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January 31, 2011

Rental scams still flourishing -- beware

If you're in the market for a new rental home, make sure you don't get conned by a scammer using a seemingly sweet deal as bait.

Online fraudsters posing as landlords -- advertising real properties they don't actually own -- are grabbing prospective renters' deposit money. Other scammers go the other route, pretending to be renters in order to steal from legitimate landlords.

It's a subject we've talked about before, but it's worth a reminder because it's still happening -- as Robert H. Leininger, a real estate agent with Real Estate Professionals Inc. in Baltimore, discovered recently.

"I received a call about a week ago from someone who said they had seen one of my listings on a 'For Rent By Owner' web site," he told me in an email.

He hadn't advertised there. But a scammer had -- using the listing information from a property he had already helped an owner rent out.

The scam ad didn't have his contact information, of course -- just the email address of the supposed owner. But the caller, a woman hoping to rent the place, found Leininger's number when she Googled the address and happened across a virtual tour of the property he'd put together. So she connected with Leininger as her boyfriend was emailing the "owner."

Leininger didn't initially feel uneasy to hear one of his listings was in an unexpected place because so many sites automatically pull in details from the multiple-listing service. He explained the home had already been rented and offered to help the couple find something else suitable.

Then the so-called owner emailed back. Guess what? The place was available! He was eager to rent it because he was working in the UK. All he wanted for the three-bedroom house, which is located in a ritzy North Baltimore neighborhood and comes with a gourmet kitchen and a two-car garage, was $1,500 a month -- and a $1,000 deposit, of course.

The couple forwarded the message to Leininger, who saw that the name was right but the email address wasn't. The message was full of misspellings and grammatical errors. And the asking rent? Designed to entice, considering that "my listing had been rented with a year's lease for $2,200 per month," Leininger said.

"I contacted the legitimate owner to find out what was going on, and he said he had no idea of any of this," he said. "The e-mail received from this fake 'owner' stated that he would like to know more about the potential renter, and asked usual questions such as if any pets or children were involved, but also asked what type of work they did and other inappropriate questions at this stage. The potential renter then received yet another e-mail, this time with an application attached. This application requested personal information from the renter."

The couple didn't respond, of course. And hopefully they wouldn't have, even if they hadn't happened across the agent who handled the real listing. But people have been taken in by this scam, because it's more subtle than the emails out of the blue that begin, "Dear Sir/Madam, I have a splendorous business proposition for you ..." 

Leininger alerted the website that it had a scam listing and got it taken down. He suggested to the real owner of the house -- his client -- that a call to the FBI would not be amiss, since the client's name was being used by a con artist.

"I assume what happened is that this person saw my listing, copied my photos (right click and save) and my copy, and posted the listing as his own," Leininger said. "It would be easy for him to find the owner's name from public tax records. Who knows how many other listings that was done with!"

So be cautious, renters and landlords. You don't want to lose money or put your Social Security and bank account numbers in danger. Rule No. 1: Does it smell a bit fishy? Run, run away.

Snopes, the site that works to separate rumors from fact, says red flags for potential renters to watch for are landlords who are eager to rent quick-quick at below-market amounts, who don't make the property available for you to look at and/or who ask for money before you have a signed contract and keys in hand.

Here's a list of red flags for landlords to look out for.

Come across a scam? Report it to the FBI.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (8)
Categories: Renting

January 27, 2011

Readers respond to Laurel resident's plight

Last weekend I wrote about the rough economy's effect on unemployed workers ages 50 and up, who are having an especially rotten time finding a new job. A growing number are at the brink of homelessness.

One, Laurel resident Kathleen Harwell, 59, has searched for nearly two years to replace her eliminated administrative-assistant position. Unemployment benefits exhausted and too young for Social Security, she was about to be evicted from her mobile-home community.

She owns her house outright but had fallen several months behind on the rent for her land. Her management company warned her in December that it would move to auction it to pay the arrears if she couldn't pay up by mid-January. "I'm out of luck unless a miracle happens," she said last week.

Readers took that as a call to action. Several sent checks to Harwell, made out to the company, that collectively paid off the $2,100 in arrears as well as her February rent. That buys her a month to keep searching for a job or another alternative to life in a shelter.

Some of the people donating money are in that 50-plus age group and felt fortunate that they were doing all right. One woman, a retiree, felt a connection based on background: "I was an administrative assistant for many years," she told me.

In thank-you notes to the strangers who stepped in at her time of need, Harwell said she wrote: "Your kindness will always be in my thoughts."

"At least for the time being, right now, things are stabilized," said Harwell, who spends part of every week going through help-wanted listings at the one-stop job center in Columbia. (That's how we connected in the first place.)

Offers of help, including job and job-training suggestions, also came in for Eve Prietz, whose home is in foreclosure. So don't let anyone convince you that people don't care about each other anymore.

The real key for most people at the brink of eviction or foreclosure is employment. I hope the job picture improves substantially soon, because people's lives depend on it.

In the meantime: Do you have a housing plan B, C and D in place in case you lose your job? Could you survive if you're out of work for a year or more?

A new survey finds that 38 percent of Americans feel less comfortable about their savings level than they did a year earlier, compared with just 19 percent who feel more comfortable. So financial insecurity remains an ever-present issue, even though the recession was officially over a year and a half ago.

