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January 30, 2009

Regulators close Suburban Federal Savings Bank

The bank-toppling credit crisis hit home tonight for Crofton-based Suburban Federal, which was closed by federal regulators for being "critically undercapitalized and in unsound condition."

The Office of Thrift Supervision says in its press release that the Bank of Essex of Tappahannock, Va., has acquired the deposits and "Suburban’s branches will open tomorrow as usual as branches of the Bank of Essex."

As you can probably guess, it was a case of mortgages gone bad. From the press release:

Suburban was founded in 1955 and focused on traditional single-family mortgage lending for most of its history. Its problems resulted from the failure of the Board of Directors and managers to oversee an aggressive lending program that began in 2005. The program included reduced documentation, single-family loans and expanded into residential acquisition and development, construction loans and land loans. The program led to a significant increase in problem assets in 2006 and a series of quarterly losses starting in the third quarter of 2007.

It was the first Maryland bank failure since 1992.

Posted by Jamie Smith Hopkins at 8:03 PM | | Comments (0)

Homes for sale vs. homes sold: Take the poll

"When will things get back to normal" is the million-dollar question for the housing market. What exactly is normal -- that's at least a $500,000 question.

Here's a stab at the second one: when the number of people trying to sell isn't so much higher than the number of people buying. There were about four-and-a-half homes on the market for every one that sold in 2000, before the boom. In 2005, when you could stick a "for sale" sign in your yard one day and take it down the next, that figure dropped to two.

Last year? Eleven.

This is known in the biz as "months supply." At the rate people are buying homes, it would take 11 months to turn all the listings into sales if nothing else came on the market.

Some say a four-month supply is normal. Some say five. Some say six. I wish we had decades of home sale statistics for our area, but Metropolitan Regional Information Systems' numbers start in the late '90s.

For argument's sake, let's say 2000 was our normal. When do you think homes for sale vs. homes sold will get back to that point? (And remember, it's not the same question as "when will sales increase.")

Posted by Jamie Smith Hopkins at 5:53 PM | | Comments (2)
Categories: Polls

January 29, 2009

Update: City's predatory-lending suit against Wells Fargo

You'd be excused if it had slipped your mind that Baltimore is suing Wells Fargo for allegedly making predatory home loans to black residents. It's been a year now since the announcement. Reporter Tricia Bishop brings us an update from the front, as the two parties tussle over Wells Fargo's request to dismiss the suit:
Saying that the city was so "thirsty for revenue" that it had to sue companies, Wells Fargo attorney Andrew Sandler blamed Baltimore for its foreclosure problems, particularly its tax lien system and high property taxes. There "is not a single assertion that's beyond mere speculation that Wells Fargo is the problem," Sandler said.

City lawyer John Relman said Baltimore would show "the precise injury" if the case went forward. In its complaint, the city says Wells Fargo targeted black communities to distribute risky subprime loans, making it "one of the leading causes of the disproportionately high rate of foreclosures" in such neighborhoods.

Posted by Jamie Smith Hopkins at 8:09 AM | | Comments (7)

January 28, 2009

Apartments: The next credit-crisis shoe to drop?

You might think apartment owners are doing fine -- or at least better than homeowners -- as waves of foreclosures push more people into rentals. But even the apartment industry can't escape the foreclosure-fueled credit crisis. That's because lenders stopped lending across the board.

So says Harvard's Joint Center for Housing Studies in a report you can read at the National Multi Housing Council site. (The council, a trade group, provided some of the support for the report.)

Harvard's center notes a danger that apartment owners could follow homeowners into default if the lending situation doesn't improve, even though their loan performance "remains quite strong." Multifamily loans generally come due quickly -- in five to 10 years rather than 30 -- and industry players count on being able to refinance.

