The $8,000 federal homebuyer tax credit pushed up sales in 2009 and part of 2010. Now Baltimore's housing department is hoping $10,000 toward closing costs and downpayment will drum up as much interest in vacant homes, the city's perennial problem.

The agency plans to officially announce the incentive today -- a total of $500,000 available for the first 50 buyers of Vacants to Value properties. Homeowners can qualify either by finding a recently rehabbed home that the city considers a Vacants to Value property or by purchasing a still-vacant home with a rehab loan such as a 203(k).

Ken Strong, assistant commissioner for green, healthy and sustainable homes at Baltimore Housing, said the city is putting together a list of eligible homes. The program will launch July 1, he said.

The money comes from bond funds intended for homeownership incentives.

"We've had such a slow year -- the housing market has been so depressed -- that some of the money we've set aside for homeownership incentives in the past year have been unspent," Strong said. "Now we want to target them to get real stimulus into Vacants to Value."

The city's Office of Homeownership, 410-396-3124, will handle questions about the program. The money can be used with other incentives, such as Live Near Your Work and Buying into Baltimore.

Buyers, do these sorts of incentives make a difference? I'm curious whether they get people off the fence or change buying patterns. The now-gone federal tax credit was widely seen as encouraging people who would have bought a bit later to speed things up -- at a multi-billion-dollar cost.

UPDATE: Here are more specifics from the city about which homes are eligible:

1. A city-owned vacant house sold since July 1, 2010 and rehabbed for homeownership

2. A city-cited property with a "vacant house" notice since July 1, 2010

3. Any property that has been vacant for a year, as long as the evidence of that -- from the seller and/or buyer -- is acceptable to the city

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (14)
Categories: Closing costs, Renovation/rehab, Resources for new buyers & owners, Savings/downpayment, Vacancies
        

St. Ambrose Housing Aid Center in Baltimore saw more than 1,000 homeowners trying to avoid foreclosure in 2007, the first year of the long-running crisis. What has become of them since then, staffers wondered?

It's not at all an easy question to answer. Some borrowers came for advice but opted to work with their lenders on their own. Others disappeared mid-stream without explanation. Still others got loan modifications or other help through counselors' efforts, but St. Ambrose didn't know if those resolutions were really the end of the story -- a lot can change in a few years.

Leaders at the nonprofit housing-counseling group decided to sift through public records to try to figure out what happened. They were buoyed by the results, announced a few days ago.

Land records suggest that 60 percent of St. Ambrose's '07 class of struggling borrowers still owned their homes as of December, the nonprofit says. An additional 10 percent sold their homes for more than they paid, which St. Ambrose also counted as a win compared with foreclosure.

Twenty-four percent fell into categories St. Ambrose counted as negatives -- foreclosure, short sales and deeds-in-lieu of foreclosure. (Short sales and deeds-in-lieu are often characterized as better than foreclosure for borrowers, but the nonprofit thinks the main beneficiary is the mortgage holder.)

Data errors prevented St. Ambrose from determining the state of the remaining 6 percent of properties. 

Mark Benson, special assistant to the executive director at St. Ambrose, thinks that's a good track record and a sign that foreclosure-prevention counseling helps borrowers. But he's quick to acknowledge two issues that make it harder to draw absolute conclusions from the study.

St. Ambrose determined property ownership by property records -- the state Department of Assessments and Taxation's searchable database. That ought to be just fine, but one of the challenges of foreclosure is that the bank (or mortgage-backed-security investor) doesn't necessary show up as the new owner soon after repossessing the house.

At least sometimes, their mortgage servicer doesn't actually record the deed showing the property's REO status until the point that it's passing into the hands of a new, non-bank owner. (State Sen. Richard F. Colburn, a Republican from the Eastern Shore, sponsored a bill last session requiring deed recordation within 60 days of foreclosure ratification to address that issue. But the bill didn't make it out of the Senate.)

Now, if a homeowner was foreclosed on in 2007 -- or 2008 or 2009, for that matter -- the odds would seem pretty good that the deed would have been recorded by December of 2010. Benson said St. Ambrose staffers spot-checked the data, visiting 25 homes in one ZIP code to see if they were still owned by clients as the land records suggested, and were able to connect with the people or find clear signs of owner-occupation in every case except one.

But he said deed recordation delays certainly could "mask" ownership.

The other issue? Without a control group of people who didn't seek counseling help, it's difficult to say how St. Ambrose's clients might have fared if they went it alone. But Benson said another study comparing loan modifications found that homeowners working with counselors had better odds of landing a lower payment than homeowners without, so he doesn't think it's a stretch to conclude that St. Ambrose had an impact.

"I think it just supports the concept that housing counseling plays a role in helping people stay in their house," he said.

Either way, sometimes homeowners get help, get back on track and get walloped anew. Benson said one of the borrowers from 2007 explained that she was in financial difficulty again after two operations and the need to take in her daughter, who had been laid off.

"She was going to come back and talk with a counselor again," he said.

Some other findings of the study:

St. Ambrose clients who owned homes in the city were more likely to avoid foreclosure, a deed-in-lieu or short sale than homeowners outside the city.

Clients who lost their homes to foreclosure typically bought in 2006, near the peak of home prices. The median price they'd paid: almost $140,000.

Homeowners who were able to sell for more than their purchase price bought before things got particularly bubbly -- not surprisingly. The typical client in that situation purchased in 2002 for $68,000.

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

The price that sellers are asking for homes in the Baltimore metro area has been on the rise the last few months, but so have the number of homes for sale -- two measures that can't head in the same direction for long.

New figures from Altos Research, a California-based real estate market research firm, show a 12 percent increase in single-family homes for sale in the Baltimore region over the past three months. Asking prices rose 4 percent over the same period.

Altos, which noted in an email to me that prices and inventory "usually have an inverse relationship," said Baltimore's increase in the number of houses for sale was the largest among 21 mid-sized metro areas. The average increase across the group was about 2 percent.

