RealAstute Real Estate Blog

Tuesday, October 02, 2007

Multiple Offers Sign of Faltering Buyers Market

By M. Anthony Carr

I've talked with four agents this week who have had contracts beat out by competing buyer offers. This news surprised me, but it shouldn't have. With last month's meltdown in the mortgage industry (actually, more of a purifying), it seems that buyers are starting to come out of the woodwork with good financing in hand to compete with other buyers for houses that are in good shape and priced right.

There are tales of multiple contract offers (when the seller actually gets to choose between offers, instead of beg for one); the use of escalation clauses once again; and sellers holding the line on subsidies to buyers.

This isn't across the whole market, but we're seeing pockets of neighborhoods where if a house comes on the market in great condition and priced at the last sale, the buyers are moving in like chickens after the proverbial flock of June bugs.

Is the buyers market over? Not yet. In fact, in the Washington, DC market area, where last year more than 22,000 houses sold around the District, Virginia and Maryland, there were plenty of homeowners who are walking away with large sums of gain from a market that has doubled in value over the last five years. Nevertheless, they are still having to price right and put the house in marketable -- nay -- “wow-ness” condition to sell them to a group of finicky buyers.

With that said, we are starting to see well-financed buyers put in full-price offers for homes that fit the definition of great condition and pricing. The challenge now is for those real estate agents who don't know how to survive in a buyers market to keep the lights on during this transition market -- which isn't disappearing just yet.

To determine if a market is turning from buyer to seller, you have to look at the same statistics you would research to see if the opposite is true -- a buyers market turning into a sellers market.

The first two stats would be for listings (inventory) and sales (how many sold). Is the inventory retreating over year-to-year numbers? If it is, then how are the sales holding up? With sales maintaining last year levels or moving upward, then the trek up the seller's market mountain has begun.

This doesn't mean sellers can now wait for a better offer, it just means the days on market will start tumbling, which is what has happened month after month in the DC market since February 2007 at 108 days to just 75 days on average in August. The days on market rate has been growing month after month for nearly two years, till it peaked in February, when it started its slow slide town to where it is today.

We'll have to see what happens with the DOM as a result of August's mortgage trials, but if this last week is any indication, the buyers who can qualify for a good mortgage are jumping off the fence, brushing off their jeans and hopping on the Bull.

We've been watching the market turn slowly but surely in the DC area for the last several months, starting with housing sales on Capitol Hill and moving out from there into the Virginia suburbs. The average home sales price in Washington has edged up from $416,000 in January of this year to $516,000 in August. Arlington County, the first county outside the District, is in a thriving market right now, as well.

In Arlington, the average sales price from August to August is up 18 percent, while days on market are clipping along at a spring-like pace at 49 days (barely a month). (The median sold price is up 25 percent).

Is it a buyers market? Yep. But not for long.

Thursday, September 27, 2007

Feeling Nosy about DC? MD? VA?

Ok, I know you're probably not planning on moving this very second, but here's this week's list of interesting-looking listings that have just come on the market. Mind you, they may not actually be my personal listings --- just intriguing properties I've come across that week.

Feeling nosy about the District of Columbia?
Feeling nosy about Virginia?
Feeling nosy about Maryland?

If you know someone who might be interested in this list, please forward it on to him or her. And if there's a listing that you're curious about yourself, just let me know ... and I'll show it to you ... just for the hell of it ... no obligation ... *I promise*. Really. (One of the perks of being the friend of a real estate agent ought to be that you get to freely snoop around other peoples' homes!

Real Estate Search Engines Keep Growing

Daily Real Estate News September 24, 2007

Real Estate Search Engines Keep Growing

Housing search engine Web sites are enjoying a boom in business despite a slowing market.

Trulia.com is outpacing all but Google and Yahoo! search engines in sending traffic to real estate companies nationwide, the company said, basing its claim on data from Hitwise, which measures how people interact with Web sites.

Trulia says it sends an average of 11 percent of all the traffic being directed to major real estate firms, including Coldwell Banker Real Estate, Century 21 Real Estate, ERA Franchise Systems, Keller Williams Realty, Weichert, and others.

Meanwhile, Zillow.com announced that it has landed $30 million in additional investment from Legg Mason Capital Management to support an expansion of its staff of 155, including a 20-person national advertising sales team.

“We believe Zillow is well on its way toward becoming a market-leader in a huge, and untapped online category of online tools and information for homeowners," said Bill Miller, chief investment officer at Legg Mason.

— REALTOR® Magazine Online

Thursday, September 20, 2007

Feeling Nosy about DC? MD? VA?

Professional Inspector Provides Relief for the Anxious New-Home Buyer

By Benny L. Kass
Saturday, September 15, 2007
F04 The Washington Post

Q: We are considering buying a new home from a builder. We like the neighborhood, and the price on the house has been reduced. The builder is also throwing in a number of extras, including paying all of our closing costs. However, we don't know the reputation of this builder, and we'd like to have the home inspected before we go to closing. Is this possible?

A: I think it's a good idea, but builders often reject such arrangements for a number of reasons. Some builders claim that this will void their insurance policy and are afraid that someone will get hurt during the inspection. Other builders don't want their employees bothered by too many questions from the inspector, and other builders just say, "We will provide you with a house that has been approved by the county inspectors, so you do not have to worry."

But you are smart to worry. Frank Lesh, president of the American Society of Home Inspectors, said, "Even new homes have defects that only a professional can detect."

Keep in mind that in many counties, the government inspectors are busy and do not have time to carefully look at all aspects of the new home. Often, by the time the county inspector makes a site visit, your builder may already have put up the drywall, thereby covering up the electrical and plumbing systems.

I have been involved in a number of new-home warranty issues, many of which could have been avoided had the buyer been given the right to inspect the home as it was being built. In one case, the homeowner kept hearing pipes knocking every time the upstairs bathroom sink was turned on. The homeowner forced the developer to open the walls, at the developer's expense, and found that some of the pipes were not properly affixed to the wall. The building inspector hired by the homeowner determined that this was "water hammer."

In this case, the builder acknowledged that had there been a periodic inspection, the problem would have been detected earlier, at a significant cost savings to the builder.

ASHI recommends a three-pronged inspection: before pouring the foundation, before putting in insulation and drywall, and before the final walk-through.

Tell the builder that you want the right to have an inspector of your choice, and at your expense, conduct these inspections. Your sales contract should clearly spell this out.

Remember that a new home has many components, including the roof, the foundation, the electrical and plumbing systems, and the heating and air-conditioning systems. I recently heard of a situation in which a homeowner complained that a new house was not being adequately cooled. When a professional inspected the system, he discovered that the builder had made a mistake. A system designed for a smaller house had accidentally been installed.

Again, the developer had to spend a lot of money to correct the situation, money that could have been saved had there been periodic inspections.

It often amazes me that when consumers buy a new car, they inspect it carefully, even to the point of kicking the tires. But when they buy a new house, they are more concerned about how many bedrooms there will be and what size television they will be able to put in the family room.

If you do not have a referral for an inspector, you can find one by going to the Web site of either ASHI ( http://www.ashi.org/) or the National Association of Certified Home Inspectors ( http://www.nachi.org/).

When you contact a home inspector, inquire about his or her qualifications and background.

Many states have laws governing certification of home inspectors, and the full list of these state laws can be found on the ASHI Web site.

If you decide to hire an inspector, get a copy of the inspector's contract before you formally commit. Read it carefully, and make sure that the inspector will be doing the job you want.

There is one controversial provision in most home inspectors' contracts, called an "exculpatory clause." This states that should the inspector make a mistake and negligently fail to pick up problem areas in the house, your only remedy is to get a full refund of the contract price.

This clause has been upheld in Maryland. Recently, however, the D.C. Court of Appeals held that these exculpatory clauses will not be enforced "when a party to the contract attempts to avoid liability for intentional conduct of harm caused by 'reckless, wanton or gross behavior.' " ( Carlton v. Home Tech, decided June 15, 2006.) This was a modest fix, but unless you can prove that the inspector was engaged in such behavior, the exculpatory clause will be enforced.

While not every home inspector will agree to delete this clause, it certainly is worth trying.
Buying a new home creates significant anxiety among many home buyers. Why not get an inspector to relieve you of at least part of it?

