Magnets are in the mail
If you didn't ask for one and are bitterly regretting it (imagining all the future pieces of paper it could have attached to your refrigerator, etc.), don't worry: There are still plenty to go around.
If you didn't ask for one and are bitterly regretting it (imagining all the future pieces of paper it could have attached to your refrigerator, etc.), don't worry: There are still plenty to go around.
The listing for the Ellicott City house pictured above is getting a lot of hits on Realtor.com, and you can probably see why. It's the sort of thing that people, once stumbling upon it, will forward to everyone they know with "can you believe this?!" in the subject header.
In a sea of Colonials and split-levels, a geodesic dome does tend to stand out.
I talked this week to real estate agent Kevin Willner, who represents the couple selling the home, and he said eight or nine people had been to see it since it hit the market two weeks ago. It's listed at $340,000.
What do prospective buyers think of the place, I asked?
"Either they love it or they hate it," said Willner, who is with ReMax Sails in Federal Hill and supplied the photo above. "One couple came in and it was funny -- he loved it, she hated it."
He passed this detail on to one of the owners, who quipped: "Well, that means we're halfway there."
Engineer Buckminster Fuller coined the term "geodesic dome" and designed them for the military, colleges and the like. Nowadays, companies sell kits that can be assembled by prospective dome homeowners (domeowners?).
The Buckminster Fuller Institute says, "The spherical structure of a dome is one of the most efficient interior atmospheres for human dwellings because air and energy are allowed to circulate without obstruction."
One UK dome-kit company warns that this energy-efficiency can be troublesome -- "warm moist air that rises to the top of the dome causing uncomfortable temperatures upstairs" as well as condensation and rot -- if the dome isn't designed well. (Willner said his Ellicott City sellers "have done some really good maintenance" to keep their dome up.)
This particular dome is a three-bedroom model. It has a large basement and two above-ground levels topped by a loft.
Willner said he's having an open house Sunday from 2 p.m. to 4 p.m.
Seen any other unusual homes for sale?
I have in my possession items so awesome, so incredibly amazing, that I know you'll want one.
OK, they're just magnets. But they're Real Estate Wonk magnets, which makes them ... yeah, just magnets.
Still, you can never have too many magnets on your fridge. If you send an email to email@example.com with your mailing address, I'll send you one. (Stick MAGNET in the subject line so you don't get lost amidst the 10,000 press releases I get every day.)
Magnet downside: It has my goofy face on it.
Magnet upside: It doesn't swoon onto the floor if you hold a piece of paper too close to it, like some specimins I've owned.
UPDATE at 9:50: First request already. (There's no accounting for taste.) Your magnet is in the mail.
A few months back, I warned you to be on the lookout for rental scams. Now the FBI, concerned about the problem, is asking people to report potential or definite rental scamming to its Internet Crime Complaint Center.
You can’t believe your good fortune—you find a rental home in a nice area through a Craigslist classified ad at an unbelievably low rate. The landlord—who had to leave the country and travel to Nigeria—asks that you wire him two months’ worth of rent. You arrive at the home on the agreed-upon date, but there’s just one small problem—the house is not actually for rent and its owners know nothing about your agreement.
Or the home is for rent, except not by the "landlord" who has your money.
Scammers are going after landlords, too. Wonk reader Lisa says she's had lots of scam replies to her rental ads: "Most typically, the scammers are in a huge rush to move, want to send a deposit immediately and so request your bank info."
The FBI offers these suggestions to avoid falling victim:
Only deal with landlords or renters who are local;
Be suspicious if you’re asked to only use a wire transfer service;
Beware of e-mail correspondence from the “landlord” that’s written in poor or broken English;
Research the average rental rates in that area and be suspicious if the rate is significantly lower;
Don’t give out personal information, like social security, bank account, or credit card numbers.
You know the drill: If it sounds too good to be true, it probably is.
Economist Dean Baker with the Center for Economic and Policy Research says such a move will help keep vacant homes from piling up on the housing market and dragging down neighborhoods. His "right to rent" proposal suggests that homeowners-turned-tenants be guaranteed the option to stay in their homes for a "substantial" time, such as five to 10 years, as long as they pay market rent.
Many borrowers would have an easier time paying rent than a mortgage, Baker says, because rents are significantly lower than the ownership costs of the typical home purchased in many markets in 2006 and 2007. In the Baltimore metro area, he says, the monthly fair-market rent is $1,037 for a two-bedroom unit while the monthly ownership cost for a starter home is $1,666.
(The fair-market rent figure comes from HUD. Baker is calculating ownership costs by assuming that a home equivalent to a two-bedroom rental will be valued at 75 percent of the median home, and he's including property taxes, insurance and maintenance costs along with principal and interest. He assumes a 6 percent interest rate.)
The $629-a-month savings he calculates for struggling Baltimore-area homeowners becoming renters is more than some markets, like Cleveland ($126) and Philadelphia ($274). But it's less than pricey places like New York and Washington (both more than $1,000).
But what about the tax benefits of homeownership? He says owner-to-renter savings would dip to $475 a month in the Baltimore metro area if you take that into account, assuming a 25 percent income tax bracket.
Baker, who co-authored the July report with Hye Jin Rho, writes:
During ordinary years, homeowners would not gain much from having a right to rent, since the gap between ownership costs and rental costs is usually not very large. However, because of the run-up in house prices during the housing bubble years, ownership costs vastly exceeded rental costs in many bubble markets. ... Right to Rent offers the advantage that it could immediately benefit all homeowners facing foreclosure without any bureaucracy and would require no taxpayer dollars.
What do you think of this proposal? Does it make financial sense for a lender to turn landlord rather than home seller -- and would homeowners be willing to become renters to avoid a forced move?
There's a lot of woohoo-ing over the news that sales of new homes in the U.S. rose 11 percent in June, compared with the month before. "The worst of the housing recession is now behind us," David Resler, chief economist at Nomura Securities, told The Associated Press.
