Lance Horsley - DC's Loft Specialist

DC home prices post healthy gain

2010-08-27T14:43:00.000-04:00

D.C. home prices post healthy gain

Washington Business Journal - by Jeff Clabaugh
Existing-home sales plunged nationwide in July, but prices were higher than a year ago with price gains in Washington among the biggest in the nation.

The National Association of Realtors reports July existing-home sales dropped 27.2 percent from June and were down 25.5 percent from a year earlier. Existing-home sales last month fell to the lowest level in more than a decade.

Washington-area sales also plunged, falling 18.4 percent from the previous month. Existing-home sales in Baltimore were down 17.9 percent.

The Realtors group expects sales to be soft for several more months.

"Consumers rationally jumped into the market before the deadline for the homebuyer tax credit expired," said NAR Chief Economist Lawrence Yun. "However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs."

Nationwide, existing-home prices rose 0.7 percent from year-ago levels.

In Washington, the year-over-year price gain was 4 percent, to an average sales price of $351,100. Washington's gain in prices was the fourth strongest among the nation's 20 largest markets, topped only by Boston, New York and San Diego

Read more: D.C. home prices post healthy gain - Washington Business Journal

2010-06-17T15:41:00.001-04:00

Check out the latest Washington, DC Market Minute report for May 2010 from Long and Foster.

D.C. gained more new residents between July 2008 and July 2009 than it did in any other one-year period since World War II.

2010-06-16T10:59:00.003-04:00

WOW! That is a surprising fact! As important and interesting is that DC was also recently named to the Kiplinger's Personal Finance magazine's list of the "10 Best Cities for the Next Decade," based on the region's both actual and potential growth....it landed at #3 behind Austin, Texas and Seattle, Washington.....

Home prices in the Washington area increased by the most in the country during the 12 months ending in March

2010-05-20T13:51:00.001-04:00

Thursday, May 20, 2010, 6:19am EDT

The Washington Business Journal Morning Call

Home prices in the Washington area increased by the most in the country during the 12 months ending in March, the Washington Examiner reported.

Prices for single-family homes increased 6.4 percent -- the biggest increase out of 10 major metropolitan areas, according to CoreLogic, a real estate data company.

D.C.-area home sales jump in April 2010

2010-05-11T15:02:00.001-04:00

Monday, May 10, 2010, 1:23pm EDT | Modified: Monday, May 10, 2010, 4:39pm
D.C.-area home sales jump in April
Washington Business Journal - by Jeff Clabaugh
Read more: D.C.-area home sales jump in April - Washington Business Journal:

Residential sales in the mid-Atlantic region in April were up 25 percent from a year earlier, with the average number of days on the market down 26 percent, according to Metropolitan Regional Information Systems Inc.
The average sales price in the mid-Atlantic was up 4 percent from a year ago, MRIS says.
Prince George?s County had the highest year-over-year increase in sales, up 85.6 percent. Falls Church posted the biggest drop in days on the market, down more than 73 percent from 71 days a year ago to just 19 days last month.

In the District, total dollar volume sold was up 50 percent, the number of units sold was up 58 percent and average days on the market fell 30 percent, from 92 days to 64 days.
In Baltimore, total sales were up 24 percent, and average sales prices rose 10 percent from year-ago levels.

Read more: D.C.-area home sales jump in April - Washington Business Journal:

http://www.bizjournals.com/washington/stories/2010/05/10/daily9.html?ana=e_du_pap

DC increases employment (1/2009-1/2010)!!!

2010-03-26T14:08:00.002-04:00

Did You Know: State Employment Trends
March 26, 2010

By: Arun Barman, Research Economist

* Alaska, DC, and North Dakota were the only three states that saw year-over-year increases in employment between January 2009 and January 2010 according to data from the Bureau of Labor Statistics.
* Nevada, Arizona, Wyoming, and California had the largest percentage yearly decreases in January 2010.

For more information on state employment trends, see State Employment Trends (PPT: 826KB).

http://www.realtor.org/research/economists_outlook/didyouknow/dyk032610ab

D.C. area's population is still blooming!!!- Wasington Post 3/24/2010

2010-03-24T09:58:00.005-04:00

Great news for those of us living and working here! D.C. has weathered the economic storm the past couple of years better than any where else in the country.....D.C. area's population is still blooming : Data shows brisk growth 163,000 gain in 2 years; people...

Washington area population rises faster than other regions

By Carol Morello
Wednesday, March 24, 2010

New census statistics released Tuesday show that the Washington region's population has continued to grow at a brisk pace since the onset of the economic downturn, another indicator that the area has weathered the recession better than other parts of the country. In the two years preceding July 1, 2009, the region added 163,000 people, bringing the total to almost 5.5 million residents -- a growth rate of about 3 percent that is faster than that of any other Eastern Seaboard city. Metropolitan New York, Philadelphia and Baltimore all grew by less than 1 percent during the same period, and the Boston area's population increased by about 2 percent.

FOR the entire article, click on the following link:

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/23/AR2010032301808.html?referrer=emailarticlepg

FHA Policy Changes Effective April 30, 2010

2010-03-19T18:44:00.001-04:00

Article from WWW.TREXGLOBAL.COM as provided to us by The Gregg Busch Team (http://www.greggbusch.com/loanOptions/Featured/FHA%20Policy%20Changes%20Effective%20April%2030%2C%202010/)

Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.

“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”

Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
* The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
* If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
* This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
* The initial up-front increase is included in a Mortgagee Letter released, January 21st, and will go into effect in the spring.

1. Update the combination of FICO scores and down payments for new borrowers.
* New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
* This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
* This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

1. Reduce allowable seller concessions from 6% to 3%
* The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
* This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

1. Increase enforcement on FHA lenders
* Publicly report lender performance rankings to complement currently available Neighborhood Watch data – Will be available on the HUD website on February 1.
o This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
* Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
o Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
o This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
* Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
o Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
* HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
o Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
o Legislative authority permitting HUD maximum flexibility to establish separate “areas” for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

Article from WWW.TREXGLOBAL.COM

D.C.-area homes sold faster, yielded higher prices in February 2010

2010-03-17T11:50:00.001-04:00

Monday, March 15, 2010, 3:49pm EDT | Modified: Monday, March 15, 2010, 5:39pm
D.C.-area homes sold faster, yielded higher prices in February
Washington Business Journal - by Sarah Krouse Staff Reporter

http://washington.bizjournals.com/washington/stories/2010/03/15/daily16.html

A NEW condo project? Really? LANCE QUOTED......

2010-03-17T11:36:00.006-04:00

Friday, March 5, 2010
Commercial Real Estate
The JBG Cos. preparing to start on 14th Street condo project
Washington Business Journal - by Sarah Krouse Staff Reporter

The 14th Street NW corridor has seen a slew of new retail in the last three years some of the citys hottest restaurants, the ever-popular gelato shop and several furniture stores.

View full article

http://washington.bizjournals.com/washington/stories/2010/03/08/story2.html?surround=etf&ana=e_article&b=1268024400^2979111

LANCE'S CONTRIBUTION:
The 14th Street corridor from Logan Circle to U Street has continued to be one most stable residential markets in the city.

“Now that Logan Circle and U Street have converged, it has become an even greater neighborhood,” said Lance Horsley, a Realtor with Long & Foster Real Estate Inc. “The demand there is huge given the retail and all the activity of boutiques and restaurants. People love it. New construction is gone, so we are going to have to deal with a lot of resale in the next few years. We’ve got a shortage and it will only get tighter.”

D.C. housing prices jump 10.5%

2010-02-26T17:02:00.001-05:00

D.C. housing prices jump 10.5%
Washington Business Journal - by Jeff Clabaugh Staff Reporter
Thursday, February 25, 2010, 12:15pm EST

A government report says housing prices in the Washington area posted the biggest year-over-year increase in the nation last quarter, jumping more than 10.5 percent.

The Federal Housing Finance Agency says average prices in the Washington area were up 10.55 percent in the fourth quarter compared to the fourth quarter of 2008. It says average prices jumped 5.63 percent from the third quarter.

For the entire article......

http://washington.bizjournals.com/washington/stories/2010/02/22/daily61.html

The New Good Faith Estimate (GFE). Lets Embrace it!!!!

2010-01-12T12:39:00.001-05:00

A big thanks to Gregg Busch for the following:

The New Good Faith Estimate. Lets Embrace it!!!!

It is a tremendous improvement over what we had. They're not even in the same ball park! It is so good, in fact, that I predict the quiet rumblings of criticism I've heard within the industry will grow louder. Why? Because this is one of those rare, government mandated documents that actually and truly helps the people it purports to help: the borrowers! The 3 page disclosure also breaks out third party fees like title company fees and state taxes.

A quick overview: the new Good Faith Estimate is three pages long. Within those three pages borrowers will find these helpful sections:

Important Dates showing how long the rate and terms of the offered loan are valid and the terms of the rate lock.
Summary of your loan including term, rate, amount, whether it is adjustable, negatively amortizing, subject to a prepay penalty and so on.
Escrow Account explanation and information.
Summary of Loan Charges in plain black and white.
Origination Charges revealing fees charged directly by the lender.
Other Settlement Charges making clear third party fees from the title company. They too are now going to be shopped on their fees and will compete for the buyers business. The new Hud actually breaks down the cost of title and their commission/fee on the title insurance.
Instructions clearly explaining which charges cannot increase at closing as well as any limits on increases for those charges that can change at settlement.
Trade-off Table wherein the lender compares how the payment (rate) and closing fees move in opposite directions for the same loan as the rate moves higher or lower than that quoted.
Shopping Cart giving borrowers an organized way to compare lenders.

This new Good Faith Estimate is transparency, bottom line! Take a look again at those last two items: a Trade-off Table and a Shopping Cart. What is so great about this 3 page document is that the borrowers will have no surprises at settlement or the lender will make up the difference. The borrower will have done their best due diligence in shopping fees which means a faster closing transaction with a happier buyer.

I also expect an even greater share of business to come my way. For a number of lenders out there, this new Good Faith Estimate means their model for doing business is going to change. That benefits the borrowers (obviously) but it also benefits those of us who have been doing business the right way all along. In my next e-mail I am going to explain why now more than ever it is more important for realtors to work closely with their lender when writing contracts. I will also go over some of the main features of the new good faith estimate and how to read it.

WE CAN STILL CLOSE LOANS IN LESS THAN 2 WEEKS!!!!!

WE CAN STILL GET APPRAISALS BACK IN 2 WEEKS!!!!!!!

BUSINESS WILL ONLY GET BETTER!!!

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

Apply online: www.greggbusch.com

Washington DC's condo develpers loose big!!!

2010-01-02T16:22:00.004-05:00

I forgot to post this interesting story by Paul Schwartzman in this past week's Washington Post. Stories on the demise of many of our local developers when the condo real estate market slowed.....

District's developers swagger no longer

By Paul Schwartzman

In the go-go years of the housing boom, in one of Washington's hippest neighborhoods, Scott Pannick built more than 300 loft-style condos, many of them attracting fevered bids even before their gourmet kitchens were installed. (Click on link above for full story)

Washington DC Real Estate in the 2000's- One Story at a time.....

2010-01-02T16:11:00.004-05:00

GREAT way of looking back on the Washington DC real estate market in the 2000's........

Tracing the story of the 2000s, one story at a time

A sampling of headlines and news passages from The Washington Post (click on the link above)

Boom. Bust. Can the market find a healthy middle?

2010-01-02T16:06:00.002-05:00

Great article in today's Washington Post (Real Estate Section):

Click on the link below......

Boom. Bust. Can the market find a healthy middle?

By Renae Merle

The U.S. housing market has been in a slump for nearly four years. Home prices have fallen 30 percent since reaching their peak in 2006, leaving nearly a quarter of borrowers owing more than their homes are worth. Millions of homeowners have fallen into foreclosure.

From 893 to 786 Active Condos in Washington DC in 2 days???????

2010-01-02T15:26:00.004-05:00

Why would there be such a huge drop in Active CONDO listings in the MRIS in just 2 days? I posted on December 30th that there were 893 Active condos which was the lowest number it had been in years. Well today the Active CONDOS in the MRIS are 786. I noted that most of these are Expired....Agents only had a Listing Agreement through 12/31/09 is the reason that these would expire and drop out of Active in the system. It is still quite odd to do searches, regardless of price or location in DC, and see so few available properties!

By the way, here are the Active CONDO AND COOP numbers at the end of each month in 2009 according to the monthly HOUSING REPORT by our local Real Estate Association, GCAAR:

December (2008) 1260
January 1400
February 1420
March 1500
April 1525
May 1470
June 1350
July 1300
August 1200
September 1230
October 1200
November 1125

D.C. Population Set to Break 600,000 Mark

2009-12-31T18:08:00.002-05:00

I just heard on ABC (Channel 7 here in DC) that our population here in Washington DC is increasing and is going to break 600,000!!! This is the first time in decades to be at this population. See post below from the ABC web site (http://www.wjla.com/news/stories/1209/691770.html) Also noted was there are fewer people applying for Drivers Licenses here in "The District". This proves my point to new buyers that a parking space is no longer "required" as it was in the past here in DC. The metro continues to grow as do neighborhoods around metros; lessening the need to have a vehicle. Times are good here in DC!!!!!! -Lance

D.C. Population Set to Break 600,000 Mark

posted 12/31/09 9:28 am

WASHINGTON, D.C. - Washington D.C.'s population is set to break 600,000 again.

Recently released Census Bureau statistics show the city had an estimated population of 599,657 as of July 1. That's nearly 9,600 more than the previous year. It's also the first time in decades that the city has not had a net population loss as residents moved into the suburbs or elsewhere in the country.

The city will get an official head count with the 2010 Census, but the most recent count is the city's highest since 1991 when it was approximately 601,000.