I'd like to hear about creative things you've done to keep a roof over your head in tough times, or to cut back on housing expenses to build up more savings.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (3)
Categories: Homelessness, The economy

January 26, 2011

What everyone's paying in city property taxes, one by one

Baltimore's new release of government data at OpenBaltimore lets you see how much the owners of each property are paying without having to look it up one at a time at the city's property-tax lookup site.

It's a huge file, the sort requiring a database manager such as Access to analyze, but you can page through the display on the site itself and do some sorting there as well. Top amount: $4.3 million -- that's for an office tower. Lowest: thousands of $0s for religious, nonprofit and government properties.

Also at OpenBaltimore: parking fines, 311 calls and a lot more.

Find something intriguing? Please share.

I'm not trying to make this a property-tax week, by the way. I'll have some completely non-tax-related topics for you soon.

Posted by Jamie Smith Hopkins at 3:40 PM | | Comments (11)
Categories: Housing stats, Property taxes

January 25, 2011

Baltimore property taxes: Should they be cut in half?

So an economist is suggesting Baltimore cut its property-tax rate in half. And he's suggesting it in an election year.

Naturally, I'm curious what you all think.

The proposal is a little bit more complicated than "just cut," so here's a summary in case you didn't see the Sunday Q&A or Monday blog conversation:

Loyola University Maryland's Steve Walters, in a paper with former student Louis Miserendino, recommends officials amend the city charter to ensure that the rate will drop at a specified time -- say, in three or four years -- to give people a reason to buy while prices are still depressed (compared with the suburbs) by the current rate. Set aside any extra tax revenue that comes in and spend it only after the rate is slashed, they say. They're calling it the "cash on delivery" plan.

If it were up to you, what would you do?

Do you think the city could get through this sort of major shift without a big dent to its budget?

Do you have alternative suggestions for city leaders and would-be leaders?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (31)
Categories: Property taxes

January 24, 2011

Slash Baltimore property-tax rate in half, economist says

The long-standing political consensus on Baltimore's property-tax rate seems to be that it's a necessary evil. The nearly 2.3 percent rate is so much higher than in the rest of the state that it's a disincentive to buy in the city, but substantially lowering it would immediately dent revenues and force big budget cuts -- so the argument goes.

Steve Walters, an economics professor at Loyola University Maryland, is offering up a plan designed to get the city out of that box.

He and a former student, Louis Miserendino, suggest the city reduce the tax rate by half -- yes, half -- in one fell swoop. But not right this instant. Instead, they write in a new paper, officials should amend the city charter to ensure that the rate will drop in, say, 2015, giving people a reason to buy while prices are still depressed (compared with the suburbs) by the current rate. Then bank the extra money that flows in and spend it only after the rate is cut.

Walters believes that "cash on delivery" plan would be a bridge over the initial budgetary chasm of a halved tax rate. Cities that were forced by tax revolts to slash rates 30 years ago saw revenues surpass their original levels pretty quickly, he said -- within four years in San Francisco, for instance.

Here's a Q&A with Walters about the plan, the political reaction and why he thinks the property-tax rate is the key reason for Baltimore's decades-long population loss.

But if you've seen that already, I figured you might like to hear more of what he had to say and offer your feedback. Read on: 

Question: Some have argued that the city's tax rate isn't so very bad because property prices are lower in the city than the suburbs, and thus city residents' total costs aren't necessarily higher. What are your thoughts?

Answer: Even economists have been, I would say, complicit in this policy disaster, because that's exactly the argument that economists made back in the '50s and '60s. And this is called tax capitalization: If taxes go up, your property values go down, so it's a wash. And yeah, it's true; the purchase price of a house is cheaper in Baltimore, all else the same, than it would be in the lower tax environment in the suburbs, but that's looking at all of this housing and business property as if it's completely static and never depreciates. But it does.

If you're a homeowner, you know it depreciates. ... We need new kitchens, we need new roofs. ... You have to put money into it. Once the property tax here is higher than in the county, every new investment exposes you to that capital loss that county residents don't pay. ... So what happens is city property decays. People who were thinking of making these investments make them in more favorable tax environments. It leads to more decay in the city; it leads to more out migration.

Q: You offer Boston and San Francisco as examples for Baltimore to follow. Are there other cities that were worse off after cutting property-tax rates?

A: I don’t know of any. ... I just have not found cities that have a property-tax rate of 3 percent, 2 1/2 percent, getting into the punitive range, that are doing very well. Just about every city that people identify as fiscal basket cases are high-tax jurisdictions. 

I had one guy write to me from West Chester in New York, and apparently their property taxes are high, and his claim is, "We're happy with our property taxes because we know we have the best schools in the New York area and the safest streets in the New York area." That's fine. If your high property taxes are efficiently delivering high levels of service, then you probably won't see this high level of out migration. Because people are saying, "I’m probably getting value for my money." But I don't think people would say in the same in Baltimore.

Q: How do Baltimore's spending levels compare with San Francisco and Boston?

A: San Francisco spends more than twice as much as Baltimore per resident. So San Francisco's city government is not cheap. Prop. 13 isn't choking the city -- because the tax base has grown so robustly, San Francisco spends much more per capita than we do on city services. Boston spends about 25 percent more than Baltimore does. (I think it was the 2005 budget year I looked at.) Both Boston and San Francisco have the wherewithal to address some of the issues like schools and crime ... that we don't.

