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April 30, 2010

Foreclosure-prevention event on Monday

Looking for a foreclosure-prevention workshop, stat? Congressman C.A. Dutch Ruppersberger's office is holding one in Essex on Monday from 6:30 p.m. to 9:30 p.m.

His staff say their last event -- held earlier this week -- matched up 50 struggling borrowers with their lenders for one-on-one discussions.

If you go, bring all the things lenders usually want to see:

• Hardship letter

• Last two months of bank statements

• Last two pay stubs

• 2008 or 2009 tax return

• Any foreclosure notifications you're received

• And anything other documents specific to your situation

The workshop is scheduled to be held at Stemmers Run Middle School, 201 Stemmers Run Rd.

Posted by Jamie Smith Hopkins at 10:08 PM | | Comments (0)
Categories: Foreclosure help

Last day for the first-time home buyer tax credit

The two-year-old federal tax incentive credited with a spike in home buying -- and tax fraud -- is scheduled to end tonight.

You have until the end of the day to sign a binding contract if you hope to qualify for the $8,000 credit for first-time home buyers. (There's a second deadline for the settlement itself, which must happen by the end of June.)

A $6,500 credit for certain repeat home buyers, added to the program when it was extended in November, also phases out today.

A number of local buyers have only just gotten under contract, agents report.

"Everyone I’ve been talking to is saying they've been super busy," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors.

The first-timer incentive, passed in July 2008, started as a $7,500 credit (retroactive to April purchases) and was actually a no-interest loan: Buyers had to repay the money over 15 years. The reaction was tepid.

In February 2009, Congress turned it into an $8,000 housewarming gift from Uncle Sam -- no repayment needed as long as you kept the place as your primary residence for at least three years. (The sweeter incentive was made retroactive to purchases in January.)

It's fully refundable, "meaning the credit will be paid out to eligible taxpayers, even if they owe no tax," as the IRS notes.

Supporters called the credit a necessary stimulant for a housing market that had helped topple the economy and was one of the anchors preventing USS Recovery from sailing off. Detractors said it was a big expense and stole buyers from the future to handle today's problems.

Then there were the flurry of $8k checks mailed out to non-buyers, not to mention the preschool-aged children of buyers who figured their darlings qualified as first-timers. Congress tried to shore up the controls when it extended the credit, requiring proof of purchase and at least 18 years of life on Earth.

The National Association of Realtors is estimating that 2 million Americans qualified for the credit last year, and it expects more than that will qualify this year, despite the shorter period.

So, folks: Was it worth it? Are you sorry or glad the credit is coming to an end?

And what do you think will happen to the housing market in its absence?

It should be noted that an echo of the program will be bouncing around for a while yet: People in the military and certain federal workers stationed overseas have until April 30 of next year to get under contract.

"It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010," the IRS says.

April 29, 2010

Home improvement plans

As the song goes, if you can't be with the one you love, love the one you're with. That might explain a recent American Express survey, which found that nearly two-thirds of homeowners are planning home improvement projects this year.

Average amount the polled folks intended to spend: $6,200. So we're not talking about gut rehabs. The most popular projects were cosmetic work, redoing a room and new flooring.

Most of the homeowners planned to pay with cash. Few expected to rely on loans.

A small amount of the work -- about 5 percent -- is getting ducks in a row to list for sale, American Express says. Many homeowners said they just want their property to look better.

Some of the motivation, of course, is probably homeowners settling in to try to wait for prices to rise. (Asked when they thought a seller's market might return, just over half of homeowners said they're not expecting it for two years or more.)

Wonk reader ruth noted this week that she has a different reason: "We definitely want to move and as we are looking to downsize it should be workable. What holds us back? Aging parents. Plain and simple. We're stuck, until this situation resolves. So, in the meantime, we remodel. As time passes and enough remodeling goes on, what's the sense of moving? We have a feeling we're not the only ones out there like this."

So, all you folks with experience, help out the raft of homeowners (me included) who are trying to get some improvements done this year:

What went right?

What went wrong?

How did you decide what to do yourself and what to hand over to a pro? (And was it the right choice?)

How did you find good contractors?

What's the most important lesson you learned? 

We who are about to remodel salute you.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (7)
Categories: Home maintenance

April 28, 2010

Q&A: Md.'s foreclosure mediation program

If you're a Maryland homeowner struggling with your mortgage, you might be curious -- extremely curious -- about the state's newly passed foreclosure mediation law. It takes effect for foreclosure cases filed on or after July 1.

Raymond A. Skinner, the state's secretary of housing and community development, offered details in a recent interview.

Question: What will change for homeowners and lenders?

Answer: What we’re trying to do is to put in place a process which is really kind of the last step before foreclosure can proceed. And it gives the homeowner a chance to sit down face to face with their lender or servicer with a neutral third party to see if something can be worked out before actually going to foreclosure. The law builds on what we had done in 2008, when we changed the foreclosure process and added more time and more notice for borrowers.

Q: What steps does the law add?

A: When the lender ... sends the notice of intent [to foreclose] to the borrower, they’ve got to include some additional things now under this new law. They must include a loss-mitigation application with instructions for how to complete it and where to send it. ... They also have to include information about various loss-mitigation programs, including the federal Home Affordable Modification Program -- the HAMP program -- and also specific information about the lender’s loss-mitigation programs. … In addition, they've got to send information about the state programs -- our HOPE program with the HOPE hot line number and the website.

Q: What comes next?

A: Before they can file an order to docket [a foreclosure case in the court system], they’ve got to file a loss-mitigation analysis. And basically, it’s an affidavit where the lender certifies that they’ve exhausted all loss-mitigation procedures or processes, and they could not find a way to give this particular borrower any kind of relief. And they’ve got to explain the reasons why they could not provide any relief.

Q: They have to be specific?

A: They have to be very specific. … At the same time, when they file that order to docket and provide the analysis, they have to give the borrower a "request for foreclosure mediation" form. Then the borrower has 15 days to file the request for mediation with the court. And again, when the lender sends the information to the borrower, the request for mediation form, they have to give instructions for how to fill out the form and where to send it.

Q: How will the mediation itself work?

A: The request for mediation would be filed with the Circuit Court. The court would then refer it to the Office of Administrative Hearings. Under the law, the mediation must be conducted within 60 days of the Office of Administrative Hearings receiving it from the court. They’re administrative law judges, and they hear appeals [of] various decisions of state agencies, and they also have some kind of mediation program now.

The mediation is just an opportunity to sit with a neutral third party. They are not decision-makers. They can work with the two parties and get the parties to agree to some outcome, but they don’t have any legal powers to dictate an outcome. So the parties have to agree.

Q: What happens if they don't agree?

