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August 31, 2010

Calls begin for another home buyer tax credit

As home sales plummet, some folks want the federal home buyer tax credit -- like hope -- to spring eternal.

Florida's governor, who is running for the Senate, told CNN another credit "would help enormously." Another Senate candidate in the hard-hit Sunshine state said he's in favor of a reboot, too. They were reacting to comments on the same CNN show from a federal housing official, who prompted much twittering simply by not declaring, "Read my lips -- no new credits."

After telling CNN that "it's too early to say after one month of numbers whether the tax credit will be revived or not," HUD Secretary Shaun Donovan said: "All I can tell you is that we are watching very carefully. ... We are going to go everywhere we can to make sure this market stabilizes and recovers." 

If you're in favor of another credit, don't uncork the champagne yet. Nick Timiraos with The Wall Street Journal sees in Donovan's comments an attempt to sidestep -- "awkwardly" -- a reporter's question about tax-credit revival.

"There’s been a lot of breathless speculation ever since," Timiraos writes.

Economist Thomas Lawler says on the Calculated Risk blog that officials better clarify their position toot-sweet:

If in fact there is “no news here” – and good God I hope administration officials realize that giving potential home buyers the notion that a home buyer tax credit MIGHT be revived will absolutely and unequivocally depress home sales over the next several months – the administration should have Donovan or another HUD spokesperson explicitly state that there is no plan to revive the home buyer tax credit in the foreseeable future – and they should do this SOON!!!!

The idea of the credit was to get buyers off the sidelines and kickstart the housing market. Home sales picked up when Uncle Sam dangled $8,000 to first-timers -- and later to some repeat buyers -- and then took a dive after the tax-credit buffet closed up. (Buyers had to sign a contract by April 30, and most of the deals have closed by now.)

Critics say the incentive encouraged people to buy homes while it was in place rather than later, effectively stealing those sales from the future. Estimated cost to the federal government: more than $25 billion in foregone revenue.

The National Association of Realtors supported the incentive, crediting it (no pun intended) with about 1 million sales. But a spokesman there says it is not calling for a redo. The current slump, he says, really has only one fix.

"What's happening now is a reflection of the broad economy and insufficient job creation," Walter Molony, the spokesman, told me. "We really need job creation to pick back up for housing to pick back up."
Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (14)
Categories: First-time buyer tax credit

August 30, 2010

Staying on top of breaking business news

If you read this blog, you like at least one subset of business news -- real estate. But I think most people are interested in most business news, whether they categorize themselves that way or not. We're all affected by the economy and the job market, after all.

Here's one way to stay on top of The Baltimore Sun's local business coverage: Text BUSINESS to 70701 to get breaking news alerts sent to your mobile device. (Remember to respond to the confirmation message to opt in.)

When we get local housing news such as Baltimore-area home sale numbers, I immediately write a short story for the web before expanding it for next-day readers. A text alert means you'll be among the first to know.

Have you already signed up? Let me know what you think.

Posted by Jamie Smith Hopkins at 1:45 PM | | Comments (0)

More than 100,000 Baltimore-area homeowners underwater

The number of homeowners here who are underwater dipped ever so slightly in the spring, but it remains a distressingly large group. About 103,000 homes in the Baltimore metro area are worth less than their mortgages, real estate information firm CoreLogic estimates.

That's roughly 16 percent of all homes with mortgages. And 5 percent more -- 32,000 homes -- were right on the cusp of negative equity.

Statewide, the situation is worse, with 22 percent of mortgaged homes underwater and 5 percent more close to it. That's about the same as the national average, but of course the average is pulled up by large, hard-hit states such as California. Only eight states have higher negative-equity shares than Maryland. (We've been in the top 10 for a while.)

CoreLogic estimates that negative equity fell from 24 percent of mortgaged homes nationwide in the first quarter to 23 percent in the second quarter. But that's not because rising values lifted lots of homeowners above water.

"The declines were primarily due to foreclosures," the company says.


For Baltimore-area homeowners, at least, it could be worse. We could be Nevada.

Two-thirds -- two-thirds! -- of mortgaged homes in that state are underwater. And that's an improvement from the first quarter.

Oklahoma has the smallest share of underwater homes: just under 6 percent.

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

August 29, 2010

Choosing a real estate agent -- reader asks for advice

A Wonk reader would like your input about a subject I figured would prompt some interesting discussion. Here's the situation:

He's looking for a real estate agent to help him sell his house and buy a replacement. One of the candidates happens to work for the same agency as the agent listing the home he's interested in buying.

"I’ve heard it’s not a good idea, but I get conflicting advice," says said reader.


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

August 28, 2010

Habitat for Humanity affiliate gets a VIP volunteer

Former President Jimmy Carter isn't scheduled to start hammering nails for Habitat for the Humanity of the Chesapeake until Oct. 5, but already he's lending them a hand.

Mike Mitchell, chief executive of the nonprofit, says the planned visit as part of Carter's annual "work project" week with Habitat for Humanity International has helped the Baltimore-based affordable housing builder raise hundreds of thousands of dollars.

Check out the Q&A I did with Mitchell, in which he discusses the ripple effect of the work project, how to volunteer and whether these economic times are any good for affordable housing efforts.

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

August 27, 2010

Things looking up for struggling Md. homeowners?

If you're struggling to pay your mortgage, the best help -- of course -- is a job with a good income. Failing that, homeowners often seek loan modifications or other assistance from their lenders, but many have complained that the process is Kafkaesque.

If this describes your life, see if one or both of these options might help:

Mediation. Owner-occupiers in Maryland can ask for court-supervised mediation with their lender if their foreclosure case started on or after July 1, when the new state law went into effect.

HOPE LoanPort. The web portal lets participating housing counselors and mortgage servicers nationwide trade loan-modification information electronically. The promise there is no more faxing the same paperwork over and over and over in the hope that it might actually reach someone who will put it in your file.

Here's what you need to know about each program:

First, mediation. I covered the basics in a Q&A, but state regulators have since shared additional information that you might find useful.

The "order to docket," the foreclosure filing that officially starts the quasi-judicial process, is the key here. If it was filed before July 1, you don't qualify. If it was filed on or after, you do.

Keep in mind that you have only 15 days to request mediation once you've received the form, so you want to be on the lookout.

You could get it with the order-to-docket paperwork, which is served on homeowners. Or, if your lender hasn't completed a required loss-mitigation review of your loan at the point the paperwork is filed, you'll get it 28-plus days later by certified and regular mail when the analysis is done.

The Maryland Office of Administrative Hearings is spearheading the mediation effort. Administrative law judges will be the mediators. Just two dozen cases have been scheduled so far, though, because fairly few borrowers qualify yet.