Q: What do you say to those who argue that the city should focus on schools and crime before it tackles the property-tax rate?

A: This is not something you can compartmentalize and say, well, first, we have to do something about the schools. ... This is something that will contribute to all those concerns. I just don't see the city joining the superstar ranks without this fundamental change. Unless it does this, unless it creates a more favorable environment for capital investment, I see the city limping along as it has in recent decades, always wondering why ... it's having a tough time with population loss and other issues. It should be no mystery.

When you change the property rate, the property-tax base changes over time. If you raise the property tax, the base shrinks. People stop making investments. Frustrated residents move out and sales fall. These dynamic effects, they can work for you or they can work against you. For decades, they’ve worked against us.

Neighborhoods become safer when you've got more people in them. Schools become better when enrollments are rising and parents are concerned. When you attract new residents to the city, you'll bring not only their tax receipts, but you'll bring more eyes on the streets to make the streets safer.

Q: How has the property-tax rate affected Baltimore's business base?

A: It made employers want to leave. And as we depopulated and impoverished ourselves by this capital scarcity, then all these other problems began to get out of hand. ... The businesses that we have hung onto aren't capital-intensive businesses. They're human-capital intensive.

Q: What would you suggest voters do if they want to see a large property-tax cut?

A: It's like in any market. You have to send a signal to producers about what you want produced, and when somebody comes up with something you want, you have to buy it. 

My point has long been, the candidate that actually does this is going to change the destiny of the city so dramatically that this person becomes not just a successful mayor but a national figure. ... If you're thinking of a way to distinguish yourself from the herd, you'd say, "I'm going to reform the property-tax system, and that's actually going to save the city."

Q: Would you move back to the city if elected officials take your tax advice? (Note to readers: Walters relocated to Lutherville in the late '80s after living in Baltimore.)

A: Oh, sure -- I've been trying to get my wife to move back for a while. But she has friends and other entanglements in our area. She's starting to crack, though.

Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (14)
Categories: Property taxes, Q&A

January 21, 2011

Top home sale in the Baltimore area in December


Photo courtesy of Bonnie Parks


The Baltimore-area housing market topped out at $3.2 million in December. The property above shows what those buyers got for their money.

The home, on about 3.5 acres of land where the South River meets Selby Bay in Anne Arundel County, has its own pier, beach and two-bedroom guest house.

"It's just the most phenomenal lot, with all the waterfront," said Bonnie Parks, broker of Annapolis Realty, who was the listing agent. "It looks ... all the way down to the Eastern Shore across the Bay."

The sellers -- who had purchased for $4 million 10 years ago and were asking $4.5 million -- live in New Jersey and used the Edgewater home as a weekend place, she said. The buyers live in Maryland but also plan to spend weekends there. 

The three-bedroom main house, built in 1995 on the foundation of the original 1920 structure, has large screened-in porches and a master suite with a bathroom "the size of most people's bedrooms," Parks said.

Whether legend or truth, the story passed down from owner to owner is that the property was a speakeasy in the '20s. "There's a huge safe in the basement," she said. "When the current buyers looked at it, they said, 'Hmm, bet there was a lot of rum in here.'"

Here's a close up of the house:


Above: the exterior. Below: the marble-flooring foyer.


And that's your monthly postcard from the upper echelon. What would you spend $3.2 million on, if money were no object?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (5)
Categories: Priciest home of the month

January 20, 2011

The housing-bust hit to houses, townhouses, condos



Source: Maryland Department of Planning


Sales of all types of homes have really plummeted in the state since the peak days, as you can see from this new Maryland Department of Planning chart. The number of single-family homes didn't just drop well below its 2002 level, for instance, but also below the 2002 level for townhouses -- which had accounted for about half as many sales as detached homes that year.

Here's how the decline by housing type breaks down:

Measured from the peak in 2005, townhouse sales dropped the fastest, according to the planning department -- almost 68 percent.

The pace of decline in single-family home sales was a bit slower, at 63 percent. But because this housing type accounts for the largest piece of the market, the change in sheer numbers is pretty dramatic: from just over 70,000 in 2005 to under 26,000 four years later.

The drop in condo sales, at 62 percent, was close on the heels of detached housing.

The planning department is measuring all arms-length sales, not only those on the multiple-listing service. You can find its full report here. And if you really like data, you can peruse the agency's Excel files of home sale figures by housing type, including average and median prices, down to a ZIP code level.

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

January 19, 2011

GMAC drops some Maryland foreclosure cases

You could be excused for wondering what happened to robo-signing, which roared onto the scene last fall amid predictions of foreclosure gridlock and then seemed to tiptoe out of the collective consciousness. But it's not gone.

GMAC Mortgage said Tuesday that it is dropping about 250 foreclosure cases in Maryland because of "potentially defective" documentation.

More on that story here, including the back-and-forth about whether a class-action challenge by Civil Justice in Baltimore was a key factor in the dismissals.

It might seem like a small number of cases, compared with the total number of Maryland homeowners in foreclosure. (It's certainly smaller than the 10,000 dismissals the Firedoglake blog reported, without sources, over the holiday weekend.) But it raises the possibility that other mortgage servicers might feel compelled to drop cases, too, and start afresh. A similar challenge against Wells Fargo is pending.

