Rents in Baltimore (and many other places) are climbing, while typical home prices -- thanks to foreclosure sales -- are way down.

Here are just two of the implications:

--Affordability problems for renters. Twenty-seven percent of renter householders in the Baltimore region were spending more than half their pre-tax income on housing and utilities in 2009, up from 19 percent in 2000, according to a new report by Harvard's Joint Center for Housing Studies. And rents have only increased since.

That's a "severe" cost burden, but plenty of others are feeling pinched. Nationwide, just half of renter households were spending less than 30 percent of their income on housing and utilities in 2009, the center said.

"In the last decade, rental housing affordability problems went through the roof," co-author Eric S. Belsky of the joint center said in a statement. "And these affordability problems are marching up the income scale. In real terms, it means more people have less money to spend on household necessities such as food, health care, and savings."

--New grist for the buy vs. rent debate. HotPads.com, a real estate site that shows both rental and for-sale listings, says rents in Baltimore have jumped nearly 5 percent in the last year while asking prices for city homes on the market have slumped nearly 30 percent. That's lowered the "rent ratio" -- its buy vs. rent calculation -- to the point that buying is "more favorable" than renting, the company says. The median home price is 7.8 times higher than a year's worth of rent in Baltimore, down from 10.7 a year ago, HotPads says.

Continue reading "Baltimore rents up, home prices down" »

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (14)
Categories: First-time home buyers, Housing stats, Renting
        

Today's guest-post writer is the keeper of his own blog, the Echo Boom Bomb, which focuses on Echo Boomers -- aka the Millennial generation -- from an economic and financial perspective.

Timothy Smith has worked in the financial-services industry for five years in Texas. He's spent the last two collecting data, anecdotes and details on the generation the Baby Boom produced. (At age 28, he's an Echo Boomer himself.)

He predicts that the Echo Boom won't buy houses in bulk for a while -- if at all. His guest post is aimed at people trying to sell homes in one way or another, but it will probably interest anyone trying to get a handle on what the future holds for the housing market.

Take it away, Timothy:

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

How would you like to have 80 million customers? If you sell real estate, I know that you would love it. The great news is that the Millennial generation is estimated at 80 million strong, but the bad news is that these Echo Boomers don't appear ready to buy homes and may not want homes.

Echo Boomers, born from 1980 to 1995, constitute the second-largest generation in U.S. history. While they perform well in school, they tend to lack the financial skills needed to make large purchases, such as buying a home. They also think in a different value system than former generations when it comes to financial investments. Those in the real estate profession will face three major challenges with Echo Boomers, but each of these can be addressed with the appropriate strategy.

The first major challenge for those in real estate is the lack of net worth among Echo Boomers.

Continue reading "Timothy Smith: 'Echo Boomers' have a different outlook on homeownership" »

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (14)
Categories: Expert guest post, First-time home buyers, Guest post
        

One result of the new deficit-cutting federal budget: an almost $90 million cut in housing counseling efforts.

Congress agreed to continue funding a foreclosure-prevention program to the tune of $65 million but completely eliminated funding for the U.S. Department of Housing and Urban Development's $88 million Housing Counseling Program, which is used not only on foreclosure prevention but also for nonprofit counselors who work with people before they buy, refinance, get a reverse mortgage, start renting and the like. The idea of such counseling is objective advice -- free or low-cost -- in an industry where that's hard to come by.

HUD spokesman Lemar C. Wooley called the zeroing out of the agency program "painful cuts that would not have been made in better circumstances."

The result locally could be both a reduction in services and new charges for long-free counseling, said Carol Gilbert, assistant secretary of neighborhood revitalization at the state Department of Housing and Community Development.

"It means a curtailment of services for sure, and that's very troubling," she said Monday. "This is a time we need as much housing counseling as we can make available to consumers."

A variety of programs aimed at new homebuyers, including a variety of downpayment grants and the state-run Maryland Mortgage Program, require that participants get the pre-purchase counseling that had been funded by the federal government. 

Continue reading "Funding for housing counseling cut" »

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (6)
Categories: First-time home buyers, Foreclosure help
        

Spring is when some people's fancy turns to homebuying, so it's not surprising that a pair of buyer 101 events are coming up soon.

Live Baltimore has a Smart Homebuying Night scheduled for April 6 at the Jewish Community Center of Greater Baltimore, 5700 Park Heights Ave. (That's not the same as the twice-yearly Buying Into Baltimore, next scheduled for May 14.) An exhibitor fair with real estate agents, lenders and others will run from 5 to 6:30 p.m., with a pre-purchase counseling class from 6 to 9 p.m. for the first 100 registrants. The class is part of what you need to get a counseling certificate, which makes you eligible for some homebuyer incentives.

