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November 30, 2007

An "incomplete" snapshot and a "stinking lie"

Motley Fool contributor David Lee Smith noted this week that he'd really like to see more statistics on the housing market:
The information currently provided isn't inappropriate -- just incomplete. Imagine how valuable those figures would be if we could combine them with data, broken down by region, on how long those houses spent on the market, or the variance between their asking price and final sales price. The Realtors have all that information readily on hand, and those metrics would better help us assess whether each housing region was waking up, or still comatose.
Motley Fool writer Seth Jayson, meanwhile, chastises the National Association of Realtors for its word choice:
Take a look at this ridiculous and self-contradictory release, titled "Mixed Results for October Existing-Home Sales; Mortgages Improving." The NAR follows that front-line fib with what I can only characterize as a big, fat, stinking lie. The first line begins, "Single-family existing-home sales were stable in October."

"Mixed" results? "Stable" sales? There's nothing mixed about a nearly 21% drop from October 2006. There's nothing stable about a housing inventory that has jumped 15.4% year over year, so that the months'-supply number screamed upward by 46%, meaning there is now an incredible 10.8 months' worth of homes on the market.

Posted by Jamie Smith Hopkins at 3:52 PM | | Comments (0)

Guess that price

If all-things-housing is your idea of fun, then Realius has the game for you: Guess the value of various homes -- California only at this point. calls the Price Me Now game "the equivalent of fantasy baseball or football for the real estate wonk."

Realius notes in its blog that you're guessing what the selling price will be on homes that are still listed:

The object of the game is to guess what you think a home will sell for. As the game plays today, you’re not actually scored against how close your guess is to the List Price. The interface strongly suggests this, but that’s not the case. In fact, your accuracy is based on how close you are to the moving average of all of the user guesses.
Posted by Jamie Smith Hopkins at 3:31 PM | | Comments (0)
Categories: Housing humor

Baltimore housing: Hey, could be worse

The Baltimore area's housing market -- flat recorded housing prices and sales drop of 30 percent in October -- doesn't look so bad compared with the other coast. The California Association of Realtors said this week that median prices fell about 10 percent while sales plummeted 40 percent.

At the current pace of sales, it would take 16 months to move all the unsold single-family homes in California, the association said. Yes. Nearly a year and a half. That's up from six months this time in 2006.

From the association's press release:

“Financing issues have dogged entry-level buyers since early 2007, but they spilled over into the middle and upper-tier markets in the last few months,” said C.A.R. President William E. Brown. “The decline in sales at the upper end of the market contributed to a significant decline in the statewide median price as even well-qualified borrowers had difficulty securing financing.”
Posted by Jamie Smith Hopkins at 10:08 AM | | Comments (1)

Goldman Sachs: Big price drops for Md. homes

Investment banking firm Goldman Sachs, which predicts that U.S. home prices will fall 13 to 14 percent in the next several years, says it reserves its "most acute concern for eight states" that it thinks are more than 30 percent overvalued.

Maryland's one of them.

The company, which put out a research note and held a conference call last week on the state of the housing and mortgage markets, says the rest of the "worrisome" areas are California, Florida, Nevada, Arizona, Virginia, New Jersey and Washington, D.C.

The first four are frequently mentioned by economists are states feeling the slump keenly after riding the boom. The rest -- not so much, though there were plenty of boomtime price hikes here too.

Goldman Sachs' forecast is based on the long-term relationship between prices and the change in disposable income and long-term interest rates. It says that model suggests price appreciation is due in just two states: Michigan and Ohio. (Interestingly, these are also mentioned by many economists -- as states in trouble, because they're seeing tons of foreclosures. But they didn't get the boomtime run-up in prices.)

Thanks to Calculated Risk and Baltimore Housing Bubble for catching this. There's some discussion about the prediction in my story today on the OFHEO house price index.

Posted by Jamie Smith Hopkins at 6:30 AM | | Comments (0)

Rehabbing video series, part V

In this final installment of the five-video series, Mel Stachura offers a look at one of the plans for the Little Italy rowhouse he's helping rehab. Yes, that's it on the wall there.

Thanks to Stachura and homeowner Tianne Baker for participating, to Sun tech whiz John Lindner for editing and to you all for watching.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (0)
Categories: Video

November 29, 2007

Down goes the housing index

I'll have a story tomorrow on OFHEO's new house price index numbers, which show the first quarter-over-quarter drop in nine years for the Baltimore metro area and the first in 13 years for the nation as a whole.

In both cases, the third-quarter drops are small -- less than half a percent -- though economists note that the index doesn't capture the part of the mortgage market feeling the credit crunch most: jumbo loans for pricey homes and subprime loans aimed at folks with imperfect credit.

Posted by Jamie Smith Hopkins at 8:12 PM | | Comments (0)

Weighing whether to buy a house?

If so, I'd love to hear from you. I'm interested in what potential buyers think about this market and what you're considering as you weigh your options.

Drop me a line at jamie.smith.hopkins (at) baltsun (dot) com.

Posted by Jamie Smith Hopkins at 1:30 PM | | Comments (4)

Relocating in the slump

The Wall Street Journal reports that "some companies are adjusting their relocation policies to provide more help to employees in troubled housing situations, including absorbing losses on home sales."
"Companies have had to change their programs and policies and step it up to keep their employees mobile," says Cris Collie, chief executive of the Employee Relocation Council, an industry group. Mr. Collie's group estimates that it cost about $62,000 on average to move an employee this year. Of that amount, $15,000 went for so-called loss on sale assistance, where companies make up the difference when employees sell their homes at a loss. Last year, loss-on-sale assistance averaged about $9,000.
Posted by Jamie Smith Hopkins at 9:54 AM | | Comments (0)

An affordable-housing plan

As promised, I have a story today about state Department of Housing and Community Development announcing that it will put $75 million toward preserving subsidized rental housing -- renovating old units and keeping them from going market-rate. (It won't be buying, but rather offering financing to businesses.)
Many subsidized rentals in Maryland are 15 to 20 years old. Not only do they need work, they're at or near the point that their owners can opt out of the subsidy and switch to higher, market-rate rents. ...

"This is really a proactive move to make sure we don't lose what we do have," said Bill Ariano, deputy director of the housing department's Community Development Administration. He said it is the state's first large-scale preservation effort "because this is the first time we've really seen this kind of potential problem looming."


Posted by Jamie Smith Hopkins at 9:22 AM | | Comments (0)

Rehabbing video series, part IV

In this fourth of five video clips on rehabbing, Mel Stachura offers a handy tip about when you have to bring something up to code -- and when you don't.

Tomorrow: No, I won't spoil it. You have to see it. It makes me grin every time.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (0)
Categories: Video

November 28, 2007

Quite depressing

The Fed's newest Beige Book report, released today, said the housing market is "quite depressed, with only a few tentative and scattered signs of stabilization amidst the ongoing slowdown."
Most Districts pointed to further increases in the inventory of available homes, with the earlier tightening of credit conditions for mortgage lending continuing to create barriers for some buyers. ... The pace of homebuilding remained very low in general, and builders continued to shelve projects and lay off workers in many areas; contacts generally do not expect a significant pickup in homebuilding until well into next year at the earliest.
Posted by Jamie Smith Hopkins at 8:29 PM | | Comments (0)

Hey! Come back with my virtual house!

The Real Estate Metaverse Association -- Remeta -- says it's joined forces with mediation and negotiation company Open Dialogue to help residents of Second Life settle real estate complaints. (Second Life, in case you're hip to blogging without being hep to the rest of the online world, is a 3-D online society.)

Yes. You can now pay a fee to resolve a dispute about real estate that doesn't, in the physical sense of the word, exist.