Here's the original story about the challenges, which were filed as motions in two foreclosure cases rather than as fresh class-action lawsuits. Civil Justice's argument was that mortgage servicers must abide by the rules not only to uphold their borrowers' rights, but also to avoid "years and years of litigation concerning the title to properties."

"We have a huge title problem that needs to be solved," Phillip Robinson, executive director of Civil Justice, said at the time. "The only way to clear title is to dismiss cases and make [mortgage servicers] do it the right way."

Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (4)
Categories: The foreclosure mess

January 18, 2011

A ground rent 'oops'

A bunch of Maryland ground-rent owners were shocked when they discovered, too late, that they had to register their property by Sept. 29 of last year or it would cease to exist. One of those owners got a second surprise when he noticed that the state declared in its tax booklet -- incorrectly, as it happens -- that the deadline was September of this year.

Colleague Andrea Siegel reports on that oopsie here, which some ground-rent advocates say is adding to confusion about the law.

Just after the actual deadline passed, I heard from about half a dozen people who say they didn't know and don't see why the state thought its occasional public notices were sufficient.

There were lots of news stories in 2007 when the General Assembly was changing ground-rent laws, one of which was about registration. But the three-year window to apply meant it fell off the radar until the very end. Some of the folks I talked to remembered the '07 hoopla but didn't catch on to the fact that the changes had implications for all ground-rent owners, not just the big investors whose aggressive tactics prompted a Baltimore Sun investigation.

One man didn't have the heart to tell his elderly mother that the bills she was carefully sending out had no legal standing anymore. 

The idea of registration is to make it absolutely clear who owns each ground rent and how to contact them, something that title companies say has proved difficult in the past. So it seems like a useful idea, but it also seems a shame that some folks were in the dark. One suggested a do-over period. What do you think?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (9)
Categories: Ground rent

January 17, 2011

Is your home typical?

If, while waiting for your turn in the shower, you occasionally ponder whether most Americans have more bathrooms than you do, HSH Associates has just the infographic for you. The financial publisher pulled statistics from the American Housing Survey to create the typical house. Drumroll, please:


Related Resources: Mortgage Rates and Mortgage Calculator at


How does that match up with your living arrangements?

Here are some Baltimore-specific statistics for owners and renters alike, drawn from the separate American Community Survey:

--The most popular housing type? Single-family detached. Almost half the homes in the Baltimore metro area fall into this category.

Nearly 30 percent are single-family attached, such as townhouses and rowhouses.

Fourteen percent of homes are within buildings that have at least 10 units.

--A three-bedroom situation is most common, with 40 percent of homes in that category.

Twenty-four percent have two bedrooms.

Nineteen percent have four bedrooms.

Eleven percent have one bedroom.

Just over 5 percent -- about 60,000 homes -- have five bedrooms or more.

And about 1 percent are studio situations, with no bedrooms at all.

--The typical monthly housing cost for owners with a mortgage is just under $1,800.

For owners without a mortgage, it's about $500.

For renters, it's just under $1,000.

--Household size is a bit larger, on average, for owners.

Owner-occupied units have an average of 2.7 people, compared with 2.3 people in rented units. 

--More than half the metro area's households moved into their current home within the last decade.

A full quarter moved in 2005 or later, so you can see why there might be a fair number of underwater folks out there. Slightly less than a quarter, by contrast, last moved before 1990.

All these statistics come from the American Community Survey's most recent five-year estimates, a look at trends from 2005 through 2009. 

So: Are you typical?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (4)
Categories: Housing stats

January 14, 2011

BGE isn't sending staffers to your door asking for cash

Baltimore Gas and Electric Co. just sent out an advisory to make sure you realize that anyone showing up at your door, demanding cash to settle an overdue BGE bill, is trying to pull a fast one.

"Periodically, people posing as BGE employees visit customers, usually seeking entry into their homes to attempt to steal money and other valuables," the company said in its press release. "Occasionally, these scam artists call customers seeking credit card or other personal information. Many times, they indicate that they're trying to collect payment on a past due BGE bill and threaten to suspend service if the 'payment' isn't made."

Said Jeannette M. Mills, the company's senior vice president of customer relations and account services: "BGE no longer accepts cash payments from customers and at no time should a customer give cash to someone who approaches them claiming to represent BGE, nor should they give personal information such as credit card numbers to people misrepresenting themselves as BGE employees in telephone calls."

BGE usually only sends employees your way to respond to an emergency, check equipment, read meters or get service started or stopped. "Although it is rare for the BGE representative to require entry into the customer's home, if the entry is requested, the customer should always ask to see photo identification," the company said. "All BGE employees and contractors carry company identification badges displaying their name, photograph and identification number."

Want to make sure it's the real deal? Call BGE at 410-685-0123.

Posted by Jamie Smith Hopkins at 1:50 PM | | Comments (12)

An outsider perspective on Md. property-tax rules

Wonk reader Jim, a Boston resident who bought a home in Baltimore recently for visiting his daughter on weekends, got a taste of the "bewildering" Maryland property-tax rules as he was searching for a place.

Here's what struck him:

--It's not always apparent to buyers how much they'll be paying in taxes. He found that many listings had incorrect tax amounts, either calculated on the wrong year of the three-year phase-in or noting the seller's (lower) tax burden thanks to his or her Homestead tax credit.