This may be. Certainly there are other hopeful signs, even amidst the dour news of layoffs. But you probably don't want to hang your hat on that 11 percent increase because the federal government estimate comes with a big asterisk: plus or minus 13.2 percent.
That's right: Home sales might have increased 11 percent, or maybe they're up 24.2 percent or down 2.2 percent. As the press release helpfully notes, "The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero." In wonk-speak, that means the change is not "statistically significant."
The change in new-home sales from a year ago is big enough that the Census Bureau is comfortable that it's not zero. But that estimate is a 21.3 percent drop.
Hmm ... what's the opposite of woohoo? Oh yes.
Economists seem to be hanging their hat on the trend, which is positive for the past three months. Not considering the margin of error, of course.
I was hoping for something a bit more hopeful, and also more local, so I turned to new-home permits issued in June. (The federal government tracks that measure of planned construction in our area as well as nationally.) Builders got permits for 442 units in the Baltimore metro area, down 16 percent from a year ago.
Now, I realize that doesn't sound like a woohoo-worthy statistic -- unless you're in favor of less building -- but it's a much smaller drop than the one nationwide. U.S. new-home permits fell 37 percent, according to the government's unadjusted numbers.
And new-home permits in the metro area actually rose a tiny bit in May vs. a year earlier, up by 9 units.
I don't know if it's something to hang your hat on, but it's worth noting.
Some of you are loving your commutes. Others not so much.
I know because I asked you to share in last week's twin polls, which asked how long your drive to work lasts and what you think of it.
Half of you have commutes that generally take you less than 30 minutes one way. (Most common answer: 20 to 29 minutes.) One lucky soul reports an 11-minute commute -- by foot.
The rest of you aren't so fortunate.
Eighteen percent have commutes that last 30 to 44 minutes one way.
Fourteen percent drive 45 to 59 minutes one way.
Thirteen percent report commutes that take anywhere from a hour to 89 minutes.
And 5 percent of you, poor things, have one-way commutes of at least an hour and a half. Yes, one way.
Despite the range, three-quarters of say your commutes are at least "OK." (Twenty-seven percent say "excellent.")
Eighteen percent say your commute is lousy.
Five percent of you say it's truly awful and you can't wait to move or switch jobs. (The same five percent who commute three hours a day round-trip, perhaps ...)
And one person says he or she hates the commute but gets to work from home a lot. So perhaps that averages out to an OK?
Nick T., whose workplace is only a few minutes from the place he's renting, commented on the poll with his personal calculation of the cost discount "required to buy with an extended commute (all else being equal)":
0-5 Minutes: -10% (would pay more!)
5-10 Minutes: No Effect - Base House
10-20 Minutes: 10%
20-30 Minutes: 20%
30-60 Minutes: 45%
+60 Minutes: It better be free!
What's your calculation?
And what do those of you with lousy or awful commutes do to get through the grind? Mine's just this side of lousy, and I listen to recorded books.
Ask a real estate agent about schools, and you might get nothing more than a pained smile and a school-information website or two.
"I list homes in a neighborhood that boasts the highest rated schools in the country and I can't even say it!!!" one Virginia agent wrote on Trulia, in response to a frustrated buyer who wants to know why Realtors won't "answer questions regarding where the best schools are" near Bel Air.
Agents are afraid they're going to get into trouble with the federal Fair Housing Act, that's why. The law aims to stop housing discrimination, including the steering of people to or away from neighborhoods based on factors like race, gender and religion.
The National Fair Housing Alliance, putting agents to the test during the housing boom, filed complaints against real estate companies for allegedly telling white clients -- but not minority clients -- to avoid certain neighborhoods because of the schools.
"'Good schools’ and ‘bad schools’ are the new code words used by some real estate agents to discourage Whites from considering integrated neighborhoods," the alliance said in a 2006 press release.
Such testing -- and federal-complaint-filing -- has not gone unnoticed by agents. When I interviewed Realtors for today's story about the impact of school test scores on such non-classroom matters as home values, there was some squirming over the phone line.
One agent wouldn't even say on the record what school districts parents were often asking him to show them homes in, even though it was their request and not his suggestion. Another agent said he's pressed by out-of-town clients to tell them which schools are good, but he's not about to do it because they could be testers for all he knows.
I wondered what agents really can say on the subject of schools. So I asked John Trasviña, assistant secretary for fair housing and equal opportunity at the U.S. Department of Housing and Urban Development.
Are agents prevented from telling clients objective facts such as test scores?
"There's a different way of looking at it that I think will be a more broad answer to your question, and that is that real estate agents ought to share information with clients on an even-handed basis,"Trasviña said. "The question isn't what can they say, but whether they say is said to everybody."
He added: "If a real estate agent is only saying to white prospective renters or owners, 'Oh, you don't want to look over in that area, the schools are terrible,' that would be a problem. But if they told everyone, 'Here are the test scores over here, here are the test scores over there,' that would be appropriate. That would not be a violation of the law. And the same would be true on crime data."
So, agents, you can talk about test scores. Whether you can say "the schools in that neighborhood are terrible" as long as you say that to everyone -- well, that's apparently not so clear-cut.
"I can't give you a blanket assurance one way or another," Trasviña said. "But if an agent says 'schools in this area are terrible,' they're probably not going to do much business in that area. They can restrict their business to a certain community as long as they are treating everybody the same."
What's handy about the Internet, Trasviña said, is that agents can put school information on their websites and then by definition are telling everyone the same thing.
(Got a question or complaint related to the fair-housing law? Trasviña says to call HUD's housing discrimination hot line at 800-669-9777.)
Dominic Cantalupo, an associate broker at Champion Realty in Pasadena, noted something last week that gets forgotten in all the angst about whether agents can reveal test scores: You can't necessarily tell what a school is like from its stats. Or whether it will be a good fit for your children.
