Land is a critical part of homebuilding. Those homes have to sit somewhere, right? But while house prices have fallen significantly -- about 19 percent in the Baltimore metro area since peaking, according to Moody's Analytics -- the cost of the ground, not so much.

"Land and lot prices have not declined substantially in most of the Baltimore metropolitan area," said Kenneth Wenhold, Mid-Atlantic regional director for Metrostudy, which does market research for homebuilders. "Perhaps to a degree in the exurban areas (Cecil County, Washington County, Eastern Shore), but for the most part, prices are surprisingly close to where they were at the peak."

Why? In an email interview, Wenhold blamed it on "very tight" lot supplies, "to the point of seeing bidding wars between builders who need to refill their pipelines." The Baltimore region is "among the tightest markets" for available lots, similar to places such as San Francisco and southern coastal California, he said.

"The result is that builders are constructing smaller, less feature-rich homes on very expensive lots, skewing the lot-to-home [cost] ratio to over 40 percent in some cases, as compared to 28 percent to 30 percent during the peak (2003-2005)," he said. "Builders are only able to do this as they have cut overhead to the bone, are spending fewer dollars in sticks, bricks and labor (since it is a smaller house), and accepting much thinner margins."

Typical lot prices in the region range a lot:

While noting that the cost "depends on the location, product type, amenities, necessary off-site improvements needed, etc.," Wenhold said: "As a rough estimate of a typical suburban development, single family lots around Baltimore go for $140,000 to $170,000, townhome lots in the $75,000 to $90,000 range."

The counties on the Washington side of the Baltimore region have the least development-ready land, he said.

"Howard and Anne Arundel are grossly undersupplied, while Baltimore County and Harford County are slowly depleting their supplies," he said.

The state of land availability means problems for builders.

"It is ironic that many of the builders who were able to weather the storm are now facing their biggest challenge: acquiring land at a reasonable price to maintain activity and stay in business," Wenhold said. "National builders have hundreds of millions of [dollars in] cash or cash equivalent on the books (NVR has over one billion), and many have given a directive to their local divisions to grow this market by 50 – 200 percent over the next few years. ... Current projects are selling out, and few projects were submitted for approval over the past four years. While starts are down, we are still using more lots than we are replacing every single quarter, making the supply issue worse and worse. As a result, some builders are running out of lots. Without lots/land, builders are out of business, and in a supply-constrained area like Baltimore, this is supporting/pushing up prices, depending on the submarket and product type."

Unlike the national builders, the small locals don't have tons of dough to spend. They don't have the same access to credit that they once did, either.

"The life blood of a small builder, their revolving lines of credit, have been slashed," Wenhold said. "Now we see smaller builders who are turning to private equity to get the money for new deals, but that can be a very expensive and dangerous proposition."

So: Take the risk and possibly fail? Or don't, running out of the ingredient that they can't exist without -- if they want to build new homes on raw land, at least? 

"They have to make tough decisions, so a land grab is on, and some builders are paying 15 percent more than others for the same lots," Wenhold said. "In the end, that will put them at a significant disadvantage, both now and in the future. Purchasing land for a new development is even riskier, as there are dozens of pitfalls which could prevent the development in a timely, profitable manner. The catch is that if a builder makes one bad decision it will more often than not erase any gains from their other performing communities, so a builder can take on five new communities and have only one badly positioned and fail, and the whole enterprise falls apart."

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

Bankrate.com's Holden Lewis made an observation via Twitter this week that, in less than 140 characters, sums up one of the points readers here sometimes make: "Are falling home prices bad news? Would falling used-car prices be bad news? There are two sides to every trade."

The Wall Street Journal's Robbie Whelan had a response: "Falling used car prices are inevitable and would be way worse if millions of Americans had poured all their equity into jalopies."

What's your answer? (You don't need to stay under 140 characters.)

And, more fundamentally, are you rooting for prices to keep falling, stay where they are or go back up?

Here, have a poll:

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (25)
Categories: Polls, Question of the day
        

How many homes are people buying, and how much did they pay?

The go-to source for that information has long been the National Association of Realtors. But real estate data firm CoreLogic says the trade group's tally of the number of homes sold is too high by a substantial amount:

Historically, the CoreLogic existing sales data have covered about 85% to 90% of all NAR’s existing home sales data. However, in 2006 NAR’s sales data became elevated relative to the CoreLogic, MBA [Mortgage Bankers Association], HMDA [Home Mortgage Disclosure Act] and Census sales related data, and that trend has continued and become more pronounced through 2010. There are several reasons for the divergence, including benchmarking drift, more sales going through MLS systems due to consolidation and a lower share of for sale by owners (FSBO) home sales. Net, NAR’s existing home sales data are overstated by about 15% to 20%.

A CoreLogic economist told The Wall Street Journal that he sees it as the difficulty of adjusting data accurately in times of big changes -- the National Association of Realtors' statistics are built on a sample -- rather than a "gaming-the-numbers issue."