--The Homestead credit, which caps increases in taxable assessments for owner-occupants, is probably a key reason relatively few people appeal. Someone being taxed on $150,000 of a $300,000 assessment in Baltimore won't get a lower bill if they successfully argue that the true value is just $200,000.   

"What I found out pretty quickly was that a lot of people do not contest their assessment, which leads to a poor system," he wrote me. "Why would someone who is covered under the Homestead rule contest a high assessment? They probably like a high assessment because it doesn't cost them anything and it makes it seem like their property is worth more."

--That high assessment that's not bothering you, Mr. or Ms. Home Seller? Remember that your buyers will be stuck with the full tab. 

"So while the seller of my place is paying $6,000 a year in taxes, I'm scheduled to go to $12,000 next year," Jim writes. "If my appeal wins, I would be paying more like $9,000, but still $3k less than scheduled."

--Not that this will surprise any locals, but city property-tax rate: Ouch.

"In Boston, which is a high cost city, especially in real estate, property taxes run approximately 1% of a home's actual market value, so Baltimore's taxes really shocked me," Jim notes. "To pay $400,000 for a condominium and pay $12,000 in taxes is unreal. On my primary residence in Boston, valued at $1.1 million for taxes, I pay about $10k in taxes with the local homeowner exclusions."

(On a side note, this much-discussed analysis of Baltimore's tax rate has comparisons to Boston. Stay tuned for a Q&A with one of the authors.)

Anyone move to Maryland after owning a home elsewhere? What do you think of the assessment and taxation setup?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (16)
Categories: Homestead Property Tax Credit, Property taxes

January 13, 2011

Metrostudy: 'Tax credit hangover' is over

You never know for sure if the first upturn in home sales after a stretch of decreases is a blip or a trend until you can look back with 20-20 hindsight, but a homebuilding market research firm is ready to call December the start of a new era.

"The fact that sales are positive on a year over year basis, and that contracts continue to trend higher in many submarkets, indicates that the 'Tax Credit Hangover' is done," writes Kenneth Wenhold, Mid-Atlantic regional director for Metrostudy -- referring, of course, to the federal homebuyer tax credit that phased out last summer.

And here's something you don't see every month: The Baltimore suburbs saw a bigger turnaround than the Washington metro area. (The Baltimore area was worsening from a seller's perspective in the fall, so we have farther to go.) Sales rose eight percent in the local suburbs Metrostudy focuses on -- Anne Arundel County, Baltimore County, Cecil County, Harford County and Howard County -- while, for instance, falling 3 percent in Northern Virginia and 12 percent in D.C.

Here are a few more of Wenhold's Baltimore-area market musings:


Unfortunately listings are up 10%, muting the effect of the additional activity. However the months of supply declined by 0.6 months to 10.0 months, representing the first significant decline in inventories in nearly a year. Harford, Baltimore and Howard lead the pack in gaining inventory, while Baltimore and Harford account for the majority of increased sales. Prices are negative, though the various submarkets seem to be fluctuating between single digit gains and losses on alternative months. New contracts are now positive or flat in nearly every submarket, with Harford seeing the largest increase, most likely due to immigration of workers affected by the BRAC initiative.

This is the slow time of year for sales and new listings, as Wenhold notes, so a key test of market momentum will come in the spring. Who will emerge in greater numbers, new would-be buyers or new would-be sellers?

While you're chewing over that, check out this new chart put together by RealEstate Business Intelligence, Metropolitan Regional Information Systems' stats arm. It shows the last two years of pending sales in the Baltimore metro area -- city and surrounding counties -- compared with the trend in home prices for sales that closed.

RBI's take on December was in the "on the one hand ... on the other hand" vein. For instance: "Seasonal holiday slowdown is evident by decline in December pending sales but decline was less than normal." (That's December vs. November, not year-over-year.)

Also: "Buyers and sellers signed 9.7% more purchase contracts in December 2010 than they did in December 2009. However, the increase in pending sales (to 1,643 from 1,498) over this period was largely due to a two week lull in activity in December 2009 as consumers waited between the first, and then second, expanded federal tax credit home purchase programs."

The tax credit might be gone, and maybe even the sales hangover it caused, but it'll still be throwing a wrench into comparisons for a while yet, apparently.

What's your take on the hangover? Done or no?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (10)
Categories: Housing stats

January 12, 2011

What to do about an extinguished ground rent

Sept. 29 was a key day for owners and payers of ground rent, that unusual Baltimore system that separates ownership of homes from the land below them. If the ground-rent investors registered by that date, they get to keep collecting their twice-yearly fees. If they didn't, then the homeowners no longer have to pay -- because the ground rent officially ceased to exist.

But it's taken time for the state to process the thousands of last-minute registrations. That's left some homeowners in a state of suspense, wondering whether they still owe ground rent. If you check a residential property on the state's lookup site with a registered and processed ground rent, you'll see a link to "ground rent registration" near the top right corner. No link, on the other hand, could either mean there's no ground rent or it's still being processed.

There's not a lot in that last group, as it happens. The state Department of Assessments and Taxation said last week that it's going back and forth with ground-rent owners on about 45 applications, trying to correct what it believes are inaccuracies in the information provided. Once that's done, it'll post a message to that effect so homeowners know.

