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December 31, 2010

How many homes are overassessed?

The state usually gets property-assessment appeals on fewer than 5 percent of homes a year. But a company that specializes in appeals thinks many more homeowners than that are overassessed.

ValueAppeal, which added Maryland to its online service in May, analyzed properties that were last reassessed a year or two ago as part of the state's three-year cycle and says comparable-home sales suggest that a quarter are significantly overassessed. Baltimore City has the highest share, the company says.

(The deadline to appeal your assessment for July 1 tax purposes is Monday -- that's when they must be postmarked -- if you aren't in the group that was just reassessed.)

Here is ValueAppeal's analysis for Baltimore-area jurisdictions:

CountyOverassessed% of totalAverage estimated savingsAverage overassessed amount
Anne Arundel 12,549 11%$1,362$73,116
Baltimore 63,431 41%$1,179$57,083
Baltimore City 49,672 52%$3,574$52,117
Carroll 911 3%$892$56,309
Harford 3,082 6%$946$49,799
Howard 3,305 6%$1,031$79,177

ValueAppeal dubs a property "overassessed" if comps suggest that the overage amounts to at least $300 in extra taxes. (It set that threshold because it charges $99 for its services, after the initial free look-up to determine if you could benefit from appealing.)

The average savings calculated above accounts for the fact that some homeowners would have two years of lower taxes and some would have one, depending on where they were in the assessment cycle.

But the savings figure assumes that everyone is paying on their full assessment. Thanks to Maryland's complex Homestead tax credit system, that's frequently not the case.

The Homestead credit acts as a ceiling on tax increases for owner-occupiers, capping the annual amount of additional assessable value you can be taxed on once you've lived in your home for at least one tax year. The cap ranges from zero to 10 percent in the state, with both Baltimore City and Baltimore County at 4 percent.

Let's say Joe Schmoe bought his Baltimore home before the housing boom, and now he's paying taxes on just $125,000 of his $200,000 total assessed value. Even if the real value of his home is now $175,000, getting $25,000 shaved off his assessment won't lower his taxes. (His taxes will actually rise 4 percent a year until his taxable value catches up with his assessed value.)

This has kept some homeowners from contesting their assessments. One reader who contacted me this week to see if he'd save money by appealing decided against it when we calculated that his taxable value was substantially less than his best guess at the market value.

ValueAppeal CEO Charlie Walsh says his company doesn't account for tax credits right now, but it plans to do so in the future.

As for the one-third of Maryland homes that were just assessed, ValueAppeal can't compare them against comps until it has the new data in hand. Chances are the overassessment percentage in that group will be lower, because those valuations are new while the others are one to two years old in an environment of falling home prices. (Assessed values dropped 22 percent on average in the newest round.)

But ValueAppeal, like all companies that help people appeal their property assessments, is counting on mistakes. When I interviewed Walsh for a story last year, he said studies suggest that government agencies' mass-assessment process will always miss the mark on a significant number of properties.

"I don't blame them," he said at the time. "It's just not feasible to do it any other way. But one of the things that's beautiful about real estate is that each individual property is unique."

This post has links to resources on the appeal process, including the off-cycle appeal known as the "petition for review."

And you can take the appeal poll here. So far, about 60 percent of the Marylanders who've participated say they plan to appeal and 20 percent more say they already have. A clear case of an unscientific sample, I'm guessing -- unless the state is really going to be deluged this time around.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (9)
Categories: Homestead Property Tax Credit, Property taxes

December 30, 2010

Don't let your home poison you

Here's a heartfelt plea in light of the recent spate of carbon monoxide deaths: Don't become the next statistic.

CO can kill when appliances that burn fuel -- gas, oil, wood, etc. -- are used improperly or stop working well, or when a car is left to idle in an enclosed space, the Environmental Protection Agency says. Because it's odorless, the only warning you'll get is the symptoms that develop as you're being poisoned.

"At moderate levels, you or your family can get severe headaches, become dizzy, mentally confused, nauseated, or faint. ... Low levels can cause shortness of breath, mild nausea, and mild headaches, and may have longer term effects on your health," the EPA says on its website. "Since many of these symptoms are similar to those of the flu, food poisoning, or other illnesses, you may not think that CO poisoning could be the cause."

Two people were killed and three badly sickened by carbon monoxide in a Baltimore rowhouse this week after leaving open the door of a gas oven that was turned on, possibly to heat the second-floor apartment.

Carbon monoxide, apparently from a faulty furnace, killed two others in Pikesville earlier in the month.

And eight people were hospitalized after CO exposure in Pigtown yesterday, though fortunately they appear to have escaped serious injury.

Here are some steps you can take to reduce your chances of running afoul of this silent killer:

Usually the first thing people suggest is buying carbon-monoxide detectors and putting them throughout your home. The EPA, however, seems pretty unenthusiastic about the devices. They aren't foolproof, and the quality varies pretty dramatically, the agency says, so do some research before buying and don't let them "lull you into a false sense of security."

Here's what it suggests as higher priorities:

DO have your fuel-burning appliances -- including oil and gas furnaces, gas water heaters, gas ranges and ovens, gas dryers, gas or kerosene space heaters, fireplaces, and wood stoves -- inspected by a trained professional at the beginning of every heating season. Make certain that the flues and chimneys are connected, in good condition, and not blocked.

DO choose appliances that vent their fumes to the outside whenever possible, have them properly installed, and maintain them according to manufacturers’ instructions.

DO read and follow all of the instructions that accompany any fuel-burning device. If you cannot avoid using an unvented gas or kerosene space heater, carefully follow the cautions that come with the device. Use the proper fuel and keep doors to the rest of the house open. Crack a window to ensure enough air for ventilation and proper fuel-burning.