Benny L. Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed, stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite 1100, Washington, D.C. 20036. Readers may also send questions to him at that address or contact him through his Web site, http://www.kmklawyers.com/

Thursday, September 13, 2007

Feeling Nosy about DC? MD? VA?

Tuesday, September 11, 2007

State of the Market for First Time Homebuyers

Recently, one of our prospective first-time home buyers posed the following question: “To be honest with you, I'm feeling a little apprehensive right now about the market. I know that houses are getting to be more affordable, but I'm concerned that I will have trouble getting a mortgage, or at least, a mortgage that I could afford. Do you think it would be wise to wait until I have a bit more cash on hand and then start looking? What do you think?”

We asked one of our favorite lenders, Connie Echeverria at Bank of America, to answer this question. Her excellent answer is below:

Hello there,
I would be happy to answer any questions that you may have regarding the state of the market. You can call me anytime-info below…

However, I find the simplest way to sum up what is happening/happened is that banks that were lending money to buyers that could not really afford to buy are no longer being allowed to do so. And buyers that were put in homes above their price point are no longer able to pay their mortgages, and so those banks are going under, and foreclosures are up.

Bank of America invested in neighborhoods that needed tax infrastructure (Bank of America’s Community Commitment Program) and we diversified our assets (bought LaSalle , MBNA, sponsors NFL, charity organizations, playgrounds, universities) to such a degree, that we were actually able to stabilize the mortgage market by purchasing several billion worth of Countrywide stock (we lent them the original $75,000 to start the bank J), amongst other things.

Mind you, we were never into the exotic type of loans that many brokers used to qualify buyers, so now, when everyone’s regulations are changing, we seem very exotic, simply because ours have stayed the same. Really, we are just stable…and we deliver consistently across the board.

My advice to you would be the following:
If you are curious about whether or not you should buy a home, now or in the future, ask yourself whether or not researching that prospect would be a worthwhile investment of your time. There is no monetary investment; your buyer orientation with Kevin and Michael is free; your pre approval and dialogue with me is…free. At the end of it all, you will have more knowledge, experience and comfort with something that may seem foreign to you now. Why wouldn’t you learn something new and look at pretty places where you may one day want to live while empowering yourself with knowledge?

Lastly, EVERYONE will want to give you advice on this subject. However, if YOU are the one to do the leg work, and in the end make the decision that it is NOT the right time for you, no matter what anyone else’s argument may be, you will never feel as if you may have missed out on something. You will be certain you made the right choice for you AND you will be prepped for another choice at any time…just keep reading and brushing up on what is going on, and when you are ready…that’s it. win-win...my favorite scenario!

Best of luck to you,
Cheers,
Connie Echeverria
Mortgage Loan Officer
The Krista Ellis Group
Bank of America Mortgage
3 Bethesda Metro, Suite 950
Bethesda, MD 20814
301-571-1407 direct
301-571-1444 fax
202-285-3937 cell
Connie.Echeverria@BankofAmerica.com
Yo Hablo Espanol

Thursday, September 06, 2007

Feeling Nosy about DC? MD? VA?

Area Housing Price Gains Still Outpace National Average

Washington Business Journal - 12:48 PM EDT Thursday, August 30, 2007
by Jeff Clabaugh
Staff Reporter

A government report Thursday says housing price appreciation has slowed to the slowest pace in a decade, but price gains in the Washington area continue to outpace the national average.

The Office of Federal Housing Enterprise Oversight (OFHEO) says average prices of a single-family home last quarter were up 3.2 percent from year-ago prices. Maryland, D.C. and Virginia, all consistently in the top 10 for housing prices gains for years, have slipped further down the list in recent quarters.

In the second quarter, single family home prices in Virginia were up 3.7 percent from year ago levels, ranking 32nd in the nation for price gains. Maryland ranked 21 last quarter, with year-over-year price gains of 4.72 percent. The District ranks 24 with prices up 4.62 percent.

All three jurisdictions had quarterly price gains of less than 1 percent.

The Washington area ranked 201 out of cities for price gains, up 1.16 percent from a year ago. The OFHEO say Washington metro housing prices fell an average of 0.23 percent from the previous quarter.

Home prices in Utah surged 15.1 percent from year ago levels, ranking it top on the list of pricing changes. Nevada was at the bottom of the list, with a price decline of 1.45 percent over year ago levels.

In the Thick of A Resurgence On the Hill

Building Salvaged From Neglect
By Ruben Castaneda
Washington Post Staff Writer
Saturday, September 1, 2007; Page T05

Although she's lived in suburban Maryland for most of the past 20 years, Yvonne Johnson found herself spending more time in the District in recent years. So much time that she decided she may as well live there.

This spring, she moved into a three-story brick building on 15th Street SE in Capitol Hill.

It was a good choice, Johnson said. "I enjoy living in the city."

The Stadium-Armory Metro stop is a short walk away, and, though her job as a real estate agent is in Waldorf, the commute is relatively easy. "I'm going in the opposite direction of traffic . . . so it's a breeze," Johnson said.

Now, in her spare time, Johnson walks to such venerable Capitol Hill haunts as the Banana Cafe and Marty's, two of the many restaurants on Eighth Street SE. Johnson has become a regular at nearby Eastern Market and takes Metro whenever she can.
But life in and around Johnson's building wasn't always so pleasant.

In the late 1990s and the early part of this decade, the building was in disrepair, some of its 17 units were unoccupied, and others were occupied by squatters, said Joan Simon, who with her husband, Joel Simon, bought the building for about $500,000 at a foreclosure sale in December 2001.

Some of the people who lived in or hung around the building then sold drugs, Simon said. The front door was not secure and was often broken.

When she and her husband bought the building, the legal tenants received federal Section 8

vouchers and other help finding new homes, Joan Simon said.
Then the Simons went to work, spending hundreds of thousands of dollars to renovate the units and the building's common areas.
Among the new features: a secure front door, an intercom system, security cameras in the front and back entrances and in the hallways, and a fenced parking area behind the building with a remote-controlled gate.

Joan Simon updated the landscaping, planting shrubs, small trees and colorful flowers. The Simons reached out to D.C. police, who, she said, were responsive. "The police and I became best friends," Joan Simon said.

Their hard work paid off. By August 2002, the first new tenants had moved into the renovated building. By December of that year, the building was completely rented, the Simons said.

The building's comeback is part of a broader neighborhood resurgence; housing prices and rents have soared in Capitol Hill in recent years. Most of the other buildings on the block are rowhouses inhabited by families, and there's a new condominium building going up a few doors from the apartment building.

Joel Simon estimated that his building dates to the 1930s or 1940s. There are coin-operated washers and dryers in the basement, and there is no elevator. Although the kitchens in each of the units were modernized in the renovation, the apartments have a film-noir feel, with arched doorways, asymmetrical angles and hardwood floors.

Tenants said Yarmouth Management, which manages the building, is friendly and responsive whenever they call for service. Johnson said that when she moved in, the remote control for the gate around the parking lot wasn't working, and she called the management company. "They got on it right away, and by the next day it was done," she said.

Johnson and other tenants said they knew before they moved in that crime was a problem for some parts of Capitol Hill but that they feel secure in their building and haven't had any problems in the neighborhood.

Michael John Casey, an actor, moved into a one-bedroom unit with his fiancee in late April. "I've never felt any kind of danger since we've moved here," Casey said.

Casey praised the convenience of the neighborhood, noting that he can walk to Eastern Market, the restaurants and shops on Eighth Street SE, or a nearby Safeway in a matter of minutes. Casey said his fiancee, Colleen Delaney, an actress, walks to a theater group's rehearsal hall on Eighth Street.

Kathleen Barr, a lobbyist for a nonprofit group, lives in an efficiency in the building. She described the neighborhood as welcoming, noting that there is usually no shortage of quiet activity on the street, such as people walking their dogs or tending to their front yards. "I like the laid-back atmosphere," Barr said.

Thursday, August 30, 2007

Feeling Nosy about DC? MD? VA?