April 9 -- the following Saturday -- is the Howard County Housing Fair from 10 a.m. to 2 p.m., which will have industry folks (including homebuilders and remodelers), a bus tour of new developments and a lottery to buy a renovated townhome at what organizers describe as a "substantially reduced" price. (Deadline to register for the lottery is April 6.) The event will be held at Long Reach High School, 6101 Old Dobbin Lane in Columbia.

Residents looking for ways to improve their neighborhood have an event to check out, too: The Greater Homewood Community Corp.'s Fourth Annual Neighborhood Institute, which this year is focusing on "Building Blocks for Better Neighborhoods." That's scheduled for April 2 from 10 a.m. to 4:30 p.m. at Govans Presbyterian Church, 5852 York Road in Baltimore. Workshop topics will include marketing your neighborhood, training "block captains," starting a community garden and dealing with problem properties.

Know of other upcoming housing or neighborhood events? Please leave a comment with a link.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (2)
Categories: First-time home buyers, Neighborhood improvement
        

The nonprofit marketing group that encourages people to live in Baltimore has launched a new ad campaign with a bit of (tongue-in-cheek) anti-marketing. The big letters proclaim, "When people ask if you love Baltimore, say 'no.'"

The small print adds, "The less other people know about the City, the cooler it stays for the rest of us."

For a larger pop-up with readable text, click on the ad.

This is Live Baltimore's first new image campaign, not counting event promotion, since one that launched in 2007 and ended two years later.

The group is advertising in the Baltimore and Washington regions, including D.C.-area Metro stations -- repeating the strategy that drew a lot of attention in the bubble years, when Live Baltimore made hay out of the price and personality differences between the two areas. (A 2007 ad showed a black-and-white photo of suburban tract housing under the headline "Generica," contrasted with colorful "painted ladies" in Charles Village, headlined "America.")

Anna Custer, Live Baltimore's executive director, says the group is spending $40,000 on the first three months of advertising in hopes of pushing people off the fence. The tagline is "So if you've ever told yourself, 'Someday I'll own my own place,' get in touch. Because someday is now." (SomedayBaltimore.com redirects to the Live Baltimore site.)

"We’ve talked with our real estate partners who’ve lamented that some of their customers who seem to know it’s prudent to buy aren’t talking any active steps to do so," Custer said in an email interview. "With the start of the spring buying season, we thought it’s a good time to focus people on buying a home – and specifically buying in the City."

Besides the reverse-psychology ad, the others "highlight ironic things about Baltimore, like the farmer’s market under I-83, with the goal of showing to a broader audience just how cool the Baltimore of today is," she said. "We can always aspire to be more, but Baltimore has a lot of great things going for it and this campaign celebrates those aspects."

I asked about property taxes, since that's a perennial thorn in the "buy here" effort. Is Live Baltimore taking a position on the slash-the-rate-in-half proposal making the rounds?

"We are a marketing organization and don’t take official positions on ideas or proposals," Custer said. "When people start diving into the homebuying process, we do get questions on the property tax rate. While it's higher than the regional average, we also have lower overall housing costs. Additionally, we make sure people know about the tax abatement opportunities here in the City that other jurisdictions don’t offer – new construction, renovation, and historic tax credits – along with the state's homestead and homeowner's credit programs."

Read on for the rest of the ads, and remember that you'll get a larger (and easier-to-read) pop-up if you click on them. What do you think? And city residents: When people ask you if you love Baltimore, what do you say?

Continue reading "New Live Baltimore ad campaign offers twist on "just say no"" »

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (24)
Categories: First-time home buyers
        

Where can you afford to purchase a home if your limit is $250,000 or less? Many more places than a few years ago.

The average sale price was between $50,000 and $250,000 in 40 ZIP codes in the Baltimore metro area last year, spread around every jurisdiction in the region except pricey Howard County. (A few more were under $50,000, but that seems like the point below which sales are much more likely to be homes in bad repair picked up by real estate investors, rather than by first-time buyers.)

They account for almost one-third of ZIP codes in the metro area that had at least a handful of home sales last year. Many more had some sales in that price range -- just not enough to put the average there.

Neighborhoods are a more useful categorization in the city than ZIPs, and just over 120 in Baltimore had average prices between $50,000 and $250,000 last year. That's close to two-thirds of the neighborhoods with at least a handful of sales.

Here's the list of ZIPs and city neighborhoods:

Continue reading ""Starter home" neighborhoods" »

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (12)
Categories: First-time home buyers, Housing stats
        

Homebuyers: Are you aware that a variety of state and local programs offer closing cost and down payment help?

Personal finance columnist Eileen Ambrose offers details -- who's offering, whether the money is a no-interest loan or a grant, and what you have to do -- in this story.

