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March 31, 2008

How-to Monday: Developments in your back yard

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Source: Sun photographer Barbara Haddock Taylor

 

To be forewarned is to be forearmed -- or to have something to look forward to, as the case may be. That's why people like to know what real estate developments are brewing in their community.

Once, there was little choice for the interested citizen but to visit the local planning department. Now -- well, that's still the main option, but more jurisdictions are offering some information online.

Anne Arundel County has a list of scheduled "pre-submission" meetings, for developers to meet with residents about upcoming plans, HERE. The county also keeps maps and charts of subdivision activity HERE, to give you a sense of what's going on where. The Office of Planning and Zoning is at 2664 Riva Road in Annapolis, 410-222-7450.

Baltimore City has a site HERE that lets you look up permits issued since 2002. Need planning and zoning information? You can call a community planner -- their contacts are HERE -- or visit the city Planning Department at 417 E. Fayette St., 410-396-7526.

Baltimore County keeps its community plans, zoning maps and similar information HERE. You can sign up for a quarterly e-newsletter about approved plans HERE (and find other e-newsletters, some related to development, HERE). The county also has information about "planned unit developments" HERE. The county Office of Planning is in the Jefferson Building, Suite 101, at 105 W. Chesapeake Ave. in Towson, 410-887-3211.

Carroll County keeps a list of approvals, submittals and recordations HERE. But the information is only through 2007, last I checked. The Department of Planning is at 225 N. Center St. in Westminster, 410-386-2145. Incentive to go in: The county has a mapping program on a computer set aside for public use that lets you see subdivisions in process and a lot of other useful things, like school district boundaries and zoning.

Harford County has updates to its zoning code HERE. It lists development meetings HERE with some details on the developments being discussed. The Department of Planning and Zoning is at 220 S. Main Street in Bel Air, 410-638-3103.

Howard County offers more information for people who want details on individual developments. Click HERE for a searchable tool that lets you see site development plans, subdivision plans and pre-submission meetings for properties near any address you choose. The Department of Planning and Zoning is at 3430 Court House Drive in Ellicott City, 410-313-2350.

Remember: If you live in a municipality with its own planning powers -- Carroll has eight, for instance -- you'll most likely want to turn to your city for information.

We're still a ways away from seeing all public documents on all development plans with the click of a home-computer mouse, but your local officials might hop to it if you ask. Arnold F. "Pat" Keller III, Baltimore County's planning director, encourages residents to email planning@baltimorecountymd.gov with ideas for Planning's website.

"If people feel like we could improve it or would like different types of information, email us," Keller says. "No joke."

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (1)
Categories: How-to Mondays
        

March 30, 2008

The lowdown on big loans

Columnist Kenneth Harney has details about the new jumbo-sized Fannie, Freddie and FHA loans -- credit scores, down payment required and the like. Click HERE to see today's piece, or read on for a taste:
For example, in the guidelines for what Fannie Mae calls its new "jumbo conforming" program, the company will, beginning April 1, purchase fixed-rate mortgages up to $729,750, but only with the following conditions:

• Minimum down payment of 10 percent.

• Minimum FICO credit score of 700 for any loan with less than a 20 percent down payment. "Nontraditional" credit histories as alternatives to FICOs are not permitted as in other programs.

• Minimum 40 percent down payment and 660 FICO for second homes and investor properties.

Posted by Jamie Smith Hopkins at 8:00 AM | | Comments (0)
        

March 29, 2008

Potentially inflated tax bills

Have you been paying too much in property taxes? Most people would probably say yes, of course, but some residents might have the law on their side.

John Fritze reports today that city homeowners in "special benefits districts" such as Charles Village and Mount Vernon may have overpaid:

At issue is whether a popular tax credit should be applied to additional levies collected by the Charles Village Community Benefits District and the Midtown Community Benefits District to offer extra garbage collection and private security guards.

For years, the city has applied the Homestead Tax Credit to property taxes that support city services, but not to the benefits districts' tax rate, which might have resulted in small overpayments by thousands of homeowners.

The city solicitor's office said in an opinion this week that any credit that applies to the city's regular property tax should also apply to the benefits districts' tax. But after questions from The Sun about whether that meant prior tax bills were calculated incorrectly, the city withdrew the opinion.

Posted by Jamie Smith Hopkins at 2:07 PM | | Comments (1)
        

March 28, 2008

Who these homebuyers are

The big drop in U.S. home buying last year came because everyone was pulling back -- primary-residence purchasers, vacation-home buyers and real estate investors. That's according to a survey released today by the National Association of Realtors that looks at sales of all homes, new and existing.

The trade group said the biggest decrease came in vacation-home sales, down 31 percent in 2007. Investment-home sales dropped 18 percent, while primary-home sales fell the least -- 10 percent.

Total sales in each category last year: 740,000 vacation homes; 1.35 million investment homes; and about 4.3 million primary-residence homes.

In all, vacation- and investment homes were 33 percent of sales, down from 36 percent in 2006, the NAR said.

Posted by Jamie Smith Hopkins at 5:20 PM | | Comments (2)
        

Living where you work

Today's Dream Home profile in The Sun focuses on a Washington County resident who runs a knitting business from her house. As it turns out, she's in good company.

Half the businesses in the nation are home-based, according to the Census Bureau.

It's an interesting twist on the old commuting question, though of course not all those business owners are only working from home. Plenty of full-time employees run small firms on the side.

Posted by Jamie Smith Hopkins at 4:37 PM | | Comments (0)
        

March 27, 2008

The mortgage mess: a fresh example

The whole point of an adjustable-rate mortgage is to start off with a lower interest rate than a fixed loan. But it's a topsy-turvy world in the mortgage industry these days.

Bankrate.com's weekly survey of large lenders, released today, found average rates for conforming 30-year fixed mortgages at 5.95 percent, while ARM rates were above 6 percent. (The 1-year adjustable loan had a rate of 6.25 percent.)