DO call the Consumer Product Safety Commission (1-800-638-2772) at for more information on how to reduce your risks from CO and other combustion gases and particles.

DON’T idle the car in a garage -- even if the garage door to the outside is open. Fumes can build up very quickly in the garage and living area of your home.

DON’T use a gas oven to heat your home, even for a short time.

DON’T ever use a charcoal grill indoors -- even in a fireplace.

DON'T sleep in any room with an unvented gas or kerosene space heater.

DON’T use any gasoline-powered engines (mowers, weed trimmers, snow blowers, chain saws, small engines or generators) in enclosed spaces.

DON’T ignore symptoms, particularly if more than one person is feeling them. You could lose consciousness and die if you do nothing.

That's a pretty long list. But even if you do just some of those things, it's better than throwing up your hands and merely hoping for the best.

Wonk reader pigtown shared a close-call experience last year: 

I had carbon monoxide poisoning a few years ago. I moved into a house that had been empty for several years and the furnace hadn't been turned on. When I finally began heating the house, the furnace would only be on for a few minutes and then go off.

I came home one day to find my dog unconscious and took him to the vet immediately, but when I got there, he was better. Finally, I called the HVAC company and they found the problem.

Good thing I'd just come back from living in the UK where I wasn't used to heat!

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

December 29, 2010

Hey, renters -- share your experience

If you switched rentals or saw your rent change in the last few months, I'd be interested in hearing your story.

Leave a comment (with the email-address line filled in, so we can connect), or just email me directly at jhopkins(at)baltsun(dot)com.

Thanks, all.

Posted by Jamie Smith Hopkins at 2:47 PM | | Comments (0)
Categories: Renting, Your name in lights (well, newsprint)

Real estate poll: Are you appealing your assessment?

American homeowners were asked in a new BIGresearch poll whether they're appealing to have their property taxes lowered. About one-quarter say they either plan to or already have. Another one-quarter haven't decided.

So there's a lot of tax angst out there. But what about here, specifically?

On the one hand, Maryland sent out notices this week to the one-third of homeowners who were just reassessed for tax purposes, and 95 percent of them have lower valuations now than they did three years ago. Average drop: 22 percent. On the other hand, two-thirds of homeowners were last assessed a year or two ago, and prices have continued to fall since.

Satisfy my curiosity: Do you plan to appeal your assessment? (You can play along if you're not in Maryland, too -- just make sure you choose the appropriate category.)

Once average assessed values began to fall in Maryland, so did the number of people contesting those new valuations. But out-of-cycle appeals -- the petitions mailed in by owners who weren't just reassessed -- have skyrocketed:


Source: Maryland Department of Assessments and Taxation. First four years of petition figures are estimates.

This year, the number of "petitions for review" -- the out-of-cycle appeals -- outnumbered the "I don't like my new assessment" appeals for the first time.

UPDATE: Wondering what your assessed value actually is? Look it up here.

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

December 28, 2010

New property assessments in Md. -- and how to appeal them

Assessed values are down an average of 22 percent on homes Maryland assessors just evaluated, about one-third of properties in the state.

The Maryland Department of Assessments and Taxation, which is announcing the details today as it mails out the notices, called it a record drop. (The group of homes reassessed late last year declined almost 20 percent on average.)

Here's the county-by-county breakdown in the Baltimore metro area:

Anne Arundel County: down 23 percent

Baltimore City: down almost 14 percent

Baltimore County: down about 18 percent

Carroll County: down about 20 percent

Harford County: down about 17 percent

Howard County: down almost 23 percent

Baltimore's drop was one of the smallest in the state. The city also had the smallest share of  residential properties that declined in assessed value -- 74 percent, compared with 95 percent in the state overall.

Want to contest your property assessment? Here's how:

If you're part of the group that was just reassessed, you have until Feb. 11 to appeal. You can read up on the process -- complete with useful links -- in this blast-from-the-past blog post from three years ago.

If you're not in the recently reassessed group (and two-thirds of properties aren't), you can contest your valuation, too. But you'd better hurry. Such out-of-cycle appeals, known as "petitions," must be postmarked by Jan. 3. (The official deadline is Jan. 1, but as it's a holiday, state assessors told me that they'll accept postmarks for the following business day -- next Monday.)

Here are more details on petitions, and here's a petition success story.

As the appeal posts note, the key is to arm yourself with sale data on comparable homes. Some of you have asked whether foreclosures and short sales are considered "comps" by state assessors, and the answer is "it depends."

Such distressed-property sales aren't normally treated as arms-length transactions for assessment purposes. But these are hardly normal times. Robert Young, acting deputy director of the state assessments department, said short sales and foreclosures resold by banks are used as comps for assessments in communities where these transactions are a significant part of the market.

So if you're appealing your assessment in a neighborhood where distressed sales are few and far between, make sure you're not building your case around just those few-and-far-between sales.

"An isolated short sale is not the best argument to make," Young said. "You want to talk about the other sales that are arms-length."

Also remember: A successful appeal will only cause your property-tax bill to drop if the assessed value falls below the amount you were actually paying taxes on before. Thanks to the Homestead tax credit for owner-occupiers, a lot of people are paying taxes on a fraction of their total assessed value. (In Baltimore, for instance, the amount of assessment that homeowners pay taxes on can't increase more than 4 percent a year.)

As it happens, that means some of the newly reassessed property owners will see a bigger tax bill come July despite the lower assessed value -- because there will still be a gap between the full assessment and the portion they're taxed on.

Got an assessment story? Please share.

Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (30)
Categories: Property taxes

December 27, 2010

Mortgage rates ease after upward climb

The average rate for a 30-year fixed-rate mortgage was a bit lower last week than it was the week before, a pullback after more than a month of speedy increases.

Rates, which had been just below 4.2 percent in the second week of November, ratcheted up to 4.83 percent before inching back last week. (The average last Thursday was 4.81 percent, according to financier Freddie Mac's most recent survey.)

Financial publisher HSH Associates is seeing the same trend with its survey, which tracks not only the conforming market but also jumbo mortgages. (It put the average at 5.15 percent last week.)

"Warmer economic growth has been largely to blame for the increase in rates during the fall, but this increase has been exacerbated to a degree by the Federal Reserve's stimulus program, some post-election improvement in moods and a tax compromise which lends some certainty (and a little boost) to the outlook as we roll into 2011," HSH said in a market-trends analysis.

It's not expecting additional big increases: "While the economy is moving forward at a measured clip, there are few signals that it is powering ahead so forcefully that interest rates should rise much further than they already have, and they may have even overshot the mark, which is typical."

Greg McBride, senior financial analyst at, said much the same when he chatted with me earlier in the month about the then-upward trend in mortgage rates. He wasn't anticipating further large jumps or a big reversal. "The better trend of economic data is likely to keep a floor under mortgage rates," he said.

Here's a graph showing the fluctuation in rates this year:


Source: Freddie Mac. Rates do not include average fees and points, which have run between 0.7 percent and 0.8 percent this year.


The average rate was just over 5 percent last year and a hair over 6 percent in 2008, according to Freddie Mac. During the housing bubble years, the average annual rate ranged from 5.8 percent to 6.5 percent.

Today's rates are lower than that, let alone compared with 2000 (8 percent) and the double-digit 1980s. (The average for 1981 was more than 16 percent.)

Here's the monthly principal and interest payment on a $200,000 mortgage at some of those different interest rates, in case you're curious:

4.81 percent: $1,050

6 percent: $1,200

8 percent: $1,470

16 percent: $2,690

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

December 23, 2010

Fate of mortgage-interest deduction on the bubble

A greater share of Marylanders benefit from the mortgage-interest tax deduction than residents in any other state. So there are probably a fair number of homeowners here -- not to mention real estate agents and homebuilders -- who really want to know what will come of a recommendation to give this supposedly untouchable tax break a major overhaul.

The National Commission on Fiscal Responsibility and Reform, which issued a raft of suggestions earlier this month in a report entitled "The Moment of Truth," favors a change that will increase taxes for folks with pricier homes while benefiting other homeowners.

Currently, you can deduct your interest on a primary residence and second home with mortgages up to $1 million if you itemize your tax return. You can also get the deduction on a home-equity loan of up to $100,000.

The commission, charged with helping the country balance the budget by 2015, recommends that the deduction be allowed only on a primary residence with a mortgage of $500,000 or less. So you can see how it would change the playing field. But the commission not only wants to taketh away, it also wants to giveth, allowing homeowners to get a 12 percent non-refundable tax credit for their mortgage interest whether they itemize or not.

I haven't seen any recent figures on the number of plus-sized mortgages in Maryland, but it's more than a handful. Back in mid-2007, about 11 percent of loan applications in the state were for jumbo mortgages of more than $417,000. That ranked Maryland behind just seven states and D.C.

Even so, the vast majority of buyers are borrowing a lot less. Half the homes sold in Maryland last month changed hands for less than $245,000. (Despite the nationally high level of mortgage-interest deduction takers here, the share of Marylanders who don't deduct still tops 60 percent.)

The deduction is at once popular and widely criticized.

Supporters say it helps more Americans become homeowners, and they contend that the state of the housing market makes this an awful time to reduce it. (The National Association of Realtors, like other housing-related organizations, has come out swinging.)

Detractors call it a redistribution of wealth to the already wealthy -- people with big homes deduct the most interest while homeowners of modest means might not even itemize -- that makes homes less affordable.

"Despite its purported objective of increasing home ownership, all it really does is increase home prices," writes the Tax Foundation, which opposes the deduction. (Canada and Australia, as it happens, have homeownership levels similar to the United States' with no mortgage deduction at all.)

It comes with a big budgetary price tag: "The current deduction is now the second most expensive tax subsidy, expected to cost the US Treasury $104 billion in 2011," the Christian Science Monitor notes.

What all this means for renters is a bit hazy. Right now, they're locked out of a break that homeowners can enjoy, but whether a deduction overhaul would actually lower their taxes would depend on what other changes lawmakers make to the tax code.

It could have other effects, of course. Here's what Wall Street Journal columnist June Fletcher offers up as a possibility with a reduced deduction:

Under such a scenario, more people might opt for renting to avoid the hassles and expenses of homeownership. Yet those who chose to rent would have to compete with those who must rent because of reduced income, job loss, foreclosure or other circumstances. Supply would shrink, and rents would likely rise.
Meanwhile, as demand for homes fell, so would home prices. NAR [the National Association of Realtors] projects prices could fall as much as 15%; but whatever the number, eventually they'd stop at a point where investors could achieve positive cash flow by renting out homes.
At that point, both the rental and ownership markets would stabilize, and a new normal would result.
What do you think should happen? Keep the tax break as is, change it or scrap it?
Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (13)
Categories: Mortgages

December 22, 2010

Maryland's population grows 9%

About 480,000 more people live in Maryland now than did 10 years ago.

So says the Census Bureau, which released Census 2010 figures showing that Maryland's growth rate was 9 percent over the decade -- lower than the '90s and '80s but higher than the '70s.

