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May 31, 2008

Housing fair -- for buyers and renters

Greater Coppin Heights/Rosemont Community organizers know that homebuyers aren't the only ones who could use advice and help, so they've put together a housing fair meant for buyers and renters. The event is scheduled for next Saturday -- June 7 -- from 10 a.m. to 2 p.m. at the dining and meeting hall of Coppin State College, 2500 W. North Ave.

The free event, billed as the second annual, will include workshops about buying, mortgages and budgeting, and tenant/landlord issues. (Current homeowners might want to go for the workshop about avoiding foreclosure.)

Organizers suggest pre-registering, which you can do by emailing or by calling one of the numbers on the announcement. (Scroll down to the second page of the PDF.)

Posted by Jamie Smith Hopkins at 6:41 AM | | Comments (0)

May 30, 2008

An escrow allegation

The point of an escrow account is to safeguard money or other property with a neutral third party, which is why state regulators just shut down a title company that is allegedly missing up to $2 million from its account for property settlements.

Hanah Cho reports today:

Maryland Insurance Commissioner Ralph S. Tyler ordered yesterday that business licenses for Day Title Inc. and owner Deborah A. Williams be suspended and revoked. The Maryland Insurance Administration issues licenses and regulates title companies, which conduct real estate closings.

Tyler's action follows an order issued last week by an Anne Arundel County Circuit Court judge appointing a receiver to oversee the liquidation of Day Title. The court action was initiated by The Security Title Guarantee Corp. of Baltimore, the title insurance company for Day Title.

Security Title says homeowners will not be responsible for any losses.

Industry players say escrow misuse is rare, but it can crop up "when title company owners who are facing financial difficulties use money in their escrow accounts to operate their business," Cho notes:

Tyler said his office is seeing a spike in complaints involving title companies not making mortgage payments, a trend the commissioner attributes to the slowing real estate market.
Posted by Jamie Smith Hopkins at 9:27 AM | | Comments (1)

May 29, 2008

Overpaying to get the loan?

A HUD-funded study released today says that many borrowers are overpaying "by thousands of dollars" for their closing costs.

The press release sums it up thusly:

The study found that there are significant and unsupported variations in loan charges, title fees and other closing costs charged to homebuyers, and that minority borrowers pay hundreds of dollars more in total loan origination fees than do non-minority homebuyers.

This isn't about the crazy mortgages of the late housing boom. The Urban Institute, which produced the study for HUD, looked at FHA-insured, fixed-rate mortgages originated in May and June of 2001.

HUD is trying to win support for a proposal that mortgage lenders and brokers give consumers a standard "good faith estimate" so consumers can more easily compare offers.

"This report demonstrates once and for all that the process consumers endure when they buy their homes is entirely too confusing," said HUD Deputy Secretary Roy A. Bernardi. "Clearly, we need to open the window and allow consumers to understand the fine print and shop more effectively for the largest purchase of their lives."
According to the study:

--Title fees can range by more than $1,000 even in the same state and to "identical" borrowers

--Borrowers agreeing to higher interest rates aren't generally getting lower upfront fees in exchange

--African-American borrowers "pay an average of $415 more in total loan origination fees than non-minorities"

--Costs range substantially from state to state, even after accounting for differences in loan amounts and borrower qualifications. Nevada borrowers pay the most in lender or broker charges -- $2,700 more than the lowest-cost state, Alaska. Marylanders pay almost $1,900 more than Alaskans.

Posted by Jamie Smith Hopkins at 3:46 PM | | Comments (6)

Higher fee, condo concerns and lots of construction

If you rely on city water, plan on paying about $30 more a year for it. The Sun reports today that the Board of Estimates approved the increase to cover the cost of sewer upgrades:
The rate increases would have a direct effect on customers in Baltimore and the surrounding counties that use city water, including Howard, Anne Arundel and Carroll counties.

Also today, Lorraine Mirabella has a story about the new condo market. Figures from Delta Associates suggest that condo developers are feeling the effects of borrowing restrictions and nervous buyers:

Contract cancellations have begun to show up in the sales numbers in metropolitan Baltimore, which had a net gain of just 13 condo sales in the city and Baltimore, Harford, Howard and Anne Arundel counties in the first three months of the year, Delta said.

And you know -- I completely forgot to mention that I had a story yesterday about the new "State of Downtown" report, which had interesting statistics about the pace of construction. Though market conditions have stalled some major projects in the planning stages, there's lots of construction activity:

Developers finished nearly $550 million in downtown Baltimore construction projects in the first four months of the year - more than twice the value of developments completed in all of 2007.

That's according to the Downtown Partnership of Baltimore, which detailed a continuing boom in activity in its newest "State of Downtown" report being released today. About $2.7 billion in construction is under way now, despite the housing slump, credit crunch and economic slowdown, the group said.

Posted by Jamie Smith Hopkins at 9:15 AM | | Comments (2)

May 28, 2008

The 800-pound gorillas

A story today about a fight over appraisals includes this nugget, which underscores how significant the already sizable Fannie Mae and Freddie Mac have become in the new lending reality:
Created by Congress to increase homeownership, Fannie Mae and Freddie Mac have become one of the few avenues for new mortgage financing as competitors scaled back amid record increases in delinquencies and defaults. Their share of the conforming mortgage market, or new loans of $417,000 or less, almost doubled to 81 percent in the first quarter.