From the press release:

"Mediation offers the parties an opportunity to resolve their concerns in a respectful, creative way that often keeps the relationship intact afterward," said Ronnie Howell of Open Dialogue. "In contrast, arbitration offers the parties the opportunity to present their concerns to an individual who ultimately renders a decision, much in the same way a judge might do. With both processes the parties are often able to avoid what may be a costly, messy, lengthy, unhappy experience in the judicial system, especially when judicial systems aren't quite sure how to handle virtual world issues yet."
Posted by Jamie Smith Hopkins at 5:31 PM | | Comments (1)
Categories: Housing humor

Read all about it -- tomorrow

The state's Department of Housing and Community Development announced today that it plans to use $75 million in tax-exempt bonds next year to help owners of subsidized rentals renovate their units and keep them affordable to low- and moderate-income people.

I'll have a story in tomorrow's paper about the announcement, and why it's coming now.

Posted by Jamie Smith Hopkins at 5:19 PM | | Comments (0)

The home as ATM

The Irvine Housing Blog -- "chronicling ‘the seventh circle of real estate hell’ since September 2006" -- has an interesting post about the owners of a million-dollar California house who are now trying to sell it for more than they bought it for but less than they borrowed against it:
They never put any money into the deal, they pulled out $333,000 in cash, and they got to live in Turtle Ridge for 3 years. Not a bad deal — for them. ...

If you knew prices were going to collapse, and the lifestyle was not sustainable (like many on this board did,) would you have done it anyway? When you see the lives led by people like today’s owners, it is not difficult to see why so many chose that life.

Thanks to Jay Hancock for pointing it out. (If you click on the link, you'll need to scroll down a bit.)

Posted by Jamie Smith Hopkins at 11:45 AM | | Comments (0)

U.S. home sales fall in October

Existing-home sales in October were down nearly 21 percent from a year earlier, the National Association of Realtors said today. The seasonally adjusted annual rate of sales was 4.97 million homes. The Realtors blamed the mortgage crunch that hit in August, saying the biggest impact to sales came in "high-cost markets that rely on jumbo loans."

The median price fell 5.1 percent to $207,800. Here too the NAR blamed mortgages -- fewer sales in expensive areas pulled down the median price, it said.

The association's mantra in recent months has been that real estate is all local, local, local, and in its press release today it repeated that message:

NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., emphasized that all real estate is local. “Keep in mind that home prices are up in 93 out of 150 metro areas, and there is a lot of confusion in the market from reports about national data. Broadly speaking, home prices in most areas are up modestly or fairly stable,” he said. “Areas with population or job growth are seeing the strongest home price gains.”
Posted by Jamie Smith Hopkins at 11:29 AM | | Comments (0)

Rehabbing video series, part III

In this third of five video clips, Mel Stachura talks about the difference between owner-occupier rehabs and investor rehabs -- and why he thinks it's a much better time to try the latter than it was during the housing boom.

Posted by Jamie Smith Hopkins at 8:37 AM | | Comments (0)
Categories: Video

November 27, 2007

"No real positive news" for the housing market

Tough summer: The newest numbers from the S&P/Case-Shiller house price index, released today, show a 4.5 percent decline in nationwide prices in the third quarter vs. the same time a year ago. Prices in the July-through-September period were also down from the second quarter -- 1.7 percent, specifically.

Robert J. Shiller, chief economist at MacroMarkets LLC and the Shiller who gives the index one-third of its name, said in a statement that the price drop was the largest quarter-over-quarter decline in the 21 years of the index. The year-over-year drop is "its second consecutive record low."

“Consistent with prior 2007 reports, there is no real positive news in today’s data," Shiller said.

Index officials also released September figures for major metro areas, a list that does not include Baltimore. (Sticks in the craw, that does.) The Washington area saw prices fall 6.6 percent vs. September 2006, according to the index.

Posted by Jamie Smith Hopkins at 2:05 PM | | Comments (0)

Home sales trends in your community

Step right up for this amazing, splendiferous, one-time-only, money-back opportunity you've all been desperately searching for: a way to compare and contrast the housing market in your ZIP code with all the rest!

All right, it's probably not amazing, it's certainly not one-time-only, and there's no money back because it's free. But I stand by splendiferous.

By popular request, I've crunched the October home sales tracked by Metropolitan Regional Information Systems so you can look at ZIP codes throughout the Baltimore area and see how sales numbers and average prices changed vs. a year earlier. (See this post for the big picture.)

If you're interested in seeing the ZIP codes ordered by the change in price, click HERE. If you're interested in ZIP codes ordered by change in sales, click HERE.

Once you have the Excel file open, of course, you can order things around exactly the way you want -- makes for a nice change from regular life.

I've tried to keep the apples-to-kumquats comparisons to a minimum by including only those ZIP codes with at least five home sales in October 2007 and at least five in October 2006. Even so, there are bound to be statistical oddities in areas where the homes sold last month were very different than those sold a year earlier.

With those words of caution in mind, have fun wonking! And do let me know if you notice anything interesting.

Posted by Jamie Smith Hopkins at 9:15 AM | | Comments (3)
Categories: Number-crunching

Rehabbing video series, part II

In this second of five video clips, Little Italy homeowner Tianne Baker talks about why she decided to buy a house and tear it apart before moving in.

Keep those rehabbing tips coming, guys! You can't beat the voice of experience.

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (0)
Categories: Video

November 26, 2007

Home sales in October: By the numbers



A new analysis -- by which I mean, of course, number-crunching and general squinting here at Wonk central -- shows that the big drop in Baltimore-area home sales in October was a pain felt in the vast majority of communities.

Here's a look at trends at the ZIP code level, taken from deals tracked by Metropolitan Regional Information Systems. I'm including the 87 ZIP codes that had at least five sales in October 2007 and at least five sales in October 2006:


Number of ZIP codes where home sales fell: 70

Number where sales rose: 10

Number with no change in sales figures: 7


Number of ZIP codes with a drop in average price:  44

Number where prices increased: 35

Number with no change in price: 8



And finally, some FUN (or not so fun) FACTS:

Number of ZIP codes where average prices topped $500,000: 10

Number of ZIP codes with average prices under $200,000: 14

Number of the 10 most expensive ZIP codes that saw a decrease in average prices: 2

Number of the 10 cheapest ZIP codes that saw a decrease in average prices: 8

Posted by Jamie Smith Hopkins at 4:22 PM | | Comments (0)
Categories: Number-crunching

Looking for state help on those settlement costs?

Tim Wheeler has a story today about Smart Keys for Employees, "the latest name for the on-again, off-again purchasing assistance program offered in a variety of forms for much of the past 10 years by the Maryland Department of Housing and Community Development."

The new program -- or rather new-ish, since it was quietly retooled months ago -- pays up to $5,000 toward settlement costs for qualifying applicants buying a home that's either within 10 miles of their work or within the same county or city. It's part of the House Keys for Employees initiative.

Posted by Jamie Smith Hopkins at 9:16 AM | | Comments (0)

How-to Monday: Rehabbing

Admit it: You've thought about rehabbing. You have a house that could use some work, or you fantasized about buying, fixing and flipping a rowhome during the boom, or perhaps you just wondered how on earth people do it. (Maybe you've actually rehabbed a place yourself, in which case you've thought a whole lot about rehabbing, up to and including "what have I gotten myself into.")

Whichever of these yous you are, I think you'll enjoy this first-ever video version of How-to Monday, in which Mel Stachura of Urban Rehab Consultants in Baltimore talks about a project he's working on for a Little Italy homeowner.

This is the first of a series of videos that will be going up all week to give you a glimpse into a top-to-bottom home rehab in progress, along with words of advice from both Stachura -- the project manager -- and homeowner Tianne Baker, who is acting as general contractor. (More on the differences between "project manager" and "general contractor" in tomorrow's video.)

It's just a taste of what you'd need to keep in mind before starting a rehab: I couldn't hope to cover it all if I had a year and a book contract. As Baker says, "These are complicated projects. You never know what you're going to find when you open up one of these old houses."