Here's what Bankrate.com says about it:

It is unusual to see fixed mortgage rates lower than the rates offered to borrowers taking adjustable rate mortgages. But that is exactly the situation we are currently in, with rates on adjustable mortgages having been pushed higher in recent weeks due to a secondary market for adjustable rate mortgage-backed securities that is in disarray and being plagued by more sellers than buyers. Adjustable rate mortgages have higher instances of delinquency than fixed rate loans, and investors are exacting a price for that by commanding higher returns. This means higher rates for borrowers. Lenders not dependent upon the secondary markets are in a position to offer better terms, underscoring the need for consumers to shop around.
Posted by Jamie Smith Hopkins at 10:58 AM | | Comments (1)
        

March 26, 2008

Asking less

Asking prices in the Baltimore metro area are down about 9 percent in the past 12 months for the median house, according to HousingTracker.net.

Asking prices for higher-end housing dropped slightly more, closer to 11 percent. But here's what surprised me: People selling homes at the cheaper end of the spectrum are asking almost 12 percent less than a year ago. One might assume they'd feel less downward pressure rather than more -- I continue to hear that properties affordable to the most buyers are generally the easiest to sell.

At the lower end, a 12 percent drop takes asking prices from almost $224,000 to about $197,400, according to HousingTracker.net.

Posted by Jamie Smith Hopkins at 7:25 AM | | Comments (3)
        

March 25, 2008

Dueling studies

Remember the University of Maryland study concluding that "inclusionary zoning" makes housing more expensive overall? (Read about it HERE if you don't.) Now comes a study from New York University's Furman Center for Real Estate and Urban Policy, which says the laws requiring some below-market affordable housing aren't having much effect.

From today's press release:

Objective, rigorous analysis of the San Francisco region finds no evidence that Inclusionary Zoning impacts either prices or production, while study of the suburban Boston area finds some evidence that Inclusionary Zoning programs resulted in small decreases in production and slight increases in prices.

... “Our analysis refutes the ‘sky-is-falling’ cries from IZ opponents; we find no evidence that IZ programs have reduced housing production in the San Francisco area, and find evidence of only slight effects on production in the Boston area,” says Vicki Been, Director of the Furman Center. “However, we found that IZ policies have produced only a modest number of affordable housing units, suggesting that IZ by itself is not a panacea for a community’s affordable housing challenges.”

The study was co-released by the Center for Housing Policy in Washington.

Posted by Jamie Smith Hopkins at 11:00 AM | | Comments (0)
        

Here's something new

The country's more than 8 percent drop in median home prices last month, the biggest decline on record, might not sound like hopeful news. But paired with an increase in month-over-month sales for the first time in half a year, it struck economists as very promising indeed.

From my story today:

The end of the housing downturn? No, said Mark Zandi, chief economist at Moody's Economy.com, but he thinks it is "the beginning of the end." He and many economists have been saying for months that the housing market won't right itself until prices drop significantly.

"Sellers are cutting prices, and that's now putting a floor under sales," said Zandi. "That's the first step in what will be a long housing bottom."

Unlike the national figures, Baltimore metro area sales aren't seasonally adjusted, which means there's no use comparing the normal upturn in February to sales in, say, December or November. But you can compare the January-February increase to previous January-February periods, and this year's was the biggest since Metropolitan Regional Information Systems first started tracking those months back in 2000.

Median prices in our metro area -- the city and five surrounding counties -- dropped 2.5 percent last month from a year earlier.

Posted by Jamie Smith Hopkins at 10:24 AM | | Comments (5)
        

March 24, 2008

How-to Monday: Schools and neighborhood safety

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Photo courtesy of Stock.XCHNG

What do you want to know about a neighborhood before you sign a sales contract or apartment lease? Lots of things, probably -- but safety and schools top the list if you're like most people.

You'll need to do your own research: The federal Fair Housing Act prevents real estate agents from giving you information about school quality or other factors that boil down to characterizing a neighborhood.

"Realtors refer anyone who is interested in what goes on in the schools to the Board of Education," said Debbie Hager, director of communications for the Maryland Association of Realtors. "The Realtor really needs to remain totally impartial."

The Internet makes it easier than ever to start your research, though it's not the end-all and be-all.

To learn more about reported crimes in your area:

Anne Arundel County lets you look up crime stats near you -- or near the address of your choosing -- HERE. You can also put in an address and get general information, such as trash pickup times.

The Baltimore City Police Department has an interactive map HERE.

The Baltimore County Police Department keeps statistics and an interactive map HERE.

The Carroll County Sheriff's Office suggests that people seeking information about neighborhood crime call the office's public information officer, 410-386-2759. Similarly, the Harford County Sheriff's Office suggests calling its crime analysis unit, 410-836-5402.

The Howard County Police Department spits out reports about crime near the address of your choosing, though be warned that the stats are from 2006. Click HERE. (UPDATE in 2011: The data's more up-to-date now.)

To learn more about local public school test scores, go to the Maryland State Department of Education's Maryland Report Card site HERE. You can see scores for the Maryland School Assessment (MSA), the Alternate Maryland School Assessment (ALT-MSA), and the High School Assessments (HSA) -- they're summed up statewide, by county and by school. You can compare schools with other schools, and you can also look at the Adequate Yearly Progress reports.

But that's just the beginning. Crime stats and test scores won't necessarily tell you if you'll be comfortable living in the neighborhood and/or happy with the local schools. So visit -- and talk to neighbors and parents about what they think.

You can find other sources of information, too. The state's sex offender registry. The Sun's education blog, Crime Beat blog and homicide map. Another homicide map -- tracking a larger area -- on the blog burgersub.org. A collection of crime information on the Baltimore Crime blog.

Have other sites or offline sources of information you like? Please share.

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (3)
Categories: How-to Mondays
        

March 23, 2008

Statistic of the day

Courtesy of The Los Angeles Times:
In 1970, 36 percent of new homes were less than 1,200 square feet, the National Association of Home Builders reports. Today, 4 percent of new homes are that petite. One in 10 new houses was 2,400 square feet or more in 1970; 42 percent are that large now.