And that, dear friends, is why Fannie and Freddie's borrowing rules matter to you if you're trying to buy, sell or refinance.

Posted by Jamie Smith Hopkins at 8:50 AM | | Comments (0)

May 27, 2008

A smorgasbord of news

In the good news/bad news department: The federal government said today that new-home sales increased in April, the first upward movement in six months -- but only because March was worse than it originally thought.

As the Associated Press notes:

The Commerce report on new home sales showed the April rebound was led by a huge 41.7 percent surge in sales in the Northeast. Sales were up 8.3 percent in the West and 5.8 percent in the Midwest. The only region which saw a decline in sales in April was the South, where sales fell by 2.4 percent.

Maryland, according to the Commerce Department, is in the South, in case you were wondering.

Also today, the federal government and National Association of Realtors settled an antitrust suit "that accused the trade group of trying to restrain competition," Bloomberg reports. No longer will NAR-affiliated multiple-listing services be able to keep online real estate brokers from fully accessing the listing information:

The government said the practice propped up an old-fashioned business model and harmed consumers who can save up to 1 percent of the price of a home by using a Web-based broker.

The National Association of Realtors says in a press release (headlined "Realtors Compete, Consumers Win") that the order "expressly provides that NAR does not admit any liability or wrongdoing and NAR will make no payments in connection with the settlement." 

Interested in the Justice Department press release? Read it HERE.

Posted by Jamie Smith Hopkins at 5:29 PM | | Comments (0)

May 26, 2008

How-to Monday: Property taxes


Photo courtesy of Stock.XCHNG

Local property taxes range considerably in Maryland, as anyone who's moved to and from Baltimore knows. You might not want to make homebuying decisions based on taxes alone, but it doesn't hurt to understand the differences beforehand.

So I've broken it out for you. Here's what you'd be paying in county and state property taxes this fiscal year if you bought the median-priced home in various jurisdictions in 2007, and what you'd be paying for a $300,000 house.

Read this doc on Scribd: PropertyTaxRates3

Read this doc on Scribd: PropertyTaxRates2

(Squinting at the numbers? You can hit the plus button to make the chart larger.)

The home price data comes from the Maryland Association of Realtors, and the tax rates I used to calculate the bill are courtesy of the state Department of Assessments and Taxation. These rates are for July 2007 through June 2008, which means they could change come July 1.

Your home price and your "taxable assessment" aren't necessarily one and the same, but for the purposes of this example I'm assuming that they are. Also, keep in mind that the county rates really are the county rates: If you live in a municipality that adds an additional property tax, such as Annapolis, you'll pay more. (Click HERE to look at all the rates.)

Baltimore City's property tax rate -- $2.268 per $100 of taxable assessment -- means a tax bill that's far and away the highest when you're comparing costs for a $300,000 house across the state. (In fact, it's almost $5,400 more than the cheapest county, Talbot.) It looks better if you're comparing what you'd pay in taxes for the typical city home vs., say, the typical Howard County home.

What you get for your taxes is harder to sum up in a neat jurisdictional chart. That's always a heated topic.

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

May 25, 2008

Is your house your retirement plan?

Rapidly rising home prices during the boom years may have helped lull Americans into a false sense of security about retirement. That's one of the explanations offered for the slowing number of workers investing in 401(k) and 401(k)-like plans during those years, the Los Angeles Times reports:
The number of people investing in 401(k) and similar plans climbed to 50.9 million in 2000, from 42.2 million in 1995, according to the Employee Benefit Research Institute. From there, though, participation rose only to 52.2 million through 2004, the institute said.

There are several reasons, including fewer small companies offering plans and lingering investor concerns about the stock market after the bursting of the technology bubble in 2000, said Craig Copeland, the author of the study.

But the preoccupation with housing played a role, Copeland said, as some people earmarked cash for new or remodeled dwellings as home prices surged, instead of funding retirement accounts.

People considered housing to be "the big investment," he said.

Posted by Jamie Smith Hopkins at 11:57 AM | | Comments (0)

May 24, 2008

Map those trends

The Reinvestment Fund, which has tracked foreclosures and other housing-related issues in Maryland, has a new tool for people who like to see what's going on.

PolicyMap lets you add layers of data to see what's going on with home prices, mortgages, neighborhood conditions, etc. You can try an address to see a close-in look or check out the entire state.

Find anything interesting? Feel free to weigh in. 

Posted by Jamie Smith Hopkins at 7:35 AM | | Comments (1)

May 23, 2008

Housing affordability improves

Let it not be forgotten in the turmoil created by a downward market that falling home prices have at least one benefit: More renters can afford to buy, if they choose (and if they can qualify for a mortgage, of course).

The National Association of Home Builders, which released its NAHB/Wells Fargo "housing opportunity" index this week, calculated that 57 percent of the new and existing homes sold in the first three months of this year in the Baltimore metro area were in price ranges affordable to families making the area's median income. Less than half the homes sold in the last three months of 2007 fit the same criteria.

The low point in the 17-year index was the spring of 2006, when the median-income family could afford just 41 percent of the homes that sold in the Baltimore metro area. (The index defines a home as affordable if the typical household wouldn't have to spend more than 28 percent of its income on the mortgage payments.) 

The home builders take into account fluctuating interest rates as well as changing prices and incomes. In the first quarter of this year, according to the figures they track, interest rates fell, incomes rose and prices dropped.

