« April 2009 | Main | June 2009 »

May 31, 2009

Real estate poll results: Rental costs

More people are renting because of the housing slump -- some by choice, some not. That's the sort of thing that would normally drive up rents ... except that more homeowners are turning landlord because they can't sell for the price they want.

What's all this mean for rental costs? I asked you tenants out there, and you weighed in on the latest Wonk poll. As of right now:

Forty-one percent of you said your monthly rent has risen this year or is due to rise. (About half are seeing a big increase and half are seeing a small increase.)

Another 41 percent said your rental costs have stayed the same.

And eighteen percent are the lucky ones whose rent has dropped or is due to drop. (A small decrease for most of you in that group. A big one for a really fortunate few.)

Thanks for taking the poll, folks. I'd be interested to know whether you tenants seeing declines in rent are in apartment units or homes. And whether people hit with big increases are planning to move.

Got a suggestion for a future poll? Let me know.

Posted by Jamie Smith Hopkins at 8:10 PM | | Comments (0)
Categories: Polls

May 30, 2009

Using the new-buyer tax credit for downpayment

It's official: Uncle Sam wants to be the sort of relative that gives you money for your downpayment. The U.S. Department of Housing and Urban Development announced Friday that new buyers getting an FHA-insured mortgage can use the first-time buyer tax credit, worth up to $8,000, toward the downpayment and other purchase costs.

But not exactly the way you might have envisioned it.

FHA borrowers are required to put at least 3.5 percent down. Well, that won't change. Instead, the "monetized" tax credit -- money upfront rather than a break on your taxes later -- can be added to that downpayment so your monthly costs are lower. Or you can use it on other closing costs or to buy down your interest rate.

As The Wall Street Journal puts it, "the industry could be disappointed by the plan ... because they wanted to allow buyers to use the credit to fund the initial 3.5% down-payment." But it probably comes as a pleasant surprise to the critics who feared the plan would create a new wave of no-money-down buyers.

If you do go for this option, remember that you're getting a short-term loan for your tax credit and you'll probably pay upfront for the convenience. HUD warns buyers to "beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services."

Here's what the agency says in its letter to lenders:

FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local governmental agencies and instrumentalities thereof may purchase the tax credit anticipated by the homebuyer.  

•    The proceeds of the sale of the tax credit may not exceed the anticipated tax credit due the homebuyer ...
•    Any costs attendant to the purchase of the tax credit ... must be reasonable and disclosed to the homebuyer.  In FHA’s view, fees and costs that total more than 2.5% of the anticipated credit are considered excessive.  (Example:  $6000 to be refunded, with all fees and costs discounted, borrower should receive not less than $5850.00 for sale of tax credit.)

So, folks: What do you think?

Posted by Jamie Smith Hopkins at 1:03 PM | | Comments (4)
Categories: First-time buyer tax credit

A modest proposal

Homebuyers and sellers are both looking to strike a deal, but by definition they're on opposite sides of the bargaining table. Buyers want the lowest price possible for the house they're eying. Sellers want the highest price possible. If you're in one of those groups and see the other as unreasonable people standing in the way of your dreams, well -- we're all human.

But you know, it doesn't cost you anything to see things from their point of view just a little bit.

You're a seller aggravated at buyers who keep tramping in to see your place but never make an offer? Well, imagine how they feel, going to look at house after house that doesn't suit or is priced too high.

You're a buyer annoyed at sellers who won't budge on price and haven't done a thing to the property since they bought it? Well, imagine how they feel, effectively trapped because they bought too much house and don't have enough money to replace the roof, let alone pay the difference between what you think is a fair price and what they still owe on their mortgage.

Sure, this doesn't apply to all buyers and sellers, but you get the idea.

Having a bit of sympathy for the person on the other side of the housing-market coin doesn't require you buyers to pay more than you think is fair, or you sellers to take less than you believe your house is worth. It just keeps you from forgetting that they're human too. It makes you think twice before you say or write something cruel.

Now, some of you would-be buyers are shaking your heads at me because you're angry at sellers. You're angry at homeowners, period, especially the ones who bought during the boom and thus helped run up the prices. You waited because you didn't want to buy something you couldn't afford. You waited, and you waited, and you waited. But here it is 2009 and you still can't afford anything and -- dagnabbit -- prices can't come down fast enough. Nothing would make you happier than hearing that homeowners are losing their shirts, and possibly their homes too. Serves 'em right, you say.

But here's the thing: Those folks who bought during the run-up in prices? Unless they were downsizing from something more expensive, they probably haven't seen any benefit from the frenzy -- particularly the poor souls who bought at the very peak.

Imagine, if you will, a couple very much like you would-be buyers. They also waited, and waited, and waited. Except they finally gave in and got an adjustable-rate loan and a smaller house than they had in mind because -- dagnabbit -- the longer they delayed, the higher prices went, and everyone they knew was telling them that waiting was exactly the wrong thing to do, and they couldn't believe they were still renting when they'd intended to buy three years earlier. And now here it is 2009, and they lie awake at night, wishing one of the three other buyers they had to outbid for their lousy place with the leaky basement would have gotten it instead.

(I invented this couple, by the way, but I'd be very surprised if they don't exist somewhere.)

There's plenty of housing-market angst to go around, that's what I'm saying. Plenty of renters and homeowners alike wish the housing bubble never happened.

And that's my modest proposal: Remember that you have more in common than it might appear at first glance.

Posted by Jamie Smith Hopkins at 8:58 AM | | Comments (9)
Categories: Housing market experiences

May 29, 2009

More Md. prime borrowers behind on mortgages

The number of Maryland borrowers in trouble on their mortgages keeps rising -- particularly among homeowners who were supposed to be better credit risks. Some 60,000 prime borrowers were at least one payment behind during the first quarter of the year, up 90 percent from a year earlier, according to the Mortgage Bankers Association. That includes people on the brink of losing their homes.

Maryland had about 15,000 fewer delinquent subprime loans than prime. And their numbers rose 44 percent from a year ago, or half as fast as the prime mortgages in trouble.

Subprime borrowers are still much more likely to get behind than prime, mind you. Practically 40 percent of Maryland's subprime loans are past due, including those the lenders are trying to foreclose on. Yes, four in every 10.

For prime loans, it's 7.2 percent -- less than one in 10.

But no more than 3.5 percent of Maryland prime loans were behind in the late '90s, when the housing market was normal and jobs were plentiful. That's a big, big change. We'd have 30,000 fewer loans in various stages of delinquency if the ones in trouble still added up to 3.5 percent of the state's prime mortgages.

Lorraine Mirabella has a story today about the mortgage delinquencies. Economists are blaming the continued job losses.

As it happens, Maryland borrowers weren't struggling nearly as much during the early '80s double-dip recessions and the early '90s recession. Among all borrowers, delinquencies didn't top 5.5 percent between 1980 and 1982 or 1990 and 1991.

But delinquencies got pretty high -- peaking at nearly 8.5 percent -- in the late '90s and early part of this decade. And not because of the 2001 recession, either. Because FHA mortgages (government insured, and therefore not counted in either prime or subprime) were going bad at a frantic pace in Baltimore. That was during the spike in illegal flipping that landed people in jail for mortgage fraud.

Depressing to think that now it's worse. The share of all Maryland mortgages in trouble? More than 11 percent.

Posted by Jamie Smith Hopkins at 10:59 AM | | Comments (14)
Categories: The foreclosure mess

May 28, 2009

Another look at local home prices

Winter of home sellers' discontent? Maryland's drop in home prices in the months of January through March was sixth-largest in the country, according to new federal figures.

But there is one ray of sunshine there for anyone who sees price drops as bad news.

The 10 percent decline -- compared with the first three months of 2008 -- wasn't as steep an annual decrease as Maryland home prices saw last fall, the Federal Housing Finance Agency says. Prices were down almost 13 percent then. That was the biggest year-over-year drop in Maryland in at least 17 years, as far back as the agency's seasonally adjusted, purchase-only index goes.