The event, scheduled for Wednesday at 11:30 a.m., aims to answer "unusual questions about the housing market" -- for instance, "What happened physiologically in the brain when some owners stopped paying their mortgages after hearing about possible federal home bailouts?"
Other questions offered up to tantalize us: "How will the mortgage crisis change the psychology of future home buyer and investor decisions?" and "Why are foreclosures in some areas sparking new bidding wars so soon after the recent market crash?"
Yale University economist Robert Shiller, of Case-Shiller home price index fame, will answer questions. So will Caltech economist Colin Camerer, who enlists brain scans in the quest to understand why people make the economic decisions they do, and economist Nancy Lutz with the National Science Foundation.
Here's the cool part: You can ask them your questions. I checked. Submit them beforehand to firstname.lastname@example.org.
The webcast itself will be shown here (as in, at that link -- not here here). You'll get a prompt for username and password if you click it early but not, organizers say, when it's time for the show.
Submitting a question? Stick it in a comment here while you're at it. Inquiring minds like inquiries.
I still want nominations -- keep 'em coming HERE -- and particularly challenge suburbanites to offer up neighborhoods for the list. (Unless there are really only a couple of suburban neighborhoods with typical prices under $250,000 that any of you like living in?) City folks, you're all over this: splendid work. Though I'm sure there are a number of as-yet-unnominated Baltimore City neighborhoods in need of a spotlight, so don't stop now.
The amount of ardent support for your neighborhoods can't be contained in one top-ten list, or at least that's what I'm beginning to suspect. So -- which of you ardent supporters would like to get a little more soapbox time to say what you like about your communities? I'll line up Q&As (simple ones) for the blog, if enough of you raise your hands.
This will be in addition to the hidden-gems list I'm compiling, not instead of. And tell you what: no $250,000 ceiling on the Q&As.
Raising your hand is easy. Comment below. Just be sure to fill in the part that asks for email address.
Now comes the news that a luxury condo project planned for Baltimore's west side is being reimagined as affordable "work force" housing.
Lorraine Mirabella reports that Oak Street Developers has revised its plans after the recession -- and financing difficulties -- kept construction from starting on the proposed "M on Madison" condos at North Howard and Madison streets.
It's not as stunning a turn as an already built condo high-rise with penthouses and rooftop terraces getting marketed to residents with decidedly unluxury-sized bank accounts, but I thought it worth noting.
Mirabella reports that the developer "plans to write down the cost of the project with the help of state low-income housing tax credits." That will put restrictions on the target audience.
According to the state Department of Housing and Community Development, projects getting those tax credits "must elect to set aside, at a minimum, either 20% of the housing units in the project for households with incomes of 50% or less of the area median gross income, or 40% of the housing units in the project for households with incomes of 60% or less of the area median gross income." (Sixty percent of median income is about $40,000 for a two-person household, according to the state's calculation.)
What sort of housing -- price range and type -- would you like to see a builder taking on?
You've probably heard people talking about V-shaped housing-market recoveries -- sharply down, sharply up -- and U-shaped turnarounds (down, flat, up).
But letters of the alphabet as economic metaphors are so 2008. The hot new thing: kitchen implements.
David Stiff, chief economist at Fiserv, tells Time's Curious Capitalist blog that he's expecting a recovery will look like a frying pan. Here's what he means:
Once the glut of low-priced foreclosures thins out and buyers are back to choosing between homes owned by more typical sellers, he anticipates a short increase in price, followed by more-or-less flat values. The Curious Capitalist says, "Following the housing bust in the northeastern U.S. in the 1980s, home prices were fairly flat for four to five years. It takes a while for folks to regain their confidence to go out and buy a house—especially a more-expensive one."
If you're scratching your head over the comparison to a frying pan, picture a two-dimensional drawing: down, then flat, then up a bit, then -- along the handle -- flat once again. (Actually, you don't need to imagine it. You can see Stiff's doodle here.)
This prompted a tongue-in-cheek response from a reader who wondered if the frying-pan handle could "possibly have an upward tilt, or perhaps an ergonomically designed grip," and warned that if "it's a Pyrex frying pan, you could slip right off that handle into the fire."
Ouch. Don't get folks started on the subject of "green shoots," either.
Are any of you buyers using the scores to hone in on neighborhoods you want to live in? Are any of you sellers crowing (or crying) over the performance of your local schools?
Have you noticed neighborhoods where home values are higher specifically because they're within the district of a particularly sought-after school?
Here are two stats to cheer up would-be home sellers: Sixteen percent more properties were under contract last month in the Baltimore metro area than a year ago, and 10 percent fewer were on the market jostling for buyers' attention.
The biggest increase in pending deals came in Howard and Carroll counties (both up 26 percent), followed by Anne Arundel County (up 23 percent), Baltimore City (up 13 percent), Baltimore County (up 12 percent) and Harford County (up 1 percent). The raw numbers come from Metropolitan Regional Information Systems via the Maryland Association of Realtors.
Howard's inventory of homes for sale dropped 17 percent from a year ago. The decrease ranged from 8 percent to 10 percent in the rest of the metro area.
Many pending deals come with contingencies, so they won't necessarily get to settlement. But the figure is a useful bellwether. The increase in home sales last month was preceded by an increase in pendings.
If this is a sign of the long-awaited "bottom" in home sales, the Maryland side of the Washington metro area is farther along than we are: Add up Frederick, Montgomery and Prince George's counties, and pending deals were up 63 percent last month.
Together, those three counties had fewer pending deals a year ago than the Baltimore metro area. Now they have more -- 2,759 to our 2,723.
Keep those nominations coming. I'd like suggestions all across the city and in each nearby county. So far, nobody's recommended any communities in Anne Arundel, Carroll, Harford or Howard. (The price requirement -- below $250,000 -- makes it tricky in the more expensive suburbs, I know.)