893....can you believe it???

2009-12-30T12:43:00.003-05:00

Yep,.....893!

That is the number of ACTIVE Condos for sale in Washington DC today in the MRIS. This is the first time we have seen the number drop below 900 FOR MANY YEARS!!!

There are a couple reasons for such a low number....

1) LACK OF NEW CONSTRUCTION-New construction ceased several years ago but it has taken the past four years for us to absorb the extra surplus. Few Developers are working on or finishing projects currently and bank-lent money is limited (non-existent) for any new projects.

2) SEASON-This is typically a slow time to list your property so many sellers do not place their properties on the market at this time of year (November-February).

3) LENDING-Many want-to-be sellers have found they either will not get enough from the sell of their current property as a future down payment thus these potential "move-uppers" are stuck for the short term OR even if they have a down payment after selling their current property due to stricter lending many will not qualify for a larger mortgage. These people are stuck for the short term.

4) ABSORPTION- We had a VERY busy year in the DC condo market due to low interest rates, first-time home buyer incentives and stronger consumer confidence; thus many properties were absorbed both new construction and resale.

By the end of November 2009, we had almost 22% less listings than the previous year; down from 1436 in 2008 to 1129 in 2009. A trend continued in the other direction with almost 14% more CONTRACTS year to year from 2008 to 2009. And actual SETTLEMENTS were up by over 8% from 2443 in 2008 to 2640 in 2009.

Home-buyer Tax Credit Update! (11/6/09)

2009-11-06T15:27:00.002-05:00

A BIG thanks to our friend, Brad Cohen, at Mason Dixon Funding for the latest update on the HOME BUYER TAX CREDIT that went into law today.....

Brad Cohen

Vice President

Mason Dixon Funding

800 King farm Blvd. Suite 210

Rockville, Md. 20850

BCohen@masondixon.com www.0points.com

301-354-8266(office)

301-354-2866 (fax)

240-601-7556 (Cell)

Home-buyer Tax Credit Update!

On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time.

To learn what the new tax credit means to you take a look at the concise overview below.

TAX CREDIT OVERVIEW

Who Gets What?

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

What is a Tax Credit?

A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

How Much are First-Time Homebuyers (FTHB) Eligible to Receive?

An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible fort FTHB Tax Credit?

Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.

This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How Much are Current Home Owners Eligible to Receive?

The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?

No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?

Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:

1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.

Are There Other Restrictions to Taking the FTHB Credit?

Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?

Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?

Yes, provided that the child meets the other requirements for the tax credit.

2009 Results are in! DC hits #1 list for AMERICA'S FAVORITE CITIES

2009-11-04T09:36:00.004-05:00

The 2009 TRAVEL + LEISURE America's Favorite City results are in!

This summer, you ranked 30 U.S. cities on their culture, shopping, restaurants, nightlife, and more. Below you can find where DC came out on top:

TYPE OF TRIP-
Cultural Get Away; #1-Washington DC
Family Vacation; #2-Washington DC

CULTURAL-
Museums/galleries; #1-Washington DC
Historical sites/monuments; #1 Washington DC

QUALITY OF LIFE-
Public transportation & pedestrian-friendliness; #2-Washington DC

For dozens of other categories and top place finishers, go to:

http://www.travelandleisure.com/afc/2009/

MARKET INFORMATION (3rd Q Report)- Delta Associates

2009-11-04T09:27:00.005-05:00

The 3rd Quarter Market Information is in!!!
posted at www.DeltaAssociates.com

Some of the highlights (and GREAT NEWS).....
PLEASE go to www.DeltaAssociates.com for the full report.....

1) ECONOMY-Regional Downtown Ended During the First Quarter of 2009

The most recent data available suggests the recession in the Washington metro area ended during the first quarter of 2009 – coming out of this downturn ahead of nation. Although conditions remain sluggish, the worst conditions are behind us, as a slow recovery is underway. Notably, 42,600 net new jobs have been added since January 31, 2009. Although the recession has come to an end, sluggish conditions remain as a slow growth recovery is underway. Despite this, Washington maintains one of the strongest economic bases in the nation.

2) CONDOMINIUMS-Sales Volume Picks Up in Washington to the Highest Quarterly Volume in Two Years; Prices Down but More Moderately than Single Family Homes; Pipeline Declines Further, Product Shortage Seen in DC Metro by Late 2010.

Volume: New unit sales volume (defined as net binding contracts written with security deposits up) in the Washington metro area during the 3rd Quarter was 686 units, the highest quarterly sales volume in two years. In the past 12 months, there were 2,120 sales, which is an increase of 45% from the prior 12-month period.

Pipeline: There are currently 7,128 unsold new condominium units that are actively marketing in the Washington metro area. There is now 3.4 years worth of inventory of product on the market at current rates of sales velocity in the metro area. Arlington/Alexandria and the District are below the metro average and are approaching levels considered “product shortage”.

DELAYED FHA Condo Financing Changes

2009-10-23T17:49:00.001-04:00

FHA notice on delay in FHA condominium changes:

Implementation of FHA’s new policy guidance for condominium project approval and condo unit financing will be delayed until December 7^th2009. The new guidance, to be issued within the next two weeks, will: 1) offer additional leniencies to address the difficult market conditions and 2) augment some portions of FHA Mortgagee Letter 2009-19, providing additional information and clarification.

Until the new guidance takes effect on December 7^th, 2009 lenders may continue to use the Spot Loan Approval guidance issued in Mortgagee Letter 1996-41. Further, the site condo and manufactured housing condo project changes that have already been implemented are not affected by this delay.

To read FHA Mortgagee Letters 1996-41 and 2009-19 please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

FIRST SAVINGS MORTGAGE IS ONCE AGAIN OFFERING 5% DOWN PAYMENT FINANCING FOR WASHINGTON DC CONDOMINIUMS AND HOUSES

2009-10-06T17:44:00.002-04:00

Gregg Busch does such a super job of keeping us updated on the latest loan products....
Here is a new one just in.....GREAT NEWS!!!!

FIRST SAVINGS MORTGAGE IS ONCE AGAIN OFFERING 5% DOWN PAYMENT FINANCING FOR WASHINGTON DC CONDOMINIUMS AND HOUSES. NO MORE HIGH COST FHA LOANS IF YOUR BORROWER IS WELL QUALIFIED!!!!

FEW IF ANY LENDERS ARE OFFERING 5% DOWN FINANCING UNLESS YOU GO THE COSTLY ROUTE OF FHA FINANICNG!!!!

95% FINANING UP TO $729,750 (CONDOMINIUMS LIMITED TO $417,000 WITH 5% DOWN PAYMENT)

FIRST SAVINGS MORTGAGE CAN STILL CLOSE LOANS UP TO $729,750 WITHIN 1 WEEK!!!!!

WE ONLY WORK WITH LOCAL APPRAISERS THAT KNOW AND LIVE THE IMMEDIATE DC AREA THAT ARE SEASONED!!!!!

I OFFER PRE-APPROVAL LETTERS WITHIN 1 HOUR!!!!!!

CALL FOR DETAILS!!!!!

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

As lenders clamp down, credit scores take a hit-USA TODAY-September 22, 2009

2009-09-28T19:50:00.003-04:00

Read this in Tuesday's (September 22nd, 2009) USA TODAY issue......thought it was really on point and current.

As lenders clamp down, credit scores take a hit

By Kathy Chu and Sandra Block, USA TODAY

Long after the economy recovers, millions of Americans will be left with a grim legacy of the recession: damaged credit scores, the three-digit ratings that help determine consumers' ability to get loans and other types of credit.

Even though some consumers have seen their credit scores improve as they trim their debt, others have seen their scores drop significantly because of late payments on bills, foreclosures and rising credit card debt.

Meanwhile, lenders' actions during the recession are delivering another blow to borrowers — even some with pristine credit. Lenders are closing credit card accounts and lowering credit limits for millions of consumers and business owners who have never paid late. Some lenders are reporting mortgage modifications in a way that dings consumers' scores, dealing a setback to those trying to get their finances on track.

More lenders also are adopting a new scoring model the financial industry believes is better at predicting risk — but that could move consumers' scores more than 20 points up or down. The most widely used credit score, the FICO score, ranges from 300 (poor) to 850 (excellent). Consumers with scores above 750 generally qualify for the lowest-rate loans.

"The credit environment has a whole lot of moving parts that weren't there three years ago," says John Ulzheimer, president of consumer education for Credit.com. "Consumers can't just sit still and expect all is well."

From the third quarter of 2006 to the second quarter of 2009, the number of consumers considered "deep subprime" — with such low credit scores they qualify for credit only at steep interest rates, if at all — rose from 34.4 million to 39.8 million, according to research by the Experian credit bureau and Oliver Wyman, a consulting firm.

Meanwhile, the percentage of "superprime" consumers, who are able to qualify for the best rates, dipped in recent quarters, partly because more people paid their bills late, the firms found.

Lenders say they're taking steps to reduce their risk in a difficult economy. Some admit they're concerned about the impact of their actions on consumers' credit scores but say they have no control over how scores are determined.

"Banks have no motivation to take an action that will impair someone's ability to obtain credit," says Claudia Callaway, partner at Katten Muchin Rosenman, a law firm that represents lenders.

But consumer advocates say regulators and Congress need to address lender actions that are unintentionally hurting credit scores. They say that as underwriting standards tighten, even a small change in a credit score could affect what rate consumers get on a loan — if they get one at all. Some analysts also say the fact that consumers' credit scores can fall even if they've never missed a payment or exceeded their credit limits raises questions about the score's usefulness.

"All these changes are new structural changes in the financial system," says Leonard Bennett, a Newport News, Va., lawyer who has testified before Congress about credit-reporting issues. "The ability to predict risk and integrate that into a credit score — based on historic data — is logically impossible."

But Tom Quinn, a vice president at Fair Isaac, which created the FICO credit score, says its data show the scoring formula "is working," because it's able to rank consumers' riskiness.

For now, with little guidance from regulators, lenders are moving ahead with actions that could lower many consumers' credit scores and hinder their ability to get credit. Here's how:

for the rest of the story......click here......

http://www.usatoday.com/money/perfi/credit/2009-09-21-lenders-scores-credits_N.htm

DC Coop transer and recordation taxes start OCTOBER 1st, 2009!!!!!

2009-09-28T17:06:00.002-04:00

Economic Interest Tax on Co-ops Begins Thursday, October 1, 2009

Many of you in the co-operative market in the District are aware, but for those who are not, this Thursday, October 1, the District government will begin charging an economic interest tax on the sale/transfer of co-operatives.

This economic interest tax (some may say recordation tax) of 2.2% will be assessed on the transfer of co-operative units less than $400,000 and 2.9% for transfer greater than $400,000. The rates and consideration numbers were intended to mirror recordation and transfer taxes currently charged on fee simple Real Estate transactions.

Unfortunately, amendments to the legislation this past Tuesday, have made some details and implementation issues of the economic interest tax unsettled

Effective October 1,2009 the District appears to be out of the business of identifying merely Vacant building and lots

2009-09-28T17:03:00.001-04:00

District Class 3 Property Tax Rate to Focus on BLIGHT not Merely Vacant Properties

In a complicated , convoluted, roller-coaster ride of a debate with numerous twists and turns, the DC Council on Tuesday heard our cries and ELIMINATED the CLASS 3 property tax rate on VACANT properties, and created a new CLASS 3 property which focuses on BLIGHTED properties.

Effective October 1, the District appears to be out of the business of identifying merely Vacant building and lots, and now appropriately will begin focusing on identifying BLIGHTED buildings.

The Class 1 Property Tax Rate for Residential Properties will be $0.85 per $100 of assessed value.
The Class 2 Property Tax Rate for Commercial Properties will be $1.85 per $100 of assessed value.
The Class 3 Property Tax Rate for BLIGHTED Properties will be $10.00 per $100 of assessed value.

Since the relevant amendments and legislative language were created on the fly from the Council dais on the fourth reading of the budget, the actual legislative language that passed has not been made public and is likely to be quite messy and will need clarification.

We will definitely keep you posted as this discussion moves forward, but for now, let's just enjoy the moment that our long, hard-fought efforts have succeeded (for now) and the District will begin to focus their attention on BLIGHTED properties, not merely vacant ones. Hopefully, that will keep your clients from being ensnared in a higher property tax rate for merely vacant properties.

Below are links to articles from the Washington Business Journal, The City Paper, and a press release from Council Member Tommy Wells on the issue.

Washington Business Journal

The City Paper
Council Member Wells Press Release

WALLS IN COVERAGE now REQUIRED on Condo Master Insurance Policy!!!

2009-09-15T17:43:00.002-04:00

FANNIE MAE / FREDDIE MAC, FHA / VA ARE NOW REQUIRING WALLS IN COVERAGE ON CONDOMINIUMS MASTER INSURANCE POLICY!!!!!

What is WALLS IN COVERAGE?

Coverage on the interior walls and for personal property held within the dwelling. If a condominium's master policy does not have walls in coverage for the building, then you must inform your purchaser that they need to call an insurance agent (i.e.: State Farm, Allstate, etc) and get a HO-6 policy (known as a renters insurance by most).

If the policy does state that there is walls in coverage it MUST specifically state replacement of improvements and betterment coverage to include improvements that the current owner has made to the unit, otherwise lenders will still ask for a separate renters policy!!!

Many thanks to Gregg Busch for providing this information!!!

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

FHA CONDOMINIUM GUIDELINES...UPDATE!!!!!

2009-09-14T13:38:00.001-04:00

FHA WILL POSSIBLY BE SUSPENDING THE NEW CONDOMINIUM GUIDELINES THAT WERE SUPPOSE TO GO INTO EFFECT OCTOBER 1^ST TO NOVEMBER 1^ST SO THEY CAN WORK THREW SOME CHANGES THAT WERE NEGATIVELY GOING TO EFFECT THE CONDO MARKET.

