Hi, folks -- I'll be hosting a live chat with Baltimore economist Anirban Basu at 9 a.m. Friday. We'll go for at least half an hour.
Submit your questions about the Maryland economy, housing market or related subjects as a comment on this post. Or you can type questions directly into the live-chat portal below beginning at 8:30 a.m.
Wondering where things stand with the Maryland economy? Or how long unemployment might continue to worsen? Or why home sales are increasing in some price ranges but falling in others?
Ask Baltimore economist Anirban Basu. We're one day -- and less than 24 hours -- away from the live chat with him. Come with your questions and help make it lively!
The chat will begin at 9 a.m. tomorrow, right here. You can post a question to our chat system starting at 8:30 a.m., or -- if you're afraid life might conspire to keep you away -- you can post your question as a comment here.
Some of you had interesting questions in the queue for our last live-chat economist, Celia Chen, that didn't get answered because we ran out of time. I encourage you to ask them again.
A reminder to all you inquisitive folks: Baltimore economist Anirban Basu will take your questions in a live chat at 9 a.m. this Friday. Queries about the economy, the housing market and related topics are all fair game. (You can see his bio here.)
Our live-chat system will open its doors here (baltimoresun.com/realestatewonk) around 8:30 a.m. to collect questions.
But you know how it is: Life will prevent some of you from showing up, virtually speaking. I'd love to see some questions asked in advance -- we've only got two so far. You can submit them in the comments.
Baltimore economist Anirban Basu will take your questions in a live chat at 9 a.m. Sept. 18. Got a query about the housing market, the economy or any related topic? He's got answers.
You can submit your questions that day -- two weeks from Friday. But I encourage you to ask 'em now by commenting below, lowering my stress level by ensuring that we can start the chat with a bang rather than with chirping-cricket noises.
Here's a quick bio on Basu:
He's chairman and chief executive of Sage Policy Group Inc., an economic and policy consulting firm in Baltimore. His clients include developers, bankers, brokerage houses, energy suppliers and law firms, and he's written economic development strategies for government agencies and nonprofits.
In addition to economic development, he focuses on health economics and the economics of education. And he's a regular speaker at the Home Builders Association of Maryland's construction-forecast conferences.
Basu, a Baltimore City Public School System board member, earned a bachelor's degree in foreign service at Georgetown University. He earned a master’s degree in public policy from Harvard University’s John F. Kennedy School of Government and a master’s degree in economics from the University of Maryland. He graduated from the University of Maryland School of Law in 2003.
Foreclosure doesn’t have to be the answer.
Join us for a live chat on Tuesday at noon with housing counselors from St. Ambrose Housing Aid Center. The counselors will be able to answer questions on the new federal program — Home Affordable Modification Program — that modifies mortgages so you can afford monthly mortgage payments. They also can discuss other options you might have if you’re having trouble with your mortgage.
Can’t make the chat? Submit your questions early to the housing counselors at eileen.ambrose@baltsun.com and you can check out the answers later on the blog.
Last reminder: Celia Chen of Moody's Economy.com will take your questions about the housing market at noon today in this space.
A senior director of the Moody's Economy.com research staff, she manages the company's regional house price forecast models, develops proprietary housing market indicators and writes extensively about housing issues. Chen earned her Ph.D. -- with a concentration in econometrics and international finance -- at the University of Pennsylvania.
She's happy to take housing-outlook questions about metro areas and the nation. Just don't make your questions too specific, i.e. "what's going to happen to $400,000 homes in my neighborhood."
See you at noon!
Remember, folks, Celia Chen with Moody's Economy.com will be taking reader questions about the housing market this Thursday at noon. More details in this post.
Some of you have submitted questions already. In fact, some of you have submitted multiple questions. I'm planning to sort them to ensure that everyone gets to ask at least one question before we go to No. 2, 3, or 4. If you asked several questions, the first one you asked will go in the No. 1 spot unless you let me know that you're more interested in hearing an answer to a later one.