Three cheers for John Lindner, Sun video editor extraordinaire, who pieced together my questionable camera work into something I hope you'll find worth watching.

Posted by Jamie Smith Hopkins at 8:31 AM | | Comments (5)
Categories: How-to Mondays, Video

November 25, 2007

Shiller on housing fixes: a Great Depression primer

Economist Robert J. Shiller, best known for the S&P/Case-Shiller house price index that has been showing significant value declines in major American cities, says in a New York Times opinion piece today that the country should take a page from history in crafting ways to deal with the housing slump fallout.

Specifically the pages on the Great Depression.

He says the U.S. has "to consider the possibility that the housing price downturn will eventually be as big as that of the last truly big decline, from 1925 to 1933, when prices fell by a total of 30 percent."

So far, Shiller believes, "actions that have already been taken are not impressive." He suggests thinking big.

Among the changes made to deal with real estate troubles during the Great Depression, he notes, was the formation of the Home Owners Loan Corporation "to sponsor loans for those having trouble making payments, replacing short-term mortgages — then typically five years with a final balloon payment that was often hard for homeowners to afford — with much more sensible 15-year ones that were fixed-rate and self-amortizing."

Posted by Jamie Smith Hopkins at 3:52 PM | | Comments (1)

November 24, 2007

A big Black Friday, despite housing slump

Economists predict mediocre-to-poor sales growth this holiday season, in part because shoppers have already tapped their home equity and are now being buffeted by the effects of the housing slump -- but that didn't stop them yesterday, the traditional kickoff to holiday shopping. The AP reports:
According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent.
Posted by Jamie Smith Hopkins at 10:05 PM | | Comments (0)

Stay tuned for the first video How-to Monday

This Monday, specifically.

Crossing my fingers that it shows up as well on the blog as it looked on my computer. One never knows.

Posted by Jamie Smith Hopkins at 8:45 AM | | Comments (0)

Hey, don't blame ME!

Alan Greenspan, who as Federal Reserve Chairman led the cuts in interest rates that have been credited with launching the housing boom, says the bust isn't his fault, Bloomberg reports. Greenspan said:
"I have no particular regrets. The housing bubble is not a reflection of what we did, as it is a global phenomenon.''

Nobel Prize-winning economist Joseph Stiglitz disagrees; he recently said the retired Fed chairman "really made a mess of all this." Bloomberg notes:

After the 2001 recession, the Fed cut its benchmark rate to a four-decade low of 1 percent. That move, along with a hands-off approach to regulation, has brought Greenspan under fire as the bursting of the housing bubble and the subprime mortgage crisis threaten to sink the economy.

In an earlier story, Bloomberg reported on Greenspan's response to Stiglitz:

The U.S. home-price surge resulted mainly from the ``dramatic'' drop in rates on long-term fixed-rate mortgages, which itself resulted from the broader decline in long-term interest rates, Greenspan said. More than two dozen countries have experienced similar price surges and drops in long-term rates, Greenspan said.
Posted by Jamie Smith Hopkins at 8:18 AM | | Comments (0)

November 23, 2007

What housing has to do with holiday sales

I'm in the middle of working on a story for tomorrow's paper about Black Friday shopping, but I wanted to pause for a moment to bring you a thought from retail analyst Jay McIntosh of Ernst & Young.

He predicts mediocre holiday sales this year. I asked why. High gas prices? Pricey heating bills? No savings?

"I think if you had to pick one thing, it's the housing situation," McIntosh said. "The lack of housing starts, the inability to take home equity out ... That would be the single biggest factor."

Posted by Jamie Smith Hopkins at 5:17 PM | | Comments (0)

November 22, 2007

Home sales vs. home prices: Fight! Fight!

Laura McCandlish has a full story today about the National Association of Realtors numbers on Maryland sales and local home prices. She points out the really notable oddity: Two years into the slump, sales are continuing to fall fast -- but recorded prices are still up.
The sales picture in Maryland deteriorated over the course of the year, the NAR data show. ... Still, during the third quarter, all the state's metro areas surveyed, except Hagerstown/Martinsburg, W.Va., reported an increase in the median sale price of existing single-family homes.

Later in the story, McCandlish quotes Marc Witman, a partner with Yerman Witman Gaines & Garceau Realty, who "said home prices should drop by early next year to counter the plunge in sales."

"There's a disconnect between sellers and the buyers' expectations," said Witman, a Baltimore County-based Realtor. "Until the sellers come down with their pricing, the buyers aren't going to jump off the bench."
Posted by Jamie Smith Hopkins at 8:49 AM | | Comments (0)

What's happened to construction jobs

Maryland's construction sector -- which includes commercial as well as residential -- has felt the hit of the housing market change. But commercial building has remained strong enough to help keep job growth positive.

Here's a snapshot of recent trends, with data from the U.S. Department of Labor. It's an October to October chart, so the 3,600-job growth listed for 2007 is Oct. 2006 through Oct. 2007:




As you can see, the most recent 12-month stretch has the least job growth since 2002 -- which, though it was the year after a recession, was actually a lousier time for employment growth across sectors in Maryland than 2001.

But it could be worse ...

It could look like Oct. 1990 to Oct. 1991, during the second-to-last recession, a particularly bad time for construction companies. Employers in the sector cut nearly 25,000 jobs in Maryland.

Hey, "it could be worse" is something to be thankful for this Thanksgiving, right? Happy turkey day, everyone.

Posted by Jamie Smith Hopkins at 7:40 AM | | Comments (1)
Categories: Number-crunching

November 21, 2007

Us vs. them (how our housing market compares)

The National Association of Realtors' sales figures for the states continue to show an unusually sharp slowdown for Maryland. Home sales here in the third quarter -- July through September -- dropped nearly 30 percent from the same period last year, according to numbers released today.

Only three states saw worse numbers: Nevada, Florida and Arizona, often singled out as states particularly hard-hit by the bust. California, another state that tends to make the list, did slightly better than Maryland at fifth worst. (These are seasonally adjusted annualized numbers, in case you were wondering.)

The Realtors also released price data for the metro areas today. Single-family houses that sold in the Baltimore area in the summer had contract prices slightly above those sold a year earlier, up 1.7 percent. That ranked it 70th out of the 93 metro areas with reported price gains.

Just over 50 metro areas saw price drops. The biggest, at just over 12 percent, came in Palm Bay, Fla.

One reader asked about Cumberland, which was seeing big gains earlier in the year. (I wrote a story about it.) It's still fairly high up on the price-gain rankings, but it has dropped to No. 19, with a gain of about 7 percent. Bismarck, N.D. is tops at 15 percent.

Posted by Jamie Smith Hopkins at 12:39 PM | | Comments (0)
Categories: Number-crunching

Maryland jobs and the housing effect

I have a story today on Maryland's employment picture, which is not as rosy as it once was thanks to national economic uncertainty caused by the housing troubles.
The state's jobless rate was 4 percent in October, up from 3.9 percent a month earlier and 3.7 percent the month before that, the federal government said yesterday. ...

Employers added 28,600 jobs in the past 12 months, according to preliminary estimates - a slowdown since the summer, when year-over-year gains topped 30,000.

The numbers show no massive job losses in sectors most connected with housing, but there's clearly been an impact. When I feel up to it -- I'm fading fast here -- I'll put up a chart showing how construction job growth has changed in recent years.

Posted by Jamie Smith Hopkins at 9:24 AM | | Comments (0)

Wait: It gets worse

Freddie Mac, the mortgage financing giant, said yesterday that it lost $2 billion in the third quarter -- its worst quarterly loss since it went public in 1989. Of that, $1.2 billion was money it had to set aside to deal with home loans gone bad. The Sun, in a wire story roundup today, said the company "warned that it may need to curtail its business unless it can raise fresh capital."
Freddie's loss was larger than the $1.4 billion quarterly deficit of Fannie Mae, its bigger government-sponsored competitor. Shares of the nation's largest mortgage lender, Countrywide Financial Corp., dropped on worries that one of its main sources of sales could dry up.