As for HOPE LoanPort, an outgrowth of the HOPE NOW alliance: Eleven mortgage servicers are participating, including large players such as Bank of America. So are about 250 housing counseling agencies, the nonprofit says. Participants are listed here. (The housing-counseling list is far shorter than 250, but I'm guessing that's because most of the agencies in NeighborWorks America's large network aren't listed separately.)

If you're hoping for a loan modification, a repayment plan or other assistance from your servicer and it's on the list, find a housing counseling agency that has also signed on.

It's early days still, but the initial reaction looks promising. Home Partnership Inc., a Harford County housing counselor, has had two clients get loan modifications since it started using the portal in July -- light speed compared with the usual months-long slog.

"We've never seen things go this quickly before," says Kim Cowie, a counselor there.

She said it's an improvement not just because there's no debate about who sent which paperwork when, though that in itself is a big step forward. The system allows counselors and servicers to communicate by email, rather than trade voicemail messages, and there's also an opportunity to contact an "escalation officer" if something's not going well, she says.

Planning on trying mediation or the portal? I'd like to hear from you.

Posted by Jamie Smith Hopkins at 9:38 AM | | Comments (10)
Categories: Foreclosure help, Mortgages, The foreclosure mess

Good news, bad news on the foreclosure front

New figures from the Mortgage Bankers Association offer hope that the foreclosure mess is easing, as well as reasons to be anxious that the worst is yet to come.

It's that kind of economy.

Good news: Fewer Marylanders were behind on their mortgages during the spring than in the winter. And the number wending their way through foreclosure proceedings dropped for the first time in four years.

Bad news: The number of newly delinquent borrowers rose -- and both the job market and housing market worsened after the spring.

Borrowers trying to avoid foreclosure do have two new options available.

There's the state's mediation law, which went into effect July 1 and requires that lenders sit down with borrowers if the borrowers request it. And there's HOPE LoanPort, a system that lets participating housing counselors and mortgage servicers trade loan-modification information electronically -- meaning no "we never received your faxed paperwork" excuses.

More details on both in a bit.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (1)
Categories: Mortgages, The foreclosure mess

August 26, 2010

Report: housing market 'in the basement'

According to an analysis of the housing market for the Maryland State Builders Association, the national and local situation is -- brace yourself -- lousy.

The report, "Housing Market Remains in the Basement," written by economist Anirban Basu of Sage Policy Group in Baltimore, lays out a variety of the sobering statistics that have made data-watchers anxious. (Here's a PDF of the report.)

Basu writes that "housing construction in Maryland remains mired at or near its cyclical nadir."

"Even after many inducements and one year of economic recovery, home construction activity in Maryland remains a fraction of what it was five years ago," he notes.

He says the outlook is "bleak" in the near term, pointing to big drops in new home sales nationwide, falling housing starts, depressed levels of mortgage applications by buyers and high numbers of foreclosures. But wait -- there's more:

"According to the most recent survey conducted by the National Association of Homebuilders, well over half of survey respondents reported that the availability of credit for acquisition, construction and development (ADC) loans has worsened every quarter for ten quarters in a row," Basu writes.

He describes a "downward spiral" in which falling appraised values constrain credit, which in turn depresses values.

The new-home market has an effect on resales and vice versa. It also impacts employment and local tax revenues.

Employment in Maryland's construction industry fell by more than 20 percent -- nearly 50,000 jobs -- between the start of the recession in December 2007 and February of this year, Basu says. The industry is contributing less in taxes as a result.

All in all, the housing industry is not in a "sustained recovery," he says. When do you think it will be?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (22)
Categories: Housing stats

August 25, 2010

The market's less obvious effect on home prices

Many things influence home prices. Demand or lack of it. Supply -- too much, too little, just right. Building-material costs. Land values. Zoning rules.

When it comes to price averages, though, it's useful to remember that they can move in mysterious ways that don't necessarily reflect what any actual homeowners are seeing in their own values.

If you've been reading my stories for a while, you've probably seen some variation of my skewing warning: The change in the average price is influenced by the sorts of homes people are buying this year vs. what others bought last year. So if many buyers opt for houses this year but were tending toward smaller condos a year ago, the average will rise even if those houses sold for less than they would have before. (This affects the median price, too.)

Ross Mackesey, a Long & Foster sales manager, wrote commentary on July home sales in the Baltimore region that offers some price-skewing examples.

Why, for instance, did average and median prices rise so strongly in Anne Arundel County last month? The median increased nearly 8 percent, according to Metropolitan Regional Information Systems; the average jumped about 12 percent. Are BRAC buyers rushing in, declaring, "Money is no object"?

Well, no. He thinks BRAC is supporting that part of the region's housing market a bit, but mainly he sees a shift in buying patterns. The first-time buyer market was "reduced to a trickle" in the absence of the federal tax credit, he writes. But homes priced above $450,000 were "still selling at spring’s pace."

In Baltimore, meanwhile, the average price fell 14 percent last month while the median plummeted 23 percent. Another sort of price-moving factor is at play here:

A third of city home sales in July were foreclosures, Mackesey says. And eight out of 10 of the foreclosures were purchased without a mortgage -- usually a sign of deal-seeking investors snapping up rentals or properties for rehab, as opposed to homeowners moving in.

"You don’t pay too much attention to average prices with these market forces playing such a prominent role," Mackesey writes. 

I always feel like I'm on more solid ground when I'm talking about the number of homes sold than the average or median price the sellers got. Still, it's not as if the price figure is telling us nothing -- it's just a message that takes some untangling. Buying trends swinging wildly? That's a good thing to know.

Have you noticed changes in what people are buying and selling in your neck of the woods?

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

August 24, 2010

Silo Point and Westport

I know how much you salivate over updates on large real estate projects. So while I was chatting with developer Patrick Turner about BRAC, I asked for details on Silo Point -- the converted grain elevator in Baltimore's Locust Point neighborhood -- and Westport, his planned mixed-use redevelopment in Southwest Baltimore.

"We've got over 50 percent of the building sold," he said of the 228-condo Silo Point. Ninety of the luxury units have settled, according to state records, and another "20-some" are under contract, he said.

When I last checked in April, 74 condos had closed and almost 40 others were under contract.

The Westport project, an effort to capitalize on waterfront in a rough part of the city, had wetlands planted about a month ago. Turner is looking to start on the infrastructure, such as roads and sidewalks, around the end of the year.

Construction can begin 12 months after the infrastructure work gets underway. First up: townhouses, offices and a 200-unit apartment building.