The average asking-price increase was about 3 percent, Altos said.

The company predicts the housing market is entering a "catfish recovery" (we're way past the point of using letters to describe the market's past-and-future trajectory).

"The recovery in housing will be extended for a long period of time, and like a catfish, bob up and down with no direction," Altos wrote in its mid-sized markets report.

Department of Numbers, the website formerly known as HousingTracker, has asking-price data for the metro area back to 2006. That shows small increases aren't unusual in the spring and early summer -- the busy season for home sales -- but asking prices fall later in the year. 

This time the uptick is bigger than normal, though. The median asking price in June is $17,000 higher than it was in January, the largest increase for that period since the site began tracking asking prices five years ago. (The increase was $10,000 last year, when the homebuyer tax credit was giving a kick to sales, about $3,500 in 2009 and 2008, and $7,200 in 2007.)

What's up? Perhaps more owners of larger homes are in the market now, pressing up the median asking price. Or maybe sellers are just feeling more optimistic. What do you think?

Despite the increase from $213,000 in January to $230,000 in June, the median asking price is 8 percent below what it was in June of last year, Department of Numbers reports.

The change since June 2006, more or less the top of the market? Down 34 percent.

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

Predicting when the bottom of the real estate bust will arrive has been the parlor game of the last half-decade. Some would-be buyers are holding off with the idea of catching lower prices later, while some would-be sellers are waiting in hopes of better times down the road.

Now comes today's guest poster, real estate attorney and broker Billy Yerman, with an argument about when to buy and sell that will be sure to fire up debate.

He's chief executive of the Baltimore-based Strata Group, parent company of real estate businesses such as the Yerman Witman Gaines & Conklin real estate brokerage. He's been in real estate for 22 years.

Take it away, Billy:

------------------------------------

It’s more or less accepted wisdom that it’s not a good idea to “time” the stock market. Most professional investment advisers warn against a strategy of betting on spikes in stock prices in the short term (versus a long-term “buy and hold” strategy), for the simple reason that the markets are too complex to predict accurately in the near term. Of course, that doesn’t stop a lot of people from trying to do just that, with varying results.

I would offer the same advice to anyone considering buying or selling a home. The real estate industry generates reams of data every week – much of it contradictory, depending on the basis of the comparisons. Interest rates move up and down weekly, but the overall recent trend is down – to near 50-year lows. The number of homes sold in the Baltimore area started to increase in year-over-year comparisons starting in December, then plummeted recently due to comparisons with the closing months of last year’s federal homebuyer tax credits. On the flip side, the housing affordability index is up …

You get the idea.

Here is my honest advice (for purposes of full disclosure, remember that I am the CEO of a real estate firm) to anyone who wants to buy or sell a home in the near future: The most important numbers you should look at are your own. If you’re a seller, make an honest calculation of the price you think you need – to pay off your mortgage, cover the cost of improvements you have made, moving expenses, and so on. Then work up a realistic price that you would like to get, based on the condition of your home, the neighborhood, etc. Take that price range to an experienced real estate professional, and ask for his or her honest opinion of where your home falls in the current market.

By the same token, potential buyers should make a detailed list of what they need/want in a home, where they think they would like to live, and how much they can realistically afford to invest in a home. Then talk to that same experienced real estate professional and get an expert opinion.

On the bottom line, the only timing that matters is your timeline. And the only numbers that matter are your numbers. If you have a compelling reason to sell or buy a home in the near to mid-term, then your timeline may be different than someone else’s, and that may affect the price that you are willing to accept or pay. Just be sure that you base your decision on your individual situation, rather than market averages that may or may not apply to you. The best time to buy or sell a home is the time that’s best for you, based on all of the factors that only you can fully understand.

------------------------------------

Thanks, Billy!

Thoughts, questions, arguments? Comment away.

If you'd like to write a guest post -- either to share expertise or to share an interesting housing-related personal experience -- please drop me a line. Details here.

And if you've got questions you'd like to see a guest poster address on another subject, ask away right here.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (15)
Categories: Expert guest post, Guest post
        

The so-called shadow inventory -- homes that aren't on the market now but soon could be thanks to the foreclosure crisis -- receded in April, according to real estate data firm CoreLogic.

The company estimates the total at 1.7 million homes nationwide, down from 1.9 million in April 2010. (Both numbers add up to a five-month supply of homes because the pace of sales was faster last spring, with the federal tax credit in effect, than it is now.) CoreLogic attributes the drop to a combination of fewer homeowners newly behind on payments and a "high level" of distress sales.

A few interesting tidbits:

o Homes whose owners are seriously delinquent on their payments but not in foreclosure account for almost half the shadow inventory. The rest -- in equal split -- are homes in the foreclosure process and properties repossessed by banks but not yet on the market.

o The shadow inventory plus all homes for sale -- the "visible" inventory -- added up to 5.7 million units in April. To put it another way: Three in every ten of those properties are in the shadow group.

o CoreLogic says shadow inventory has dropped 18 percent since peaking in January 2010. But its chief economist, Mark Fleming, expects several more years before total absorption "given the long timelines in processing and completing foreclosures."

Here's the question of the day, folks: Does the much-discussed shadow inventory make any difference to you? If you're thinking of buying, is this potential pipeline holding you back for now? Sellers, has it factored into your strategy at all?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (4)
Categories: Distress sales, Question of the day, The foreclosure mess
        

Earlier I laid out the steps for homeowners to get the ground rent on their land officially extinguished if the ground-rent holder didn't register it by the deadline last fall. Now here's a flip side of sorts -- assistance for mom-and-pop ground-rent owners who aren't getting paid what they're due.

The help comes courtesy of Louis Wilen, a part-owner of a small number of ground rents who figured the many small-time and elderly owners of such leases aren't having an easy time deciphering the new-ish collection rules. He's sharing examples of a ground-rent invoice and an overdue notice (a heads up that a lien will be forthcoming if the rent money is not).