But some were quick to see ill intent from a group whose members benefit if people think it's a good time to buy. "Where are the subpoenas and Congressional hearings?" asked trader Karl Denninger on the Seeking Alpha blog, suggesting that people overpaid for homes as a result of relying on faulty sale data.

The National Association of Realtors is re-examining its numbers, The Wall Street Journal said. (Reuters reported afterward that the NAR was calling any overcounting "relatively minor.")

So what about the local figures? 

They're reported by the company that runs the area's multiple-listing service, Metropolitan Regional Information Systems (specifically, its stats arm, RealEstate Business Intelligence). If there's any intentional adjusting going -- starting with a sample and extrapolating upward or trying to account for unlisted sales -- it would be news to me. So that seems to be a more solid starting point, at least. But the recent back-and-forth that came when MRIS's stats arm redesigned its statistics database wasn't exactly confidence-inspiring.

One useful comparison is the multiple-list sales vs. all recorded arms-length home sales. The multiple list should account for most but not all the arms-length sales, because not all homes are listed before they're sold. The state Department of Assessments and Taxation, as it happens, just shipped me data on all arms-length sales recorded in 2010.

Baltimore metro area home sales last year as originally reported by MRIS: just under 21,500.

Baltimore metro area home sales last year as recorded with the state: just over 23,900.

Does that mean everything's hunky dory? I'd need prior years to see if the difference is typical, and since I'm on vacation this week I don't have access to most of my files. But at least the multiple-list figure is less than the state's figure.

Statewide, that's not the case.

MRIS covers most of Maryland, with the rest handled by the Coastal Association of Realtors. Together, they show just under 50,900 homes sold last year, according to the tally by the Maryland Association of Realtors.

The state, meanwhile, has records of 47,817 arms-length home sales -- about 3,000 less than were supposedly sold on the multiple list.

Hmm.

Thoughts?

Posted by Jamie Smith Hopkins at 12:01 AM | Permalink | Comments (14)
Categories: Housing stats
        

More than 2.5 million people live in the Baltimore metro area. Think of how many know something interesting about real estate.

I'm following colleague Gus Sentementes' lead and inviting you all to join in on a bit of crowdsourcing.

Do you have some housing-market expertise? Add your name to this sources list. Share your contact information, tell me about your expertise, even suggest a story or three. And please feel free to share the link.

While we're at it: Here's a place for all Maryland businesses, economic experts and the like to do the same.

Most of you reading this, I suspect, don't work in real estate. It's just part of your life in some way. You're buying. Selling. Renting. Trying to refinance. Deciding whether to move. Appealing your property taxes. But that means you have some personal experience. Here's how you can share it:

Thanks to Google Docs, you can tell me your housing experience -- and/or suggest a story -- by filling out the form below. Unlike the sources spreadsheets, which are viewable by anyone who clicks on the link, the answers here go just to me.

It doesn't have to be something earth-shattering to be worth sharing. It doesn't have to be bad news, either. ("Hey, I managed to get from offer to settlement on a short sale in two months" would be interesting to hear.)

Thanks, everyone, for all the ideas and expertise you've already shared over the years. Have I mentioned lately that I love you guys?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (0)
Categories: Your name in lights (well, newsprint)
        

Bottom line on the Baltimore metro area's housing market last year: There is no bottom line. It really depends which part of it you're talking about.

Read about the variety in Sunday's story, assuming you haven't already.

Check out the maps showing the change in average price and sales in the region's ZIP codes. (There are two maps of city neighborhoods, too, but darned if I can find them online. I'll update with links if they're out there.)

Play with the searchable database of ZIP codes to see specifics. (Thanks to Patrick Maynard for handling the programming on that feature!)

Click here for an Excel chart with the city neighborhood data on one worksheet and the ZIP code data on another.

Have fun with photo galleries of the most expensive places and other housing-market extremes, put together by biz editor Liz Hacken.

Thoughts, suggestions? Comment away.

How did 2010 treat your neighborhood?

Posted by Jamie Smith Hopkins at 12:01 AM | Permalink | Comments (3)
Categories: Housing stats
        

Maryland's highest court will consider a challenge to the state law that wipes out ground rents not registered before a September deadline.

Charles J. Muskin, trustee for a family estate that includes ground rents, sued last year, arguing that the law amounted to an unconstitutional taking of property.

A Baltimore judge ruled in favor of the state, saying the registration rule didn't "retroactively create or eliminate property rights, but instead, prospectively conditions the continued ownership of ground rents on compliance with the requirement of registration." Now the state Court of Appeals will review the case.

Another challenge to the raft of ground-rent reform laws passed in 2007 is headed for trial in Anne Arundel County. That class-action suit contends the changes to the way owners are allowed to collect past-due accounts, intended to keep investors from seizing homes over small debts, made ground rents effectively worthless.

The constitutionality of the registry is an interesting legal question, and some will be waiting anxiously for the court's opinion.

On one side are ground-rent owners who didn't register -- many of whom (at least among those who have contacted me) are elderly and were unaware of the provision. On the other are the homeowners who rushed to officially extinguish the ground rent on their property after it wasn't registered, and who don't like the thought that it might come back from the dead. 