A: If an agreement is not reached at that point, the lender can schedule the foreclosure sale. But they have to wait 15 days after the mediation to schedule a foreclosure sale. At that point, clearly, if the borrower is not satisfied with the outcome, an agreement is not reached and they think there’s some plausible reason, then they can go to the court. … But that’s sort of it for the foreclosure mediation process.

Q: What's the cost?

A: The lender has to pay $300 at the order to docket stage. ... It’s a $50 fee for the homeowner to request mediation. Both of those fees that the lender would pay and the homeowner would pay go into a fund … for the additional administrative law judges that OAH would hire, as well as pay for continuing our counseling network.

Q: Is there any reason for lenders to work something out in mediation?

A: We’re really hopeful it doesn’t even come to mediation. There are built-in incentives. ... Recently, the Obama administration has enhanced the HAMP program and provided additional incentives for lenders to do loan modifications under the HAMP program. We’re hoping the combination of that plus the additional barriers this law puts in place, in terms of having them file this affidavit and certify what they’ve done, as well as the fee, will really force lenders and servicers to get more serious about loan modification upfront. … Really get serious about looking for options for loan modifications or other types of things, such as doing short sales, a deed in lieu, anything to avoid foreclosure. ...

We think the lenders can be much more consumer friendly and customer friendly in terms of how they work with borrowers in the loss-mitigation process.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (6)
Categories: Foreclosure help, Mortgages, Q&A, The foreclosure mess

April 27, 2010

Looking for a housing market recovery

Predicting when the housing market will recover and/or when prices will rise is a game that has attracted many players, if only because the slump has dragged on for so long that everyone's had an opportunity to weigh in.

Here are two more forecasts in that vein:

Metropolitan Regional Information Systems, the company that runs the local multiple-listing service used by home buyers and sellers, says in a report issued today with real estate information firm Delta Associates that it's "too soon to declare the Baltimore metro area housing market in recovery, but 2010 may herald recovery."

"Yearly statistics show a modest decline in prices since the 1st quarter of 2009, but improvement in both volume and days on market," the report said.

First American CoreLogic, another real estate information firm, offered its own take in a separate report on single-family home prices. Baltimore metro area prices were down 6.6 percent in February compared with a year earlier even as national prices bumped upward ever so slightly, it said.

The company expects continued -- but smaller -- decreases for a while in the Baltimore metro area. Its forecast is that prices next February will be down almost 1.5 percent.

Maryland, meanwhile, had the seventh-largest price drop among the states in February, the company said -- 7.5 percent.

Distressed sales are playing a significant role there. Counting only traditional home sales, prices are down 3.2 percent in the state, the company said. And its forecast for Maryland is for a 1.5 percent drop in price overall next February, but a more than 5 percent gain when excluding distressed sales.

More food for thought ... and debate.

Posted by Jamie Smith Hopkins at 8:00 AM | | Comments (5)
Categories: Housing forecasts

April 26, 2010

Home buyer tax credit set to expire this week

If you're trying to get the $8,000 first-time home buyer tax credit or the $6,500 credit for certain repeat buyers, this shouldn't be news to you: Your deadline is Friday. That's the last day you can enter into a binding contract, as the IRS puts it, and still qualify.

That's not the only thing you'll need to do to qualify, naturally. You can peruse the list on the IRS site, or read some frequently asked questions here.

I'm interested in hearing from buyers in Baltimore and 'burbs who are trying to get under contract before the credit clock runs out. (And, for that matter, anyone purposely waiting until afterward to look.) You can send me an email at jamie.smith.hopkins(at)

Moving from D.C. to Baltimore -- and vice versa

The Baltimore metro area has cheaper home prices and rents than the Washington metro area, so you probably don't need me to tell you that more people relocate our way from D.C. than the other way around. 

But the recession, housing slump and credit crunch have had an effect on that northward migration. Our net gain from the Washington area sunk from about 10,000 in 2006 to 5,000 in 2008, according to the newest federal numbers.

Here's the story.

It's not just fewer D.C.-area folks coming our way that cut down on the net gain. It's also more Baltimore-area residents moving south. Jason Policastro, for instance, who took a job at American University's Washington College of Law a year and a half ago and relocated four months later.

He didn't want to leave Baltimore, "But boy, that commute, I couldn't handle it. Eventually I broke down and started looking and found something close to work."

He's so close now, he walks to campus. That takes him a grand total of 15 minutes. Before, it was taking him anywhere from an hour -- on those very rare days with no traffic -- to nearly three hours. One way.

The alternative of the MARC train didn't appeal to him because it was often delayed, he said.

Even so, "I just can't shake the thought of moving back," Policastro said. "I love it there. Everything about it. The personality of the city, the character -- the cost of living there is dramatically lower. So yes, I do think about that. The job market, though, you can't compare the two. Which is just a shame."

It's been interesting to read people's comments on the Sunday story. Several readers shared their personal experiences:

Brodeur552 says MARC makes the Baltimore-to-Washington commute less tolerable than expected: "I wish I had known just how bad it was before moving here. I have a 1.5+ hr commute on a good day, which I had come to terms with before moving here, but at least once a week, my MARC Penn Line train breaks down for no apparent reason."

Bmore09 laments that Baltimore-area home prices look great with a Washington-area salary, but "if you live and work in Baltimore and want to buy a home here Good luck. Housing prices are not at a level that will afford you to own one. and you can't just move someplace 'more affordable' to live if there is none."

Smccall64 writes, "Due to the fact that I needed to commute to the I-270 Corridor, but my wife needed to commute to Annapolis or Baltimore, we ended up in Howard County. So, yes, I'm technically part of that 'migration' from D.C. to Baltimore according to how the markets are divided. But I don't consider myself to be part of Baltimore; I'm part of the Washington-Baltimore metropolitan area. I can get both Washington and Baltimore newspapers, TV stations, and radio stations. Long-time Baltimore residents don't seem to want to be linked with Washington, but D.C. is the source of wealth and prosperity that has come to the entire region. We should look at ourselves as one big mega region, with over 8 million strong."

A long discussion thread kicked off on the DCist site in 2007 about the two cities in response to Live Baltimore's various "It's Better in Baltimore" and "Get In On It" ads, which the nonprofit ran in the Washington area to add fuel to the relocation trend.

"Are these ads, and their promise of a less expensive way of life, making you think about it all?" DCist Editor-in-Chief Sommer Mathis asked.

"I was thinking about moving to Baltimore," one wit responded. "Then I remembered that it's not in Washington, which would make it a real drag to get to work and see my friends and stuff. Other than that -- totally cool, great idea."

Another reader there wrote, "They're competing with the 'West Virginia is Calling' ad blitz at Metro Center. And when I hear that WV is 'calling' by the way, I assume it's a call for help. ... Surely, this constitutes Advantage: Baltimore. I'm going to hold out, though, until I hear Fredericksburg's offer."