The Baltimore area ranks 123rd out of 223 metros for affordability, with 1 being most affordable. It was 31st in the spring of 2000, when three-quarters of the homes that sold were in the typical family's price range.

Nowadays, the area's median family income is $78,000 and the median home price is $250,000, the home builders say.

Posted by Jamie Smith Hopkins at 10:09 AM | | Comments (4)

May 22, 2008

Maryland home prices: 8th biggest drop in nation

Maryland home sale prices in the first three months of the year dropped 4.8 percent from a year earlier, the Office of Federal Housing Enterprise Oversight said today. That's the eighth largest decline in the country.

Here's the bottom 10:

1. California, down 19 percent

2. Nevada, down 17 percent

3. Florida, down 15 percent

4. Arizona, down 11 percent

5. Michigan, down 8.9 percent

6. New Hampshire, down 5.1 percent

7. Minnesota, down 5 percent

8. Maryland, down 4.8 percent

9. Ohio, down 3.9 percent

10. Virginia, down 3.7 percent

You can see OFHEO's news release HERE and its data HERE. OFHEO says home sales prices are down 3.1 percent nationally, the largest drop on record. (In its press release, it has a ranking of the states that includes not just sales but also refinance mortgages, so it's a bit apples-to-oranges to the national figure. That's why I crunched the data to come up with a purchase-only ranking.)

Posted by Jamie Smith Hopkins at 11:31 AM | | Comments (7)
Categories: Number-crunching

Wells Fargo and city exchange barbs

The city's suit against Wells Fargo for allegedly bad lending practices is well into the pointed-words and finger-pointing stage. As Lynn Anderson reports today, the two are going back and forth about who's the bigger baddie.

Wells Fargo says the city's tax lien program is responsible for many more "foreclosure actions" in Baltimore than the company is:

A spokesman for the bank said the city is trying to make it a "scapegoat for broad social problems that have plagued Baltimore for decades."

The city responded this week in a court filing that "the bank's conclusion that City Hall is responsible for Baltimore's urban ills is 'palpably false,'" Anderson wrote.

"Defendants would have the court believe that Baltimore has intentionally 'unleashed' on its residents a program of tax lien sales that causes thousands of foreclosures for nothing more than a small unpaid water bill and the like," city attorneys said in opposing the bank's request. "Maryland law mandates that Baltimore conduct these sales."
Posted by Jamie Smith Hopkins at 9:14 AM | | Comments (0)

May 21, 2008

More notification for renters?

A bill working its way through the City Council aims to "prevent tenants from being notified of a foreclosure for the first time when a sheriff's deputy arrives to evict them," as John Fritze reports today:
The proposal requires tenants of foreclosed property to be notified by certified mail and first-class mail at least two weeks before the eviction takes place and also requires that notice be posted on the property a week in advance.

"That will eliminate renters suddenly being evicted while totally unaware their landlords are being foreclosed upon," said Mel Freeman, president of the board of the Citizens Planning and Housing Association, which has advocated for the legislation.

That's a problem, as we noted in this story last week.

Renters, how much notice would you need to find a new place and move your belongings?

Posted by Jamie Smith Hopkins at 10:10 AM | | Comments (2)

May 20, 2008

Two new developments

John Fritze reports today that a developer planning to build a large community of homes along Baltimore's southern border won initial approval to buy 159 acres of city-owned land -- a former landfill slated to be used as an access point for the homes:
Charles County developer Stephen P. McAllister has proposed building 1,300 homes on a site in Anne Arundel County and hopes to build an access road across the former Pennington Avenue landfill near Curtis Bay.

There's debate over the plan, which advanced past the City Council yesterday but still needs an OK by the Board of Estimates. Some residents are glad the landfill would be cleaned up, while some businesses foresee that new homeowners and current industrial traffic in the area will end up at odds.

Meanwhile, Lorraine Mirabella has a story today about plans to restore the North Avenue Market in midtown Baltimore:

Developers envision a market of a different sort. Plans call for an arts-focused mix of shops, eateries and offices that can become a gathering spot for Charles North, part of the city's emerging Station North arts district.
Posted by Jamie Smith Hopkins at 9:33 AM | | Comments (2)

May 19, 2008

How-to Monday: Childproofing


Photo courtesy of Stock.XCHNG

Expecting a child? In the flurry of baby purchases and preparations, don't forget to childproof your house or apartment.

The U.S. Consumer Product Safety Commission says that home hazards kill or injure about 2.5 million children every year, a sobering statistic.

Here's what the commission and others suggest you do:

Bathrooms: Childproof them by installing a safety latch on the toilet seat and safety covers on the faucet handles -- unless you're planning to keep Baby out altogether by putting a latch on the door, suggests the UCSF Children's Hospital in California. Move medicines, household cleaners, etc., out of reach.

Kitchen: Whether the contents are dirty or clean, the dishwater should be locked. Install safety latches on drawers and cabinets -- but move poisons out of reach entirely just in case, says ServiceMagic, which connects people with home improvement contractors. Put corner and edge bumpers on counters. Remove refrigerator magnets so they can't fall and tempt your child into tasting them. Alternative plan: Get a baby gate or gates to help prevent kitchen incursions by unauthorized underage persons.

Bedrooms: Make sure you have smoke detectors near bedrooms (and on every level of the home). The commission also recommends checking them frequently -- once a month. If you have gas or oil heat or an attached garage, you'll also want to install a carbon monoxide detector near sleeping areas, the commission says.