But Robert Young, acting deputy director of the agency, said homeowners don't have to wait any longer to get the ball rolling on the next step -- requesting a "letter of extinguishment" to make it official.

If there's no "ground rent registration" link on the lookup page for your property, "then you can write us a letter saying, 'I want a certificate of extinguishment,'" Young said.

After staffers check to make sure your property isn't among the 45 that are still up in the air, they will send a certificate your way. It will specify that the ground rent on your property was extinguished Sept. 29.

Don't just stick it in a drawer, though. Take that document to your local clerk of the Circuit Court -- if you live in Baltimore, in other words, to the Baltimore Circuit Court. "Say, 'I want to record this in the land records,'" Young said. "Then it will be part of the deed."

Later, if you're selling your home, the company doing a title search will see that you own it "in fee simple," meaning ground and building alike.

Young says to mail the requests to the Maryland Department of Assessments and Taxation, Ground Rent Section, 301 W. Preston St., Room 808, Baltimore MD 21201. (I see "Room 801" specified on the state's site, so I'm trying to find out whether one is preferred over the other. Including the words "Ground Rent" is probably the key thing. UPDATE: Either is fine, Young confirmed.)

All told, nearly 85,000 ground rents were registered, which is what the state was estimating a few months back. Thousands, possibly tens of thousands, ceased to exist after they weren't registered. (A state estimate a few years back put the total at about 115,000.) 

One ground-rent owner sued, calling unconstitutional the law that makes property disappear if you don't register it. Others are challenging changes to how ground-rent owners can collect delinquent amounts owed, saying it made their property worthless. That second suit is headed for trial.

One reader, seeing the lawsuit story, asked a question about ground rent that might have occurred to some other folks, too: Why do homeowners have to pay property tax on land that someone else owns?

Because the law says so, according to Young.

"You're the one with the use and enjoyment of that land," he said. "So the idea is, you need to pay the property taxes."

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (17)
Categories: Ground rent

January 11, 2011

A decade of Baltimore-area home sales


Source: Metropolitan Regional Information Systems


Above: The craziest decade for the housing market, at a glance.

Preliminary numbers from Metropolitan Regional Information Systems show buyers in the Baltimore metro area -- the city and surrounding counties -- closing deals on about 21,500 homes last year, down 3 percent from the year before.

That's about the same number of homes that sold in 2008.

MRIS releases official year-end figures in February, often higher as a result of last-minute additions by real estate agents, so I'm using preliminary numbers only to allow for fairer comparisons. It'll be interesting, once we have the full results, to see if the effect of the federal home buyer tax credit was a wash. (Preliminary figures show a sales gain of 3 percent in 2009, counterbalanced by the 3 percent drop last year.)

Check out colleague Lorraine Mirabella's story about the newest market trends, including the sales increase in December after five months of losses. (I, alas, am home sick.)

Do you think the increase in December means the number of home sales is stabilizing? (In case you're wondering, December 2009 sales weren't nearly as high as November 2009, originally the deadline for the home buyer tax credit, but they did post a 10 percent gain over the previous December.)

One other nugget of information to chew on: The number of pending deals, which will turn into sales if all goes as planned, rose 10 percent last month vs. a year earlier.

Prices are another matter. The average fell about 7 percent in December.

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

January 7, 2011

Question of the day: Will you move in 2011?

My daughter is sick and I'm exhausted, so I'm going to ask you all to talk amongst yourselves today. Here's a question to chew on: Do you plan to move this year, either to switch rentals, jump from renting to owning or sell your home and buy elsewhere?

If so, why?

If not, are you happy where you are or staying put for other reasons?

The last question of the day got you all discussing whether you had any plans to buy or sell a home during the holidays, typically a low point for sales.

Wonk reader Brian said then that he was taking a break until spring because there was nothing for sale that he wanted to buy. And he shared his frustration about all the economic and market uncertainty: "It's tough to even pay fair market value when prices are potentially still falling. I worry about losing the great interest rates by waiting but I worry much more about overpaying and then taking a loss if I need to sell."

SZ was about to take a break as well -- from trying to sell -- "when out of the blue buyers who saw our house in August gave us a contract a few weeks ago. So now we are selling and buying in mid-January. We'll be packing during the winter holidays and settlement is scheduled for our son's bday in January. I didn't think it would happen now, and it will be hectic, but we're happy to have it!"

Posted by Jamie Smith Hopkins at 9:22 AM | | Comments (36)
Categories: Question of the day

January 6, 2011

Forecast: Home prices will fall 6% in Baltimore area in '11

A real estate data firm that says home prices fell about 8 percent in the Baltimore metro area last year expects declines of nearly 6 percent this year.

Clear Capital released a forecast today for the 50 largest metro areas, ranking our region 32nd. Washington, D.C. topped the list with an expected gain of more than 6 percent, while the Virginia Beach/Norfolk area of Virginia -- with a forecasted drop of nearly 13 percent -- is at the bottom.

Quite a range in a fairly small geographic region.

Here's how Clear Capital believes all the largest metro areas will do this year, compared with how they fared last year:


(Sorry to make you squint -- it's a screen capture from a PDF.)

Clear Capital, in case you've forgotten from earlier recitations, calculates price by comparing repeat sales of the same homes over the years.