From the report:

That puts an even greater sense of urgency on preparing plans now to make sure federal sources continue to provide liquidity.
The risks are great. The CMBS [commercial mortgage-backed security] market has basically shut down, banks and thrifts are presently not willing to lend for multifamily new construction or rehabilitation, and life insurance companies, pension funds, endowments, and others that have provided permanent financing are standing on the sidelines. Also, with no income tax liability to shelter, Fannie Mae and Freddie Mac have stopped buying low-income housing tax credits.
New investors have not yet been found to fill the gap and credit pricing is making most planned projects unworkable. Meanwhile, the public markets for state tax-exempt bonds have been roiled, making it harder to finance the preservation and production of much needed affordable, low-income housing.
Posted by Jamie Smith Hopkins at 8:19 AM | | Comments (5)

January 27, 2009

What sort of stimulus would work?

Big businesses announced big layoffs yesterday, housing-dependent Home Depot among them. Some economists are now predicting unemployment will rise to 10 percent in the next year -- for the first time since 1983. It adds urgency to the debates about what (if anything) the government should do to turn the economy around.

Wonk reader H offered up an idea and thought some of you opinionated people would have your own suggestions.

Here's what he says:

The only building product that has not dropped in price is concrete, so any road building package that gets passed is largely a gift to concrete manufactures, and a small portion specialty building contractors. Popular but it's not going to be effective at getting the economy moving.

The tax stimulus plan supported by the Democrats is a clone of the ineffective Bush 2007 tax stimulus plan. The Republican tax plans are only slightly better than the Democratic plans.

Here's my idea, and it's costly.

The only plan I see as being effective and in our nation's long-term interest is allow up to 75 percent cost deductibility for energy/water-saving home improvements for the next two years. ($500 energy savings deduction is near meaningless.)

The most critical benefit is that it gets people with money to spend it, and it will affect a much broader group of the construction industry and the part that needs money the most. Real estate prices quickly start to stabilize, because a significant number of foreclosures are on those employed in the construction field.

By the way, H says he is not employed in the construction/home improvement biz. (He's a programmer.)

Agree with his idea? Disagree? Have a brilliant proposal of your own? You know what to do.

Posted by Jamie Smith Hopkins at 7:42 PM | | Comments (0)

Work in construction?

It's an unnerving time to be an employee anywhere, but especially if you're in construction. Here's what Wachovia economists predict is yet to come for workers in that field:
We continue to expect large declines in construction across the nation and across product types. We expect that real residential investment will drop another 17 percent in 2009 after dropping almost 18 percent in 2007 and more than 20 percent in 2008. While non-residential construction held up through 2008 we look for declines to begin this year and carry through 2010, as funding for the sector has all but evaporated. With such a bleak outlook for both components of the construction sector we do not see much hope for employment. Declines in aggregate employment will likely continue for some time in these sectors.

The best hope for employees in construction will come in late 2009 and 2010 when infrastructure investment is expected to pick-up as part of a fiscal stimulus package. While this will help stem the tide of job losses in the sector, there simply will not be nearly enough government work to offset the losses in the private sector. With businesses continuing to pull back on capital expenditures and consumers looking to cut back as well, the private side losses will far outweigh even the largest of stimulus efforts.

Posted by Jamie Smith Hopkins at 7:08 AM | | Comments (0)

January 26, 2009

Q&A: Pat Hiban

Pat Hiban's been selling homes for 21 years, so he's seen markets good and bad, interest rates high and low. I chatted with him recently to get his thoughts on the slump. (He's most familiar with the southern part of the Baltimore metro area — his Pat Hiban Real Estate Group with Keller Williams Crossroads has offices in Ellicott City and Glen Burnie.)

Q. What's happening to home values in the parts of the metro area you know best?

Hiban: Home values are going down — it's unequivocal. They're definitely going down and they're going to continue to go down. ... Baltimore generally is the last area to be affected by the swings, you know? They come through California, kind of almost down to Florida and they hit Virginia, Northern Virginia, Washington, D.C. and then they kind of move toward Baltimore. That's how it happened when prices went up, and that's how it seems to be happening now that prices are going down.