Here's a recap of what I'm looking for: places in the metro area where the housing stock is decent, typical prices are below $250,000, crime isn't rampant and there's something that people would like if only they knew about it -- fun night life, a great elementary school, a strong neighborhood association, etc. You can nominate neighborhoods or entire ZIP codes.
Add your nominations to the running list here, or simply comment on this post.
Experts say the environment is strikingly similar to what they saw at the height of the real estate bubble.
Yeah, a chill went down my spine, too.
The AP story, which focused on Phoenix, Ariz., included one couple making multiple offers a day on homes they haven't even seen.
The difference between now and 2005? This time, buyers are fighting over foreclosures.
I've talked to agents and buyers in the Baltimore area who have stories of multiple bids, but so far I haven't heard anything that suggests the sort of frenzy in Phoenix. That wouldn't be too surprising, since our prices haven't fallen nearly as fast. (Phoenix prices plummeted more than 40 percent in the first quarter vs. a year earlier, according to the National Association of Realtors. The Baltimore metro area -- 9 percent.)
I do wonder, however, if it's only a matter of time. Have any of you been outbid? What happened?
I'm making a list and want your input. I'd like nominations for places in the metro area where the housing stock is decent, typical prices are below $250,000, crime isn't rampant and there's something that people would like if only they knew about it -- fun night life, a great elementary school, a strong neighborhood association, etc.
I can crunch numbers all I want -- which is just what I'm doing, as it happens -- but there's no substitute for recommendations from people who like where they're living. So leave a comment nominating a place or several places. I'm eager to hear your suggestions, whether they're neighborhoods nobody knows about (well, except the residents) or ones that have an unfairly not-so-great reputation.
UPDATE: Keep putting your nominations here, but see this post for another opportunity to get the word out about the neighborhoods you love.
Share your experience in this week's poll. Er, polls. (If you commute to an institution of higher learning, feel free to participate, too.)
What do you like about your commute, if anything? What drives you crazy? If you're looking for a new place to buy or rent, how important a factor is commute time?
Rob started it with this comment:
I bought in Cecil County. More house for the money compared to nearly any county. 45 minute drive to Baltimore on most days...not so bad to save a bundle. Plenty of homes for sale up here. Come on up!
Mighty Mouse (I love the 'Net names you come up with for yourselves) followed up:
Rob - I'm glad you found a house you like in Cecil.
Personally, I have yet to determine the quantifiable 'opportunity cost' (not gas) to permanently adding 1-2 hours a day onto my workday via commuting. (I've done both long and short commutes)
Right now I'm within a 15 minute walk from my office (2 minute drive). Previously I was commuting from Sparks to Annapolis everyday and I don't think I could go back to that - not even for twice the house...
On the other hand, my sister in LA has a 90-120 minute commute EACH WAY because she wanted to live away from the epicenter and is truly happy with her decision. (She has been doing the commute for 2 years)
But anyway, the point is that commute and distance from points of interest are an x-factor that I've never really been able to come to terms with during my house hunting. Does anyone have a distance to $'s ratio they use?
It's a good question -- there's no one-stat-fits-all answer. Mighty Mouse isn't talking about the dollar-and-cent commuting cost but rather the value of your time.
How far are you willing to drive every day for a house you like very much in all ways (cost included)? What are you willing to compromise on housing-wise for an ideal commute?
Have you found a housing/commute balance that suits you?
Here's what the federal agency says about "Operation Loan Lies":
The FTC charged that the defendants falsely claimed that they would either obtain a mortgage loan modification or stop foreclosure, or both, and that some of the defendants falsely represented that they would give consumers refunds if they failed to do so. After charging consumers the equivalent of one month’s mortgage payment or more in advance, these companies often did little or nothing to help homeowners renegotiate their mortgages or stop foreclosure. After failing to provide the promised services, the defendants that promised refunds did not honor those promises.
Here's the full list (link opens a PDF), which includes the firms and players that Maryland went after. Several are run by attorneys.
The state Department of Labor, Licensing and Regulation offers suggestions for avoiding foreclosure-help scams, including this one: "Beware of any person or organization asking you to pay up-front fees in exchange for providing mortgage counseling services or modification of a delinquent loan."
Remember, HUD-approved nonprofits have counselors who help borrowers navigate their lenders' loan-modification process, and they do foreclosure-prevention work free of charge. Here's the list of Maryland housing counseling groups.
The typical household in the Baltimore metro area earns about $71,000. Buyers getting a low-down-payment FHA mortgage can comfortably afford a $250,000 house with today's rates as long as they make at least $65,000, by themselves or as part of a couple.
Some of you took issue with the "comfortably" that's placed oh-so-innocently right before "afford." Reader Jay, noting property taxes and other housing costs, wrote: "Wouldn't a $250K home in Baltimore City end up in monthly payments of 50% plus of a $71K income? Isn't that how the country ended up in the housing crisis that it's in -- people spending way more than they should on their homes?"
No question, Jay, that was a big part of the problem. (Also cash-out refinancing, but that's another story.) More about the "comfortably" in a moment. First, here's how I calculated affordability:
First, I needed a reasonable spend-no-more-than-this figure. There's some debate on that, but affordable-housing advocates usually say your housing costs are too high if they're sucking up more than 30 or 33 percent of your before-tax income.
But that really should include all costs -- including maintenance, which can vary tremendously from house to house. I wanted to look at principal and interest only.
I chatted with Frank E. Nothaft, chief economist with Freddie Mac, to find a better -- lower -- threshold. We discussed the popular "28 percent on mortgage payments" rule of thumb, but he says that ought to include property taxes, hazard insurance and mortgage insurance.
His suggestion for a threshold: 25 percent -- a quarter -- of pre-tax income on principal and interest.