The United States posted slightly faster growth than the state, at 9.7 percent, but its rate was the slowest since the '30s. Considering the recession that officially ended last year was the worst since the Great Depression, that makes some sense.

"The slow population growth witnessed over the past decade is attributed to slowing immigration from abroad, both legal and undocumented," Wells Fargo economists Mark Vitner and Joe Seydl said in a research note. "Over the past decade, a weakening employment picture in the United States was the primary catalyst for slower immigration."

Maryland is still attracting immigrants. And it's also gaining newcomers via BRAC, the base realignment and closure effort.

If you want to sell a home, growth is good. (The population in hard-hit Michigan shrank during the last decade.) But some portion of the 480,000 new people have already bought homes, of course -- they didn't all get here last week. (Some of the newbies didn't relocate here at all in the traditional sense but, rather, were born here.)

What would be really interesting to know is this: How many Americans would have moved to a different state in the last few years if they could?

Nevada grew 35 percent during the decade, fastest among the states. But it also has the nation's highest unemployment rate, worse even than No. 2 Michigan. So what gives? A lot of people moved in when the economy was good, and now folks in that bubble-bust state are stuck in underwater homes, unable to relocate. It's a problem playing out in a variety of communities.

Do you think Maryland, with its lower-than-average unemployment rate, would see more growth if people weren't constrained by their homes?

Or less?

Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (5)
Categories: Growth

December 21, 2010

A late addition for Maryland Mortgage Program

Maryland officials have been outspoken on the subject of foreclosure prevention, lecturing mortgage servicers to work with struggling borrowers and passing laws to try to make loan modifications more likely. But it wasn't until recently that the state's own mortgage program -- aimed at first-time homebuyers -- designed a modification option to lower monthly payments to an amount its borrowers in trouble could afford.

Three of those loan modifications have been approved so far. Four more have been OK'd by the state but are awaiting authorization from mortgage insurers. 

More here.

While we're on the subject of delinquencies and foreclosures, you might be interested in the results of a project by The Seattle Times and ProPublica that looked at three areas -- one of them Baltimore. Reporters there were frustrated by the lack of good information on the foreclosure crisis (amen to that) and compiled a random sample of foreclosure filings in Baltimore, Seattle and Phoenix from 2005 through 2008.

As you'd expect, the dataset shows "how the housing bubble and lower lending standards of the era reinforced each other, seducing many homeowners to get in over their heads." But there were significant differences by geography, the organizations wrote:


In the Phoenix area, one of the biggest housing bubbles in the nation suddenly burst, unleashing an equally sudden wave of foreclosure filings.

In the Baltimore area, job losses in an aging city threatened home purchases and neighborhood revitalization.

And in the Seattle area, longtime homeowners responded to lenders' aggressive pitches by tapping into rising equity, taking on more debt, and refinancing into adjustable-rate mortgages.

I think the problem isn't only about job loss in Baltimore, though, at least not at first. Many people live in the city but work outside it, and the state didn't start losing jobs until the spring of 2008.

Part of the story is speculation. When I analyzed Baltimore foreclosure proceedings started in early 2007, state records showed that properties belonging to "non-owner occupiers" -- usually real estate investors -- accounted for nearly 30 percent of the city homes that lenders were trying to foreclose on.

What factors do you think were key in causing foreclosures to spike in our area?

Posted by Jamie Smith Hopkins at 10:50 AM | | Comments (2)
Categories: Foreclosure help, Mortgages, The foreclosure mess

December 20, 2010

Americans aren't expecting a quick housing-market turnaround

Nearly 60 percent of Americans think the housing market won't recover until after 2012, according to a recent survey by real estate site and foreclosure-tracking site RealtyTrac. More than 20 percent are especially bearish, expecting no turnaround until 2015 or later.

Predicting the market is a tricky thing, as I was reminded when I took a walk down forecast memory lane for this post. For instance:

In January 2008, economist Lawrence Yun with the National Association of Realtors predicted while he was in town that the local market had bottomed. "Ten years from now, people will look back at 2008 and say, 'Wow, that was a great time to become a homeowner," he said. (Instead, 2008 was the year of the financial meltdown.)

In May of that year, the managing partner of hedge fund Traxis Partners declared in a Wall Street Journal piece that the worst was over for the U.S. housing market. (Nope.)

Fannie Mae's chief executive said around the same time that his best guess at when things would start improving was 2010. (Home sales and prices were on the upswing in many places early in the year, but once the homebuyer tax credit expired, that trend reversed.)

The company that spun off CoreLogic predicted in 2009 that home prices in Maryland would be 4 percent higher in October 2010 than they were a year earlier. (Instead, they fell.)

That's just a small sampling of the too-optimistic forecasts, of course. (And they're not limited to words. Here's a visual!) The pessimists have the advantage here -- it'll be a while yet before we'll know if the most bearish of bears are just as far off the mark.

But why let that stop you from joining in on the forecasting fun? Weigh in:

By "recover," I mean "start to improve," not "return to peak prices." But I realize opinions differ on what "improvement" actually means.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (12)
Categories: Housing forecasts, Polls, Survey says ...

December 17, 2010

Documenting your possessions, just in case

If your home burns down, would you know exactly what you lost? 

And could you prove it?

Paul Quinn, assistant vice president of claims communication at Farmers Insurance, suggests getting some video now. Consider it for your year-end to-do list (or make it a New Year's resolution, if your December is already packed).

"Take a room-by-room, walking inventory," said Quinn, who blogs about insurance issues (including this one). "Say 'we're now walking into the kitchen' and just briefly describe what you're showing. The same thing with every room throughout the house, including closets. One of the things that's important is, 'How many suits did I have' or 'How many dresses did I have?' If you show the vastness of the closet, that helps prepare you."