Dining room: Beware of tablecloths, ServiceMagic says. If your child tugs, down come the plates, flower vases, etc.

Stairs: You'll want baby gates at the top and bottom. A gate that screws to the wall is preferable for the top of a staircase than one that relies on pressure to work, the safety commission says. And avoid older gates with "V" shapes in which a child could get his or her head stuck.

Water: To prevent scalding, the children's hospital recommends you set your home's hot water temperature at no more than 120 degrees Fahrenheit. You could also install anti-scald devices on your faucets and shower heads to keep water from getting too hot, the commission notes.

Cords: Window blinds, phones, lamps -- anything with a hanging cord can be a hazard. Tuck them out of reach. ServiceMagic also suggests cutting blind cords that are long or that form a loop.

Outlets: Have any unused outlets? Avoid problems by putting in plastic outlet plugs.

Furniture: Soften sharp edges with corner and edge bumpers.

Windows/balconies/decks: Keep inquisitive babies from accidentally falling by installing window guards or safety netting, the safety commission suggests. Just keep in mind that you'll want at least one window in every room to be accessible for quick escapes in emergency situations.

Want more advice? Click HERE for the commission's tip sheet, HERE for the UCSF Children's Hospital recommendations and HERE for ServiceMagic's lists (scroll to the bottom of the page). (The commission also notes that you can check its site to make sure any hand-me-down safety products or toys haven't been recalled, and you can sign up for email updates about new recalls.)

Want to offer advice? Comment away.

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (0)
Categories: How-to Mondays

May 18, 2008

A different way to heat and cool

Andrea Siegel has a story today about homeowners switching to geothermal heating and cooling in an effort to cut down on rapidly rising utility expenses. She follows the Borles of Pasadena as they have their system installed:
They are making a $22,000 investment in their home now. They will start to realize utility bills cut by about half. They'll recoup that upfront outlay, depending on their thermostat settings and utility rates, in 10 years at the outside, but most likely sooner. ...

Come July 1, the Maryland Energy Administration maximum grant to a homeowner for installing a geothermal system will rise from $1,000 to $3,000, and jump to $10,000 for a commercial use. Officials expect the number of applications for the $591,000 cash pool that is to be shared with grants for solar-energy systems to continue to climb.

"It will go quickly," said David Cronin, MEA assistant director for renewable resources.

Reason to click the link above and read the whole story: There's a fascinating anecdote from a Middle River builder about how his clients are going geothermal once they see the numbers.

Posted by Jamie Smith Hopkins at 12:07 PM | | Comments (0)

Q&A with a man who gave an early warning

Dean Baker, an economist who back in 2002 warned that the housing market was caught in a bubble, chatted with me recently for a Q&A. The results are in the Ideas section today -- you can read it HERE.

Here's his answer to the question, Do you think now is a good time to buy a home?

Across the Midwest, the South, upstate New York, you can find lots of places where housing looks pretty reasonably priced, isn't much different than it was 10 years ago. But places like the D.C. area, New York, Boston, it's hard for me to see that those prices don't still have a long way down to go.

What about the Baltimore area?

Baltimore didn't have as much of a run-up as D.C., but it did have one. My expectation is you're going to see a lot of that, if not all of that, eliminated. ... Prices won't fall back to where they were in the '90s, even adjusting for inflation. They'll probably stay higher. But they'll certainly come down from their peak in '06.

Posted by Jamie Smith Hopkins at 8:07 AM | | Comments (2)

May 17, 2008

More on down payment requirements

Interested in Fannie Mae's decision to drop its requirements for higher down payments in areas with declining home prices? Read more HERE.

This is what Maryland folks had to say about it:

Local industry players hailed the announcement as good news. Joseph Child, director of Greenbelt-based Step One Mortgage, who does most of his business in the Baltimore metro area, said he ran up against the declining-market requirements frequently and found it difficult to tell why the company was flagging certain neighborhoods. Tim Higgins, home loan consultant with Patuxent Funding in Ellicott City, said almost every place in the state appeared to be flagged. ...

Higgins thinks Fannie Mae's move will ripple through the lending industry as a whole, encouraging lenders who sell to the mortgage financier to drop their own declining-market down payment requirements. But that could take a while, he added.

One sticking point: New underwriting rules Fannie Mae is rolling out might disqualify more borrowers from loans even as it lets those who do qualify put less money down, Child said. The company said in a statement yesterday that the new system "will limit risk layering and assess each loan more precisely."

Posted by Jamie Smith Hopkins at 8:16 AM | | Comments (2)

May 16, 2008

Fannie Mae changes down payment rules

Mortgage giant Fannie Mae, which in December began requiring higher down payments in markets it deemed to be declining, said today that it's scrapping that policy. Buyers of single-family homes will be able to put down as little as 3 percent nationwide.

That's for loans made to people who will occupy the homes they're buying and handled through Fannie's automated underwriting system. Loans underwritten in other ways will require 5 percent down.

Here's what the company says in a press release:

"As another part of our 'Keys to RecoveryTM' initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions," Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management, said. "This new down payment policy reinforces our goal to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover."

Fannie, a major player in the market because it buys and securitizes mortgages made by other lenders, said it can afford to make this change because its new model for automated underwriting "will limit risk layering and assess each loan more precisely."