"The big guys who own hundreds of ground rents already know how to collect -- and the tactics that they used (as reported by the Baltimore Sun) spurred the legislature into changing the ground rent laws in 2007," he wrote me in an email. "Unfortunately, the new laws made collection much more difficult for the small guys. Hopefully, making these sample documents available will help out the little guys."

He added: "Also, anyone who uses the lien warning notice should carefully read the law (which I included with the lien warning notice) and be sure to follow the required notification procedures, which include sending the notice by certified mail, then posting it if the certified mail is not deliverable, notifying lenders (if any), etc., etc. Determining the name and address of lenders requires a title search. The process isn't terribly difficult but it isn't simple, either."

On a semi-related note: The state's highest court is mulling over a challenge to the '07 registration law, which specified that all ground rents not registered with the state before Sept. 30 of last year would cease to exist. Sun columnist Jay Hancock wrote recently that people with a small number of ground rents -- one, in some cases -- got caught by this rule because they didn't know about it.

"Maryland could have given ground rent owners plenty of incentive to register without confiscating their assets," he wrote. "Don't let landlords collect rent until they sign up, for example. Don't let them sue tenants. Don't allow ownership transfers."

Would those penalties for non-registration be better than what's in place now?

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

Lots of factors influence how well or poorly a local housing market will do, but The Wall Street Journal's David Crook argues that you can boil them down to three essentials. And no, it's not location, location, location.

First, jobs. Second, the price of homes vs. the cost to rent. Third, foreclosures.

Makes sense. If the local economy isn't growing, you won't have a growing number of people able to buy. If it's a lot more costly to buy than rent, tenants aren't going to be rushing to purchase -- not in these post-boom days, anyway. And a flood of bank-owned properties on the market makes it harder for regular homeowners to sell.

He offers a "yes, but" to his second rule-of-thumb: "Beware the outliers. Extremely low price-to-rent multiples can be warning flags for seriously depressed markets that are glutted with unsold properties."

Do you think these three factors are the most important measures for a housing market, or do you have others you prefer?

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

Predicting how long a home will take to sell is no certain business. But here's one statistic sellers and buyers alike might like to know:

At the pace of May sales, it would take eight months to find buyers for all the Maryland homes still on the market.

A year earlier, when the federal home buyer tax credit was boosting activity, that pipeline was just over six-and-a-half months long. (Six months or so is usually considered a balanced market, where sellers and buyers have more or less equal power.)

This stat can tell you only so much, of course. There's no guarantee that sales will continue at the same pace or that the number of listings will remain more or less even as some homes come on the market and others go off. How quickly banks repossess homes and put them on the market as new foreclosures is one of the big question marks, what with the slowdown that came in the wake of robo-signing revelations.

But that months-of-supply figure is one bit of market intel you'll want to have if you're looking or selling. Here's the breakdown by county in the Baltimore region for the month of May, and a way to get it down to the ZIP code:

Source: Maryland Association of Realtors, Metropolitan Regional Information Systems

Remember, that's for May. The months-of-inventory figures are May 2011 and May 2010.

If you'd like to see what the situation is at a community level, go to the website of Metropolitan Regional Information Systems' stats arm, RealEstate Business Intelligence, and look up a ZIP code report. (Here, for instance, is 21212.)

Once you're on the landing page for the ZIP code you want, find the "Reports" tab, click on it, and  then hit the button for "See Most Recent." (This is what you get when you do that for 21212.)

Find the figure for "active listings" in the month you want. Then divide that by the number of "units sold." Voila: the months of supply.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (1)
Categories: Housing stats
        

Buying a home is complicated. When it's a foreclosure, though, the questions really multiply -- whether you're trying to purchase an REO (real-estate owned) property from a bank or you're thinking of bidding at a foreclosure auction.

Two settlement attorneys teamed up to answer common questions, including ones several of you submitted. Lee M. Snyder and Eric Oberer are colleagues at Mid-Atlantic Settlement Services. Lee has been practicing real estate law since 1969 and Eric -- a former city prosecutor -- joined Mid-Atlantic in 2005.

Take it away, Lee and Eric:

-----------------------------------

Question: Is there any way for a buyer to tell before getting under contract on an REO whether the institution already has the legal ability to go to settlement?

Answer: The land records of the county/city where the property is located are the best source of information as to who is in title. It is also possible to go onto the website for the state Department of Assessments and Taxation to determine who is in title according to their records. However, both of these sources can be as much as 60-90 days behind in indexing and therefore may not show that title has recently changed. Many times, the selling REO bank has seen the foreclosure procedure completed, sale ratified, etc., and the deed from the trustees to it has not yet been recorded or indexed but the bank lists the property for sale anyway.

Q: What issues do you see crop up on a regular basis with REO transactions – delays, etc. – that buyers should be aware of?

A: The Circuit Court may re-examine the filed documents for bad signatures, robo-signing etc. Failure to give proper notice to subordinate lien holders requires the trustee to get waivers of notice or some other resolution of the problem. Before the closing for the new buyer can conclude, the REO bank must approve the HUD-1 being used and sometimes there is a delay in getting this approval.

Q: Please detail "hidden" settlement costs such as HOA fee pay-offs and other liens that may accrue for accounts in arrears. Explain borrower liabilities for Homepath, HUD REOs and auctions.

HOA payoff for existing liens and arrearages are sometime disputed by the REO bank and as a result, HOA attorneys may try to enforce the lien against the new owners even if there is no legal basis for doing so, resulting in a standoff or compromise, all of which takes time. A purchase at auction creates a different issue, in that the buyer is expected to pay ALL closing costs including stamps and transfer taxes, with adjustments to the date of SALE, not the date of settlement, but selling trustee warrants that title is merchantable.

Q: What does the trustee warranting that the title is "merchantable" mean?

A: The trustee agrees to convey good and marketable title or insurable title, which is not quite as good as marketable title, but it is up to the buyer's attorney/title company to cause the land records, court records, judgment records, lien records, bankruptcy records, etc., to be carefully examined, to determine if the trustee can convey good title. This becomes very important in the title area today based on the practices and procedures being followed in some instances. This means that the burden is on the buyer or his attorney to discover title problems and to have them resolved before accepting the deed from the trustee.