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (18)
Categories: From home to work, Moving

April 25, 2010

Home buyers and would-be buyers

I asked you recently if you planned to buy a home in the next year, since I'm nosy that way. Forty percent of you said yes -- no doubt a higher share than a scientific poll would get, since I'm asking people reading a blog about the housing market.

The results are more involved than just that, though. Many of you are would-be buyers. As in, you'd like to buy in the next year but probably can't.

About 22 percent of you said that describes your situation. Most in that category are currently homeowners, not renters.

All told, 61 percent of renters who took the poll expect to buy in the next year.

Just 28 percent of homeowners said the same.

A number of you said in a past poll that you're underwater on your mortgage -- that's a major factor keeping people stuck in place.

Wonk reader M writes, "I have 20% down for a new house and have been ready to move for the past year. However, my house/mortgage is just about level and maybe a little under water and I don't want to deal with renting it out and possibly going a couple months paying two mortgages if I can't get it filled right away. So I am holding off for now, which is disappointing. If I could at least break even I would move."

What's your reason, if you're in the "want to move but can't yet" group?

Is anyone doing home-improvement projects in lieu of relocating?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (5)
Categories: Housing market experiences, Underwater

April 24, 2010

Home buyers and sellers on when prices will rise

Along with all the other things that buying a home represents, it's an act of faith that the purchase will be a good deal. No one plunks down their hard-earned cash at the settlement table and says, "Boy, what a lousy idea this is!" (Well -- very few, at least.)

But there are apparently a lot of buyers going in with the expectation that home prices are not poised to start rebounding in the immediate future.

Century 21 said this week that it polled first-time buyers, and 48 percent of them said they think prices will rise over the next year. Which, if my mad math skillz are not failing me, means 52 percent think prices won't rise over the next year at the very least.

First-time sellers, Century 21 said, are slightly more optimistic. Fifty-three percent expect prices to rise within the next year.

Here's a discussion point: If you think prices have farther to fall, does it make sense to buy now? When do lifestyle considerations (like, "I'm so sick of leases") outweigh financial considerations (like, "Buy low, sell high")?

Other tidbits from the Century 21 poll:

--84 percent of first-time buyers say they're aware of the $8,000 federal tax credit for first-timers, and 64 percent of those in the market to buy for the first time say they qualify

--Just as many first-time sellers say they're aware of the $6,500 credit for repeat buyers who have owned their homes for at least five years of the last eight, but just 33 percent say they qualify

Here, weigh in on prices in this just-for-you Wonk poll:

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (4)
Categories: Housing forecasts

April 23, 2010

Getting rich off the housing crisis -- in song form

Bet Against the American Dream from Alexander Hotz on Vimeo.

Because what credit default swaps really need are some jazz hands: The Avenue Q folks have put together a song to go with a This American Life story about a hedge fund that turned the collapse into cash. Catchy! ("The housing market's losing steam / And all we gotta do / To make our dreams come true / Is bet against the American Dream!")

On another note, The New York Times suggests that you use the "20" rule of thumb if you're deciding whether to buy or rent. That is, divide the home's sale price vs. a year's rent for a comparable place. If it's above 20, you're probably better off renting. Below, and you could be better off buying. (The Baltimore metro area, it says, dropped from 21 in 2005 to 18 last year.) Thoughts?

On yet another note, RelocateAmerica's Top 100 Places to Live in 2010 -- which this year focused on "communities poised for recovery and future growth" -- includes Baltimore.

Happy Friday.


April 22, 2010

President Carter to build homes in Baltimore, Annapolis

Habitat for Humanity's most famous booster is former President Jimmy Carter, so you can imagine the glee of any chapter that gets him as a volunteer.

Take Baltimore's Habitat for Humanity of the Chesapeake -- it's holding two public announcements today to spread the word about its good luck.

Carter and wife Rosalynn will be helping build homes at one of the chapter's sites in East Baltimore and another in Annapolis on Oct. 5, part of their annual Habitat work week. (Other chosen ones this year: Washington; Birmingham, Ala.; and the twin Minnesota cities of Minneapolis and St. Paul.)

"Habitat for Humanity's Jimmy and Rosalynn Carter Work Project for 27 years has been a catalyst for increasing the work being done in local communities and empowering people to bring hope, stability and housing solutions," Habitat for Humanity International said in a press release.

Mike Mitchell, chief executive of Habitat for Humanity of the Chesapeake, said he's "thrilled" that Carter "has decided to join with us in raising the visibility of the lack of simple, decent, affordable housing in our community along with the paradox of need alongside the plenty."

"I'm referring to the thousands of vacants in our community that could be homes and harbors from crime, poor health, and environmental degradation," Mitchell wrote me in an email.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (4)
Categories: Affordable housing

April 21, 2010

Price reductions (and increases) on Baltimore homes for sale

Almost 30 percent of homes for sale in Baltimore have had at least one asking-price reduction, according to real estate search engine Trulia. That's more than all but five of the 50 largest cities.

Devoted readers will recall that this is more of the same -- we've been in the top 10 for a while. (Here's a post from February, for instance.)

You've had a lot to say about asking prices. Wonk reader M commented: "I think most homeowners think their homes are worth more than they are and they waste valuable time/money with their homes just sitting there."

But here's a new question: Why do you think Baltimore is high up on the list for homes with reductions?

Are sellers here more out of touch? Are Baltimore buyers more apt to play the waiting game than to make a low offer right off the bat?

On a related note, I checked out to see how asking prices in the Baltimore metro area have changed lately, and lo and behold -- they're up.

The median asking price, which has been falling pretty consistently for months, bottomed at $239,925 in January, inched up in February, rose $4,000 in March and is now sitting at just under $250,000.

So if you're getting the impression that prices are rising -- asking prices, anyway -- that's why. (We'll just have to wait and see how many of the new listings will end up with "just reduced!" signs down the road.)

I can think of a few reasons why asking prices might have risen in the last few months. Perhaps more bigger, pricier homes hit the market. Or perhaps sellers are hoping that buyers rushing to qualify for the first-time home buyer credit won't be as picky about price. Or, hey, perhaps sellers are confident that the market is rebounding.


Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (23)
Categories: Housing stats

April 20, 2010

'Normal' home sales vs. distress sales in Baltimore

Real estate information firm First American CoreLogic has good news and bad news for Baltimore-area residents trying to sell a home that's not a short sale or foreclosure.

The good news for sellers: Average sale prices are rising -- up 8 percent in January vs. two years earlier and up 13 percent vs. January 2009.

The bad news: You're not riding the wave of increased home sales.

Seventeen percent fewer traditional resales sold in January than a year earlier in the Baltimore metro area, says First American CoreLogic. Compared with two years ago, the drop in sales is about 50 percent.