So, folks -- now seems as good a time as any to try out our snazzy new ability to do blog polls:

Posted by Jamie Smith Hopkins at 10:23 AM | | Comments (2)
Categories: Polls

May 15, 2008

What renters and homeowners have in common

Answer: Foreclosure can affect both. We have a story today about a tenant who found herself evicted, despite paying her rent, because her landlord lost the house -- a largely unmeasured but clearly growing problem.

Janet Portman, an attorney and the managing editor at Nolo, a provider of legal information and products, offers these tips for renters to safeguard themselves beforehand or get justice after the fact:

--Look the landlord up in the court records to make sure he or she isn't already facing a foreclosure action on the property in question or other properties. The Maryland Judiciary Case Search lets you do that online.

--Ask to see the landlord's credit report. "Especially if you're going to pay several thousand dollars a month for a single-family home," Portman says. "If you look at someone's credit report, you're going to see how extended they are. Now, a lot of landlords are going to say, 'Heck no.' But if it's a soft market, you might get somewhere with that."

--Ask the landlord's lender for an agreement that if they foreclose, they won't evict you as long as you're not in default. Businesses renting commercial space do that all the time -- it's called a "subordination, attornment and nondisturbance" clause, Portman says. But this is the "platinum model for protecting yourself," as she puts it, because you're going to have to really work to get a residential lender to agree, and you'd probably need to hire a lawyer.

--Remember that you can take the landlord to court if you get evicted because he or she gets foreclosed on. "There's no reason you can't sue that person in small claims court for moving costs and everything else" for failure to make the home available for the period specified in the lease, Portman says.

On the flip side, sometimes landlords go into foreclosure because their renters aren't paying, not because they've overextended themselves. I interviewed a real estate investor last year who couldn't juggle the mortgage payments on his handful of properties because he kept having renter problems.

Posted by Jamie Smith Hopkins at 11:36 AM | | Comments (2)

May 14, 2008

It's all relative

Economists and Realtors often point out that our housing market isn't the hardest hit by the downturn, and inevitably California and Florida get mentioned as the "could be worse" examples. Prices are falling faster in communities there.

But frustrated local sellers who think it's the worst of times now have something they can point to, too: Home sales in Maryland fell faster than in any other state from January-March 2007 to January-March of this year.

You can see the numbers from the National Association of Realtors HERE, look at the NAR's press release HERE or read the story I wrote about the data HERE.

In the fourth quarter of last year, Maryland's sales decline was seventh-biggest in the nation.

Posted by Jamie Smith Hopkins at 3:00 PM | | Comments (3)

May 13, 2008

Monitoring mortgage risk

What's the risk of late mortgage payments in the Baltimore metro area? Higher than in Dallas but lower than in Los Angeles, according to real estate information company First American CoreLogic.

Its latest "mortgage risk monitor" report ranks our metro No. 71 out of 381 markets, with 1 being the highest risk. The Dallas area, by comparison, is ranked 318th and LA comes in at No. 2 (right behind Riverside, Calif.).

The company's ranking of other parts of Maryland include Bethesda-Gaithersburg-Frederick at No. 100, Cumberland in Western Maryland at 109, Hagerstown at 115 and Salisbury at 149. CoreLogic says it bases its risk forecast on "fraud propensity and collateral risk, house price dynamics, and the health of local market economies."

You can find the second-quarter report HERE.

Posted by Jamie Smith Hopkins at 10:10 AM | | Comments (4)

May 12, 2008

Too good to be true

Readers of The Sun, not to mention this blog, may remember that I had a story last Thursday about a study showing that sales of less expensive homes were actually rising year-over-year despite the steep falloff in sales overall.

Alas -- the study was wrong.

Delta Associates, a real estate research firm that prepared the report for multiple listing service Metropolitan Regional Information Systems, said today that it included condos in its calculation for the first three months of this year but excluded them in the first quarter 2007 calculation. That apples-to-oranges comparison made it look like cheaper homes were selling like hotcakes when in fact they too were seeing sales declines.

Delta says now that single-family home sales -- that is, not condos -- fell 26 percent in the $120,000 to $249,999 category. (Its original calculation was a sales increase of nearly 20 percent.)


So why did no one -- either at Delta, at Wonk Central or in the Realtor ranks I interviewed -- suspect there was an error at first? Because all anecdotal evidence has for months suggested that this price range is doing significantly better than more expensive homes. Over and over, agents have said there are more buyers interested in under-$250 homes.

And they're right, relatively speaking. Cheaper homes haven't seen as steep a sales dropoff as more expensive ones. Sales of homes priced at $250,000 and above declined 37 percent in the first quarter of this year vs. the first quarter of last year, according to Delta's new calculation. (That includes a dropoff of almost 50 percent in the $500,000-plus range.)

It's a useful reminder that data errors can crop up, even at reputable research firms. And it's made me even more paranoid about the accuracy of any analysis that I haven't done personally. (Which is not to say I'm not extremely paranoid about potential data foul-ups in my own analyses, because I am.)

We'll have a correction in tomorrow's Business section.

Posted by Jamie Smith Hopkins at 6:08 PM | | Comments (3)

How-to Monday: The buying timeline


Image courtesy of Stock.XCHNG


Few things in everyday life are as intimidating and overwhelming as first-time home buying can be. There's so much to consider, and you don't know what you don't know.

So here's a rough to-do list -- the steps buyers typically go through from start to finish.

Keith L. Cross, a Realtor with Century 21 Downtown in Baltimore, suggests that Step One -- long before you get your heart set on a particular price range -- is to get pre-qualified for a mortgage. You need to know what lenders are willing to lend you in this ever-changing market.