Perhaps homes would be more affordable to more people if they weren't so huge. Of course, a complicating factor is that big homes are sometimes the only option under local zoning rules in rural and semi-rural places, which is where a fair bit of homebuilding has been going on in the last generation.

Posted by Jamie Smith Hopkins at 8:13 AM | | Comments (0)
        

March 22, 2008

Come again?

Perhaps you're still trying to understand how mortgages that people shouldn't have gotten and lenders shouldn't have underwritten are causing as much turmoil as they are, rippling far, far beyond the housing market. It's OK. Financial whizzes are still trying to understand.

David Leonhardt with The New York Times wrote a piece this week on the topic:

I spent a good part of the last few days calling people on Wall Street and in the government to ask one question, “Can you try to explain this to me?” When they finished, I often had a highly sophisticated follow-up question: “Can you try again?”

He ends up with one of the clearest explanations I've seen yet. The problem wasn't simply risky loans turned into risky investments. It was risky loans turned into risky investments that were -- yes -- made even riskier:

Investors then goosed their returns through leverage, the oldest strategy around. They made $100 million bets with only $1 million of their own money and $99 million in debt. If the value of the investment rose to just $101 million, the investors would double their money. Home buyers did the same thing, by putting little money down on new houses, notes Mark Zandi of Moody’s Economy.com. The Fed under Alan Greenspan helped make it all possible, sharply reducing interest rates, to prevent a double-dip recession after the technology bust of 2000, and then keeping them low for several years.
... The American home seemed like such a sure bet that a huge portion of the global financial system ended up owning a piece of it. 
Posted by Jamie Smith Hopkins at 12:32 PM | | Comments (6)
        

March 21, 2008

Is your neighborhood making you unfit?

Research published in the Urban Studies journal concludes that the neighborhood you live in has a noticeable impact on whether you exercise. From the press release:
Residents of neighborhoods with higher levels of poverty, lower education, and more female-headed families are less likely than others to exercise, according to the study.

It’s not simply that poorer people are less likely to exercise, researchers say. In fact, the study, which was done in Chicago, found that a person’s individual income wasn’t as important as the neighborhood he or she lived in for determining exercise levels.

Co-author Christopher Browning, an associate professor of sociology at Ohio State University, attributes it to residents not feeling "comfortable to go outside for activities.”

Other studies have blamed suburban-sprawl neighborhoods for making people fat because there's nowhere to walk.

Of course, there's always exercise tapes.

Posted by Jamie Smith Hopkins at 12:55 PM | | Comments (0)
        

March 20, 2008

Population growth slows in metro area

The Baltimore metro area grew by about 4,000 people from the summer of 2006 to the summer of 2007, according to new Census Bureau estimates released today. That's the smallest number for a while -- at least so far this decade, which kicked off with a gain of 20,000 people -- and it's not just about city losses.

Growth slowed last year in Baltimore County, Carroll and Harford, the estimates suggest.

Census workers estimate a population decline of about 3,500 people in Baltimore City, which would be a setback from the slight gain in '06 if the figure stands. The city has routinely appealed the counts and ended up with higher numbers, and it anticipates challenging this time around, Kelly Brewington reports today.

Maryland's growth as a whole was slow, which the Baltimore Metropolitan Council's Dunbar Brooks attributes to the economy and housing prices, Brewington reports:

Even before the economy weakened, Maryland's high housing costs drove residents to neighboring states with more affordable housing, he said.

The number of people leaving both the region and the state is what struck me most about the census counts. In the Baltimore metro area, 8,600 more people moved out than moved in. The number of Marylanders moving out of state outnumbered people coming the other direction by about 18,500. In other words, the only true growth is coming from babies born to residents.

Look at the decade as a whole -- 2000 through 2007 -- and both the metro area and the state have more people coming in than out. That means the change has been fairly recent, and housing costs probably are playing a role.

Posted by Jamie Smith Hopkins at 11:20 AM | | Comments (0)
Categories: Number-crunching
        

March 19, 2008

The building permits go down, down, down

Permits for new Baltimore metro area residential construction -- houses, townhouses, condos and apartments -- were down 45 percent last year compared with 2005, the end of the boom. And it's not as simple as a sharp drop after a sharp increase, either:

 

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Source: Baltimore Metropolitan Council

As you can see, the number of permitted units bounced around but didn't really rise during the boom years. Suburban caps on building meant there were only so many new homes allowed at any one time. (The numbers above include Baltimore and its five suburbs, Anne Arundel, Baltimore Co., Carroll, Harford and Howard.)

But permitted units fell faster here than they did nationwide, even though the country saw a big increase in building during the boom. U.S. permits dropped 36 percent from 2005 to 2007, according to the federal government.

So what gives? A key reason is that homebuilders aren't just competing with each other. They've got the area's big supply of existing and rehabbed homes to contend with, too, and they want to get their own inventory under control.

I'll have a story in tomorrow's paper that looks at the ripple effects of this drop in homebuilding.

Posted by Jamie Smith Hopkins at 5:56 PM | | Comments (0)
        

Builder Mart 2008

Some 7,000 Mid-Atlantic builders, developers, remodelers and others in the industry are expected to congregate at the state fairgrounds today for Builder Mart, the annual event put on by the Home Builders Association of Maryland. At last count, more than 300 exhibitors had signed up to show off their products and services -- and hope that the industry players bite.

Last year the trade group tallied attendance at more than 7,000 and exhibitors at more than 350.

Posted by Jamie Smith Hopkins at 9:43 AM | | Comments (0)
        

March 18, 2008

Fed lowers short-term interest rates

There was buzz that this cut would be a full (and unusual) point, but the Federal Reserve opted for a drop of three-quarters of a percentage point. That leaves the federal funds rate, which determines what banks charge each other for overnight loans, at 2.25 percent.

The last time the rate was that low? At the end of 2004 and beginning of 2005.

The Fed, which is being urged to cut by some market players and urged not to by others who fear the result is higher inflation, had this to say:

Financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.