FHFA -- the agency whose predecessor was OFHEO -- tracks repeat transactions of the same single-family homes to try to avoid the apples-to-oranges comparisons that can crop up when averaging all sales over time. It's based off Fannie Mae and Freddie Mac mortgages, though, so it doesn't represent the entire market.

Yeah, yeah, you say, enough of the wonk-stuff. Who dropped more than Maryland?

1. Nevada, down 31 percent

2. Florida, down 22.5 percent

3. California, down 22 percent

4. Arizona, down 19.5 percent

5. D.C., down 15 percent

The rest of the country dropped less than 10 percent. Alaska, Oklahoma, North Dakota and South Dakota saw increases. (Alaska's was almost 5 percent, but the rest were tiny.)

Home prices in Nevada, Florida and California -- prime housing-bubble states -- are now below what they were five years ago. Same with economically struggling Michigan and a few other states.

Maryland? It's 22 percent above its five-year-ago mark. Fifteen other states are higher than that; the rest are lower.

The FHFA, which also tracks metros, says prices in the Baltimore area dropped about 8 percent. Again, that's the purchase-only index. Throw in refinancing, and the value drop is about 6.5 percent.

Posted by Jamie Smith Hopkins at 10:16 AM | | Comments (6)
Categories: Housing stats

May 27, 2009

What do homebuyers, sellers and agents want?

Readers got into a spirited discussion last week about the value (or lack of value) real estate agents offer. This raises a larger question, I think: As a homebuyer or seller, what do you want from a Realtor? What would you consider good and helpful service?

And for you agents out there: What do you want from your buyer and seller clients? What behavior and expectations are reasonable?

To kick this off, here's part of a comment by reader Semiconscious: "My home hunting experience has taught me that I do all the heavy lifting. If I don't buy within the 1st 10 houses I see, the realtor starts to grumble. I've written several contracts so far, and a lawyer can do just as well as a realtor."

A recent opinion article about "buyer etiquette" by Renee Porsia, a Philadelphia Realtor, happens to address the same how-many-houses-are-enough issue from the other side:

Seeing 25 homes is not very good buyer etiquette and also just shows your Realtor that you really do not know what you are looking for in your new home. It will also only wind up confusing you and chances are, the home will not be there by the time you decide that you liked home number one. Viewing approximately 8-10 homes on average is plenty of homes to view.

And what's enough is just one issue. Should an agent and potential client set ground rules before doing business together? Would agents, buyers and/or sellers be happier if the agents were paid a set fee for specific services rendered over a specific time period rather than a commission at settlement?

Talk amongst yourselves. Talking through problems is the first step to solving them, right? Call it relationship counseling for the housing-market set.

Posted by Jamie Smith Hopkins at 9:28 AM | | Comments (29)
Categories: Housing market experiences

May 26, 2009

A useful way to look at home sales

Average and median home sale prices are all well and good, but what the typical homeowner really wants to know is, "Could I sell for more than I bought?" Neither the average nor the median price will necessarily answer that.

Analyze same-home sales, on the other hand, and you're getting somewhere.

That's just what The Washington Post has done for D.C.-area jurisdictions, including two that the Baltimore area claims, Anne Arundel and Howard counties. The newspaper found that only 38 percent of home sellers who bought in 2000 or later made a profit in the first three months of this year, vs. almost everyone who sold in 2005.

You can see the graphic here and the story here.

It's not a simple matter to compare same-home sales over an entire metro area, but you can do it with data culled from jurisdictions. Analyzing this for the Baltimore area has been on my to-do list for a while, but a couple of things interceded. The financial meltdown, first of all. Then a baby. (Not that I'm complaining about the baby. She's wonderful.) I'm hoping to make some progress on this to-do item once I'm back at work.

You can help me out: If you've sold a home this year, let me know how it compared with the price you bought it for.

Posted by Jamie Smith Hopkins at 1:50 PM | | Comments (1)
Categories: Housing stats

May 25, 2009

Q&A: Would-be landlords

A Wonk reader is wondering whether to rent out his home rather than sell in this market, but he knows there's a lot to consider beyond finding a good tenant.

He's hardly the only one weighing the "to be a landlord or not to be a landlord" question. So I chatted with Lewis F. Laws, Maryland regional director of Long & Foster's property management division, about what landlords who never thought they'd be landlords should keep in mind.

Laws, who has worked in property management since 1984, oversees managers in the state and also manages a portfolio of properties in Montgomery County.

Q. What should homeowners consider before turning landlord?

The first thing they need to do is determine the age the property was constructed, because Maryland has the Maryland lead paint law, and that's a biggie. So if the property was constructed prior to 1950, then it is mandatory that they will have to register their property with MDE--Maryland Department of the Environment. They will have to have it inspected by a state certified inspector, and they have to obtain from this inspection a passing certificate before they can rent the property. And until they obtain a passing certificate, they cannot legally lease the property.

Everything prior to 1950 is mandatory participation. Properties constructed from 1950 to 1978, they may opt to participate in the program or opt not to. But the problem is, those properties built in the opt-in, opt-out timeline, they may still have lead paint. Because it wasn't until 1978 that the government banned the sale of the lead-based paint.

So what happens is, if they are in the program and they are compliant through the MDE program, it doesn't guarantee them that they can't be sued and lose money, but what it provides is … a cap of $17,000 as an award. Also, if they are in the program, then their landlord insurance policy should cover--they'll have to request it, but it should cover lead-based paint. …

So those owners who have the '50 through '78 properties, we recommend, strongly recommend, they have them tested, [and] if there is lead in the property, then they participate in the program to have that limited liability protection.

Q. What was that about landlord insurance?

They need a landlord liability policy. … If they don't, heaven forbid something happens. If the house burns down and the insurance company finds out it wasn't owner-occupied, they've violated their insurance policy and the insurance company owes them nothing.

Q. What should landlords do to attract renters?

They want to make sure they have the property in marketable condition--competitive marketable condition, and they be realistic about pricing it. Landlords tend to think their property is the best property in the whole country as an investment, and they certainly want to maximize their income, but they have to be very careful not to overprice it.

If it doesn't show well and it's not priced right, it's not going to rent. There is no shortage of rentals on the market at this time, because of what's happened on the sale side.

Q. How can homeowners determine a competitive rent?

Work with a Realtor who works the rental market and listen to the agent. Not poo-poo the agent. … The agents know their business. Other than that, they can read the paper and see what their neighbors are renting their properties for. But if they're for rent by the owner, the price might not be a realistic obtainable value.

Q. What's the trend for rentals in the Baltimore area?

My manager there has told me if … the folks are realistic about condition and pricing, they are moving. I'm finding for my market, that if a property is vacant in excess of 60 days, there's a reason. It's either condition or it's price. It's one of those two or a combination of those both.

Because there is so much available, this is a tenant's market--because there is so much available, even the rental properties have to look almost as good as the sales properties. If they don't maintain them, if they don't look good, there will be one down the street that will outshine them and that's the one that's going to get rented.

Q. How is it a buyer's market and a renter's market at the same time?

It is a buyers market, but the buyers aren't buying. And the media is guilty of contributing to this as well. The media is preaching that prices haven't reached the bottom, so you've got a lot of people out there that could buy but aren't buying. … "I'll just rent something."

Q. So then why isn't it a landlord's market?

Typically the two markets … are opposite, but not in this cycle. What's happening is, you have a lot of owners who are not landlords by choice. They've got their properties for sale because they've moved on, so they have to generate money from the property because they can't afford double mortgages. So they're faced with, 'Well, if we can't sell the place, we've got to rent it.' That's placed a lot of rentals on the market that normally would not be there. …

They couldn't sell the properties, so they had a choice: rent it or lose it. That's what it amounted to.