It's possible that all of you will get all your questions answered before the live chat ends, of course. I'm just organizing my ducks (look at the lovely row they're in!).
Ask and you shall receive ... answers.
Housing economist and forecaster Celia Chen of Moody's Economy.com has kindly agreed to take reader questions in a live chat next week. Mark your calendars: Next Thursday -- Aug. 20 -- at noon.
But I encourage you to start asking your questions now. Comment below with 'em. Questions in the queue will ensure that we start the chat off with a bang rather than a whimper, and it's a way for you to participate even if you can't be here (virtually speaking) at the appointed time.
The Baltimore Sun has been doing live chats every week, but this will be the first about housing. Let's make it a good one! I know you're interested, because "housing-market forecaster" was your top choice when I asked what sorts of experts you'd like to question.
Here's a little bit about Chen:
A senior director of the Moody's Economy.com research staff, she manages the company's regional house price forecast models, develops proprietary housing market indicators and writes extensively about housing issues. Chen earned her Ph.D. -- with a concentration in econometrics and international finance -- at the University of Pennsylvania.
She's happy to take housing-outlook questions about metro areas and the nation. Just don't make your questions too specific. ("What's going to happen to prices on 30-year-old split-levels in Cockeysville that were recently renovated" -- way too specific.)
Commence the questioning.
(Photo courtesy of Moody's Economy.com)
The event, scheduled for Wednesday at 11:30 a.m., aims to answer "unusual questions about the housing market" -- for instance, "What happened physiologically in the brain when some owners stopped paying their mortgages after hearing about possible federal home bailouts?"
Other questions offered up to tantalize us: "How will the mortgage crisis change the psychology of future home buyer and investor decisions?" and "Why are foreclosures in some areas sparking new bidding wars so soon after the recent market crash?"
Yale University economist Robert Shiller, of Case-Shiller home price index fame, will answer questions. So will Caltech economist Colin Camerer, who enlists brain scans in the quest to understand why people make the economic decisions they do, and economist Nancy Lutz with the National Science Foundation.
Here's the cool part: You can ask them your questions. I checked. Submit them beforehand to webcast@nsf.gov.
The webcast itself will be shown here (as in, at that link -- not here here). You'll get a prompt for username and password if you click it early but not, organizers say, when it's time for the show.
Submitting a question? Stick it in a comment here while you're at it. Inquiring minds like inquiries.
A Wonk reader is wondering whether to rent out his home rather than sell in this market, but he knows there's a lot to consider beyond finding a good tenant.
He's hardly the only one weighing the "to be a landlord or not to be a landlord" question. So I chatted with Lewis F. Laws, Maryland regional director of Long & Foster's property management division, about what landlords who never thought they'd be landlords should keep in mind.
Laws, who has worked in property management since 1984, oversees managers in the state and also manages a portfolio of properties in Montgomery County.
Q. What should homeowners consider before turning landlord?
The first thing they need to do is determine the age the property was constructed, because Maryland has the Maryland lead paint law, and that's a biggie. So if the property was constructed prior to 1950, then it is mandatory that they will have to register their property with MDE--Maryland Department of the Environment. They will have to have it inspected by a state certified inspector, and they have to obtain from this inspection a passing certificate before they can rent the property. And until they obtain a passing certificate, they cannot legally lease the property.
Everything prior to 1950 is mandatory participation. Properties constructed from 1950 to 1978, they may opt to participate in the program or opt not to. But the problem is, those properties built in the opt-in, opt-out timeline, they may still have lead paint. Because it wasn't until 1978 that the government banned the sale of the lead-based paint.
So what happens is, if they are in the program and they are compliant through the MDE program, it doesn't guarantee them that they can't be sued and lose money, but what it provides is … a cap of $17,000 as an award. Also, if they are in the program, then their landlord insurance policy should cover--they'll have to request it, but it should cover lead-based paint. …
So those owners who have the '50 through '78 properties, we recommend, strongly recommend, they have them tested, [and] if there is lead in the property, then they participate in the program to have that limited liability protection.