THIS MEANS LENDERS MAY STILL BE ABLE TO USE THE OLD SPOT LOAN APPROVAL PROGRAM UNTIL NOVEMBER 1ST. FHA SHOULD BE MAKING THE OFFICIAL ANNOUNCEMENT SOMETIME THIS WEEK.

Many thanks to Gregg Busch for this IMPORTANT update!

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

Credit Scores and the 20% RULE!!!!!

2009-08-27T11:15:00.003-04:00

There is SO much confusion on FICO and how to maintain or get a great credit score. Talk to three bankers and you will get three answers....But I did find a tip that I am confident will help each of us......

How much you owe versus how much credit has been extended to you is the second most important factor in determining your score. FOR EXAMPLE, if you've charged $5,000 on credit cards and have $50,000 in credit, your rate is 10 percent, which they say is "ideal" though you can go up as far as 20 percent and still keep a good score. Once you consistently go over 20 percent, you begin to ding your credit score.

Another important point to follow is when you are looking to purchase a property do NOT have more than three (3) lenders pull your credit report within a 90-day period or your credit scores will go down. If you need to "shop" around for the best rate, quote them the FIRST credit score you had pulled and get their quote.

Pepco announces that District of Columbia residents now have the opportunity to purchase Compact Fluorescent Light (CFL) bulbs at reduced prices

2009-08-21T19:33:00.002-04:00

Washington - Pepco announces that District of Columbia residents now have the opportunity to purchase Compact Fluorescent Light (CFL) bulbs at reduced prices from stores within their community. Pepco has selected Honeywell Utility Solutions as the implementation program manager. They will run the energy efficiency and new environmentally friendly green technologies conservation program for residential customers in the District of Columbia.
This is the initial phase of the energy-efficiency program that Pepco will offer to District of Columbia residential customers. The second phase of the program will offer rebates on selected high energy efficient appliances such as window air conditioners, refrigerators and electric water heaters.
More than 40 hardware, drug and food stores are expected to offer the Pepco discount of $1.50 on select single bulbs and $3 off multi-packs. ??All bulbs are ENERGY STAR qualified.
This program supports President Barack Obama's vision for a new energy economy that will transform the way we use energy, said Thomas Graham, President of the Pepco region.

This program will expand the ability for residents to purchase these light bulbs, which save energy, save money and help save our environment.
The initial participating retailers are The Home Depot and True Value Hardware. ??Additional retailers Rite Aid, ACE Hardware, CVS, Giant Food and Safeway stores are targeted for later this summer. ??Customers can check pepco.com periodically to review the active locations.

Pepco, a subsidiary of Pepco Holdings, Inc. (NYSE: POM), delivers safe, reliable and affordable electric service to more than 750,000 customers in Maryland and the District of Columbia.

Brianne Kruger Nadeau
Commissioner, ANC 1B05
http://www.BrianneKNadeau.com

Inclusionary Zoning (IZ) LAW requires developers (10 units+) to offer affordable housing!

2009-08-21T10:23:00.004-04:00

***Special thanks to Cheryl Cort (member of Campaign for for Mandatory Inclusionary Zoning) for this information!***

Inclusionary Zoning started on Friday, August 14. Thanks to Councilmember Graham & Chairman Gray for seeing that the administration finally implemented this important affordable housing program.

After years of delay, on Friday, the Fenty Administration issued the last piece of regulations to put in place the Inclusionary Zoning affordable housing program enacted into law in 2006.? This program will require that any development over 10 units offer 8-10% of the units at prices affordable to moderate & low income households.

Special thanks to Councilmember Jim Graham & Chairman Vincent Gray. Without their unwavering commitment to push Mayor Fenty to implement the regulations, this day might have never come. The Council twice passed laws introduced by Graham & Gray setting deadlines for the Mayor to issue the regulations needed to start implementing the Inclusionary Zoning program that Fenty, as a councilmember, had supported.

The 14th & U Utopia project orginally included affordable IZ units, but due to the Fenty administration' s footdragging, the affordable units were eliminated from the project. While the 2 year delay meant we lost well over 100 units of affordable housing - many in the U Street neighborhood, now we can look forward to any sizable project in the future providing mixed income housing opportunities. Once the economy recovers, IZ will provide an important contribution to maintaining the diversity of our communities.

Thanks again to Councilmember Graham, Chairman Gray, and the rest of the Council to holding firm and ensuring that the Fenty administration finally launched this important affordable housing program.

Looking for affordable housing? Check out: www.dchousingsearch .org
Learn more about IZ at: http://dhcd. dc.gov/dhcd/ cwp/view, a,1243,q, 647468.asp

Cheryl Cort
(member of Campaign for for Mandatory Inclusionary Zoning)

Looking Forward in the Mortgage Market -- August 11, 2009

2009-08-15T11:03:00.000-04:00

Looking Forward in the Mortgage Market -- August 11, 2009

Courtesy of: Jordan Milne of Chevy Chase Bank, a division of Capital One, N.A.

Just when you thought it was safe to go back in the water, Taylor Bean & Whitaker abruptly ceased operations. It is never good news when the fellows in the windbreakers show up, and this time was no exception. In the words of TBW’s chairman, Lee Farkas, “It’s the saddest day of my life.”

Market	Close	Wk Chg
*30-Yr Agency Note Rate*	5.57%	+0.24%
*30-Yr Mortgage Yield*	4.67%	+0.29%
*Note Rate vs. MBS Yield*	0.90%	-0.05%
*Mortgage-Treasury*	1.90%	-0.05%
*10-Yr Treasury*	3.86%	+0.38%
*2-Yr Treasury*	1.32%	+0.20%
*10yr- to-2yr Spread*	2.54%	+0.17%
*Fed Funds*	0.19%	0.00%
*Fed (Aug ‘09)*	0.24%	+0.03%
*Fed (Feb ’10)*	0.81%	+0.20%
*Dow Industrials*	9,370	+198

TBW, ranked 12^th in national origination volume, left at least 600 banks and many independent mortgage companies wondering what to do with their loan locks, and many very qualified mortgage bankers wondering what happened to their jobs. TBW was leading an effort to raise $300 million of private equity to shore up Colonial Bank. That deal fell apart too. Rumors are swirling about the viability of Colonial, a bank that provides 20% of the mortgage industry’s warehouse lines.

The TBW news is a blow to a mortgage industry already struggling with higher interest rates. Friday’s could-have-been-worse jobs report sent Treasury yields to their highs of the year. Futures are pricing in a Fed rate increase by the end of the year. Though the economy could still stumble – where is the real growth going to come from – rates could push higher this week. The market is coming to grips with an economy that is no longer on the ropes. In the months ahead, it is likely that mortgage rates will be range-bound, pushing towards 6.00% when the economic news is good, and falling back to 5.00% when the news is bad.

There are some green shoots in the housing business. Home prices posted their first month-to-month rise in three years. Origination profits are pushing towards 1.00% in yield, after hitting a post-refi low of 0.75%. Mortgage rates are near 5.50% – not a great level, but pretty good nonetheless. Rates owe much of their recent decline to further compression in the mortgage-Treasury yield spread. At 1.90%, the spread is near the year’s lows, and down considerably from 2.25% some weeks ago.

The economy shrank just 1% last quarter. The recession, now in its 19th month, has been the most severe since quarterly numbers were first published in 1947. But it is probably over. Recent reports suggest that GDP will expand an annualized 3% this quarter.

News that the economy’s decline is decelerating helped send stocks higher for a fourth straight week. Stocks had their best July in 12 years, with the S&P 500 up 7.4%. Stocks just had their best five-month run since 1938 – up nearly 50%; the S&P 500 is 19% below levels set before Lehman Brothers' collapse last September. Barron’s, however, warns of a 760x P/E ratio (based on reported earnings), and of a huge rally while two million jobs evaporated. The paper exclaims “that the marginal buyer of equities today may well be the same person who was loading up on real estate during the summer of '06."

You know it’s a bad day when people like the IRS more than you. Such is the case for Ben Bernanke. Americans currently rate the Federal Reserve lowest of any government agency, even below the IRS. In a recent Gallup poll, only 30% said the nation's central bank was doing an excellent or good job, trailing the IRS at 40%. Top marks went to the Centers for Disease Control with 61%, followed by a tie between NASA and the FBI at 58%.

Thanks for your business and have a good week. – Jordan Milne

Thank You,

Jordan Milne

Jordan T. Milne

Senior Mortgage Loan Officer

Chevy Chase Bank, a division of Capital One, N.A.

O. 240. 497. 8533 | F. 240. 497. 8098 | C. 240. 423. 8717

New FHA Guidelines Could Change the Condo Market Forever!!!!

2009-08-15T11:00:00.002-04:00

WOW....my vacation to Brazil was SUPER!!!! So here are a few posts to catch up for when I was away....this is from my friend, Gregg Busch, at First Savings......

AGENTS AND PROSPECTIVE BUYERS BEWARE!!!!! URGENT NEWS!!!!!!

You need to pay attention to some recent changes HUD (Department of Urban Housing and Development) is making that affects condominiums.

In the past, you only needed to satisfy one of the following two criteria?s to finance a condo unit using FHA financing.

1.) The Condo Project has a FHA warranty

- This requires the Homeowners Association of the condominium project to apply and receive a warranty on the project from the HUD.

2.) The unit must pass a questionnaire called a ?Spot Check? done on an individual basis

HUD recently released an announcement that they will be changing the guidelines which includes the removal of ?Spot Check? approvals which means you will only be able to get a FHA loan on a condo if the project has a warranty. (Mortgage Letter 2009-19).

FHA loans now represent more than 25% of all home purchases. If you are selling a condo in a complex that does not have a FHA warranty, you are eliminating 25% of the buyers today. As our current real estate market has shown that when the ability to obtain financing for a property becomes more difficult, values drop.
WHAT THIS MEANS TO YOU IF YOU?RE A CONDO BUYER

Whether you?re looking to buy using FHA financing or not, this should still affect your buying decision. You don?t want to buy a property that will be more difficult sell down the road. If you find a condo that does not have a FHA warranty and you really want to buy it, know that October 1^st is the date the new guidelines go in affect. Also, many lenders will adopt this policy prior to this date, so be sure to check your lender. If you do buy using the ?Spot Check? approval now, I would recommend you actively speak to the homeowners association about making the property FHA warrantable immediately after you close on your purchase.

WHAT THIS MEANS TO YOU IF YOU?RE A CONDO OWNER

Check immediately to see if your condo has a FHA warranty. If it has a FHA warranty, you?re good! If it is not a FHA warrantable complex, speak to the Homeowners Association immediately about getting the complex FHA warrantable. The key is to get your complex a FHA warranty PRIOR to the October 1^st date. Keep in mind that the turn times to get a warranty will be based highly on the amount of submissions HUD receives. Everybody will likely

FHA received a wave of applications and submissions. Try to be ahead of the curve.

IS THIS THE ONLY NEW CHANGE?

I?m happy to say that even though this change could potentially be extremely damaging to condo values, there are some positive changes on the 2009-19 HUD letter.

1.) Direct Endorsement Lenders can approve a project (First Savings Mortgage is a direct endorsement lender)!!!!!

a. This means that a FHA lender can actually do the warranty process for HUD. This is great if your lender is a DE (Direct Endorsement) lender as they can approve the entire project then provide you the financing to close

2.) Site Condominiums will not require a Condominium Project approval

a. Site Condos are single family detached dwellings. These will be looked at almost identically like a standard Single Family Residence to the FHA lender.

3.) Refinancing a condo that?s not warrantable that already has a FHA loan does not require a warranty when refinanced to another FHA lender

4.) No Project Approval is needed for buying a HUD foreclosure condo

What does this mean to existing projects that have FHA approvals currently and the Warranty Insurance?

Projects consisting of three or less units will have no more than 1 encumbered with FHA insurance.

Projects consisting of four or more units will have no more than 30 % of the total units encumbered with FHA insurance.

Please call me with questions. Get your buyers familiar with the changes and closed before the 30^th of September if they are buying an FHA condo and before Nov. 30^th if they want the $8000 first time home buyers credit.

Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com

8444 Westpark Drive, 4th Floor
McLean, VA 22102

Government Regulation Clogs the (LENDING) Pipes; Looking at HVCC and HERA

2009-07-22T15:28:00.002-04:00

It's no secret that many facets of lending and real estate have changed as a result of the credit crisis. In addition to tightened lending practices that resulted from rising mortgage delinquencies, Washington has been heavily involved in altering the way lenders do business today.

Two individual pieces of legislation impacting our business need to be taken into account when determining closing dates for purchase transactions.

Home Valuation Code of Conduct (HVCC) went into effect May 1, 2009. Intended to shield appraisers from undue influence from loan officers and lenders, this legislation installed a "firewall" between those individuals directly involved in the origination of the loan from the selection of and contact with appraisers.

HVCC also requires that borrowers receive a copy of the appraisal a minimum of three days in advance of closing. Part of the kicker here is that "received" is considered, in effect, three business days after the appraisal has been mailed to the borrower.As HVCC requires a firewall between the originator and the appraiser, the time to receive an appraisal has increased, in some cases by as much as two weeks or more. While this may not always be the case, it is important to take into consideration when considering closing dates. Today, conservative closing dates are mandatory to properly manage expectations of all parties.

Housing and Economic Recovery Act (HERA) amends and impacts several aspects of obtaining a mortgage, the disclosures required for borrowers, and the timing of their delivery. This impacts the minimum time required to close, and should any changes be made to a loan application that could impact the Annual Percentage Rate (APR), this could impact the closing date.