Q. Are you finding that most homeowners-turned-landlords are making money renting out their homes? Or are they losing money after paying expenses?

Depends on when they bought. … If they bought at the height of the market when we saw double-digit appreciation, they're carrying negatives. They're not breaking even. But that's still better than losing the property. A lot of landlords, the ones who are landlords not by choice, as soon as the market turns around that they can carry a positive cash flow or even a break even, they're going to sell these properties. But until that point, they really can't afford to sell these properties.

Q. This is the "shadow inventory" we keep hearing about, then?

Yes. That's a good phrase.

Q. How much does it cost to hire a property manager?

It depends on the brokerage. Different brokerages have different fees. … Our management fee is either 10 or 12 percent of the monthly rent. It depends not on the price of the property, it depends on what the landlord wants included in the service. … If they want their homeowners' or condo association fee paid on a monthly basis through Long & Foster, then we're at 12 percent.

Q. What does a property manager do?

My God, they do everything. The property manager's job is to oversee the property. When it's vacant, to remarket it to find and locate the tenant for the landlord. … To oversee the maintenance, repair of the property. … Now, the cost of the repairs are the owner's expense, but we oversee the repairs, get the vendors and so forth. … They get annual property condition visits--we visit the property, and depending on how long the lease is, they get multiple visits. We do move-in condition reports, move-out condition reports.

In Maryland, there are a lot of jurisdictions that a landlord must license their property with their county and city to have a legal rental. So we basically try to make it as easy and carefree for the owner as humanly possible.

Q. What are the mortgage implications of renting out your home?

Unless the owner has a mortgage that stipulates that he or she must occupy the property for a specific number of years, … mortgage companies don’t care. As long as they get their payments, they have no heartburn. But there are certain mortgages, such as VA, you have to occupy the property for a certain number of years before you can rent it. …

If the [conventional] mortgage lender knows they're financing an investor, the [investor] probably will be paying a higher interest rate initially. If [instead] they've occupied it and moved out, they've got their loan as owner-occupied. … The mortgage companies, I don't think, care as long as the mortgage is paid. … They can't legally make them renegotiate their loan.

Q. What about property taxes? Once you're a landlord, you're no longer eligible for the state homestead credit, so you'll almost certainly be paying more.

Precisely. … But if they move out, a lot of times the assessors don't know it's [not] an owner-occupied property.

Q. But officials have been cracking down on that, haven't they?

Well, in the counties that require licensing. … Obviously if they license, then the county will have knowledge that it's no longer owner-occupied.

Q. What about income tax deductions?

The IRS requires that the landlord not be a passive landlord. … Even if they turn it over to a property management company, they still need to have some active participation in it to continue meeting the IRS requirement.

Q. What sorts of expenses should homeowners-turned-landlords count on?

Depending on the age of the property, the Maryland Department of the Environment lead paint program. The licensing, if their property is in a jurisdiction that requires licensing. And the maintenance on the property. They are expected to maintain the houses, and the local jurisdictions have housing codes. So they're going to have to do repairs and maintain the property.

Q. What's the rule of thumb for maintenance costs? One percent of the value of the property every year?

There is no rule of thumb. I wish there were! A lot of it depends on the age of the property. … Certainly the newer homes need a lot less service, a lot less maintenance.

Q. Do you suggest homeowners talk to a real estate attorney and/or financial planner before turning landlord?

Realtors are not licensed attorneys. We do not and should not give assured financial information that will impact these folks' life. The Realtors can only give them their guess of what these things will be, their estimation. … They do need to speak to their own financial advisors or attorneys, whoever they choose.

Q. If a landlord wants to hire a property manager, what questions might he or she ask before choosing one?

They really need to read the property management contract completely, every word of it, before they sign the dotted line. Because a contract is a contract, and they're all different. Some firms or some contracts allow that in addition to a management fee, that every time the company has to oversee repairs to the property, that they get an additional percentage for every repair.

Posted by Jamie Smith Hopkins at 11:40 AM | | Comments (4)
Categories: Q&A

May 24, 2009

FHA and lenders part ways -- not amicably

The U.S. Department of Housing and Urban Development said last week that 102 lenders no longer have permission to offer FHA-insured mortgages because HUD found violations ranging from "failure to conduct sufficient quality control, to failure to continue to meet FHA recertification requirements, to falsifying loan documents."

Several Maryland companies were on the list, which also includes lenders hit by fines and other HUD actions. One "failed to comply with HUD/FHA housing counseling referral requirements." But the list also includes a lot of lenders that are no longer allowed to participate in FHA because they didn't send in their yearly fee for recertification.

Posted by Jamie Smith Hopkins at 3:52 PM | | Comments (2)
Categories: Mortgages

May 23, 2009

New real estate poll: Rental costs

Many of you are renters -- or at least that's what the results of the last poll suggest -- so I thought I'd put together a poll just for you.

Shed some light on how your rental costs are changing (or not) in these strange days. On the one hand, falling homeownership rates. On the other hand, more homes for rent because sales are still dropping. So what's winning, supply or demand?

Posted by Jamie Smith Hopkins at 12:43 PM | | Comments (3)
Categories: Polls

Real estate poll results: Asking prices

How 'bout dem asking prices for Baltimore-area homes?

I put this to you a week ago, and nearly nine in 10 of you said "overpriced." And about four in 10 of you polled folks say you're homeowners, so this isn't just coming from renters in search of rock-bottom deals.

Here's the full breakdown as of right now:

Forty-three percent chose "overpriced by more than 20 percent."

Thirty-five percent opted for "overpriced by 10 to 20 percent."

Nine percent said "overpriced by less than 10 percent."

Ten percent, meanwhile, said "fairly priced," and the remaining three percent chose "underpriced by 10 to 20 percent." (No one opted for the other underpriced options.)

I also asked for a bit of demographic information to put the answers into context -- and help me get to know you better.

Forty-eight percent of you say you're renters hoping to buy now or in the fairly near future, and 14 percent are homeowners hoping to sell within that same time period.

Twenty-four percent of you are homeowners not planning to sell anytime soon, and 13 percent are renters not planning to buy anytime soon.

And one person identified him or herself as an industry pro.

Thanks for weighing in, everyone. Are these results what you expected?


Posted by Jamie Smith Hopkins at 8:39 AM | | Comments (1)
Categories: Polls

May 22, 2009

ISO square feet

Buyers want to know a variety of things about homes for sale. Size, for instance. But a Wonk reader wrote me yesterday to say that the seller philosophy on square footage around here seems to be that it should be seen, not listed:
One thing that totally annoys me about the Baltimore real estate scene is that the size of the house in square feet is not typically revealed in descriptions (for instance on Redfin). In other places we've lived, this information [is] right up front, and is critical to comparisons and part of the value calculation. I know I can do work to find it, but why?

We asked our agent about this back when we were looking and the answer was, "We've never shown square feet in Baltimore."

I searched a few popular real estate sites and can see what she means. Redfin, for instance, has categories for square footage and cost per square foot, but they're mostly blank for Baltimore-area homes.

Still, there does seem to be some variation depending on the site. I couldn't find a mention of square footage for one listing on MRIS's HomesDatabase, but when I threw the MLS number into a search engine, had the answer (3,360).

Buyers, is square footage something you want to know upfront? Sellers, do you have concerns about including that information?

Update: Realtor Jonathan Benya has a succint explanation for why you often won't see square feet, but sometimes will. See his answer in the comments.

Posted by Jamie Smith Hopkins at 10:59 AM | | Comments (17)
Categories: Housing market experiences

May 21, 2009

Renters, landlords: scams to watch out for

So you're a renter and you've found an ad for a place with a price that's fabulously low. Or you're trying to rent out your home and just got an email from a prospective tenant willing to send you a deposit sight unseen.

Uh oh.