Q: Does that issue specifically apply to purchases at auction, or does it include REO purchases too?

A: The basic info for checking title is the same but an REO bank will give a deed with special warranties, as would any other individual or entity seller. Trustees and some court appointees do not usually give such warranties.

Q: How do you know if the auction is a wash sale for the bank to take title, or if they're actually going to give it to the highest bidder?

A: As to auction sales, anyone can check the Circuit Court records for the county in question and examine the Statement of Claim file therein which will state the balance due the lender. After adding an additional amount for costs, advertising and trustees' fees, the bank will come up with a predetermined amount, which may be the first bid made. Usually, any bid after that means that there is someone else interested, and if so, the bank may let the auction take its natural course.

Q: Why are some properties winterized and put away, and others are listed or auctioned?

A: The REO bank determines by geography, condition of the property and what value they can expect to get before putting the property on the market, i.e. listing it for sale with a Realtor.

-----------------------------------

Thanks, Eric and Lee!

Thoughts, questions, arguments? Comment away.

If you'd like to write a guest post -- either to share expertise or to share an interesting housing-related personal experience -- please drop me a line. Details here.

And if you've got questions you'd like to see a guest poster address on another subject, ask away right here.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (4)
Categories: Auctions, Distress sales, Guest post, The foreclosure mess
        

The builder of a high-end condo project in Annapolis that used an auction to jump-start sales in November is planning another one to move what's left into the hands of buyers.

Sturbridge Homes, the builder, has scheduled the GrandView at Annapolis Towne Centre auction for July 24. Auctioneer Sheldon Good & Co. said the idea is to close out the project by selling everything that's not already under contract by the event -- around 25 units, give or take.

When the first auction was announced, two-thirds of the project was empty -- only 50 of the 150 condos had changed hands over the previous year and a half. Buyers purchased 33 units at the November event and then 30 more after that, counting both active contracts and settlements, said Mark Troen, chief operating officer of Sheldon Good.

(Wondering why the math isn't working out? Because more condos could sell between now and July 24, there's wiggle room between the number currently up for the sale and the 25-unit figure being advertised.)

Troen said the first auction helped set -- and put a floor under -- prices. Afterward, "They went up about 5 to 7 percent, depending on the units," he said.

Sale prices at the November auction ranged from $275,000 to $610,000, not including commissions. (For comparison's sake, the auctioneer advertised the original listing prices at $415,000 to $995,000, and the minimum starting bids were $148,500 to $308,000.)

This time, units the auctioneer says were originally priced at $514,000 to $937,900 will have minimum opening bids of 59 to 70 percent off. They're guaranteeing at least 10 will sell at that minimum price if the bids don't get any higher.

Troen said he's confident that none will be left after the auction is done. "I think the market demand is there," he said.

What do you all think of the auction method of selling higher-end product? A variety of developers have gone that route -- some more than once, such as Sturbridge -- so they must be doing the math and deciding it's a good option. Do you think buyers end up doing any better than they would have in a traditional sale?

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

Want to live in one of the most expensive housing markets in the country? You won't have to move far. (You might even be there now.)

Coldwell Banker Real Estate's new ranking of just over 2,300 markets in the country by average price puts Annapolis at No. 2,240, meaning it's among the 100 priciest areas -- No. 1 is cheapest. Annapolis is the priciest sizable market in Maryland by Coldwell Banker's measurement, outpacing the Washington suburbs of Rockville and Silver Spring.

The list doesn't include everything you might consider its own market, such as tony Potomac and Bethesda. And the calculation for Baltimore appears to include at least part of Baltimore County, upping its average price to $265,000 rather than the $135,000 measured by the local multiple-listing service.

But hey, everyone loves a ranking. Go on, have a look:

What communities aren't on the list that are worthy of being considered their own housing markets, rather than satellites of larger neighborhoods?

And where do you think buyers get the most bang for their buck?

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

If you're a tenant in need of help budgeting, saving money by saving energy and generally avoiding a situation where you can't pay your rent, the University of Maryland Extension suggests carving out time next week to sit in on its eviction-prevention seminar.

The event, from 8:30 a.m. to noon on Friday 6/24, will include sessions on energy conservation, increasing savings through budgeting, tenant resources and renters' rights when their landlord gets foreclosed on.

It's scheduled to be held at Pleasant View Gardens, 201 N. Aisquith St. in Baltimore. To register, call the extension at 410-856-1850, x128 or email MElonge@umd.edu.

Posted by Jamie Smith Hopkins at 5:55 AM | Permalink | Comments (0)
Categories: Renting
        

Calls to cut the city's high property-tax rate have been long-standing and numerous. What's grabbed attention more recently is the idea of slashing it in half.

An economist at Loyola University Maryland suggested that such a move would revitalize Baltimore, pointing to good effects in cities -- such as San Fransisco -- that years ago had big cuts imposed upon them by voters. Councilman Carl Stokes, a mayoral candidate, proposed halving the rate over three years.

Now the city's Finance Department has weighed in, saying the only way Stokes' plan wouldn't dent revenues is if more than 500,000 new residents move in.

That's the equivalent of two-thirds of the people who left the city in the last 60 years coming back.

Colleague Julie Scharper had the story over the weekend, and I figured you'd all be interested in chewing over this newest development. As you might expect, supporters of a lower rate don't agree with the Finance Department's conclusions. They think it overstates the needed expansion.

Stephen Walters, the Loyola professor, said the report ignores a variety of financial benefits from an increase in residents, including more jobs, businesses and vacants-turned-rehabs. He told Scharper that the report was "really bad economics."

Joseph T. "Jody" Landers III, the mayoral candidate who runs the Greater Baltimore Board of Realtors (update at 9:15 a.m.: he's leaving that job to run full-time) and is suggesting a rate reduction over the next four years of 25 to 35 percent "or more," also fired back.