There's two levels of bottom. The first level of bottom you have is the sorting out of "want-to" sellers vs. "have-to" sellers. The market gets sorted out so the people actually selling are the ones going through divorces, the ones having deaths [in the family] ... or they're being relocated. They have to sell. The people who, "I want to sell because I want better neighbors" or "I want a better backyard" — those are want-to sellers. That bottom has kind of formed now. ...

There's a whole other bottom that hasn't hit yet. This bottom has hit in California, it's hit in Detroit, it's hit in Florida, it's started to hit in Northern Virginia and it's going to hit here next. It's unequivocally going to hit in 2009. And that's going to be another kind of seller. ... The banks.

I have accounts with several banks now — not bank accounts, but they give me the listings. The ask me, "If we've got to sell this thing in a reasonable amount of time, 30 to 60 days, where do we need to price it?" And any smart Realtor is going to say, "You need to be the cheapest guy in the neighborhood." And if it doesn't sell, then you say: "Let's drop it 10 percent."

Q. What's the trend with the foreclosure listings you're handling?

These things sell. A lot of our other stuff — I have five [non-foreclosure] houses in River Hill right now, in Clarksville, and they're all five just sitting there. Some haven't been shown in 30 days. ... I think some will sell. But it's a much longer process, you know, then the foreclosures.

Foreclosures come on the market, and we hope to get them sold in 30 days. A foreclosure's a done deal in our mind. The bank's going to take our advice and drop the price.

Q. But homeowners aren't?

They can't, and they're not. It's like anything — it's like the stock market. If you bought some Cisco Systems stock for $100 and now it's at $16, you don't want to sell it because you've lost 84 percent of what you had. It's the same thing.

I had somebody call this week who bought a house in June of 2007. ... They paid $550 for it, and I pulled the comps ... They needed to be around $450. She put $125 down on it, and I told her it was $100,000 less than she paid. She'd essentially lost all her equity.[So she didn't want to sell] and lock in her loss. In reality, she's already lost it.

Q. You expect more foreclosures to come. Why?

There's a lot of people I know, their savings are zilch, zero. Some of my agents that I counsel, I'm like, "You know, if this does get worse, do you have a couple mortgage payments saved up?" [They say], "No. I need to sell X amount of houses every month or I don't know what I'm going to do."

Q. How much have prices dropped on comparable homes?

They've probably dropped a good 10 to 15 percent in the last six months. And then before that — I'm guessing the peak was '06. If you paid a million in '06 and you called me to come list it and said, "What do I need to do to get it sold," I would tell you $699,9.

The upper end has been severely beaten up.

Q. Any good news out there?

Interest rates are extremely low. ... I really do think that we'll look back on this time frame and say, "Can you believe when they were 5 percent?"

Q. You're blogging at Why did you start the site?

Because I felt that no one was getting the truth. ... We would go on listing appointments and lose the listing because [another] agent would tell them the house was worth $800 and we would tell them it was worth $700, and then the house would sit on the market for six or seven months and drop to $700, and then drop to $650, and then the other agent would get the commission.

We got really frustrated. That's why I started it. I was hoping other agents would join in, say, "Yeah, it's true, the prices are going down, and there's some unrealistic prices," and I wanted my sellers to read it so they'd say, "Yeah, let's price it so it sells rather than price it so it sits."

Q. Is it working?

I think it works once in a while. ... I'll keep blogging once a week and see.

Posted by Jamie Smith Hopkins at 1:00 AM | | Comments (5)
Categories: Q&A

January 25, 2009

That "new buyer" tax credit may end up a real credit

Remember the $7,500 tax credit for new buyers? It's the one that, as columnist Ken Harney puts it, is less tax credit than an "interest-free installment loan" because it has to be repaid over 15 years. Perhaps that's why new buyers haven't been falling over themselves to use it.

But Harney reports that "Congress may be on the verge of transforming it into a true tax credit - one that never has to be paid back."

Though final details on a revised credit are still subject to negotiations between the House and Senate - and to passage of the economic stimulus package itself - there's a good chance that buyers who sought the credit in 2008, and new purchasers in 2009, will be relieved of the repayment requirement.

So, you renters thinking of buying in the near future: Does the fate of the tax credit matter to you? And you renters not planning on buying: Would the revision change your mind?