"It's as bad as it possibly could be," said Howard Shapiro, an analyst at Fox-Pitt Kelton in New York.

The reason he says that -- though it does seem like daring the universe to make it worse, doesn't it -- is because the changes "Freddie Mac is contemplating could add to the strain on the slumping housing market," the story notes.

Oh, and bear with me today, folks. I'm sick and working at quarter-speed.

Posted by Jamie Smith Hopkins at 9:12 AM | | Comments (0)

November 20, 2007

More slowing on the new-home front

New-home permits and starts just keep shrinking, a side effect of record-low levels of builder confidence.

The federal government released numbers today that suggest permits in October were down nearly 25 percent from a year earlier. Housing starts, the number of homes newly under construction, dropped about 16 percent from a year earlier.

But wait, you say: Housing starts in October were higher than they were in September! Up 3 percent! Isn't that good news?

Nope, sorry. The margin of error is nearly 11 percent, plus or minus, so you wouldn't want to bet money that October was actually better than September.

In a statement he put out about the data, economist Charles W. McMillion of MBG Information Services in Washington sums up the big picture for the single-family piece of the market:

There were only 884,000 new single-family homes started in Oct. 2007, the fewest monthly total since October 1991 and -33.8% fewer than the 1,336,000 homes started in January 1959 – the earliest data on record. The 807,000 new permits to construct single-family homes in Oct. 2007 were the fewest since November 1991 and -4.6% lower than in January, 1960 – the earliest data on record.


Posted by Jamie Smith Hopkins at 12:51 PM | | Comments (0)
Categories: Number-crunching

So much for good cheer

The Sun has a roundup of wire reports today about the stock market falling in large part because of depressing housing-related news. For instance:
Goldman Sachs Group Inc.'s downgrade of large banks, and its estimate that Citigroup Inc. would have to write down $15 billion due to its exposure to risky debt over the next two quarters, unnerved Wall Street.

The risky debt in question? Mortgages, of course. 

The National Association of Home Builders' November housing forecast didn't help, either. It "remained unchanged at its lowest-ever level."

Posted by Jamie Smith Hopkins at 8:59 AM | | Comments (0)

Targeting BRAC growth

Tim Wheeler reports today that state and local officials are drafting a plan for dealing with the planned influx of jobs and people connected with Base Realignment and Closure: "steer at least some of the expected business and residential growth into Baltimore City and other communities near the expanding bases, particularly Aberdeen Proving Ground and Fort Meade."
One of the more notable proposals calls for creation of so-called "BRAC zones," where tax credits or other incentives might encourage base-related business and residential growth in areas served by public transit and in need of revitalization.

Price tag: No one knows, Wheeler reports.

Posted by Jamie Smith Hopkins at 8:48 AM | | Comments (0)
Categories: BRAC

November 19, 2007

Foreclosure-help efforts

Faithful readers with good memories will recall that last month the Bush administration announced an alliance of mortgage industry players aimed at helping prevent foreclosures. Robert K. Steel, the Treasury Department's undersecretary for domestic finance, gave an update on the "HOPE NOW" effort at a housing forum in Minneapolis today:
Today is an important day in this public-private outreach effort. Starting today, HOPE NOW will send more than 300,000 letters by the end of this month alone to struggling homeowners who could be in a position to move into a more affordable mortgage. That is 100,000 more homeowners than they initially expected to reach this month. And they will continue reaching out to more borrowers over the next several months.

The administration expects that the letter campaign will be more effective than can-we-help-you notices sent out by mortgage servicers. Steel said servicers "have reported limited success reaching at-risk customers, but independent counselors have reported a significantly higher success rate."

The letter recommends that borrowers in trouble get help by calling their servicer or a hotline, 888-995-HOPE. (The hotline belongs to the Homeownership Preservation Foundation.)

Posted by Jamie Smith Hopkins at 5:48 PM | | Comments (0)
Categories: Foreclosure help

How-to Monday: Renting vs. selling, part II (financing)


Photo copyright 


So you're buying a new house but thinking about renting out your current place rather than selling it. Naturally you've read last week's How-to post, so you have some food for thought about the joys and headaches of becoming a landlord. But how are you going to finance your move if all your equity is tied up in your old home?

You could always cover your down payment with the tens of thousands of dollars you squirreled away for just such an occasion. What? You haven't squirreled away tens of thousands of dollars? You average American, you. 

That leaves you with mortgage options.

I posed the question to two people in the business -- Michael C. Parsons, president of Nationwide Home Mortgage in Rockville, and Laura Randall, principal of Baltimore-based World Capital Lending. Both suggested a home equity line of credit or a home equity loan. 

Parsons notes that both require that you have enough equity in your current residence to borrow against and also that you have enough income to qualify. You can borrow up to 90 percent of the value of your current home, he said.

Parsons offers this example: Say your house, the one you're planning on renting out, is worth $200,000 and you owe $100,000 on the mortgage. You can borrow an additional $80,000 against that value -- a total of $180,000 in mortgage debt, or 90 percent of the house's value. That $80,000 is enough for a 20 percent down payment if you're moving up to a place worth twice as much as your current home.

Home equity lines of credit are generally variable-rate, which means the interest rate you pay can change whenever the rate your line of credit is indexed to -- usually the prime rate -- changes. You begin paying interest once you actually borrow against the line of credit, not when you sign the paperwork giving you access to it. Most banks will also eat the closing costs rather than passing them along to you as they would with a regular mortgage, Randall said.'s loan survey last week found that the average rate for lines-of-credit was about 7.6 percent.

Home equity loans are generally fixed-rate and look like a typical mortgage (in contrast to home equity lines of credit, which are often compared with credit cards). The average rate was about 8 percent last week, according to

What about a bridge loan, you say? This type of product typically lasts only six months and then comes due. "It's more or less a balloon note," Parsons said. It's a tool for someone buying a new home who wants to sell, not rent, their old one.

So: what to do? As always when lots of money is involved, you'll want to proceed with caution -- hence the yellow traffic light at the top of this post.  

The thing to consider is this: Are you confident you can juggle three mortgages at once (two on your old home and one on your new)? Be especially wary if you're counting on good rental income to make the numbers work.

"You can't be reckless about decisions with real estate because there are predictions that there's not going to be another increase in equity for five to 10 years after the market bottoms out," said Randall, a real estate investor whose brokerage firm works primarily with other investors. "So real estate's not liquid, and you don't want to be stuck in a position where you're struggling to make ends meet."

If you go the landlord route, she warns, be sure to have money set aside for vacancies and unexpected expenses. "I just wouldn't suggest that people do this on a shoestring," she said.

One thing to remember about Maryland is that the homestead tax credit, that cap on property tax increases you get as a homeowner, does not apply when you're no longer an owner-occupier.

Holden Lewis, who follows mortgage issues for, says this can all get so very complicated that a homeowner might want to sit down with a financial adviser to think through the implications -- income taxes, for a start.

If all this sounds headache-inducing rather than invigorating, there's another option: You could rent a new place while renting out your old one to someone else. Lewis recommends renting first in any case when you move to a new area.

"If you're leaving for a new job, you can't be sure if it's going to last forever," Lewis said. "You need to test it out. And also, you just want ... to live there for a while and find out where you want to buy."

There's nothing like being both a landlord and a tenant for a cocktail party conversation-starter.

Got other tips on this subject -- or questions you'd like to see answered here? You know the drill: Comment below or drop me a line. 

Posted by Jamie Smith Hopkins at 8:14 AM | | Comments (4)
Categories: Homestead Property Tax Credit, How-to Mondays

November 18, 2007

Tomorrow's How-to

On the subject of homes not selling, tomorrow's How-to Monday will explore financing options when you have to move but can't (or don't want to) sell your current house.