He put a scathing statement on his campaign website from David B. Rudow, founder of the Baltimore Efficiency and Economy Foundation. Rudow sat on a blue-ribbon panel -- which Landers co-chaired -- that in 2007 proposed ways to reduce the city's property-tax rate.

Rudow wrote:

The report offered 11 suggestions to achieve major property tax rate reductions. The city implemented several of the suggestions - increasing the City’s piggyback income tax and hotel tax to the highest rates in Maryland, and taking advantage of several new state transfer tax laws - but failed to reduce the property tax rate even a penny.

We are long past study time – it is time for action. In addition to the destructive real estate tax rate on homeowners and businesses, city business are also overburdened with a huge nearly 6% annual tax on all personal property located in the City. We need to get competitive to survive.

The thing about a big tax-rate cut is that it's a jump into the unknown for Baltimore, one that would make most budget directors -- who like predictability -- gasp and gulp.

Walters' plan tries to address that by proposing a charter-amended guaranteed cut at a certain point in the future -- say, four years -- so the city could start amassing a fund to cover any gaps at the point of slashing. The idea is that people would start moving in before the cut, to buy properties before the prices presumably rise in tandem with the rate reduction, and the extra money would be funneled into the rainy-day fund.

So: Thoughts? Do those of you who were in favor of such a move (most of you, judging by this poll) still think it's doable?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (29)
Categories: Property taxes
        

Baltimore officials want vacant homes renovated and lived in again, because that fixes a host of problems in one fell swoop. So they're hoping you go this weekend to a city-organized event about -- what else? -- rehabbing vacant homes.

More than 200 people have already registered for the free expo, scheduled for 10 a.m. to 2 p.m. Saturday, the city's housing department says.

Julie Day, deputy commissioner of land resources at at the agency, known as Baltimore Housing, said the event will offer seminars on choosing a contractor, rehab financing options, understanding the permitting process and the like. The information is aimed at people hoping to redevelop vacants for a living, prospective home buyers looking for a place to fix up and live in, and housing counselors who want to help walk buyers through the process.

Teresa Stephens, director of marketing and community outreach for land resources at Baltimore Housing, said a vacant property "can offer a home buyer a really good opportunity."

"Often it does take a little vision and rose-colored glasses to see it," she added.

Expo participants will get a list of city-owned vacants that were purchased, rehabbed and are now for sale. Ten will be open for viewing Saturday afternoon, Day said. 

The expo is an outgrowth of the city's Vacants to Value program. That's an effort to turn the tide on Baltimore's long problem of abandonment by picking up the pace on sales of city-owned homes, more aggressively going after vacancy in otherwise healthy areas through code enforcement and taking other steps -- such as tear-downs -- when called for.

Sales are up -- they're on pace to double last year's figure, Day says. But part of the challenge facing the city is that even a doubling of sales is just a small dent in the total. (And WBAL-TV reported last month that a number of sales the city is claiming as Vacants to Value successes were already in the works before the program existed.)

If you'd like to attend the Saturday expo, you can find out here how to register. Day expects it won't be the city's last offering on the subject.

"The interest is really enthusiastic and growing, so I do see that we will be doing either similar workshops or a similar format with different content," she said. 

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (6)
Categories: Renovation/rehab, Vacancies
        

You asked for answers to renting questions. Nokomis Johns kindly volunteered.

She's the senior tenant/landlord counselor for Baltimore Neighborhoods Inc., a nonprofit that has a hot line just for questions in this arena. A BNI employee for more than seven years, her mission is getting "more people informed on the correct laws and procedures before they get into a bad situation."

BNI counselors often provide information about tenant/landlord laws, but they're not attorneys -- and of course the answers to the questions below aren't legal advice. They're designed to point you in the right direction.

Take it away, Nokomis:

---------------------------------------------------

Question: What is considered "normal wear and tear" in a rental agreement? I am thinking about what a landlord can deduct from a security deposit and what he cannot deduct.

Answer: Normal wear and tear are things that result from coming and going. They are things that cannot be prevented. For example, the carpet wears down as you walk on it, or after a while the paint starts to crack and peel. These types of things cannot be prevented and the landlord cannot charge you for replacing the carpet or repainting due to ordinary wear and tear. If you do not agree with what is deducted from your security deposit, you can sue the landlord.

Q: I'm really concerned about rising rental costs. Are there rent consumer advocates to help us fight for our rights? For instance, it would be useful for consumers to determine if the rent is fairly priced for the area and amenities. When there's a rent increase, is the amount fair?

A: To determine fair market rent, you will want to contact HUD or use their National Housing Locator System. Or contact the state Department of Housing and Community Development.

There are a several types of rental housing advocacy agencies. You may want to do an internet search to determine what exists in your county and the state.

Q: What resources are available for mom-and-pop landlords to check out potential tenants before renting to them?

A: You may want to check the Better Business Bureau website for companies that do tenant background checks. You want to check rental history as well as criminal and credit history. Verify employment and check personal and professional references. Be sure to ask in your application if the person is a member of the military.

Q: If the landlord refuses to return my security deposit and offers no reason (or no valid reason), what can I do?

A: The landlord has 45 days to return the security deposit or an itemized list of damages and costs incurred. If they fail to return the security deposit or list within 45 days, the tenant can sue for up to three times the security deposit amount.

Q: What recourse do tenants have if they’re ordered to move out before the lease is up even though payments have been made on time and they’re not breaking the contract in any other way? What about cases where the landlord or property manager is making false claims about the renter – for instance, "you’re letting your pet run amok”?

A: Don’t leave. If your landlord gives you a written notice to leave in the middle of your lease, you can dispute it by not leaving. The landlord has to go through a court process to evict. If you can prove the notice is not valid, you may be successful in getting the case dismissed. (There are some exceptions for Baltimore City residents if the landlord plans to move himself or family into the property. Contact the BNI tenant/landlord hot line for more information. If you are a tenant in a foreclosed property, seek out an attorney for legal advice.)