Q. What was that about landlord insurance?
They need a landlord liability policy. … If they don't, heaven forbid something happens. If the house burns down and the insurance company finds out it wasn't owner-occupied, they've violated their insurance policy and the insurance company owes them nothing.
Q. What should landlords do to attract renters?
Baltimore's Patterson Park neighborhood is often hailed as a revitalization success story, with many aging and vacant homes now rehabbed and lived in. But the Patterson Park Community Development Corp., a nonprofit that did a lot of the rehabbing and community organizing behind that turnaround, filed for bankruptcy protection in February. (The CDC's website is here; the site appears to no longer be operational.)
I chatted last week with Marisa Vilardo, president of the Patterson Park Neighborhood Association, about efforts by residents to keep things going the right direction.
Q. A little background--what happened to the Patterson Park CDC?
They ended up taking on more than they could chew as far as investing in real estate and then renovating it, so apparently they did not anticipate the market downturn and have suffered as a result. They're trying to pay these mortgages they have on houses and they can't. The houses aren't selling enough. … The neighborhood association started to get nervous about it back in September, October of last year.
Q. Why does that matter to Patterson Park?
The CDC is to a large extent responsible for the renovations and the reinvestment and progress that the neighborhood made, because they--through the Healthy Neighborhoods program--were able to direct a lot of money toward the neighborhood, and redeveloping. Got a lot of city attention focused on the area.
Q. What has the Patterson Park Neighborhood Association been doing to step into the void?
Continue reading "Q&A: Patterson Park Neighborhood Association" »
Some of you read blogger Epiphany in Baltimore and have followed his efforts to buy a home. (Thanks to the Wonk reader -- whose name now escapes me -- for pointing me that way. Let me know who you are and I'll credit you properly.) I thought it would be interesting to chat with him about his experience, since every buying story can help other would-be buyers … and often would-be sellers, too.
Throughout the interview below, I've included links to his blog for all who would like to see how each step unfolded in real time. And that's why I'm identifying him by his online name: He's a teacher whose personal blog links to a blog about his job, and he therefore prefers to stay anonymous.
Q. When did you close?
I just closed on Thursday! I've been living in the house for a couple of weeks, though, with a pre-settlement agreement.
Q. What did you end up buying -- the Baltimore rowhome rehabbed by St. Ambrose that you were serious about?
Yes, I ended up going with the St. Ambrose rehabbed rowhome in Belair-Edison. It's three-bedroom, with a balcony, finished basement, and a nice yard with a private fence.
Q. How much did you pay?
Q. Which "first-time buyer" grants and/or mortgage programs did you use? How easy or hard was it to line everything up? Do you have any advice for others?
Continue reading "Q&A: Epiphany in Baltimore" »
Two Q&As for the price of one this week!
Wonk reader Matt Gonter noticed a new blog called Baltimore Housing Overstock that's trying to revive the idea of "dollar homes." (The city raffled off 104 homes for $1 in 1975, as this Live Baltimore bio of Otterbein notes. You can read about the larger, longer-running homesteading project here.)
I thought you all might be interested, so I chatted by email with Steve Goodman, the blog owner and a Better Waverly resident. He kicked off the site last week with this description of his proposal and a request that people go to Mayor Sheila Dixon's May 6 "neighborhood conversation" about vacant and abandoned properties.
Q. Why did you start the site? Do you plan to keep it up as a blog, or do you see it as more of a way to get your proposal out there?
I started the site as a way to spread the word that the mayor is interested in addressing the blight issue, and to rally public support for action. I think we're at a unique moment in time when there is a lot of flux in our country, and a coherent vision of the future can be quite powerful. I want to publicize that there are many people in Baltimore who love the city, but know that it needs to change and are hopeful for what lies ahead. I don't have any long term plans for it; I'm taking it day by day at this point.