Muskin, an Anne Arundel County Circuit Court master, was aware of the law but said he only managed to register about two-thirds of the family's 300 ground rents because he tried unsuccessfully to sell before starting the process.

What would happen to the extinguished ground rents if he prevails, I asked?

Posted by Jamie Smith Hopkins at 10:25 AM | Permalink | Comments (4)
Categories: Ground rent
        

Check out the paper this weekend: If everything goes according to plan, you'll see the the story we do every six months that looks at housing-market trends down to the ZIP code and city neighborhood -- the one with lots of color-coded maps showing what's up and down. ("The story with all the maps," in fact, is how I always explain it in the newsroom.)

Online, you'll find a database with the numbers behind the maps, aimed at readers who want specifics rather than ranges.

Links to come, once they're live.

And then I'm taking some time off. I've spent so much time squinting at numbers that I've had a continual headache the last two weeks. (Time for a new prescription, maybe ...)

Posted by Jamie Smith Hopkins at 9:45 AM | Permalink | Comments (0)
Categories: Housing stats
        

Foreclosures and short sales -- but particularly foreclosures -- were a sizable chunk of the Baltimore region's housing market last year. Nevada we're not, but distress sales increased across our metro area.

Here's the breakdown for 2010, with numbers pulled by Joseph T. "Jody" Landers III of the Greater Baltimore Board of Realtors from Metropolitan Regional Information Systems' multiple-listing service:

The number of Maryland mortgages in default moved downward last year after several years of rapid escalation, as colleague Lorraine Mirabella reports.

How have you been affected by foreclosures and short sales -- if at all?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (1)
Categories: Distress sales, Housing stats, The foreclosure mess
        

Almost 2,000 homes in the Baltimore metro area went under contract last month, deals that will turn into sales down the road if all goes smoothly. That figure, which includes contracts with contingencies, jumped more than 40 percent from a year earlier, according to Metropolitan Regional Information Systems.

Just to put that in perspective: The region saw the most newly signed contracts for a January since 2007, but it's still well below the '07 figure of about 2,400 -- not the mention the 2,600-plus signed in go-go January 2005.

MRIS's stats arm, RealEstate Business Intelligence, now shows how many contracts were signed in a particular month as well as how many deals are pending in total. That's interesting because it helps tell the story of dragged-out sales, the ones that take far longer than the traditional 45 to 60 days to get to the settlement table.

Consider:

In January 2005, 66 percent of all pending deals had been struck that month. That figure hovered around 70 percent for the next few years.

Until January 2009, when wham -- just 58 percent of deals were new.

The next January, 45 percent. Less than half.

Last month, it was back up to '09 levels, though that's still a substantial share of contracts that were signed before January -- months before, in some cases.

What's going on? Short sales can take a long time to get from contract to closing, assuming they don't blow up in the meantime, and there are a lot more of those now than there were four or five years ago. Foreclosures are a lot more numerous, too, and can also drag. Then you have all the other settlement-delaying issues that have popped up with a vengeance in the last few years, from low appraisals that send buyer and seller back into price negotiations to all manner of paperwork snarls.

One couple -- mentioned in this housing-market story -- waited for a large portion of 2010 to close on a short sale only to see it fall apart as the first- and second-mortgage holders bickered. Then they made an offer on a foreclosure, but that settlement was pushed off for several months  because the selling bank hadn't completed the required paperwork for the small matter of actually claiming ownership.

Anyone got a personal story to share about a slow (or speedy) journey from contract to closing?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (3)
Categories: Housing stats
        

Think it's impossible to sell a home quickly these days?

Last month, 100 homes in the Baltimore metro area were on the market and back off -- with a contract -- in one to 10 days. So it can be done. (About 130 more sold in 11 to 20 days, according to Metropolitan Regional Information Systems, keeper of the local multiple-listing service.)

All told, about 350 homes -- a quarter of the properties sold in January -- were on the market for one to 30 days.

But there are plenty of homes that sit and sit, too. Just among those selling last month, about 150 were listed for at least six months before going under contract. Two were on the market for -- wait for it -- at least two years.  

Here's the range:

(Days on market to the left, number of home sales to the right)

What about the 37 homes that sold in zero days? MRIS's stats arm, RealEstate Business Intelligence, says that category was all about the sold-immediately craziness of the bubbly years but nowadays is more likely to capture the unlisted "comps" sold and entered into the system by agents after the fact, such as for-sale-by-owner properties and new homes.

(Agents who focus on the upscale part of the market tell me they still do sell some homes before they're listed, either because the stars align or because their clients don't want photos of their home splashed all over the MLS and therefore the Internet.)

The statistics don't break down the average days on market among homes still on the market -- the ones without contracts yet. But I'm guessing there are a lot more two-year-plus listings, even accounting for owners who go on and off the multiple list a few times.

In January, at least, it was a whole lot easier to sell a newly listed home than one on the market for six months. (The most common selling point? Between one and two months.) Puts a lot of pressure on sellers to figure out the sweet-spot asking price early on.