A word to the wise: Scammers have infiltrated the rental market. It's a slightly more sophisticated effort than the "help me get my money out of a bank account and I'll pay you millions" emails from Nigeria. has examples of questionable emails from supposed renters and landlords. The typical scammer-renter sends a cashier's check that's too high, says "whoops" and asks you to refund the difference -- and after you do, you find out that the original check was a fake. The typical scammer-landlord asks you to send a deposit and promises to send you the keys -- but never does.

Here's what the site says to watch out for in emails.

The major red flags of any scam are:
* Outside of the US
* Misspellings
* Wanting Payments – Cashiers Check, FEDEX, etc
* Unable to personally show you the property
* Is traveling on business and will just send you the keys

Has anyone run into a scam like this?

A colleague once showed me emails from someone claiming to want to buy his house, and it had all the hallmarks. "Send me your bank account information to faciliate the transaction," etc. So home sellers: Keep these warnings in mind, too.

Update: Wonk reader Matt Gonter says he sees ads for suspiciously cheap Baltimore apartments -- like a newly renovated two-bedroom, two-bath, heated two-car-garage condo for $600 a month -- all the time on Craigslist.

Posted by Jamie Smith Hopkins at 11:19 AM | | Comments (2)
Categories: Landlording, Renting

May 20, 2009

In search of "distressed" homes

Banks are trying to get rid of foreclosures, but California-based Redwood Real Estate Partners wants to buy them -- along with homes nearing foreclosure. It said today that it's started an investment fund to get $500 million in distressed properties.

The company expects to focus a lot of its attention on the western U.S. -- not surprising, since there are a lot of foreclosures in California and nearby states. But it told me that Maryland is on its list of "targeted states" for acquisitions.

This move is a change for Redwood, which invests in commercial real estate. Here's the plan, according to its website: "Purchase bulk portfolios of residential REOs and late stage defaulted whole loans through direct relationships with mortgage banks and financial institutions."

The company wants individual homes and buildings with up to four residences, valued between $100,000 and $900,000, with no more than "light rehab" needed.

And it intends to quickly resell -- "at discounted retail levels priced lower than competing distressed inventory." It thinks it can do so because it's expecting to get the properties at a "significant" discount from lenders who see a benefit to getting a bunch of homes off their books -- in return for cash -- in one fell swoop. That $500 million in distressed properties it wants? It's expecting to pay $300 million to $350 million for them.

If Redwood succeeds, this could mean new opportunities for buyers. And new challenges for traditional sellers, the homeowners who just want to move.

Posted by Jamie Smith Hopkins at 10:22 AM | | Comments (2)
Categories: Real estate investing

May 19, 2009

Hey, you foreclosure buyers out there ...

Sun reporter Hanah Cho wants to interview a few folks who have bought foreclosed homes within the last year. (One foreclosed home is enough to qualify you. You don't need to be collecting them.)

If this is you, email her at She'll appreciate it, and so will the rest of us who are interested in housing -- because we'll get to hear about your experience.

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

Truth in (property tax) advertising

You may have run into this before: real estate ads trumpeting property-tax bills that aren't anywhere near what you -- the prospective buyer -- would pay, because they're what the seller is paying after years of homestead-credit protection.

Maryland's tax break for owner-occupants keeps the property tax bill from rising more than a certain amount each year. In Baltimore, for instance, the homestead cap is 4 percent. But the credit doesn't transfer from one owner to the next, so a new buyer will get a bill that reflects the full assessment.

This can be a nasty shock if you didn't realize it and weren't budgeting for it.

As Julie Bykowicz reports, city real estate ads will have to take that into account in about three months. That's when a new ordinance goes into effect to put the kibosh on "misleadingly low figures." (We could call it the "read my lips: no old taxes" rule.)

The ordinance, the story says, requires that "tax figures in ads must be a reflection of the property's most recent assessment multiplied by the city property tax rate of $2.268 per $100 of assessed value."

What do you think of that?

Posted by Jamie Smith Hopkins at 9:31 AM | | Comments (7)
Categories: Homestead Property Tax Credit, Property taxes

May 18, 2009

Home sales: 10 years at a glance

Kevin over at the Baltimore Housing Bubble blog has new graphs up showing 10 years of housing statistics -- sales, prices and more across the state.

I figured the graph lovers among you might want to check it out.

Comparing all months makes it easier to see that the 1,632 homes sold in the Baltimore metro area last month -- spring, when buyers kick it up a notch -- was a lot like the number of homes sold in January in years before the market frenzy hit here. (January 1999: 1,642 homes sold.) And January is always a low-sales month, usually vying with February for the lowest point of the year.

Maryland as a whole shows a similar pattern.

Posted by Jamie Smith Hopkins at 11:32 AM | | Comments (6)
Categories: Housing stats

HomeGain survey: Agents opine on local prices

Zillow asked homeowners to weigh in on their property values, as I noted last week. A new survey from real estate site HomeGain gets Realtors' opinions about prices.

You can find the national results here. HomeGain provided me with Maryland data, which suggests that opinions about home values are continuing to split down the middle -- sellers on one side, buyers on the other. (Of the 1,150 agents surveyed nationally, 26 were from Maryland.)

Eight in 10 Maryland Realtors polled say their homeowner clients lost value in the last year, but those clients are more optimistic about prices than the agents. Two-thirds of Realtors surveyed say the average client thinks his home is worth more than the recommended listing price. (A sizable number of agents report that the average client believes his home is worth 10 to 20 percent more.)

Two-thirds of agents say their buyer clients, meanwhile, think listing prices are too high. The most popular choice -- chosen by 45 percent of those surveyed -- is "overpriced by less than 10 percent."

That split is after a number of agents have convinced sellers to list at a price that's lower than what the owners thought their homes were worth.

Strip away all the economic issues -- income vs. prices, recession, credit crunch -- and this difference of opinion between would-be buyers and sellers seems a key explanation for why the number of Maryland home sales is still dropping.

The Maryland agents surveyed by HomeGain were themselves split on what will happen to home values in the next six months. Almost four in 10 expect decreases. Just over four in 10 expect no change. And the rest -- 18 percent -- expect increases.

As for President Obama's stimulus efforts, half of the surveyed Realtors think they've had no effect on home prices. Thirty-four percent believe they've stabilized prices, 13 percent believe they've decreased prices and just 3 percent think they've increased prices.

The poll that went live on this blog over the weekend -- still going, vote now! -- is modeled after HomeGain's question about how buyers view listing prices. Once our poll has been up for a week, I'll show how the results compare.

Here, of course, polltakers are a varied bunch -- buyers, sellers and people (renters and homeowners) who aren't going anywhere. So far, nobody thinks asking prices are low. Even the sellers.

Posted by Jamie Smith Hopkins at 9:10 AM | | Comments (7)
Categories: Survey says ...

May 17, 2009

Housing stimulus?

Realtors and homebuilders are all abuzz over the federal government's newest plan to help the housing market: let first-time homebuyers use the $8,000 tax credit toward their downpayment if they're getting an FHA-insured mortgage.

The head of the U.S. Department of Housing and Urban Development announced it at a National Association of Realtors summit last week. Here's what Secretary Shaun Donovan said:

We, like you, believe that this new tax credit is not only a tremendous opportunity for first-time homebuyers, but also an enormous benefit for communities struggling to deal with an oversupply of housing. ...
We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to "monetize" the tax credit through short-term bridge loans.

Specifics, he said, will come shortly. (I was hoping "shortly" meant "by the end of the week," which is why I held off blogging on the subject.) But the brief announcement was plenty long enough for Realtors and builders to cheer -- "the biggest obstacle for first-time buyers is coming up with a downpayment," the chairman of the National Association of Home Builders said -- and for some economists to groan.

From Dow Jones Newswires:

"Much like the lax lending standards of the housing bubble, all it succeeds in doing in our view is pulling sales forward and encouraging speculative buyers into the market," noted Michael Widner, an analyst with Stifel Nicolaus Equity Research.

What do you all think? Good idea or bad? If you're contemplating buying, would it make a difference?