Q. Why are you concerned about the city's abandoned homes?
By most measures, the neighborhoods around Baltimore's Inner Harbor are doing well. So I was interested to hear of the Outer Harbor Initiative, which calls for attention to be focused on neighborhoods just outside that ring of affluence and activity.
Chesapeake Habitat for Humanity in Baltimore, a nonprofit that builds affordable housing, developed the concept and approached Councilman William Cole for help. I asked Mike Mitchell, chief executive of Chesapeake Habitat, to explain the idea.
Q. What is the Outer Harbor Initiative?
Thirty years ago, the city redeveloped the Inner Harbor, and in the time since that redevelopment, neighborhoods around the Inner Harbor have succeeded in redeveloping. They've attracted homeowners, renters, and those neighborhoods have increased their tax base for the city, and they also have contributed to stability throughout the city.
In Habitat's work, we have seen that the neighborhoods just outside these Inner Harbor neighborhoods have faced blight and a lack of new investment. Part of the reason for this is that investors and speculators have not been willing to turn around their properties for rental or homeownership. And the great irony is these in quotes "investors" have prevented development from happening.
This has caused two negative impacts for Baltimore. First, it's meant the continuation of blight and vacancy, which has meant lost tax base for the city, increased crime and fewer resources for city services and schools, but it has also meant that thousands of Baltimore City residents who could be homeowners in these properties have not had the opportunity to be homeowners and live in these homes.
The Outer Harbor Initiative seeks to resolve this by continuing development beyond the Inner Harbor neighborhoods to this outer ring, these Outer Harbor neighborhoods. The idea is to present a strategy that entails four tools.
He usually works from Annapolis southward, though he's represented foreclosures farther north in the Baltimore area as well.
Q: How long have you been a real estate agent?
Licensed, I've been in the business for two years. (My mother has been in the business for 12 -- I worked with her as her assistant for a time.) …
It was a simple twist of fate, really. I used to do audio engineering work for a band, and I had an accident on the job where I broke my fingers in 23 places. I decided it was time to get out.
Q: Holy cow -- how did that happen?
Backstage, after a show. … I got in [real estate] right as the market was tanking, which might be less than opportune, but when you get lemons, you make lemonade.
Q: What's the lemonade?
Foreclosures. … Everybody wants a foreclosure right now. Even when they don't want a foreclosure, they think they want a foreclosure. If I had a dollar for everybody who said, 'I want a foreclosure for half-price that needs no work,' I'd be a rich man.
The problem with foreclosures is, it's always a double-edged sword. They always need some work.
Q: What sort of condition are the foreclosed homes usually in?
Continue reading "Q&A: Jonathan Benya, real estate agent" »
Baltimore Neighborhoods Inc. and the University of Baltimore School of Law have teamed up to put on a fair-housing symposium this Friday. (Interested in attending? Go to law.ubalt.edu/fairhousing. It's free, but organizers recommend you pre-register.)
Michele Gilman, a professor who directs UB's Civil Advocacy Clinic, talked to me last week about the event and the housing issues her clinic is seeing.
Q: Why did you decide to organize the symposium with BNI?
It's their 50th anniversary, so they wanted to do something big and statewide. We thought it was a great opportunity to do something and come together. …
Fair housing is always an issue, but at a time of recession, it's an even more urgent issue. We're seeing that in our docket of cases at the clinic. It's exciting to be part of something that's really tackling these issues head on. Our keynote speaker is James Carr, the chief operating officer of the National Community Reinvestment Coalition, and he's going to be focusing on the intersection of fair housing and the foreclosure crisis.
Q: What is that intersection, in your experience?
The foreclosure crisis has disproportionately impacted low-income Americans and Marylanders, which is also the population that I serve in the clinic. ... And it tends to be more moderate- and low-income communities that are also bearing the brunt of dealing with the foreclosure crisis, as far as … abandoned and foreclosed properties and all the harms that flow from that.