Inflation has been elevated, and some indicators of inflation expectations have risen. The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization. Still, uncertainty about the inflation outlook has increased. It will be necessary to continue to monitor inflation developments carefully.

Posted by Jamie Smith Hopkins at 2:45 PM | | Comments (0)
        

A 'failure of regulation'

As dessert for your Bear Stearns fallout reading fare, check out Jay Hancock's column today, which lays the bulk of the mortgage-mess blame at the government's feet:
Consumer advocates pleaded with banking regulators to take action in 2005. They worried deeply about interest-only mortgages, "option ARMs" and other complex loans.

They were concerned that banks were ignoring borrowers' ability to repay "stated income" and "liar" loans that didn't require documentation.

Don't worry, said Washington.

"We don't want to stifle financial innovation," Steve Fritts, associate director for risk management policy at the Federal Deposit Insurance Corp., told The New York Times.

Posted by Jamie Smith Hopkins at 11:50 AM | | Comments (3)
        

March 17, 2008

Foreclosure cases, county by county

If you're concerned -- or just curious -- about rising foreclosure numbers, you now have a new tool to track local trends from 2000 through 2007. I collaborated with Sun cartographer Christine Fellenz and our resident Flash whiz, Leeann Adams, on an online gadget that lets you see the changing number of foreclosure cases in each county and Baltimore City ... plus home sales, home prices, incomes and the share of prime vs. subprime.

Yes, this did take us a while to put together, and yes, I am feeling squintier than ever from checking all those numbers. A grateful thanks to Sun intern Megan Hartley for pitching in with the double-checking.

This information goes hand-in-hand with a story I wrote about foreclosure cases, which notes that many of the counties seeing the biggest increases are well-off and high-priced. Click on the link for the interactive tool and you'll see the story as well.

Posted by Jamie Smith Hopkins at 9:58 AM | | Comments (0)
Categories: Number-crunching
        

How-to Monday: Affordable mortgages

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Image courtesy of Stock.XCHNG

 

The mortgage mess hanging over the country offers many useful (if painful) lessons. First on the list: Don't borrow more than you can really afford to pay back.

Closely related to that is Lesson #2: Don't blindly rely on industry professionals to tell you what that amount is. Get down and dirty with the math yourself.

Here's a look at the debt-to-income levels you'll need to qualify for a loan nowadays, and some thoughts about how to get beyond that to true affordability.

Lenders look at a measurement they call your debt-to-income ratio. In plainer English, that means they'll be comparing your monthly before-tax income to your proposed mortgage payment (principal, interest, insurance and taxes) PLUS any other installment or revolving debt (car loans, boat loans, student loans, personal loans, credit-card minimum payments, etc.). Thanks to Ryan W. James, senior mortgage banker with First Horizon Home Loans, for that plainer English definition.

James, who's based in Timonium, said lenders will in most cases allow a debt-to-income ratio of up to 50 percent. If you make $5,000 a month ($60,000 a year), your monthly debt can't top $2,500.

"If you had a $400 car payment and a $200 student loan and a $60 minimum payment on your credit cards, we know your maximum mortgage payment is only going to be about $1,840," James said.

(U.S. News & World Report has a debt-to-income calculator HERE, if you'd like to take one for a spin.)

In the go-go housing boom days, it wasn't too hard to push beyond that 50 percent limit, James said. Good credit? Sure, go ahead. But he says it's much tougher now.

Though credit availability has tightened a lot in the last year, with loan products disappearing everywhere you look and lenders requiring better credit scores, today's debt-to-income limits are still high by historical standards. The traditional rule of thumb was 36 percent, says Christopher Cruise, a mortgage trainer in Silver Spring and a board member of the National Association of Responsible Loan Officers.

Both Cruise and James recommend you think carefully about how much mortgage debt you'll be comfortable taking on.

James says he does a budget analysis with clients that gets beyond the ratios to the nitty gritty. What's your take-home pay after taxes, retirement plan contributions and the like? How much are you spending a month in addition to debt payments -- the cost of meals, entertainment, gas, utilities, etc.? How much do you want to be able to save once everything, including your mortgage, is paid up each month?

Cruise says that Baltimore-Washington housing prices, even with recent declines, remain high enough that buyers may feel forced to choose between the house they want and the lifestyle they're used to. His advice: Look in less-expensive neighborhoods you might not have considered, cut back on your non-mortgage spending or keep renting while you whip your finances into shape.

"Have some willpower, for God's sake," Cruise said. "Buying a home now and getting foreclosed on in a year or two is not ideal."

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (8)
Categories: How-to Mondays
        

March 16, 2008

Mortgage rates head ... up?

So you're thinking about getting a mortgage or refinancing one you already have -- you keep hearing about how the Fed is lowering rates, and that means a better deal on loans, right?

Well ... no. It's more complicated than that, and you need only look at what's happened in recent weeks for proof:

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That's the weekly average for 30-year fixed-rate loans, according to Freddie Mac.

So why aren't mortgage rates playing nice? 

Usually, recession fears press rates down. That's what was going on at the beginning of the year. But after that, as the Associated Press notes, "bond markets have grown worried about rising inflation pressures that are coming as the economy slows." That's sent rates back upward.

So far, though, they're below the average for last year -- 6.34 percent. 

Posted by Jamie Smith Hopkins at 6:45 AM | | Comments (1)
        

March 15, 2008

A mortgage picture

Whose exotic loans are doing worse -- Baltimore's or Washington's?

The Federal Reserve Bank of Richmond, which oversees an area that includes both metros, has put together maps with LoanPerformance data that show the subprime and "Alt-A" mortgage situation in the wider region. Subprime loans were designed (if not always given) to people with poor credit or high debt, while so-called Alternative A loans were in the gray area between subprime and traditional products.

For a map showing the percentage of homeowners more than 90 days behind on their subprime mortgages, click HERE.

For a map showing the percentage of homeowners more than 90 days behind on their Alt-A mortgages, click HERE.

Thanks to the Fed for sharing.

Posted by Jamie Smith Hopkins at 2:13 PM | | Comments (4)
        

March 14, 2008

Moving?