In other feds-involved-in-housing news, officials announced new aspects of the Making Home Affordable foreclosure-prevention program. HUD says it will offer incentives to loan services and borrowers to opt for short sales or "deeds in lieu" (in which the borrower voluntarily gives up the house) rather than foreclosures. Those alternatives aren't quite as bad for the borrower's credit score and, the government argues, are less costly for lenders and neighborhoods.

The feds are also offering extra incentive payments to lenders for making loan modifications "where home price declines have been most severe and lenders fear these declines may persist."

Posted by Jamie Smith Hopkins at 9:16 AM | | Comments (7)
Categories: First-time buyer tax credit, Foreclosure help

May 16, 2009

Real estate poll: Baltimore-area asking prices

No subject draws more debate on this blog than home prices. Not even property taxes. So I know you'll all want to weigh in on this new poll.

Oh, go on, it'll only take a few seconds.

It's true that asking prices vary considerably, so all you can do is say what you think about the majority you're seeing. Oh, and I normally randomize the order of answers, but in this case I feared that would simply end up being confusing. I doubt your opinion of prices will be swayed by answer order, in any case.

While we're at it, take another few seconds and tell me about yourself:

You'll fit into two categories if you're an industry professional, but I'd suggest choosing "industry pro" since that's what you do for a living. And if you're scratching your head about what to pick because you're staying with friends or relatives -- go for one of the "renter" choices.

Posted by Jamie Smith Hopkins at 2:15 PM | | Comments (3)
Categories: Polls

State Center project: New developer, but no go?

Maryland replaced Struever Bros. Eccles & Rouse -- which is dealing with debt woes -- as the lead developer for the reimagining of the State Center complex in Baltimore. But state officials are now wondering aloud whether this recession is really the time to redevelop their offices.

Treasurer Nancy K. Kopp says the state could top its debt limit within a decade if it goes forward with the $1.4 billion mixed-use project, Laura Smitherman and Lorraine Mirabella report. That touched off a debate about what's better -- spending money to help the economy or saving at a time when the state budget requires further cuts.

One side:

"We see this whole project as an economic stimulus when this economy really needs this kind of private investment," said Michael A. Gaines, a project manager at the Maryland Department of General Services. ... Gaines said more than 60 percent of the project's capital costs would be borne by private developers, and that the state has time to back out of the deal.

And the other:

"If we think we're going to go into a long depression, it would be kind of stupid to do such a development," said Sen. David R. Brinkley, a Frederick County Republican.
Posted by Jamie Smith Hopkins at 9:56 AM | | Comments (0)
Categories: New developments

May 15, 2009

High-tech house hunting

Colleague Lorraine Mirabella is looking to interview homebuyers who use mobile phones to house hunt -- or, more specifically, mobile-phone apps that let you get listing information on the go. For instance, Trulia's, Zillow's, Smarter Agent -- I'm sure there are more out there, but you get the idea.

Are you in this early-adopter group? Shoot her an email at She'd love to hear from you.

And I'd be curious to hear in the comments if you've found any of these apps useful.

Posted by Jamie Smith Hopkins at 11:05 AM | | Comments (2)

Real estate poll results: Affordability

I asked you recently if the slump has made homes more affordable for you. It's a different question than "do you think prices are good" -- many of you have strong opinions about that -- but I figured it was equally worthwhile. Here are your answers on the poll, as of right now:

Thirty-eight percent said, "I still can't afford any homes around here."

Thirty percent said you can afford nicer homes now than before.

Twenty-one percent said the value of your own home is down as well as the price of homes you might buy.

And eleven percent said, "I can afford to buy a home now -- I couldn't afford anything before."

I'm wondering about you folks who opted for the first answer. Can you truly not afford to buy anything in the metro area, either because the prices are too high or because of debt/mortgage issues? Or can you not afford the price of any home you'd be willing to buy?

The end result is the same, of course -- you're not going to buy a home you're not willing to buy. But I'm curious whether you're being aggravated by rundown homes for sale in your price range or if you're finding nothing whatsoever listed for the price you could afford.

While we're on the subject of affordability: Maya Brennan, one of the authors of the recent Paycheck to Paycheck report, ran an analysis to see if accountants, bookkeeping clerks, customer service representatives, general managers, receptionists and stock movers could afford to buy in Scranton, Penn.

If all those positions in that place sound oddly familiar, then you probably watch The Office. She wondered if the characters could live where they work.

Answer: Yes, for most of them. The median-priced home in Scranton was $85,000 last year.

Posted by Jamie Smith Hopkins at 9:10 AM | | Comments (1)
Categories: Polls

May 14, 2009

Tweet all about it

I've been hammered over the head enough about Twitter, the micro-blogging site, that I am now sufficiently fuzzy-headed enough to think you might care what I have to tweet about.

If you're among the ranks of Twitter users, feel free to check out And please do comment below if you often write about housing-related subjects on Twitter so I can return the favor.

Posted by Jamie Smith Hopkins at 1:54 PM | | Comments (0)
Categories: Real estate online

The optimism of homeowners

A majority of homeowners say their properties are worth less than they were a year ago, but they believe that slump is all over now, according to a Zillow poll out today. Nearly three-quarters don't expect a decline in the next six months. In fact, 27 percent are counting on an increase.

Zillow says it found a significant amount of "shadow inventory" waiting in the wings -- homes that people want to sell but haven't marketed yet. Almost one in three homeowners polled said "they would be at least 'somewhat likely' to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround," according to the poll.

Stan Humphries, Zillow's vice president of data and analytics, had this to say in a press release:

While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes' prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well. ...

With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.

The Northeast, which includes Maryland in this poll, was the most optimistic. It was the only region with less than a quarter of polled homeowners expecting continued declines in value.

Zillow said its poll was conducted online by Harris Interactive last month, with about 2,100 adults participating. Wonks eager to know the margin of error will be disappointed: "This online survey is not based on a probability sample and therefore no estimates of theoretical sampling error can be calculated," the company says in its press release.

Posted by Jamie Smith Hopkins at 10:13 AM | | Comments (5)
Categories: Survey says ...

May 13, 2009

Want to show off your place?

HGTV's Bang for Your Buck show is looking for Baltimore-area homeowners to feature -- specifically folks with a "great room" renovated within the last three years.

Show publicists say they'll show three similar renovations and let experts to opine about the impact on home value.

If you're interested, send photos of the room and a request for an application to (Quickly, the organizers say, because they intend to tape soon.)

While we're on the subject ... Buyers and agents: Are you noticing any renovation (or in-need-of-renovation) trends? What works? What doesn't? Do you prefer sellers to fix up their homes or would you rather see homes as-is with a lower price?

Posted by Jamie Smith Hopkins at 7:21 PM | | Comments (1)

Buyers in the wings

Home sales in Maryland are still falling -- they were down 10 percent last month from a year earlier. But buyers had contracts on about 500 more homes than they did a year ago, pending deals that will later turn into sales if all goes well. That's a 9 percent increase, according to the Maryland Association of Realtors.

As was true in March, much of the increased activity is in counties around Washington. Prince George's, Frederick and Montgomery topped the list, all with pending-sale increases of more than 30 percent. (Deals in Prince George's were up 54 percent.)

But some Baltimore-area counties saw a pickup, too. Pending sales rose 14 percent in Howard, 13 percent in Anne Arundel and 2 percent in Carroll. (They fell 1 percent in Harford, 4 percent in Baltimore County and 9 percent in Baltimore City.)

Active inventory -- the number of unsold homes jostling for buyers' attention -- fell 10 percent in the state vs. a year earlier. Again, much of the thinning out came in Washington-area counties. Most of the Baltimore area saw single-digit decreases. But they were decreases, which is better for would-be sellers than the alternative.

