I agree with Pat. The Banzers and some of our friends are back to buying vacation homes and homes for our children (we have 2 darling recent college graduates). Our stocks have done amazingly well and we are borrowing against that money and buying some hard assets. Real Estate is the only game in town. If you are still in that townhome or any house that costs under $500,000 or so - better move up now. Regular common homes will be approaching $1,000,000 in the next few years. We Banzers are very confident of this. Off to spin class and then the spa!!

If regular wages don't keep pace, those million dollar "regular" homes will be the sign of total economic collapse. Overpriced homes, and those willing to bend the ethics of lending to those that could not afford those homes, are what lead to this recession in the first place.

Hot Diggity-

Didn't you read Pat's column? The recession is a thing of the past. It happened 2 years ago. Obama and this Republican controlled Senate fixed everything. Wages have nothing to do with buying a house. If you can get someone to pay more for your house than what youy bought it for. You don't need to have a good job. Us Banzers and most of the people we talk with have great jobs and our companies are hiring!!

Banzer - The Republicans control the HOUSE, not the SENATE.

And I like good satire, but only if it has a point.

Let's see...you talk about Gaithersburg and PG County. Of course they're going up; every article out there on local housing sales have said that the DC area is booming. Meanwhile, everywhere else is still sinking, including Baltimore, sadly. This is just using general stats to pump up a specific area...an area that hasn't had the upswing MoCo, PG & the rest of the DC Metro area has.

Way to stir Baltimore folks up over nothing.

@Banzers- For those of us in the bottom 98% of the American economic spectrum, wages have EVERYTHING to do with the ability to afford property. You need to have someone ABLE to pay more for your home. And if their loan is more than they can really afford-- well, once again, that's what caused this recession. And with unemployment still over 8%, I'd hardly say it's over.
I have no doubt you would consider my combined household income of 125,000 annual paltry; yet that's double the average household income in Maryland, considered a wealthy state. My family is better off than most. By the old standard of mortgage loans, 3x my income, I should only get a loan for 375,000, not a million, for my average single-family home.
I still support real estate investment, and I'm glad prices are slowly going back up, esp. for all my neighbors caught "under water"; but to hope that the average Baltimore-area goes to over a million per home is to wish for hyper-inflation, a bad and scary thing.

Concurring with Ms. Skeptical,

Hiban is reporting the effect of strong DC area incomes that are the result of siphoning resources off the rest of the country only.

Can't you feel the sense of urgency and salesmanship? My only question: Since unsustainably loose credit guidelines are what principally drove prices to the bubble levels, what will make prices rise without that input? Clearly low interest rates aren't enough to drive prices if the credit guidelines are tight. A simple isolation of variables comparing 2003-2007 vs 2007-2011 shows that.

If you're counting on incomes to drive prices, they've been flat for the last decade, and only a mere 6% of the productivity gains of the last 2 years were passed through to wages.

Republicans ( Banks and corporations) control everything GMC. House, Senate, you. I guess you just are not in our "economy". Wouldn't expect you to understand. When Ben Bernanke is done giving us rich people more money - you better believe the average house will be $1,000,000. Will happen sooner than you think!!

The real estate market is on fire...April Fool!!!

Hopefully Baltimore will follow suit

Four very technical factors exist today that didn't even a year ago

***elweedz rolling on the floor laughing uncontrollably***

Any guest bloggers lined up who are not such transparently self-serving cheerleaders?

Dan, there are a lot of self-serving cheerleaders out there, but Pat Hiban was saying things were lousy when a lot of other agents were trying to put a happy face on things. (Read the '09 Q&A for an example.) The sales and contract numbers do support the essence of what he's saying -- that there's been an upturn in activity the last few months. Where the market is headed, though -- who knows.

Feel free to recommend someone you like for a later guest post.

Where is that crazy realtor Greg Northrop? Remember him? "Always a good time to buy guy". "Interest rates are going up guy so better buy soon guy" "everything looks awesome for him guy" "say anything for a sale guy" Maybe he can tell us how great everything is again. That would be great.

I guess a suggestion - perhaps have a real life first time home buyer write about their experience. Maybe someone who has the median/average/mode household income in Maryland come on and let everyone know their experiences in trying to buy a home. These real estate people have no clue. Zero. They are just really, really bad salesmen.

I'd love to have guest posts from first-time buyers. Any volunteers?

Mr. Hiban-

I appreciate the courage in posting here but, if you are going to guest blog, shouldn’t you engage in the ensuing discussion that call into question your points?

For example, I have yet to hear or know of anyone that has mentioned needing to buy before interest rates rise. Certainly, if it were a prevailing factor in this *perceived* surge in business, it would be a popular talking point among people who are interested in purchasing real estate. If I take it one step further and assume rates will in fact rise, how would you reconcile the certain property value plummet as a result with your clients.