Ilyce Glink's real estate column today offers advice about picking a moving company. The experts she talked to recommend asking ...
how long the business has been operating (a fact you can check online with the agency that regulates businesses in your state); whether it has the proper insurance (ask to see a certificate); how personal goods are handled; what type of wrap is used; if climate-controlled trucks are used; if your items will be stored during a move, whether the storage facility will be climate-controlled; whether you can speak with clients who have used the service; whether employees are background-checked; and whether the individuals who will be moving your furniture are employees or independent contractors.
Posted by Jamie Smith Hopkins at 10:00 AM | | Comments (0)
        

March 13, 2008

Maryland and mortgage fraud

A new study about mortgage fraud suggests the problem has hardly disappeared from local housing markets in the years since the government cracked down on scam artists flipping homes in Baltimore.

The Mortgage Bankers Association and the Mortgage Asset Research Institute, which released the study today, say that Maryland's reported mortgage fraud as a share of loans originated last year is 15th worst in the country. That's the same ranking the state had in 2006.

By "fraud," the groups mean both the fudging that homebuyers did to qualify for a loan ("I make $150,000 a year -- yeah, that's the ticket") and the scams by people looking to steal from lenders and scram. Some of the latter are really complex, with straw buyers and falsified appraisals and the like. Click HERE for an FBI briefing on the subject.

The worst 10 states for mortgage fraud, according to the new report:

1. Florida

2. Nevada

3. Michigan

4. California

5. Utah

6. Georgia

7. Virginia

8. Illinois

9. New York

10. Minnesota

Posted by Jamie Smith Hopkins at 5:15 PM | | Comments (6)
        

Freddie Mac weighs in on housing values

Whether you're happy to hear what Freddie Mac's chief executive has to say about home prices probably depends on whether you're selling or interested in buying. As reported by the Orlando Business Journal:
During a call with analysts, Richard Syron, CEO of the McLean, Va.-based mortgage-finance giant (NYSE: FRE), says prices still have more falling to do, and from peak to trough will decline 15 percent.

It feels like every expert has made a price prediction, so why not you? Chime in if you have thoughts about where prices -- nationally or locally -- are headed.

Posted by Jamie Smith Hopkins at 11:10 AM | | Comments (3)
        

March 12, 2008

A tough year to be working in construction

Construction jobs in Maryland, which have increased by the thousands in recent years, dropped by 200 in 2007, according to new numbers from the Labor Department. (This revises an earlier, rosier estimate.)

It's the first year since 1992, in the aftermath of a recession, that the construction industry has cut. If there were a local category for homebuilding, that would probably be worse -- commercial construction has buoyed the job creation numbers. Here's a look at trends in the last 10 years:

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Interested in reading about the overall employment picture in Maryland? Step right up -- or, rather, click right HERE -- to read my story about it in today's paper.

Posted by Jamie Smith Hopkins at 9:48 AM | | Comments (0)
        

March 11, 2008

City home sales -- by neighborhood

Live Baltimore Home Center now has 2007 Baltimore City home sales by neighborhood. You can see the numbers HERE.

But wait, you say: Didn't The Sun already sort city sales into neighborhoods? Yes -- but it's still well worth taking a look if you're interested. The datasets are different, that's why.

The numbers I crunched were home sales tracked by Metropolitan Regional Information Systems, which means ones in which an agent is involved. Live Baltimore's numbers come from First American CoreLogic -- sorted into neighborhoods by Baltimore City -- and include all home sales.

Click HERE to see Live Baltimore's numbers for previous years.

Posted by Jamie Smith Hopkins at 4:09 PM | | Comments (1)
        

The Feb. housing market -- and a twist on developer aid

I've got a story today about the February home sales numbers from Metropolitan Regional Information Systems, which show average prices dropping about 4 percent and sales down 33 percent from a year earlier in the Baltimore metro area. You can read the story HERE or see the statistics HERE. (I did mean to blog about it yesterday, but busy and ill was too much of a combination to overcome.)

With this housing-market backdrop in mind, you can understand why a developer might decide not to go ahead with plans for a new subdivision. But Chris Guy reports today that Snow Hill on the Eastern Shore so wants developer Mark Odachowski to build as proposed that it's "considering borrowing several million dollars" to build a sewage treatment plant and save Odachowski the upfront expense.

"My hope is that we're able to get a grant to cover about half the cost, borrow the rest and then the developer pays the town back," Mayor Stephen R. Mathews says of the new plan, details of which are being negotiated.

"If anybody thinks we're left holding the bag, they need to realize that it was ours to begin with," the mayor says. "We have to have a new sewage system ... to grow."

Snow Hill leaders want growth, much like Baltimore -- and unlike Baltimore's suburbs, where fights between residents and developers are much, much more common than cooperative deals.

Posted by Jamie Smith Hopkins at 12:22 PM | | Comments (2)
        

March 10, 2008

How-to Monday: What to do after you buy

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Image courtesy of StockXCHNG, produced by kikashi

 

So you've bought a house -- now what?

A Wonk reader had the excellent suggestion that new homeowners could use a few pointers about, well, being new homeowners. It's one of those potentially never-ending lists, so please add your thoughts where I leave off.

First up on the list: Dotted lines awaiting your signature.

--Sign up for utility service (and cancel it at your current location, if applicable). Baltimore Gas & Electric says to make your request at least three business days before you move. Call 410-685-0123.

--Set up any other services (phone, Internet, cable, FiOS) you know you'll want. Comcast's moving-to-a-new-home page is HERE; Verizon's is HERE.

--Update your address. The U.S. Postal Service lets you fill out a change of address form HERE, but you'll want to tell other people, companies, government agencies, etc., as well.

--Register to vote. The Maryland State Board of Elections explains how -- and answers other voting questions -- HERE.

--Apply for the Homestead Tax Credit, which puts a ceiling on property tax increases once you've been in the property a full fiscal year (meaning July 1 through June 30). New buyers have 180 days to apply after purchase.

--Not from Maryland? Once you move in, you have 60 days to apply for a Maryland driver's license if you want to capitalize on the fact that you already have one from another state. Click HERE for more information.