Posted by Jamie Smith Hopkins at 6:55 AM | | Comments (14)
Categories: Housing stats

May 12, 2009

Housing markets: Ours vs. the rest of the nation's

Baltimore-area single-family home prices in the first three months of the year were down about 9 percent from a year earlier, which is middle of the pack among U.S. metro areas. That's according to numbers out this morning from the National Association of Realtors.

Most places in (or partially including) Maryland saw bigger decreases. Hagerstown prices declined 13 percent. Washington prices plummeted 25 percent.

But Cumberland -- in mountainous Western Maryland -- topped the nation with a reported gain of 21 percent.

The overall decline in the U.S. was almost 14 percent, the NAR said. The trade group said half the homes sold during the first quarter of the year went to first-time buyers, and nearly half were "deeply discounted" foreclosures or short sales. (I'm guessing there's some overlap between the distress sales and the homes sold to first-timers.)

The NAR, which also released transaction numbers by state, said home sales dropped 12 percent in Maryland from a year earlier. That's better than 32 other states and D.C., a heartening change (from a seller's perspective) from the days when Maryland sales were dropping faster than just about everywhere else.

Still, six states reported sales gains over the year. Most of them are the ones battered by big price drops and foreclosure inventories. Sales in Nevada more than doubled, according to the NAR, while they rose 80 percent in California and 50 percent in Arizona.

Also on the increased-sales list: Florida, Minnesota and Virginia. Our neighbor to the south saw sales rise 12 percent.

Posted by Jamie Smith Hopkins at 10:03 AM | | Comments (6)
Categories: Housing stats

May 11, 2009

Q&A: Patterson Park Neighborhood Association

Baltimore's Patterson Park neighborhood is often hailed as a revitalization success story, with many aging and vacant homes now rehabbed and lived in. But the Patterson Park Community Development Corp., a nonprofit that did a lot of the rehabbing and community organizing behind that turnaround, filed for bankruptcy protection in February. (The CDC's website is here; the site appears to no longer be operational.)

I chatted last week with Marisa Vilardo, president of the Patterson Park Neighborhood Association, about efforts by residents to keep things going the right direction.

Q. A little background--what happened to the Patterson Park CDC?

They ended up taking on more than they could chew as far as investing in real estate and then renovating it, so apparently they did not anticipate the market downturn and have suffered as a result. They're trying to pay these mortgages they have on houses and they can't. The houses aren't selling enough. … The neighborhood association started to get nervous about it back in September, October of last year.

Q. Why does that matter to Patterson Park?

The CDC is to a large extent responsible for the renovations and the reinvestment and progress that the neighborhood made, because they--through the Healthy Neighborhoods program--were able to direct a lot of money toward the neighborhood, and redeveloping. Got a lot of city attention focused on the area.

Q. What has the Patterson Park Neighborhood Association been doing to step into the void?

It's tough. We're all volunteers. So obviously our time is much more constrained than what the CDC could do. But the biggest project we've taken on is hosting the home tour [May 2]. That's something the CDC used to do, and we thought it would be a good and relatively easy way to show off what Patterson Park has to offer. … So that was a first step.

And we also have hopes of starting a marketing committee, which would do those kinds of projects and also different kinds of advertising. We don't really know yet what we're capable of doing, and I think that's the sort of thing we'll figure out as we go.

Q. How did the home tour go?

It was good. We didn't know what to expect, especially with the weather. The weather actually cooperated. We had 120 people come through and raised $600. That $600, we're going to use as seed money for our marketing committee.

Q. Can the neighborhood association do enough by itself? Or are you hoping other groups will spring up?

There's no way that we can do what the CDC did on a volunteer basis--and I'm not talking about the investment and flipping houses, I'm talking about the community organizing. … There's so much work and time that goes into that. There's no way that we can do it on the level that it needs to be done on an all-volunteer basis.

This is one of the things we're trying to work with on Healthy Neighborhoods to address. … They seem to be optimistic that we can do it all on a volunteer basis. … Obviously, we disagree. It's been a source of frustration to us.

Q. Healthy Neighborhoods used to give the neighborhood a grant?

It stopped when the CDC was no longer really in existence. It was annual--operating funds, I guess. This is something that every Healthy Neighborhood gets, except for us now.

Q. The frenzied housing market earlier in the decade not only increased prices but also interest in Patterson Park. How has the down market affected the neighborhood?

Honestly, I think we've weathered the down market better than other neighborhoods, because our home prices never got completely outrageous. My husband works at Live Baltimore, and he's told me when you look at the results, Patterson Park has actually done better than the average neighborhood. The prices have come down but not to the extent that they have in other neighborhoods.

Q. What about related effects, such as foreclosures?

Any foreclosures that we've had have been investors, not homeowners. So we certainly are nervous about the number of properties on the market and what's going to happen to them. For instance, the CDC's properties. I think they own 100 rental properties and a number of properties for sale … We're concerned about what happens to them. We want to make sure if they stay rentals, they get into the hands of responsible landlords. You see some properties that landlords run into the ground. It's not healthy for the neighborhood or the tenants.

[The CDC] also had hopes of redoing Library Square and getting more commercial activity up there. That's definitely a concern. They've sold a lot of people on promises of that square. Some people north of Fayette, they're getting a little nervous and impatient. … As of right now, there are two or three organizations that are picking up where the CDC left off, as far as keeping that area clean. There's a group called United at Library Square and a group called Neighbors of Library Square. And then there's another one called 200 North. …

They're community organizations, and they've been focused on just keeping the area clean and green. They've been doing a lot of planting and weekly cleanups, just to keep the area from becoming a nightmare and sliding down.

Q. What can individuals do for their neighborhood--Patterson Park or elsewhere--to help it thrive in challenging times?

I think it's just a matter of the residents in the neighborhood getting involved and showing they've got a vested interest in the neighborhood and seeing it improve. That to me has resulted in increased participation and an increased attention from city agencies. …

Our active participation is certainly up from what it was when I first moved into the neighborhood five years ago. … We've got a woman who's lived in the neighborhood her whole life and she's very excited to see the renewed energy and enthusiasm from the neighbors.

Q. What attracted you to the neighborhood?

The proximity to 95 and 895 and the park itself. At the time, we didn't know how great the neighbors were. That came with time. Patterson Park, you get all the benefits of, like, Canton--Canton's O'Donnell Square is only a 10- to 15-minute walk away, but you don't get the parking nightmare. … It's a great place.

Q. What do you foresee for Patterson Park?

I definitely think Patterson Park has a bright future. I don't think it'll fly back to where it was five years ago by any means.

Posted by Jamie Smith Hopkins at 10:20 AM | | Comments (0)
Categories: Q&A

May 10, 2009

Baltimore real estate poll: Affordability

Average home prices fell a significant amount last month across the Baltimore metro area, so it seems like a good time for a new poll: Has the housing downturn made more homes affordable to you?

As usual, the order of answers is randomized.

This poll isn't meant to get your opinion on whether home prices are too high, too low or just right, by the way -- only whether you've noticed a real difference in the sorts of homes you could buy if you wanted to.

Posted by Jamie Smith Hopkins at 10:27 AM | | Comments (1)
Categories: Polls

May 9, 2009

Community-focused websites: Your finds

In a recent post about blogs and websites focused on housing, development or local neighborhoods, I asked you all if you've run across other sites worth pointing out. Naturally, you have.

MCG suggested Change Baltimore, a new blog that opines about problems and promises future solutions.

Carson recommended the Washington Village Development Association's blog, which details efforts to clean the neighborhood -- complete with photos of trash-wrangling and of troublesome vacant properties. (WVDA has videos here.)

These Wonk readers also noted that a lot of neighborhoods have Yahoo groups where folks can keep abreast of local happenings. Not usually in the same category as muckraking sites, of course, but a potentially useful tool for residents and people thinking of moving in. Here's a list of Yahoo groups you get when you search on "Baltimore neighborhood."