Next, identify your wants and needs. Where do you see yourself living? What type of house do you want, and with how many bedrooms and bathrooms?

If you're working with an agent, this is the point at which he or she will make a list of properties meeting your criteria. You decide which to see.

Perhaps you'll find something immediately. Perhaps you'll look and look and look. But once you're ready to make an offer, your agent will write it up, present it to the listing agent to give to the seller and wait for a response.

"Usually in this market, there's a little bit of negotiation back and forth," Cross says.

If negotiations break down, you keep looking. If not, a contract is ratified -- and then there's even more to do.

A home inspection to see if there's anything wrong with the property. A termite inspection to look for the wood-chewing insects. An appraisal, ordered by your lender, to see what a third party thinks the property is worth.

Also during this period, both the lender and the title company you'll be using will need copies of your contract so they can get to work on processing. The title company has to make sure, for instance, that there's nothing legally preventing the seller from selling.

When the home inspection is done, you'll probably have a list of problems to consider, small or otherwise. (There's usually something wrong, Cross finds.) You can request that the homeowner make repairs or lower the sales price to give you money to make the fixes yourself. Depending on your contract, you might have to give the seller the opportunity to make things right but be able to get out of the deal if he or she isn't cooperative, Cross says.

If the appraisal comes in lower than the price you offered, you can walk or negotiate a lower price, Cross says. "In this kind of market, you may very well get that lower price," Cross adds.

Shortly before settlement, you'll do a final walk-through of the property to make sure any agreed-upon repairs were done and to give it a once-over for unexpected new problems -- i.e. flooded basement.

"Then we go to settlement -- and hopefully everybody's happy," Cross says.

Other things for the to-do list before settlement: Get homeowners' insurance, contact Baltimore Gas & Electric, start the process for telephone service ... That list can go on and on. (Click HERE to see the sorts of things new homeowners might want to do.)

Is this buying timeline missing something -- or do you have a buying story you'd like to share? Chime in.

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (6)
Categories: How-to Mondays

May 11, 2008

An affordable housing suggestion

Planners in expensive Westchester County, N.Y., have a thought about moderately priced homes that could work in most suburbs: Build them on top of some of the oodles of unnecessarily large office parking lots.

The New York Times reports today:

The recommendations came in response to a severe shortage of moderate-income housing in Westchester. Demand is expected to reach 19,083 units by 2015, yet between 2000 and 2005 only 970 units had been built, according to Deborah DeLong, the county’s housing director.

Because the roads and utilities in existing office parks are already in place, the study asserts, further development of those properties would not be as costly for developers.

Posted by Jamie Smith Hopkins at 6:43 AM | | Comments (3)

May 10, 2008

Are we there yet?

Forget horse racing, presidential elections and stock picking. The in thing to predict nowadays is when the housing market will start improving.

Fannie Mae's CEO says his best guess is 2010. Delta Associates and analyst John McClain of George Mason University, both speaking of our neck of the woods, say 2009 and the second half of 2008, respectively. Cyril Moulle-Berteaux, managing partner of hedge fund firm Traxis Partners LP, opines in a Wall Street Journal piece that the housing market already hit bottom last month.

But why let them have all the fun? You've been paying attention -- obviously, as you're here -- and you have opinions.

So: What's your forecast, either for the Baltimore area or the nation as a whole? Feel free to leave a detailed comment or just a date.

Posted by Jamie Smith Hopkins at 10:21 AM | | Comments (5)

May 9, 2008

April home sales

To the disappointment of all hoping for signs of a turnaround, April continued the trend of big sales declines in the Baltimore metro area. The number of homes sold last month was down 31 percent from a year earlier. Average prices were essentially flat. (The median price -- the point at which half the homes are less expensive and half more expensive -- fell 4.7 percent.)

Click HERE to see the data, released today by Metropolitan Regional Information Systems.

The sales drop ranged from 27 percent in Baltimore County to 42 percent in Carroll, which has really been taking a pummeling. Prices fell the most in Carroll, down 7.6 percent on average. Every other jurisdiction in the area saw tiny-to-modest price drops except Baltimore, where average prices rose 3.7 percent. (But the city's median price fell, which just goes to show that it depends on what you're measuring.)

The number of unsold homes is again on the rise. That's probably to be expected, because a number of agents mentioned in the winter months that they had clients planning to put their properties on the market in the spring.

Thoughts about the market? As always, chime in. 

Posted by Jamie Smith Hopkins at 9:16 PM | | Comments (1)

Housing and the government

Now comes the latest salvo in the political wrangling over what the government should and shouldn't do about the housing slump, credit crunch and foreclosure problem: The House yesterday passed a measure to have the FHA insure billions in refinanced mortgages.

The Los Angeles Times, which notes that President Bush has "threatened a veto," reports in today's story:

At the center of the legislation is a measure that would allow the Federal Housing Administration to insure up to $300 billion in refinanced mortgages if lenders agree to write down the loan principal below the home's current appraised value. The plan would help an estimated 500,000 homeowners avoid foreclosure.

The measure would cost about $2.7 billion, according to the Congressional Budget Office.

Another provision, with particular relevance to states with high home costs, would permanently raise to $729,750 the limit for mortgages that government-sponsored holders Fannie Mae and Freddie Mac can buy.