--Have kids? Don't forget to register them for school (or homeschool, if you prefer). In the case of public school, you can usually register at the location your child will be attending, the Maryland State Department of Education says. If you're not sure which school district you're in, call your local school board.

--Have pets? Get them licensed. You can see Baltimore's rules HERE.

--Planning on renovating? Make sure you know what permits and inspections you'll need. Howard County has a list of its rules HERE.

Live Baltimore Home Center has a useful "Now That You're Here" list that city residents might also want to check out. Thanks to executive director Anna Custer for pointing me to it.

Other things to consider:

--Inquire about trash and recycling pick-up. Baltimore has recycling times and information HERE. Baltimore County suggests calling 410-887-2000 to have the recycling schedule sent to you.

--Join your neighborhood association. You can find a list of city neighborhood groups (and a lot of other neighborhood-related information) on Live Baltimore's site HERE. If you live in the city and wonder which of the many neighborhoods is yours, enter your address HERE to find out.

--Make sure your mortgage company is escrowing enough of your money for property taxes.

--Keep up with local happenings. Baltimore County, for instance, offers newsletters you can subscribe to HERE.

--Find convenient libraries. Start HERE to choose the library system you want. 

Now wait a minute, you say. Almost all of these things are useful to new renters, too, not just new homeowners, and some of these things would be handy for long-time residents!

Yes, you've found me out. I'm devious.

So: What else would you recommend people do before or after they move?

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (4)
Categories: Homestead Property Tax Credit, How-to Mondays
        

March 9, 2008

Crime and the 'burbs

Madison Park has an interesting story today about Edgewood's slide into violent crime and what people in the Harford County community are trying to do about it. As activists pull out the bullhorns, the police are turning to methods familiar to anyone living in Baltimore:
The pockets of crime in this once-rural county are forcing law enforcement to adopt urban police strategies, such as surveillance cameras and CompStat, a crime-mapping system that analyzes statistics. Deputies will begin using "HarfordStat" this month.

Safety, like schools, is such a key part of what makes a community a place where people want to live. When things start to go downhill, gravity can take over because homeowners move out, hastening decline. I wonder, are these cycles of disinvestment inevitable? Can we learn anything from Baltimore's 20th-century experience? Can a few determined residents turn things around in a neighborhood?

We'd probably all benefit from some good answers. 

Posted by Jamie Smith Hopkins at 6:48 PM | | Comments (1)
        

March 8, 2008

Affordable housing effort not really so affordable?

A University of Maryland study of "inclusionary zoning" laws in California -- designed to produce more affordable housing -- suggests that they make houses less affordable overall. (Montgomery County, Howard County and Baltimore are among the more local jurisdictions with such policies.)

The report -- funded by the National Association of Home Builders -- says that laws requiring companies to sell some below-market-price housing among more expensive ones "do not come without cost":

We find that inclusionary zoning policies had measurable effects on housing markets in jurisdictions that adopt them: the share of multifamily housing increases; the price of single family houses increases; and the size of single family houses decreases.

This, the researchers say, comes despite the fact that most of the inclusionary zoning laws "offer some form of incentives or compensation for providing affordable units" such as "density bonuses, waivers of subdivision requirements, or fee reductions."

The National Center for Smart Growth Research and Education at the University of Maryland prepared the study. Click HERE to go to the site that has the study (right now, it's at the top of the "In the News" list) and HERE for a press-release summation.

Thoughts? Opinions? Arguments? 

Remember, the study was California only. But in case you're wondering, the University of Maryland researchers note that Montgomery County's Moderately Priced Dwelling Unit program mandates that between 12.5 and 15 percent of the homes in every development of at least 20 units be "moderately priced." In exchange, the builders get to construct more homes overall than the zoning would normally allow -- up to 22 percent more.

Montgomery's law has been in place for a generation. The city's is much newer. Details from the University of Maryland:

In June 2007, the city of Baltimore also enacted an inclusionary zoning statute that calls for 10 to 20 percent of new homes in developments of 30 units or more to be affordable to people with a range of incomes. Requirements vary depending on whether a development benefits from a city subsidy or a rezoning and in some instances will not go into effect until December 2008.

Interested in Howard's law? Read a bit more about the program HERE.

Posted by Jamie Smith Hopkins at 1:13 PM | | Comments (0)
        

March 7, 2008

An inequity of equity

In the category of depressing news, as reported by the Associated Press:
For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built.

The Fed reported Thursday that homeowner equity actually slipped below 50 percent in the second quarter of last year, and fell to just below 48 percent in the fourth quarter.

The causes are varied. Current problem: values dropping. Earlier problems: homeowners taking cash-out refinances and buyers putting no money down.

Posted by Jamie Smith Hopkins at 12:52 PM | | Comments (0)
        

Cutting back on foreclosures -- the tax-sale kind

June Arney reports today about a bill to cut down on the number of homes subject to tax sales:
Responding to cases in which local governments -- primarily Baltimore -- have foreclosed on homes over small debts, including unpaid water and sewer bills, legislators have coalesced around a bill that would increase the threshold for debts that can trigger a tax sale, cap attorneys fees and provide a safety net for the needy. ...

As drafted, the bill would increase the minimum debt that could trigger a tax sale from $100 to $250, and cap attorney fees at between $1,300 and $1,500, depending on the status of the case.

Readers with good memories will recall that The Sun brought to light the fact that "at least 400 city homes were lost over debts other than property taxes during a recent three-year period." Much of the foreclosure-prevention focus has been on mortgages, but the city's tax-sale numbers show that homeowners lose their property over unpaid water bills, alley repaving charges and other fees, too.

Posted by Jamie Smith Hopkins at 8:05 AM | | Comments (3)
        

March 6, 2008

Government sets new loan limits

And the number is ... $560,000.

That's the new, temporary limit for Baltimore-area borrowers getting loans insured by the Federal Housing Administration or mortgages that will be sold to financiers Fannie Mae and Freddie Mac.