See you all in the morning!

Posted by Jamie Smith Hopkins at 9:33 AM | | Comments (0)

Home's not selling?

Andrea Siegel has a story in the real estate section today about how "the worst home-sales market in recent years has become a great one for St. Joseph statues, as desperate sellers of various faiths invest as little as $4.95 and hope for a miracle." St. Joseph is popularly considered the patron saint of home sellers.
"We are selling 400 percent more than we did five years ago, and we are selling tens of thousands this year," said Phil Cates, owner of stjoseph "Last Tuesday, from 12 [p.m.] to 1 p.m., we had 560 orders."

The story notes that the owners of a Washington Village house with no takers despite three price cuts got a statue and are hoping for the best.

"I am a staunch believer in faith, and I know I have done everything possible within my realm of expertise to sell the house," an exasperated Dee Statham, agent for the Washington Village house, said earlier.


Posted by Jamie Smith Hopkins at 9:27 AM | | Comments (0)

Meanwhile, in California

The Home Builders Association of Northern California says prices for new homes in the Bay Area are down "by as much as 20 percent," the San Francisco Chronicle reports today. Builders are offering "price cuts of as much as $150,000 on some projects in the far reaches of the Bay Area," the newspaper says.
"There is a massive amount of inventory sitting out there that is not being sold, particularly out in the East Bay," said Christopher Thornberg, a principal at the consulting firm Beacon Economics. "You're talking total meltdown."

On the other hand, the paper reports, home builders "do think the market has just about bottomed."

Posted by Jamie Smith Hopkins at 7:46 AM | | Comments (0)

November 17, 2007

Everything is interconnected

Bloomberg has a story today about the international ripple effects of U.S. housing market troubles:
Bank of Japan Deputy Governor Toshiro Muto said growth could be threatened if the U.S. housing slump spreads.

"You just don't see an end to the subprime housing-loan problem," said Soichiro Monji at Daiwa SB Investments Ltd. in Tokyo. "Unless we see some light at the end of the tunnel, we can't expect the market to rise."

Bloomberg said the Morgan Stanley Capital International Asia Pacific index "has lost 7.9 percent in November and is set for its biggest monthly drop since September 2001."

Posted by Jamie Smith Hopkins at 6:32 AM | | Comments (0)

November 16, 2007

Bill targets mortgage practices

The AP has a story about a bill passed by the House last night that would make illegal some lending practices that politicians consider abusive:
Democrats and consumer advocates have said that many subprime loans, made to people with weak credit, were essentially predatory: containing confusing terms, generating high fees for mortgage lenders and forcing low-income borrowers into loans they can't repay.

The House bill would ban lenders from making loans that borrowers can't repay, create a nationwide licensing system for mortgage brokers and make Wall Street banks that package mortgage securities into investments liable for violations of lending laws.

Critics, including lenders, say the industry has already changed its practices to deal with the post-boom housing market.

The National Association of Mortgage Brokers takes issue with one part of the legislation but still hails the bill as a "victory for borrowers and small businesses." You can see the press release here.


Posted by Jamie Smith Hopkins at 3:21 PM | | Comments (0)

A local look at home sales -- coming soon

Thanks for speaking up, Wonk readers. I got enough emails to assure me that I won't be number-crunching in vain -- that some people do want to know how their community's housing market performed in October compared with the rest of the area.

I'll post the results here as soon as time allows -- with luck, next week. It's multiple-listing data from Metropolitan Regional Information Systems, which means primarily existing-home sales.

Posted by Jamie Smith Hopkins at 8:39 AM | | Comments (0)

November 15, 2007

Speak up: Interested in a detailed peek at home sales near you?

I have here in my hand -- well, computer -- a list of all Baltimore-area home sales in October. Comment below or send me an email if you'd like to see how the region performed at a community level.
Posted by Jamie Smith Hopkins at 5:02 PM | | Comments (1)

Whose home is it anyway?

The New York Times has a story today about a foreclosure ruling that could allow attorneys to "impede foreclosures across the country or force investors to settle with homeowners":
Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize.

The pooling of home loans into securities has been practiced for decades and helped propel real estate prices in recent years as investors sought the higher yields that such mortgage trusts could provide. ... But as foreclosures have surged, the complex structure and disparate ownership of mortgage securities have made it harder for borrowers to work out troubled loans, in part because they cannot identify who holds the mortgage notes, consumer advocates say.

Now, the Ohio ruling indicates that the intricacies of the mortgage pools are starting to create problems for lenders as well.

Posted by Jamie Smith Hopkins at 12:50 PM | | Comments (0)

Mortgage scammers

Reuters, in an interesting story about lending scams, says "fraud accounts for a sizable share of the bad bets on mortgages, according to many industry experts, and lenders may have been victimized as much as anyone else."
Mortgage scams involve a cartel of inside players -- colluding property appraisers, real-estate brokers and accountants willing to draw up fake income statements and tax returns -- who recruit people with good credit histories to serve as a decoy or "straw buyer" in a real-estate deal.

The conspirators inflate the price of the property, to get the biggest loan possible, pay the sellers the original price and then pocket the excess loan money as "cash back" at the closing of the deal.

The decoy buyer is paid off -- often with just $5,000 -- and the property is quickly abandoned to foreclosure.

The story's main focus is a condo tower in Miami that Reuters says is "a leader in mortgage foreclosures and ... appears also to stand at ground zero in a blizzard of fraud that may lie behind many of the failed loans threatening to bury the U.S. property market."

Baltimore is no stranger to mortgage fraud, as anyone who remembers The Sun's reporting on a pre-boom flipping epidemic will recall.


Posted by Jamie Smith Hopkins at 11:41 AM | | Comments (0)

Survey says: Good time to buy a home

The National Association of Realtors released a survey about the housing market yesterday that suggests most Americans subscribe to the good-time-to-buy argument that both the Realtors and the homebuilders are making. From the press release:
This year’s results show that nearly nine out of 10 consumers believe that buying a home is a good financial decision. Fifty-nine percent of respondents also agree that now is a good time to buy a home; that number is even higher (64 percent) in areas of recent home price declines.

Other nuggets from the survey, which the Realtors say was a telephone poll of 1,000 people last month and (wonk alert) has a margin of error of plus or minus 3.1 percentage points:

--"More than eight in 10 say having enough money for down payment and closing costs are obstacles for home buyers in their area, up 17 percent from 2005."

--"Sixty-three percent also think the mortgage approval process is an obstacle, up 13 percent since 2005."

--"When asked how big of a problem foreclosures were in their area, 38 percent of respondents said foreclosures were a very big or moderate problem, but the majority, 51 percent, said foreclosures were only a slight problem or not one at all."

--"Of those surveyed, more than one in five homeowners have some type of variable-rate mortgage, including interest-only (15 percent), adjustable-rate (6 percent) and a balloon or other large payment due in the next five years (2 percent)."

Posted by Jamie Smith Hopkins at 9:31 AM | | Comments (0)

November 14, 2007

Brother, can you spare a dime to purchase some stock?

Standard & Poor’s Capital IQ has put out a new graph showing the pummeling that homebuilding stocks have taken in the past year. The key is hard to see: Blue represents the S&P 500 (up 6 percent), maroon represents the major homebuilders (down 46 percent) and yellow is the S&P 500 Homebuilding Sub-Industry Index (down 53 percent).




Source: Standard & Poor’s Capital IQ


Posted by Jamie Smith Hopkins at 5:03 PM | | Comments (0)

The ripple effect of foreclosures

Lorraine Mirabella and I have a story today about a report by the Center for Responsible Lending that tries to put a figure on the number of homes that will see values decline simply because they are near subprime foreclosures.