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

A reader had a bone to pick with a blog post last week about declining local home prices -- such an artfully crafted picked bone that other readers weren't quite sure whether it was meant seriously or with tongue in cheek:

"My husband and I bought our home in 2007 for $450,000 in Baltimore County, made some major upgrades (granite counterstops, fancy faucets, painted, new carpets, new fridge -we even planted a tree)," wrote Beverly Banzer. "We have had another child and were planning on moving this Spring due to an addition to the family (WOOT WOOT) We are going to put the house on the market for $750,000 next month. When we sell, we are going to use the profits as a down payment on our dream home - (a bigger home in Baltimore County) This article about decrease in home values is ridiculous and makes me mad. it is like some people don't understand real estate values at all. it is local, local, local. My home has been every well taken care of and how could it LOSE value? Give me a break. Stoocks are roaring, gas is up, food is up. Why would this type of article come out about housing? Why does the media hate the housing market so much. Come armed with facts about prices, Ok!!"

Frequent commenter Jaded shot back: "Beverly: Sarcastic vs. delusional? I can't tell. Whatever the case I have a bridge in Brooklyn that I'd love to sell you!"

Sparky enjoyed it either way: "'We even planted a tree.' LOL."

"Too bad it wasn't the tree of knowledge," Adam joked.

Beverly roared back to defend, or more likely "defend," herself:

"We Banzers (and lots of our neighbors and others we meet on the street) are a pretty wealthy bunch. It has almost been like money is dropping from the sky. So - tell me - why would housing prices be down. Someone will pay $750,000 for my house. My realtor has told me so in fact."

Some readers took Beverly at face value.

"A good friend of mine had a very nice home for sale in Harford county," zang commented. "He started at $450,000 eighteen months ago. He just closed at $295,000. I don't know anyone that has sold a house in the last two years for the price they wanted. Don't let some fast talking, slick Willy of a Real Estate Agent blow smoke up your skirt, girlfriend. You might want to get professional help from someone to present your home in it's best possible light but don't expect to get your asking price."

Beverly thanked zang brightly for the suggestion but said she's all set where staging is concerned: "We will have cookies laid out and others baking in oven for our open houses. We are going to offer free sodas and coffee and also have 'Million Dollar Listing' on all the TV's as people go from room to room. There will also be some baloons and a quote from Ben Cardin printed out when he said there was never a better time to buy a house. ... Our actions will help us wealthy stay wealthy, especially in our neighborhood. So - if you want to feel weatlhy also and show people that you actually are and can pay a lot for a home - come see us!! "

But frequent commenter Darwin Rules, who has been predicting a return to 1999 prices for pretty much as long as this blog has been around, took the cake:

"Beverly you are wasting your time responding to these fools," Darwin wrote. "Only the few of us with clear heads and clear vision realize that the events from 2007-2009 were just a hiccup, and that Ben Bernanke, with his Princeton education, has led the U.S. back to prosperity with the best of days still ahead of us! Imagine, all we had to do was hit the 'Push here to print Trillions button' to restart the party! My only concern is that you still seem influenced by the naysayers around you. From the description of your home, especially with that wonderful tree, I fail to see why you would accept any less than $1,000,000. In fact, if you serve lattes and capaccino's at your open house, I would prepare for an all out bidding war to the seven figure prmised land!! I am soooo envious!!"

Oh, you guys. Are you trying to get me to do a spit-take on my computer screen?

UPDATE: One thing I should mention for the kindhearted among you -- Beverly's email address is the same as the address used by a frequent commenter who posts under a variety of names, generally tongue-in-cheek. So I don't think there's actually a Beverly Banzer trying to sell a Baltimore County house. (Nexis shows no one by that name anywhere in Maryland.) But the thing about a good parody is you're never absolutely certain if you're being had.

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

January home sale figures meant I was in the office Thursday rather than at the city's Vacants to Value summit, but others went. More than 600, actually, which explains why city officials held the event at the Baltimore Convention Center.

St. Ambrose Housing Aid Center's blog has a piece from an attendee. Millie Hrdina gives a brief outline and says the workshop on using vacant homes for purposes other than housing was particularly interesting: "Not only do I feel it is potentially the easiest means to handling a large segment of Baltimore’s blight but quite possibly the cheaper of all the opportunities which exist to us as a community."

A Baltimore architect, Klaus Philipsen, muses on his own blog that Vacants to Value focuses "on disposition" -- getting city properties into private hands, for instance -- "and not so much on what happens afterwards." He suggests forming a "citywide rowhouse recovery agency" charged with getting 6,000 properties rehabbed, arguing that the started-then-stopped rehab projects by "naïve" newcomers "are as bad or worse than the original vacants."

He adds:

What I have in mind are developer and contractor training programs and more systematic screening before awarding properties, also effective monitoring of ongoing work. ... At this point many players on each side enter this world blindly, and have great difficulty finding partners, understanding the rules, the funding options, the possible funding support programs and how to leverage their respective assets optimally.