Other than paying for a credit report, lenders may not accept any additional fees from a borrower until four business days after disclosures have been provided to or mailed to a borrower. This has the potential to delay several aspects of the application process.

What Now? – While there is more we can discuss on the specifics of these legislative implications, I felt it important enough to let you know now that I would not recommend you write purchase contracts with short closing time frames (30 days at a minimum and ideally not less than 45 days).

-Francki DiFrancesco

DC transfer and recordation tax SURPRISE!!!!!!!

2009-07-17T10:39:00.004-04:00

GET READY TO PAY MORE AT SETTLEMENT FOR THE DC TRANSFER OR RECORDATION TAXES!!!!!
In the past when our DC Clients went to settlement the selected Settlement Company would collect the 1.1% tax or 1.45% tax from BOTH Buyer and Seller (DC) based off the CONTRACT/PURCHASE PRICE of the transaction. (1.1% for residential properties <$400,000 and 1.45% for residential properties >$400,000.00) Things are changing......

On a recent transaction one of our Buyers purchased a foreclosure for $64,000; a steal to be sure! The assessed value for 2010 is over $200,000.00 The nationally known settlement company who we use quite a bit and is phenomenal, collected the usual taxes from both parties. A few short weeks later, DC contacted the settlement company to advise them that the taxes should have been collected on the proposed 2010 assessed taxes for the property, not the contract/purchase price. They explained that this has ALWAYS been the law; it just has not been interpreted this way or enforced. A lot of back and forth went on that I am not going to include here, but I appreciate the settlement companies attempt to get this over turned.....here is the point from the settlement company....

Dear Ms. Williams:

This transaction is a small one and I know Larry Todd has greater issues on his plate. I have been unable to get him to focus on the difference between assessed value, nominal consideration and fair market value. As a result, he has rejected the recording of this Deed without payment of recordation and transfer taxes that he says are due based on the 2010 assessed value of the property, because the sales price is less than 30% of it.

I don't believe that formula applies to this transaction.

Definitions according to the D.C. Code:

Recordation Tax:

The recording of all deeds to real estate in the District. The basis of the tax is the value of consideration given for the property. Where there is no consideration or where the consideration is nominal, the tax is imposed on the basis of the fair market value of the property.

DC Code Citation: Title 42, Chapter 9.

Transfer Tax:

Each transfer of real property at the time the deed is submitted for recordation. The tax is based upon the consideration paid for the transfer. Where there is no consideration or where the amount is nominal, the basis of the transfer tax is the fair market value of the property conveyed.

DC Code Citation: Title 47, Chapter 9.

Nominal Consideration:

In the Final Rulemaking of 1999 it states: "there are no regulations governing the basis on which the Recorder of Deeds may deem consideration paid to be nominal. Under these final rules, the fair market value of the property may be deemed nominal where the consideration paid bears no resemblance to the fair market value of the property".

The Final Rulemaking goes on to state that "under D.C. law, the recordation tax is assessed based on the consideration paid, and the transfer taxes are paid based on the higher of the assessed value or the sales price, unless no consideration is paid and/or the consideration paid is deemed to be nominal."

Further, the Final Rulemaking states that if the consideration paid is deemed to be nominal, the recordation and transfer taxes are then based on the fair market value of the property.

Fair Market Value:

"The most probable price at which a particular piece of real property, if exposed for sale in the open market with a reasonable time for the seller to find a purchaser, would be expected to transfer under prevailing market conditions between parties who have knowledge of the uses to which the property may be put, both seeking to maximize their gains and neither being in a position to take advantage of the exigencies of the other". DC Code 47-802(4)

It appears to me that Mr. Todd is defining "fair market value" as the assessed value of the property, which it is not in an arms length transaction, such as this one.

The assessed value is an element used to determine nominal consideration, not the fair market value of the property.

I do not believe that the D.C. law intended for the Recorder of Deeds office to penalize D.C. homeowners by taxing arms-length transactions in which there is actual consideration and fair market value, because the fair market value of the property is less than 30% of the assessed value.

I believe that it was intended as a formula for taxing non-arms length transactions in which there is no actual consideration of there is a claim that the consideration is nominal, but when the consideration is nominal but there is actual consideration, then the tax is to be paid based on that consideration, if it is fair market value.

Attached are the documents that support that this is an arms-length transaction in which there is actual consideration paid. The contract is proof of this and the appraisal supports that the consideration paid fits the definition of "fair market value". The only other document that I can provide in support of this argument is a copy of the MRIS listing that shows how long the property has been on the market and the reductions in the asking price before a purchaser was found.

I know you are not in a position to overrule Mr. Todd's decision, but I value your opinion. Can you explain to me the flaw in my logic?

Thank you for taking the time to review this matter.

Lowball Appraisals Spark Uproar

2009-07-06T16:23:00.009-04:00

FINALLY the national media is paying attention to the LOW appraisals that have been driving down prices here in DC and costing many of my Clients who are selling TENS OF THOUSANDS OF DOLLARS!!!!

READ ON FROM THE WASHINGTON POST...

By Kenneth R. Harney

Saturday, July 4, 2009

It's by far the hottest controversy in real estate this summer, and it could directly affect the value of your house -- probably negatively -- by tens of thousands of dollars

Click here for full story.

OFFICIAL REPORT on the DC Spring Market

2009-07-01T14:22:00.003-04:00

WOW!!! My apologies for the LONG break, but the SPRING market which is typically March, April and May started early this year (in February for us) and is STILL going STRONG!!! It has been UNBELIEVEABLE!!!!

So besides being my busiest spring market yet, here are some specifics on what has happened....

TODAY inventory on CONDOS is down to 1127 units; which is trending lower. FINALLY we have gotten on pace to absorb most of the new construction that is left (Madrigal Lofts, CityVista and Yale Steam Lofts in Mt Vernon Triangle; Metropole in Logan Circle; Solea, CityScape, Union Row in U Street....) by the END OF THE YEAR! These are some HOT projects that offer some of the BEST product out there at some of THE BEST PRICES!!!!

Since the "stimulus" has not kicked in yet and DC is still feeling the national slow down, once these dollars and programs kick in and we rise out of the recession, we will be extremely short on housing here in DC. I have discussed this for the past year with my Buyers so they know the "deals" with developers will be soon gone. Those Sellers who have NOT been able to compete with the developers will FINALLY be able to sell their properties! For this group, spring of 2010 should be a great time to sell (if interest rates are reasonable AND we see job growth improve).

Delta Associates (www.DeltaAssociates.com), who I quote all the time and respect their research and thoughts above all others, is generally SPOT ON.
Delta CEO Greg Leisch said the dwindling pipeline — now at its lowest in five years — will likely result in a shortage by 2010, causing effective prices to rise. Prices tend to rise when there inventory-to-sales ratio is at three years or less. It is currently at 1.7 years in Arlington and Alexandria and 2.8 years in D.C.

The latest stats from our MRIS posted on GCAAR (through May 2009) show that we have moved ABOVE the 2005 "peak" AVERAGE PRICE of $426.576 to $433,421. The MEDIUM PRICE is at $360,000; below the "peak" MEDIUM PRICE in 2005 of $375,000 but well above the 2006 medium of $354,100, 2007 medium of $350,000 and matches the 2008 medium of $360,000.

I ASSURE YOU that although our CONDO market has remained VERY STABLE, we have moved PASSED THE BOTTOM some time ago. To those that want to understand the location, location, location "real estate 101" meaning applied to DC, buy CLOSE to METRO, with the most ammenites, in the BEST BUILDINGS.

I promise to blog each week for the balance of the year!!!!!!!

Happy 4th of July!!!!!

22WEST WINS 2009 RADA GRAND AWARD

2009-02-06T14:33:00.001-05:00

This is no surprise and a wonderful award for 22West! A project that I have long said represents the best of what DC high-end condo living has to offer!

22WEST WINS 2009 RADA GRAND AWARD

BEST MULTIFAMILY RESIDENTIAL ARCHITECTURAL DESIGN IN THE COUNTRY!

The 10th annual residential architect Design Awards received more than 1,100 entries in 16 categories. Just 44 projects were singled out for accolades, making RADA the most competitive residential architecture awards program in the country. The jury comprised six distinguished architects, including Gary L. Brewer, AIA, Robert A.M. Stern Architects, New York City; William Kreager, FAIA, Mithun, Seattle; Mell Lawrence, FAIA, Mell Lawrence Architects, Austin, Texas; Mark McInturff, FAIA, McInturff Architects, Bethesda, Md.; John Sheehan, AIA, Studio E Architects, San Diego; and John Vetter, AIA, Vetter Denk Architects, Milwaukee. In all, they bestowed 33 Merit awards, 10 Grand awards, and one Project of the Year award.

Grand Award for Multifamily Design:
22 West Condominiums, Washington, D.C.
Robert M. Sponseller, AIA
Shalom Baranes Associates
Washington, D.C.

Merit Award
The Clure Project, Duluth, Minn.
David Salmela, FAIA
SALMELA ARCHITECT
Duluth

Merit Award
Abbot Kinney Lofts, Venice, Calif.
Jim Gelfat
Equinox Architecture
Culver City, Calif.

Merit Award
Morris Square, Charleston, S.C.
Wayne Ramsey Jr., AIA

Lance to become the "Mayor of U Street"??? Maybe not, but U does got sales!!!!

2009-02-05T12:23:00.005-05:00

U Got Sales?

Posted by Ruth Samuelson on Feb. 4, 2009, at 3:17 pm

Washington City Paper; BLOG- Housing Complex; News and Fluff on DC Real Estate

With no open houses, no advertising, and paint still drying, the Moderno’s quickly selling out.

Last weekend, Timur Loynab, sales manager of the Moderno near the corner of 12th and U Streets NW, had six scheduled walk-throughs. The weekend before, he gave seven tours. In a condo-glut market, he’s done no advertising beyond a sign on the side of the building that went up in early January. No targeted fliers. No fancy-themed opening-night party with circulating trays of Champagne flutes. No open houses.

To read the complete article please go to www.WashingtonCityPaper.com OR click on...

U Got Sales?

Lance was highlighted in the article as well......

Find someone who loved U Street even before Obama discovered it. In 2006, Long & Foster real estate agent Lance Horsley was dealt a crushing blow. He’d pre-purchased a condo at View 14, a highrise still under construction at 14th Street and Florida Avenue NW, but the building didn’t sell, and developers turned it into rentals, nullifying his contract. Horsley, who says he would like to be “the mayor of U Street,” packed up his dreams and checked out 22 West in the West End and a few other spots around D.C. None gave him the U Street cred he was looking for. “I’m continually scouring for not only new buildings…but I’m also just looking specifically in that area for great projects,” he says. When Horsley got wind of the Moderno and its nice appliances and finishings, he knew he was ready to sign some papers. He purchased the largest penthouse in the building, with about 1,500 square feet and a deck with views in both directions. Horsley was so jazzed, he brought in three more clients to buy up some of the building’s most expensive units, all based on plans alone. So 2004!

$15K tax credit for HOME BUYERS

2009-02-05T12:21:00.000-05:00

Thursday, February 5, 2009, 9:09am EST

Isakson amendment gives $15K tax credit to homebuyers

Atlanta Business Chronicle

The U.S. Senate on Wednesday unanimously approved an amendment to the economic stimulus bill by U.S. Senator Johnny Isakson, R-Ga., that gives a $15,000 tax credit to anyone who buys a home in the next year.

Isakson’s amendment would provide a direct tax credit to any homebuyer who buys any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.

“It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous,” Isakson said. “We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history and repeated a method that worked by adopting this amendment.”

In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson said he believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Isakson has not made a decision about his vote on the overall economic stimulus legislation.

If your buying a condo or loft in DC....you need to contact me!!!!

2009-01-23T10:53:00.002-05:00

5 Top Blunders of Internet Home Buying

How to avoid the common pitfalls of online real estate searching

By Matthew Bandyk
U.S. News & World Report

Posted January 7, 2009

While the painful real estate swoon appears likely to extend well into 2009—at least—the number of Americans using the Internet to find the home of their dreams is poised to keep on climbing. According to the 2008 National Association of Realtors Profile of Home Buyers and Sellers, 87 percent of home buyers used the Internet to search for homes in the past year. That's up steadily from 84 percent in 2007, 80 percent in 2006. But despite its mounting popularity, the Internet home-buying process can present a host of pitfalls. To help make your online real estate searching more effective, here's a look at the top five Internet home-buying blunders and what you can do to avoid them.

1) Assuming you can do it all yourself. The Internet allows users to handle for themselves many of the tasks that could once only be performed by real estate agents. The NAR profile, for example, found that the number of home buyers who first learned of their homes on the Internet has been rising in recent years—to 32 percent in 2008, up from a tiny 2 percent in 1997. Accordingly, the number of home buyers who first learned of their homes through agents has been declining—it was at 34 percent in 2008, down from 50 percent in 1997.

But although the Internet can provide heaps of helpful tips and research, it would be a mistake to assume that the Web is all you need to buy a house—unless you are an experienced real estate investor. The process of purchasing real estate can be extremely complicated from a legal standpoint, and it's easy to make a mistake if you don't have an expert advising you. And when it comes to something as expensive as real estate, those mistakes could cost you thousands of dollars. "Doing all the paperwork yourself is a huge mistake," says Joshua Dorkin, CEO of BiggerPockets.com, a real estate networking and information site. "There are so many things you can miss on a contract."

2) Looking too narrowly. The sheer amount of information about the real estate market online can be overwhelming. As a result, buyers can be tempted to stick to just one or two popular real estate search engines, like Realtor.com, for their research. The problem with doing that, however, is that you're missing out on the biggest advantages that the Internet offers.