I know some of you have strong opinions about government housing efforts thus far. For your reading pleasure, click HERE to see a list of recent federal actions and proposals.

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

May 8, 2008

Your idea here

QuestionMarkStockxchng.jpgEvery Monday in this space, I cover an issue related to buying, selling, renting or just generally living in a home. Every Monday. Eventually I'm going to run out of ideas.

So help me out, kind readers: Tell me what topics you're most interested in. What would you like to see? (Click HERE for all the previous How-to posts, if you'd prefer to check there first.) 

How-to Monday isn't the time for exhaustive analyses or big investigations, of course. It has to be a how-to, for one, and it can't be too complicated or it'll never fit in the small space they give me when it gets printed in The Sun the following Friday. But that doesn't mean you can't suggest news stories for my (frightening long) queue.

So chime in, either in the comments or by email. What would you like to know? What do you think others should know?

(Image courtesy of Stock.XCHNG)

Posted by Jamie Smith Hopkins at 12:25 PM | | Comments (4)
Categories: How-to Mondays

These homes are selling

I've lost track of how many times I've noted in stories that less expensive homes are selling more easily than pricier ones, but a new analysis puts a number on the strength of that part of the market. From today's article:
Nearly 20 percent more properties priced from $120,000 to $249,999 sold in the first three months of the year than in the same period in 2007, according to a report released yesterday by Metropolitan Regional Information Systems. That comes as sales in all pricier categories, particularly $500,000 and over, continued to fall sharply.

The report, prepared for the multiple listing service by real estate research firm Delta Associates, is a potent reminder that price matters. Homes affordable to first-time buyers are getting contracts faster because those buyers don't have property of their own to sell first. The $120,000 to $249,999 category, which accounted for one-fifth of sales in the early part of last year, swelled to more than a third of the market in the first quarter.

Other interesting statistics from the MRIS/Delta report that I couldn't fit in the story:

--Vacancy among Baltimore metro area Class A apartments is rising (6.1 percent in the first quarter, up from 4.4 percent a year earlier). Rental prices are essentially flat, at $1,296.

--Vacancy is also rising in the Baltimore metro area office market -- it's 12 percent, up from 10.9 percent a year ago. While homebuilders have been assiduously cutting back to get inventory under control, office development is still growing. Delta reports that there are 4 million square feet under construction, compared with 2.5 million square feet a year ago.

Posted by Jamie Smith Hopkins at 9:20 AM | | Comments (2)

May 7, 2008

State Center plans unveiled

The housing, credit and economic troubles killing development projects here and nationwide haven't stopped plans to redevelop the state complex in midtown Baltimore into new offices, apartments, condos and shops.

Lorraine Mirabella reports today that "state officials and developers said yesterday that they hoped to start construction of a new State Center by 2010."

A master plan totaling 6 million square feet, to be presented tomorrow to a city design panel, includes 2 million square feet of office space, 1,200 market-rate and affordable residences and about 250,000 square feet of restaurants, shops and, possibly, a supermarket.

The dozen state agencies that currently occupy four state-owned buildings would become a key anchor, filling about three-quarters of the office space.

Posted by Jamie Smith Hopkins at 11:38 AM | | Comments (2)

May 6, 2008

Home buying fair this Saturday

Live Baltimore Home Center is holding a home buying fair and neighborhood tour event this Saturday from 9 a.m. to 2 p.m. It starts at Baltimore Polytechnic Institute, 1400 W. Cold Spring Lane, and concludes with tours in the western half of the city.

Want more details? Click HERE.

Posted by Jamie Smith Hopkins at 10:35 AM | | Comments (0)

Owing more than the home is worth

Nearly half the people who bought homes last year in the Baltimore metro area owe more than those properties are worth now, same as the nationwide average, estimates. The company, best known for its "Zestimates" of home values, released the negative-equity numbers today as part of its report on trends in the first quarter of the year.

In the "could be worse" category, here are the 10 metro areas that Zillow believes have the biggest share of '07 buyers with negative equity:

1. Merced, Calif. -- 90.9%

2. Stockton, Calif. -- 90.5%

3. Modesto, Calif. -- 84.6%

4. Las Vegas-Paradise, Nev. -- 82.9%

5. Riverside-San Bernardino-Ontario, Calif. -- 80.9%

6. Madera, Calif. -- 80.3%

7. Vallejo-Fairfield, Calif. -- 78.9%

8. Bakersfield, Calif. -- 77.6%

9. Jackson, Mich. -- 77%

10. Fresno, Calif. -- 75.9%

At the other end: About 9 percent of 2007 buyers have negative equity in Corvallis, Ore., Zillow says.

Interested in other housing-market stats? Click HERE to see the first-quarter report.

Zillow also pinpoints the Baltimore metro area's market peak as summer of 2007 -- judging by price -- and says values have fallen 7 percent since then, back to levels last seen at the end of 2005.

Posted by Jamie Smith Hopkins at 9:16 AM | | Comments (4)

May 5, 2008

How-to Monday: Property lines (or, Whose tree is it anyway?)


Photo courtesy of Stock.XCHNG


If good fences make good neighbors, then you'll want to know the extent of your property. How else can you figure out where to put the fence?

Problem is, the "location" or "mortgage" survey a buyer gets is conducted to assure the lender that the house is inside the property lines, said John V. Mettee III, vice president of Frederick Ward Associates, an engineering, architecture and surveying firm in Bel Air. It's not very useful for telling you if that tree that needs trimming belongs to you or the Joneses next door.