Home Buyers Forced to Change Tactics

By Dina ElBoghdady
Washington Post
Staff Writer
Wednesday, August 29, 2007; D01

The credit crunch has turned $417,000 into the magic number for home buyers shopping for mortgages.

Rattled investors have become reluctant to buy loans for more than that amount -- known as jumbo mortgages -- and that in turn has pushed some lenders to raise interest rates. Caught in the middle are potential home buyers who are getting walloped by higher rates or shut out of the market.

The phenomenon is particularly significant in Washington, where half the homes sell for more than $417,000. Here, home buyers are figuring out how to adapt to the new circumstances by making larger down payments or splitting their purchase into two loans to dodge higher rates. Others are sitting tight until the rates go down.

The course they take can have deep implications for the mortgage industry, the housing sector, and by extension, the economy. If too many potential jumbo-loan borrowers wait it out, chances are the excess supply of homes on the market will swell, further dragging down prices. Home values fell in 15 of 20 large metropolitan areas in the second quarter from a year earlier, according to a report yesterday from S&P/Case-Shiller. They fell 7 percent in the Washington area.

About 24 percent of mortgages granted in the District, 14 percent in Virginia, and 10 percent in Maryland were jumbo loans in 2005, according to the most recent Mortgage Bankers Association data available. Sixteen percent of all new mortgages last year were jumbo loans, according to the trade publication Inside Mortgage Finance.

"Lenders are all putting our collective heads together to come up with a new way to get borrowers into houses," said Bill McGoey, a senior vice president at American Partners Bank, owned by the thrift holding company Federal City Bancorp of the District. "There are tools that we've been using forever, but we've had to tweak them to suit the current situation."

That tweaking benefited Melissa Pool, who took out a jumbo loan to purchase a new $950,000 loft in Arlington. Her father, Otis Pool, helped arrange the logistics but said the experience "kind of put me in a tizzy."

Pool said his daughter signed a contract for the loft a few months ago while it was under construction, but as the closing date approached and the jumbo rates jumped, her mortgage company, First Savings Mortgage, arranged an alternative.

Her loan officer advised her to apply for a piggyback mortgage, meaning two loans. She made a $350,000 down payment, as planned. Then she split the remaining $600,000 between a first loan for $417,000 and a second at a higher interest rate for the balance.

The combined rate of the two, 6.875 percent, was about half a percentage point lower than the jumbo loan would have been, the mortgage company said.

So what's so special about a $417,000 loan?

Fannie Mae and Freddie Mac by law can purchase or guarantee loans for single-family homes up to that amount. The limit is determined annually by federal regulators based on the average home price nationwide from October to October. Some members of Congress want to increase the limit in light of the current mortgage problems.

Loans that meet Fannie and Freddie rules are called "conforming" loans, and they are about the only types of mortgages that investors want to buy now because they are perceived as safe bets.
Investors lost their appetite for non-conforming loans soon after subprime borrowers, typically those with poor credit, started defaulting on their loans at an alarming rate this year.

Jumbo loans are not nearly as risky as subprime loans, but they too are non-conforming and also suffered when investors yanked their money out of the non-conforming market. With investors' money gone, many firms specializing in jumbo loans were left with little money to fund mortgages.

Some shut down, including a unit of Capital One of McLean, which closed last week. Others stopped making loans, as Thornburg Mortgage did this month. Countrywide Financial, IndyMac Bancorp and other large lenders are getting more selective about who gets jumbo loans.

Many lenders reacted by simply raising their rates. Some did it to offset investor concerns by offering better returns for their money. Some also wanted to pull back on granting those loans until they could find investors to buy them on the secondary market.

That led to a widening gap between jumbo and conforming loans in recent weeks, making the former more expensive. While jumbo rates were rising, a conforming 30-year fixed-rate loan is the lowest it has been since June.

Lenders were charging an average 7.46 percent for prime 30-year, fixed-rate jumbo loans last week, compared with 6.57 percent for conforming loans, according to mortgage research firm HSH Associates.

That's why consumers are angling for conforming loans and why some lenders are accommodating them with such options as the piggyback.

But a piggyback mortgage is tougher to find for people with less-than-stellar credit. And sometimes the math does not work out even for those who qualify for that arrangement, said Steve Calem, vice president of real estate lending at American Bank of Rockville.

For people buying homes of $1 million or more, a second loan may be so large that the combined rate of the two loans far exceeds the jumbo loan rate, Calem said. Second mortgages are more risky for lenders and typically carry higher rates than first mortgages.

"You really need to know how to cut these things up to get the best rate," Calem said. "A little bit more on the first or a little bit less on the second could add thousands of dollars to closing costs and interest expenses for the consumer."

The numbers did not work in Mike Stidham's favor. Stidham was approved for a jumbo loan that fell through a day before he was to settle on a $560,000 home near Baltimore.

Stidham, who works in advertising sales, put no money down, something lenders now frown upon. His lender had his home reappraised at the last minute. The value came back lower than the original appraisal, and the lender canceled the loan.

Stidham scrambled and found a new loan through his mortgage broker at Universal Trust Mortgage in Columbia. But the jumbo rates had increased in the meantime and now he's paying $230 more a month than he would have under the original loan.

"We had no choice. I had sold my house that Monday and I had to settle on Tuesday," Stidham said. "So I had to take my lumps."

Tammy Arbogast and her husband, Derrick Fouts, were in less of a bind. They own a townhouse in Germantown. Now that they have two young children, they want a larger home and were planning to buy one nearby until jumbo rates shot up and pushed them to reconsider their options.

Instead of buying the home and then selling the townhouse, they hope to do the reverse. But even if they get the asking price for their townhouse, they may need a jumbo loan. To lessen the borrowing costs, they could make a larger down payment by dipping into their kids' college savings, but they prefer not to.

"We can just stay put in our townhouse," said Arbogast, an environmental health and safety specialist at a nonprofit organization. "We'll just wait it out."

Doing so might mean passing up the house they've been eyeing, but that's okay, said Fouts, a scientist at a nonprofit group. "You can't get attached to a house in this climate. It's so easy to lose a house because of variables out of your control."

The question now is how long the jumbo rates will stay this high, said Mark Fleming, chief economist at First American Core Logic. "If this lasts much longer, then people will begin to reevaluate what they can afford."

Friday, August 24, 2007

Feeling Nosy about DC? MD? VA?

Feeling nosy about the District of Columbia?
Feeling nosy about Virginia?
Feeling nosy about Maryland?

If you know someone who might be interested in this list, please forward it on to him or her. And if there's a listing that you're curious about yourself, just let me know ... and I'll show it to you ... just for the hell of it ... no obligation ... *I promise*. Really. (One of the perks of being the friend of a real estate agent ought to be that you get to freely snoop around other peoples' homes!

A New Conundrum in the D.C. Real Estate Market

A New Conundrum in the D.C. Real Estate Market
August 22, 2007 - 12:50pm
Adam Tuss, WTOP Radio

WASHINGTON - Buy or sell? Rent or own? It is a tricky time in the local D.C. real estate market. Now there's another conundrum.

New statistics from the Metropolitan Regional Information Systems show that while the region has the highest number of properties for sale on the market since October 2006, home prices are actually spiking by nearly 10 percent in some areas.

"What we saw in the housing sales data for July 2007 (compared to July 2006) is that closer-in jurisdictions to the center of the region where the jobs are had significant average housing price increases," says John McLean, senior fellow at George Mason University's Center for Regional Analysis. "The District was up about 6.5 percent, Montgomery County was close to 10 percent, Arlington was up over 9 percent, Alexandria was up 3 percent and for the first time Fairfax County was up almost 2 percent. It had been negative there for several months."

Those numbers are in contrast to some other areas, away from jobs, which saw decreases. "Contrast that with minus 3 percent in Prince George's County, minus 5 in Loudoun and Prince William counties. It appears that the closer-in markets are not only able to sustain prices now, but are actually moving higher," says McLean.

He believes our commutes are definitely playing a part.

"Traffic congestion in many cases is not as bad in some of the inner areas of the region as it is in some of the outer, suburban areas."

Residential properties in many of the areas where prices have shot up are also staying on the market for shorter periods of time.

"Right now we are looking at two months for the close in neighborhoods, and that is really healthy and normal," says local real estate guru Donna Evers. "That number has come down from three months in January of 2007."