Colleague Julie Scharper gave an update in a story last week about Vacants to Value sales through this site: "Housing officials now are marketing about 280 homes on a revamped website with detailed descriptions and photos, similar to sites managed by private real estate agents. Since it went live, the city has sold four homes from the site, at prices ranging from $5,500 to $25,000, officials said." (More homes have been sold by other means -- 57 all told since the overall effort was announced in November.)

Did you attend the summit? Have you looked into buying a city-owned property? Do share.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (11)
Categories: Vacancies
        

January home sale figures came out yesterday morning, but it wasn't until well into the afternoon that I knew what the numbers actually were.

The first set I saw said 25 percent more homes sold compared with a year earlier in the Baltimore metro area. But wait -- elsewhere on the website run by Metropolitan Regional Information Systems' stats arm was an area profile that pegged the increase at 23 percent. So I called for clarification and was eventually shipped over a third set of numbers showing a 15 percent increase.

And the percentage change on that one was calculated wrong.

Oh, my aching head.

The final answer, according to MRIS's RealEstate Business Intelligence, was a 17 percent increase. (Average prices fell 5 percent.)

RealEstate Business Intelligence said it was opening-day glitches after a massive switchover from an old sales-statistics database to a new one, which is slicing the multiple-listing-service numbers in ways we couldn't get at before. Interested in how many homes were snapped up in 10 days or less? Now you can find that out.

"We recalculated everything this month for the past 13 years," said Margaret O'Sullivan, vice president of operations at RBI. "Before, it wasn’t queryable. It was like a big spreadsheet. ... In order to be more dynamic going forward, we had to go through these pains."

One of the differences sharp-eyed readers will notice is that figures for past months have changed.

That's partly because RBI is categorizing things differently: Pending sales with contingencies in the contracts, i.e. "I'll buy your home if I sell mine," are no longer also counted in the active-listing number.

In addition, you'll see that sales totals are higher or, in some cases, lower. Why? Frequently, agents add some sales information to the multiple-listing service after the company takes its monthly statistics snapshot. And sometimes agents take back sales that were recorded in the system in error (or with the wrong date). Now that RealEstate Business Intelligence has recalculated the last 13 years of figures, what you see picks up on all those after-the-fact changes.

December home sales, originally posted as an 8 percent increase over the year, are now showing up as zero change. That makes January's gain the first since the post-tax-credit swoon.

Thoughts on the database switch? Please share.

Posted by Jamie Smith Hopkins at 12:01 AM | Permalink | Comments (7)
Categories: Housing stats
        

While you're waiting for January home sale stats to appear today, here are two very different stories to read that both have something to say about the housing market:

First, Crofton-based Beltway Title and Abstract Inc. has had its licensed suspended by the state after auditors discovered that more than $1 million in escrowed funds intended for real estate transaction costs had been misappropriated, the Maryland Insurance Administration said Wednesday. The money, pulled out over a period of seven months, was spent on business expenses, the state said.

Here's the insurance administration's license-suspension order.

Second, the new Census 2010 numbers show population growth -- and decline -- across the state. According to the count, Baltimore has 30,000 fewer residents than it did a decade ago. As one colleague pointed out, that works out to a loss of eight people per day. ("I hope people aren't leaving because of me - I have so many arms to embrace you!" quipped @manwomanstatue, the self-proclaimed "most hated public art in Charm City.")

The city has successfully challenged census estimates before: The 2003 figures were revised upward by nearly 15,000, for instance. But the decennial census is a count rather than an annual estimate.

Baltimore Mayor Stephanie Rawlings-Blake said in a statement that the 30,000-person loss was the city's smallest since the decade of the 1950s. (Baltimore's population peaked in 1950 at about 950,000 before dropping by nearly 11,000 by 1960.)

Still, the newest loss figure is striking for a decade that brought an inflow of housing-bubble newcomers and ended at a time when moving -- if you had to sell your home first -- was no easy proposition. (Still isn't, but it's a new decade now.)

Thoughts?

Posted by Jamie Smith Hopkins at 1:00 AM | Permalink | Comments (1)
Categories: Closing costs, Housing stats, Moving
        

If you bought a home in the Baltimore metro area three years ago and put down less than 20 percent, you're probably underwater on your loan.

That's the takeaway from a new housing analysis by Fiserv, which says home prices in the region dropped 17 percent between summer 2007 and summer 2010.

Fiserv, provider of the data that fuels the Case-Shiller index, expects a decrease of not quite 2 percent in the metro area -- that is, Baltimore and its surrounding suburbs -- over the 12 months ending this summer. Prices in Washington, by contrast, "have already stabilized," the firm says. (It produces its forecasts with Moody's Analytics.)

Here's another forecast to add to your score card if you're keeping track at home: Fiserv and Moody's are predicting that three-quarters of metro areas will see prices stop falling by the end of this year, with all leveling out by the end of next year.

But don't count on significant price gains anytime soon, the firm says: 

"Large supplies of foreclosed properties will continue to be the biggest downside risk for home prices and metro area housing markets," David Stiff, Fiserv's chief economist, said in a statement. He added: "In bubble and crash markets, the uncertain timing and volume of bank liquidated properties will cause home prices to bounce around their lows for many years."