Mettee suggests buyers do a true survey of property lines so they know what they're getting upfront. That will run you at least $1,000 -- possibly several thousand dollars, depending on the size of the property, he said.

"I've heard individuals say many a time, they thought that their property went to such-and-such a place and never really had a survey to determine that, only to find out years later that they didn't actually acquire what they thought they were acquiring," said Mettee, who gets a number of calls from homeowners disputing property lines with neighbors.

You can go to your local land records office to see the official word on your property. But unless you have professional training, Mettee doubts you'll be able to translate it into useful information.

If the tree that needs trimming might be sitting in public right-of-way, you have other places to turn. In Baltimore County, for instance, you'll want to call the Bureau of Highways, 410-887-3560 , which will make a determination. Should the tree be in the right-of-way, the bureau will also decide whether to trim (or remove).

The county doesn't charge for the maintenance, but you will have to pay a $25 work-order application fee, said David F. Fidler, a spokesman for the county Department of Public Works.

You also might find yourself with neighbor issues, never mind that the tree is county responsibility.

"We've had so much interest in the last year or two about trees -- for various reasons, it's become a hot topic in the county," Fidler said. "You may ask to have it taken down, and your neighbors may love that tree. ... This has sparked a good deal of controversy."

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (0)
Categories: How-to Mondays

May 4, 2008

More news on the "credit squeeze" front

Kenneth Harney continues documenting restrictions in the mortgage world with today's column, noting changes you might face if you're interested in cash-out refinancing, investment purchases and other specialized parts of the lending market:
Why the continuing rollbacks and how long could they continue? Lenders and insurers are carefully studying the sources of their greatest losses from mortgage vintages between 2003 and 2007. Where they see inordinate risk, they are reacting much as they would to a disease: They are eradicating it.

In the meantime, consumers have little choice: Get used to it. The excesses of the boom begat the credit squeeze, and it's not going away anytime soon.

If you're in the market for a new-purchase loan or a refinance, have you had any issues? Or have you found a product -- whether private market or government backed -- that suits you?

Posted by Jamie Smith Hopkins at 1:47 PM | | Comments (0)

May 3, 2008

Harvard center: Pay attention to rentals

As most of the nation fixates on home sales, housing prices, homeownership and foreclosures, Harvard's Joint Center for Housing Studies makes a plea for policymakers to consider the plight of renters:
While some owners who have lost their homes will quickly buy another unit and others will move in with family and friends, many will become renters. Indeed, after averaging just 0.7 percent annual growth from 2003 to 2006, the number of renter households jumped by 2.8 percent or nearly one million in 2007.

The growing numbers of renters must now compete for the limited supply of affordable housing, adding to the longstanding pressures in markets across the country.

Interested in this subject? Read the center's report HERE.

Posted by Jamie Smith Hopkins at 6:57 AM | | Comments (0)

May 2, 2008

Tallying up foreclosure's toll on children

First Focus, a Washington group that advocates for child-friendly policies and funding, said today it's estimating that 43,200 Maryland children will have to move as a result of subprime foreclosures -- primarily this year and next.

First Focus used as its base the Center for Responsible Lending's forecast that more than 55,000 Maryland homes with subprime loans will be foreclosed on. It then compared that to the share of households with children and the average number of kids in those households.

In its report, First Focus says:

These children are not just losing their homes, but they also risk losing their friends, schools, and in many ways, their childhood. When foreclosures force children from their homes, their education is disrupted, their peer relationships crumble, and the social networks that support them are fractured. Indeed, their physical health, as well as their emotional health and well-being, is placed at risk.
Posted by Jamie Smith Hopkins at 12:15 PM | | Comments (2)

... Or maybe there will be a property tax cut

The property tax rate cut Baltimore Mayor Sheila Dixon had intended to make and then said wasn't doable may happen after all, John Fritze reports today. The City Council is trying to put it back into the budget.
Though the council has limited power to alter the proposed $2.94 billion spending plan, several members said they will seek to cut millions in spending in the coming weeks so the city can afford to reduce its property tax rate by as much as 2 cents, the latest step in a five-year plan to reduce Baltimore's highest-in-the-state property tax rate.

Political wrangling over the issue this year underscores the pressure city leaders are under to do something about Baltimore's property tax at a time when assessments have increased and the economy is slowing.


Posted by Jamie Smith Hopkins at 7:30 AM | | Comments (1)

May 1, 2008

Air quality near you

Wondering if you should be taking deep breaths when you go outside? The Maryland Department of the Environment suggests you go to this site to see the current state of air quality in your neck of the woods.

I don't know about you, but the air seems to me to be more parts pollen than oxygen at the moment.

Posted by Jamie Smith Hopkins at 10:30 AM | | Comments (0)

Lowball offers has a piece today about prospective homebuyers lowballing sellers and whether it's an effective negotiating strategy. (Even if interested buyers are scarce, a seller may react with anger rather than a counteroffer.)

One point, though it might seem a no-brainer, deserves highlighting:

If the seller wants to sell the property, every offer deserves a counteroffer, and if the buyer wants to purchase the property, every counteroffer merits consideration.

Buyers: Have you tried offering a lot less than the asking price, or do you just move on if the price isn't right? Sellers: How have you handled low offers?

Posted by Jamie Smith Hopkins at 9:30 AM | | Comments (4)
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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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