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (0)
Categories: First-time home buyers, Resources for new buyers & owners
        

If you're a first-time home buyer, or just buying a home in the Baltimore area for the first time, you might not know everything you need to know. Worse, you don't necessarily know what you don't know until it comes back to bite you.

A newcomer who got bitten inspired me to start collecting New Buyer 101 posts in one easily accessible place. I'll link them all to this one, adding more as they're written. Some are most helpful if you haven't bought yet, and others are intended as aids once you're already in your home. (Some long-time homeowners might find useful tips here.)

A number of readers suggested subject matter, and I'll be working through that list as I can. I'll happily take more suggestions (or requests) in the comments on this post.

One word of warning -- some of these posts were written a few years ago. I glanced through for outdated information or broken links, but please let me know if anything needs fixing. 

Here are the links:

Continue reading "Buying a home in the Baltimore area for the first time?" »

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (4)
Categories: First-time home buyers, Homestead Property Tax Credit, Property taxes, Resources for new buyers & owners
        

Jared Franz feels he's in the poorer-but-wiser category of home buyer. He's hoping to help get the word out so others can avoid pitfalls that aren't easy to spot if you're a first-time purchaser or a newcomer to the region.

He and his wife moved from Chicago to Baltimore last year, and they were shocked to discover -- when they got their property tax bill recently -- that they're paying taxes on a much higher amount than their purchase price. They paid $485,000 for their Canton rowhouse, a foreclosure. The assessed value? Nearly $750,000.

That's $6,357 more in taxes than they expected to pay, based on the purchase price. As Franz notes, that's a $500-plus monthly bump to his housing costs. "Ouch!" he summed up succinctly in an email to me. (Franz, who saved up his down payment over 10 years, said the unexpected cost is a real burden.)

Local homeowners are probably vaguely aware that the state's reassessment cycle for each home is once every three years. But Franz, new to the area, didn't realize that the state doesn't automatically adjust a property's assessed value based on its sales price. No one told him so, or that there are limited periods to appeal. (More on that in a moment.)

I've written about property-tax appeals before, but I'm thinking a "Read This Before (or Shortly After) You Buy a Home Here" post would be really useful for folks -- hopefully anchored on this blog in a way that people could easily find down the road.

So here's my request to you all: Tell me what a new or new-to-the-area buyer ought to know, besides property tax rates, transfer tax costs and the appeal process. What information should such a post include? What do you wish you knew before you bought? I'm looking for Maryland-specific things.

While you're pondering that, here's the rest of Franz's story -- and the appeal rules:

Continue reading "What new home buyers should know" »

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (25)
Categories: First-time home buyers, Property taxes
        

If you're planning to buy a Baltimore home in the near future, you might qualify for a $5,000 grant to put toward your down payment or closing costs.

Here's what you need to qualify for the city program:

--First-time home buyer status

--A certificate showing that you've been through pre-purchase housing counseling with a city-approved agency.

--Moderate income. The limits are $44,800 for a one-person household, $51,200 for two, $57,600 for three and $64,000 for four. (See the limits for larger households here.)

The program, funded with federal Community Development Block Grant money, has enough money to pass on to 60 buyers. When the program launched last summer, it was tapped out after two months.

"We just got renewed funding," said Tania Baker, a spokeswoman for the city's housing department.

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (1)
Categories: First-time home buyers
        

If you're thinking of buying for the first time, you're probably interested in homes priced below $250,000. What are your chances of finding something in that range?

As always, it depends on where you look. The Greater Baltimore Board of Realtors compared homes on the market two weeks ago and found -- to no one's surprise, I'd imagine -- that your odds of finding a place for less than $250k are best in Baltimore. Nearly three-quarters of listings were priced at $250,000 or under in the city.

Baltimore County and Harford County are next on the list for their share of less-pricey homes for sale. Almost half the listings in Baltimore County were $250,000 or under; it was 43 percent in Harford.

It's hardest in Howard County, where 15 percent of sellers were asking $250,000 or less. 

(One asterisk: The Realtors group didn't include homes listed for less than $30,000 in its affordability calculation, figuring there's nothing in that range that's livable as is.) 

Here's a chart I put together with these stats. (Just remember that the percentages don't include the listings under $30,000.)

And here's the under-$200 picture: 

Continue reading "Homes for sale under $250,000: Where are they?" »

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (4)
Categories: First-time home buyers, Housing stats
        

Live Baltimore's big home-buying fair and tour, Buying Into Baltimore, offers $3,000 as a first-come, first-served incentive to buy a city home. More than 650 have been bought with those sweeteners since the first event in 1998, and they're everywhere -- from Woodberry to Middle East, from Walbrook to Fells Point.

Live Baltimore, a nonprofit that wants folks to take a hint from its name and live in Baltimore, compiled this statistic as it prepares its latest Buying Into Baltimore event, scheduled Sept. 12. (Pre-registration information here.)