Evers also believes if you are shopping around for a property, now may be the best time to get in.

"Because it is August, I think you can get a good deal on quite a few things. August and December are the best months to look for good deals, because people are tired of waiting out the Spring and Fall seasons."

(Copyright 2007 by WTOP Radio. All Rights Reserved.)
Adam Tuss, WTOP Radio

Thursday, August 16, 2007

Feeling Nosy about DC? MD? VA?

Greater Washington's Housing Market

From the Washington Business Journal

The news wasn't all bad for Greater Washington's housing market in July, as prices and sales volume eked up in some jurisdictions.

In D.C., 740 single-family homes were sold in July, up 10.6 percent from July 2006, according to data compiled by Metropolitan Regional Information Systems. The median sales price for homes in the District was $431,000, up nearly 4 percent from $415,000 a year ago.

Some municipalities still didn't fare too well during the typically-slow summer month for real estate activity. In Prince George's County, sales volume fell 42 percent in July and median prices were virtually unchanged at $320,000. Sales volume also fell nearly 16 percent in Montgomery County in July, but the median sales price was $490,000, up nearly 8 percent from a year ago and the highest median price in Greater Washington for the month.

In a region that includes Arlington and Fairfax counties and the cities of Alexandria, Fairfax and Falls Church, sales and median price were flat. There were 1,859 single-family homes sold in that region in July, an annual increase of just 0.1 percent, and the median price was $480,000, up 0.7 percent from the previous year.

In Loudoun County, 478 units were sold, an increase of about 12.5 percent, and the median price was $440,000, down about 6.4 percent from July 2006. Sales volume fell more than 26 percent in Prince William County in July, and the median sales price was $365,000, a decline of 6.4 percent.

Thursday, August 09, 2007

Feeling Nosy about DC? MD? VA?

Once More, With Savings

Once More, With Savings
Homeowners increasingly are selecting used building materials to make projects look better, cost less and save resources.

By Allan Lengel
Washington Post Staff Writer
Saturday, August 4, 2007; F01

On a sizzling Saturday, inside a toasty warehouse, Eunice Youmans walks past the vintage fireplace mantels, unhinged doors and light fixtures at Community Forklift, a nonprofit store in Prince George's County that peddles reusable housing materials.

In one hand is her 10-month-old son, in the other a tape measure. Her two young daughters trail behind her like ducklings. She zeroes in on a used 48-by-17-inch kitchen cabinet.

It needs some work. It has been sitting for months. One door is chipped. The white paint is old. She plans to fix it up, refinish it and put it in her dining room.

The price is $50. She gets it for $30.

"It's much cheaper and good-quality stuff," the Cheverly resident says of the store's products, extolling the benefits of buying used rather than going to the large home stores. "I come here all the time."

In a disposable society, where new is often equated with better, where big-box stores such as Home Depot have become the temple of home improvers, a growing number of homeowners are turning to reclaimed or reused products. In the past five years, the number of reused-material stores around the country has doubled, from 150 to 300, according to the Building Materials Reuse Association.

Driven by economics, environmental concerns, aesthetics or old-fashioned quality -- or all the above -- do-it-yourself homeowners, as well as contractors, handymen and landlords, are buying construction products at a fraction of the retail cost -- such things as marble countertops, cast-iron radiators, sunken bathtubs, toilets, sinks and solid five-panel pine doors. Some come from homes built more than a century ago, some from new-home construction sites.

Sometimes there's even historic value: The Community Forklift recently landed marble from a federal building and a chandelier and several mahogany doors from a penthouse at the Watergate.

"Most people are proud of themselves for recycling cans and recycling newspaper and buying bags that are made out of recycled plastic, but people don't realize that they can recycle entire houses and that they can buy recycled products for their homes," said Ruthie Mundell, outreach director for Forklift, which opened in November 2005.

"When we first started, we had probably five customers a day. Now we probably have 150 sales a day," she said. "People are finding out about the concept. They realize how much it makes sense financially and environmentally."

In the Washington region, the Building Materials Reuse Association and Habitat for Humanity's Habitat ReStore Web site together list 60 for-profit and nonprofit operations that collect or sell reusable and reclaimed products: three in the District, 17 in Maryland and 40 in Virginia.

Nonprofit organizations such as Community Forklift, the Loading Dock and Second Chance in Baltimore, and Habitat ReStores in Virginia and Maryland get all or most of their products from donations, many of which come from homes that have been torn down or "deconstructed" instead of being demolished by bulldozers and wrecking balls.

"I would say about 85 percent is donated," said Desiree Carter, general manager of the Loading Dock. In addition, "We get some materials from landfills" and buy some from places going out of business, such as plumbing supply shops.

Often, about 80 percent of a disassembled home can be salvaged or recycled, experts say. In that case, donating the materials is a boon for everyone, recycling advocates say. Homeowners get a tax write-off by donating the disassembled materials to the nonprofit stores and save on trash fees at the landfill. The environment benefits, as do the people who bought the products.

"Some homeowners can't stand good material -- hardwood floors, kitchen cabinets, and on and on -- just being dumped in a landfill," said Paul Hughes, president of DeConstruction Services of Fairfax, which tears apart homes and donates the materials to nonprofit organizations. "Many builders are starting to feel the same way."

For many people, such as Gregory Cavanaugh, the savings are attractive, but more important is "the durability of the product."

Cavanaugh, a contractor, said he saved more than $1,000 recently by buying six used doors -- five from Community Forklift and one from Second Chance -- for a restoration job at a Capitol Hill home built in the 1800s.

He said he paid $58 for an entrance door instead of about $300 new; $260 for a walnut Victorian-style door that "you'd probably pay upwards of $1,000" for; and $25 each for the interior doors that would run "upwards of $150" each at a lumber store.

On top of that, he said, he got a good deal on used yellow pine, a couple of hundred years old, that he used for door and window frames and windowsills. He said the quality was superior to that of lumber sold today.

"Basically, what you buy in the stores today is white pine, and it's junk," he said. "In two to three years, it can start to rot."

Still, not all reusable material is cheap.

Mountain Lumber in Ruckersville, Va., which manufactures products from reclaimed wood, charges an average of about $3,000 for flooring for a 300-square-foot kitchen and about $8,000 for an 800-square-foot one. And that's just for the product -- the company does not do installation.

Willie Drake, president and founder, said the wood averages 100 to 600 years old and comes from barns, ancient temples, buildings and schools around the world, including countries as far away as China. Recently, he said, the company bought 25-by-25-foot wooden Guinness beer vats from Ireland to convert to flooring.

Drake said most customers are from the United States, particularly the mid-Atlantic, but he "just shipped an order to Moscow and just sent an order to Italy."

"We have never cut down a tree to make our product," he added with pride. "It's all from 100 percent reclaimed wood."

Some places specialize in certain products.

The Brass Knob, a for-profit store on N Street in Northwest Washington, has an impressive collection of cast-iron radiators, some from the early 1900s, that cost about $85 to $500. It also has more than a thousand used doors. There's a second location, in Adams Morgan, which operates under a different owner.

Ron Allan, owner of the N Street shop, said he attracts a lot of homeowners, architects and contractors who work on old homes.

"I've almost become a Victorian Home Depot," he said.

Jim Schulman, president of Community Forklift and a big believer in the reuse business, concedes: "This place is not for everybody. Not everybody is a do-it-yourselfer."

Sometimes, even the do-it-yourselfers bump up against a task too great.

That was the case with Pamela Preston of Clinton, who was at Community Forklift one recent Thursday with her 9-year-old son Jelan, hunting for kitchen cabinets.

She had been to Home Depot, which wanted about $5,000 for new kitchen cabinets. She picked out used cabinets at the Community Forklift for about $500.

They needed refinishing, which she said her husband would do. She seemed excited.

"I'm going to put him to work," she said with a smile. "Five thousand dollars is ridiculous when you have other things to do with your money."

She took pictures and measurements. She asked the store to put the cabinets on hold until she could talk to her husband.

By the next day, it was a no-go: Her husband thought it would be too much work.

Thursday, August 02, 2007

Feeling Nosy about DC? MD? VA?