What would it take for you to buy, if you're on the fence?

And for that matter, if you've got a house you're putting off selling, what will make you decide the time is right?

Posted by Jamie Smith Hopkins at 8:03 AM | | Comments (2)

January 24, 2009

Here's what you said

Chances are you're a Baltimore homeowner who's not planning on selling anytime soon. That's the upshot of the "Tell Me About Yourself" poll results.

Well, OK, not quite. The results -- as of 1 p.m. today -- show that more than a third of you who took the poll live in the city and about 40 percent of you own a home you're not intending to sell in the near future. But naturally there's no way to know how much the city resident group and the not-selling-my-home group overlap.

Thirty-five percent of you are renters interested in buying soonish; 11 percent are homeowners trying to sell now or in the near future. The rest of you are either renters not planning on buying anytime soon or residents with a different situation altogether. (One reader wants to buy property without selling his or her current home.)

Just under half of you live in the Baltimore 'burbs, the largest group (23 percent) in Baltimore County. The rest of you -- 17 percent -- live outside the metro area.

Thanks for playing, folks! You're a pretty diverse group, and I'll try to find things that will interest people who aren't going anywhere as well as the buyers and sellers.

Posted by Jamie Smith Hopkins at 1:24 PM | | Comments (0)
Categories: Polls

Property tax scam

As if there weren't enough scams targeting homeowners: Annie Linskey reports today that a woman pretending to be a city tax collector tricked an elderly Baltimore resident into paying her more than $300 for "overdue" property taxes.

From the story:

According to police, a woman with a blocked phone number called the 96-year-old claiming that back taxes were owed.

She warned that the sheriff's department would take the elderly woman's West Baltimore home.

Legitimate city tax bills arrive in the mail, officials said.

Posted by Jamie Smith Hopkins at 12:58 PM | | Comments (0)

January 23, 2009

Poll: Tell me about yourself

Every so often I like to ask about your place in the housing world, demographically speaking, so I can keep that in mind when I look for interesting news and links.

Help me out, kind readers, by taking the two polls below:

Posted by Jamie Smith Hopkins at 7:37 AM | | Comments (0)
Categories: Polls

January 22, 2009

Summing up the local housing situation

Delta Associates, in its year-end report on the housing market, says the Baltimore metro area saw 14 net sales of new condos during the last three months of 2008. Why "net"? Because that takes into account cancellations, which are significant. In the city, Delta notes, "there were more contract cancellations than sales in 2008."

There weren't a lot of new condo sales elsewhere, either:

For the year, there were a total of just 48 net sales in the metro area, a reduction of more than 90% from 2007.
Prices for new condos fell faster in the suburbs (down 12 percent) than in the city (down 3 percent).

On the other hand, the median condo resale price was up 4.5 percent in the city, as of November. Resale condo prices dropped 4.7 percent overall in the metro area, to just over $225,000, Delta says.

Here's Delta's prediction for the housing market:

We believe increased demand and a decline in construction will stabilize pricing, leading to an up-tick in sales activity, with improvement in market conditions appearing in 2010. ... Housing prices are more stable here compared to other areas, as Baltimore refrained from overbuilding during the boom.
A number of real estate agents have said there was a form of overbuilding in some city neighborhoods -- lots of expensive rehabs -- but that might be more about price category than overall quantity.

Other details from the Delta report:

--The vacancy rate in so-called "class A" apartment buildings is stable at 4.6 percent in the Baltimore metro area, compared with 6.1 percent nationally.

--Average rent is about $1,360, up 1.3 percent from a year ago. It's up more than that in some parts of the metro area and down in others. Delta reports a 3 percent drop in rents in Fells Point and the Inner Harbor.

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

January 19, 2009

Q&A: Civil Justice

The attorneys at nonprofit Civil Justice in Baltimore specialize in real estate cases, so as you can imagine they're a bit busy at the moment. I recently sat down -- virtually speaking -- with Civil Justice's executive director, Phillip Robinson, for an email Q&A about the foreclosure situation:

Wonk: Have you noticed an impact from Maryland's new foreclosure law?