What do you think?

Real estate data firm CoreLogic, meanwhile, released numbers showing single-family home prices dropped nearly 7 percent in the Baltimore metro area in December vs. a year earlier. That's about on par with Maryland as a whole, which ranked 14th for price declines. (No. 1: Idaho, down 15 percent.)

Distress sales are helping drive the decrease. The price of homes that weren't foreclosures or short sales dropped about 2.5 percent in the state overall and about 4 percent in the Baltimore metro area, CoreLogic said. 

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (24)
Categories: Housing forecasts, Housing stats
        

Wonk reader SLL offered a warning for homebuyers yesterday that was based on hard experience:

"I was under contract to buy a foreclosure that had been winterized, and just as an FYI to anyone else thinking of buying a foreclosure -- it's a nightmare to get the house dewinterized for the (information purposes only) inspection," SLL wrote on this post about avoiding a pipe burst in a foreclosure near you.

"You just have to be a pain -- keep bugging the bank's real estate agents every day -- from the moment you have a verbal agreement until it's been confirmed that the house has been dewinterized. Also make sure it's in your contract, too (I think it's standard language in the standard MD State purchase contract) -- that all the utilities must be turned on in time for the inspection or else the contract can be voided b/c the seller didn't hold up its end of the deal. Most of the banks that own foreclosures hire a separate agency that handles the winterization, so it can be very difficult to get the house dewinterized in time for your inspection."

Realtor John K. offered an amen to that: "Often my buyers end up just paying for it themselves in order to get it done and move on. It can cost about $100-150 for the de-winterization. The worst part is that you then have to pay to RE-winterize it, and then pay AGAIN to de-winterize it once you settle."

So here's my question to you all: What argh-inducing issues have you run into as a buyer, seller or renter? What's your real estate beef?

The last question of the day -- "Will you move in 2011?" -- prompted a lot of responses. Chappy10 and spouse were just about to move, having snagged a single-family house with a total monthly payment that's $200 less than their rent on a much smaller townhouse.

"We were about to give up looking for the year (too many sellers unwilling to negotiate meaningful price reductions) and I think this seller realized they'd be unable to close out their parents' estate til next spring/summer and possibly get less money... so they were very very reasonable," Chappy10 wrote.

Frequent Little Italy Restaurant Visitor, meanwhile, was hoping to go the other direction -- sell a home in order to rent something cheaper nearby.

"We love living in Balt. City, but are sick of 1) the property taxes, 2)the property taxes, 3) all the work/costs/bad surprises associated with home ownership, and did I mention 4) the property taxes?" Frequent Little Italy Restaurant Visitor wrote.

And Chris reports that he and his wife would like to sell their home in Dundalk, but they bought it in late 2007 -- just before prices slumped -- and are now surrounded by value-sapping foreclosures.

"I hope that home prices will stabilize long enough for us to pay down our mortgage enough to catch up to the market, but that does not look like it will happen in 2011," Chris wrote. "[Here's] to hoping 2012 will be the magic year for us to sell our house!" 

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (2)
Categories: Question of the day
        

Barbara in Baltimore County owns a condo directly underneath one working its way through foreclosure. Last winter, after the borrower in default moved out, the pipes froze, burst and flooded several other units, she says -- one so badly that the owner had to live elsewhere for months. (Barbara's unit was damaged, too, but only a small part of it.)

When the pipes burst, the bank hadn't yet taken the property back. "It never dawned on me it would go into another winter," she said. But lo, as the temperatures began to drop in October, the condo was still in not-quite-foreclosed limbo.

The solution to avoiding a repeat performance seemed obvious: Get the heat turned back on. But that was much easier said than done.

Her property manager declared that nothing could be done, she said. An attorney she hired couldn't even turn up the name of the foreclosing bank for her (in Maryland, the plaintiff in foreclosures is usually the law firm handling the case). She had already tried -- months earlier -- to pay the empty condo's electric bill herself, to no avail. She even called elected officials, for all the good it did. And she figured that going after the not-yet-former homeowner wouldn't get her anywhere.

A lot of people are probably finding themselves in the same situation, considering how many improperly winterized not-quite-foreclosures the country has. But take note: Barbara finally got results.

Here's how:

One day in December, when weather forecasters were predicting 17 degree temperatures overnight, she and several neighbors called and emailed the property-management company yet again to insist that there had to be a way to get the heat on in the problem unit. This time, an assistant at the firm agreed and made calls of her own. By the end of the afternoon, the Baltimore Gas & Electric bill was in the condo association's name and the heat was back on.

"We were down to the final hours of another disaster," Barbara said. "Somehow, the impossible was done."

When she told me about this last-minute minor miracle, she wasn't sure how it had been managed. She said she'd called BGE herself early last year to try to take over the bill and said she got no satisfaction. "BGE said, 'Nothing we can do. ... It's not your account,'" she recalled.

BGE spokeswoman Linda Foy said the company doesn't have a "standing policy per se" for such a situation, but having a condo or homeowners' association "assume responsibility for the bill is an option." If neighbors can't get anywhere with their association, or if there is no association (think rowhome), they can call BGE's customer-service line "to request service to the other residence be put in their name," she said.