But short sales, where owners need lender approval because they're underwater on their mortgage, are on the rise. These deals increased 18 percent year-over-year and have more than doubled in two years.

Bank-owned properties -- foreclosures -- bumped up a modest 1 percent year-over-year, but there were 75 percent more of these sales in January than two years earlier.

All told, distress sales made up a quarter of January home sales in the Baltimore metro area, First American CoreLogic says.

(Like traditional resales, sales of new homes were also down -- but not as much in recent months. The year-over-year drop was 6 percent.)

What about the average sale price for distress deals, you ask?

For foreclosures, it's down 12 percent year-over-year (and down 20 percent over the past two years). But short sale average prices are actually rising -- up 11 percent year-over-year.

Here's the average sale price by type in January:

New homes: $392,000

Traditional resales: $278,000

Short sales: $267,000

Foreclosures: $154,00

So foreclosures -- on average -- are by far the cheapest, though they probably also require the most work. It's interesting that short sales aren't far off the average price of traditional resales. Wish we could know if the types of homes that sold in each category average out similarly in terms of size and style.

Buyers: How much of a deal do you think local foreclosures and short sales offer these days? Does it work out to significantly less money even accounting for any fix-up work needed?
Posted by Jamie Smith Hopkins at 12:13 PM | | Comments (9)
Categories: Distress sales, The foreclosure mess

April 19, 2010

Q&A: Mortgages

Do you know how much mortgage you can afford? Are you sure you know?

Tom Champion has been in the mortgage business for years, first as a loan originator and now as regional manager in Maryland, Virginia and D.C. for Mortgage Loan Inspection. He thinks people should know that qualifying for a loan isn't the same thing as being able to afford it, even though we're several years past the era of super-lax requirements.

Here's what he had to say when we chatted for a Q&A:

Question: You drew up an example budget: $226,550 loan for a family making $62,900 a year. Is that typical? What’s the problem with this scenario?

I drew that up because I wanted to show you what the qualifications under the guidelines for FHA would be for that property.... They are qualified under FHA guidelines to purchase, no problem. However, if you review the budget, they have less than $100 left over with nothing being contributed to their saving, 401(k) or [children's] education fund. They have no options if there is a problem with employment or sickness in the family. ...

When you walk into an originator to say, "Can we afford this," the originator is going to apply the guidelines for that particular agency, be it Fannie Mae, Freddie Mac, or FHA or a private lender. Under those guidelines, that's the minimum requirements. That makes you feel good, and you [say], "Oh my gosh, we're better off than I thought."

But then you have to stop, detach from the emotion and look at your current budget, and look at the possible increase you may feel over the next three years, look at the possible expenses you may incur. ... If I'm further from my work, am I going to have to replace the car? Am I going to spend more gas? It's back to thinking it through the rest of the way and applying numbers.

In the budget I gave you, you can see that these people are what I call "house poor."

Q. What should people do to figure out how much mortgage they can comfortably afford?

A. What they really should do is to look at their current budget -- which they should have; if they don't, it would be a great exercise for them. ... Be realistic. This is not a test. This is about your lifestyle. So the first and foremost thing is to put together a budget of your expenses and your income. Now you want to go back and look at the property taxes, as well as the mortgage payment, including taxes and insurance.

Then adjust the budget for whatever changes that are going to happen for the location of your new house. ... "I'm moving from Baltimore City to Baltimore County; now I'm going to be 25 miles from work rather than 10 miles from work." Make all the adjustments as best as you can.

Q. And then?

A. Look at the bottom line. Now you have a basis for you internally, for you and your partner or spouse to be able to look at what lifestyle changes are needed, if any. ...

You really have to follow it through, rather than getting involved in the emotion of, "We're buying a new home!" That's one thing I see -- I’ve spent over 20 years in lending -- the emotion takes over and the logic leaves. 

Q. So you're telling people to understand precisely what they're getting into?

A. Absolutely. Because this is not something you take lightly. This is the biggest purchase of your life. You are committing to a possible 30-year term of debt. Why not take a few days to really walk through it, instead of, "Oh honey, they say we can afford this house, let's go put a contract in"? This is the frenzy that was created in 2004, 5 and 6. There was limited inventory on the market, and they knew the house was going to go in hours or days, so it was about getting the house, making the deal work, rather than looking at its long-term impact.

Q. You recently launched a local branch of Mortgage Loan Inspection, which compares its service to home inspection. How so?

A. When home inspectors started their service, they were considered by Realtors as deal killers. Today, you will not see a home purchased without a home inspection, whether it's used in the contract or not. People want to know.

We are simply an independent advocate for the borrower. We have no affiliation with anyone, point blank period. We will never make a recommendation for a lender, title company or Realtor. We have no affiliation with them. That is our independence. What we're going to do is simply, we're going to pre-qualify that borrower on one, the traditional methods used by the lender. No. 2, we're going to come back and qualify them on a budget. ...

We're going to ask them to obtain a credit report. ... We're going to at that point set their expectation level of how they rank within the credit quality. We're going to ask them to provide to us all of the documentation that a lender is going to ask them for. We're going to review it to see that it complies with what they have told us, just like a lender. ...

If they choose to go forward, then when they will do their shopping, every time they work with a lender, we will review the lender's paperwork. ... We are looking for unethical lenders, we're looking for compliance to federal law. We're looking to make sure that transaction is exactly what they've been told. ... We will monitor that transaction all the way to closing ... and we will make them aware of anything that changes.

Q. How are you paid? Upfront fee?

A. They can pay our fee upfront with a guarantee of a 100 percent refund if they are turned down by their lender after we say they shouldn't be, or two, they can simply defer that fee and it will be collected on their settlement sheet.

Q. Is it hard to convince people to pay for something extra in the home-buying process?

A. There is a reluctance on the consumer's standpoint simply because it looks like another fee. But once we have the potential borrower in the process, they suddenly go, "Wow, this is the best money I've ever spent, because you talk in plain English and you're not trying to sell me anything."

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (11)
Categories: Mortgages

April 18, 2010

Your thoughts on high home prices

Reader Josh Dowlut posed a question recently: "are high or 'strong' real estate prices desirable or not?"

If you expected that homeowners and renters would be on opposite sides of this debate, surprise: More than half the homeowners who took the Wonk poll say high prices aren't good -- just like most of renters. (Renters are less split about it, though: Only a few said high home prices are good.)

All told, 62 percent of folks who took the poll (owners or not) said "feh" to high prices.

Does this match up with your views on home values?