Robinson: The new law has solved several major issues which existed before. We rarely ever hear from homeowners who were not aware or did not receive notice of the foreclosure sale. Since they are getting notice, not previously required under the old system, they are taking the initiative to contact their lenders and trying to work out a modification.

W: Has anything changed in the way lenders are dealing with foreclosure, now that we're several years into the housing slump?

R: The lenders are changing so fast, this is difficult. A few years ago the lending industry claimed over and over there was no problem. Now everybody knows there was, is, and will be a problem for many more years. The loans in the pipeline that will be exploding for the next couple of years are the payment-option arms given to folks with the best credit. These loans will be adjusting and coming due to levels far above the market price of the home.

W: What do you think are the main causes of the foreclosure problem?

R: If you look at the super majority of loans in foreclosure, ... they come from one and/or two sources: (1) mortgage lenders/originators who are now out of business and funded loans to people on false expectations that the person could afford the loan in the short- or long-term; (2) loan products and systems which were more like Ponzi schemes than bona fide investments and financial tools.

Posted by Jamie Smith Hopkins at 1:00 AM | | Comments (0)
Categories: Q&A

January 18, 2009

Poll: When will home sales increase?

Home sales in the Baltimore metro area have been dropping since October 2005 and in December were down 17 percent from a year earlier. When will the number of homes changing hands go up instead of down?

It's anyone's educated guess. So put in your own two cents:

UPDATE as of 7:30 a.m. on Jan. 23: You're not a hugely optimistic bunch -- just 17 percent of you think home sales will start increasing this year. Twenty-eight percent say 2010, 20 percent chose 2011, 16 percent opted for 2012 and 17 percent say "years from now."

Two voters put in their own answers. One said "when prices vs income vs mrtg policies align." The other? "Never."

Posted by Jamie Smith Hopkins at 8:53 AM | | Comments (2)
Categories: Polls

Mulling the renovation to-do list

When you decide to stick around in your house for a while, chances are you'll end up doing work on it -- by choice (new kitchen) or not (new roof). A sales slump means a lot of people deciding to stick around for a while. But the recession and sluggish credit could make homeowners wary of extra expenses or unable to swing them.

That's why experts are telling The Sun's Andrea Siegel that many popular home improvement projects of the day are comparatively small. Like siding and window replacement:

Nationwide, this investment brought a hefty payback, according to Remodeling magazine's recent "Cost vs. Value Report."

In the Baltimore area, midprice window replacements recouped about 75 percent of the price at resale. For siding, it was 88 percent, the highest payback of any project.

Posted by Jamie Smith Hopkins at 8:34 AM | | Comments (2)

January 17, 2009

Hancock: Baltimore City 'holding its own'

Jay Hancock says in his column today that Baltimore, city of tears during the early '90s recession, is doing a whole lot better this time around. Housing is one of his examples:
The average city home sold for 4 percent less in December than it did a year previously. Howard County house prices, meanwhile, plopped down 10 percent during the same period.

Credit Baltimore's mature neighborhoods, which weren't subject to the nutty speculation and pell-mell construction that occurred in some areas. But also give props to the city's comeback as a desirable place for those with options to live elsewhere. ...

While Baltimore lost nearly 90,000 residents in the 1990s, its population has been stable at 640,000 for five years, according to Census Bureau estimates. One reason: You can work in the city without worrying so much that your job is about to vanish. Today's Baltimore specializes in health care, education and government, sectors least hurt by the recession.

Posted by Jamie Smith Hopkins at 6:37 AM | | Comments (4)

January 16, 2009

For renters: New sites to explore

Looking for a new place to rent? The online search possibilities are many -- I covered some of them in this How-to -- and now there's one more for the list:, which calls itself a cross between typical property-listing sites and social-media spots (like Wikipedia). You'll see information about places for rent plus details about neighborhoods submitted by current renters.