You don't necessarily have to say how much you paid for items. But showing bar codes and serial numbers is helpful. So is naming names. 

"We expect people to have average furniture, so if it's something you bought at an upscale place, [say], 'This is an insert-the-name-of-the-chair-here that we purchased at insert-the-name-of-the-store-here.'"

You don't need to get "hung up on the minutia," Quinn said. Show the pantry, for instance, but don't start describing every can of food. And you don't have to list every video game you (or your kids) own, but do show how many you have.

"If you have a picture that shows you have three, you can't really be in a position to say you have 500," he said.

Remember to get video or photographs of the exterior, too. The damage from a fire or other disaster could extend to your landscaping and outdoor furniture.

"The more you have in a video setting, the better off you are," said Quinn, who suggests updates every year or when you make major purchases.

Important final tip: Store the video, or a copy of the video, outside your home. Bank safe deposit box, a relative's computer, etc. 

"There's two major benefits for doing this thing in advance," Quinn said. "It does help you go through the adjustment process, but it also helps to remind you, 'This is what I had.' So ... you don't have to say six months later, 'Oh, wait a minute, I forgot about this.' It just gives you a very comfortable and secure feeling: 'OK, if anything happens, I've got everything ready to talk.'"

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

December 16, 2010

Prices reduced on 40% of Baltimore homes for sale

Baltimore homes for sale with at least one price reduction now make up 40 percent of the market, according to real estate site Trulia.

That's higher than all but three of the country's large cities -- Minneapolis (44 percent), Mesa, Ariz. (43 percent) and Phoeniz, Ariz. (42 percent). Nationally, 27 percent of homes for sale have had at least one price drop.

Average reduction in Baltimore, according to Trulia: 12 percent, or more than $23,000.

Trulia focuses on cities rather than suburbs, but there are plenty of homes in the counties around Baltimore that are listed for less than they once were, too. (You can find pages and pages of "reduced!" listings in Annapolis, Columbia, Owings Mills and other communities.), a separate site that looks at what people are asking for their homes, says the typical listing price so far this month is $222,000 in the Baltimore metro area as a whole. It was $325,000 in December 2006 -- a more than $100,000 change in four years. (Unfortunately, doesn't go back much farther than that.)

While we're on the subject of home prices:

Another real estate site, HomeGain, said 75 percent of Maryland agents it surveyed said they think their sellers' homes are worth less than the sellers do.

About as many of their buyers think homes on the market are overpriced -- even though the agents report that when they list homes for sale, it's usually for less than the number the sellers had in mind.

And on a related note: Almost 300,000 Maryland homes were worth less than their mortgages during the summer, according to estimates from real estate data firm CoreLogic. That's 22 percent of all mortgaged homes, and about the same as the situation in the spring.

Just over 100,000 of those underwater mortgages are in the Baltimore metro area, CoreLogic estimates.

The firm, in its announcement this week, says such "upside down" homeowners "are not likely to behave similarly to homeowners with equity, because their financial interest (the equity) has disappeared and has only a small prospect of returning soon given price trends."

"The lack of equity means upside down homeowners are not likely to maintain and improve their property and are more likely to behave like renters," the firm concludes.

If you owe more than your home is worth, or you're close to that point, do you find yourself loath (or unable) to spend money on your place?

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

December 15, 2010

Tom Clancy's new condos, by the numbers


Photo by Baltimore Sun photographer Kim Hairston


Novelist Tom Clancy, who spent an eye-popping $12.6 million last fall to buy three condos at the Ritz-Carlton Residences in Baltimore, has taken over the entire penthouse level in his building by purchasing three more.

How much space are we talking about? Well, here are some things that could fit in Clancy's 17,000-square-foot digs:

--Seven average new single-family houses

--A fire station with 12 trucks

--An Olympic-sized swimming pool with enough space left over for a six-bedroom spread

--The giant LED billboard that wraps around a Times Square tower

--An arena-league football field

--A Las Vegas nightclub

--More than 100 of this guy's house

I wonder how much time a place like Clancy's would take to clean.

Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (9)
Categories: Unusual homes

December 14, 2010

How Baltimore neighborhoods fared in the 2000s

High-income Baltimore neighborhoods might have retained more of their housing-bubble gains than moderate- and low-income communities, a new analysis by Johns Hopkins graduate students suggests.

The public-policy students, who wanted to understand how the drama-filled last decade affected 14 varied city neighborhoods, found that home prices in 2009 were far above their 2000 levels in most places -- but as a group, the high-income spots held up the best.

The hardest-hit neighborhoods weren't low income. Frankford and Belair-Edison -- both moderate-income areas in Northeast Baltimore -- saw values fall so much during the bust that they ended the decade with prices slightly below their 2000 levels, after accounting for inflation. (I know we don't normally think of home prices in an inflation-adjusted way, but the students wanted to try to get at the real change in value.)

Rising foreclosures seem to be a key reason for the big price drops in those two neighborhoods.

Read on to see how median home sale prices changed in the analyzed neighborhoods. And tell me if you're surprised by the community that retained most of its boom-time price levels. (Hint: It's an exception to the high-income-neighborhood trend.)