Landex Development will build the apartment complex. Turner says he has a national homebuilder on tap to build the townhouses, but he can't announce the name yet because the contract is still being finalized.

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

'Buying Into Baltimore' next month

Live Baltimore's next "Buying Into Baltimore" fair -- this one focusing on East Baltimore -- is planned for Sept. 11.

The twice-yearly event has homeownership-education workshops, exhibitors, neighborhood tours and an opportunity to qualify for $4,000 in down-payment or closing-cost help.

The event starts at 9 a.m. at Mervo -- Mergenthaler Vocational-Technical Senior High School -- at 3500 Hillen Road. Tours begin at 11 a.m.

You can register here.

Know of other free housing-related events in the area? Leave the details in a comment.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (7)
Categories: Housing events

August 23, 2010

Distress sales remaining steady

Ten percent of the homes for sale in Baltimore in the middle of the month were bank-owned foreclosures. That's exactly the same as it was a month earlier.

In fact, the share of listings that were "distress" -- foreclosures or short sales -- stayed steady across the region, from a low of 12 percent in Carroll County to a high of 22 percent in the city.

The percentage of these properties that are actually selling isn't changing much either, according to Metropolitan Regional Information Systems data analyzed by the Greater Baltimore Board of Realtors. 

"Unfortunately, or fortunately (depending on whether you view the glass as half full or half empty) the percentage of foreclosures and short sales has remained relatively constant over the past 4 months," Joseph T. "Jody" Landers III, executive vice president of the group, wrote me. "These data highlight the fact that the short sale process tends to drag on and on, while foreclosure sales are having an exaggerated affect on the market, and contributing to further price instability."

Though it's not a new trend, what's really striking is how popular foreclosures are. Particularly in the city. They're 10 percent of listings in Baltimore but 30 percent of all sales in the first seven months of the year. Four foreclosures are on the market per foreclosure sold -- a seller's market! -- compared with 14 for non-distress sales.

Short sales, now -- yikes:

For every short-sale settlement in the city, there are about 23 listings.

They're 12 percent of the homes for sale in Baltimore but just six percent of closed deals from January through July. (Some of it, as Landers notes, is that people are trying to close on listings but can't do it quickly. And I know that some of you have refused to make offers on short sales because you've heard it can take forever and end up falling apart.)

The difference between short-sale listings and sales isn't as dramatic in the suburbs. They're almost equal shares in Howard County, where 9 percent of sales were short vs. 10 percent of listings. And in Carroll, they're actually a bigger portion of sales than listings (9 percent vs. 6 percent).

Are you looking at bank-owned properties and/or short sales? Have you bought one?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (20)
Categories: Distress sales, The foreclosure mess

August 22, 2010

The last time you moved

We're a mobile bunch, we Americans, but less so than we used to be.

As demographer William H. Frey notes in "The Great American Migration Slowdown," a Brookings Institution report, "The credit crisis and Great Recession that followed left Americans flat-footed, as would-be movers were unable to find financing to buy a new home, buyers for their existing homes, or a new job in more desirable areas." In the 2007-2008 period, which he analyzed in his '09 study, the migration rate was lower than it had been at any time since World War II.

So I guess I'm not surprised that many of you haven't moved for a while. About 45 percent of you who took last week's poll have been in your home -- rented or owned -- for at least five years. Last move "before 2000" was the most popular answer, with 14 percent of the vote. (One reader hasn't moved since 1969.)

Even so, a fair number of you switched homes pretty recently. Eighteen percent of you moved this year, including some in the past month. Thirteen percent more moved last year.

Even if you have nothing stopping you from moving, you might not want to go anywhere -- we all know people who are happily ensconced. My parents have lived in their home for more than 30 years.

Are you settled in for the long haul (or looking to find a long-haul place), or do you see yourself as a frequent mover for years to come?

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

August 20, 2010

Busting a myth about Md. property-assessment appeals

Psst ... better not appeal your property assessment -- the state will take away your Homestead tax credit!

It's a persistent rumor. Like many persistent rumors, it has a bit of truth all twisted out of shape.

You have to understand how the Homestead tax break works to see why this could be true, depending on the circumstances, but not in the "if you dare question us we'll show you" way that some homeowners assume.  

Here's the bottom line: If you were eligible for the tax break before you appeal, you're still eligible afterward -- but the value of your credit might drop to zero if you convince the state to lower your assessment in a big way.

Trust me, this isn't bad news. Read on to see why.

The Homestead credit is for owner-occupiers only. You qualify once you've been in your home a full fiscal year. It works by capping the amount of assessed value you can actually be taxed on in any one year -- 4 percent in the city, for instance. (That effectively means it caps the increases in your tax bill at 4 percent, as long as property-tax rates don't rise.)

If property values are skyrocketing, you'll end up with a taxable assessment that's significantly lower than your total assessment (which the state refers to as the "market value").

Here's an example:

Joe Schmoe buys a home in 2004 for $130,000, around the city average and -- conveniently -- the exact amount of his property assessment. By 2007, the average is up to about $180,000 and so is Joe's assessment.

But he's being taxed on $146,000 and change, because his annual increase was capped at 4 percent. (The cap on state taxes is 10 percent, but the state's tax rate is a small part of the total you pay, so I'm focusing on local taxes.)

Joe sees that he has a substantial Homestead credit and thinks, Sweet.

Then the housing market plummets. Now Joe's home is worth $158,000, again sticking with the city average. But let's say his assessment doesn't reflect that -- let's say it's still $180,000. (At this point, he's paying on $165,000 of that, which is the '07 figure increased by 4 percent in 2008, again in 2009 and finally in this year.)

Joe says "to heck with this" and appeals. The state looks at the comps he brings in and agrees that yes, his home is worth $158,000, not $180,000. He rejoices.

Then he sees his new tax statement. No Homestead tax break! Where did his $15,000 credit go?

It vanished because his brand-new total assessment is now less than his previous taxable assessment. This means Joe is paying less in taxes. If he'd only managed to convince the state to drop his assessed value to, say, $175,000, he'd have a small credit and a tax bill exactly the same as he would have had he not appealed.

So, really, you want your Homestead credit to go away when you appeal. It means you're having an effect on your tab.

Robert E. Young, deputy director for the Maryland Department of Assessments and Taxation, confirmed for me that the state isn't maliciously yanking Homestead credits from everyone who asks for a lower assessment.

"A homeowner does not automatically lose the Homestead Tax Credit for one year when he or she appeals," he wrote me in an email. "Instead what does occur is that the amount of the reduction in the assessment by the Department can be so significant that the homeowner no longer mathematically qualifies for the Homestead Credit."

Hope that makes sense, everyone.