The center estimates that about a third of homes nationwide -- 44.5 million -- will see property values drop by an average of $5,000 two to three years after the foreclosures of loans originated in 2005 or 2006. Such a loss would add up to $223 billion.

The study ranked Maryland sixth worst in the nation, with some 1.43 million properties - more than half the state's total - expected to lose $8 billion in value. California was ranked No. 1.
The Joint Economic Committee of Congress, in a report last month, put a smaller figure on the projected loss for Maryland.
The committee estimated the total loss of state property values at $2.7 billion, of which about $1.1 billion was the ripple effect on nearby homes. That report forecast subprime foreclosures from the middle of this year through the end of 2009.
Posted by Jamie Smith Hopkins at 10:03 AM | | Comments (1)
Categories: Foreclosure help

Columbia condo tower might not get built

June Arney has a story today about how the housing market is spelling trouble for the 23-story condo tower planned for downtown Columbia.

The developer, Florida-based WCI Communities Inc., "insists that the project is solid despite financial problems that caused it last week to announce 575 job cuts -- about a quarter of its work force," Arney reports. But others are skeptical, noting that the company is losing money and will face pressure from lenders.

"I would be shocked if WCI could actually go forward with that tower in Columbia, Md.," said Susan Berliner, a senior managing director and analyst at Bear Stearns Co. who follows the company and the homebuilding sector. "To me, there's no way it's going to get built."
Posted by Jamie Smith Hopkins at 9:53 AM | | Comments (1)

Look on the bright side, Realtors say

The National Association of Realtors has issued a press release to suggest that the market isn't nearly as bad as everyone seems to think:
In 2002, home sales set a new record at just over 5.5 million, and three-quarters of metro areas showed price gains over the previous year. At the time, home buyers were confident that the real estate market was strong and healthy. In 2007, existing-home sales are forecast to be about 5.5 million, and two-thirds of metro areas showed price gains last quarter. Both 2002 and 2007 show strong sales, and homes continue to prove a good long-term investment. But this year, public perceptions are different.

In related news, the NAR's forecast of existing-home sales this year is yet another downward revision.

The NAR has new press releases on a variety of other topics here, from auctions to for-sale-by-owner trends.

Posted by Jamie Smith Hopkins at 9:00 AM | | Comments (0)

What? The boom's over?

The Seattle Times, covering the National Association of Realtors' convention in Las Vegas, reports that the housing boom "is over and the dust is now settling, Lawrence Yun, the group's chief economist, told the thousands of real-estate professionals meeting here."
This is the first year since the Great Depression to register a nationwide decline in median home prices, Yun said. His latest numbers put the drop at 1.7 percent. "We're in a time of fear," he said.
Yun expects that sales of homes on multiple-listing services will be "bottoming out in the current quarter, then rebounding by mid-2008," the newspaper reports.
However, many other economists are far less optimistic. They predict weak sales, sinking new home construction and falling prices through next year and emphasize that those problems could worsen if the economy sinks into a recession.
Posted by Jamie Smith Hopkins at 8:38 AM | | Comments (1)

November 13, 2007

Wonk alert: Plans for growth in a town near you

The Maryland Department of Planning has launched a new feature on its website: a centralized place to find comprehensive plans for growth in towns and counties, draft plans if any are in the works and state planners' comments on those draft plans.

It's geared to the most wonkish, but you never know when you might need to find out if planners think your county government is, for instance, failing to properly account for traffic flow on the road you take to work every day.

Posted by Jamie Smith Hopkins at 9:11 AM | | Comments (0)

Shiller predicts much longer housing slump

Reuters reports that Yale University economist Robert Shiller -- yes, that Shiller, the one involved in the S&P/Case-Shiller home price index -- expects the housing slump is still years away from ending.
"There is a probability of a continuing decline for a period of years, bringing prices in many cities down in the 10s of percent," Shiller said.

"The bottom is hard to predict," he said. "I do not see it imminent, and it could be five or 10 years, too."

He also had this thought to share:
"The housing situation that we got in is unique in history because there was an investor psychology that developed that was stronger than we have ever seen before," Shiller said. "We have seen housing bubbles many times in history, but they have been much more local than this one."
Posted by Jamie Smith Hopkins at 8:53 AM | | Comments (0)

November 12, 2007

A multi-million-dollar campaign for your home-buying vote

The Chicago Tribune's real estate columnist, Mary Umberger, notes that the National Association of Realtors -- like the homebuilders -- are on a campaign to convince Americans that now is a perfectly fine time to buy:
NAR executive Frank Sibley tells me it will consume most of the group's ad budget this year - that is, $45 million in print, television and radio.

"The key points of the campaign are that the value of a home nearly doubles every 10 years, based on a 30-year history," Sibley said. "The housing market is better than what you're hearing in the media."

Umberger warns readers to "brace yourself for the planned 25,000 radio spots."
Posted by Jamie Smith Hopkins at 9:08 AM | | Comments (1)

How-to Monday: Deciding whether to sell or rent


Photo credit: Ross D. Franklin/Associated Press


A Wonk reader wonders whether it makes more sense to sell your house or rent it if you have to move -- and no doubt she's not the only one pondering this question. I asked real estate agent Dahlia Kaminsky because she works with city rehabbers, who have been pressed to consider alternatives to the fix-and-sell business plan that worked so well during the boom.

"A lot of people have their homes listed for sale and rent simultaneously," said Kaminsky, with City Life Realty in Hampden. "It's not an option for everyone, but for people who have the luxury, I would say, of being able to have options open to them, they are indeed renting or selling -- whichever comes first."

Things to consider, in Kaminsky's opinion:

--How much is your mortgage payment? If you bought your home in the last few years and didn't make a big down payment, for instance, it might be tough to get enough in rent to cover your costs. On the other hand, if you've owned for years and just want to wait out the housing slump, you could make money on the deal.

--On a related note: How much is the going rate to rent homes similar to yours? You can ask a Realtor or search websites that list rentals. (See this entry for some ideas.) If you're doing your own research, plan on spending more than a few minutes on it. Last week I checked out Baltimore's Pigtown -- or Washington Village, depending on which name you prefer for the neighborhood near the stadiums -- and found a wide range of asking prices for rents on Craigslist. A "2 BR 2 Full Bath BEAUTIFUL Rehab w/ Parkg, granite, deck, wd flrs" was listed for $1,235 a month, but there was a three-bedroom for $999 ... and another three-bedroom for $2,700.

--Will you manage the property yourself or hire someone to do it for you? Either way, count on extra expenses. And do your homework whether you're vetting tenants or property managers, Kaminsky said. A friend of hers went with a property manager and discovered later, when she was trying to sell, that the tenant had not moved out as agreed and had cats despite her no-pets rule.

--Is your house lead-safe? In Maryland, you need to pass a lead paint inspection to rent out a property if it was built before 1950. 

--Can you find a rent-to-own tenant? A tenant who intends to buy down the road is more likely to "treat it with the love and care that a homeowner would," Kaminsky said.

She thinks it could make sense to rent for a small loss if you're convinced it's better to hold off on a sale. Just keep in mind that your costs probably won't be limited to the mortgage, insurance and property taxes. And you can't count on having a tenant -- a paying one, at least -- every month, either. (One of the landlords I talked to earlier this year for a story about investors going into foreclosure spent months trying to evict a non-paying tenant.)

Rental property requires your time, too. Kaminsky's parents have rental properties so she knows that firsthand: "I remember as a child, it was a lot of work day in and day out."

But now they're financing their retirement with the money. Kaminsky said some folks who decide to rent out their homes temporarily might find they like doing it. "It's a great time to pick up investment properties," she said.

Next week, if all goes as planned: How to buy a new home if you've chosen to rent out your current one rather than sell it.

Have any tips or thoughts about renting vs. selling? Have another question you'd like to see addressed? Comment here or drop me a line.