As Mr. Dowlut articulated, the truth is house values follow income. Nothing, NOTHING, else. The Case-Shiller Index proves this ( a real technical fact with actual data). Unless incomes rise dramatically, house values will continue to plummet. As for the DC metro area- just wait til the USA has to kick in some austerity measures of its own. All those companies living high on the hog suckling off the gov’t bosom are in for a very near rude awakening.

http://www.google.com/imgres?imgurl=http://yellowroad.wallstreetexaminer.com/blogs/wp-content/uploads/2009/03/case-shiller-chart-updated.png&imgrefurl=http://yellowroad.wallstreetexaminer.com/blogs/%3Fp%3D137&h=778&w=1017&sz=312&tbnid=l1n8yb_EKff8oM:&tbnh=115&tbnw=150&prev=/images%3Fq%3DCase-Shiller%2BIndex&zoom=1&q=Case-Shiller+Index&usg=__X7z2rlC7NNRujRqNOSpyZfj10QY=&sa=X&ei=KRiWTYBGiOLSAe_7iYYM&ved=0CFUQ9QEwCg

The latest Case-Shiller numbers do show a price increase for Washington area, only one of the 20 markets covered with an increase. Anyway, Case-Shiller at the moment, supports, not detracts, from the guest blogger's points

Couldn't we have more blogging or reporting from NEUTRAL observers for a change? Somebody unaffected by the real estate market? Or maybe someone who is actually PAYING, not someone MAKING MONEY OF.

BlogIdeas, please feel free to suggest folks.

I cannot blog every day as I have in the past -- I'm doing almost all that work at home in the off hours, and I'm exhausted. I asked readers what options they'd prefer, and many voted for guest posts. Some specifically suggested that it would be interesting to see posts from various real estate agents once a week -- a jumping-off point for discussions and arguments.

In any case, there aren't a lot of people who are both neutral about the real estate market AND knowledgeable. Economists and analysts, assuming their income isn't dependent upon contract work with the industry, but there aren't enough of them locally to account for more than a few posts a year.

If you go back to my call for guest posts, though, you'll see I'm also specifically asking people who are just experiencing housing in some way in their personal lives to write, too. So far I've heard from two folks. The first of those "non expert" posts will go up next week.

After a month or two of guest posts, I'll do another poll. If readers have changed their minds, then I'll stop looking for guest posters and go to a three-day-a-week blogging schedule.

Sound like a plan?

Sounds like a good plan. Surely, if you have a free slot, a realtor would always oblige to blog about great time for buying or flipping. I personally wouldn't mind if you'd spread a theme over a few days...sequels like in good old times...

Case Shiller- neither detracts or supports Mr. Hibans points. Mr. Hiban's rhetoric is pure speculation. The fact that Washington sales are occuring would imply local incomes rising around the DC area to support the increase in value which is the point of the Case Shiller thesis. Mr Hiban makes no mention of the influence of income as it relates to house values which is curious because it is THE NUMBER ONE FACTOR. This would be akin to a stock broker giving you analysis of an equity purchase without mentioning the p/e ratio. This is the problem with the NAR. Their continued game of hear/speak/see no evil has eroded whatever public trust that once existed. They simply refuse to acknowledge the realities within the industry. Look at point #2 in his analysis. That is right out of the "You better buy now or be priced out forever playbook". Predation on fear is tired and old. Wouldnt we all benefit if house prices were cut in half? I dont understand why anyone would want to tie up their life savings buying a home or want to carry some whopper mortgage [payment. WOuldnt you rather spend $2500 month on retirement savings buying fun sh&T and entertaining yourself? We need reform.

Lose the mortgage deduction.

Outlaw borrowing against your home-turn off the ATM so that the rest of america doesnt pay for all your junk you bought after you go into foreclosure.

Re-write the property tax code and lose the homestead exemption. Both you and your neighbor should pay the same amount.

Sounds alittle too great and a Realtor stating that he is going to be "FLIPPING" his properties ( especially in PG County)is a bit ridiculous!

Ever notice how you can stand on the beach and watch waves develop and fairly accurately predict when and how they will crest and break? Imagine the multivariable calculus your brain is intuitively running, and the speed and precision with which it is running it. Why are we so bad at predicting markets? Does the emotion cloud our judgment?

Elweedz is hitting many good points and reminds me of all the buyers I saw towards the crest of the wave who were buying on fear.

I'm critically analyzing Hiban's use of neurolinguistics, and it's textbook fear of loss selling.

"All the fence sitters... are confident buying now."
"daily threats"
"surge in market volume"
"shot up 34%"
"rush of activity"

I'm with Elweedz on the question of, "so what happens to prices when mortgage rates do go up?"