"We would have to approach these types of situations on a case-by-case basis," Foy added in an email.

Judging by Barbara's experience, you might need to be persistent no matter whom you call.

The heat remains on in the unit above her, so for the moment all is well. But she can't believe how much effort it took to flip a switch. 

"It was nobody's problem," Barbara said. "And I still don't know whose problem it should have been."

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (12)
Categories: The foreclosure mess
        

The recent story about older, unemployed workers in financial straits got me thinking of St. Ambrose Housing Aid Center's "Homesharing" program, which matches homeowners with room to spare and people needing a room to rent. I blogged about the effort a few years back, when the recession was just getting going. Have more homeowners needing income and renters needing cheaper digs connected since?

Before I could pick up the phone to ask, program director Annette Leahy Maggitti emailed to say that this is just what's happening. (She's not clairvoyant -- she read the older-worker story.) 

"It has been a steady increase in matches," she said. "FY2008 we made 49 matches. FY2009 we made 78. In FY2010, 102."

One trend Maggitti is seeing: more would-be renters -- "seekers" -- who can't afford more than $400 a month even as many homeowners, "because of the economy and the utility bills," ask for $500 or more.

"Loss of employment seems to be the reason for sharing for homeseekers and the cost of living and keeping a home is the reason for homeowners," she added.

It's not always about money, or not entirely. Sometimes homeowners are having trouble seeing to household tasks and are willing to decrease their asking rent for a seeker eager to pitch in.

Seekers vary, too. Some are new to town. Some are graduate students. Some are reducing their housing costs by necessity, but others just want to save money, Maggitti said.

St. Ambrose staffers screen applicants -- homeowners and seekers -- before matching people. The applications ask for four personal references, verification that the person can pay their rent (if a seeker) or their mortgage (if a homeowner) and note that either side can ask for a criminal background check.

Right now, Maggitti said, "We could really use homeowners in the downtown area, close to transportation."

More than 800 people inquired about homesharing last year, but many didn't get to the interview stage for one reason for another -- lack of follow-through, for instance. St. Ambrose actually interviewed 230 seekers and 130 homeowners.

You can find other services designed to match strangers with compatible housing needs. And some folks just go the "roommate wanted" route. (Here's a story I wrote about the roommate search, complete with "speed roommating.")

Do you have a roommate success (or failure) story to share?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (5)
Categories: Renting
        

Colleague Meredith Cohn, reporter and Picture of Health blogger, had a personal interest in the outcome of the mass registration required of Maryland ground rents -- one of them, specifically.

I'll let her tell her story:

--

Like so many people in Baltimore, when I bought a rowhouse I learned it came with a ground rent. It was a $60-a-year payment that I always feared wouldn’t get paid by my mortgage company. And even though the holder, a local real estate agent, could no longer take my house because of changes made by the General Assembly (following a Sun investigation), I still fretted about red tape and legal fees.

My husband and I contemplated buying it, but decided it wasn’t a good financial deal. So when a Sun entry on this blog reminded me that there was a ground rent registry and the deadline for holders to list their properties passed, I checked the tax assessor’s site for my address. To my utter surprise, there was nothing.

I figured my ground rent was created about a decade ago when the Realtor, then the rowhouse owner, renovated my house. I don’t know why he’d let it lapse. But I didn’t officially need a reason. I wrote to the state asking that the ground rent be extinguished -- based on instructions I found on this blog. A certificate came in the mail about two weeks later. Wednesday, I took it to the land records office in the courthouse and asked that it be attached to my deed. The clerk said he’d return the certificate by mail.

He said a number of people had been to the courthouse before me with their letters and their $40 (cash, FYI). All were happy to pay this one last time. And while I still am nowhere close to paying off my house, I feel a little more like I own my property.

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

The federal Financial Crisis Inquiry Commission's new report on why things went so very, very wrong in the aughts includes testimony from a local loan-officer educator about what happened when lenders disconnected the risk of mortgages from the upfront reward of origination fees:

Under the radar, the lending and the financial services industry had mutated. In the past, lenders had avoided making unsound loans because they would be stuck with them in their loan portfolios. But because of the growth of securitization, it wasn’t even clear anymore who the lender was. The mortgages would be packaged, sliced, repackaged, insured, and sold as incomprehensibly complicated debt securities to an assortment of hungry investors. Now even the worst loans could find a buyer.

More loan sales meant higher profits for everyone in the chain. Business boomed for Christopher Cruise, a Maryland-based corporate educator who trained loan officers for companies that were expanding mortgage originations. He crisscrossed the nation, coaching about 10,000 loan originators a year in auditoriums and classrooms. His clients included many of the largest lenders—Countrywide, Ameriquest, and Ditech among them. Most of their new hires were young, with no mortgage experience, fresh out of school and with previous jobs “flipping burgers,” he told the FCIC. Given the right training, however, the best of them could “easily” earn millions.