The page about Baltimore's Abell neighborhood, for instance, includes hyperlocal info (like which restaurants are good and which you "absolutely must avoid ... unless you are currently paying dues to a fraternity") plus this note from a resident: "A gentrified area such as Abell is doubtless safer than most parts of Baltimore, provided residents take a few cautionary measures. Window bars on first floor apartments are ubiquitous, while bars on second-floor windows are also a good idea due to the very architecture of rowhouses dictating that you share more than just a wall with your neighbor." 

Another site for renters -- and landlords: Maryland Smoke Free Apartments, run by University of Maryland School of Law's Center for Tobacco Regulation, Litigation & Advocacy. The center says smoke that wends its way from one unit to another through air ducts is a problem for tenants and building owners alike.

The site has legal resources for renters and landlords, recommending to the latter that they restrict smoking in their units and not just the common areas. ("The number one cause of fire fatalities in Maryland is cigarette-related fires," the site says.)

Thoughts? I'm always happy to hear them. Chime in.

Posted by Jamie Smith Hopkins at 7:49 AM | | Comments (2)

January 15, 2009

Good news, bad news (gov't job edition)

First the good news, for anyone in favor of jobs and housing activity: The much-anticipated movement of government workers and contractors to the area (thanks to the national base realignment and closure) is underway, at least in a small way. Mary Gail Hare reports:
Fort Monmouth in New Jersey is closing and transferring many of its jobs to Aberdeen Proving Ground. About 300 New Jersey families have relocated to Maryland in the past six months. ... More than 700 are expected this year, with the largest move set for 2010, a year ahead of the required September 2011 BRAC completion date.

Bad news: Gov. Martin O'Malley's plan to deal with budget problems by laying off 500 to 1,000 people. Job cuts -- government or otherwise -- mean fewer people able to buy new homes, and potentially more people in danger of missing mortgage payments on the homes they have.

See other good or bad housing-related news out there? Chime in.

Posted by Jamie Smith Hopkins at 8:06 AM | | Comments (1)
Categories: BRAC

January 13, 2009

Four Seasons condos delayed

Add one more project to the list of housing delayed by the slump: the high-end condos planned for the top of the tower with the Four Seasons hotel in Baltimore's Harbor East.

Lorraine Mirabella and Ed Gunts report:

At the originally planned height, it would have been the city's tallest building. ... Revised plans call for building 21 stories, which will include the 256-room Four Seasons hotel on levels one to 18 and three additional floors. One of the top three will be temporarily developed as a $4.5 million "preview gallery" for the residences, with a sales office and model homes designed to show off harbor views. At that point, the developers intend to gauge the housing market and then determine the number of condominiums and pricing.

H&S Properties Development Corp., the developer, is building the project with Struever Bros. Eccles & Rouse Inc.

It's not an easy time to sell luxury condos. The story notes that just 14 buyers have gone to settlement on the downtown Ritz Carlton even though it had 113 sales contracts when it opened last year.

If you were a developer with residential land in the state, what would you do? Full speed ahead? Hold on in hopes of things improving before you run out of money to pay your loans? Change your plans to build the most affordable housing your budget allows? Try to sell the land?

Posted by Jamie Smith Hopkins at 7:17 AM | | Comments (1)

January 12, 2009

How to buy a home without a mortgage

Mr. Wonk, my math-minded but not-housing-obsessed husband, wondered the other day what people did before mortgages. "How long would it take for typical people to buy the typical house just by saving up?" he asked.

"Oh, I can figure that out!" I said -- and then realized that I'd need to settle on an average annual interest rate for the savings and the annual increase (if any) to income and home prices. Trained economists are still arguing over how long it'll take for prices to stabilize. I'm not about to wade in with my crystal ball.

So I did a simpler calculation -- how long it would take if home prices, incomes and bank account rates all remain stagnant.

In the Baltimore metro area, the median household income (meaning half make less and half make more) is about $68,000. The median home price in November was about $248,000.

If that typical family was really disciplined and managed to save 20 percent a year before taxes -- $13,600 -- then it would have enough to buy the typical home outright in a little over 18 years. Putting away 10 percent a year would mean a home purchase in about 36 years. Five percent, or $3,400? Seventy-three years.