Q: In Baltimore County, does a renter have any obligation to notify the county when the property they rent has not been registered under the new law? If the county finds out a landlord has not registered their property, what is the risk to the renter? Can that end up voiding the lease and forcing the renter to find a new residence?

A: The tenant has no legal obligation to notify the county if the landlord is not registered. If the county finds out the landlord has not registered the property, the landlord will be cited and fined until he does register. If the landlord continues to ignore the citations, there is a possibility that at some point the county will shut down the property and remove all occupants.

Q: What’s the most common complaint you hear from renters and landlords, and what advice do you give?

A: Our most common problem is nonpayment of the rent. The first thing we stress is no one can be evicted without a court procedure. Then we explain the court procedure and in some cases help them understand the court form. We do this so our callers are informed about the law. We cannot give any legal advice.

Q: What steps could renters and landlords take to promote a more harmonious relationship?

A: I’ll give a few suggestions:

1. Use a written lease. You want everything spelled out in writing so that it's clear what the landlord’s responsibilities are and what the tenant’s responsibilities are. Are utilities included? Is there a deductible for repairs? Are there shared meters? Does the lease renew? What is proper notice to end the tenancy?

2. Read your lease! I cannot stress this enough. Read it before you sign it and then read it again ... and again. If you do not understand something, ask a question. If you are not satisfied with the answer, you have a choice not to sign.

3. Get all verbal promises in writing! Otherwise, do not expect them to hold up in court.

4. Electronic communication may or may not hold up in court. We recommend certified letters to communicate.

5. Tenants should get a receipt from the landlord for their payments. Money-order stubs are not good enough, and personal checks do not give proof of receipt until they are cashed. Never pay in cash without a receipt.

6. Landlords should do thorough background checks on their tenants. If you decide to rent to a person with a credit, criminal or rental-history blemish, know that it is not a quick procedure to remove a tenant in the state. Some counties take four to six weeks, while other counties can take two to three months for eviction.

7. Keep the relationship strictly business. It may be a friend or relative, but they should still sign a lease and have clear terms and conditions.

8. Know the laws before you rent. You can visit BNI’s website to download our free introductory packets for tenants and landlords. You may even want to consider ordering our Guide to Local, State, and Federal Laws Governing Tenant-Landlord Relations. It has the laws written in layman’s terms. We also sell leases and rental applications.

---------------------------------------------------

Thanks, Nokomis!

If you have other questions, she suggests calling the Baltimore Neighborhoods' tenant/landlord hot line, which is available free of charge from 9 a.m. to 5 p.m. Monday through Friday. That number is 410-243-6007 or 1-800-487-6007. You can also submit a question online if you get a busy signal. Go to bni-maryland.org and click on "Have a Question? Ask a Specialist."

Thoughts? Comment away.

If you'd like to write a guest post -- either to share expertise or to share an interesting housing-related personal experience -- please drop me a line. Details here.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (10)
Categories: Expert guest post, Guest post, Landlording, Q&A, Real estate investing, Renting
        

We'll get a snapshot of May home sales and prices today when Metropolitan Regional Information Systems releases its monthly statistics for the Baltimore metro area.

MRIS, which runs the region's multiple-listing service used to buy and sell homes, puts its figures on the website of its stats arm, RealEstate Business Intelligence. You should be able to see the report here when it's released, likely later this morning.

Check back here for an update.

UPDATE:

The number of May home sales dropped 20 percent from a year ago, when homebuyers were hurrying to close deals in order to qualify for the now-gone federal tax credit. Home prices also fell, down about 4.5 percent on average.

April 2010 was the deadline to get under contract for the tax credit, which meant a big uptick that month and a big drop-off the next, so unsurprisingly, new pending deals this May blew last May's out of the water. The increase: 54 percent.

What's probably more interesting than the May vs. May contract figures is the year-to-date. New contracts signed in the first five months of this year outnumber signings in the corresponding months last year by 10 percent, MRIS says.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (1)
Categories: Housing stats
        

Home prices in the Baltimore metro area are down nearly 9 percent compared with a year ago, according to new figures from real estate data firm Clear Capital.

The company, which tracked prices in the four months ending in May, uses a repeat-sale index that tries to get at the true change in home value without the skewing that can come when comparing all homes sold in one period vs. all those that sold in another.

Clear Capital says the metro area saw the same nearly 9 percent drop when comparing February-May with the previous three months, one of the largest declines among big regions. Five other metro areas saw larger drops, including No. 1 Detroit, down 13 percent.

The federally powered Washington region was one of the few to see a gain over the quarter and also over the year.

Alex Villacorta, director of research and analytics for Clear Capital, thinks it's pretty clear why the Baltimore area is on the company's "lowest performing major markets" list.

The metro area's share of bank-owned sales, though still below the nation's, is at record levels even as the national percentage has dropped, he said.

Just over 25 percent of the Baltimore area's home sales were REO homes during the February through May period, Clear Capital says. Villacorta said that share rose rapidly during the earlier part of the bust, peaked at 20 percent in early 2009 and had been receding as the homebuyer tax credit brought more people into the market -- some of whom bought non-foreclosures.

"We are now reaching a new high in terms of this saturation rate for the Baltimore metro area," he said. "Correspondingly, we are seeing prices hit a new low in the Baltimore area, effectively since the downturn began. One of the biggest drops has been over the most recent rolling quarter, which corresponds with the sharp uptick [in] the sale of distressed homes."

What about the slowdown in foreclosure sales as a result of robo-signing problems? At least some servicers have suggested that things are back to what passes for normal. And where slowdowns are still in play, "the volumes we're talking about are so massive that the pipeline had already been saturated," Villacorta said.

Nationally, bank-owned homes accounted for just over 40 percent of sales at the beginning of 2009 and are currently "leveling off around 33 percent," he said.

Clear Capital looks at a four-month period as a way to include the most recent month -- May, in this case -- and balance out the potential for incomplete data in that month by including the previous three. We should get another bite at May data, all sales rather than an index, when the company that runs the region's multiple-listing service releases statistics on Friday.