“I was a sales and marketing trainer in terms of helping people to know how to sell these products to, in some cases, frankly unsophisticated and unsuspecting borrowers,” he said. He taught them the new playbook: “You had no incentive whatsoever to be concerned about the quality of the loan, whether it was suitable for the borrower or whether the loan performed. In fact, you were in a way encouraged not to worry about those macro issues.” He added, “I knew that the risk was being shunted off. I knew that we could be writing crap. But in the end it was like a game of musical chairs. Volume might go down but we were not going to be hurt.”

Two more excerpts from the report designed to make your blood boil:

On the subject of financial types gone wild:

On Wall Street, where many of these loans were packaged into securities and sold to investors around the globe, a new term was coined: IBGYBG, “I’ll be gone, you’ll be gone.” It referred to deals that brought in big fees up front while risking much larger losses in the future. And, for a long time, IBGYBG worked at every level.

 On the subject of warnings to government regulators:

Ruhi Maker, a lawyer who worked on foreclosure cases at the Empire Justice Center in Rochester, New York, told Fed Governors [Ben] Bernanke, Susan Bies, and Roger Ferguson in October 2004 that she suspected that some investment banks—she specified Bear Stearns and Lehman Brothers—were producing such bad loans that the very survival of the firms was put in question. “We repeatedly see false appraisals and false income,” she told the Fed officials, who were gathered at the public hearing period of a Consumer Advisory Council meeting. She urged the Fed to prod the Securities and Exchange Commission to examine the quality of the firms’ due diligence; otherwise, she said, serious questions could arise about whether they could be forced to buy back bad loans that they had made or securitized.

Maker told the board that she feared an “enormous economic impact” could result from a confluence of financial events: flat or declining incomes, a housing bubble, and fraudulent loans with overstated values.

In an interview with the FCIC, Maker said that Fed officials seemed impervious to what the consumer advocates were saying. The Fed governors politely listened and said little, she recalled. “They had their economic models, and their economic models did not see this coming,” she said. “We kept getting back, ‘This is all anecdotal.’”

See other things that catch your eye? Do share.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (4)
Categories: The foreclosure mess
        

Kwaku Atta Poku, the Columbia resident who lost his home to foreclosure even though he never missed a mortgage payment, has had one setback after another in his quest for restitution. But this is a good week for him and his family: a U.S. District Court judge ruled that he's entitled to a trial.

See colleague Larry Carson's story here.

Atta Poku refinanced his mortgage in 2001 with the same lender who held his original $97,000 loan, Washington Mutual. But somehow, the money from the refinance transaction was not used to pay off the original mortgage. The title company that handled the transaction is defunct. So is WaMu. What exactly happened is a mystery.

Atta Poku's attorney has "repeatedly argued that Atta Poku never touched the refinancing check and was not at fault in any way," Carson reports. "Even the title company involved in the refinancing agreed that Atta Poku did nothing wrong in a court hearing on the case January 20, [the judge] said."

There's a lot of outrage about this situation, as you might imagine. One Sun reader commented, "If I were his judge I would award Mr. Atta Poku TWICE what he is suing for in punitive damages."

Here's the original Sun story about the foreclosure that took most everyone by surprise.

Posted by Jamie Smith Hopkins at 12:01 AM | Permalink | Comments (0)
Categories: The foreclosure mess
        

About 2,400 children attending Baltimore public schools lived in homes in foreclosure during the 2008-2009 academic year, up more than 20 percent from five years earlier, according to a new analysis by the Baltimore Neighborhoods Indicator Alliance.

It's not necessarily about their parents' failure to pay. Half the students whose homes were in foreclosure proceedings lived in rentals, a marked change from the pre-crisis years. In 2003, 2004 and 2005, less than 30 percent of foreclosure starts involved rented homes, according to the analysis, done by Matthew Kachura with the University of Baltimore-based alliance. (The research was conducted for the Open Society Institute.)

Above: a map showing the areas where foreclosures and public-school students intersected. Almost every school had at least one affected student in the 2008-09 year, but certain parts of the city have taken the brunt of the wallop.

Two schools -- Brehms Lane Elementary in the Belair-Edison area and Patterson High -- each had more than 50 students whose homes were in foreclosure during the 2008-09 academic year. (That amounts to 7 percent of the elementary school's enrollment and just over 3.5 percent of the high school's.)

Why does this matter? As the University of Baltimore put it in a press release, "more Baltimore homes in foreclosure translates into more students facing an uncertain future—one in which they may have to switch schools, move in with relatives, or leave the city altogether."

Kachura, the report's author, is particularly concerned that the largest percentage of affected students are in ninth grade, a critical point in the K-12 continuum. An unsettled housing situation could prompt more to drop out, he says.

The even split between foreclosure proceedings started on parent-homeowners vs. parent-renters might seem bizarre. But many investors rushed into the city during the bubble years and got into trouble later, sometimes because their tenants didn't pay but other times because the investors overextended themselves. Many renters -- with and without children -- have found themselves on the wrong side of an eviction notice as a result.

Thoughts?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (4)
Categories: Schools, The foreclosure mess