Wow, you might be saying -- that's why mortgages are useful. Or perhaps: "Wow -- home prices are way out of whack."

Which is it, I wondered, so I did the same calculation for incomes and prices in 1999, pre-boom.

How long -- again assuming that nothing (not prices, not income, not interest rates) changed?

Thirteen years for the 20-percent-a-year savers. Fifty-one years for the 5-percent-a-year folks.

Faster, most definitely. But still a long wait.

Posted by Jamie Smith Hopkins at 1:00 AM | | Comments (29)

January 10, 2009

December home sales in the Baltimore area

At first glance, the most positive news about the local housing market in December -- from a seller's point of view, at least -- is that it wasn't as bad as November.

According to numbers released today by Metropolitan Regional Information Systems, the number of homes changing hands in the metro area last month was down about 17 percent from a year earlier. The average price dropped almost 6 percent, to just under $295,000. (For median fans: the midpoint price dropped 5 percent.)

In November, by contrast, sales fell 33 percent and prices, 8 percent.

Average prices dropped in all Baltimore-area jurisdictions except Carroll, which was essentially flat -- a break for that county, which saw big drops earlier in the year. Sales fell everywhere except Harford, which posted a slight increase. (People bought 159 homes there in December 2007; last month -- 160.)

MRIS will release official year-end figures in February, once it's gotten all late comps in and scrubbed the numbers. But unofficially -- based off the numbers we have now -- I calculate that metro-area sales fell 28 percent in 2008 and average prices dropped 3 percent, to about $306,500. (Wonk alert: I'm comparing to the unadjusted figures for '07.)

About 21,500 homes changed hands last year, the lowest on record. It was just shy of 44,000 in 2005, the height of the buying spree, and nearly 29,000 in 1998, the first year MRIS tracked sales in the area.

Any thoughts about the '08 housing market? Experiences? Words of wisdom? Chime in.

Posted by Jamie Smith Hopkins at 8:07 PM | | Comments (0)

January 8, 2009

Think YOUR housing costs are through the roof?

Alan Brian Fabian, newly in prison for fraud, reveals in a bankruptcy filing how much his mortgage is setting him back: $17,546 -- a month. (That's more than some people pay for housing in an entire year.)

Sun reporter extraordinaire Tricia Bishop notes in a story today other surprising numbers in Fabian's bankruptcy filing -- how much he thinks his dogs are worth, for instance. (Not nearly as much as his Hunt Valley house.)

Posted by Jamie Smith Hopkins at 11:16 AM | | Comments (0)

January 7, 2009

To refinance or not to refinance?

Lorraine Mirabella's story today about mortgage rates -- around 5 percent for fixed-rate loans, "the lowest level since Freddie Mac began tracking rates in 1971" -- has a variety of tips for people considering whether to refinance.

For instance:

• Consider how long you plan to stay in your home to help determine when -- or if -- you will save money.

• Consider the impact of closing costs, which include appraisal, title research, title insurance, credit check, attorney review, inspection fees and transfer taxes. Some costs could include loan points -- one point typically equals about 1 percent of the amount you borrow.

• Consider that most lenders will let you borrow about 80 percent of your home's current appraised value.

Want help calculating whether now is the time? Go to's calculator HERE or HSH Associates' HERE.

Or go HERE to read my How-to about "points."

Can you get a rate of 5 percent? A lot depends on your financial picture, but location matters, too., which tracks rates for states with high quote volumes, says they're highest in -- you guessed it -- Maryland, at 5.26 percent. Arizona is lowest, at 4.97 percent.

Posted by Jamie Smith Hopkins at 11:27 AM | | Comments (0)

January 5, 2009

Assessment season

If you're among the third of Marylanders with a home that was just reassessed, you're probably looking at a tax bill this year that's higher -- not lower -- than it was last year. "Oh housing slump," I can hear you saying, "where is thy sting?"