So I set off (in a number-crunching sense) to see how much income someone would need to spend no more than that on a $250,000 house. And not someone putting down 10 or 20 percent, either, but someone making the 3.5 percent minimum down payment on an FHA-insured mortgage.
With a 5.5 percent interest rate, this buyer would spend $1,370 a month on principal and interest for a $250,000 house. That's 25 percent of pre-tax income for someone making about $65,000.
As you can see, I wasn't looking for reasons to increase the threshold -- more the opposite. It occurred to me that I might get a call from an industry pro complaining that I was being too conservative, so I threw in the "comfortably" before "afford" to show that I wasn't trying to push the affordability envelope to the bursting point.
I should have remembered that reasonable complaints about what's really affordable can come from both directions.
The bigger point I wanted to make -- and I hope it didn't get lost in adjectives -- is that a large number of people can't comfortably afford a house if it's more than $250,000. So it's pretty amazing that just 24 percent of listings in May 2006 were under that amount.
What do you consider the line between affordable and unaffordable? I know some buyers have two figures in mind -- the amount they can borrow and the lower amount they're willing to borrow. What's your willing-to-borrow number?
This Old House magazine recently picked what editors consider the "best old house neighborhoods," and Baltimore's Lauraville community makes the list. Lauraville folks think it's a recognition worth celebrating.
Granted, it's not a top-ten list -- the magazine picked one neighborhood in every state. But why not party if you can call yourself "The Best Place in Maryland to Buy an Old House"?
The event will start Thursday at 3 p.m. outside 2905 Rueckert Avenue, a house renovated with a loan from Healthy Neighborhoods Inc. (That's it in the photo above, courtesy Mark Tough, executive director of the Neighborhoods of Greater Lauraville Inc.) After an award presentation, Lauraville residents will move the party to Clementine, a restaurant at 5402 Harford Road.
If you're planning to show up, go here for details.
This Old House magazine, which calls Lauraville "a leafy paradise studded with hefty framed and shingled homes with full-length front porches and large front lots," had this to say about the housing stock:
Lauraville has a combination of Colonial Revivals, Foursquares, bungalows, and Victorian-era homes, many of which have their original millwork inside and their shingle siding outside. Some single-family homes that were carved up into multifamily units are being returned to their original floor plans. Prices run between $175,000 and $250,000.
Is the price right on homes for sale nowadays? That's a point of great contention, as you'll quickly notice reading the comments on this blog. But one thing's for certain: More and more homes are listed for less than $250,000.
Homes with asking prices below that mark made up 43 percent of the Baltimore metro area's housing market in May, up from 24 percent three years earlier. Total listings in that price range: about 8,150, the highest figure for the month of May since 2001.
More on this in my story today, which you can read here.
What probably won't surprise you is that your under-$250 options are more varied in Baltimore City, Baltimore County and Harford County than in Anne Arundel, Carroll and Howard counties. And there are a lot of foreclosures and short sales in the mix.
Looking to buy (or sell) in the under-$250 range? What trends have you noticed?
Local agents say they're seeing a lot of first-time home buyers. This isn't too surprising, since it's an advantage nowadays to not have a home you have to sell first -- plus there's the $8,000 tax credit, an enticement for some first-timers.
But I've been wondering just how much of the Baltimore-area market is made up of prospective homeowners.
When I asked Joseph T. "Jody" Landers III with the Greater Baltimore Board of Realtors, he said: "I've been hearing figures like 50 percent."
That would be high for the metro area. Nationally, the average hovers around 40 percent. And last year, 40 percent of Baltimore County buyers were first-timers, according to National Association of Realtors data that Landers provided to me.
But the city, with its lower prices, always attracts a lot of new buyers: They were 65 percent of the city's housing market last year.
If you're a first-time buyer (or thinking of becoming one), what factors made you decide to make a move? If you've thought about buying and opted against it, what issues turned you off?
There's debate about how much this will really help customers, since the devices aren't free. You can read more about that in today's story. But here's what BGE is saying:
Under the proposal, smart meter rates would go into effect in 2012, and BGE customers would earn rebates by choosing to conserve energy during the peak hours of 2 p.m. to 7 p.m. on specific critical use days, such as high heat days. BGE said even those who didn't cut peak usage would benefit from lower prices as a result of reduced overall demand.
Have you been trying to reduce your bill by dialing back the air conditioner or leaving it off entirely at certain times of the day? Or have you found other ways to cut energy costs? Do share.
Home sellers have reduced their asking prices on 25 percent of properties for sale in Baltimore, real estate search engine Trulia says. That's the same as the national average, and less than the number of city listings last month that had at least one reduction.
Average price drop: 10 percent, or $28,192. (You can see those listings here.)
Baltimore was noted in Trulia's press release as one of the cities with a "significant" decrease in the percentage of listings with price declines -- last month, it was 30 percent.
"All real estate is local and we’re seeing glimmers of hope as price stabilization occurs in major cities across the nation, including some of the earliest hit cities that have experienced huge declines in the past few years," said Pete Flint, Trulia co-founder and CEO. "On the flip side, perhaps sellers are pricing their homes more rationally to get them off the market as soon as possible."
Trulia, which crunched other local numbers for me, said the rest of the metro area has a greater share of listings with price reductions than the city. As of last week, it was 26 percent in Howard, 27 percent in Harford, 29 percent in Carroll, 31 percent in Baltimore County and 32 percent in Anne Arundel.
But the average reduction amount was smaller in the counties, Trulia said: 9 percent in both Anne Arundel and Baltimore counties, 8 percent in both Carroll and Howard counties and 7 percent in Harford County.
What really struck me was the pricey end of the market -- $1 million or more -- had a smaller share of reduced listings locally. That's especially true in Carroll, where Trulia found just 5 percent of $1-million-plus homes with slashed asking prices. On the other hand, those pricey-property price reductions really add up. (Average reduction on the million-plus homes in Carroll: 12 percent, or just over $400,000.)