The $3,000 -- which can be used toward closing costs or down payment -- is a city loan that turns into a grant after five years. Fifty are up for grabs. Detailed details are here, but in general, buyers qualify by getting homeownership counseling, participating in the event's home tours and buying a place within 90 days afterward. (You don't have to choose one of the 16 homes on the tour, but you do have to buy in the eastern half of Baltimore. The spring fair focuses on the west and the fall fair on the east.)

"Our Buying Into Baltimore program is mostly designed for first-time home buyers," said Anna Custer, executive director of Live Baltimore. "All of those homes we feature ... are under $250."

Many of the participants aren't planning big moves. Nearly three-quarters of the 500 people who showed up for the spring Buying Into Baltimore event were already Baltimore residents.

Some of the out-of-towners were from the Baltimore 'burbs, some from Washington and some from New Jersey. (New Jersey is the home of Fort Monmouth, due to send thousands of jobs to Aberdeen Proving Ground in Harford County as part of base realignment and closure.)

Live Baltimore bused in BRAC relocatees for the spring event. This time, it's got an overnight trip planned with a BRAC-only tour the following day.

Posted by Jamie Smith Hopkins at 7:00 AM | Permalink | Comments (11)
Categories: First-time home buyers, Housing events
        

Is the price right on homes for sale nowadays? That's a point of great contention, as you'll quickly notice reading the comments on this blog. But one thing's for certain: More and more homes are listed for less than $250,000.

Homes with asking prices below that mark made up 43 percent of the Baltimore metro area's housing market in May, up from 24 percent three years earlier. Total listings in that price range: about 8,150, the highest figure for the month of May since 2001.

More on this in my story today, which you can read here.

What probably won't surprise you is that your under-$250 options are more varied in Baltimore City, Baltimore County and Harford County than in Anne Arundel, Carroll and Howard counties. And there are a lot of foreclosures and short sales in the mix.

Looking to buy (or sell) in the under-$250 range? What trends have you noticed?

Posted by Jamie Smith Hopkins at 7:04 AM | Permalink | Comments (28)
Categories: First-time home buyers, Housing stats
        

Local agents say they're seeing a lot of first-time home buyers. This isn't too surprising, since it's an advantage nowadays to not have a home you have to sell first -- plus there's the $8,000 tax credit, an enticement for some first-timers.

But I've been wondering just how much of the Baltimore-area market is made up of prospective homeowners.

When I asked Joseph T. "Jody" Landers III with the Greater Baltimore Board of Realtors, he said: "I've been hearing figures like 50 percent."

That would be high for the metro area. Nationally, the average hovers around 40 percent. And last year, 40 percent of Baltimore County buyers were first-timers, according to National Association of Realtors data that Landers provided to me.

But the city, with its lower prices, always attracts a lot of new buyers: They were 65 percent of the city's housing market last year.

If you're a first-time buyer (or thinking of becoming one), what factors made you decide to make a move? If you've thought about buying and opted against it, what issues turned you off?

Posted by Jamie Smith Hopkins at 9:28 AM | Permalink | Comments (33)
Categories: First-time home buyers, Housing stats
        

Have declining home prices and mortgage rates put buying in the reach of more people? Yes, according to a new report -- though the authors say the market downturn hasn't been an affordability bonanza.

Buyers needed a household income of about $79,000 to afford the median-priced home in the Baltimore metro area last year, better than the $88,000 needed in 2007, according to the Center for Housing Policy's Paycheck to Paycheck study. But that still locks out a lot of people in professions that pay less, the center says.

Median household income in the Baltimore metro area was $68,000 in '07, the most recent estimates from the Maryland Department of Planning.

The Paycheck to Paycheck report puts our metro area's median home price at $243,000 last year. Thirty-three metros were pricier, while more than 170 were less expensive. Even though prices fell here last year, we rose in the rankings -- meaning the area is comparatively pricier -- because some metros are shedding value at a much faster pace.

Also, the decrease in income needed to buy a median home is smaller here than in many other parts of the country -- 10.5 percent vs. 14.5 percent nationally. (The report authors assume a 10 percent downpayment and no more than 28 percent of income spent on the mortgage, property taxes and insurance.)

But what about rents? They've gone up in many places. Nationally, rents rose 3.7 percent last year in urban places, the report says.

The HUD-defined "fair market rent" for a two-bedroom unit in the Baltimore area was $1,037 at the end of last year, ranking us 41st among 210 metro areas. First -- and therefore most expensive -- was San Fransisco, at $1,658. The least expensive: Wheeling, W. Va. ($577).

Are rents rising or falling for you renters out there?

And if you're looking to buy, are you noticing any significant change in the types of homes you can afford?

Posted by Jamie Smith Hopkins at 10:25 AM | Permalink | Comments (6)
Categories: First-time home buyers