August 19, 2010

More takers for those low mortgage rates

So these low-low mortgage rates are having an effect on Americans after all: Applications for refinance deals jumped 17 percent last week to the highest level in 15 months.

That's according to the Mortgage Bankers Association, which surveys lenders. In its previous survey, it noted that applications for loans -- refinance and purchase -- barely budged despite the lowest rates since it began its survey in 1990.

Last week's rates were slightly higher than the week before, according to the survey -- 4.6 percent for a 30-year fixed-rate product rather than 4.57 percent.

Homebuyers, however, are not applying in droves. Applications for loans to purchase homes dropped 3.4 percent from a week earlier.

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

Ritz reduces asking prices

The Ritz-Carlton Residences in the Inner Harbor has lowered the asking prices on 30 of its condos by about 30 percent.

The luxury development, conceived in good times and delivered after the housing market slammed on the brakes, has closed deals on just 24 of its 190 units. About a dozen more are under contract. That leaves a lot more to sell.

The discounted units represent about 20 percent of the condos that haven't either sold or gone under contract. (Hat tip to The Daily Record, which had it first -- though you'll need to sign in to see the story.)

New prices on the 30 units range from $499,000 to $2.1 million, says Greg Harris, a spokesman for the developer, RXR Realty. It's not the first reduction: When the development opened, asking prices ranged from the upper $800,000s to $5 million.

Back when a bunch of the Pier Homes at HarborView were being auctioned off, I asked the Ritz-Carlton developers what effect their next-door neighbor's big price drops were having on them. In a statement, they said the development "has seen a record increase in traffic in April, May and June." 

Harris said Wednesday that the auction results had nothing to do with the Ritz-Carlton's decision to discount some of its units.

"It's not a true comparison of projects," he said. "The list of amenities and the finishes and the lifestyle that people are looking for at the Ritz-Carlton don't compare with any other project in Baltimore."

It's an interesting question for both appraisers and buyers: How different do luxury products need to be before they're not competing against each other for the same prospects?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (6)
Categories: For sale

August 18, 2010

Real estate closing costs on the rise

If you got a "good faith estimate" for a loan last year and again more recently, the  closing-cost figure probably went way up.

Closing costs -- minus taxes -- are about 35 percent higher on lenders' good faith estimates in Maryland and nationwide this year, says in its annual mortgage fee survey.

Some of that jump is actual, honest-to-goodness increase. But a big part of it, Bankrate says, is more honesty. Or at least more careful calculation.

"Before this year, lenders were not penalized for underestimating fees in the good faith estimate. Now they are penalized for lowballing fees," the company says, referring to a federal rule that went into effect Jan. 1.

Maryland's closing costs
, not including taxes, average $3,402 for a $200,000 loan, according to Bankrate's survey of lenders. That ranked the state 15th lowest.

The national average was $3,741, which ranged from a high of $5,623 in New York to a low of $3,007 in Arkansas.

Bankrate picked one area in each state for its cost survey -- not including California, where it studied costs in two metro areas. In Maryland, it looked at the 21236 ZIP code, Nottingham in Baltimore County.

About $1,500 of the total here is for origination and the rest -- about $1,900 -- is for title and third-party fees. (Here's the 2009 study, for comparison.)

Bankrate compared good faith estimates for a $200,000 loan on a $240,000 purchase. It didn't include taxes and escrow fees, which vary a lot from one area to another and can be substantial.

Take transfer taxes, for instance. If you're buying in Baltimore, they'll add $3,600 to your tab for a $240,000 home.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (14)
Categories: Closing costs, Resources for new buyers & owners

August 17, 2010

202-unit apartment complex could lose license

Are apartment owners responsible for crimes committed by tenants?

Many think they aren't, "but in fact, they are," says Baltimore Housing Commissioner Paul T. Graziano. "And they must take specific actions to address these egregious criminal acts."

Graziano said late Monday that lack of owner action is why he has issued a notice of intent to revoke the license of the Madison Park North Apartments in Reservoir Hill, a 202-unit complex the city calls a haven of drug dealing and violence. If the license is pulled, no one could rent there anymore and residents would have to move.

A hearing is scheduled for September to determine the fate of the property. The city says its housing agency and the federal government will help relocate renters if the license is revoked -- the law-abiding ones, that is.

More details in this news story.

Posted by Jamie Smith Hopkins at 10:09 AM | | Comments (2)
Categories: Landlording, Renting

August 16, 2010

Record low mortgage rates -- and low interest, too

Mortgage rates averaged 4.44 percent last week for 30-year fixed-rate products, a new record low in Freddie Mac's 39-year survey. But few borrowers are biting.

After plummeting in the wake of the homebuyer tax credit expiration, the number of applicants for loans has stayed essentially unchanged, according to the Mortgage Bankers Association's weekly surveys.

Seventy-eight percent of those who are applying want to refinance an existing mortgage, not take a new one out for a home purchase. Even so, applications for refinancing barely budged upward in the trade group's most recent survey, released last week.

When home prices fall, fewer people have the equity to refinance. So that's a key reason lenders aren't getting a borrowing boom from these mortgage rates that are half as high as they were in the mid-1970s and mid-1990s -- and one-forth as high as the 17.8 percent rates people were getting in November 1981. (The average last year was 5 percent, and the average in 2008 was 6 percent.)

Freddie Mac's second-quarter report on refinance activity showed some interesting trends among those who are replacing the mortgages on their homes.

Twenty-seven percent -- a little more than one in four -- did "cash-out" deals, where the new mortgage was at least 5 percent bigger than the old one. (People cash out for a variety of reasons, from home improvement to paying off higher-interest debt.)

Twenty-two percent, meanwhile, brought money to the table in order to get smaller mortgages -- "cash-in" refinancing. (Some probably did it because they wouldn't be able to refinance otherwise, but others might have wanted to pay down their total to reduce their payments.) 

Some perspective: Last quarter's 22 percent cash-in share ties for third-highest since Freddie Mac's survey began in 1985.

Half or more of mortgages refinanced between the summer of 2004 and the end of 2008 were cash-out, as it happens. The peak: Spring and summer of 2006, when nearly nine out of every 10 refinancing borrowers did a cash-out deal. These were the frenzied "home as ATM" days.

Some homeowners don't have equity simply because prices dropped. Others helped the process along.
Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (14)
Categories: Mortgage rates

August 15, 2010

Real estate poll: When did you last move?

Lots of people are feeling stuck in place nowadays. They can't easily sell their home because they're underwater. Or they're anxious about buying. Or they'd like to rent a bigger place but don't know if their job situation is stable.