Posted by Jamie Smith Hopkins at 11:21 AM | | Comments (2)
Categories: Real estate online

May 8, 2009

Baltimore-area home sales, April '09 edition

Average home prices really took a beating in the Baltimore metro area last month, or at least that's what new figures from Metropolitan Regional Information Systems suggest. Prices fell more than 13 percent, which as Lorraine Mirabella points out in this story is the biggest year-over-year drop since MRIS began tracking the region in March 1999.

Here's the change in average price and in sales by jurisdiction vs. a year earlier, with figures rounded to spare your eyes:

Anne Arundel Co., down 12 percent in price and down 16 percent in sales

Baltimore City, down 22 percent in price and down 13 percent in sales

Baltimore Co., down 14 percent in price and down 20 percent in sales

Carroll Co., down 16 percent in price and up (yes -- up) 19 percent in sales

Harford Co., down 10 percent in price and down 30 percent in sales

Howard Co., down 9 percent in price and down 13 percent in sales

The city's 22 percent plunge puts the average there at $143,000. That's back to April 2005 levels. (By contrast, Baltimore's average was $183,000 in April of last year.) The drop in city sales is a bit better than in March and a lot better than in February.

Carroll's 16 percent decline in price brings its average down to just under $271,000. That's on par with April 2004 -- five years ago. Its month-of-April price peaked in 2005 at $352,000.

The sizable jump in the percentage of homes sold in Carroll actually works out to just 18 more properties changing hands, which gives you an idea of how far sales have fallen in that county. But a sales increase is a sales increase.

Do last month's statistics suggest a break in the stalemate between sellers who want their asking price and buyers unwilling to pay it? I'm curious to hear whether these changes in average price reflect what you're seeing in your neighborhood or the neighborhoods to which you're paying attention.

The inventory of unsold homes across the metro area is still high -- 18,700, or about 11 places with "For Sale" signs in the yard for every one that changed hands last month. Nearly 4,600 homes hit the market last month while 2,600 deals were pending.

But people trying to sell can take heart that at least we're closer to equilibrium than a year earlier, when the same number of contracts were signed but 1,000 additional homes hit the market.

Posted by Jamie Smith Hopkins at 9:47 PM | | Comments (4)
Categories: Housing stats

'Buying into Baltimore' this Saturday

In the mood to look at homes tomorrow? Live Baltimore Home Center is holding a "Buying into Baltimore" event from 9 a.m. to 2 p.m. that focuses on the western half of the city.

It starts at Baltimore Polytechnic Institute High School, 1400 W. Cold Spring Lane, and includes tours of neighborhoods, homebuying workshops and a chance to get a $3,000 grant for downpayment and closing costs.

More details about the event are here.

Posted by Jamie Smith Hopkins at 11:28 AM | | Comments (0)

Emptiest neighborhood? Not one you'd probably guess

Sun reporter Lorraine Mirabella took a look at neighborhood vacancies and noticed that the highest rate in the region wasn't a spot in Baltimore or "an area hit by foreclosures." It's at Aberdeen Proving Ground.

In her story today, she notes that about four in 10 homes in a census tract on the Harford County Army base are empty. APG says that's because there are more civilians and fewer soldiers working there, and the base realignment and closure process will accelerate that trend.

The vacancy statistics were collected by the U.S. Postal Service for the Department of Housing and Urban Development and provided by The Associated Press, which found that the emptiest neighborhoods nationally were in the Rust Belt rather than recently-battered places like Las Vegas.

Baltimore, which has some Rust Belt characteristics despite progress made in high tech and biotech fields, is home to the rest of the emptiest areas in the region's top five. All are in East Baltimore.

As if you needed a reminder why long-vacant homes are troublesome for neighborhoods, part of an East Baltimore rowhome collapsed Thursday in a pile of rubble.

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

May 7, 2009

The income to buy or rent a Baltimore-area home

Have declining home prices and mortgage rates put buying in the reach of more people? Yes, according to a new report -- though the authors say the market downturn hasn't been an affordability bonanza.

Buyers needed a household income of about $79,000 to afford the median-priced home in the Baltimore metro area last year, better than the $88,000 needed in 2007, according to the Center for Housing Policy's Paycheck to Paycheck study. But that still locks out a lot of people in professions that pay less, the center says.

Median household income in the Baltimore metro area was $68,000 in '07, the most recent estimates from the Maryland Department of Planning.

The Paycheck to Paycheck report puts our metro area's median home price at $243,000 last year. Thirty-three metros were pricier, while more than 170 were less expensive. Even though prices fell here last year, we rose in the rankings -- meaning the area is comparatively pricier -- because some metros are shedding value at a much faster pace.

Also, the decrease in income needed to buy a median home is smaller here than in many other parts of the country -- 10.5 percent vs. 14.5 percent nationally. (The report authors assume a 10 percent downpayment and no more than 28 percent of income spent on the mortgage, property taxes and insurance.)

But what about rents? They've gone up in many places. Nationally, rents rose 3.7 percent last year in urban places, the report says.

The HUD-defined "fair market rent" for a two-bedroom unit in the Baltimore area was $1,037 at the end of last year, ranking us 41st among 210 metro areas. First -- and therefore most expensive -- was San Fransisco, at $1,658. The least expensive: Wheeling, W. Va. ($577).

Are rents rising or falling for you renters out there?

And if you're looking to buy, are you noticing any significant change in the types of homes you can afford?

Posted by Jamie Smith Hopkins at 10:25 AM | | Comments (6)
Categories: First-time home buyers

May 6, 2009

Distress transactions hit 18 percent; values fall

Eighteen percent of home sales in the Baltimore metro area in the last year were "distress" transactions -- either foreclosures or short sales. So says a new report from Zillow, the real estate information site. 

That's not helping prices any. Home values in the first three months of the year dropped 11.5 percent vs. the same period in '08, according to Zillow. That's a decline to early '05 levels of about $252,000, though the decreases vary depending on the type of house. Cheaper properties shed 7 percent of value while the priciest homes lost twice as much, the company says.

That matches up with Zillow's estimates of how local jurisdictions fared. Baltimore City home values dropped the least -- about 6 percent vs. a year ago -- while expensive Howard County declined the most (16 percent).

The company relies on its "Zestimates," which means these figures are estimates of all home values, not just the price of recently sold properties.

Home values declined faster nationally than they did in the metro area, dropping about 14 percent, Zillow says.

Other stats:

--Nearly 14 percent of homeowners in the Baltimore metro area are "underwater," their property values having dropped below the amount they owe on their mortgages. That's depressing, but Zillow estimates that the percentage of U.S. homeowners in the same situation is 22 percent.

--As you might guess, people who bought in 2006 and 2007 are the most likely to be underwater. More than half the Baltimore-area homeowners of that vintage -- the ones with mortgages, at least -- owe more on their loans than their properties are worth, according to Zillow.

--Folks who bought in the Baltimore area in 2004 are (as a group) still doing all right. Zillow says the typical '04 buyer has equity of almost $60,000.

--Homes in the metro area are collectively worth $30 billion less than they were a year ago, Zillow says.

Posted by Jamie Smith Hopkins at 3:00 AM | | Comments (7)
Categories: Housing stats, The foreclosure mess

May 5, 2009

The risk of foreclosures in our region

First American CoreLogic, which judges "mortgage risk" in metro areas across the country, ranks the Baltimore metro area 71st for risk. Good news in that it's nowhere near the worst, though it's still among the one-fifth of metro areas that are riskiest.

No. 1 for risk: Riverside-San Bernardino-Ontario, Calif. It's an area that tops a lot of "problem" lists related to housing.

These rankings, based on economic factors such as unemployment and the direction of home prices, are for the first three months of the year. The Baltimore metro area was a bit lower on the risk list at the end of last year -- 76th.

The Washington metro area, meanwhile, was judged a much riskier 25th. But that's an improvement from the end of last year, when it was 13th.