Have the roller-coaster events of the last decade altered your views, by chance?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (8)
Categories: Polls

April 17, 2010

Silo Point -- a question, an answer

Wonk reader Andy thought about buying in Silo Point last summer and decided against it, but he's still curious about the project, which turned a grain elevator in Locust Point into a 24-story luxury condo tower with 24-hour concierge service and penthouse units as large as exurban McMansions.

He emailed recently with a question in the subject header: "Silo Point Empty?"

"I was driving on 95 the other night and noticed that Silo Point looks about 90% empty," he wrote. "I just checked real property, and it looks like only 50 units have sold and the majority are on the lower floors."

I checked with a spokeswoman for the developer, and she says 74 condos have sold -- it takes a while for the deals to show up online. Almost 40 more are under contract, including 15 scheduled to close in less than 30 days.

That means a third of the 228 units are in the hands of new owners. Add in the units under contract, and developer Patrick Turner is about halfway done with sales -- if all the deals close, of course. Units have been for sale since the fall of 2008.

(Fun fact: a quarter of the 208 condo sales in Baltimore last year were Silo Point deals, according to Turner's spokeswoman. It hasn't been an easy road for Baltimore condo builders, though sales numbers have been improving this year.)

Andy was also curious about the asking prices these days, so I asked. They range from $269,900 for the one-bedrooms to $4.2 million for one of the penthouses. The monthly condo fees start at $300. 

Silo Point kicked off a long-running conversation amongst yourselves. Check it out here.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (9)
Categories: Housing market experiences

April 16, 2010

Real estate poll: Buyers (and sellers) in the wings

Economists and real estate agents often muse about "pent-up demand" -- the number of people who would have bought a home already if not for economic conditions. A new survey by real estate search site operator Move Inc. suggests there's a lot of people in that group, but it's not just buying they have in mind.

Nearly half of homeowners surveyed said they'd buy another home right away if they could sell the property they have for at least as much as they paid for it. A lot of Americans are underwater on their mortgages, so there's definitely some "if only" among those surveyed owners.

Fewer people -- 21 percent of those surveyed, current owners or not -- said they actually plan to buy within the next five years. Many with near-term plans are first-timers.

Other interesting results from the survey:

A year ago, less than 6 percent of potential buyers told Move that they intended to snap up a home for investment purposes soon. Now, it's 17 percent. (About one in eight of those intending to buy investment property have the war chest to pay entirely with cash.)

And, Move says, "Just over two-thirds (69.1%) of homeowners who have delayed selling their home reduced their daily living expenses in order to pay their mortgage."

Does reading about a survey fill you with envy that you weren't asked to participate? Here -- try this one:

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (2)
Categories: Housing stats

April 15, 2010

Anne Arundel mansion auctioned off


Photo of Tulip Hill supplied by Concierge Auctions


What's a pre-Revolutionary War mansion on 52 acres worth? More than $2,375,000, according to the retired senior military official who bought it at an auction last weekend.

But auctioneer Concierge Auctions isn't saying just how much more the winning bidder paid -- or who the buyer is, for that matter. Unlike most auctions around here, this one was closed to the public.

The property, known as Tulip Hill, is a Georgian plantation house in Harwood that dates back to 1755. It has seven bedrooms, six-and-a-half bathrooms and a pier on the water.

It was also a distress sale. Citibank took it back from the owners as a deed-in-lieu of foreclosure last year. 

Before that, it was on the market with an asking price as high as $7.5 million at one point. But the auctioneers note that the property had more land associated with it then.

Though the buyer was local, the 16 other registered bidders hailed from as far away as England and Dubai.

"Many of the bidders were qualified to do the historic renovation that that type of property deserves," said George Graham, chief executive of Concierge Auctions, which sells luxury digs. "A property like that has very significant requirements and restrictions ... to renovate the property, given its historical significance. ... That's not the type of thing that a person that's just looking to buy a large home is necessarily prepared or qualified to do."

Selling a large house is tricky enough in a rough market, but an older large house has particular challenges. For every person who oohs and aahs over historic touches, three others will say, "Feh, this kitchen is small." Beautiful, spacious kitchens were not generally a priority back in the days when the lord and lady of the manor had a staff to whip up brunch.

Another historic home -- Cliffeholme in Baltimore County -- also ended up in the hands of its lender recently after the owner failed to sell it. That home -- a 14,000-square-foot English Revival mansion on 9 acres -- had been owned by businessman Steve Geppi.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (1)
Categories: Auctions, Unusual homes

April 14, 2010

Finding a roommate

While researching this story about finding a roommate, I spent some time clicking through craigslist "roommate wanted" postings. I was curious to see what Baltimore folks say they want from a roommate, and what they say about themselves.

Here's what caught my eye:

One woman looking for a room near the harbor describes herself as "pulchritudinous" -- a 15th-century word for beautiful, so hey: lovely and smart.

Two men living in Canton, advertising the third bedroom, ask for the usual in a roommate -- be respectful -- but hope for more: "It would be great if you like to go out with us or join in community sports teams so hopefully we can all not just live together but be friends as well."

A 25-year-old man sharing a city home with a 21-year-old woman says they're looking for another roommate -- female only: "I have had much better girl roommate experiences than ones with guys revolving around household responsibility. I'm a guy but I pick up my end of the chores!"

Someone advertising a $425-a-month room for rent bucks the trend of asking for quiet types: "Have to be outgoing. The people in the house are 21-22 [and] they party all night."

But it's not all laughs.

An Anne Arundel County man, offering a free room to someone who will watch his son during the day and help his school-aged daughter with her hair, writes: "I am a single Dad in need of help. childrens mother deceased."

And a 22-year-old Cecil County resident with a 1-year-old daughter is desperately searching for a place she can rent for $400 a month. "I will be homeless within the week," she writes.  

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)
Categories: Renting, Roommates

April 13, 2010

Home buyer tax credit deadline approaches

There were loud calls from the real estate industry to extend the $8,000 first-time home buyer tax credit when the original Nov. 30 deadline neared. Now we're in shouting distance of the extended deadline -- April 30 to sign a contract -- and it's been pretty quiet. The National Association of Realtors, for instance, tells me it hasn't been lobbying for a re-extension.

But mortgage publisher HSH Associates notes that most of the people taking a poll on its blog "overwhelmingly support" more time. As of 10 p.m. Monday, 84 percent said they were "depending on" an extension.

HSH notes a quote from economist Robert Shiller (of Case-Shiller fame) in a New York Times story about the credit:

"You don't make drug addicts go cold turkey," Mr. Shiller said. "The credit interferes with the market in an arbitrary way, but ending it now would be psychologically powerful. People will be in a bad mood about buying a house." He advocates phasing it out gradually.