A recent Wonk poll asked for your predictions on when the local housing market would recover. By "recover," I meant start to improve, not return to housing-bubble levels. You're a pessimistic bunch, unless you're defining recovery differently, because the most popular answer was "after 2015." (That option got 22 percent of the vote.)

All told, 60 percent chose 2013 or later, about the same as Americans participating in a survey conducted for and RealtyTrac.

As for the rest of the Wonk poll participants, 20 percent expect recovery in 2012.

Thirteen percent are more hopeful than that, predicting recovery this year.

Five percent are feeling especially sunny about the market, saying it's already recovered.

And the small remainder wrote in an answer, such as, "THE WHOLE SYSTEM IS SET UP TO FAIL AND ANY RECOVERY WILL BE A FACADE." 

What a cheerful beat this is.

So, folks -- thoughts about the Clear Capital predictions? Want to take a stab at the simplest sort of forecast, namely whether prices will rise, fall or stay about the same?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (9)
Categories: Housing forecasts

January 5, 2011

Q&A: Baltimore Slumlord Watch

Two years ago, an anonymous blogger declared war on the absentee property owners letting large swaths of Baltimore rot. The Baltimore Slumlord Watch site is still going strong today, shining the unwelcome light of publicity on blighted real estate and the people, LLCs and (in some cases) government agencies responsible for them.

Names, addresses, resident agents, photographs -- they're all there, along with occasional commentary that doesn't pull punches. "Please note the lack of a roof, exposing this house to the elements — the houses on either side of this blighted mess are occupied," the slumlord watcher wrote of one rowhouse.

So, in light of the anniversary, here's an unusual Q&A for you all today -- one with an unnamed person. She describes herself on the blog as "tired of watching out of town 'investors' and others destroy neighborhoods as a result of their negligence."

Question: Is Baltimore Slumlord Watch a one-person affair -- not counting reader contributions -- or is there a slumlord-watch team?

Answer: It started out as a one-woman show, but others have joined in. I have a couple of people I consider "partners" in this venture, along with a legal advisor who I go to from time to time with questions. As word got out, other cities started similar blogs (Richmond, Va. and Columbus, Ohio come to mind) so I like to think we're now a loose coalition.

Q: How many run-down properties have you "featured"?

A: Out of the 358 total posts I've written, probably 200+ are centered on vacant properties.

Q: What prompted you to start the blog?

A: There were two reasons. One is the fact that I was laid off from my job and needed something to do. I'm a bit of a workaholic, and after a week of daytime TV, I found my brain turning to mush.

The second thing that spurred the project was the fact that I attended a community meeting where the attendees were discussing a problem property, and I realized this was the same conversation we had the last time I attended a community meeting -- at least 3 years prior. I figured that surely one person could make enough noise that someone would listen, without having to create a committee with several sub-committees to tackle the problem. I didn't want to hear to about this same issue three years later ... again and again.

Q: The blog is written anonymously. Why?

A: Because I have one child still at home. At the beginning, I anticipated receiving some nasty emails, perhaps even a threat or two. I am an adult -- I can take care of myself. However, a small child can't, and therefore to protect my child, I had to use anonymity. However, I do understand that it can't go on forever -- my ultimate goal is to shape public policy, and it's hard to do that when you're a "man behind the curtain," so to speak.

Q: Can you share a few personal details -- how long have you lived in Baltimore, what sort of work do you do and are badly maintained properties a problem in your neighborhood?

A: I have lived in Baltimore for just over ten years. I work for a nonprofit in Baltimore City, and have worked in communications for many years. Most of my career has been spent working for architects and builders, and I have been extremely fortunate to have worked for (past and present) people who have taught me everything they know about urban planning/revitalization, land preservation, and how to truly shape communities for the better.

Badly maintained properties are indeed a problem in my neighborhood. However, the true extent of the problem has yet to be realized. Right now we have a lot of empty-but-not-yet-abandoned homes, as a result of the foreclosure crisis and the resulting decline in the economy.

Q: What themes have you noticed in two years of Slumlord Watch blogging?

A: There are two types of bad property owners:

The first is the guy who watched one too many episodes of an HGTV or TLC show on real estate and decided he could do that too, and quickly found out it doesn't really happen in a day or a week, despite what you see on the show. (Have you ever noticed that the people on HGTV never seem to stand in line at the permit office? Never seem to have inspectors come around?)

The second is the true slumlord -- the guy who has owned literally hundreds of properties and has kept them in such horrible disrepair that he's in and out of housing court (and civil court) more often than most of us change our clothes.

Q: Which type do you think is easier for the city to address, a handful of neglectful owners with a lot of real estate or a lot of owners with one or two homes apiece?

A: The guy who owns the large number of parcels -- he's the guy the city should go after the hardest, because he's causing the most damage. Not only to our city, but to the people who live in and around some of his dilapidated properties. Anyone who's been sued hundreds of times for the same thing clearly isn't learning the lesson. Time for him to be told, "Get out and don't do business in Baltimore City."

However, the little guy who owns one or two homes should also feel the wrath of the city. But my guess is that most of those people do want to do the right thing -- they just don't know how, because they didn't bother to do the research beforehand. Sometimes education can go a long way. However, if they don't comply, they also should be hauled into housing court and fined heavily -- environmental crimes and housing violations can be just as hazardous as drug dealing on a community.