First, you're closing yourself off to a smaller cross section of the homes that are out there. "A lot of the sites aren't comprehensive and don't have all of the new listings," says Pat Kitano, a cofounder of Domus Consulting Group, which works with real estate brokerage firms on technology marketing strategies. Don't assume that because a house is on one real estate website that it is on them all, says Greg Healy, vice president of operations at ForSaleByOwner.com. "It's still very fragmented," he says. Healy recommends using several websites to get a more complete picture.

Second, you miss all the breaking, up-to-the-minute information on the housing market that can make you a smarter consumer. Blogs have become a popular resource for real estate agents and others to post information as it happens. "If consumers are interested in a local area, they should find local real estate bloggers who know this breaking information," says Kitano.

3. Ignoring the indies. One area that major real estate search engines often overlook is the market for homes sold by the owners. "A lot of people forget to think how many homes are sold without agents. The current estimate is that 20 to 25 percent of homes are" listed by owner, says Healy.

Your dream house could easily fall into that 20 to 25 percent. So how do you bring homes sold independently into your online searches? "Craigslist is one of the best resources," says Dorkin.

4. Falling for fake listings. Remember, the Internet is a giant playground for scammers, and unfortunately they have penetrated the world of online home buying as well. Combine big dollars for online advertising and a lot of people searching for homes, and the result is a proliferation of fake home listings. There are a number of red flags to look out for. "If there are no photos [of the house], that's a big warning sign. That's just people trying to collect page views," says Healy. But even if there are photos, it's not guaranteed to be legitimate. Legitimate websites will put watermarks on their home photos to brand those photos as their own. If a home's photos have several different watermarks on it, then you can guess you are looking at the work of a scammer.

5. Putting too much stock in home valuation websites. Sites like Zillow.com and Cyberhomes.com have changed the way people buy homes by putting pricing information at buyers' fingertips. But they're not infallible. Don't assume to know what the value of a home should be based on what these sites tell you about the neighborhood. There are many elements of a home's value that home valuation sites cannot incorporate. "Take their values with a grain of salt," says Dorkin. He recommends using this information merely as a range. Do other research to narrow that range. For example, walkscore.com can tell you the number of amenities within walking distance of a location—those are some of the tangibles that can raise or lower the value of a home.

Washington, D.C. Tops List for Real Estate Buys (2009)

2009-01-23T08:52:00.000-05:00

Washington, D.C. Tops List for Real Estate Buys (2009)

The nation's capital leapfrogged London this year as the world's best city for real estate investment. With the federal government on a path to grow bigger and increase spending, the new programs will need offices and its employees will need homes.

Forbes magazine turned to the Association of Foreign Investors in Real Estate for the list of where its member investors are finding the best opportunities around the world.

In normal times, financial capitals, New York City and London, vie for first place. Today, both may even be a little grateful to come in second or third. "There used to be a rivalry between New York and London," says Kenneth Patton, divisional dean of the New York University Schack Institute of Real Estate. "The subject has shifted to the fact that we're both in the same lifeboat, and maybe it's leaking."

Here is the list of the world’s 10 best place for real estate buys:

Washington, DC
London
New York City
Tokyo
Shanghai
San Francisco
Los Angeles
Paris
Houston
Singapore

Source: Forbes, Matt Woolsey (01/21/2009)

WOW what a few months it has been!!!! Great article from December 22nd Newsweek as well!

2008-12-19T14:33:00.003-05:00

WOW!!!! What a crazy roller coaster ride it has been for the US and the world these past few months! World credit crisis, Obama elected as new US President, house-hold name sake firms crash and burn, retailers slashing prices 50-90%, no commercial, student or auto loans available, etc. etc. etc. Well, here is some good news on the home front:

Posted Saturday, December 13, 2008 9:10 AM
A Buyer’s Market at Last
Newsweek
By Linda Stern
December 22, 2008 issue
Sunday Open Houses are starting to look a lot more attractive, and it’s not just because the sellers baked brownies and slapped on another coat of paint. Since 2006, the peak of the housing boom, prices have dropped nationally by 18 percent and the rates on 30-year fixed mortgages have fallen from 6.8 percent to 5.5 percent. That means the average monthly mortgage payment has dropped from more than $1,000 to $894. The bottom line? Says Rich Arzaga, an independent financial adviser who teaches real estate investing at University of California, Berkeley, “Money is cheap, the homes are affordable, and sellers are really very desperate.”
That doesn’t mean you should run out and buy a house today; you can take your time to find the perfect home. The market is likely to bump along the bottom for a while, say analysts, and some markets may not hit their absolute rock-bottom prices for weeks or months—or even, in some vulnerable markets, years. But if you’re a first-time home buyer or a preretiree looking to line up your place in the sun (and you’re lucky enough to be able to afford one in this economy), start shopping now. Here’s why.
Good deals for snowbirds. Retirement hot spots like Florida, Nevada and Arizona have been particularly hard hit with falling prices. There are more than 21,000 homes for sale in Vegas; more than 5,000 in Boca Raton, almost 15,000 in Phoenix. That means lots of choice and room to bargain on price. If you’re intending to move to one of those areas, it makes sense to vacation there this winter and start checking out the market. In the three to five years it takes you to relocate, prices and rates are likely to solidify. There are already signs of slowing inventories and firming prices in some spots, like San Diego. But be careful: if you buy into a condo development that has many empty units, you can expect your monthly condo fees to rise significantly, to cover all those no-shows. And don’t count on rental income in those communities-in-crisis.
A bird in the hand. Don’t wait for the government-backed 4.5 percent rate that Treasury Department sources floated recently. It may never materialize, what with opposition from troubled banks and existing homeowners, and skepticism that it is the economic tool most needed now. Current rates are grazing their 45-year lows as it is, says Keith Gumbinger of HSH Associates, a mortgage-research firm. And they are as likely to head back up as they are to fall further.
Free money. First-time home buyers who ink their contracts before July 1, 2009, can claim a $7,500 tax credit to help them muster up a down payment. It’s really a zero-interest loan, repayable over 15 years with your annual income taxes. First-time home buyers can also withdraw money from their Individual Retirement Accounts penalty-free (but not tax-free) to make a down payment. They can also take some tax-free money out of their Roth IRAs to buy a home.
But some serious prep work is in order. As the sick housing market heads into typically slow winter, there’s time to amass a down payment (10 percent is good, 20 percent is much, much better) and get your low credit score up over 680, the new minimum level to qualify for a decent loan now. First-time and second-home buyers should take their time to explore what’s out there, and an extra moment to enjoy the one other advantage they have now. They can buy when they want, without worrying about selling a house in this market.

Plenty to Coax Home Buyers Back To the Market By Elizabeth Razzi

2008-09-23T15:29:00.004-04:00

WOW! There is SO much going on to distract us during our buying or selling process. The current financial crisis meltdown has everyone talking and boy are the airwaves and papers full of crisis topics. In the middle of this storm, let's take a step back and focus on what is happening right now here in the DC real estate market. A recent article in The Washington Post has lots of positive, helpful information for "on the fence buyers", as well as the rest of us!

Plenty to Coax Home Buyers Back To the Market

By Elizabeth Razzi
Sunday, September 7, 2008; F01

If you've been watching for the fleeting, best time to buy a home, this fall may be it, especially if you're a first-timer.

That's not because all is suddenly well with the housing market. It's not. But there are signs that things are starting to stabilize. Pair that with limited-time-only offers from the government, and this fall's market looks awfully tempting for buyers.

For example, even though the Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas such as Washington, it's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.

Because it's one of the few remaining alternatives for buyers with low down payments, the FHA is a mainstay of the mortgage market now. It accounted for 29 percent of all applications accepted by lenders in July, according to the Mortgage Bankers Association. The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. If you're scraping dollars together for a down payment, try to set your closing for the end of this month.

If you're going to need an FHA mortgage from $625,500 to $729,750, start touring homes now, and make sure to close by the end of the year.

Also keep an eye on the expiration date for the new tax credit of up to $7,500 for first-time home buyers. It requires that you close on the home no later than June 30, 2009. That may seem like a long way off, but it will loom larger come spring, traditionally the busiest time for real estate sales.

It's reasonable to expect title companies, loan officers, home inspectors and others involved in real estate closings to be swamped as the deadline nears. Get your purchase contract signed -- and your loan application submitted -- no later than the end of May; earlier would be better.

This so-called tax credit will shave $7,500 off your federal tax bill due April 15. If you don't owe tax, you'll get the money as a refund.

But it's not exactly a tax credit; it's more accurately a no-interest loan because it has to be paid back to the IRS. After two years, you start to repay the money by adding $500 to each year's income tax bill. If you sell the home during the 15-year payback period, you have to pay the outstanding balance out of your sales proceeds. If you sell for a loss, the IRS will forgive the debt.

The payback requirement has drawn criticism and even some recommendations that buyers turn down the $7,500. But I see no need to abstain.

Here's why: Your tax situation is going to be changing so dramatically after becoming a homeowner that the payments on that tax credit/loan will simply add one more ingredient to a complicated soup. For most people, becoming a homeowner triggers their first need to move from simple, one-page EZ tax forms into the granddaddy Form 1040 that allows individual deductions, such as mortgage interest and property taxes.

New homeowners can get an immediate benefit from the credit -- and other tax breaks -- by filing a new W-4 form to have a smaller amount of tax withheld from their pay. When payback starts in two years, another slight adjustment to your W-4 would make payback relatively painless.

More cash in the paycheck can help new owners adjust to the myriad new expenses (tools, repairs, unexpected bills) that come with homeownership without resorting to expensive credit card debt.

If you haven't owned a home for three years (the government's definition of a first-time buyer in this case) and your income qualifies for the new tax credit, I say take it.

That is, take it, unless you're buying in the District. First-time buyers in the District can get a better deal -- a real $5,000 tax credit that doesn't have to be repaid. It's available to buyers with modified adjusted gross incomes of up to $90,000, or $130,000 for couples filing jointly. (The credit is reduced once income hits $70,000 for singles or $110,000 for couples.) And the "first-time buyer" definition is looser, too. It's a one-year restriction on prior ownership in the District, even if you have owned a home somewhere else for years.

The law says you can't claim both tax credits, so if I were a first-time buyer in the District, I would go with the smaller amount that doesn't require payback.

These government incentives happen to be peaking as we enter the second-busiest season for Washington area real estate, September and October. The pickings this fall are about as bountiful as they're going to get. Inventories remain swollen, and sellers still expect to pay buyers' closing costs or offer other incentives. But there are signs that inventories are starting to shrink, especially in Loudoun and Prince William counties, which have experienced some of the worst of the foreclosure crisis locally.

Consider recent inventory trends reported by Metropolitan Regional Information Systems, the local multiple-listing service.

In July 2004, in the throes of the boom, homes were selling almost as fast as they came on the market. There were only 1.1 to 1.5 new listings for each sale throughout the area.

In July of 2006 and 2007, as inventories were building rapidly, that ratio of new listings to sales ballooned, peaking at 2.26 in Fairfax, Arlington, Alexandria and Falls Church; 2.77 in Loudoun County; and 3.15 in Prince William County, Manassas and Manassas Park.

That ratio now has shrunk significantly. In July, there were only 1.44 new listings per sale in Fairfax, Arlington, Alexandria and Falls Church; 1.35 in Loudoun; and 1.26 in Prince William, Manassas and Manassas Park.

The ratio remained more stable through boom and bust in the District and Montgomery County. In Prince George's County, however, where the bust hit later than in Loudoun and Prince William counties, the ratio rose in July compared with a year ago, with 2.79 new listings for each sale. That market isn't stabilizing yet. But things are looking promising elsewhere.

Interesting article from FORTUNE MAGAZINE..On the path to a housing rebound!

2008-06-25T11:56:00.001-04:00

On the path to a housing rebound

The pain that homeowners and homebuilders are feeling now is a sign that things are going to get better.

By Shawn Tully, editor at large

Last Updated: June 24, 2008: 12:23 PM EDT

NEW YORK (Fortune) -- The news that housing starts have fallen to their lowest level in 17 years sounds like one more reason to be depressed about the shrinking value of your home. In fact, it's an almost certain sign that the path to a housing recovery is finally in sight.

If prices are going to stabilize, let alone rebound, the United States needs to produce far more first-time home buyers than new houses. That's the only way to tame the glut of "For Sale" signs dotting front yards from the Inland Empire of California to the Gold Coast of Florida.

Builders constructed far more homes from 2002 until 2006 - the peak bubble years - than could possibly be absorbed by the normal growth in households.

As a result, the market is now swamped with one million new and existing homes for sale that aren't occupied, and hence need to sell quickly. That's a multiple of the figure in most downturns, and it testifies to the duration and girth of the bubble.

"For the recovery to begin, builders need to eliminate the standing inventory of finished, unoccupied new homes," says Mike Castleman, founder of Metrostudy, which assembles sales data on four million subdivisions across the U.S.

The massive overhang of unsold inventory has remained stubbornly high. Sure, builders cut back, but sales dropped just as quickly.

Now that excess supply is finally beginning to shrink. In April, the number of new homes for sale stood at 456,000 according to the U.S. Commerce Department, still a big number, but 93,000 below the mountainous figure a year ago.

The return of the first-time buyer

The key player in any recovery scenario is the first time buyer. The housing market operates with a pronounced laddering or ripple effect. When entry-level buyers flood the market, they not only stimulate production of new homes, they purchase existing homes. Those purchases, in turn, allow the sellers to move up to bigger houses.

But when the first-timers are absent, the entire buying chain gets frozen.

Today, newbies are coming back. Why? For the first time in years, entry-level homes are affordable. Builders have slashed prices, and what they're building tends to be far smaller than the McMansions of the boom, selling for far lower prices. KB Home's average selling price dropped to $248,0000 in its February quarter, versus $267,000 a year earlier. In 2006, KB's basic model in Victorville, Cal., a former boomtown east of Los Angeles, took up as much as 3,800 square feet and sold for $328,000. Today, its stripped down offering goes for $220,000, at less than half the size.