Feeling nosy about the District of Columbia?
Feeling nosy about Virginia?
Feeling nosy about Maryland?

NAR: Market Shows Signs of Improvement

Daily Real Estate News August 1, 2007

The market is likely to stabilize in the months ahead, according to the NATIONAL ASSOCIATION OF REALTORS®’ forward-looking indicator on pending home sales.

The Pending Home Sales Index, based on contracts signed in June, was 5 percent higher from the downwardly revised May index of 97.5, but is still 8.6 percent below June 2006 when it stood at 112. The 5 percent monthly gain is the largest in more than three years, since a 6.1 percent increase was recorded in March 2004.

Lawrence Yun, NAR senior economist, says it’s encouraging that the increase occurred in all four major regions of the United States. “However, it is too early to say if home sales have already passed bottom,” he says. “Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand.”

The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed.

What Happened Regionally

Here’s a breakdown of what the PHSI showed across the country:

-West: the PHSI increased 8.6 percent in June to 103.6, but was 5.5 percent below a year ago.

-Northeast: the index rose 3.1 percent from May to 96, which is 2.4 percent lower than June 2006.

-South: the index increased 4.7 percent in June to 111.6, but was 12.7 percent below a year ago.

-Midwest: the PHSI rose 3.5 percent in June to 92.5, which is 8.2 percent lower than June 2006.
— REALTOR® Magazine Online

Thursday, July 26, 2007

Feeling Nosy about DC? MD? VA?

Real estate: Good curb appeal helps sell a house

BY JESSICA DAMIANO
Special to Newsday
July 26, 2007, 7:56 AM EDT

Terry and Maureen Ferrante of Sea Cliff had always taken pride in the property around their painted-lady Victorian. But after they placed the house on the market early this month, they worked even harder to ensure the gardens were impeccable.

"We pruned all the trees and bushes and planted flowers," Maureen Ferrante, 58, a mental health counselor, says. "Terry planted about 150 impatiens in various colors and put down wood chips so it would look neat. He cleaned everything up and made sure that when you pull up to the house, you see how beautiful it is."

That's exactly the approach homeowners should take in landscaping their property to speed up the sale of their house, says Barb Schwarz, creator of the home-staging philosophy and founder of the International Association of Home Staging Professionals, which educates stagers, or stylists, to prepare houses for sale.

"We've found that staging the outside is crucial because otherwise you can't get people inside," Schwarz says, adding that homeowners who stage the outside of their houses will garner a 3.95 percent higher selling price than those who do not.

John Langone, a partner and associate broker with Richard B. Arnold Real Estate in Sea Cliff, says some buyers won't even go into a house if they don't like its outside appearance.

Something as basic as an unobstructed view of the house can add to its appeal, Langone says. "If bushes and trees are blocking the house, it definitely detracts," he says.

Neatness counts
So how can sellers entice shoppers to get out of their cars and come inside?

One thing many homeowners forget to do, Schwarz says, is to declutter the yard of toys and little pots. "It's far better to have fewer bigger pots than the clutter of smaller hanging pots," she says. "They just weigh down the house."

Another tip from Schwarz, who reminds sellers that buyers only know what they see: "If the grass is dead where the dog has urinated, paint it. I recommend using Sherwin Williams Emerald Green. That's the right color."

Just as you'll likely vacuum more often and keep your countertops clear while your house is on the market, Val Allocco, owner of Staged 2 Sell NY, a home staging company in Northport, says the same effort should be put into the garden.

Changes don't have to be upscale or expensive, she says.

She suggests that sellers aim for a neat and well-manicured look: Be sure the grass is cut and bushes are trimmed, that nothing is overgrown and that garden beds are free of weeds.

If there's no color in the garden, plant some flowers and place planters outside the door or along the walkway. She says adding color can be as simple as purchasing an inexpensive hanging planter filled with impatiens. Clip the hanger and set it on the porch.

Landscaping touches
Allocco also recommends paying a landscaper to do a good weeding and to edge the lawn. "This is where people get their first impression," she says. "If the yard doesn't look well-manicured, then they feel the home hasn't been well maintained."

Schwarz recommends trimming trees from the bottom to allow the house to be viewed through them. "Don't chop off the tops," she instructs. Foundation plants, on the other hand, should be rounded off and trimmed from the top so they don't block windows.

She also recommends looking at your house from across the street. "It's a different view than you'll get from your own driveway," she says. "It's the only way to see what buyers will see."

Cindi Wardell of Huntington recently went into contract on her four-bedroom Colonial near her asking price of $849,000 in less than eight weeks. Although she didn't hire a stager, she did arrange to have her garden designer, Marie Knapp of Laurel Hollow, visit more often. She did more weeding and kept the garden more spruced up than usual and she changed the flowers in the planters to keep them fresh.

"I always start with annuals," Knapp says. "I added spring flowers in pots and along the edges of borders. When they faded, I put in summer annuals like Vinca periwinkle, and I jazzed up her pots."

Knapp recommends dressing up bare spots in the garden with flowerpots. "The great thing about pots is you can move them around," she says. And if there's time to plan ahead, she suggests a trio of shrubs that provide season-long interest: Lilacs, roses and hydrangeas.
Knapp, who favors annuals like Plumbago and Angelonia, also took care to ensure the willow and Annabelle hydrangea in Wardell's garden match the off-white trim on the house and the picket fence.

Her pet peeve? "I think it's such a turnoff when you go to a house and the foundation plantings are out of scale. It's so uninviting," she says. "If something is overgrown, I would consider removing it and putting in something smaller."

Planning far in advance
Wardell, 52, who is retired from the real estate industry, says she believes the presentation of her house helped counter its location on a busy road that might have been unappealing to some shoppers. "I knew it needed something extra because of where it was situated," she says.

"When I bought the house three years ago, there was no landscaping at all," Wardell says. "What I did was mostly for myself, but I also thought about resale value. In the backyard, I put in 12 of the fastest-growing evergreens ever - Leland cypresses - so you can't see any of the homes behind me anymore. I think the secluded feeling really added to my selling price."

In addition to landscaping, Allocco says other front-yard items often are overlooked. The driveway should be clean and presentable. The walkway should be free of stains. If it isn't, she recommends power-washing. If it's made of cement, be sure there aren't any weeds growing through the cracks, she advises.

For a finishing touch, Allocco says buyers should purchase a new front doormat. "The little things really make a difference," she says.

The bottom line, Langone says, is pride of ownership. "When people take care of the outside, it shows that they love their home. When buyers see that, it gives the impression they take care of the inside as well."

Tips for a snip-shape yard
Even if you think you already have good curb appeal, Northport home stager Val Allocco says "styling" can help you get top dollar. And you don't even have to spend a lot of money. Here are five elements you can borrow from successful seller Cindi Wardell's Huntington home for creating an inviting entrance and getting you on your way to that coveted "sold" sign.

-Planters on front steps add color.
-Lawn is well manicured.
-Bushes are neatly trimmed.
-Plantings create symmetry.
-Garden beds are weed-free.

For a winter wonderland
What about winter? There isn't much you can do by way of landscaping during the winter months, but these tips from Northport home stager Val Allocco might make your house more inviting:

-Keep the sidewalk shoveled.
-Make sure the walkways are never icy.
-Put a welcoming wreath on the front door.
-For a manicured look, buy two inexpensive, small evergreen trees and place them in planters on either side of the front door.

- JESSICA DAMIANO Copyright 2007 Newsday Inc..

Thursday, July 19, 2007

Feeling Nosy about DC? MD? VA?

6 Incentives to Attract Buyers to Your Listings

Daily Real Estate News July 17, 2007

6 Incentives to Attract Buyers to Your Listings

Flashy buyer incentives — such as a new TV or car — may entice some buyers, but bottom line perks are more likely to close a sale, say experienced real estate professionals.

Here are the six most common buyer incentives in today's market:

1. Reduce the price. "The price is something that is a common currency — it appeals to everybody," says Gene Rivers, who owns four Keller Williams offices in Florida.

2. Pay points. One point is 1 percent of the loan amount, charged as prepaid interest. Sellers can pay these points on behalf of the buyer, so for the first year or two, the buyer has a lower mortgage payment.