This is the flip side of the Homestead Credit, which caps annual property tax increases. When home prices are skyrocketing, your taxes reflect only part of that rise. But you'll be catching up with the unpaid part of the increase later when prices stagnate -- and even when they drop. (It's only when your property assessment and your tax burden equal out that your tax bill figure stays put.)

As Larry Carson reports, "a house that jumped 50 percent in value when it was reassessed in 2005, for example, would take 10 years to reach full value if the annual cap is 5 percent or less, as it is in 15 of Maryland's 24 jurisdictions." His article notes that "virtually all" of the 700,000-plus property owners recently reassessed will have a bigger tax bill this year.

Carson, property tax reporter extraordinaire, reports in another story that Baltimore City's reassessed neighborhoods saw a big increase in taxable values even as some parts of the state declined:

While appraisals were nearly flat statewide for property overall - and even dipped in the more prosperous suburbs - values for homes in the third of Baltimore that will receive the notices rose 21.4 percent since their last assessment in 2005.

State assessors said home values rose 9.7 percent in eastern Baltimore County, 5 percent along the U.S. 40 corridor in Harford County, and 2 percent in the reassessed area of Carroll County. Home values dropped 4.2 percent in Anne Arundel, 7 percent in Howard and 16.3 percent in Montgomery County.

Think your reassessed value is wrong? You can appeal.

Read a How-to from the end of '07 on property tax appeals or go to the state's appeal page for information.

Looking for tax information specific to your community? Go HERE for homestead caps across Maryland and HERE for local property tax rates (as of July 1, 2008).

Posted by Jamie Smith Hopkins at 1:00 AM | | Comments (6)
Categories: Homestead Property Tax Credit, Property taxes

January 4, 2009

Spam of the times

The email spam I'm getting is no longer the "increase the size of your [body part]" variety but instead either "I've found you a job!" or "BUY FORECLOSURES!!!"

What's the strangest housing-related spam you've seen?

UPDATE: Now I've gotten a "help me sell my house" chain letter. (No "break the chain and you'll suffer from pimples the rest of your life" warning at the end, though.)

Posted by Jamie Smith Hopkins at 7:21 PM | | Comments (0)

January 2, 2009

Early warnings

Oh, if only experts saw what was coming years ago -- if only someone had told us what might happen.

That's a frequent lament about the U.S. housing market (and now the entire world economy). But some economists did warn that a bubble was forming long before it popped. (I did a Q&A with one last year.)

Now comes Bruce Bartlett, a former Treasury Department economist and current columnist for, who -- starting in 2001 -- kept a file of articles, reports and speeches on the housing bubble. Yes, '01. Here's what he writes:

There were, in fact, many warnings dating back more than seven years--but in the euphoria of rising home prices, no one listened. As time went by and no crash occurred, many of those doing the warning lost credibility or decided that perhaps they were wrong and moved on to other issues.

... Unfortunately, it is in the nature of economic and financial forecasting that being right too soon is insignificantly different from just being wrong. And forecasters that are wrong when most of their community is also wrong never suffer for it. The trick is to be right just a little bit sooner than everyone else--but only a little bit.

Not among the economists who were right sooner than the crowd: Alan Greenspan, who -- Bartlett says -- "was still saying that the housing market was nothing to be concerned about" in October 2004 when he was Fed chairman.

But in fairness, I see a New York Times story in February of that year about a warning Greenspan did issue:

Mr. Greenspan said that Fannie Mae and Freddie Mac, which buy up and repackage billions of dollars' worth of mortgages every year, have grown so rapidly and accumulated so much debt that they cannot adequately hedge against the risks of financial crises.
Posted by Jamie Smith Hopkins at 8:56 AM | | Comments (1)

January 1, 2009

Back -- sort of

Hi, folks -- I've made it a New Year's resolution to blog at least once a week while I'm on leave, so I hope you'll continue to read.

My goal: to put up a topic of interest every Monday. See you then.

(And I am checking my email, so you can reach me there as well as here.)

Posted by Jamie Smith Hopkins at 11:59 AM | | Comments (1)
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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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