Nobody should be allowed to hold a community hostage, whether through illegal activity or ignorance and negligence.

Q: What could city officials do to attack the problem of neglectful ownership that they aren't doing now? What could residents do?

A: Create solutions that are sustainable over the long term, with strong no-nonsense leadership at the helm. Frankly, some of our neighborhoods are so filled with blocks of blighted homes and nothing to attract long-term taxpaying residents. It seems a waste to promote those homes as worth saving, when you have vacants in other neighborhoods that are viable -- neighborhoods with transit, strong infrastructure, and potential for further development.

One of the things -- an elephant in the room, if you will -- people don't like to discuss, is the fact that you will always have a "bad part of town." Always. Not every neighborhood in every city is going to be "the next Canton" or "the next ... whatever." The city needs to look at some of these neighborhoods, go back 50 years -- who lived there? Who lives there now? Have the demographics drastically changed, or is that just wishful thinking?

Develop our neighborhoods for the taxpaying, law-abiding citizens who live there -- they represent the people you're trying to attract -- make sure they have access to good schools, supermarkets, transit, clean sidewalks and streets, open space -- and the positive changes will happen organically and sustainably. If you develop a community for a population that doesn't yet exist, you're taking a huge risk, and with taxpayer money. None of us can afford to waste money anymore, or time.

Q: Have you seen results from the blog's MO of taking photos and naming names?

A: As a matter of fact, yes. I need to do some updating -- but there have been some changes, positive ones. 701 Washington Boulevard, our first property, now has a functioning business where the vacant supermarket used to be, and the entire shopping center has undergone small improvements. Other properties have been improved to some extent, and others have been sold. In the new year we'll definitely do an update on some of the worst-of-the-worst.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (17)
Categories: Q&A, Real estate investing

January 4, 2011

Apartment market takes turn for better (for owners) in 2010



There's a lot of hand-wringing over the less-than-roaring economic recovery, the housing-market mess and the foreclosure crisis. But here's a group that's not complaining: apartment owners.

Employment is growing again, but not strongly enough to encourage people to relocate if they're already renting, which has kept turnover low. Home sales are way below where they were even a decade ago -- a plus for the guys offering an alternative to buying. And foreclosures are pushing people back into the rental pool.

I've got a story about the results here. Bottom line: Average "effective rents" are up more than 6 percent in the Baltimore metro area, according to one research firm, while rents in the upper end of the market rose 7 percent. That's being driven both by rising monthly rents and falling concessions, i.e. "first month free!" (Fewer concessions, in fact, are nearly half the story.)

The figures focus on apartment complexes, but rented-out homes make up a significant part of the rental market. That's trickier to measure. But it appears those rentals aren't seeing the same sorts of gains (if any gains at all) because there's so much supply in the form of homes up for rent by owners who can't sell.

I'm sure that varies a great deal depending on the neighborhood.

Speaking of neighborhoods, here's a photo gallery that biz editor Liz Hacken put together using data on monthly rents in Baltimore communities. If you work your way through the gallery, you'll see which neighborhoods RentJungle says are the priciest. Most at the very top are pretty obvious, but one of the top five surprised me.

Do you think $1,357 a month is representative of Highlandtown? (That's slightly higher than the site's average for the Inner Harbor.)

I didn't draw on RentJungle data for the story, in case you're wondering, but I did a post about its averages in the fall of 2010. The site, which compiles rent ads from a variety of sources, was showing a lower rent increase year-over-year than research firms that track the industry.

Part of it may be differences in geography, and part of it could be the types of rentals tracked. But it looks like the concessions effect is a real driver. Apartment complexes were offering valuable givebacks in 2009, which effectively reduced the cost of their face rent, but those concessions have faded as the market improved.

Got a renting/landlording story to share? Please do.
Posted by Jamie Smith Hopkins at 12:01 AM | | Comments (7)
Categories: Landlording, Renting

January 3, 2011

Highest-end Baltimore-area home sale in November

The most expensive home sold in the Baltimore region during November -- changing hands for $3.4 million -- is an Annapolis waterfront property with its own heated lap pool and spa.

The four-bedroom home, with four full bathrooms and two half-baths, sits alongside Spa Creek, near the point where it joins the Chesapeake Bay. The property comes with 168 feet of bulkheaded waterfront, two deep water slips and a boat lift, according to the listing.

Other features: a library, a gourmet kitchen with a six-burner stove and a "2+ person" tub in one bathroom.

It was originally listed for almost $4.7 million, according to Redfin. Last sale price: $2.7 million in 2003.

The house was far and away the top of the heap for November sales through the multiple-listing service, run by Metropolitan Regional Information Systems. No. 2 in Baltimore County changed hands for $1.3 million while No. 3 in the city's Fells Point neighborhood went for $1.2 million.

At the other end of the spectrum is this two-bedroom Baltimore property, a rental rowhome that appeared to be in pre-foreclosure and sold for $1,500. (Original list price was $9,900, so that's a heck of a drop in percentage terms.)

Oh, and real estate agent Michael Hamby has compiled a list of the priciest home sales of the Washington region in 2010, including parts of the Baltimore area. Find it here.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)
Categories: Priciest home of the month
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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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