3. Assist with the down payment. First-time buyers without enough money for a down payment appreciate this kind of assistance.

4. Pay closing costs. Closing costs generally add up to somewhere between 2 percent and 7 percent of the loan value, according to Freddie Mac. Buyers who are stretching to make a down payment will be attracted to this type of help.

5. Add a home warranty. A residential service contract is some insurance that the buyer won’t encounter high repair costs in the first year or two of home ownership.

6. Pay home owner association fees or pool maintenance. Paying these kinds of predictable maintenance costs at the beginning can be a nice welcome to the buyer when money undoubtedly will be tight for them.

Source: MarketWatch, Amy Hoak (07/15/07)

Thursday, July 12, 2007

Feeling Nosy about DC? MD? VA?

NAR: Home Prices to Recover in 2008

Daily Real Estate News July 11, 2007
NAR: Home Prices to Recover in 2008

The latest economic forecast by the NATIONAL ASSOCIATION OF REALTORS® shows home prices recovering in 2008 as housing inventory falls from current levels.

“Buyers now have an overwhelming advantage given the wide selection of homes available in many markets,” says Lawrence Yun, NAR senior economist. “But with profit margins coming under pressure, homebuilders will limit new construction well into 2008. This should help the overall inventory level to move steadily into a more balanced state.”

NAR says existing-home sales will begin picking up late this year, rising to a total of 6.11 million for 2007 and 6.37 million in 2008. Those numbers are both lower than last year's 6.48 million.

Meanwhile, new-home sales are projected to reach 865,000 in 2007 and rise to 878,000 next year, compared with 1.05 million in 2006. Housing starts, including multifamily units, are forecast at 1.43 million units this year and 1.44 million in 2008, down from 1.80 million last year.will start to rise early next year.

Prices Seen Rising for New, Existing Homes

Existing-home prices are likely to rise 1.8 percent to a median of $222,700 in 2008 after a 1.4 percent decline this year to $218,800.

The median new-home price should rise 2.2 percent to $245,400 next year following a 2.6 percent drop in 2007 to $240,100.

“Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008,” Yun says. “Local conditions vary considerably, but with historically low mortgage interest rates this summer and sustained job gains, it could be a good time for first-time buyers with a long-term view to test the housing waters.”

Other Predictions: Mortgage Rates, Jobs, GDP

The 30-year fixed-rate mortgage is estimated to average 6.7 percent during the second half of this year, and fluctuate around 6.6 percent in 2008.

Growth in the U.S. gross domestic product (GDP) will probably be 2.0 percent in 2007, compared with a 3.3 percent growth rate last year; GDP is forecast to grow 2.8 percent in 2008.

The unemployment rate is likely to average 4.6 percent in 2007, unchanged from last year. Inflation, as measured by the Consumer Price Index, is projected at 2.6 percent in 2007, down from 3.2 percent last year. Inflation-adjusted disposable personal income should rise 3.0 percent this year, up from a 2.6 percent gain in 2006.

— REALTOR® Magazine Online

Thursday, July 05, 2007

Feeling Nosy about DC? MD? VA?

'Groundbreaking' Celebrates The Old and New

By Jacqueline DupreeThursday, June 28, 2007; Page DZ03

Ballpark and Beyond is from Jacqueline Dupree's blog on development in Near Southeast Washington, an area between Capitol Hill and the Anacostia River that is being transformed by the construction of the Nationals baseball stadium.

On Tuesday, the D.C. Housing Authority had a ceremonial groundbreaking at Fourth and K streets SE to celebrate the redevelopment of the old Arthur Capper/Carrollsburg public housing project.

It was a pretty warm day, but the tent was air-conditioned. There was a bit of a revival feel as authority Executive Director Michael Kelly, D.C. Council member Tommy Wells (D-Ward 6) and other officials sang the praises of the federal-city-private partnership that has leveraged a $35 million U.S. Housing and Urban Development grant into a nearly $500 million revitalization project.

Kelly and others spoke with particular pride about how all 707 units of public housing at Capper/Carrollsburg will be replaced in the new development, which will include 525 affordable rental units and 330 market- and workforce-rate homes. The 23-acre project is a joint venture of Forest City Enterprises, Mid-City Urban and the authority.

The townhouse portion of the redevelopment, now named Capitol Quarter, will have about 121 market-rate and 91 workforce-rate ownership houses. An additional 65 townhouses will contain 111 subsidized rental units and Section 8 ownership units.

The market-rate houses are being made available for reservation in monthly blocks, with tents popping up at the sales center as hopeful homeowners stake their claims. There was a lottery in October for the first 20 workforce units. I imagine another will be coming before too long, although nothing's been announced.

Construction will begin on the first homes in early 2008, and infrastructure work at the site has begun.

Many former Capper residents were at the groundbreaking, clearly excited about what they will be returning to. Kivette Abraham, whose mother moved there when the complex opened in 1956, spoke of being one of the 55 Capper households participating in the community support services homeownership education and counseling program, which will help her to buy a home in the community where she's spent almost her entire life.

As for the rest of the project, 300 low-income rental units have been completed since December in two new buildings for senior citizens and low-income residents. Four mixed-income apartment buildings planned along the new Canal Park between Second and Third streets and I and M streets SE will eventually complete the residential component. Construction probably won't start before 2010. In the meantime, temporary surface parking lots will soon appear on those blocks to help ease the expected Nationals stadium parking crunch.

Office buildings totaling 700,000 square feet are also part of the long-range Capper plan, as are 50,000 square feet of retail. A new community center is on the boards as well, replacing the one demolished earlier this year.

Thursday, June 28, 2007

Feeling Nosy about DC? MD? VA?

Road to a Retail Makeover

Road to a Retail MakeoverD.C.'s Plan to Revive Shopping Areas Leads Through H Street NE
By Ylan Q. MuiWashington Post Staff WriterMonday, June 25, 2007; D01

On H Street Northeast, there are hipster bars that draw weekend crowds large enough to rival those of U Street. There is a dance studio that teaches ballroom, ballet and Afro-Caribbean. A massive red-brick luxury condo building is rising on the western end, touting the slogan "DC's next great quarter."

The corridor once infamous for race riots and crime is in the midst of an urban revival. But one critical piece is missing: the shopping.

A few veteran mom-and-pop stores have survived the decades of neglect. A handful of national chains, such as Payless ShoeSource and Rite Aid, have staked out ground. But retail along H Street has not caught up with the rest of the development. Check-cashing stores, tax preparers and liquor stores dominate.

The District is looking at the street as one of the first places where it can influence the shopping landscape. Recently, Mayor Adrian M. Fenty (D) and Planning Director Harriet Tregoning said the District will develop a citywide plan to keep and attract retail, and stem the $1 billion in sales tax they say is leaked to surrounding jurisdictions. The plan will target 20 neighborhoods where stores have failed to take hold.

H Street is on the list, along with Georgia Avenue, Shaw, M Street SE, Nannie Helen Burroughs Avenue, East Capitol Street and Bladensburg Road. The other neighborhoods have not yet been identified.

Each faces its own challenges. Some require redevelopment from the ground up, others resemble suburbia. But H Street is perhaps the closest to a turnaround.

The community hopes the city's plan will create a better environment to attract retail. Among their requests are tax breaks for restoring old buildings, an expedited permitting process and cleaner streets.

"They talked about H Street in the theoretical and now we're here," said Joe Englert, who owns several popular bars in the neighborhood. "Now they've got to get in a different mind-set."

During a bumpy van ride through the corridor, Tregoning and Neil O. Albert, deputy mayor for planning and economic development, spoke about their visions of higher-quality stores on the street.

Over the next 10 years, the city thinks the neighborhood could support 300,000 square feet of retail. Through its Great Streets program, the city plans to spend $27 million sprucing up the corridor with wider sidewalks, more trees, flattering lighting, bike racks and signs for community attractions. There are plans for a trolley to ferry residents along the 1 1/2 -mile stretch.

Build it and they will come seems to be the prevailing philosophy. There are hopes for more apparel retailers, a jewelry store, book shop, pet store. The blocks from 7th to 12th streets are designated as the retail epicenter. To the west is the residential neighborhood that, with any luck, would feature a grocery store like Trader Joe's. To the east is the arts-and-entertainment zone, ending at Hechinger Mall.