Not all home buyers will be sorry to see the credit go -- whenever that may be. Wonk reader Jelena, for instance, offered up an example of market interference:

"In the past few weeks I've been observing a peculiar trend in AA and HO counties in the below 400K segment," Jelena wrote in a comment. "Many new listings are coming up that already were for sale a year ago but did not sell. And the prices are around Zestimate or even higher. It seems the sellers expect the buyers will scoop up anything because of the looming tax credit expiration date. Sadly, they're frequently right - quite a few homes are being sold above their true value."

What do you think: Should the credit be extended or no?

April 12, 2010

Q&A about new lead-paint renovation rules

If you renovate homes, on the side or for a living, the federal rules that apply to you will change next week for any project you take on where lead paint lurks. The regulations, put in place by the Environmental Protection Agency, have been in the works for years.

Rebecca L. Morley, executive director of the Columbia-based National Center for Healthy Housing,  covers the basics -- and why homeowners should care -- in this Q&A:

Question: What’s required of people renovating homes with lead paint now, and how is that changing?

Answer: Currently, there really aren’t any requirements for people who are renovating older homes, except that they do have to provide some notification to the owners that there may be lead paint there. … But with the new rule, they’ll actually be required to follow a certain set of practices. So certain things are banned: For instance, they can’t belt-sand away old paint, or they can’t use heat guns to remove the paint. ... It just is requiring them not to create any new hazards during the course of the work that they do.

The focus really is, if they’re going to be disturbing paint … that they don’t stir up lead dust and they don’t leave it on the surfaces when they finish the job. ... A common misperception about lead is you have to eat paint chips in order to get poisoned, but lead dust, which is generated from the deterioration of lead-based paint or these renovation activities, [is] the most insidious exposure threat. That’s because the lead dust isn’t visible and just minute amounts of it can result in an exposure — and a serious exposure.

That understanding, which has come to light over the last couple of decades, has really changed our emphasis about how we deal with lead. You can create significant hazards simply by virtue of scraping it off. We want to clean up really well at the end of [renovation] jobs.

Q: How old does a building need to be in order to fall under this regulation?

A. It applies to any housing and/or commercial and public buildings built before 1978. The commercial and public buildings is for child-occupied facilities, so that gets your daycares and schools.

Q: ’78 was when lead paint was banned?

A: Exactly.

Q: What must renovators do to comply?

If you’re working in older homes, you first have to become a certified firm, and that just means registering and paying a $300 fee, but certified renovation firms also have to have certified renovators working for them. The certified renovator needs to take a one-day training.

Their job is to be at the job at the front end, ... making sure containment is being done properly so it doesn’t get distributed throughout the house. ... And they do what’s called the cleaning verification when the job is done. … It’s a white glove test, and they run over the surface with an electrostatic cloth, basically, to determine whether the color of the Swiffer is lighter than the verification card.

That person’s responsibility is also to train the other people on the job in how to work lead-safely. ... More than 50,000 folks have been trained nationwide, and EPA expects it will have trained about 120,000 come April 22.

Q: How is your center involved?

A: The National Center for Healthy Housing is an accredited training provider.

Q: Are all renovators aware of the new rules?

A: It is hard to stomach the idea that people are unaware of it, given its long regulatory history. That said, ... we understand there’s probably a bunch of contractors that don’t know. We figure the ones that know the most belong to local associations.

Q: What sorts of problems can crop up when a home with lead paint is renovated?

There’s the dust that’s generated in the debris; it can contaminate the interior of the house, or if it’s exterior work, it can contaminate the soil outside. ... Those are the key hazards, and it’s unsafe practices that result in these conditions.

In the past, there really was really very little recourse, either for the owner of the home being worked on, or for an adjacent neighbor, to ensure safety.

Q: What difference will this rule make for a city with old housing stock, such as Baltimore?

A: I think it could make a huge impact in Baltimore. ... Because of the rental registry law, the number of kids being poisoned in rental units is starting to balance out with the number of kids being poisoned in owner-occupied units. ... There’s a ton of renovation that happens in those older rowhomes.

Q: What should people do if they want to renovate a home with lead paint?

A: If they’re renovating an older home and they’re hiring a contractor, they should ask to see the person's certified renovator certificate. ... You need it for the certified renovator showing up on your job, but also, you want to see proof that the firm is a certified firm.

And references. There are some easy questions you can ask ... "Was there a lot of dust in the house? Did they use plastic? Did you feel they did a proper clean-up job?" Since this law is fairly new, they might not have a long track record as a certified renovator, but if they have been a careful contractor in the past, that’s a good indication that they’ll do good, safe lead work in the future.

Q: How would a renovator use plastic?

A: The plastic is used for two reasons: One is ... to seal off that work area. Another thing you might do is put it down on the floor, because a lot of this dust and debris will fall on the floor.

Q: What has been the reaction to the rules?

A: I think there’s been some pushback by the contractor world about costs in this. EPA estimates it’s about $35 in extra costs per job. ...

It really depends on your baseline practice. If you typically practice pretty clean work and do a good job with containment, it won’t be much in additional costs. But if you’re a pretty sloppy contractor, yeah, it’s going to cost you more.

Q: Remind us why this issue matters to homeowners. What are the health ramifications?

A: The long term effects of lead exposure are irreversible. Children under 6 are most susceptible because their neurological systems are still developing. It interferes with their growth and development. It causes ... learning disabilities, behavioral problems. At very high levels, it can cause coma and death. I think a lot of times people are doing these renovations while they’re expecting. Lead dust can travel through the placental barrier. If you’re an expectant mom, you could definitely poison your child.

If you know that you can save your child several IQ points down the road, most people would be willing to hire a person who can demonstrate that they can do this work safely.
Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (3)
Categories: Home maintenance, Q&A, Renovation/rehab

April 11, 2010

'Financial fitness' event for homeowners, renters

Some housing events are aimed at renters (usually of the "how to buy" variety), some at homeowners (invariably foreclosure prevention). Neighborhood Housing Services of Baltimore is putting on a Financial Fitness Day for both.

The event next weekend will have resources for "overcoming the obstacles that come along with trying to become a homeowner, maintenance after purchase, foreclosure, and overall financial fitness," organizers say. Participants can get their credit report pulled, talk to housing counselors and attend classes geared to their stage in the housing continuum.

Financial Fitness Day is scheduled for Saturday at Pleasant Hope Baptist Church, 430 E. Belvedere Ave. For more details, and to register, contact Neighborhood Housing Services.