Dear Bloggers,
I appreciate all of your input and love all of it even the one's that believe I'm being self serving in my comments. Trust me I'm not.
I'm simply telling you how I see things from my vantage point as a realtor and my opinion as to why the sudden change. I saw an awful lot of yakking away about the fact that I had motives behind my statements but no one truly picked apart the 4 reasons for our recent surge of activity. 1. Confidence 2. Rates 3. Price Spread and 4. Rents
Can you deny rents are up? Can you deny rates are down? Can you deny investors are flipping and making more profit than a year ago?
Pat Hiban

I find the majority of the responses comical. People LOVE to hide behind their computer and bash others. I'm sorry, but are you posting anything useful? Did you write an informative blog?

Mr. Hiban is a realtor. He's not a salesman. How many times has someone "sold" you a house? Have you ever met someone who is so upset because they own 12 houses because they just couldn't resist that home salesman's pitch?

People use realtors when they WANT to buy a house. Realtors are a source of information. If you don't trust the informatoin, then use a realtor you do trust.

Everyone has a doctor right? Do you go back to your doctor for informaton, and cause you trust him?

Same thing. I used a realtor when I bought my house and glad I did. I had no clue what went into buying a house.

In response to one of the posts above, I was a first time home buyer and am very glad to have bought. When it comes time to sell, I'll go to Mr. Hiban because I trust him - and because i have no idea what it takes to sell a home. Not because he is going to cold call me and pitch me on selling my home.

Elweedz I don't understand. How does the Case-Shiller index relate to household income? Say, for example, MD's median income rose less than 1% annually from 2000 to 2009 ($65k to $69k, peaking in '07 to $70k+), however, the values of homes skyrocketed (FAR gerater than the increase in income)until 2005 then went into decline (and continued to do so). Unit sales also increased...+30% in '01, ~7% '02-'04, then declined at a rapid rate from '06 going forward. All the while, median MD household income peaked in '07. I don't see the correlation. Yet I do see the imposition of gov't programs (tax credits), basement-level mortgage rates, deregulation of the lending market, etc. that heavily influences price changes and buying activity.

I will agree with you that the higher your income, the higher your house value - that is a linear relationship and common sense tells me that if you make a lot of money, you more than likely have a lot of house.

I'm with Pat and I will add I think the influence of the "investor" on the current market is underestimated. We also need to account for the psychological factors that drive us to purchase anything. We are a "bandwagon" generation...if our neighbors are doing it, well so am I. If they aren't doing it, well I'm not either. It is very dificult for individuals to be non-conforming, they don't want to be talked about behind their back....

To answer Realtor (not salesman) Hiban's questions.
Can you deny rents are up? (yes - I can)
Can you deny rates are down? (Yes - I can) Can you deny investors are flipping and making more profit than a year ago? (Yes - I can)

Realtor Hiban is only telling us what would serve him as a realtor despite what he may say. Why would he not? If the housing market was anywhere close to coming back - interest rates WOULD be up, the FED would not be printing money to save the banks (still), taxes would not have to raised and the country would not be in the debt predicament it is in. Realtor Hiban cites the following:

1. Confidence 2. Rates 3. Price Spread and 4. Rents .

1)I don't know ANYONE who has confidence in the housing market. Nobody.

2) Rates were lower than what they are now. In fact they were close to 20% lower at is lowest.

3) Price Spreads? Give me a break.

4)Rents are actually lower in some places and I cannot tell you the number of people I run into who can't sell their home so they think they are just going to "rent their place out" - to who Ii wonder?

The housing market is sinking (price wise). If it doesn't - we will have another financial crisis. People don't have real money!!!!

A wise old friend once told me the golden rule of real estate;

Can you put down 20% and rent it for more than the mortgage payment, thus netting positive cash-flow? If the answer is yes, and you have money to invest (not to be confussed with borrowered money to speculate on) then real estate can be a lucrative and profitable investment.

I'm beginning to see this theory become more of a reality as prices have dropped. If a condo that rents for $1500.00 can be bought for $180,000.00 then we have reached the bottom, it's that simple.

The same rule can be applied to a owner ocupied property;
Why would I pay $1500.00 in rent for a property that I can buy for $180,000.00 and have a $1300.00 mortgage payment after putting 20% down?

Pat knows these rules, he's lived them for 20 years, his points are valid, and it just a matter of time before the average consumer does the math.

Real Estate is still block-by-block, but the trend has brought prices to an interesting territory.

Thanks for your insight Pat!

I was just reading Vinny Babbarino's post above. He makes a lot of great points. It seems with the latest dose of housing data - Pat has been proven very incorrect. Pending Sales year over year and Prices year over year - all DOWN significantly.