"You can almost never begin with retail first, because retail wants customers," Tregoning said.

About 40 to 45 of the street's 300 buildings are vacant, according to Anwar Saleem, head of the city's Main Streets initiative on H Street, which aims to spur business. That's an improvement from the roughly 150 that were empty four years ago, he said. A slew of new businesses have moved to the area -- clothing boutique and salon Stella Bleu, coffee shop Sidamo, a gym called WillPower that advertises pilates classes. There's also a Subway, Rainbow clothing store and GameStop.

Retailers that can keep up with the $2 million condos going up down the street are still several years away by the most ambitious estimates. A strip shopping center called H Street Connection dominates the corridor's retail district -- not quite the historic feel that residents and city officials envision.

Henry Fonvielle, executive vice president of the Rappaport Cos., which owns the center, said he just now is starting to think about remodeling.

He would eventually like to raze the building and replace it with a mixed-use development with retail on the bottom floors and residences above. But rents have to rise substantially to make it worth the effort, he said.

Still, Fonvielle said he is excited by the changes underway. It's all a matter of timing.
"Every time a storefront turns over on H Street, it's going to be a turnover for the better," he said. "It's just an evolutionary process."

High Costs of Change

City officials say they envision a shopping district on H Street populated with lots of small, unique shops and a few national retailers. But independent businesses have struggled to gain footholds in the corridor because of the age and poor conditions of many of the buildings, as well as their small footprints.

Englert was one of H Street's pioneers, opening several trendy bars and restaurants in the past two years. Englert estimated that he spent $500,000 to get Rock and Roll Hotel off the ground -- nearly double the cost to open his businesses in more upscale neighborhoods such as Dupont Circle and Cleveland Park. Most of the money went to rehabilitating the building, with $85,000 for the heating and air-conditioning system.

"It's like you need an advanced degree or an incredibly astute permit person to get the littlest thing," he said. "In reality, you're not going to get a lot of breaks."

But Englert helped prove that people would make H Street a destination. Now he is planning a Belgian restaurant with mussels and frites in the 1200 block of H Street, and an indoor mini-golf place in the 1300 block.

"I know we're going to do well there when all's said and done," he said. "But you have to be a realist and say that's tough going. Really tough going."

Space is another issue. Many of the properties are small and narrow, with the tiniest at about 1,250 square feet -- too small for most national retailers to even consider. The average restaurant needs at least 2,000 square feet. A drug store such as CVS is generally 5,000 to 9,000 square feet. Even a small grocery store such as Trader Joe's claims about 40,000 square feet.

That means most property owners are searching for small, independent retailers to lease the space. But as property values rise, so do taxes -- and rent. And many merchants have found it difficult to sell enough merchandise in their small spaces to pay off the growing rents.

There have been several casualties as well. The pet shop. The bookstore. The women's specialty store, all felled by high rents and slow sales.

"What can you do about that?" Saleem said. "If they can't pay the rent, they aren't coming."
Smokey Maye has owned the building that houses his barbershop, at 1338 H St. NE, since 1999. It's been in business at the same location since 1966. People in the neighborhood know him by name.

In 2005, Maye said, his property taxes were $2,100. Last year, they more than doubled to $5,400. At this rate, he figures he will have to increase his prices by a few dollars just to stay in business.

Still, he said, he is glad that change is coming to H Street.

"It's bringing people down here," he said. "It's just been a few businesses down here for so long."
'I Don't Want to Evolve'

Developer Jim Abdo is building Senate Square, a luxury condo building on 3rd and H streets NE that will begin to deliver this fall. He said the corridor is strikingly similar to 14th Street NW.

Abdo watched change come slowly to the businesses on 14th Street, like the liquor stores that once sold 40-ounce beers and switched to stocking expensive wines instead. They adapted to the needs of the new residents.

"This is a whole new level of buying power that we're bringing you," he said. "Look at ways to respond to that to allow your business to grow, not leave the neighborhood."

But not everyone wants to change. One H Street merchant, who spoke on condition of anonymity for fear of jeopardizing his business, said his core clientele are low-income residents. He said it is easier to leave H Street and follow them than to rethink his business model.

As for the residents moving to H Street? They don't want to shop at the stores there now, he said, even though they might carry products they need. The new folks want stores that look fancy, he said. His is not among them. He figures he can last seven to 10 years.

"I don't want to evolve," he said. "It's the haves and the have-nots, and they would like the have-nots to please leave."

Saleem is trying to bridge that gap. He grew up in the neighborhood, and his parents, family and friends still live there. He doesn't want the moms-and-pops who stuck with H Street during the hard times to leave. But he also wants to see new life breathed into the corridor.

"You may not get what you want today. But they may morph into what you want tomorrow," he said. "It's a whole lot better than it was."

Thursday, June 21, 2007

Feeling Nosy about DC? MD? VA?

Feeling nosy about the District of Columbia?
Feeling nosy about Virginia?
Feeling nosy about Maryland?

If you know someone who might be interested in this list, please forward it on to him or her. And if there's a listing that you're curious about yourself, just let me know ... and I'll show it to you ... just for the hell of it ... no obligation ... *I promise*. Really. (One of the perks of being the friend of a real estate agent ought to be that you get to freely snoop around other peoples' homes!

Developers, Managers See Green Building Perks

Daily Real Estate News June 20, 2007

The real estate industry — most notably the commercial side — is slowly but surely embracing sustainable business practices and green technologies, according to an analysis of the industry by Progressive Investor, monthly newsletter that’s focused on sustainable investments.

"The benefits will make green ubiquitous over the next two years," says George Caraghiaur, vice president for energy services at Simon Property Group, owner of 300 shopping malls.
Developers are using green construction in their projects, real estate consumers and tenants are showing a preference for sustainable buildings, and it’s becoming more affordable to make earth-friendly choices, the newsletter says. What’s driving the trend? Progressive Investor identified these factors:

Energy prices are rising. Developers and building owners are feeling the crunch of high energy and water costs, which, according to the Building Owners and Managers Association (BOMA), constitute 28 percent of operating costs for downtown office properties, and 30.4 percent for suburban properties. They see the quick payback and cost savings energy efficiency and other green building upgrades offer.Construction costs are coming down. Building green no longer costs more. Turner Construction's 2005 Green Building Market Barometer shows it costs a just 0.8 percent more for basic LEED certification, easily recouped through lower operating costs.

Tenants are demanding it. Increasingly, clients and tenants show a preference for green buildings, which have been proven to increase productivity, retain employees and lower absenteeism. The combination of reduced operating costs and more satisfied occupants translates into 3.5% higher occupancy rates, 3% higher rents, and a 7.5% increase in building value, says the McGraw-Hill 2006 SmartMarket Report.

Green gets visibility. Corporations with sustainable business policies are building highly visible green headquarters including Bank of America, Toyota, Goldman Sachs, Hearst, IBM, JPMorgan Chase and Herman Miller. The Freedom Tower, which replaces the World Trade Center, will be LEED-certified.

States are requiring it. Green building is increasingly being mandated. Nine states and 40+ municipalities have passed legislation mandating LEED-certified buildings. Six percent of commercial developments are LEED-certified, and it’s projected to jump to 10 percent of the market by 2010.

REITS Fill Demand for Green Investments

Because there are more green buildings, there also are more choices for investors who want to put there money into an environmentally friendly funds. Some 41 percent of the 300 U.S. real estate investment trusts (REITs) are actively pursuing energy efficiency and green building upgrades and another 27 percent plan to do so.

For now, U.S. investors can gain exposure to the sector through the Forward Progressive Real Estate Fund (FFREX), the first SRI REIT mutual fund, and through about two dozen individual securities, including Simon Property Group (NYSE:SPG) , Weingarten Realty Investors (NYSE:WRI) , Prologis (NYSE:PLD) and SL Green Realty (NYSE:SLG) .

Outside the U.S., leaders include Investa Property Group (IPG.AX), Australia's largest owner of prime grade office space, Lend Lease (LLC.AX), Land Securities (LAND.L), British Land (BLND.L) and SEGRO (SGRO.L), in the UK.