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

The number of homeowners underwater on their mortgages has -- at least temporarily -- stabilized at 120,000 in the Baltimore metro area, according to new estimates from CoreLogic.

The real estate data company says that amounts to 19 percent of all mortgaged homes in the first three months of this year, essentially the same as at the end of last year. Last spring, by contrast, just over 100,000 homeowners owed more on their mortgages than their homes were worth, the company said.

Home prices have continued to drop since the beginning of the year, though, so the next underwater figure might show a return to the upward climb. (About 33,000 Baltimore-area homes were on the edge of negative equity in the first three months of the year, CoreLogic says.)

Maryland remains in the top 10 for its share of underwater borrowers, ranking 8th with just under 24 percent. But the hardest-hit states are much worse off.

Nevada is top of the heap -- more than 60 percent of its mortgaged homes are worth less than the loans on them, CoreLogic estimates.

So how much money are we talking about? The average underwater American is upside down to the tune of $65,000, about the same as the average underwater Marylander.

By the way, it's getting really lonely shouting into the void, which is what we bloggers are having to do while the commenting system is down due to spammers. If you email your comments to jhopkins(at)baltsun.com, I'll post a round-up with links to any relevant posts. Let me know how you'd like to be identified.

UPDATE: Hooray, comments are fixed! Opine away.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (52)
Categories: Underwater
        

If you're trying to apply for the Emergency Mortgage Assistance program, aimed at staving off foreclosure with a no-interest, payment-deferred loan, you'll have several opportunities to meet directly with state officials this month.

The state Department of Housing and Community Development has scheduled events June 9 (this Thursday), June 18 and June 30 at its offices in Crownsville -- Anne Arundel County.

Details, including how to register, are here.

The state also announced two other new loan programs yesterday, one for people purchasing a foreclosure or short sale and the other aimed at purchasers of homes in need of repair. (The second mortgage program includes money for renovation.) Details about those mortgages here.

Posted by Jamie Smith Hopkins at 5:45 AM | Permalink | Comments (0)
Categories: Foreclosure help
        

It's getting even harder for low-income renters to find housing they can afford -- not that it was ever easy.

In a new report, Harvard's Joint Center for Housing Studies says there were 6.8 million more U.S. households among the renting poor in 2009 than the number of units priced for that demographic and not occupied by higher-income tenants. That's up from 5.6 million in 2003, its report says.

That change is driven by more demand plus less supply -- an increasing number of renters with very low incomes even as the number of available units dropped by 200,000. And the problem is poised to get worse.

"With little new supply of multifamily units in the pipeline, rents could rise sharply as demand increases," the center warns. "Regardless, affordability is likely to deteriorate further over the next few years as persistently high unemployment limits renter income gains."

Renters as a whole, not just the lowest-income tenants, have felt the pressure. Renter income dropped in the last decade, hitting a level in 2009 that was actually lower -- in real terms -- than what renters were earning in 1980. But the cost of monthly rent is up.

Rising energy costs aren't helping, either. They accounted for 15 percent of all renters' housing costs in 2009, up from less than 11 percent at the beginning of the decade, the center says.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (2)
Categories: Renting
        

No one has been able to comment on Sun blogs the past few days, thanks to a spam attack, which has reminded me how important you all are to this community. It's just not a conversation without you, dagnabbit. So I'd like to take a moment to thank everyone who takes the time to share thoughts here and, while I'm at it, shine a spotlight on one frequent commenter.

Pete from Highlandtown does interior demolition for a living, so he has hands-on experience with the housing industry. He's also a thoughtful, philosophical sort of guy who always has interesting points to make.

What will a housing recovery look like, for instance, and should we want the price of homes to return to where they were before the bust?

"Maybe they are undervalued now. Im sure that some are. But in my opinion, a lot of house values have simply gone down to what they really are," he wrote recently.

On another post, Pete made a thought-provoking point about the difference between "vacant housing" in the official sense -- homes with violations because they're actually or effectively abandoned -- and those that are just empty:

"In my experience for every house that is boarded up, there are two houses that are vacant, but not boarded up. You can tell that they are vacant because of the 6 month old phone books on the steps and the dozen pizza fliers stuck in the door," he wrote. "My point is that im guessing that a lot of those houses arent officially considered 'vacant'. Even though no one has lived in them for over 5 years. So i am sceptical of some of the official statistics on vacant housing."

When I asked you all if you're rooting for home prices to rise, stay steady or fall, he weighed in with a comment that's too good to condense:

I own my house and dont plan to sell it or buy a new one now, or probably ever. So i dont have much personally to lose or gain either way in that regard.

But i would have to say that one thing that i have always liked about Baltimore was that someone like me could work as a construction laborer and still be able to save up and afford a house.Someone like me couldnt do that in Boston or NYC. And i would like that to continue, so others might enjoy owning a house as i enjoy it.

I now own my own construction business, doing interior demolition on rowhouses and excavating basements. So you would think that i would want prices to rise. But the fact is that my work slowed down way before the official recession hit. Houses were so expensive that many investors couldnt afford to buy shells. And potential homeowners couldnt afford to buy the houses once they were rehabbed.

Now that prices have fallen, im actually busier then ive ever been. Good solid growth is a good thing. But in my opinion, bubbles are never a good thing. Too many people still think that the only problem with the housing bubble was that it burst. But the problem ran deeper.

So im glad that some sanity has returned to the housing market. And im glad that people dont have to go massively into debt anymore just to buy a 12 foot by 38 foot rowhouse.

Josh Dowlut, another frequent commenter, had this to say in response: "Pete From Highlandtown understands more about economics than most PhD economists."

So, Pete, thank you for the part you play in the conversation here. I hope I didn't embarrass you too badly!

And I hope you regulars know that I enjoy seeing your take on things and I'm always happy to hear from you. (Lurkers, you're very welcome to join in.)