But it's also an issue because we have an affordable-housing crisis in this country, and yet at the same time, we have all these empty shells of homes that aren't being used. Certainly, there could be affordable-housing strategies that better take into account what's happening on the foreclosure side. …
We're seeing a unique issue in the clinic where there are clients who are being evicted from homes because their landlords are being foreclosed on. There are so many unintended consequences and ripple effects of the foreclosure crisis.
Q: What is your clinic doing for those evicted tenants?
The number of homes sold in the Baltimore metro area last year was the lowest in at least a decade, since Metropolitan Regional Information Systems began tracking the region. So what's a would-be seller to do?
I asked Vera Ballard, personal moving consultant for Charlestown, a retirement community in Catonsville. Her job is to advise people about preparing their home for sale so they can downsize. (To Charlestown, of course.) It's trickier for downsizers because in most cases they need a buyer who not only likes their house but has already managed to sell his or her own.
Ballard, a real estate agent, has been Charlestown's personal moving consultant since August.
Q: So, what recommendations do you make to homeowners who want to sell?
Continue reading "Q&A: Vera Ballard, personal moving consultant" »
Falling prices for homes and land are bad news for the people who own them. They're good news for buyers and affordable-housing developers.
But the tight credit situation — particularly for developers — is another matter. I talked to Chickie Grayson, president and chief executive of Enterprise Homes in Baltimore, about how the economic climate is affecting affordable-housing efforts. (Enterprise Homes is an arm of the nonprofit Enterprise Community Partners, founded by James Rouse of Columbia fame.)
Q. What has the housing downturn, credit crunch and recession meant for affordable housing?
Typically in a downturn, ... people who do housing, particularly people who do market-rate housing, kind of switch over to affordable housing because in a typical economic downturn, there are fewer people to purchase their products. There are many more people at the lower end of the scale. So there are always people who need affordable housing. That need is unending.
But that [switch] is not happening this time, and the reason is, everything that's happening is much more overwhelming than anything that's happened before. ... Up until September it was to some extent a market issue — people weren't purchasing homes — but with the economic downturn and the credit crunch, well, there's no money available either. That's a double whammy.
Pat Hiban's been selling homes for 21 years, so he's seen markets good and bad, interest rates high and low. I chatted with him recently to get his thoughts on the slump. (He's most familiar with the southern part of the Baltimore metro area — his Pat Hiban Real Estate Group with Keller Williams Crossroads has offices in Ellicott City and Glen Burnie.)
Q. What's happening to home values in the parts of the metro area you know best?
Hiban: Home values are going down — it's unequivocal. They're definitely going down and they're going to continue to go down. ... Baltimore generally is the last area to be affected by the swings, you know? They come through California, kind of almost down to Florida and they hit Virginia, Northern Virginia, Washington, D.C. and then they kind of move toward Baltimore. That's how it happened when prices went up, and that's how it seems to be happening now that prices are going down.
Wonk: Have you noticed an impact from Maryland's new foreclosure law?
Robinson: The new law has solved several major issues which existed before. We rarely ever hear from homeowners who were not aware or did not receive notice of the foreclosure sale. Since they are getting notice, not previously required under the old system, they are taking the initiative to contact their lenders and trying to work out a modification.
W: Has anything changed in the way lenders are dealing with foreclosure, now that we're several years into the housing slump?
R: The lenders are changing so fast, this is difficult. A few years ago the lending industry claimed over and over there was no problem. Now everybody knows there was, is, and will be a problem for many more years. The loans in the pipeline that will be exploding for the next couple of years are the payment-option arms given to folks with the best credit. These loans will be adjusting and coming due to levels far above the market price of the home.
W: What do you think are the main causes of the foreclosure problem?
R: If you look at the super majority of loans in foreclosure, ... they come from one and/or two sources: (1) mortgage lenders/originators who are now out of business and funded loans to people on false expectations that the person could afford the loan in the short- or long-term; (2) loan products and systems which were more like Ponzi schemes than bona fide investments and financial tools.
Mark Zandi, chief economist of Moody’s Economy.com, is a frequent housing-market commentator. Now he has a new book out -- Financial Shock: A 360 Degree Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis.