Here's what First American CoreLogic says about mortgage troubles nationwide:

The continuing decline in house prices has created a self-reinforcing feedback loop, where lower prices lead to more defaults and excess housing inventory, which in turn cause demand to decline and prices to fall further, and so on. This downward cycle poses substantial ongoing difficulties for the U.S. economy, not least of which are its devastating effects on personal wealth and consumer spending. Until home prices and the economy stabilize, mortgage risk will remain very high.
Posted by Jamie Smith Hopkins at 10:33 AM | | Comments (0)
Categories: The foreclosure mess

May 4, 2009

Q&A: Epiphany in Baltimore

Some of you read blogger Epiphany in Baltimore and have followed his efforts to buy a home. (Thanks to the Wonk reader -- whose name now escapes me -- for pointing me that way. Let me know who you are and I'll credit you properly.) I thought it would be interesting to chat with him about his experience, since every buying story can help other would-be buyers … and often would-be sellers, too.

Throughout the interview below, I've included links to his blog for all who would like to see how each step unfolded in real time. And that's why I'm identifying him by his online name: He's a teacher whose personal blog links to a blog about his job, and he therefore prefers to stay anonymous.

Q. When did you close?

I just closed on Thursday! I've been living in the house for a couple of weeks, though, with a pre-settlement agreement.

Q. What did you end up buying -- the Baltimore rowhome rehabbed by St. Ambrose that you were serious about?

Yes, I ended up going with the St. Ambrose rehabbed rowhome in Belair-Edison. It's three-bedroom, with a balcony, finished basement, and a nice yard with a private fence.

Q. How much did you pay?


Q. Which "first-time buyer" grants and/or mortgage programs did you use? How easy or hard was it to line everything up? Do you have any advice for others?

My mortgage is through Healthy Neighborhoods, with a 3.75 percent interest rate. I definitely recommend checking out Healthy blocks in Baltimore and considering going through HNI to get that great interest rate. St. Ambrose was extra-helpful in helping me figure things out, as was my real estate agent, Bob Burkhard (who I met at the Live Baltimore office, which was my first stop).

I did Home Ownership Counseling with St. Ambrose and then with Belair-Edison [Neighborhoods Inc.]. I used the Baltimore City Employee grant for $3,000 as part of my closing costs.

Q. You mentioned on your blog in December that you were renting and weren't motivated to buy a house. What changed your mind?

I had some credit card debt I wanted to eliminate before I started house shopping. I really needed a new car, too, and didn't think my car would last long enough to shop for a house. Basically, I just wanted to get my finances in as perfect shape as possible before I went through the process. My credit score is around 675, and [I] wanted to get it up over 700.

Then, my landlord/roommate told me ... that she wanted to change her living situation and wanted me to look for another place to move into by April. I never wanted to rent again, so this is what motivated me to just see if I could do the house thing; I didn't really have savings, but I had just got my tax return back so I had a small amount to go from. So, basically, I decided to buy a house because I needed a place to live and realized that my financial situation didn't need to be absolutely perfect to do so. Hearing about Barack Obama's stimulus plans were another minor factor.

Q. How many homes did you end up looking at? What did you think of the options in your price range? And how did you decide whether asking prices were fair or not?

I looked at probably 20 to 25 homes; it was at a breakneck pace. I'm a teacher and a baseball coach, and my season (and 12- to 14-hour workdays) starts on March 1, so I basically tried to get everything figured out in the span of two to three weeks. I had a few ideas about neighborhoods I wanted to live in -- Belair-Edison (where I was currently living), Waverly (very near my job and a great neighborhood), Lauraville, and Ednor Gardens-Lakeside.

I did a lot of research online and joined a few online groups for each community. And, in the end, it ended up being mostly about price; the houses in Belair-Edison were just nicer in my price range than the ones in Ednor Gardens (my second choice). I saw really cool houses in the latter neighborhood, and one I just loved in Waverly as well, but they needed a lot of work and were $15-25K more. ... Plus, I got such good vibes from St. Ambrose; both their mission and their houses were so nice.

As for prices, I got a handle of things by looking at a whole lot of houses, looking at websites (Google addresses and it pops up real estate sites), and, most importantly, by listening to my real estate agent, who ran analyses whenever I was really interested in a house and guided me in the process.

Q. Did anything surprise you about homebuying, either positively or negatively? (Or both?)

I found the process really exciting and fun. The only negative was how long everything took after I picked out a house. Part of it was that I was so pressed for time, and so excited, so it probably made everything seem longer than it was. But, for example, the Baltimore City grant took a really long time -- twice as long, at least, as it says on the application -- so leave yourself plenty of time.

Q. Bottom line: Happy you bought now?

Absolutely. Now that I've closed, I'm going to amend my taxes and get the $8,000 first-time buyers tax credit.

Posted by Jamie Smith Hopkins at 9:09 AM | | Comments (6)
Categories: Housing market experiences, Q&A

May 2, 2009

Housing site gets "street views"

HomeGain, one of a number of real estate sites geared toward buyers and sellers, now offers Google Street View to give you a panoramic peek at what properties look like.

Here, for example, is what you get when you type in 501 N. Calvert Street, the Sun's HQ.

Google, which has been furiously photographing the world, added street views of Baltimore in November. That means you can give people a taste of your neighborhood -- or other neighborhoods in the area -- by sending them a link. Advertising and public relations firm MGH, for instance, offers this view of Hampden. Hi, Hon!

Google Street View has sparked arguments about privacy rights and safety concerns vs. "let the information flow." Where do you come down in the debate? Are its photos useful or harmful for neighborhoods? If you're an out-of-towner thinking of moving here, is Street View helpful to you?

Posted by Jamie Smith Hopkins at 10:24 AM | | Comments (0)
Categories: Real estate online

May 1, 2009

Home tour in Patterson Park neighborhood

Baltimore's Patterson Park neighborhood is having a home tour tomorrow from 11 a.m. to 4 p.m., starting at 9 S. Linwood Ave. Admission is $5, which includes refreshments.

Organizers say the schools and community groups will be open for visits as well "to provide a full picture of daily life here in Patterson Park." (That's from the neighborhood association site.)

Does your community have events scheduled for would-be buyers and renters? Let me know and I'll be happy to list them here, as long as they're free or low-cost.

Posted by Jamie Smith Hopkins at 1:44 PM | | Comments (0)

Poll results: recession and spending habits

There's been so much talk lately about a U-turn into frugality -- including the impacts on home buying -- that I asked you to weigh in. How (if at all) has the recession changed your philosophy of spending and saving?

Just over half of you (52 percent) said it hasn't changed anything because you've always been frugal.

A little over a fifth (22 percent) said it's changed the way you'll spend and save for the rest of your life.

Seventeen percent said you're spending less until the economy improves.

Six percent say the economy hasn't changed anything because you're still in "spend, spend, spend, baby!" mode.

And the remaining two voters left other answers. One: "Time to buy properties at a discount." The other: "It made me work harder to become debt free. I'm almost there."

Thanks for playing, folks. Thoughts? Comment away. And I'm open to suggestions for the next poll.

Posted by Jamie Smith Hopkins at 10:18 AM | | Comments (0)
Categories: Polls
Keep reading
Recent entries
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.
Baltimore Sun articles by Jamie

Most Recent Comments
Baltimore Sun coverage
Baltimore Sun Real Estate section
Archive: Dream Home
Dream Home takes readers into the houses of area residents who have found their ideal home.
Sign up for FREE business alerts
Get free Sun alerts sent to your mobile phone.*
Get free Baltimore Sun mobile alerts
Sign up for Business text alerts

Returning user? Update preferences.
Sign up for more Sun text alerts
*Standard message and data rates apply. Click here for Frequently Asked Questions.
  • Sign up for the At Home newsletter
The home and garden newsletter includes design tips and trends, gardening coverage, ideas for DIY projects and more.
See a sample | Sign up

Charm City Current
Stay connected