Neighborhood 2000 median 2006 median 2009 median 09 vs 00 09 vs 06
Frankford $84,530 $149,451 $79,500 -6% -47%
Belair-Edison $62,465 $98,211 $61,558 -1% -37%
Ashburton $85,649 $148,598 $97,000 13% -35%
Mt. Holly $55,939 $122,711 $66,683 19% -46%
West Forest Park $73,342 $120,949 $95,000 30% -21%
Cedarcroft $308,287 $523,082 $415,000 35% -21%
Highlandtown $47,374 $128,102 $70,695 49% -45%
Ten Hills $99,385 $176,140 $148,500 49% -16%
Morrell Park $67,438 $118,494 $101,000 50% -15%
Tuscany-Canterbury $242,403 $412,060 $365,000 51% -11%
Mt. Washington $182,113 $373,096 $299,500 64% -20%
Canton $150,041 $297,836 $249,900 67% -16%
Greektown $64,641 $152,868 $110,000 70% -28%
Wilson Park $36,547 $71,257 $69,540 90% -2%


Wilson Park is a low-income neighborhood next to high-income Guilford. The Johns Hopkins students, who focused on census tracts rather than neighborhoods as defined by the city, said part of the area is filled with long-term residents who care deeply about the community. (The students went out into the neighborhoods to interview folks, so it wasn't all number-crunching.)

I tried to upload the analysis, but it's so large that either my computer or this blogging platform couldn't manage it. Comment if you'd like me to email it to you. UPDATE: I've uploaded it to Google Docs. Read it here.

Oh, and in case you're wondering: These median figures are pulled from all recorded sales, rather than just those listed on the multiple-listing service used by real estate pros.

Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (11)
Categories: Housing stats

December 13, 2010

Finding city-owned property in Baltimore to buy

Looking for an abandoned property to call your own? Baltimore housing officials launched a site last week listing some of the city-owned properties for sale -- a very small number of them, though they say that will change.

The site, part of Mayor Stephanie Rawlings-Blake's "Vacants to Value" effort to move more properties into the hands of private owners, "will get more interactive as time goes on," housing department spokeswoman Cheron Porter said.

"We decided to offer a limited amount in order to make sure the mechanics of the website were solid before we increased the volume," she said in an email, adding: "Visitors will see more listings in the coming weeks."

Wonk reader JuanitaBeasley, who visited the site last week, was disappointed to find only a small percentage of the roughly 4,000 total vacant buildings the city owns. (I counted 27 over the weekend, though Porter quoted a higher figure on Friday.)

JuanitaBeasley was also struck by the prices. This SCOPE home in Broadway, for instance, is listed for $25,000, which would just be the start of the costs a buyer would need to cover.

"Renovation etc is going to be costly," she wrote, referring in general to the vacant properties.

Prices vary, though. This one in Upton is listed at $7,000.

Porter said prices are based on such factors as comparables, square footage, condition and neighborhood. "Our staff tries to set a fair price based on these criteria," she wrote in her email.

But the set up is supposed to be just like any other for-sale listing: If you're interested but think the price is too high, suggest another figure.

"Reasonable offers will be considered," Porter said.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (18)
Categories: For sale, Vacancies

December 10, 2010

Home sales fall, but contracts rise in Baltimore area

Home sales in the Baltimore metro area continued to plummet in November, but the number of newly signed contracts rose for the first time in months — a hopeful sign.

About 1,530 homes changed hands in November, according to figures released Friday by Metropolitan Regional Information Systems, the Rockville company that runs the area’s multiple-listing service. That was a 32 percent drop from a year earlier, when buyers were rushing to beat a deadline for a federal tax credit for first-time purchasers.

The $8,000 credit was ultimately extended so buyers could sign contracts as late as April 30. Contract-signing swooned afterward — until November broke the streak. Buyers and sellers agreed to 100 more contracts last month than they did a year earlier, a 6 percent increase.

That means sales could stop falling soon. Contracts often turn into settled deals in a month or two.

The average sale price in November was essentially unchanged from a year earlier, at just over $260,000, Metropolitan Regional Information Systems said.

Sales numbers are solid, but prices should be taken with a grain of salt. Averages can be skewed up or down if the homes that sell one month aren’t comparable to those sold the previous year.

Posted by Jamie Smith Hopkins at 12:18 PM | | Comments (3)
Categories: Housing stats

On the lending discrimination front ...

A settlement agreement announced this week to resolve lending discrimination allegations reminded me of a report that found FHA interest rates varying by race.

The report, released by Communities United, said Baltimore residents getting FHA mortgages in 2008 were twice as likely to receive high-cost loans if they lived in minority neighborhoods than if they lived in white neighborhoods. But did the trend point to discrimination or the topsy-turvey environment of that year? Federal Reserve economists analyzing the data thought the latter.

But PrimeLending, a major FHA lender, has just agreed to pay $2 million to "resolve allegations that it engaged in a pattern or practice of discrimination against African-American borrowers between 2006 and 2009," the Justice Department said Wednesday.

Details from the announcement:

Between 2006 and 2009, PrimeLending charged African-American borrowers higher annual percentage rates of interest for prime fixed-rate home loans and for home loans guaranteed by the Federal Housing Administration and Department of Veterans Affairs than it charged to similarly-situated white borrowers. PrimeLending gave its employees wide discretion to increase their commissions by adding "overages" to loans, which increased the interest rates paid by borrowers. This policy had a disparate impact on African-American borrowers. The Justice Department for more than a decade has identified the charging of overages as a means by which lending discrimination can occur.
Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (20)
Categories: Mortgages

Ready for November home sales?

We'll find out how many people bought homes in November -- and for how much -- later this morning. In the meantime, chew on these figures from October:

--35 percent of the homes sold in the Baltimore metro area were financed with FHA-insured loans

--32 percent were financed with conventional loans

--21 percent were bought with cash, though real estate investors tell me that category includes the deals they struck with money loaned to them by other local investors

--7 percent were financed with VA-insured loans

--3 percent were assumptions, where the buyer took on the seller's loan

--The rest were financed in other ways, including just over half a dozen in which the buyer's "lender" was the seller

The numbers come from the stats arm of Metropolitan Regional Information Systems, which runs the area's multiple-listing service.