Posted by Jamie Smith Hopkins at 8:29 AM | | Comments (0)
Categories: How-to Mondays, Q&A

November 11, 2007

Going, going, going -- green

Andrea Siegel has a story in today's real estate section about solar-power systems in homes, a niche market that is attracting more interest in these days of sharply rising electricity costs.
"Residential is about to happen," said David Pratt, a principal in the Lorax Partnership consulting firm and president of the Baltimore chapter of the U.S. Green Building Council.

Solar energy is catching on faster for commercial buildings because it is more cost-effective there, though, he said, if it could be made more cost-effective for houses, it could become mainstream.

On a related note, The New York Times has a story today about green education programs for homebuilders, who have been much slower than commercial builders to embrace such construction techniques, and not just where solar is involved. The Times notes General Electric’s “ecomagination home builder program," which is "one of several new programs":

Demand for green housing has been growing — 46 percent of buyers would like a green home, according to an August report by the National Association of Realtors on home buyers’ preferences — but supplies are limited. Yet only 2 percent of existing American homes contain green features, like energy-efficient windows, according to an October report by the McGraw-Hill Construction Information Group. And many of those homes are either high-end apartment buildings or low-income residences.
Posted by Jamie Smith Hopkins at 11:18 AM | | Comments (0)

November 10, 2007

Big home price decline predicted for Baltimore

Catching up with things I missed while out of town: Fortune is predicting big decreases in home prices in communities across the country, Baltimore in particular, with a calculation that looks at prices compared with rents. The cost of renting, Fortune says, is "over time the most reliable guide to home values":
So what are rents saying about home values today? To answer that question, Fortune worked with Moody's to estimate adjustments needed to get prices and rents back in balance. We'll go into detail below, but the headline is gloomy: According to our calculations, prices in most markets will fall by double digits over the next five years.

Fortune says upper-end homes in the Baltimore area -- ones that sell for twice the median price -- will likely see a price decline of almost 28 percent over that period. That would be the fifth-biggest decrease, if Fortune is right, behind only Orlando, Miami, California's East Bay and Tampa in Florida. See the list here.

The average drop it predicts for upper-end homes in the 54 metro areas it looked at is about 15 percent. (Fortune's forecasts account for rents rising; otherwise, it says, the drop would have be even bigger to get home prices and rents into balance.)

Tip of the hat to Baltimore Housing Bubble for pointing this out first.

All forecasts must be taken with a grain of salt, of course, if for no other reason than the fact that reasonable economists disagree. Last time I talked to, folks there weren't predicting such a big decline for the Baltimore area.

But back in 2004, well before the slump, Dean Baker, co-director of the think-tank Center for Economic and Policy Research, was convinced by the rent-price differential that Washington was headed for trouble -- so convinced that he sold his home and switched to renting.

Posted by Jamie Smith Hopkins at 12:37 PM | | Comments (4)

November 9, 2007

Prices up, but sales way down

Average home prices rose just under 3 percent in the Baltimore metro area last month, but apparently at the expense of sales, which took the biggest year-over-year nose-dive on record. Buying dropped by about 32 percent compared with October 2006.

Metropolitan Regional Information Systems, which released the numbers today, has sales comparisons going back to March 1999.

The second-worst performance was in September of 2006, followed by September of this year. Economists attribute the increased problems in the last two months to the pullback in subprime lending, the rise in jumbo-loan rates and other mortgage trauma that hit in August.

In the good news/bad news department:

Good news: Inventory fell rather than rose, to about 20,500 unsold homes from 20,900 the month before. Bad news: The sales figure was by far the lowest for any October on record. That means the time it would take to move all the unsold homes at the current sales pace is continuing to go up.

I know, I know, this is all my fault. Sorry.

Other noteworthy stats:

Average prices jumped about 10 percent in both Baltimore City and Howard County -- though the typical home seller probably didn't see that, since the median price increase was much more modest. (It was about 5 percent in Howard and less than 1.5 percent in the city.)

Average prices dropped in Baltimore County and Harford County (about 4 percent and 3 percent, respectively).

Carroll County, which saw a small increase in average price, had the best sales performance -- its numbers fell less than 7 percent. Every other jurisdiction in the Baltimore area saw decreases around 30 percent.

Homes that sold in the Baltimore metro area in October sat on the market an average of 103 days, up from 70 a year earlier. That's about on par with October 1999, and better than October 1998, when the days on market hit 127 -- more than four months.

Posted by Jamie Smith Hopkins at 12:50 PM | | Comments (1)
Categories: Number-crunching

Baltimore home sales numbers for October

Metropolitan Regional Information Systems just released the October numbers for Baltimore and the rest of the region. I'll put up an entry about it in a little bit.
Posted by Jamie Smith Hopkins at 11:18 AM | | Comments (0)

Home sales ... and cancellations

You can read my story in today's paper on the local housing forecasting conference here, if you'd like more than the thumbnail sketch from yesterday.

I included information from Metrostudy, which tracks the industry and released numbers on the region this week -- the region as Metrostudy defines it, namely Washington, Northern Virginia and Maryland minus the Eastern Shore and far western edge. Notwithstanding Toll Brothers' opinion, Metrostudy ranks this area as among the healthier markets it follows because builders have decreased inventory.


Sales in the region dropped about 50 percent last month, compared with September, Metrostudy said. The cancellation rate was 60 percent. The company attributed both problems to the credit crunch that hit in August, pushing up rates on the "jumbo" loans needed for pricey homes and cutting back on mortgage options.
Posted by Jamie Smith Hopkins at 10:49 AM | | Comments (0)

Lousy grades for housing markets -- and more blame

The New York Times has a story today in which Toll Brothers' chief executive says the housing market is so bad in many parts of the country that he has to "differentiate between F, F-minus and F-minus-minus."

CEO Robert I. Toll said the worst markets -- the F-minus-minuses -- were Las Vegas and Tampa. But he awarded an F-minus grade to Maryland's Eastern Shore and a D to Washington and its Maryland suburbs.

And speaking of blame -- he says he fears the market "will not get better until the newspapers stop saying how bad it is," the Times reports, paraphrasing Toll. 

He said a survey of Toll customers who canceled contracts showed that only 11 percent reported trouble getting mortgages. More either had personal financial problems or were unable to sell the homes they already owned. “People who just wanted to walk” accounted for 17 percent of the cancellations, he said.

“Translation, they’ve read one too many Times articles, and decided now is not the time to buy a home,” he said.

EDIT: Hat tip to editor Bernie Kohn for pointing out an amusing irony: Toll Bros. co-founder Bruce Toll is one of the owners of The Philadelphia Inquirer.

Posted by Jamie Smith Hopkins at 10:29 AM | | Comments (1)

November 8, 2007

It's a great time to buy, say the folks who are selling

At its forecasting conference today, the Home Builders Association of Maryland handed out some of the National Association of Home Builders' ads intended to counteract the negative news that we pesky journalists keep reporting on. I thought you all would enjoy them, whether you think it's a great time to buy or not.




Here's another ...


On a related note, one of the conference attendees asked Baltimore economist Anirban Basu about the impact of press negativity. Basu responded: "The psychological shift that took place in 2005 ... had to do with the Baltimore Sun, the Boston Globe and all of the rest of them saying, 'This is the peak of the market.'"

Other problems cropped up later, he said -- lots of other problems. Still, he said, journalists have made "a bad situation worse" by piling on. 

Et tu, Basu?

"But at the end of the day," he added, "this is just economics."

All right then. The Wonk feels better.

Posted by Jamie Smith Hopkins at 6:33 PM | | Comments (0)

Economists to home builders: no bottom yet

Some quick notes about the Home Builders Association of Maryland's annual forecast conference, held today:

A record number of people showed up -- 360, almost twice as many as last year, which gives you an idea of the level of anxiety about the market. (The conference was first held in 1996.)