Progressive firms are increasingly focused on urban infill buildings rather than suburban greenfields and incorporating advanced energy efficiency measures, as well as recycled building materials, gray water systems, rainwater capture and green roofs, the report says.

— REALTOR® Magazine Online

Thursday, June 14, 2007

Feeling Nosy about DC? MD? VA?

How Home Buyers Can Make Sure They Get the Best Mortgage

By Ruth Mantell, MarketWatch

RISMEDIA, June 14, 2007-(MarketWatch) - Think you're getting a good deal from your mortgage broker? Try looking at the fine print.Your mortgage broker could be getting paid by a lender to sell you a loan. The practice is perfectly legal.

It's also controversial. Critics complain that brokers looking for a fat check from a lender can lead consumers into unnecessarily pricey loans.

"One thing that consumers need to understand is that a broker's interest is not always aligned with theirs," said Ira Rheingold, general counsel with the National Association of Consumer Advocates. "You need to be very wary. Despite what the broker may say about getting the best loan for you."

Here's how mortgage brokers get paid: They can get a fee from you. Brokers can also collect a premium from a lender that is based on the rate of the loan — the higher the rate the more they make.And that's where the trouble begins, consumer advocates say. Brokers describe themselves as independent contractors, meaning that they provide services to consumers, as well as lenders. Critics charge that brokers sometimes push a pricey product to pocket higher fees.Borrowers don't need to despair, though. Experts say there are ways to make sure you're getting a good deal from your mortgage broker.

1. Do your homework

Some fees and rates are negotiable — so don't say yes to the first deal you hear.

"My first advice would be to shop around. Check with a variety of lenders," said L. Jean Noonan, a partner at law firm Hudson Cook and former associate director for credit practices in the Federal Trade Commission's consumer protection bureau.

Also, consumers should be wary if their broker is offering a nontraditional mortgage that doesn't require full documentation of income and assets.

"Those mortgages almost always carry a high interest rate, and the consumer should be very sure that that's the right mortgage for them," Noonan said. "If they are able to document their income and assets, it's almost always worth doing that and getting a more favorable rate.

"It's important to understand all of the fees, as well as the interest rate, associated with a loan."

An inexperienced or fast-talking broker may not explain it well. A good broker understands his business is largely referral business, and unhappy customers don't give referrals," Noonan said.

2. Bring a buddy

Get help from someone you trust — other than the broker.

"It's fine to bring someone with you who can help stand up for you if you're feeling pressured," Noonan said.

The key is to ask for help from someone who isn't getting paid. You can turn to a home-ownership counselor, or friends and family with professional expertise or at least experience in real estate."Consumers should not rely on brokers, when all is said and done, to find them the best loan to take. They ought to turn to experienced professionals who can give them candid and informed advice," said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America.

3. Don't be shy

It's important to ask questions, experts agree.

"You want to look for the loans that best meet your needs and budget," said Carole Reynolds, a senior attorney with the Federal Trade Commission's financial practices division.

You need to know whether the loan has a fixed or adjustable interest rate, whether it includes a balloon payment, and how soon you could face an interest-rate adjustment.

"You should understand these points before you become obligated because otherwise you may end up in a mortgage that is not truly right for you and that can lead to a payment shock," Reynolds said.And, perhaps most important: Be wary of terms such as "no cost" and "no fees."

"You really need to look into the loan," Reynolds said. "You should be comfortable and understand the terms before you sign."

4. Don't sign under pressure

Take a deep breath, and remember that you are in charge of choosing the best mortgage for yourself.

"When brokers use high-pressure tactics, if a broker presses them to sign a contract, that should be a telltale sign that this broker is someone they should be wary of," Fishbein said.

Don't sign a contract you don't understand just to get the process over with.

"You are paying for settlement services and you shouldn't sign the papers and leave before you understand everything," Noonan said. "Don't rush to the settlement. When a purchase is hanging in the balance, they can still walk away but it is much harder to do. There's a time pressure to close by a certain date."

It's easy to be intimated at a closing. After all, there are many pages of loan documents to review, and some of the language is cryptic or in small type.

"They may feel that they are slowing things down, or they appear dumb if they ask questions," Noonan said. But don't let fear get the better of you when it comes time to choose a loan.

5. Know the score

Before you enter negotiations, look at your credit score. That way you can research loans ahead of time and find out what sort of rates you qualify for. You can get the information from an array of Web sites.

Also, credit scores can be wrong."If you see problems with your credit report, you need to get that fixed," Rheingold said.

Ruth Mantell is a MarketWatch reporter based in Washington.RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Friday, June 08, 2007

Feeling Nosy about DC? MD? VA?

The State of the Market

By Jack Guttentag
The Washington Post
Saturday, June 2, 2007; F23

Over the past two weeks, I have explained that the immediate cause of turmoil in the subprime market has been the halt in house price appreciation and that the underlying cause has been a myopic tendency by lenders to make loans that worked only if prices continually rose. What's the state of the market now?

The pain is uneven. The dozens of subprime lenders that have failed have garnered little sympathy. Put simply, they gambled and lost. Some borrowers fall in that category as well because they were trying to profit from house price appreciation. Instead, they face foreclosure.
Investors in securities issued against pools of subprime mortgages have also felt pain as the market value of these securities has declined. Lehman Brothers estimates the decline at $19 billion. Most of it is concentrated among the riskiest securities, which promised the highest yields. (Few tears are being shed for those investors, either.) Securities rated AAA, which are first in line to be repaid and last in line to take losses, have been hurt very little.

Mortgage brokers have not been significantly affected. A few have lost access to subprime lenders, but most have been able to replace defunct lenders with other lenders.

The big losers are those borrowers who, as unwitting victims of hype and deception, took out mortgages that were unworkable if house prices stopped rising. Now, with values stagnant, many of these borrowers are waiting for the next shoe to drop. They have adjustable-rate mortgages on which the rate will reset to a much higher level.

The subprime market remains open. This is the good news, and it should not be taken for granted. When the international banking crisis erupted in the early 1980s, the market adjustment stretched over a decade, during which there was almost no new lending.

The subprime lenders who remain are the more cautious ones. They are also more likely to be affiliated with other firms with deep pockets, which will help them ride out future market disturbances.

Of course, the profit potential in subprime lending is not what it was. Investors require a higher yield than before, especially on the riskiest securities. This has caused tightening of underwriting requirements, which has effectively lopped off the riskiest segment of the market.

Underwriting requirements are more restrictive. Underwriting requirements are the conditions that borrowers must meet to be eligible for a loan. They are significantly more restrictive now than they were a year ago. One of the most important shifts is the near-disappearance of the 100 percent (no-down-payment) loan.

Periodically, I receive an advertisement from a subprime wholesale lender rep advertising what is available from his firm. (He thinks I am a mortgage broker.) One came to me on April 19, showing that a borrower with a credit score of 620 (which is low) could qualify for a loan of $650,000 with a down payment of 10 percent. In my records, I found a message from the same rep dated June 20, 2006. At that time, he was offering the borrower with a 620 score a loan of $1 million with nothing down.

The 2006 offer was insane, a product of the euphoria created by steadily rising real estate prices. The current rules are no longer based on the inevitability of rising prices.

The prospects for some are poor. If house prices begin to rise again this year, the problems of the subprime market will go away. In 1998 and 1999, we had a similar episode, in which as many as 20 subprime lenders failed. But in 2000, house prices took off, the problems disappeared and few people today even remember the episode.

This time, however, the prospects for a quick revival of house price appreciation are poor. A further weakening is much more likely. Under these conditions, there is an ominous cloud on the horizon: Subprime borrowers who took out 2/28 ARMs in 2005 and 2006 will have their interest rates and payments reset to much higher levels this year and next. A significant number will not be able to make the new payments and won't be able to refinance because the equity in their houses is not sufficient to meet the new underwriting requirements. They will face foreclosure.

Next Saturday, I will discuss what if anything should be done about that.
Jack Guttentag is professor of finance emeritus at the Wharton School of the University of Pennsylvania. He can be contacted through his Web site, http://www.mtgprofessor.com.

Copyright 2007, Jack Guttentag
Distributed by Inman News Features

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