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

December 9, 2010

Jenna Bush's Baltimore rowhouse up for sale (for more than '08 purchase price)

Jenna Bush, daughter of the former president, is trying to sell her Baltimore rowhouse, as colleague Laura Vozzella notes.

What might interest you folks more than the gee-whiz celebrity factor: The asking price is about $35,000 more than what she and her husband paid in early 2008 for the property, in Riverside on the south side of Baltimore. (Average sale prices have fallen 25 percent over that period in her ZIP code, though obviously individual mileage has varied.)

The 2,000-square-foot rowhouse, on the market for $474,900, looks nicely renovated and appointed in the listing photos. But of the five homes that changed hands in or around the area in the last few months for $400,000 or more, none broke the $450,000 mark, according to real estate search site Trulia -- including three properties with substantially more space.

On the other hand, some smaller places have sold for more per square foot than Bush is hoping to get. One home in Riverside, for instance, went for $360,000 in August -- the equivalent of $319 a square foot, which makes Bush's $222-per-square-foot price look positively cheap.

Have you seen homes bought in or after 2005 sell for a higher price this year without the aid of substantial improvements? I'd be interested in examples. The reverse trend is, as we all know, a heck of a lot easier to find. (That $319-a-foot home in Riverside? Its August sale price was about $20,000 below what it last sold for in 2005.)

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (15)
Categories: For sale, Housing market experiences

December 8, 2010

Don't get surprised by this property-tax rule

Maryland caps annual property-tax increases for people who live in their homes. But there's an exception for sizable home improvements -- and you really don't want to find out about it after you're on the hook.

Normally, the state's Homestead tax credit kicks in once you hit your second July 1 in your property. That means your property-tax bill can increase only up to a certain amount every year -- 4 percent in Baltimore and Baltimore County, for instance. (Full list here.)

But if you've made more than $100,000 in improvements to the property, the Homestead cap doesn't shield you from the taxman. Even if you didn't make the improvements yourself but instead bought a recently spiffed-up home that the state hasn't already reassessed, you could end up with a sizable tax hike a few years down the road.

That's the sort of thing you want to budget for. Here's how the exception works:

The $100,000 threshold has been in place since 2009, when it was increased from $50,000. New appliances, interior decorating and the like doesn't count: "We look at the cost of constructing those things for which one needs the building permit," says Robert Young, acting deputy director of the state Department of Assessments and Taxation.

So, let's say your Baltimore home is assessed at $90,000 and you add $110,000 in improvements. When the state picks up on that change, it reassesses your home at $200,000.

You get to keep the Homestead credit you amassed on the original portion of your home, but you don't get it for the new stuff. That means a big increase in your tax bill, rather than a 4 percent rise.

If the city forwards copies of your building permits to the state assessors, they'll come out and revalue your property then. Otherwise, they probably won't account for the change until they're in the neighborhood for the once-every-three-years reassessment that each home gets.

There's some phase-in of the extra value assigned to the home-improvement work, but it's done in such a way that there's not likely to be much difference between the full value and what you're taxed on in the first year.

"The bottom line is that if you add more than $100,000 in new improvements to an existing property, then you are going to end paying taxes on most of that new improvement value because you receive a new base assessment," Young said. 

His advice: If you're going to do big home improvements, calculate the tax impact first and make sure you can swing it. "If you’re adding $100,000 of extra value, then figure on a couple thousand dollars extra in city taxes," he said. (You can find the various local tax rates here, with a Wonk post about them here.)

What about if you're thinking of buying a recently improved home? Do some legwork before signing on the dotted line. Look at the assessed value. Is it a lot lower than your expected purchase price? It's a good bet that the state hasn't accounted for the new construction yet.

If you have any reason to doubt, you can call the local office for the state Department of Assessment and Taxation and ask if staffers there have sent out a new construction notice on the property. If not, count on a higher tax bill than the current assessment would suggest.

"Even when you're buying a home now, when the market prices are declining, you really need to see, what's my actual tax bill going to be?" Young said.

One city homeowner who bought a rehabbed home in 2006 says she could no longer afford her mortgage payments once the assessment was adjusted and her taxes spiked. Wonk reader MCG was similarly surprised by a big jump in his taxes, though fortunately he did not end up in foreclosure as the other resident did.

"Nobody told us at closing -- my Realtor didn't tell me, 'Oh yeah, they can reassess your property based on the value of the improvements,'" MCG said. "It put a dent in my budget. I was able to handle it, but I could understand how somebody could end up being foreclosed in that situation."

So please pass on the word to people in the market to buy or to do big home improvements. Always good to be forewarned so you can plan accordingly.

While we're at it: Remember that Baltimore has several tax credits, good for five years, that you might be eligible for if you improved your home or bought a newly rehabbed (or constructed) place. Links here:

1. Vacant dwelling property tax credit

2. Home improvement property tax credit

3. Newly constructed dwelling property tax credit

UPDATE: Wonk reader Cory reminded me that people renovating homes in historic districts can be eligible for tax credits, too. Here's Baltimore-centric information.

December 7, 2010

Real estate poll: What's most important?

Say you know where you want to buy, and you've already narrowed down the homes in that location to the ones where the price works for you.

What's the deciding factor?

Wonk reader Matt James suggested a poll to this effect because he's curious to hear whether it's bedroom number, yard size, house style or something else entirely that breaks the tie. 

Let's assume good condition. What's most important to you?