So the first time in a decade renters can carry the mortgage payments and taxes on a new house for what they're paying a landlord. Call it the New Affordability.

Here's how the numbers play out: Single-family housing starts are now running at fewer than 500,000 a year. The normal demand for housing, based on immigration and household formation, is around one million units.

We won't get back to that figure for a while because so many people rushed to buy homes during the boom.

But with first timers returning, sales should rise to almost 700,000 units by the end of next year, according to Bernard Markstein, senior economist for the National Association of Homebuilders. That means sales will soon exceed new production by as much as 250,000 units a year.

That margin forms the foundation of the housing revival.

Movin' on up

Step 1: First, the return of first-time buyers will shrink the overhang of new houses for sale.

Step 2: Second, because so few new homes are being built, first-timers will start buying existing homes from owners who want to move up but have been trapped by the dearth of buyers. Their improved fortunes, though, come with a big caveat: The prices of new homes are now lower than comparably-sized existing homes. It's as if used cars are selling for more than new ones. That can't last. So move-up buyers are going to have to accept less than they had hoped to get for their current homes.

They'll get a big break as they trade up, however. Unless they bought at the height of the boom, they'll still sell at a profit. They can then use that equity to buy bigger homes at bargain prices. During the bubble, homebuilders started pushing up home sizes to 3,500 square feet or more. It's those behemoths that are selling for the steepest discounts today.

Step 3: Next, housing starts should start rising, probably next year. The increase, however, will be slow and gradual. For the next two years at least, homebuilders will compete ferociously with existing home sellers for customers.

Step 4: Eventually, the glut of existing homes will disappear as well. The excess of new-home buyers over new homes being built makes that inevitable. But the oversupply is so enormous that the healing process could take as much as three more years. Only then will prices in former bubble markets start rising again.

What could go wrong?

One event has the potential to slow or even derail the recovery: A sharp rise in interest rates. Right now, the first-timers are gorging on 6% loans guaranteed by the FHA. But rates may not stay there.

If they rise to 8% or higher because inflation rebounds, it would take a far bigger drop in prices to make new and existing homes affordable.

The New Affordability is now in place. But if rates rise, we'll have to establish a New New Affordability - at even lower prices.

First Published: June 24, 2008: 10:44 AM EDT

Find this article at:
http://money.cnn.com/2008/06/24/news/economy/tully_housing.fortune/index.htm?postversion=2008062412

DC spring market PLUS Location, Location, Location...

2008-06-24T10:21:00.001-04:00

WOW! I am SO glad summer is here so we can get a little R & R! My team had such a busy spring real estate market here in DC! Great product in great locations moved quickly, many with multiple offers! So goes the spring market in DC. The reason for some properties to lag on the market while others have multiple bids STILL comes back to location. Part of that location equation that we hear less about, but is VERY important is the product. Try to purchase the BEST product in the BEST area for a conservative better-long term investment. We say MANY properties that were purchased in the past 3 years (since the market reached it’s peak frenzy) sell this spring market (or last spring as well) for MUCH more than they were purchased! These are LOCATED in the BEST areas! Areas where people REALLY want to live; HAPPENING areas with boutiques, restaurants, stores, amenities...this part of the LOCATION equation remains constant through time. Focus on these areas in DC and you will have a GREAT investment. (And please hang onto these properties for “long term”, meaning 5 years+) Some ‘newer” HOT areas in DC are Logan Circle, U Street, Columbia Heights, & Mt. Vernon.

Condo Living-Spiffed Up For a Sale- Lance contributes

2008-03-29T19:02:00.003-04:00

I have stress the importance of staging to my Sellers ALWAYS. Read on about my Client, Sarah and the success we had when she staged her unit for sale........

Condo Living: Spiffed Up For a Sale
YOUR CONDO SITS by a Metro station, and has two huge bathrooms and a great dishwasher. It's going to be a breeze to sell it, right? Maybe not. Besides the housing slump, sellers have to consider how their pads look and feel to potential buyers before putting up a "For Sale" sign.
That's why they're often hiring stagers. These design pros come in and organize, decorate and sometimes clean a property to make it look better to house-hunters. "Real estate is all about marketing," says Lyric Turner, a professional stager. "If you have $7,000 to invest in your property, you could renovate a bathroom or maybe refinish hardwood floors. But with the same money, you could also stage a three-bedroom house. It affects the entire property, not just one room. It's a total overhaul makeover."
Turner owns Red House Staging and Interiors in D.C. and is an accredited staging professional. She says staging gives sellers some control over the stressful experience of putting their pads on the market. "Three things come into play when you're selling your home," says Turner. "Two of them you have control over; the third is the market. You can control the price, and you can control how it looks. The agents help you determine the correct price. You are responsible for how it looks," Turner says.
For those not sold on the idea of spending money to have someone redecorate a house they're ready to leave, consider this: Stagedhomes.com, a Web site for the industry, claims the average time a U.S. property that hasn't been staged stays on the market is 161 days. Staged homes spend an average of 33 days or less on the market.
That's what happened for 38-year-old Sarah Watkins, who owns U Street's Caramel Boutique. She tried to sell her vacant, sans-furniture 1,060-square-foot condo near the shop in 2005. But after a few months with no nibbles, she decided to rent the place out. Two years later, in September 2007, she was ready to try again.
"I talked to my agent about staging because I was desperate to sell," Watkins says. She hired Turner's company to assist. She suggested Watkins move most of her own furniture back into the empty space. Then Turner worked her magic, creating a more neutral feel to appeal to a wider range of potential buyers. "She strategically placed things in the kitchen," says Watkins. "There was a space between the top of the cabinets and the ceiling, and she put objects up there to make it feel more spacious." Other tricks included arranging furniture in ways that made the rooms look brighter and roomier.
In her new place across the street, Watkins says, "I lived with [nothing but] my futon and a chair for about five weeks, but it was worth it." Watkins had an offer on her one-bedroom condo within two weeks. She sold it for the asking price of $449,000, and says she would ante up for a stager again. "Staging shows the buyer the potential," says Watkins. "When you walk into a vacant space, you can't always see the possibilities."Stagers can also change the look and feel of still-occupied properties. "People are looking to put their own dreams into your home," says Realtor Steve Bachman of RE/MAX Gateway in Chantilly. "They're not buying your hobbies and photos."
Staging neutralizes a space, helping folks at an open house envision themselves living there someday. When showing clients a very lived-in property, Bachman tells customers: "'When these folks leave, all of this stuff will be gone.' But if you stage it so people don't have to make that mental leap, that's much better."
Such quickie makeovers don't have to cost a whole mortgage payment, either. One can just go for an in-home consultation with a stager (typically $150 to $250 per hour). In an occupied house, a stager will make suggestions, perhaps recommending removing personal belongings or giving options for furniture placement for better flow. Often sellers take it from there, doing the work themselves.
Other times, sellers hire a stager to complete the whole project, which can cost more, depending on many factors. In a vacant space, pros may recommend furniture rental, which can add thousands of dollars to the bill. But sellers almost always recoup that money at the settlement table. A 2003 survey by HomeGain.com (an industry Web site) claims that sellers who stage will see an average return on investment of 343 percent.
Watkins spent about $1,800 to stage her place. "It was more money I was putting out to sell it, but it sold, instead of me paying the mortgage while it stayed vacant," she says.Many real estate agents believe so strongly in staging that they will bring a stager in as part of their selling package. If sellers shy away from the expense, some agents are willing to work the cost into their contract so that owners don't pay until closing.
Sometimes staging is simply about de-cluttering. Stager Laura Caron, who owns Positively Simplified, a residential organizing company in Burke, Va., says like many things in life, presentation is everything. "You don't want to open the linen closet and see dishes in there. That sends the message that there is not enough room in the kitchen," she says.
"I tell people that whenever a buyer opens the door, it needs to look like a store," says Caron, who says staging something as small as a closet goes a long way toward luring potential buyers. "When closets are beautifully colorized, with nothing on the floor and everything sorted in length order, it sends a powerful message."
But there is such a thing as cleaning up your place too much before trying to unload it. Turner says kitchens are a good example.
There's been something driven into people about decluttering counter tops, and then they look too vacant. There's nothing left to catch the eye. Often, I tell people to add stuff back into the kitchen, like a decorative bowl or some nice cookbooks."
And what about those makeover TV shows like "Flip This House" and "Get It Sold" (see page 3)? Can they teach you how to DIY? Maybe. "I watch 'em all the time," says Realtor Lance Horsley of Long & Foster in D.C. "But being able to translate it into your own space is a different thing." Horsley says staging helps sellers hide a property's flaws and accent its strong points, which can be tough to do. "I think we can learn something from them, but I can't watch a program and then go back and redo my house."
Some people hire stagers even if they aren't selling. They may just like the clean look it produces or yearn to live in a house as fresh and uncluttered as a Pottery Barn catalog. Turner says stagers often offer consultations to homeowners who have no intention of selling, but she warns, "The way you live in a home and the way you stage a home you're trying to sell are very different. Everything that is there in a staging is for decor, and that's not a practical way to live."
But she agrees there are ideas to take away from a stager, like how to minimize clutter, make a better traffic flow or create spa-like baths or colorful kitchens. No matter why they consult stagers, homeowners who use stagers should be prepared to take the advice they're given. Turner says nothing is worse than a reluctant client.
"All I'm asking people to do is invest a little bit of money, maybe buy some new bedding, throw pillows and candles," she says. "I tell them to look at staging as an investment. You'll get to keep these things when you're done and take them to your new home."

Friday, March 28th, 2008
Written by (Washington Post) Express contributor Lynn Thorne
Photos courtesy Red House Staging

DC defies home-price drop

2008-03-26T15:05:00.003-04:00

As a constant advocate of DC and the great real estate investment opportunities here, this article from today’s (March 26th, 2008) The Washington Times reinforces the great financial benefits AND stability of purchasing in the District. What a GREAT place to live!!!!!

Article published Mar 26, 2008-The Washington Times
D.C. defies home-price drop
By Gary Emerling

The District has bucked a nationwide trend of rapidly falling home prices — the latest evidence that the city is faring better than its suburban counterparts during a national economic downturn. Home prices in the District rose by 6.4 percent in the past year, while prices in other major jurisdictions dropped dramatically, according to Metropolitan Regional Information Systems. The outer suburb of Prince William County saw the biggest price drop of 25.7 percent. The successful housing market is one reason for the District's relatively firm financial footing, which officials also attribute to fiscal discipline and a strong commercial tax base. And while other jurisdictions increased taxes or raided state savings to close budget deficits in the midst of a struggling national economy, the District has emerged as among the more fiscally responsible local governments in the region.
Stephen Dinan: McCain supports limited federal aid in solving economic woes
Buying or selling in the greater D.C. area? Check out TWT's Home Guide"That was something that would not have been looked at with [anything] other than laughter years ago," said D.C. Council member Jack Evans, Ward 2 Democrat and chairman of the council's Committee on Finance and Revenue. Development projects like the Verizon Center, the new baseball stadium and the Washington Convention Center have helped anchor a commercial property tax base that serves as a "huge element of stability" for the city, said Robert Ebel, the District's deputy chief financial officer for revenue analysis. City Administrator Dan Tangherlini, who helmed the development of Mayor Adrian M. Fenty's fiscal 2009 budget proposal, said it was such "targeted investments that have contributed to this being a vibrant city and an interesting city" that people want to come to and live in. "That's probably why we'll do well during the economic downturn," he said. "But we can't rest on that assumption." Mr. Fenty's $9.4 billion budget for fiscal 2009 contains $5.66 billion in local, nonfederal funding that is only a 1 percent increase from the amount he proposed in last year's spending plan. Mr. Fenty, a Democrat, said the spending plan is "fiscally conservative" and the city's financial state is a far cry from the 1990s, when the District teetered on the brink of insolvency and was placed under a financial control board by Congress. "Who would've thunk it 13 years ago when the city was $500 million or so in the red?" Mr. Fenty said when introducing the second spending plan of his mayoral term. In Maryland, Gov. Martin O'Malley, a Democrat, signed a $1.4 billion tax increase into law late last year to help close the state's budget shortfall. Virginia Gov. Tim Kaine, a Democrat, proposed dipping into the state's savings to help cover a $339 million shortfall in the budget that runs through June 30, as well as a $1 billion revenue adjustment in the $78 billion biennial budget he proposed in December. The effects of the slowing national economy and statewide budget cuts also have contributed to struggles by local jurisdictions to stay in the black: Montgomery County Executive Isiah Leggett, a Democrat, has proposed job cuts and an 8.3 percent property-tax increase to help close a budget gap that now sits at $297 million. Prince George's County Executive Jack B. Johnson, a Democrat, aims to close a $121.6 million deficit through a hiring freeze on all non-public-safety positions and increases in the county's recordation and income taxes. And Fairfax County, facing a $120 million deficit, plans to cut salaries in government agencies and increase fees imposed on residents to help trim its budget gap. Ed Lazere, director of the D.C. Fiscal Policy Institute, said the District deserves credit for making one-time expenditures with its budgetary surpluses, while Maryland has been victimized in part by having to make up for tax cuts implemented under Gov. Parris N. Glendening, a Democrat. Mr. Lazere also said tax revenues haven't dropped as dramatically in the District as they have in Maryland and Virginia, and that the city is fortunate because it is not as reliant on the real estate market as the suburbs. "A big piece of it is that we're just fortunate," Mr. Lazere said. "I wouldn't say that we've been fiscally irresponsible, but I wouldn't say we've been particularly fiscally responsible either." The city's major tax revenues — made up of the real property tax, the general sales tax, the individual income tax, business income taxes and taxes on real estate transactions — grew by nearly 15 percent between fiscal 2006 and 2007, according to budget documents. The growth rates are projected to slow to only 3.3 percent and 6.2 percent in fiscal 2008 and 2009, respectively. But Mr. Tangherlini said the District still has benefited from its efforts to cap the tax rate on residential assessments, a strong economy in years past and a blunted impact from the national economic struggles. "If you look at the continued investment in the real estate market, where the cranes are still swinging, it's pretty much in the District of Columbia," Mr. Tangherlini said. "That's going to cushion us from a tax standpoint." The District's position also is unique from states and other localities because of its relationship with Congress, which requires the city to prove that its budget is balanced four years into the future, and its function as both a state and local government. "Property tax[es] are a third of our revenues. States don't have that. Income tax is a third of our revenues, and local governments don't have that," Mr. Ebel said. Kaine spokesman Gordon Hickey noted that Virginia is different than the District and said Mr. Kaine was fiscally responsible in making his budget cuts. "I am not an economist, but it strikes me as D.C. is a city and Virginia is state," Mr. Hickey said. "[Virginia] has urban, suburban and large urban areas. ... They are different kinds of things." Mr. Ebel said the District's tax revenues are potentially vulnerable if the national economy continues to slow and the stock market takes a hit. But he said the city is finally on equal financial footing with its suburban counterparts. "I don't think we in D.C. want to be smug that somehow we're better than our neighbors," Mr. Ebel said. "But we're just as good as our neighbors."