This is the pent-up demand -- and, except for the renters, the pent-up supply -- that we all hear so much about.

It got me wondering: How long has it been since you all last moved?

Do you want to move? Or do you happily see yourself where you are now for a while?

It's been nearly 11 years since I last moved, though being in the middle of a renovation project feels pretty similar. Half my possessions are in boxes, and I don't know what's where.

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

August 14, 2010

A Baltimore housing-market retrospective

I'm all for words, but sometimes charts get the job done better. That's why I put one together that showed at a glance how home sales in the Baltimore metro area have changed since July of last year.

That's recent history, though, and Wonk reader Ronnie was more interested in a longer horizon. So here you go -- July home sales back to '98, as far as Metropolitan Regional Information Systems' dataset goes:




Economists expected a slump in or around July because everyone rushing to get the first-time homebuyer tax credit closed by June 30 if they could. (That was the settlement deadline until late that night, when Congress extended it three months to help buyers having trouble with short sales, foreclosures and other more time-consuming deals.)

A key question is whether the drop will be temporary or long-lasting.

Here's what June trends look like over the same years:


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

August 13, 2010

The amazing bouncing home value

Most buyers probably get just one appraisal on the home they're purchasing, but Wonk reader Christina had three -- and boy, were they all over the place.

One pegged the value of her city-owned home at $115,000. The next said $60,000. The final one -- two weeks later -- was for $92,000.

That's a $55,000 swing.

It's not always easy to determine a home's value, and it's especially tricky in an uncertain environment like this one, so the answer to "why?" might be as simple as that. Real estate agents have also complained that the Home Valuation Code of Conduct -- intended to avoid conflicts of interest that led to inflated valuations in the boom days -- meant inexperienced appraisers willing to work for less money were the only ones getting any business. (The code is about to sunset now.)

Whatever the reason, you can't blame a buyer for wanting to have a solid idea of what the home they're buying is -- you know -- actually worth.

Christina, a first-time buyer, ended up with three appraisals because she was purchasing a city-owned property in need of work, and the time from contract to closing dragged out.

"In each appraisal the market value is different, the repairs to the property are different and the amount to make the property FHA insurable are all different," she wrote me. She wonders, "Does this happen a lot?"

Have any of you seen anything similar? What would you suggest buyers do if they're getting conflicting information about value?

Christina, by the way, finally settled last week. Her purchase price was close to the third appraisal -- the one that split the difference.
Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (19)
Categories: Appraisals

August 12, 2010

Baltimore-area home prices vs. the nation

Nearly two-thirds of the metro areas the National Association of Realtors tracks had rising median home prices in the second quarter. The Baltimore metro area? Not among them. But the price drop was minimal -- about half a percent compared with a year earlier, based on sales of single-family homes.

Sellers in Cumberland, tucked in the mountains of Western Maryland, were not so fortunate. The median price dropped 15 percent there, the largest decline in the country.

Cumberland topped the nation in price increases in the early part of the housing bust, so its boom and reversal were both delayed.

Hagerstown also recorded one of the largest drops in the nation, down about 9 percent.

Here are the metro areas that gained and lost the most on median price:

Biggest increases

1. Akron, Ohio: 36 percent

2. San Jose, Calif.: 26 percent

3. San Francisco, Calif.: 25 percent

4. Riverside, Calif.: 17.8 percent

5. Elmira, N.Y.: 16.7 percent

Biggest declines

1. Cumberland, Md.: -15.4 percent 

2. Tucson, Ariz.: -13.7 percent 

3. Ocala, Fla.: -13.0 percent 

4. Beaumont, Texas: -12.9 percent 

5. Boise City, Idaho: -12.7 percent

(Hagerstown is sixth.)

Lawrence Yun, the National Association of Realtors' chief economist, suggested that everyone take the price changes -- especially increases -- with a grain of salt:

"The recorded home prices in many markets were significantly depressed last year because of a large percentage of distressed homes sold at discount," he said in a statement. "Now as more normal, non-distressed home sales are occurring, the median price in many areas is showing higher values."

The Realtors group also measured sales levels by state. Maryland home sales rose about 30 percent compared with a year ago, ranking it 15th. (The top three were North Dakota, up 52 percent; Hawaii, up 39 percent; and D.C., up 37 percent.)

Three states -- Michigan, California and Nevada -- saw dropping sales numbers.

The second quarter, of course, was a "past performance does not guarantee future returns" sort of period. Buyers were rushing to meet the deadline for the first-time home buyer tax credit.

Tax-credit sales can close as late as the end of September, but everyone who could settle by June 30 did. That was the previous deadline, and Congress didn't extend it until late that day.

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

August 11, 2010

One last chance to vote

Haven't voted today in Zillow's best-blog contest? You can, if you've got a few seconds, by clicking here before 3 p.m. when it's all over. (Finally!)

It might be a lost cause at this point -- after I got ahead yesterday, real estate agent Marney Kirk zoomed back in a big way -- but hey, you can help me not lose so badly.

Thanks to you all for your support. And now back to your regularly scheduled blog posts.

UPDATE: Congratulations to Marney, the best-blog winner! Check out her blog here.
Posted by Jamie Smith Hopkins at 8:30 AM | | Comments (7)

What kind of home your money will get you

HGTV's "What You Get for the Money" compares metro areas to show you what sort of home $300,000 -- or whatever the amount -- will buy. The thing is, there's a lot of variation just within a metro area. Ours, for instance.

Wouldn't it be interesting to get examples of homes at various price points across the Baltimore region? I think it would make a fun and informative feature here. But I'll need your help if I'm going to make this work.

If you bought a home this year (or late last year, even) in Baltimore City or Anne Arundel, Baltimore, Carroll, Harford or Howard counties, I'd like to give Wonk readers a virtual tour of your place. I'm especially looking for homes purchased for around $150,000, $200,000, $250,000, $300,000, $400,000 and $500,000. (By "around," I mean "in the very general vicinity," not "within $1,000 or less.")

You don't need a showcase home. Average is perfectly fine.

Want to participate? Email me at jamie.smith.hopkins(at) -- with @ substituted for (at), of course.

Got suggestions? Comment away. 

July home sales in the Baltimore area



If you've been wondering what the housing market looks like at a glance, take a gander at the chart above. It shows the year-over-year change in home sales in the Baltimore metro area, and you can really see how the first-time home buyer tax credit influenced buyer activity.

The big swoop upward in October and November came as buyers thought they had to close by Nov. 30, a deadline that was extended to June 30.

That too was extended, though only at the last minute and only for buyers who had signed contracts by April 30 but were still wending their way through the closing process. Result: a July falloff in sales.