Seems an opportune time for a Q&A -- not just about the book, but also about his views on local home prices, his advice for homeowners and his take on the ripple effects of BRAC.
Q. So -- what can we do to avoid the next financial crisis?
Zandi: “Well, we’re doing some of those things already. For example, the Federal Reserve has ... implemented new regulations guiding mortgage lenders with respect to what kind of mortgage loans they can make going forward. ... They have to make sure that the loan … they’re providing to the borrower is affordable to the borrower. Before, that wasn’t really a criteria for making the loan, and now it is. Another thing that’s happened is we’ve gotten a housing bill, which includes a number of things, one of which is a mortgage write-down plan, which should help a few hundred thousand homeowners who are struggling hold on to their homes.
“But what’s so novel about the plan is, it’s the first attempt to facilitate loan modifications that entail a reduction in the amount of mortgage debt owed by homeowners. Before this, there was really no effort to do this. And I think this is really vital. This kind of a write-down plan is very important because there are now close to 10 million homeowners that are underwater, meaning they owe more than the value of their home. To give you context, there are 51.5 million homeowners with first mortgages. So already, closing in on 20 percent of homeowners that are underwater. … That is a large pool of homeowners that are at significant risk of default.”
Associated Press photo
Housing slumps aside, home buying is usually brisk in the spring and early fall, slowish in the summer and really slow this time of year, as buyers set aside visions of settlement tables for sugar plums. So does it make sense to try to time the market if you've got something to sell?
Inquiring minds, and a reader who needs to unload a Locust Point house in the next six months, want to know. I turned to Dave Wright with Coldwell Banker Residential Brokerage in Annapolis, a Realtor since 1976.
Continue reading "How-to Monday: Timing the housing market" »
Photo credit: Ross D. Franklin/Associated Press
A Wonk reader wonders whether it makes more sense to sell your house or rent it if you have to move -- and no doubt she's not the only one pondering this question. I asked real estate agent Dahlia Kaminsky because she works with city rehabbers, who have been pressed to consider alternatives to the fix-and-sell business plan that worked so well during the boom.
"A lot of people have their homes listed for sale and rent simultaneously," said Kaminsky, with City Life Realty in Hampden. "It's not an option for everyone, but for people who have the luxury, I would say, of being able to have options open to them, they are indeed renting or selling -- whichever comes first."
Things to consider, in Kaminsky's opinion:
Continue reading "How-to Monday: Deciding whether to sell or rent" »
A survey released this month found that agents are rushing to try blogs -- online journals -- and social-networking sites such as Facebook for advertising purposes. Coldwell Banker Real Estate announced in March that it had opened an office in Second Life, the online "virtual world." There are firms that send listing information to prospective buyers' cell phones and give the agent a heads-up.
I quote Joel Burslem, founder of the Future of Real Estate Marketing blog, but could fit only a fraction of the interesting things he said into the story. Herewith are some of his answers to my questions about what people are (or should be) doing to market homes:
We have an adjustable mortgage which is going to go up in October 2008 and want to refinance it before it does. We also have around $25,000 worth of loan and credit card debt that we would like to consolidate in one home equity loan. Both me and my wife have good credit scores, not exceptional, but not bad. What do you recommend we do first? The re-fi or the home equity?
I'll bet other people are weighing their mortgage options right about now, too, so I posed the question to Ethan Ewing, president of California-based Bills.com. His suggestion:
Typical suggestions include repainting (or re-wallpapering) in neutral colors, cleaning or replacing carpeting, and essentially removing everything that makes the house look like yours rather than a model home. (Unless your place looks like a model home, in which case -- why are you wasting your time reading home staging tips?)
I recently interviewed Tressa Manna, a Realtor with ReMax Sails in Baltimore, but wasn't able to fit her thoughts on staging into the home-sales story I was working on. Now seems like an opportune time to share.
Continue reading "Staging (or, how to make it look like you have more taste than you actually do)" »
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