Nationally, the percentage of listings with price reductions was practically the same above and below the $1 million mark, Trulia said.
I'm planning to find people with housing-related expertise -- an appraiser, a forecaster, etc. -- to answer your questions. But first, I wanted to know how you'd like to ask those questions. Live on the blog or not?
Fifty-three percent of you said "not live" -- you'd rather submit questions in advance.
Thirty-three percent said live with the option to submit questions in advance.
Thirteen percent said live, period.
It sounds like we'll go with not live, at least the first time, and see how that goes. Few of you took this poll, so I hope the question-submitting is more -- ah -- lively than these results.
A year ago, I wrote a tiny post that linked to a story about Silo Point prices. And goodness gracious, you've had a lot to say since then on the subject of the development in Baltimore's Locust Point neighborhood that transformed a grain elevator into condos. You're still commenting on the prices -- and the condo fees, sales numbers, etc.
I mention this because Lorraine Mirabella has a condo story today that includes details about Silo Point. No doubt all you commenters will want to take a look. In between commenting here about Silo Point, naturally.
Some of those details:
At the 228-unit Silo Point, [developer Patrick] Turner says he has 75 contracts, including 46 buyers who have settled and moved in. He says his strategy of setting prices as the condos are completed, rather than selling pre-construction, has preserved sales that otherwise might have been lost if buyers backed out of contracts after values declined. Last month, Turner opened sales in the final section of the now-completed project, where units feature huge windows, soaring ceilings, granite kitchens and exposed concrete columns.
And now, a few excerpts from the debate among you readers.
The frequent commenter is Baller, who says he (I'm assuming here on "he") is a future resident and calls the development a "masterpiece" that fits his housing requirements (including parking, deck and a good neighborhood). In a tough market for new condos, Baller said, it's selling well: "I find the price very reasonable considering what you pay $/per sq. ft. and the modern amenities (that are usable compared to those of The Ritz)."
When Tye2K called the price too high, Baller challenged him to go see the property in person. Tye2K reported back Saturday that the amenities appealed to him but not the surroundings: "Rusted trains and a working shipyard is not my idea of a view." But the real issue for him was his calculation of monthly costs: "Silo Point would be close to $1,400 in fees and taxes. - So, why would I *buy* a property just to pay in taxes & fees what I currently pay in RENT? - And remember, if something breaks, *you* are responsible for it."
Another commenter, Jaded, said he loves Silo Point and intended to buy there but was also turned off by price and property taxes. So, he said, he opted for a choice that doesn't cost him anything in city taxes -- he moved to the county.
What's your take?
"Prices have more to fall, given the high level of foreclosure, but sales and construction, I think, are at bottom," Zandi said. "And part of it is related to much-improved affordability."No space in the story for this, but I also asked him about his expectations for price drops. Moody's Economy.com is forecasting "peak-to-trough" declines in the Baltimore metro area of 25 percent, as measured by the median price for resale homes. Nationally, the forecast is for a 37 percent decrease.
Zandi's not expecting much in the way of sales gains, though. Just the promise of some stability after years of retrenching.
"As long as the job market is sinking, it's hard to imagine home sales taking off to any considerable degree," he said.
A smaller drop for our area, then, but Zandi expects it will be over sooner for the U.S.: the third quarter of next year, compared with a first-quarter 2011 bottom in prices for the Baltimore metro area.
Here's what he had to say about our market and its price outlook:
"It's certainly been hit hard, but it's held up much better than I thought it would through this period. It may be that I've been overly pessimistic. The region's economy has actually held up reasonably well given the severity of the national downtown. That may go to the preponderance of health-care activities in the region, which is the one industry nationwide which has continued to do reasonably well.
"It may also suggest, though, that Baltimore house prices don't start rising to any significant degree for longer. Prices didn't come down as much as I thought, so that means affordability hasn't improved as much as I would have hoped for. ... Prices need to fall a bit more to sufficiently restore affordability based on incomes and effective rents in the Baltimore metro area."
What's the magic number? He thinks an affordable median price for the metro area is around $210,000 to $220,000. Right now, as measured by MRIS, it's $250,000.
Cue the debate on whether this is a blip -- as January '07 was -- or the start of a trend. (I talked to economist Mark Zandi for tomorrow's story, so you'll get to hear his opinion soon.)
Speaking of debate: The folks who run The Baltimore Sun's Twitter account started one -- unintentionally -- when they tweeted my web story with this teaser: "A glimmer of hope: Baltimore-area sales rise for 1st time since Jan. '07. The bad news? Average prices still falling."
Yup, you know what happened. As one person responded, "dont see why its a neg that avg home sale prices are falling."
It's not great news for people underwater on their mortgages, that's for sure, but falling prices make the housing market more affordable for first-time buyers. And when buyers buy, sellers can move on with their lives.
The U.S. Department of Housing and Urban Development is sending $22.4 million to Maryland to get people who are homeless -- or at the brink of homelessness -- into rental housing. The money, part of a new $1.5 billion program, is supposed to pay for short- or medium-term rental assistance and services, HUD said. That might mean security deposits, for instance, or utility payments.
HUD, which issued its 2008 report on homelessness yesterday, says it's seeing a change that reflects these recessionary times: "many more" people are showing up at shelters who until the night before had a place to stay. The agency says "most of these persons appear to be wearing out their welcome with family and friends." Also:
Between 2007 and 2008, the share of the sheltered homeless population in suburban and rural areas increased from 23 percent to 32 percent. The increase does not reflect increased capacity of residential programs in suburban and rural areas, but instead more intensive use of that capacity.The agency estimated that Maryland's homeless population shrank a bit last year, to 9,219 from 9,628. But that count was done in January 2008, one month into the national recession and before Maryland's unemployment rate began rising fast. (Joblessness was a low 3.6 percent at the beginning of '08. Since then it's doubled to 7.2 percent, the highest in 26 years.)