In case you're wondering, home sales in the metro area were in decline year-over-year from October 2005 until June 2009, with one little blip upward in January 2007. So the pickup in the middle of 2009 does seem tax-credit driven.

Interested in a closer look at July? Check out my home-sales story.

Wonk reader Frank Rizzo was curious to know how sales looked from a month-to-month perspective, rather than year-over-year. Here's that chart, which like the one above relies on Metropolitan Regional Information Systems data:



About 1,820 homes changed hands in July, compared with about 2,580 in June and 2,240 the previous July.

Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (2)
Categories: First-time buyer tax credit, Housing stats

August 10, 2010

One day and change left to vote in best blog contest

Thirty hours to go before Zillow's best real estate blog contest ends. Oh, the tension is mounting. For me and real estate agent Marney Kirk, anyway, since we've been bouncing back and forth between No. 1 and No. 2 since the start. Right now, she's back in the lead.

This is a one-vote-a-day event, so you've got two more opportunities to register your opinion -- whatever it may be -- before it's all over. (Actually one opportunity per computer per day, but I'm not suggesting you roam around your office voting from random computers. No, not at all.)

You can vote from Zillow's Baltimore page. If the poll doesn't pop up immediately, scroll down and look for the colorful badge in the right-hand column.

Posted by Jamie Smith Hopkins at 9:00 AM | | Comments (2)

Best-of lists and ZIP-code angst

Did you know Baltimore is one of eight "hip cities" for retirees looking for urban lifestyles? Or the ninth-best place for recent college graduates to move? Or, on the other side of the coin, the fourth most "irritation-prone" city?

These are just some of the best-of, and in some cases worst-of, lists out there, as colleague Lorraine Mirabella notes in a story. I figured you'd enjoy reading it.

Also interesting reading for real estate enthusiasts: Nicole Fuller's piece about Anne Arundel waterfront communities such as Orchard Beach petitioning the U.S. Postal Service to get their own ZIP code -- specifically so they won't be lumped in with Curtis Bay.

Doug Ashton, president of the Orchard Beach Improvement Association, told Fuller: "There's a perception that there's dirty water, a lot of industry, a lot of crimes. And with the same ZIP code, people associate all that stuff with our homes, and it's just two different worlds."

State program ups its down-payment help

The state-run Maryland Mortgage Program is increasing to $5,000 the down-payment and closing-cost assistance it makes available to its borrowers.

State officials also announced Monday that the mortgage program's interest rate is being lowered to 4.25 percent, the second recent drop.

The down-payment and closing-cost assistance -- which had been $3,500 -- comes in the form of a no-interest loan that's paid back when you sell the home, refinance or pay off the mortgage. It's known as DSELP, for Downpayment and Settlement Expense Loan Program.

Other programs provide additional assistance on top of that money, such as House Keys 4 Employees, an employer-help initiative. (Here's the list of participating employers.)

The mortgage program requires borrowers to attend a homebuying workshop, so include that in your buying timeline if you want in. Most of the Baltimore region has specific housing-counseling requirements, listed here.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (0)
Categories: Closing costs, Resources for new buyers & owners

August 9, 2010

Baltimore-area home values

So yeah, I know I inundated you with housing-market statistics this weekend, but hey -- what's a few more? released new figures today that attempt to measure all home values in the spring, not just the prices of properties that sold. (That's different than my analysis, which relied on sales figures.) Here's some of what the real estate search site says about the Baltimore area:

1) Prices fell 5 percent compared with a year ago in the metro area overall ...

2) ... but that varied a lot, from a 7.5 percent increase in Stevensville (Queen Anne's County) to a 15.5 percent drop in Jessup (Howard and Anne Arundel counties).

3) Twelve communities had rising home values compared with a year earlier ...

4) ... but not all homes there were worth more at the end of the second quarter, just as not all homes in the fastest-declining places were worth less, Zillow says.

Zillow bases these conclusions off its "Zestimates" of home values, which have drawn criticism from various fronts (including from some of you). If you're in the anti-Zestimate camp, enjoy these sales-only stats from Zillow's report:

1) Fourteen percent of the homes that sold changed hands at a loss.

2) Ten percent of homes sold were bank-owned -- that is, foreclosure resales.

3) The typical sale price per square foot across the Baltimore metro area: $166.

How does this match up with your sense of the market?

Nationally, home-value declines have slowed, Zillow says, but that comes with a caveat:

"There is a large unknown on the horizon ... as these second quarter numbers are still heavily influenced by the federal homebuyer tax credits, which were available for homes under contract by the end of April," Zillow Chief Economist Stan Humphries said in a statement. "Home sales are declining significantly in the post-tax credits environment, but the impact of falling home sales on already-declining home values is yet to be seen."

Posted by Jamie Smith Hopkins at 1:00 AM | | Comments (0)
Categories: Housing stats

August 8, 2010

The Baltimore-area housing market in 2010


Photo by Sun photographer Kenneth K. Lam


Want to see what the housing market in the Baltimore metro area looks like down to the city neighborhoods and suburban communities?

You're in luck. Words, maps, photos and databases -- take your pick:

--Read about the trends I saw when I crunched all the January-through-June home sales.

--Check out these nifty interactive maps of the region: prices here, sales figures here. Three cheers to Alex Tribou on the Sun's graphics team for tackling this time-consuming effort.

--Enjoy the photo galleries of housing-market extremes. Priciest places here. Other top 10s, including most sales and biggest price drops, here. Huzzahs to editor Liz Hacken for turning the data into a visual tour of the region.

--See all the price and sales data in ZIP codes and city neighborhoods that interest you. Here's the searchable database for ZIP codes, and here's the database for city neighborhoods. (Areas had to have at least five sales in the first half of this year and the first half of last year to be included in the analysis, and thus the databases.) Applause to web guru Lauren Custer for creating the databases.

Hope you find it all informative and interesting.

Posted by Jamie Smith Hopkins at 1:00 AM | | Comments (2)
Categories: Housing market experiences, Housing stats

August 7, 2010

Meeting the neighbors

Most of you know at least some of your neighbors at least a little bit. That's what you're telling me, anyway.

Just 12 percent of readers who took this week's poll said they didn't know any of their neighbors.

But an equally small percentage of you are on the other extreme, knowing most or all of your neighbors well. Nearly half of you "sort of" know some of your neighbors, which doesn't necessarily mean more than friendly waves as you head off to your respective workplaces. (This is the category I'm in, incidentally.)

Here's what I'd like to know: Is a neighborhood better -- a nicer place to live -- when the residents know and like each other? Does it matter to you whether you know your neighbors or not?

