metro in order to capitalize on those people. To think home values won't be positively impacted by Metro is plain silly. Now, how long and how much is anyone's best guess.

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    2. Fact: Not everyone wants to live near a Metro station, especially if it doesn't go where you need to be, and especially if a glut of high density condos, apartments and commercial office space makes your neighborhood unduly congested and traffic-clogged . Fact: Home prices are more likely to increase when there is a shortage of inventory for sale, Metro or no Metro, and proximity to Metro is just one factor among many driving prices higher. Reston doesn't need Metro to drive up prices, just overall market demand for a desirable type of home will do the trick. Of course, those ever-optimistic realtors will always tell you that there is no time like the present to list your home or condo. Sometimes, they may even be correct...but Metro will not bring most Reston residents a sudden windfall in sales pricing. Prices here are already high and seem to appreciate of their own accord.These things have a way of leveling out in any active market.

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  2. It may not happen right away, but what will happen when developers come to a cluster with a plan to buy people out? Would everyone have to agree, or would there be a threshold of yes votes to make it happen?

    This may not happen right away, but when talk about redeveloping the village centers begins in earnest, it might.

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    Replies
    1. Of course they would have to buy everybody out. It's not as if they can get 90% of the homeowners to agree to sell and then take the other 10% by imminent domain. What are the developers going to do? Sue the remaining 10% for failure to accept their deal?

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  3. The popular fantasy of skyrocketing Reston home values once metro arrives, and our refusal to accept any evidence or thinking to the contrary, demonstrates perfectly the reality that in fact complete we are lemmings living in a dream world. Perhaps we ought focus less on our own pocketbooks and focus more on making sure the developers don't take a wrecking ball to our community. The last thing I want is a house that's worth a fortune in a community I don't want to live in. God save the McTacoHut!

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    1. Hear, hear!

      God save the Barnes and Noble too! Oh, wait...

      We are the lemmings, indeed! Home ownership is a dream -- a nightmare to be precise.

      "I came back home to raise crops and a family. If I can live in peace, I will."

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    2. "God save the McTacoHut" should become the official motto of Reston. RA, make it so.

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  4. But we're apparently getting a Hooters in the old Chammps location, so we've got that going for us, which is nice.

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    Replies
    1. Hooters qualifies as a neighborhood amenity worth pursuing. Even better than a Metro station!

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