Please forgive the back-to-back short posts. I'm in day four of a rotten cold, and it doesn't seem to be getting any better.

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

December 6, 2010

'Huge price reduction' on Unabomber's property

Want to follow in the Unabomber's footsteps in a strictly real estate sense? His property in Montana, minus the cabin, is up for sale.

The listing declares it's being offered for a "HUGE PRICE REDUCTION" of $69,500, down from $154,500. Apparently buyers are not lining up for the opportunity, despite the possibly one-of-a-kind tree with "FBI" carved into it.

John Pistelak Realty, which has the listing, describes the 1.4-acre land as "obviously very secluded."

"Own a piece of infamous US history!" the listing says.

The reason you can't own Ted Kaczynski's cabin, too: It's at the Newseum in D.C., the Associated Press says. The AP points out that it's not clear who the current owner of the land is.

What do you think, folks: Would the land be more likely to sell as advertised, or if no hint of its past were disclosed?

Perhaps the folks at would like to add this to their list of wild and wacky accommodations. So far it includes a toilet-shaped house and a pyramid.

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

December 3, 2010

Home prices up for smaller single-family homes?

It might be a statistical quirk, but the average price for small single-family houses in the Baltimore metro area -- two bedrooms or less -- jumped more than 20 percent in October.

This October: about $227,000. Last October: about $187,000.

Metropolitan Regional Information Systems, which runs the region's multiple-listing service, tracks the change in average price by a variety of home types, and everything else is down year-over-year. But there seems to be a trend of single-family house prices holding up better -- at least on average -- than everything else.

Consider townhouses and rowhouses: 

The two-bedroom-or-less category dropped 11 percent, to $169,000. Three-bedroom examples dropped almost 10 percent in average price, to $204,000. And townhouses or rowhouses with four or more bedrooms? Down 17 percent on average, to $222,000.

Condos -- or, more precisely, condos, coops and properties with ground rent -- dropped 9 percent on average, to $165,000.

Three-bedroom single-family houses, meanwhile, saw a small drop in average price, down under 2 percent to $265,000. Houses with four or more bedrooms also dropped less than 2 percent, to an average price of $429,000.

So what's driving the difference? I suppose if distress sales made up a bigger share of condos and attached homes that sold in October than houses, that would mean a bigger downward effect on prices. (Statistically speaking, that is -- I don't have the foreclosure and short sale breakout by home type, so I don't know if that's actually happening.) But it could simply be buyer preference at work. (We discussed similar trends back in July.)

What are you seeing out there?
Posted by Jamie Smith Hopkins at 11:12 AM | | Comments (2)
Categories: Housing stats

December 2, 2010

Where BRAC migrants are moving

Most of the people moving to Aberdeen Proving Ground for BRAC are settling in Harford County, with Cecil County the second most popular destination.

That's according to a report from the Chesapeake Science & Security Corridor, which has data for 2,400 workers whose jobs had transferred by September for the military base realignment and closure effort.

These are employees, mostly civilian, with C4ISR, the Army team of organizations that had been headquartered at Fort Monmouth, N.J.

ZIP code with the most BRAC folks: 21015, Bel Air. More than 350 are living there, with an additional 225 in Bel Air's 21014 ZIP. Havre de Grace, north of the base, is another popular spot.

Here's the breakdown by county:

1. Harford County, 60 percent

2. Cecil County, 18 percent

3. New Castle County, Del., 7 percent

4. Baltimore County, just over 5 percent

5. Baltimore City, 2.5 percent

6. Chester County, Pa., 2 percent

That's nearly everyone, but about 100 more are in other counties (in Maryland and elsewhere).

The city, which has actively worked to attract BRAC movers, has landed about 60 to do the reverse commute. More than half are in and around downtown, notes the Greater Baltimore Board of Realtors, which forwarded me this report.

So those are the early movers. We'll see if the rest follow the tracks forged by the pioneers.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (18)
Categories: BRAC

December 1, 2010

Baltimore metro area's foreclosure rate

The Baltimore region's foreclosure rate ranks it in the middle among all metro areas, according to a new report -- a lot better than the hardest-hit places and a lot worse than the best-off spots.

Mortgages in the foreclosure process, meaning that lenders were trying to repossess the homes, accounted for 3.7 percent of all loans in Baltimore and its surrounding suburbs as of June. That's according to, an effort by Local Initiatives Support Corporation, the Urban Institute, the Center for Housing Policy and KnowledgePlex.

Our rate is lower than that of 192 metro areas and higher than 173.

Here are the communities at both extremes:

Metro areas with the highest foreclosure rates are all in Florida:

1. Miami-Fort Lauderdale-Pompano Beach (17.8 percent)

2. Cape Coral-Fort Myers (15.8 percent)

3. Palm Coast (15.6 percent)

4. Port St. Lucie (15.0 percent)

5. Punta Gorda (14.6 percent)

The least-touched are more geographically diverse:

1. Bismarck, N.D. (0.9 percent)

2. College Station-Bryan, Texas (1 percent)

3. Harrisonburg, Va. (1.1 percent) 

4. Midland, Texas (1.2 percent)

5. Corvallis, Ore. (1.2 percent) also looked at "serious delinquency" -- mortgages in the foreclosure process plus ones at least 90 days behind but not yet in foreclosure proceedings. Baltimore's rank was somewhat higher for that category but still middle-of-the-pack, 164 out of 366.

The serious delinquency rate in the Baltimore area was just over 8 percent, vs. more than 25 percent in Miami and and less than 2 percent in Bismarck.

So that's where we stood at the beginning of this summer. Does that make you feel better or worse?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)
Categories: The foreclosure mess
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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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