HUD ranked Maryland 18th among the states for its number of homeless residents compared with its total population. That share: 0.16 percent, the same as New Jersey and Tennessee.
Oregon, at 0.54 percent, had the country's highest share of homeless residents, according to the estimates. Kansas, with 0.06 percent, had the lowest.
The variety on YouTube is pretty amazing, when you stop to think about it. Old music videos. Clips of random people making silly faces for your amusement. Whatever hot new visual meme is making the Internet rounds. And -- now up this week -- a Freddie Mac video for borrowers who are behind on their payments and want to request a loan modification.
Foreclosure prevention amid the pop culture.
Freddie Mac says in a press release that homeowners will have an easier time of it if they gather these documents before calling:
* Most recent monthly mortgage statement;
* Pay stubs or other documents showing their household's monthly pre-tax income;
* Most recent tax return;
* Second loan or home equity line of credit statements;
* Account balances and minimum monthly payments on credit cards, car loans, student loans or other debt;
* A short, concise description of the financial hardship that is causing – or leading to – a mortgage delinquency.
Fair warning: There's no guarantee it won't still be a difficult process.
And be wary of consultant-type firms promising to get you a loan modification if you'll pay an upfront fee. The New York Times notes in this story that you can end up closer to foreclosure and several thousand dollars poorer, even if you got a "money back" guarantee. The Federal Trade Commission is going after some companies for "marketing potentially deceptive relief programs," the newspaper reported.
For advice on avoiding foreclosure-prevention scams, check out the Maryland Department of Labor, Licensing and Regulation's foreclosure-help page.
Nope. Mortgage fraudsters will always find a way.
That's the lesson of the Federal Bureau of Investigation's newest Mortgage Fraud Report, which notes that the crime "continued to be an escalating problem in the United States during 2008." The FBI lists Maryland as one of the "top 10 mortgage fraud states" last year.
The problem ranges from people fudging numbers so they can buy a home -- the "crime? what crime?" folks -- to sophisticated thieves using faked documents to grab loan money and run.
The FBI warns that FHA loans, used to devastating effect in Baltimore flipping scams about 10 years ago, offer opportunities for today's crooks. And the housing slump is hardly a deterrent:
Multiple fraud schemes are being conducted by industry professionals who are in a position to exploit the current depressed housing market. Market conditions are also fueling the use of traditional and emerging schemes which have the potential to multiply across jurisdictions as foreclosures increase, the market contracts, access to credit diminishes, and more homeowners are unable to sell or refinance their homes. Properties affected by these schemes negatively impact neighborhoods; federally insured loan programs; the mortgage, banking, and securities industries; secondary market investors; tax payers; homeowners; and the overall US economy.
Burke specializes in construction defect cases.
One of the joys of being a homeowner is replacing appliances when they break. Thus I spent last night researching my buying options after coming home to discover that my dryer was -- technically speaking -- no longer a dryer but rather a sort of amusement-park ride for clothes. (In wet, out wet, despite great tumbling action in between.)
It seemed the right time to replace the washer as well -- both washer and dryer are 17 years old, so they're elderly as appliances go. Total bill: $931.
This got me musing about the difficulty deciding when to replace and/or upgrade things. Get a new carpet, for instance, and you might have to repeat the purchase when it's time to sell (can you tell I own cats?). But if you hold off getting new things with the idea that you'll do it when you're leaving, you'll never get to enjoy them. And if you wait until things break, well -- you could end up with a pile of wet laundry.
How have you homeowners out there dealt with this now vs. later dilemma? What sorts of things have you replaced and why?
And you buyers out there: What deferred maintenance issues really bug you in homes for sale?
You might use Google to search for a variety of things, but chances are you don't for real estate listings. Thing is, you can.
Search Engine Land, a search engine news site, notes today that Google Maps has expanded its real estate information. To take a look, throw in "Baltimore real estate" on the site, then click on the option to "Search for real estate listings near Baltimore, MD." (If you don't click that option, you'll see a map dotted with real estate companies and organizations.)
What you get isn't all you can find on the established real estate search engines. But you might find it useful:
On the map, each individual listing, whether a property for sale or rent, behaves like a business listing does in Google Maps’ business search. Users can click the red icon/dot for more information about the property; they can get directions, save the listing to My Maps, or send the listing to someone else via email, phone, car, or GPS.
I was interested to see how local listings (at least the ones Google could find) were spread out in nearly all the nooks and crannies of the area. You really can get a fuller perspective by seeing something mapped out.
I also tried searching for Baltimore real estate on Google Base. There, you can specify if you want to see properties for sale or for rent, or things that are being sublet, or even rooms for rent. Google Base tells you where it's pulling the information, so you can jump to those sites if you want to search them directly.
Thanks to the excellent Liz Kay for noticing the Search Engine Land article! Seen any other interesting housing-search options lately?
The nice thing about a live chat is that it can turn into a conversation, with answers to questions begetting more questions. The downside: You'll miss it if the time doesn't work for you. (Worse, if no one shows up on the blog at the allotted time, the chat will become the proverbial tree falling in the woods.)
Take a moment to tell me whether you'd come to the blog for a live chat -- almost certainly over lunch hour -- or whether you'd prefer another option:
The results of the multiple-choice poll:
Housing-market forecaster got the most interest, with 19 votes. Not surprising, since the direction of prices and sales is always a hot topic among commenters here.
Close behind was appraiser -- also not surprising, what with recent debate about the effectiveness of the Home Valuation Code of Conduct.
After that, in order of popularity:
Real estate agent (a few of you offered specific suggestions -- thanks!)
And with one vote each: home stager, successful investor and flipper. (The last two were write-ins.)