Fingers crossed that you all can start chatting here again quite soon.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (0)
Categories: Quote of the day
        

Several of you had renting-related questions when I opened the floor to suggestions for expert Q&As. A landlord-tenant specialist is on board now to answer questions, so last chance for more: What do you want to know from either a renter or landlord perspective?

Share your questions in the comments. Thanks, all!

UPDATE: Or you might want to email me at jhopkins(at)baltsun(dot)com, because as I write this, commenting is temporarily disabled. Fingers crossed that all will be fixed soon.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (0)
Categories: Expert guest post, Guest post
        

If you're a Bank of America borrower trying to avoid foreclosure and you're not getting anywhere by phone, you can try going to the Baltimore Convention Center today or tomorrow.

The company is in the midst of an outreach event that will pair homeowners with "home retention specialists" tasked with reviewing borrowers for foreclosure alternatives, including people who already have active loan-modification requests.

It's actually a three-day event, Thursday through Saturday, but I didn't get a heads up until late yesterday. Bank of America says it already contacted struggling homeowners within 100 miles of Baltimore -- all 27,000-plus.

If you go, prepare to stay at least two to three hours, the company says. And bring lots of documentation. Here's the list of what you'll need.

Also important: register here before you go.

Bank of America isn't the only financial institution holding convention-style foreclosure-prevention events. Have you attended one? Did it help? 

Posted by Jamie Smith Hopkins at 1:00 AM | Permalink | Comments (0)
Categories: The foreclosure mess
        

Our blogging platform was blinking on and off all day Thursday. Some comments sat in the queue for hours until the system finally let me get in to approve them, but chances are good that others just disappeared into the ether.

I know for certain that at least one did: I tried to comment in response to a reader and poof! -- nothing. Apologies if this happened to you, and I hope you'll try again.

UPDATE: Try again, that is, once the system is fully functioning -- because it isn't yet. We've just been alerted that commenting is temporarily disabled.

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

Part of what people want when they're home- or apartment shopping is a crime-free neighborhood, or at least as little crime as they can get for their budget. So it's no surprise that a real estate search site would incorporate police data into its offerings.

Trulia says it's launching a crime-tracker feature today that aims to let users "explore and compare" incidents in neighborhoods across the country. CrimeMaps will show the most and least common crimes, dangerous intersections and when problems tend to occur, the company says. (Above is a screen shot for part of the Baltimore region.)

Neighborhood Scout is another search site with crime information, but users there are prompted to fill in a city in order to get a list of the neighborhoods with the best crime rates. (Other options: getting the neighborhoods judged best for certain demographics, i.e. families or executives.)

And, of course, there are a variety of places to get crime data outside of the online real estate world, from CrimeReports to Baltimore Sun maps (city, Baltimore County and Anne Arundel County so far).

What would you find most helpful?

Posted by Jamie Smith Hopkins at 1:00 AM | Permalink | Comments (3)
Categories: Resources for new buyers & owners
        

The much-discussed "double dip" in home prices is upon us, per Standard & Poor's definition: Its Case-Shiller measures that track 10 and 20 cities are now both below their previous lows in 2009.

The Baltimore area isn't part of either index. But we already knew it was into double-dip territory earlier this year, having retrenched after a minor price boost from the first-time homebuyer tax credit in '09 and '10.

In a statement, S&P Indices' David M. Blitzer said the price increases seen in a variety of places during that period was "largely" about the tax credit.

"Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession," he said. "Further, while last year saw signs of an economic recovery, the most recent data do not point to renewed gains."

The Washington area posted a modest gain in March vs. February, according to the S&P data, but that was unusual. Consider Atlanta, Cleveland, Detroit and Las Vegas -- in all those markets, values have been falling so fast and long that "average home prices are now below their January 2000 levels," S&P says.

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

The new Emergency Mortgage Assistance program -- which gives bridge loans to Maryland homeowners who are unemployed, underemployed or dealing with a medical crisis -- has had 350 applications so far, close to 90 of them to the point of approval.

But the state believes the $40 million it's been allocated by the federal government is enough to help nearly 1,200 people. And it only has until Sept. 30 to commit all that money.

That's why politicians congregated on Deborah Goldring's lawn Tuesday in the sweltering heat to urge more people to apply before it's too late.

Goldring, who lives in Baltimore's Lauraville neighborhood, is an enthusiastic supporter of the program after being approved for one of the no-interest loans, which will pay off her past-due amount and help cover her mortgage payments as she tries to get back on her feet. (She met both the unemployed and medical-crisis criteria -- her husband died in 2007 after a long illness, then she lost her job in late 2009 while still struggling to pay off all the medical bills.)

All her efforts to get a loan modification were for naught, she said, but the application process for the Emergency Mortgage Assistance program was much faster and more productive. As long as she can stay in the home, payment on the bridge loan will be deferred for five years -- at which point it disappears, essentially converting to a grant.

Here's a video of Goldring talking about her journey, with a bit of information about the program woven in:

Here's the full story. (For the backstory about the mortgage-assistance program, see this blog post.)

In Maryland, nonprofit housing-counseling groups are helping people apply for the funding. If you're hoping you qualify but haven't already connected with a counselor, you can go to the state's HOPE site or call the hot line, 877-462-7555.

The state is also setting up appointments to take applications directly from homeowners on Saturday -- June 4 -- at its offices in Crownsville from 9 a.m. to 1 p.m. To reserve a time at the "EMA Direct" event, call 410-514-7446. (You'll need to bring lots of documentation. Check out this Emergency Mortgage Assistance page for advance information.)

And you can also get more information by going to U.S. Rep. Elijah E. Cummings' next foreclosure-prevention workshop, scheduled for June 25.

Update: On a related note, a variety of groups including the HOPE NOW alliance are putting on a general foreclosure-prevention event in Washington this Saturday (June 4) that will be attended by nearly 20 mortgage servicers, lenders and mortgage financiers. Basic details here.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (0)
Categories: Foreclosure help, The foreclosure mess