It's part of an increase in higher-price communities nationwide, an effort by the federal government to inject more life into the housing market and help people with larger loans who are having trouble refinancing. People borrowing above the Fannie and Freddie limits have to pay higher interest rates for such "jumbo" mortgages.

The $560,000 limit applies to the Baltimore metro area as a whole -- meaning, by the federal government's definition, Baltimore City, Anne Arundel County, Baltimore County, Carroll County, Harford County, Howard County and Queen Anne's County. Click HERE to see the Fannie/Freddie list and HERE for the FHA list.

For FHA-insured loans, that's an especially big increase -- up from $362,790. Fannie and Freddie's limit had been $417,000.

Coldwell Banker Residential Brokerage in Greater Baltimore, which ran some numbers today, says these limits could affect as many as 18 percent of the homes on the market around here. That's assuming buyers would be making a down payment of 20 percent.

The temporary limit is a lot higher than I expected. It's supposed to be 25 percent more than the median house price for the highest-priced county in the metro area. That's Howard County hereabouts, and the median price there last year was $390,000, according to Metropolitan Regional Information Systems. (Twenty-five percent more than that is just under $490,000.)

Clearly the government is using other figures -- perhaps ones that cut out condos and other (generally) cheaper housing types.

These temporary loan limits are set to expire at the end of the year.

Posted by Jamie Smith Hopkins at 5:27 PM | | Comments (0)
        

Builder pulls out of Arundel development

Phillip McGowan reports today that national homebuilder K. Hovnanian Homes has scrapped plans to build a condo tower at the Annapolis Towne Centre at Parole. It blamed "an inability to finance the project amid the nationwide slump in the real estate industry, the developer of the $400 million center said yesterday."
The tower, at full height, would have been the tallest building in Anne Arundel County and the cornerstone of the massive project, including high-rises of 10 and 12 stories, a Whole Foods market and a Target now under construction.

Keen observers will recall that K. Hovnanian also decided not to exercise its option to buy land that was supposed to make up the final two phases of Greenway Farm in Harford County. The 85 acres ended up changing hands at foreclosure auction last June.

Posted by Jamie Smith Hopkins at 10:03 AM | | Comments (0)
        

Foreclosure prevention event draws 850-plus

At least 850 people turned out to the HUD Homeownership & Foreclosure Prevention Clinic yesterday, held at the Show Place Arena in Upper Marlboro because federal and Prince George's County officials knew it would draw a crowd. The county has been hard-hit by rising foreclosures.

It looked a bit like a job fair, except the people going from booth to booth were seeking help from housing counselors and lenders. Attorneys from Baltimore's Civil Justice were among those answering questions.

Stacey D. Stewart of mortgage financier Fannie Mae told attendees that she is "very troubled and concerned" about the rapid increase in Prince George's County foreclosure numbers. As others encouraged homeowners to get help, she urged them to be wary of companies offering assistance for a price. Nonprofit housing counselors assist for free.

It was a timely warning: While we were inside the arena, someone put flyers on our cars promising to "STOP YOUR FORECLOSURE!!" with the unnamed organization's "PRE-FORECLOSURE BENEFITS PROGRAM."

Posted by Jamie Smith Hopkins at 9:35 AM | | Comments (1)
        

March 5, 2008

New life for down payment assistance

Gaithersburg-based AmeriDream Inc., a nonprofit that provides a type of down payment assistance the federal government tried to ban last year, said a U.S. District Court judge just shot that restriction down.

The ruling, a copy of which AmeriDream provided to me, says the U.S. Department of Housing and Urban Development's "promulgation and explanation of the Final Rule suffer from multiple significant infirmities" that "inspire a good deal of doubt" about whether the rule was a good one. Judge Paul L. Friedman struck down the ruling and remanded it to HUD to try again.

AmeriDream is among the nonprofit groups that give down payment help to buyers getting FHA-insured loans, collecting money from sellers to fund that help.

HUD passed a rule last year to ban such seller-financed down payment assistance, saying it leads to a higher-than-average number of foreclosures. AmeriDream argued that it opened the door to homeownership for low- and moderate-income buyers. The group sued, winning a temporary injunction in October to stop the rule from going into effect until the court made a final decision.

It is, alas, much too late in the day for me to hope for HUD reaction. But the agency declined to comment to Bloomberg this week after a California judge ruled against HUD on another suit about seller-financed assistance.

Posted by Jamie Smith Hopkins at 7:23 PM | | Comments (1)
        

Mortgage rate roundup

For all you would-be buyers and refinancers out there:

The average interest rate for a 30-year fixed mortgage dipped below 6 percent in the Mortgage Bankers Association's latest survey, released today from numbers gathered last week. It was 5.98 percent, compared with 6.27 percent the week before. That was for loans with 20 percent down.

As for 15-year fixed mortgages, popular for refinancing: Rates dropped to 5.26 percent from 5.77 percent.

Posted by Jamie Smith Hopkins at 9:49 AM | | Comments (0)
        

March 4, 2008

Pulling out the crystal ball on mortgage rates

Mortgage financier Freddie Mac expects that interest rates on 30-year fixed-rate mortgages will end up averaging 5.5 percent this year, "the lowest in at least 45 years," Bloomberg reports. It was 6.3 percent last year.

If you're looking to get a loan or to refinance, that's good news. But what does that mean for sellers? Is this the start of Housing Boom Part II?

As if, opines Global Insight economist Brian Bethune:

"The lower rates, in themselves, are not going to cause a housing turnaround because they are second in importance to excess inventory and falling prices," Bethune said.
Posted by Jamie Smith Hopkins at 9:20 AM | | Comments (1)
        

Homestead tax credit Q&A

Consuming Interests columnist and blogger Dan Thanh Dang addresses a question today about the homestead property tax credit: Can you still qualify for it if you're renting out part of your house as well as living in it?

Click HERE for the full answer. The bottom line: Yes. The main issue is whether you qualify for the entire credit or a partial one.