Now, here's the thing: Housing forecasters -- good ones, at least -- have plenty of opportunities to appear in the national media. I don't want to convince one to free up a half-hour to an hour for a live chat and then have no one show up to ask questions. They'll never do it again -- ya follow?
So here's the deal: I'll look for a knowledgeable local appraiser willing to give this a go, and you be ready to pepper him or her with great questions. If that goes well, I don't see why we can't do this with a forecaster next, and then a mortgage originator and so on down the line.
Does that sound like a plan?
In secondary poll results, I asked you if you'd like to see fewer polls. (Yes, a poll about polls. Oh the irony.)
Almost half of you say you like the weekly polls and to keep doing them. Twenty-seven percent of you have no opinion one way or the other. Nineteen percent of you say less frequent polls would be preferable.
Of the remaining two voters, one of you opted for the choice to stop the polls altogether, and the other wrote in this suggestion: "how about doing some REAL reporting?" (Er -- you do realize you don't have to read this blog if it annoys you, right?)
I think Wonk reader MrRational's recommendation could make most folks happy: "Having polls is a great feature; but don't feel obliged to create one because of a schedule." So I'll still aim to do regular polls, but if nothing suggests itself in a particular week, I won't sweat it.
We all hear that layoffs and salary reductions are bad for homeowners and will probably keep foreclosure numbers from dropping anytime soon. But the cuts aren't good for renters, either. And what's not good for renters -- in this case -- is bad news for landlords.
Half of U.S. property managers are having more trouble filling their units with "qualified renters," according to a new TransUnion survey. Eight out of 10 say they're worried about how the rest of the year will go. (TransUnion, a credit-information company that sells renter-screening services, said it surveyed more than 870 property managers last month.)
But what about the people who got foreclosed on? Aren't they in need of a place to rent? As it happens, only half the surveyed property managers reported an increase over last year in applicants leaving foreclosed properties. TransUnion speculates that "many consumers coming from these circumstances are moving in with family members or friends to share expenses."
Local landlords, how are things going for you? (Come on, now. I know some of you are reading. Well -- maybe not on the Fourth of July, but I'll wait.)
Renters, have you needed to make a change -- moving to a cheaper apartment, bringing in a roommate, going back to live with parents -- to deal with tighter finances? (Or are things going so well that you're moving to a nicer place?)
Zillow, the real estate information site, estimated yesterday that 29 percent of Baltimore-area homeowners are prime candidates for the program because they owe between 80 percent and 125 percent of their homes' value on their conforming first mortgages. That's 151,000 homeowners. But Zillow can't say how many meet the Fannie/Freddie requirement. (That's not publicly available information, the company says.)
These figures are up from the 113,000 (or 22 percent) of metro-area homeowners with conforming mortgages who owe between 80 and 105 percent of their home values.
The number of potentially eligible folks is higher nationwide: 36 percent of conforming-loan borrowers now and 26 percent under the original rules, Zillow estimates.
But apparently-eligible and actually-eligible are very different things, as the original rules of the program prove. Bloomberg reports that Fannie and Freddie have refinanced 80,000 mortgages under those guidelines, a tiny fraction of the participation the feds hoped for. And 60,000 of those had loan-to-value ratios of 80 percent or less. Mortgage professionals say it's tough for borrowers to qualify.
Has anyone out there tried to refinance under the older rules? I'm curious to know how it went.
If you put down a deposit on a new home, you expect to get a new home. But whenever you hand over a chunk of change for something in return down the road, there's always an opportunity for something to go horribly wrong.
Two business-partner siblings who registered a homebuilding company with the state near the beginning of the housing boom pleaded guilty this week to misusing deposits from 22 couples and individuals. I reported the story for today's paper -- you can read more about it here, but here's a taste:
Walter Osborne Ely Jr. and Kimberly Zahrey started JAE Developers in 2002 and collected between $1,000 and $50,000 in upfront payments from prospective home buyers, according to Attorney General Douglas F. Gansler's statement of fact submitted to Baltimore County Circuit Court Judge Vicki Ballou-Watts. Instead of putting the money in escrow accounts as required, the two quickly spent it. Some of the money went to business expenses that had nothing to do with building the customers' homes, the state said. Some of it Ely and Zahrey spent on themselves, the state said.
Meanwhile -- example two -- the state attorney general announced Wednesday that a Garrett County homebuilder also failed to build homes for several customers or return their money.
This comes on the heels of Lorraine Mirabella's stories about Altieri Homes, which the state has charged with "failing to start or finish construction of at least 20 homes in Harford and Howard counties after taking deposits and payments." Owner Greig Altieri said in a story last month that the tough economy put him out of business.
The City Paper's Edward Ericson Jr. has a story that will send a chill down the backs of homeowners and renters alike: Bed bugs are an increasing problem in parts of Baltimore. (There's a map here showing the location of bed-bug-related 311 calls.)
He writes, "They are fiendishly hard to eradicate, tougher than roaches, silent as a draft."
Just the thought of them makes some of the people interviewed in his story start "involuntarily" scratching. Many of the readers probably have, too.
Sawbuck.com has updated its real estate information site with a nod to social media, including a news feed of home listings that's a lot like the friend status updates on Facebook. Choose Baltimore as your city of search, and you'll see this compilation of new listings and price changes. (You can see sales and contracts, too, but only if you register.)
The Sawbuck site also offers its take on housing-market health, rating Baltimore a 58 -- "Not Healthy," though closer to "Barely Healthy" (60-69) than "Deteriorating" (40-49). The scale runs from 0 to 99.
Market activity varies from neighborhood to neighborhood, of course -- that's true nationwide. How would you rate the housing-market health in your neighborhood? (I realize this is tricky because "deteriorating" in a seller's mind might be "improving" from a buyer's perspective. Hmm: Maybe choose a number from 0 to 99 with 0 being a market where buyers can get homes for nothing and 99 where sellers can successfuly demand a buyer's first-born child in exchange for accepting their offer?)