Decorate for SPRING!!!!

2008-03-09T15:19:00.002-04:00

WOW! The DC real estate market has really gotten busy the past few weeks. Okay so it is not “officially” spring; who cares?! The “spring market”, the busiest of all the seasons for real estate really got into the swing of things early this year. I am sure this makes many Sellers and Real Estate Agents happy! If you are getting ready to sell or you just want to “freshen” up your home, here are some simple tips from Lowes:

9 HOT HOME DECORATING TIPS

1. Color your world. You can change the look of
a room in a matter of hours with paint, and we’re
not just talking about the walls. Ceilings, trim,
and chair rails can be punched up, and there are
many faux finishing techniques that are perfect
for the do-it-yourselfer. Visit Lowe’s online paint
project center http://www.lowes.com/lowes/lkn?action=pg&p=HomeDecor/paintProjCtr_index.html for ideas.

2. Update window treatments. If your windows
need a makeover, lighten them up with simple
drapery panels. Lowe’s has a collection of drapes,
blinds, shades and swags in the latest colors and
fabrics. Now you can order special order window
treatments online by clicking here: http://www.lowes.com/lowes/lkn?action=pg&p=Promos/WindowTreatments.html&rn=RightNavFiles/no

3. Rearrange the furniture. Create a new look
without spending a dime! Map things out on paper
before you start moving pieces around, especially
the heavy ones.

4. Re-purpose a room. Do you have a living
room or extra bedroom that’s not being fully
utilized? Turn it into an office, gym, media room or
playroom for the kids.

5. Accessorize! Little details can make a big
impact. If your current accessories have lost
their luster, replace them with decorative books,
candles, and interesting pieces that reflect your
personality and hobbies.

6. Don’t forget the floors. Nothing beats the smell
of fresh carpet, to give your home that “new
house” feel. Believe it or not, shag carpeting is
making a comeback!
Visit your local Lowe’s to see what’s hot in floor
coverings for the home. And, when you purchase
any special order carpet, Lowe’s offers installation
for the entire house for just $199.

7. New countertops can transform a kitchen or
bath, without having to remodel the entire room.
And you don’t have to spend a fortune: affordable
laminates now come in styles that look amazingly
close to real granite, marble and quartz.

8. Think spring. Add fresh cut flowers and new
house plants to green up your living spaces, and
remind you that spring is on its way!

9. Decorative molding can add instant
glamour to any room, and it’s easier to install
than most people think. Lowe’s offers a free
step-by-step project guide to install your own
molding http://www.lowes.com/lowes/lkn?action=howTo&p=Improve/InstMld.html

8 Home Organization Tips from Lowes

2008-02-13T20:28:00.003-05:00

Brrrrrr!!! Bitter cold weather hits the east coast. This is the perfect time to stay indoors, keep warm and get organized!

If "getting organized" is on your list of New Year's resolutions, you're not alone. Surveys show that getting organized is right up there with exercising, spending more time with family and paying off debt.
Organizing your home from top to bottom doesn't have to be a daunting task, especially if you focus on one room at a time and work in short intervals.

8 Home Organization Tips

Provided by Lowes

The MRIS Trends in Housing Year-End Report-2007

2008-02-04T09:27:00.000-05:00

This sixth issue of Trends in Housing, a joint publication of MRIS and Delta Associates, is full of useful information for both Buyers and Sellers; A MUST READ!!! This report provides a regular in-depth look at the issues that shape the Mid-Atlantic housing market. For those of you that have spoken to me, I have always suggested that you go to www.DeltaAssociates.com for statistics & housing data on the DC Metro Area's real estate market; they are the best! Inside this issue are several regular features of Trends in Housing, including:
• An analysis of the Washington and Baltimore regional economies
• An examination of regional housing data, including a review of trends in the for-sale market
• An overview of the commercial real estate market as it relates to the region’s housing market
In addition, we offer feature articles, which explore matters that affect housing in the Mid-Atlantic region. In this issue, our features are:
• The impact of foreclosures on the residential real estate market.
• The coming arrival of the Pentagon’s base realignment plan. What does it mean for military personnel and the real estate markets near affected bases?

MRIS, Feb. 4, 2008–The MRIS Trends in Housing Year-End Report is now posted online at: http://www.mris.com/reports/trendsreport/index.cfmThis issue features an analysis of the Washington and Baltimore economies with a special overview of the commercial real estate market as it relates to the region’s housing market. Of special note in this issue, features stories on the impact of foreclosures on the market and BRAC-how the coming arrival of the Pentagon’s base realignment plan will affect the region’s real estate market.

WOW! Fed slashes rates second time in just over a week! How this affects YOU!

2008-01-31T09:22:00.000-05:00

There is some great news out there for homeowners and soon to be purchasers. The Federal Reserve lowered short term interest rates again by half a percentage point on Wednesday. While this directly affects the rate of your ARM (adjustable rate mortgage) and Equity Lines of Credit on your home, it will most likely take a few weeks for this to be felt in the mortgage rates offered to potential buyers. This translates to “all good news” on the housing front, which can use a “shot in the arm”. In my opinion, we are headed back to the “good old days”, at least for a short while, where there are low interest rates and ample supply of properties to select from. Investors are coming back into the real estate market as investments in the stock market remain suspect and there are plenty of deals to be had in real estate. Yesterday’s article on www.BankRate.com does a good job of explaining the rate change and how it affects mortgages. Both the full story and link are provided below.

Fed cuts rate by half-point to 3 percent
By Holden Lewis • Bankrate.com

For the second time in just over a week, the Federal Reserve has lowered short-term interest rates. This time, the move was widely expected.
The central bank's Federal Open Market Committee reduced the target federal funds rate half a percentage point, to 3 percent. This affects consumers because the prime rate will fall half a point, too, to 6 percent. Variable-rate credit cards and home equity lines of credit are linked to the prime rate, so they will fall another half-point over the next couple of billing cycles. The Fed's rate cut is designed to get consumers borrowing and spending again.
"Financial markets remain under considerable stress, and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets," the Fed explained, adding that the rate-setting committee expects inflation to settle down in the next few quarters.
The Fed went on to say that the combined rate cuts -- totaling 2.25 percent since September -- should promote moderate growth. "However, downside risks to growth remain."
The vote wasn't unanimous. Richard W. Fisher, of the Federal Reserve Bank of Dallas, voted against a rate cut. The central bank also reduced the discount rate by a half-point. The Fed charges the discount rate on direct loans to member banks.
The rate-setting committee has eight scheduled meetings a year. On Jan. 22, the committee took the unusual step of cutting short-term rates between scheduled meetings. That day, the Fed reduced the federal funds rate by three-quarters of a point, to 3.5 percent. It explained that it took the move "in view of a weakening of the economic outlook and increasing downside risks to growth." That was a clear statement that the Fed is in recession-fighting mode. Today's rate cut confirms that.
Recession versus inflationEveryone recognizes that the Fed risks starting or exacerbating a recession if it keeps rates too high. But the central bank risks igniting inflation if it sends rates too low. The rate-setting committee has chosen which misstep it would rather make: inviting inflation.
Fed chops rate 3%
The Federal Reserve slashed 50 basis points off a key interest rate.
"The main concern they've got right now is the economy, period, and they don't want to take a recession," says John Burford, vice president and investment portfolio manager for The International Bank of Miami. "In order to avoid that, they're willing to take some inflation risk."
That isn't to say that he agrees with the rate cut. "Sad to say," Burford said before the rate cut was announced, "they've built up a pretty good expectation in the markets that they're going to do something." Leaving rates alone would have been a sell-off in the stock and bond markets, and that's not what the Fed wanted.
Richard DeKaser, chief economist for National City Corp., says the Fed's recent actions are difficult to interpret. "For the longest time, we had a very reluctant Fed that was gradualist in its approach and really moving only in reaction to very persuasive evidence that rate cuts were necessary," DeKaser says.
Last week's big, unscheduled rate cut was not gradualist, and there are still arguments to be made that more rate cuts aren't necessary. The Fed has slashed the federal funds rate from 5.25 percent to 3 percent since September, and it usually takes six to 12 months for the effects of rate reductions to show up in the economy, DeKaser says: "The pipeline of monetary stimulus is still pretty full."
Mortgage rates don't respond right awayLong-term rates, such as those for mortgages, don't respond directly to the Fed's short-term rate moves. Sometimes, mortgage rates move in the opposite direction when the Fed reduces the federal funds rate. But more often than not, mortgage rates eventually follow the Fed's lead. That might be one of the motivations of the central bank, DeKaser says -- "to help the housing market by lowering the refinance rate on many resetting mortgages. That makes it easier for people confronting resets, which we know are rampant right now, to achieve more affordable rates."
The federal funds rate is the target interest rate for banks borrowing reserves among themselves. The discount rate is the interest rate that the Fed charges banks to borrow reserves from the Federal Reserve. The Fed wants to be the lender of last resort: It wants banks to borrow from one another at the federal funds rate before borrowing from the Federal Reserve at the higher discount rate.
Posted January 30th, 2008

You can read this story on Bankrate.com at http://www.bankrate.com/brm/news/fed/main-Jan302008.asp

Troubled Borrowers; Help from President Bush's initiative

2008-01-30T14:51:00.000-05:00

We read and hear about it in the news almost daily; foreclosures on the rise across the USA. DC has been relatively untouched by this compared to many metropolitan areas. However, due to the nature of the problem, we are going to see it happen here in DC; hopefully on a very small scale. I met with a wonderful lady yesterday who was experiencing "mortgage problems" and in my research to see where I could direct her I found this helpful article in the February 2008 Realtor Magazine. It has lots of helpful advise and contact numbers so I have provided the full article and link below.

Help Troubled Borrowers

Troubled borrowers all around the country are wondering how—or whether—they’re eligible for any relief under the initiative President George W. Bush announced in mid-December to stem the tide of defaulted subprime mortgages. Here’s what you need to know to help your past customers or anyone who comes to you concerned about problems paying their mortgage loan.

Bush’s Hope Now initiative is a voluntary accord entered into by lenders, loan servicers, and mortgage investors to help borrowers who face default when their subprime adjustable-rate mortgage resets at a higher rate. The most prominent part of the initiative is an interest-rate freeze that would give borrowers facing an unmanageable interest-rate hike the time to work out a solution.
When people ask you for advice, tell them:

1. Call the national counseling hotline President Bush publicized.
The number, 888-995-4673 (888-995-HOPE), is available on a 24/7 basis.

Calling the number puts them in contact with a HUD-approved counselor affiliated with the nonprofit Homeownership Preservation Foundation.

As of mid-December, there were about 180 counselors, and their ranks were supposed to grow to about 400 early this year, according to Tracy Morgan, vice president of the foundation.

Since the president’s announcement, counselors have seen the volume of hotline calls skyrocket from about 1,500 a day to 22,000 a day as of late December, says Morgan. She expects calls to stabilize at about 2,500 a day in 2008.

2. Expect to be on the phone about 45 minutes.
A counselor will gather information about the caller’s financial situation and make a number of determinations, including eligibility to participate in the initiative.

Home owners are eligible for the initiative if they’re current and expect to stay current after the rate resets but are looking to refinance into a more appropriate loan; they’re current but face possible default after their rate resets, so they need to modify their existing loan or refinance into more affordable financing; or they’re in default before their rate resets.

The initiative applies only to purchase-money mortgages, not home equity loans, and only to borrowers who secured financing during the height of the housing boom — Jan. 1, 2005, to July 31, 2007 — and whose rate resets between Jan. 1, 2008, and July 31, 2010. Lenders estimate some 1.2 million borrowers are eligible.

Of course, the counselors can help borrowers who don’t meet eligibility for the initiative, too. “Most of the calls we receive today continue to be for more traditional types of payment problems,” says Roy Nash, executive director of NeighborWorks Waco, a Texas credit counseling and financial education organization. “Income problems as a result of a job loss and unexpected expenses like a medical emergency continue to be the main reason people call.”

3. Expect a counselor to recommend a course of action.
Typically, two or three hotline calls transpire before the counselor has enough information to make a recommendation, though it might take just one call if the borrower is prepared with paperwork verifying income and monthly expenses.

“The more prepared they are, the more quickly we can help them,” says Daniel Garcia, a counselor with NeighborWorks Waco.