Posted by Jamie Smith Hopkins at 8:47 AM | | Comments (3)
        

March 3, 2008

A rental blacklist

Here's a story that both landlords and renters will want to read: Liz Kay reports today about DoNotRentTo.com, a Web site that "that compiles information about problem tenants." It's an effort by property owners to avoid renting to people who cause thousands of dollars in damage or other expensive problems that don't necessarily show up with credit and reference checks.

Consumer and privacy advocates note the downside for renters: They could unfairly end up on the list. If you want to find out if you're on it, you'll have to pay the $14.99 annual membership.

So, landlords and renters: What do you think? And what sort of research do you do to make sure you've picked a good renter for your property or a good property to rent?

Posted by Jamie Smith Hopkins at 2:15 PM | | Comments (6)
        

How-to Monday: Choosing an agent, part II

RedHouseStockxchng.jpg

Photo courtesy of Stock.XCHNG

 

Would-be buyers in the market for a Realtor as well as a house should choose just as carefully as a seller looking for a listing agent. You want someone who will help you separate the good deals from the chaff, point out pitfalls and act in your best interests.

Never fear: Read on for tips galore. (Are you selling rather than buying? Then see last week's How-to post.)

Stephen Brobeck, executive director of the Consumer Federation of America, thinks you should consider looking for a real estate broker whose office works exclusively with buyers. Why? Because you might not get good service when a Realtor's loyalty is divided between you and colleagues working with sellers, he says.

Brobeck said he learned that first-hand when he and his wife went looking for properties, and their agent "showed us only his listings." Maryland law prevents an agent from representing both the buyer and the seller in the same deal, but that doesn't stop a Realtor from talking up the houses handled by his or her office.

Definitions for the uninitiated: An "exclusive buyer agent" works in an office that does not take listings. A "buyer agent" works with buyers but is based in an office that also sells. (UPDATE: Some call themselves buyer agents because they SOMETIMES work with buyers, says Jay Reifert, broker and owner of Excel-Exclusive Buyer Agency in Madison, Wis.) Most agents work with buyers and sellers both.

The main thing is to find someone who knows what they're doing and will represent you well. No matter what type of agent you want, Jon Boyd, past president of the National Association of Exclusive Buyer Agents, suggests you interview several and ask them about their skills in these areas:

--Negotiation. What's their level of experience? How will they get you the best deal? What evidence can they show about how they've saved previous clients money, whether on the contract price, the extras (seller help with buyer closing costs, for instance) or the loan terms?

--Property evaluation. How will they help you tell if the house is a steal or a dud?

--Representation. Ask how they intend to deal with potential conflicts of interest (i.e. the listing agent for the house you want is your agent's boss). "'Who's your boss' is a great question," Boyd said.

Brobeck also suggests asking agents if they will search for all properties that meet your specifications, no matter what the commission split. The seller's agent typically splits his or her commission with the buyer's agent, and there's always a danger that a home on the multiple-listing service with a stingier-than-usual split will get ... ah ... overlooked. (See more about splits in last week's How-to post.)

Many agents will let you search the multiple-listing service in their office if you ask, Brobeck added.

John F. Sullivan, an exclusive buyer agent with Buyer's Edge in Bethesda, notes that you'll want to know when -- and how -- you can get out of an agreement with your agent if you're not happy with the service. The standard agreement can be terminated before the expiration date only if both parties OK it, he said, but some are more flexible.

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (5)
Categories: How-to Mondays
        

March 2, 2008

If you're considering a reverse mortgage ...

... then be sure to check out Eileen Ambrose's column today. She explains how they work, notes that they could be a lifeline for seniors having trouble with mortgage payments -- and offers this reality check:
The bottom line: proceed with caution.

If you're facing foreclosure and think a reverse mortgage could be the solution, contact a government-approved housing counselor. A counselor can determine whether you're eligible for a reverse mortgage, explain the details and costs, and walk you through your options.

Posted by Jamie Smith Hopkins at 2:16 PM | | Comments (1)
        

Tomorrow's How-to

If you saw last Monday's How-to post, you'll know what tomorrow's is: part II of choosing a real estate agent, this entry focused on buyers.

As always, I'm happy to take recommendations for future How-to posts. Leave them in the comments or email me directly.

Posted by Jamie Smith Hopkins at 2:02 PM | | Comments (0)
        

March 1, 2008

McMansions: future slums?

Christopher B. Leinberger, a developer and a visiting fellow at the Brookings Institution in Washington, has a piece in the March Atlantic Monthly arguing that the decline that hit cities in the mid-20th century is now beginning to be felt elsewhere -- the suburban and semi-rural swaths of large-lot homes.

As urban cores continue to regain their popularity thanks to convenience and walkability, "many low-density suburbs and McMansion subdivisions, including some that are lovely and affluent today, may become what inner cities became in the 1960s and ’70s—slums characterized by poverty, crime, and decay," Leinberger predicts. He offers as examples communities in North Carolina, California and Florida, where rising crime and vacancies are going hand in hand.

He acknowledges that subprime lending played a role but says other factors are at work:

Arthur C. Nelson, director of the Metropolitan Institute at Virginia Tech, has looked carefully at trends in American demographics, construction, house prices, and consumer preferences. In 2006, using recent consumer research, housing supply data, and population growth rates, he modeled future demand for various types of housing. The results were bracing: Nelson forecasts a likely surplus of 22 million large-lot homes (houses built on a sixth of an acre or more) by 2025—that’s roughly 40 percent of the large-lot homes in existence today.

I'd be interested to hear what you all think -- and if you believe his piece holds a warning for the Baltimore metro area. Pretty much all of the developed part of western Howard County, for instance, is large-lot housing, and there are McMansions in suburban counties across Maryland. The zoning in such communities has prevented anything else.

On the other hand, the Baltimore suburbs don't have a lot of raw land left. That's caused some hand-wringing that the future will bring too few houses of all types rather than too many, at least without significant redevelopment of vacant houses and land in Baltimore City.

So chime in: What do you think of Leinberger's argument?

Posted by Jamie Smith Hopkins at 1:20 PM | | Comments (9)
        
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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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