Know of other housing events worthy of note? Add them in the comments.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)
Categories: Housing events

April 10, 2010

Baltimore-area housing market in March

You can check out today's story about how home sales and prices fared in the Baltimore metro area last month, or you can chew on these stats -- or, better yet, both:

4 percent: The drop in average sale prices between March 2009 and March 2010

17 percent: The increase in the number of homes sold, year over year

1,808: Homes sold last month

3,648: Homes sold in March 2005, pre-bust

39 percent: The increase in the number of contracts signed, year over year 

                     Also the share of homes in Baltimore City bought entirely with cash

12 percent: The all-cash share in the 'burbs

4/30: The deadline to sign a contract to qualify for the $8,000 first-time buyer tax credit or the $6,500 repeat-buyer credit

Here's where to find more data from Metropolitan Regional Information Systems. What numbers interest you?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)
Categories: Housing stats

April 9, 2010

Forecast: 6 years 'til home prices return to peak


Fiserv Case-Shiller map


If you're waiting for real estate prices in the Baltimore area to get back to their pre-housing-bust peak, don't hold your breath -- unless you can hold it for six years.

That's the message from Fiserv, which provides the data used for the Case-Shiller index and has put together a price forecast with Moody's They predict that prices in the Baltimore metro area will bottom out in the last three months of this year -- dropping about 22 percent in total -- but won't return to their previous peak until the summer of 2016.

It could be worse. Much worse. Fiserv expects that Orlando and Sacramento won't equal their price peaks until -- wait for it -- after 2039.

But it also could be better.

"In fact, our analysis projects that some markets are poised for a relatively fast recovery, including some areas that never experienced large declines in prices," said David Stiff, Fiserv's chief economist. "Markets that could see prices come back within the next few years include Pittsburgh, Pennsylvania; Columbia, South Carolina and several metro areas in Texas, Washington and upstate New York."

First American CoreLogic had a report out recently that predicted how long underwater borrowers would need to wait to get abovewater. No quick and easy way out of this mess.

Not the best way to kick off a Friday, but hey -- at least the weekend's just around the corner.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (20)
Categories: Housing forecasts

April 8, 2010

Baltimore-area rental and condo market in early '10

New condos have taken it on the chin in this housing market, but first-quarter sales in the Baltimore metro area were the highest in three years, according to real estate information firm Delta Associates. (There were 119 "net" deals, which accounts for contracts that fell through.)

About 1,700 new condos are ready for occupancy or under construction, so Delta doesn't expect "price traction" until next year at the earliest. Asking prices were down 4.2 percent from a year earlier.

On the up side, the inventory was nearly 2,700 a year ago. Big drop since then.

Here's one vote of confidence that the condo market is turning around: The developers of a 252-unit project planned in Anne Arundel County have switched it from apartments to condos. (A lot of projects have gone the other way since the bubble popped.)

The recession is still weighing on the apartment market. Class-A rental vacancy rates in the metro area bumped upward in the first quarter to 5.6 percent, though Delta says that's a lot better than the national rate of 8.2 percent.

Rents rose 1.6 percent in the Baltimore suburbs vs. a year ago but fell 4.8 percent in the neighborhoods where city apartment complexes are clustered -- downtown, Fells Point and the Inner Harbor.

That's the snapshot Delta is offering. Personal experiences gladly accepted in the comments.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (4)
Categories: Housing stats

April 7, 2010

Watch out for home-repair scammers

Baltimore County police want everyone to be on their guard for scam artists posing as home-repair specialists. After the beating our region took from the back-to-back snowstorms in February, the department figures more homeowners are in the market for maintenance work -- and in danger of falling for a con artist.

The police are talking about people who do shoddy work with lousy materials, particularly those who convince homeowners to take them on with a verbal agreement and then demand more money afterward.

"When the customer objects, he or she is told that the materials used were stolen and the police will be brought in if the higher price isn’t paid," the county police said in a statement. They urged people to call 911 if they suspect scam artists are at work in the area.

The National Association of Bunco Investigators has more details about these sorts of scams, including warning signs. (Offered a "special price" if you sign up on the spot? Run away.)

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (2)
Categories: Home maintenance

Trulia launches rental-search option

Trulia, best known as a search engine for people looking to buy homes, said today that it is getting into the rental-search business.

You might see it as a "making lemonade out of lemons" strategy -- the lemons part being that fewer people are buying these days than they were in 2005.

"With the burst of the housing bubble, more consumers than ever are considering renting as a housing option," Pete Flint, Trulia's chief executive, said in a statement.

You might be interested in two stats Trulia included in its press release:

--"30 percent of self declared 'home buyers' are considering both renting and buying at the same time" (that is, they're not sure which way they'll go)

--"60 percent of adults strongly/somewhat agree that renting currently makes better financial sense at this point in their life" (this, according to a recent survey by Trulia and Harris Interactive).

The company said users will be able to search by property-description keywords (such as "pool" or "covered parking"), access information on mobile devices and get details on schools, amenities and the like near rentals that interest them.

There are lots of rental-listing sites out there. What do you want to see when you're looking for a new place to live?

Posted by Jamie Smith Hopkins at 6:30 AM | | Comments (0)
Categories: Renting

April 6, 2010

Fewer homes for sale

Not seeing as many homes to choose from nowadays? That was the overall trend in February. The number of properties on the market dropped across the region vs. a year earlier, from a 16 percent decline in Howard County to a 3 percent dip in Harford.

We'll get the lowdown on March this Friday, when Metropolitan Regional Information Systems expects to release new stats. While we're waiting, here's more on February:

If you're trying to buy in Howard County, you might be feeling a bit grumpy. Between the inventory drop and a 20 percent increase in sales, the months of supply there is the lowest in the state -- tied with also-affluent Montgomery. At the rate of sales in February, normally a slow time of year for the market, sellers in both counties would all find buyers within eight months.

Garrett in Western Maryland -- at the other extreme -- had a 114-month supply.

The generally accepted magic number, when supply and demand are in balance, is six months.  

So Howard looks like an easier place to sell a home right now, but of course it's all relative. Three years ago, the county had a five-month supply. And three years ago, we were already well into the housing slump.

I was also interested to see how many deals were pending -- contracts signed in February -- because that's a helpful sign post about future sales. Can you guess which county topped them all with its whopping increase?

No, not Howard. Somerset County on the Eastern Shore.

Yeah, I really doubted you'd guess that.

Somerset's pending deals doubled in February -- to 20 from 10 a year earlier. (Sales also doubled: from two to four.)

Pending deals did rise more in Howard than elsewhere in the Baltimore area -- 18 percent. Close behind was Baltimore, with a 14 percent increase. Harford and Anne Arundel also recorded more deals in February than a year earlier (11 percent and 2 percent, respectively).

Baltimore County had the same number of contracts struck in February as it did a year earlier (almost 500), while pending deals fell in Carroll (down 6 percent).

Not all contracts will close. And not all of those destined to close will wrap up the following month. But it gives us all some idea of what's going on.

So: Are you buying or selling?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (5)
Categories: Housing stats

April 5, 2010

Finding (and living with) a roommate

Live Baltimore has a roommate match-up planned during its rental event this Saturday -- think speed-dating, except for non-romantic cohabiting purposes -- and that got me wondering about rental-sharing successes and failures.