Those of you contemplating a move: Is "friendly neighborhood" anywhere on your priority list?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (4)
Categories: Neighborhood and neighbors

August 6, 2010

Priciest places in the Baltimore area


Photo by Sun photographer Barbara Haddock Taylor


Where did homebuyers spend the most, on average, in the Baltimore area during the first half of this year?

You probably have certain city neighborhoods and suburban communities in mind when you think "upscale." But there's always a surprise or two when we comb through the sales figures.

Here's the list. Drumroll, please:

Baltimore neighborhoods:

1. Guilford ($512,500)

2. Roland Park ($510,784)

3. Homeland ($505,119)

4. Inner Harbor ($438,412)

5. Cheswolde ($353,667)

Cheswolde, in case you've never heard of it, is in Northwest Baltimore along the city-county line.

Suburban communities:

1. Glenwood, 21738 ($719,133)

2. Fulton, 20759 ($700,666)

3. Highland, 20777 ($687,422)

4. Clarksville, 21029 ($673,582)

5. Davidsonville, 21035 ($663,096)

The first four are in Howard County; Davidsonville is in Anne Arundel.

To see the full list -- 10 in the city, 10 in the 'burbs -- check out our snazzy new photo gallery.

Thanks to editor Liz Hacken for turning my number-crunching into something so visually appealing.

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

August 5, 2010

From housing boom to bust: What's happened to prices

In the last three years, single-family home prices have fallen 18 percent in the Baltimore metro area, according to Fiserv. A lot better than some places, from a seller's perspective. A lot worse than others.

Ninety metro areas saw bigger price drops than we did. Topping that list is Merced, Calif., where prices fell 64 percent -- yes, more than HALF -- between the first quarter of 2007 and 2010. Detroit is second, at 58 percent.

Just over 290 metro areas, on the other hand, had smaller price drops -- or no drops at all. Five metro areas, four of them in Texas, are up more than 10 percent vs. 2007.

Fiserv, which puts the Case-Shiller indexes together with Standard & Poor's, compares repeat sales of the same homes to try to get at the true change in housing values.

But a metro-wide average will inevitably hide swings one direction or another in individual communities. Do you live in a neighborhood where prices are down significantly more -- or less -- than 18 percent since 2007?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (15)
Categories: Housing stats

August 4, 2010

What should this homeowner do?

Wonk reader allen shared his tale of housing woe today:

i live in mount clare, bought a nice house in 07 and i regret everyday. My taxes are high, i live next to drug addicts and dealers all around me, and i fear for my life everytime i walk up the street. Baltimore wants people investing, but they don't want to do something about the drugs that deter people from investing in areas of high potential such as mount clare. It's a shame, i've had many home buyers see houses in the area and say it's the people that keeps them away. i am so depressed, do i walk away from my home and rebuild or stick it out?

If you were in his situation, what would you do? Can anyone with neighborhood-improvement experience offer specific advice?

Where homebuyers are paying what sellers are asking

Home sellers in Windsor Mill, North Beach and Laurel are either good at setting their asking prices, or buyers are eager to live there.

The average sale prices in all three Baltimore-area communities were less than 1 percent below average sellers' original listing prices, according to real estate brokerage ZipRealty's second-quarter "hot" and "cold" ZIP code report.

Across the metro area in June, by contrast, average sellers got about 8 percent less than their asking prices, according to Metropolitan Regional Information Systems.

Here's ZipRealty's full hot-and-cold list:


1. (tie) Windsor Mill (21244, in Baltimore County) -- average sale price was 99.2 percent of the average list price

1. (tie) North Beach (20714, in Anne Arundel and Calvert counties) -- 99.2 percent

3. Laurel (20724, in Anne Arundel and Prince George's counties) -- 99.1 percent

4. Hanover (21076, in Anne Arundel County) -- 98.7 percent

5. Odenton (21113, in Anne Arundel County) -- 98.4 percent


1. Baltimore (21223, in the southwestern part of the city) -- 90.1 percent

2. Cockeysville (21030, in Baltimore County) -- 92.2 percent

3. Annapolis (21401, in Anne Arundel County) -- 93 percent

4. Baltimore (21216, in the western part of the city) -- 93.1 percent

5. Towson (21204, in Baltimore County) -- 93.2 percent

A little national perspective: ZipRealty says California had a lot of ZIP codes with homes selling for more than the asking price, while "seven out of ten ZIP codes nationwide where homes were selling most below asking price for the same time period were located in Florida." Both states had big bubbles and busts.

Closer to home, the Washington metro area had eight ZIP codes where average buyers paid slightly more than average sellers asked for.

The brokerage firm says it only includes ZIP codes with at least 30 sales in its analysis, so communities need pretty active housing markets to make the list. That might explain why the "cold" ZIPs in the Baltimore area are around average for the metro area as a whole.

I said it the last time I wrote a post about ZipRealty's hot/cold list, but it's worth repeating: Sales price vs. asking price isn't the only measure of a market's health. It's one way to look at how close -- or far apart -- buyers and sellers are on price.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (27)
Categories: Housing stats

August 3, 2010

'Know your neighbors' day

I was struck this week by how little I really know my neighbors. One couple's full names and a bit of their backstory, and a few other neighbors' first names -- and that's it. My parents, by contrast, know most of the people on their long street.

If you're in the same boat I'm in, you might want to take a moment on Thursday to introduce yourself to the folks who live near you. HUD is proclaiming it "Know Your Neighbors Day," because the agency thinks that "building the bonds of neighbors" will "build stronger communities."

It's harder to build those bonds in a transient world, but it's not impossible. The thing is, it usually takes at least one enthusiastic person to say hello for the first time, to invite near-strangers over for dinner, to organize block parties.

When I think of neighborliness, the example that always pops to mind is Patterson Park, where neighbors so missed the restaurant that was the community gathering spot -- complete with weekly trivia nights -- that a group of them pooled their money to purchase the vacant building that had housed it.

But neighborliness can be as simple as knowing enough about the people around you to be aware if something's wrong next door -- and to help out, if so.

How well do you know your neighbors? Do you consider your neighborhood a neighborly place -- and does it matter to you if it is?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)
Categories: Neighborhood and neighbors

Fines, small tax bill send rowhouse to tax sale

In case you missed it yesterday: Check out the story of Tim Nickels, a roofer whose Baltimore rowhouse went to tax sale because of fines for the state of his back yard and $3.91 in mistakenly unpaid property taxes.

Nickels, who said he had no idea he owed the city any money, isn't losing his property. How he ended up in tax sale, though, is a heck of a tale.

Got any personal tax-sale stories?