National and local economists, offering their predictions about when the housing market will stop getting worse from a sellers' perspective, didn't agree on when but all said that it won't be soon.

The National Association of Home Builders' director of forecasting said the bottom would come in the middle of next year. Freddie Mac's chief economist expects it around the end of next year. Baltimore economist Anirban Basu said not until 2009, possibly the middle of that year.

You all know the reasons: lending problems, rising foreclosures, unaffordably high prices, high levels of unsold homes -- and don't forget nervous buyers. (Also, bad press, some of the builders argued.)

More about the conference once I'm done writing the story about it for tomorrow's paper.

EDIT: I was given incorrect information -- this was the 10th annual conference, not the 12th.

Posted by Jamie Smith Hopkins at 3:22 PM | | Comments (0)

Brainstorming housing-market solutions

Forbes asked a variety of people for housing-market fixes and, not surprisingly, got a variety of suggestions. For instance:
One solution put forth by Congressman Lincoln Davis (D-Tenn.) involves expanding GSE (government-sponsored enterprises) securitization to rejuvenate lending, but to regulate it so that money doesn't flow to speculators and luxury developers.

Meanwhile, some argued that the Fed's interest-rate cuts aren't helpful.

"Artificially stimulating demand," says Glenn Kelman, CEO and president of Redfin, a Seattle-based Internet brokerage, "is what got us into trouble in the first place."
Posted by Jamie Smith Hopkins at 7:08 AM | | Comments (1)

November 7, 2007

How much would your home cost ...

... if you woke up tomorrow to find it in, say, California? Coldwell Banker Real Estate recently put together a calculator that lets you compare and contrast.

By its measure, a $400,000 house in the Baltimore area would be worth a little more than $1 million in San Francisco. (It would be about $460,000 in Miami and $220,000 in Dallas.)

Coldwell Banker says it bases its comparisons on "a single-family dwelling model with approximately 2,200 sq.ft., 4 bedrooms, 2 1/2 baths, family room (or equivalent) and 2-car garage" in neighborhoods "typical for corporate middle-management transferees."

The website also has a compare-and-contrast calculator for college towns.

Posted by Jamie Smith Hopkins at 3:11 PM | | Comments (1)

A different home sales strategy

Lorraine Mirabella has a story today about Silo Point, the grain elevator in Baltimore's Locust Point neighborhood that developer Patrick Turner is turning into condos. She reports that "unlike most developers of new homes, Turner is forgoing pre-construction sales, which developers typically count on to build momentum and help cover costs."

Turner says he will not announce prices or take deposits until the end of January, about two months before the bulk of the project opens in April.

"Most developers won't take the risk," Turner said.

But he says he's financially able to wait and believes it's better to set prices according to the current market. That helps minimize the risk of either low-balling them and forgoing profit, or setting them too high and then being forced to cut prices, losing contracts from early buyers.

... John E. Kortecamp, executive director of the Home Builders Association of Maryland, said Silo Point was the first project he knew of in the Baltimore area that wasn't attempting to sell well before completion.

Posted by Jamie Smith Hopkins at 9:57 AM | | Comments (2)

November 6, 2007

The sitcoms have noticed the housing market

Last night's "How I Met Your Mother" has married couple Lily and Marshall foolishly deciding to buy an apartment despite Lily's tremendous credit card debt and the 18 percent interest rate on their (apparently) subprime loan.

Ted, their friend and the show's narrator, says it's "the third and biggest" of Marshall's three big mistakes of his life.

Marshall: "We should buy a place. Baby, real estate is always a good investment!" (Ted, narrating from the future: "It's not.")
Marshall: "And the market is really hot right now!" (Ted: "It wasn't.")
Marshall: "And because of my new job, we are in such a strong place financially!" (Ted: "They weren't.")

Any other TV shows discussing the housing market?

Posted by Jamie Smith Hopkins at 7:52 PM | | Comments (0)
Categories: Housing humor

Forecast: More home price drops to come

Money Magazine has a short story about the 2008 housing market outlook, and the forecast is dark and stormy.
Just how bad will it get? According to Fiserv Lending Solutions, the median home price nationwide is expected to tumble 5.7 percent next year, which would make it the worst year for real estate in at least 40 years.

And some previously sizzling markets in places like Florida and Nevada will likely suffer double-digit drops.

Fiserv Lending Solutions expects the biggest drops next year in Miami (down 13.1 percent); Carson City, Nev. (down 12.5 percent); St. George, Utah (down 11.5 percent); Stockton, Calif. (down 10.5 percent); Grand Junction, Colo. (down 9.9 percent); and Ocean City, N.J. (down 9 percent).

Posted by Jamie Smith Hopkins at 4:35 PM | | Comments (0)

Politics and the housing market

The Los Angeles Times has a story -- datelined Sterling, Va. -- about the potential political ramifications of the housing downturn "in fast-growing exurban counties, where the real estate market is worst":
The national downturn in the housing market has arrived in Loudoun County, a once-largely rural area on the western fringes of Washington that has become one of the fastest-growing regions in the United States. In addition to the economic effect, it's stirring anxiety and discontent that have begun to change the climate in which people consider politics -- especially some Republicans.

The story has hundreds of comments, including this one: "How exactly is either political party responsible for people buying homes they could not afford?"

Posted by Jamie Smith Hopkins at 4:19 PM | | Comments (0)

West side redevelopment

To mark my return to town (though not to work -- that'll be tomorrow), I hereby point you toward this story by Lorraine Mirabella about the continued efforts to revitalize Baltimore's west side. Her story focuses on several new development proposals:
Redevelopment of mostly vacant properties, including the former Mayfair Theater, will bring 79 market rate apartments, street-level shops and on-site parking to the 400 and 500 blocks of N. Howard and to the 300 block of W. Franklin streets, the Baltimore Development Corp. said yesterday.
M.J. "Jay" Brodie, president of the quasi-governmental BDC, told Mirabella:
"What we know works on the west side is rental housing, and retail will gradually come along. It may be slow, but it will come. But the primary thing that makes these developments work is rental housing."
Posted by Jamie Smith Hopkins at 3:42 PM | | Comments (0)

November 5, 2007

How-to Monday: Apartment hunting


The Zenith in Baltimore. Photo taken by Amy Davis, Sun photographer.


Yes, I see you out there, Baltimore-area renters. I know you feel ignored, what with all the home-sales news out there. On second thought, maybe you feel relieved that you're renting. But either way this post is for you alone.

That's right, homeowners. Move along. This is not the post you're looking for.

Now: Here's how to harness the power of the Internet to avoid renting a wretched hive of scum and villainy. (And that's my last Star Wars quote of the day, I promise.)

Craigslist's Baltimore site has a corner devoted to apartments and houses for rent.  

HousingMaps, which combines those Craigslist rental notices with Google Maps, lets you see at a glance where everything is located. After you choose "Baltimore" as the city, you can sort by price and click on "show filters" to pick must-haves (throw "rehab" into the keyword searcher, for instance). Click on the points for information, and it'll pop up photos if the property owner uploaded any. (HousingMaps also lets you search for property that's for sale and for sublet.)'s Baltimore site has you narrow your search to communities within the metro area. Figuring that a few out-of-town folks might be considering Aberdeen, I ran a search last week for two-bedrooms in that area and got 12 listings ... only one of which was actually in Aberdeen. If that's an accurate picture of the local housing market, the base realignment and closure relocatees who can't live on base are either going to have to buy or commute. (I see that The Sun's apartment search page is also powered by

Live Baltimore lists some of the apartment complexes in the city.

Rentometer tells you whether you're paying (or charging, if you're the owner) more or less than average for the area and shows comparable apartments nearby.

And finally, you can check out what renters think about local apartments at Apartment Ratings

Posted by Jamie Smith Hopkins at 8:38 AM | | Comments (2)
Categories: How-to Mondays
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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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