Are you renting with a roommate (or -mates)? How carefully did you pick them -- and how is it going?

Tell me, tell me. Best-bud stories, horror stories, "will you stop leaving your dirty socks on the floor" stories.

Posted by Jamie Smith Hopkins at 7:30 AM | | Comments (11)
Categories: Renting

Fewer homes bought last year as investments

Foreclosures and short-sales notwithstanding, fewer people bought U.S. homes for investment purposes last year.

That's according to a recent National Association of Realtors survey, which suggests that 940,000 homes went to real estate investors in 2009, a 16 percent drop from the previous year. (Primary-residence purchases rose 7 percent and vacation-home purchases were up 8 percent.)

That means 17 percent of all purchases were investments. In boom-year 2005, it was 28 percent.

The Realtors association doesn't have survey information at a state level, but it doesn't take an expert to know that investor activity varies a lot depending on the community. While it's not a perfect stand-in for real estate investment, it's worth noting that 31 percent of Baltimore City buyers last year did their deals entirely with cash, according to Metropolitan Regional Information Systems. That's up from 20 percent in 2008.

So, investors: What are you buying and why? 

Many of the people purchasing Baltimore homes for investment purposes during the boom intended to rehab and quickly resell (or flip without rehabbing, since you didn't have to wait long for prices to rise). That faded as the market turned, and investors -- the ones left -- seemed more likely to buy with landlording in mind. I'm curious what you're seeing out there now, whether you're an investor or a resident watching it happen near you.

I'm especially curious how much investment is going on -- post-purchase -- as opposed to just owning. A lot of homes out there need work.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (2)
Categories: Real estate investing

April 4, 2010

Real estate poll: Are high home prices good?

A running theme among comments on this blog is whether falling home prices are bad or good. Where the debaters stand usually depends on where they sit (in a house or a rental, that is), but not always.

So Josh Dowlut's recent poll suggestion -- "are high or 'strong' real estate prices desirable or not?" -- should be right up everyone's alley.

Tell us:

Now ponder this:

If high prices are preferable, what could/should be done to help more workers afford homes?

If lower prices are preferable, what could/should be done to help people stuck in homes they can't sell because they're underwater?

What sort of housing-market resolution would benefit everyone, at least long-term?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (5)
Categories: Polls

April 3, 2010

You colorful commenters

At least half the fun here is reading what you've got to say. You're a bright crowd -- you ask probing questions, share interesting experiences and marshal information to make arguments.

And sometimes you're a quick draw on the quips. A few examples from the last week: 

Josh Dowlut on the Federal Reserve's $1.25 trillion mortgage-backed-security buying spree: "The significance of what the Fed was doing is that it amounted to debt monetization, or paying your bills with a Xerox machine."

Will on the foreclosure mediation bill, recently passed by the Maryland House of Delegates: "They want to see if they can keep the free market from functioning. Next they'll pass a law repealing gravity, and it will do just about as much good."

Darwin Rules, reacting to auctioneer Paul R. Cooper's empathy for people who can't sell because their homes are worth less than their mortgages: "My empathy lies with those who are fiscally responsible, and have been forced to sit on the sidelines while the irresponsible fail bailout after bailout with our tax dollars. ... The politicians cannot keep this war on savers going on forever."

Whether you agree or disagree with the points, it's nice to be entertained.

I love it when you strike up conversations with each other here. It warms my heart to see real discussion and debate (quippy or not) without all the name-calling that infects so many corners of the Web. Thank you all for making this a nice place to stop in for a while.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (2)
Categories: Quote of the day

April 2, 2010

Permanently affordable housing

If you're an affordable-housing group that's managed to scrape together grants to sell homes to low- or moderate-income workers, you might want those homes to always stay in the hands of your target audience. But state law isn't ideally set up for such a move, said Jim Kelly, an assistant professor at the University of Baltimore School of Law.

That's poised to change.

Under bills that passed the Maryland House and Senate recently, affordable-housing groups will get the right to repurchase such homes whenever the owners decide to sell. Right now, the options available to enforce that right have a time limit -- 15 years for a ground lease (after that, it becomes a redeemable ground rent) and 30 years for a deed restriction, Kelly said.

The new legislation "makes sure that long-term resale restriction agreements between a subsidized homeowner and the group that wants to protect that subsidy ... [are] clear, fair and enforceable," said Kelly, chairman of the policy committee at the Maryland Asset Building and Community Development Network. "And it's really been the 'enforceable' part that has been the most obvious problem under current law."

"They're getting a very good deal, moving into a home they couldn't afford otherwise," he added. "We wanted to be very clear that ... people would be free to make a promise to pass the good deal on." 

What terms the buyer and affordable-housing group agree to upfront is left up to them, he said. When buyers later sell, they could get back everything they invested in the home plus a share of any appreciation, for instance.

What the legislation does specify is that groups' right to repurchase only lasts 120 days after owners notify them of the intent to sell -- sellers can't be indefinitely hung up by hemming and hawing. The groups must also register with the state Department of Assessments and Taxation, so there's a point of contact for owners who have lost track of where their benefactors/future buyers are.


Kelly says affordable-housing activists in Garrett County are particularly happy about the legislation. They want to get started on a development project for worker housing in an area where prices are high thanks to Deep Creek Lake's attraction to affluent outsiders.

"In a relatively high-land-value, low-wage-base economy, you really have an ideal situation for a community land trust to think very long-term," he said.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (3)
Categories: Affordable housing

April 1, 2010

Fed bows out -- what now for mortgage rates?

The Federal Reserve has gobbled up $1.25 trillion in mortgage-backed securities in an effort to keep mortgage rates down, but it's said repeatedly that it would stop by the end of March. Today is April 1, which means -- no fooling -- that the mega purchases are over.

Hello, higher interest rates?

Maybe not, says Reuters. At least not right away. What one arm of the government taketh away, the other giveth back.

Fannie Mae and Freddie Mac, the mortgage financiers operating under federal conservatorship, will be buying out $200 billion in delinquent loans, putting "about $140 billion of cash into private investors' hands" for reinvestment into the market.

But Mark Zandi, chief economist at Moody's, does expect that rates will go from the current 5 percent or so to over 5.5 percent by the end of the year. 

Rates matter because they play a significant role in how much house buyers can afford -- and how much sellers can get. Low-low rates help increase home prices (i.e. the aughts housing boom), or at least remove a reason for them to fall faster.

Where do you see mortgage rates going?

Are you anxiously rate-watching because you're hoping to buy (or sell) soon?

And when do you think the government will actually scale back its involvement in the housing market?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (14)
Categories: Mortgage rates, Mortgages
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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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