Posted by Jamie Smith Hopkins at 5:00 AM | | Comments (1)
Categories: Property taxes, Tax sale

August 2, 2010

A 'close battle' for best-blog title reports that Realtor Marney Kirk is ahead in the battle for the "best real estate blog in Baltimore" title by one vote, last they counted. The Real Estate Wonk blog is No. 2.

"The rest of the gang is within a dozen votes, so it’s a close battle," says Zillow's Matt Bowers.

Baltimore is one of 10 cities with best-blog contests. Others include Philadelphia, Chicago and San Diego.

It's interesting to watch the role of social media here. Bowers says blogging about the contest is helping contenders -- of course -- but tweeting and Facebook updates are making a difference, too.

So on that note: Vote! This is one-vote-per-day contest, which means you can register your opinion frequently between now and Aug. 11, when it's all over.

Posted by Jamie Smith Hopkins at 4:54 PM | | Comments (1)
Categories: We're No. 1! (Or thereabouts)

Maryland property tax rates -- what you'll pay

Property taxes might not seem like the most pressing issue to consider while you're searching for a home, but you'll definitely want to know what your costs will be before you buy. It's especially critical if you're planning to purchase near the top of your affordability range.

And remember, many sellers reap benefits from the Homestead tax credit, so you can't assume that your property-tax bill will in any way resemble theirs. (As Wonk reader mjm mentioned recently, "I saw a 74% increase.")

Here's the good news: It's not hard to calculate your bill for specific homes. Look up the property assessment record online. Divide by 100. Then multiply by the rate in that jurisdiction. (The state's rate is $0.112 for every $100 in assessed valuation, so you'll want to take that into account, too. Just add the state rate to the county rate before you multiply.)

EDIT: Montgomery County resident Louis Wilen notes that Montgomery has a property-tax lookup so you can find out what you'll pay for specific homes. A good thing, since the county's tax schedule is VERY complicated. More on that in a moment.

Wondering what homeowners pay if their property-tax assessments are exactly the same as their jurisdiction's average sale price? Read on:

Jurisdiction      Rate      Avg. price       Tax bill

Allegany           0.9829   $113,658         $1,244

Anne Arundel   0.88       $375,129         $3,721

Baltimore City  2.268     $171,574         $4,083

Baltimore Co.   1.1         $302,043         $3,661

Calvert              0.892     $300,480         $3,017

Caroline            0.87       $184,349         $1,810

Carroll              1.048      $304,562         $3,533

Cecil                  0.915     $247,971         $2,547

Charles             1.026      $265,945         $3,026

Dorchester        0.896     $232,909         $2,348

Frederick           0.936     $277,538         $2,909

Garrett               0.99       $440,500         $4,854

Harford              1.042     $301,727         $3,482

Howard              1.014     $422,234         $4,754

Kent                  1.022     $360,214         $4,085

Prince George's  0.96      $204,126         $2,188

Queen Anne's     0.7671   $358,604         $3,152

St. Mary's           0.857     $291,496         $2,825

Somerset            0.8837   $105,750         $1,053

Talbot                 0.432     $449,953         $2,448

Washington        0.948     $178,204         $1,889

Wicomico            0.759     $158,463         $1,380

Worcester           0.7         $292,666         $2,376

The average sale prices -- for June -- come from the Maryland Association of Realtors. The tax bill includes both the county and state tax rate for the tax year that began July 1, but keep in mind that some counties have cities or districts with their own rates as well.

EDIT: I've deleted Montgomery from the list because its rates range too much to make one figure a reasonable stand-in. As you'll see from the comment thread below, the county has several dozen special taxing districts, all with their own rates. (Most, though, are between $1 and $1.20 per $100.)

Here's how the tax bill looks for a $250,000 assessment across the Baltimore metro area:

Anne Arundel: $2,480

Baltimore City: $5,950

Baltimore Co.: $3,030

Carroll: $2,900

Harford: $2,885

Howard: $2,815

What you can get for $250,000 in each of these jurisdictions is, of course, another story altogether.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (23)
Categories: Property taxes, Resources for new buyers & owners

August 1, 2010

Thumbs up, down, sideways on the Homestead tax credit

You've been having a very interesting conversation about the fairness, or not, of the Homestead tax credit, which caps property-tax increases for owner-occupiers once they've been in their home a full tax year. (The idea is to prevent tax shocks for longtime owners, but it also means that their newcomer neighbors pay more. Sometimes a lot more.)

Aaron, arguing in favor of the credit, wrote: "The homestead credit encourages people to stay where they are and discourages flipping, in principle. It promotes stable neighborhoods. Whether it's high enough now to actually do that (or policed well enough) is another question. But it's not designed to make everyone's tax bills equal, or equally low, nor should it."

Jelena, who's looking for her first house, took the no-thanks view: "Taxes pay for roads, schools, emergency services, etc. If someone bought a house 30 years ago, they are using the roads today and they need to be maintained today at ... today's cost. And I agree that it's 'robbing Peter to pay Paul'."

Andy can see it both ways:

"It does get to be frustrating when you look at Real Property or talk to neighbors who pay 1/4 of the property tax you do because they have lived in the same house for 30 years. My taxes are about $6k a year and my neighbors are about $1800 for a nearly identical house. That said, I wouldn't want to have the risk of a huge one year increase in out of pocket expenses - the credit makes it easier to plan future expenses."

elweedz offered a proposal: "Both tax credits and the federal tax deduction for home mortgage interest should be abolished. There is no reason so subsidize homeownership. Renters have no such subsidy. Why should we favor one group over another? The net effect will be to reduce home purchase prices. Rooting for high home values is like rooting for a high energy bill. When will the mass public realize the false sense of wealth that the gov't and the banks portray as it relates to owning a home?"

(See the rest of the proposal here, which drew an "elweedz for President! Or at least for Governor" response from Jelena.)

And mjm shared a personal experience about buying a home in the area:

My only miscalculation: the Homestead credit whammy. ... Listings and estimated monthly payments reflect the seller's situation, not yours if you buy the house. In my case the seller had been there 32 years and had huge Homestead and other credits. Homestead limits property taxes increases to 4% -- except for the first year in a new home. So I saw a 74% increase in my property taxes! ...

I can see how this inhibits home buying (if you knew your taxes might double) -- or could send some new homeowners into foreclosure (if they didn't see this coming). I think it is good to promote longevity and ownership to make stable neighborhoods (too many careless renters was causing our old neighborhood to fall apart). But there should also be a cap on how big this first-year property tax whammy can be: even a 20% cap would be much much better than the 74% I saw. Ouch!

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (8)
Categories: Homestead Property Tax Credit, Property taxes
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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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