The counselor’s main job is to explain what options are available based on a borrower’s situation and to have the borrower call the mortgage servicer to initiate a workout plan.

In some cases, the counselor will recommend the borrower call another counselor, one in the borrower’s area, and get counseling in person. In other cases, the counselor will contact the servicer directly. To do that, counselors must get the borrowers’ written authorization to act on their behalf.

4. Servicers are increasingly amenable to be flexible.
Garcia says servicers are more willing to take calls and be flexible than before the subprime crisis.

“A lot of these lenders [who also do servicing] are overflowing with REOs and can’t take any more, so they have to do something,” says Garcia. “They’re ramping up their staff to deal with this, hiring and training more people, and giving them more authority.”

Countrywide Home Mortgage, the country’s largest mortgage lender and the servicer for an estimated 82,000 loans whose borrowers fall under Hope Now’s eligibility criteria, has a team of 3,000 handling workout plans, though not only for Hope Now cases.

Wells Fargo has established a dedicated counselor phone line. “If customers go to a counseling agency because they need to get help, and they give the authorization to the counseling agency, we will talk to that third party,” says Patrick Carey, executive vice president of default and retention operations for Wells Fargo.

5. Borrowers are receiving fast-track workout plans based on their eligibility.
Servicers have the most flexibility in working with borrowers who are current on their mortgage and expect to stay current after rates reset. Servicers determine these borrowers’ eligibility for refinancing based on information the servicer already has on file, such as the current loan amount and loan-to-value ratio and the borrowers’ FICO score and credit history.

Refinancing is the typical solution for these borrowers, and the servicer is supposed to recommend the best available replacement product for the borrower, even if that product isn’t one offered by a lender affiliated with the servicer’s company.

Carey of Wells Fargo says his company is prepared to do that. “Whatever works best for customers’ financial circumstance, we will work with them to accomplish,” he says.

The servicers are also supposed to help borrowers avoid prepayment penalties in a refinancing, though that might be easier said than done because many subprime loans come with stiff prepayment penalties. The initiative recommends—rather than requires—that servicers modify the original loan to eliminate a penalty. At the same time, investor rules for securities backed by these mortgages govern what servicers can and can’t do, so any attempt to modify a provision such as a prepayment penalty without investors’ OK can invite a lawsuit.

“Any servicers who service loans for others, as most of us do, are governed by the constraints or the guidelines of the investors who own the loans,” says Carey. “Unless you’re delegated to do something, you have to get approval to do it.”

Industry executives and government officials who designed the initiative think they’ve worked out a solution, though, because these kinds of problems were discussed before all parties, including investor representatives, signed off on the agreement.

“With the investor community on board and as a clear beneficiary of this approach, the risk of litigation should be manageable,” said U.S. Treasury Secretary Henry Paulson Jr., who spoke about the initiative in early December.

6. A rate freeze applies to some, not all, borrowers.
The interest-rate freeze that attracted the bulk of media attention when the president announced the initiative applies only to a specific subset of borrowers: those who are current on their mortgage but don’t have the financial wherewithal to stay current once their interest rate bumps up and can’t qualify to refinance.

The freeze is intended to buy these borrowers time to fix their situation. “There are some responsible home owners who can avoid foreclosure with some assistance,” President Bush said when he announced the initiative. “We don’t want to bail out those who recklessly took out a mortgage they couldn’t afford.”

Thus, home owners who’ve suffered a job loss or a costly medical situation may not be eligible for the freeze; to qualify, borrowers also have to have secured their financing during the eligibility window and be current before their rate’s reset.

The recourse for ineligible borrowers is traditional financial counseling, says Morgan.

7. Traditional remedies are open to the most troubled borrowers.
The last group of borrowers the initiative is designed to address includes home owners who are unable to make their payments even before the rate resets. For these borrowers, servicers have few options other than to find the least painful loss mitigation strategy.

“This is when we shift the discussion to deed in lieu of foreclosure or short sale, because these approaches give customers the opportunity to leave that property without going through the foreclosure process,” says Carey.

If borrowers in this situation first call a servicer rather than a counselor, it’s not uncommon for the servicer to refer them to a counselor before any action is taken. The borrowers might be good candidates for various assistance programs available through counselors.

“A lot of times now, the lender is directly referring the client to the Hope Now hotline, and in turn it gets referred to us,” says Garcia of NeighborWorks. “That’s a good thing.”

Counselors often bring a broader view of possible solutions than the servicer can offer. “We can direct them to organizations that can help them gain more income or help them temporarily with utility assistance. And we can also credit counsel them—help them budget better,” says Garcia.

The most important advice you can give is to encourage borrowers to call the hotline and start the process of seeking a solution to their financing woes.

Carey of Wells Fargo emphasized that servicers can do nothing until borrowers call.

“One of the biggest challenges we have in the industry is being able to even have these discussions that can help them,” says Carey. “That’s why it’s so important that they pick up the phone.”

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

Different Help for Different Borrowers

Troubled borrowers who call the Hope Now hotline, 888-995-4673 (888-995-HOPE), will find that their solution will depend on their situation.

Owners who are able to stay current even with a rate reset:

Solution: Counseling and refinancing. Lenders may be able to take these borrowers through a fast-track process into a more affordable loan.

Potential pitfall: Prepayment penalty. Borrowers are encouraged to time their refinancing to after the rate reset, since penalties often apply only during the initial rate period.

Owners who face default after a rate reset:

Solution: Counseling and rate freeze of up to five years. To qualify, they must be ineligible for refinancing (e.g., have a loan-to-value ratio of greater than 97 percent), occupy the property as a primary residence, and have a credit score of less than 660 that hasn’t improved more than 10 percent since the loan was originated.

Potential pitfall: The rate freeze is temporary; borrowers still need to work out a long-term solution

Owners already in default:

Solution: Counseling and a loss-mitigation strategy, such as a short sale or deed in lieu of foreclosure. Under the mortgage debt foregiveness law signed by President Bush Dec. 20, borrowers who receive debt foregiveness as part of a loan workout over the next three years won’t have to pay federal tax on the forgiven amount.

Potential pitfall: Those who don’t call in time may not be able to avoid foreclosure.

http://www.realtor.org/rmomag.NSF/pages/featurefeb08?OpenDocument

How big did you say it was????

2008-01-26T10:44:00.000-05:00

The square foot dilemma faces me almost every time I visit with a Seller and Buyer. The Seller is always looking for ways to maximize their sale and one easy way is to provide the highest square footage measurement available (“did your sight-impaired uncle measure this???”). The Buyer is always asking, “What is the square footage?” and “what does that come out to per square foot?” to try to justify their purchase in this expensive metro area. Unfortunately, there is no standardized way to measure properties (“what happened to tape measurers?”). I know of many local developers that measure fifty percent of the area INTO any adjacent walls of the neighboring condo owner or common area. If five people go in and measure a condo or loft, I always assume that we will have five different measurements. The tax records provided by DC are infamously incorrect. So what is a condo seller or buyer to do? The best way to establish the square footage is to measure it yourself. (Or hire an engineer or architect to do so, but of course that is costly.) A recent article in the New York Magazine by Jhoanna Robledo, “The Floor-Space Fallacy” quotes Stacey Max a Real Estate Agent in NYC, “People are DESPARATE to quantify their decisions, and (square footage) is one of the few things in real estate with numbers attached to it. How do you quantify view? Or light?” I agree that the BEST thing for a Buyer to do is forget the feet and focus on whether the space actually meets their criteria. “In the end, says Max, the numbers may not be all that useful.” I have found that it is the layout and floor plan that is just as important. As an example, there are some GREAT 1200 square foot 2BR units that feature thoughtful floor plans that feel wonderful. Across the street in a similar product you might have a 1500 square foot 2BR condo that is awkward, uncomfortable and has a dreadfully lay out, little light and no view.
Some helpful hints for Buyers: (1) Make sure to spend plenty of time looking around and getting a feel for what your money can buy and how much space your money will buy (2) compare amenities, quality of product, finishes, light, views, design, etc. in each building as this can trump square footage (3) compare neighborhoods (4) hire a knowledgeable Realtor®, as they can save you lots of time and can educate you on the best buildings (5) make sure to read the Condo or Coop docs when making an offer to see if the building has any financial, legal or other issues (6) try to buy the best quality in the best location you can afford as these properties tend to appreciate more and are more stable when there are downturns in the market, and (7) buy a place you love!

Ready for today?

2008-01-23T09:43:00.001-05:00

When I spoke with friends and clients on Tuesday (January 22nd) many were asking me if I was "ready for today?" I am generally "ready for anyday" as I wake up at 4:30am, hit the gym for a hard workout, have a hearty breakfast, you know...get ready for the day. Oh, I got it as they grabbed their wallets and held on to them dearly...the stock market! Financial markets around the world fell substantially overnight; what was in store for Wall Street? Well, I learned some wisdom back in 1987 as I was living in NYC when "Black Monday" occured back in October 1987. Markets (financial and real estate) are cyclical. The longer the investment period the better your chances are of a large return. Day trading in the financial market is very risky and few are successful. The same goes for residential real estate; a.k.a. a home. A home is first for shelter. We all need a form of shelter, so I decided years ago that I would prefer to pay for my own mortgage rather than someone elses. But, buying real estate and then selling withing a year or two can be just as risky; I call it "real estate day trading" or as it is more commonly referred to as "flipping". Real estate can be a great investment as a home but in many other forms as well. Having rental property is a great way to create long-term wealth. I have been trained to diversify my financial holdings in both the financial market and the real estate market. I have a professional advisor who handles my portfolio and having such an advisor gives me great comfort; especially in turbulant times. Professionals at the top of their game know how to perform in any market. We can not control the financial or real estate markets, but we can control our decisions. Making sound, long-term investments will help prevent you from worrying and you will be "ready for today".

Washington DC condo/coop statistics for 2007

2008-01-15T16:41:00.000-05:00

Well the numbers are in!!! Although I track inventory all year long to assist my many Buyers and Sellers, it seems that everyone is interested in "the official" year end statistics. Well for your viewing pleasure, here they are:

WASHINGTON DC CONDO/COOP HOUSING REPORT

DATA SOURCE: Metropolitan Regional Information Systems, Inc. (MRIS)

The AVERAGE PRICE for condos/coops in Washington DC for 2007 was $405,271....relatively unchanged from the 2006 average price of $406,501.

The MEDIUM PRICE for condos/coops in 2007 was also relatively flat;
with the price changing from $354,100 to $350,000; or about 1%.

Inventory was at the second lowest level in December 2007 at just below 1200 available units; only with February coming in with a slighly lower number. This should translate into a good spring market; especially as interest rates are trending lower.

So things continue to look good here in the Capital real estate market!

What does 2008 have in store for the DC area loft/condo real estate market?

2008-01-03T19:29:00.000-05:00

Well the good news is the developer-stork has slowed down deliveries of all those lofts and condos in downtown. Basic economics is always in play in real estate; a Seller's market reflects a lack of supply (and generally higher demand) and a Buyer's market reflects over supply (and thus lower demand) for homes. The press is loving all the bad news and statistics out there right now as bad news sells stories; not good news. Well there is definitely some bad news out there, but as I have written in my Quarterly Newsletter for the past year, there are many stories and statistics out there that show a favorable real estate market here in DC. When I work with Buyers, the "location, location, location" discussion is followed by the importance of "quality" and "uniqueness". When I decided back in 2003 to specialize in lofts, most Agents laughed at such a limiting strategy. I have lived in lofts and love the "loft life". It really is a phenomenal feeling to have soaring ceiling heights of 12 or 20 feet. There are not lots of lofts here in DC like exist where I lived in my first loft, New York City. But, I knew that lofts offered a unique space that would always be limited in downtown DC. Not a demand for lofts in DC? After my first year in Real Estate I was in the top 1% of all Agents in North America!!! Sure, many builders jumped on board and have built loft-like condos (some great and others horrible) but it costs them much more to do so and we will see builders think twice before building more. All this plays into the demand issue and thus has translated into stable investments; especially in the better condos and lofts. 2008 will be another year of appreciation for properties that have the best location, best quality and are unique. Unlike the deliveries from the "real" stork, in real estate you can have 100% control over your purchase and the consequences can be enjoyable and rewarding.

Lance Horsley - DC's Loft Specialist

DC home prices post healthy gain

D.C. gained more new residents between July 2008 and July 2009 than it did in any other one-year period since World War II.

Home prices in the Washington area increased by the most in the country during the 12 months ending in March

D.C.-area home sales jump in April 2010

DC increases employment (1/2009-1/2010)!!!

D.C. area's population is still blooming!!!- Wasington Post 3/24/2010

FHA Policy Changes Effective April 30, 2010

D.C.-area homes sold faster, yielded higher prices in February 2010

A NEW condo project? Really? LANCE QUOTED......

D.C. housing prices jump 10.5%

The New Good Faith Estimate (GFE). Lets Embrace it!!!!

Washington DC's condo develpers loose big!!!

District's developers swagger no longer

Washington DC Real Estate in the 2000's- One Story at a time.....

Tracing the story of the 2000s, one story at a time

Boom. Bust. Can the market find a healthy middle?

Boom. Bust. Can the market find a healthy middle?

From 893 to 786 Active Condos in Washington DC in 2 days???????

D.C. Population Set to Break 600,000 Mark

893....can you believe it???

Home-buyer Tax Credit Update! (11/6/09)

2009 Results are in! DC hits #1 list for AMERICA'S FAVORITE CITIES

MARKET INFORMATION (3rd Q Report)- Delta Associates

*DELAYED* FHA Condo Financing Changes

FIRST SAVINGS MORTGAGE IS ONCE AGAIN OFFERING 5% DOWN PAYMENT FINANCING FOR WASHINGTON DC CONDOMINIUMS AND HOUSES

As lenders clamp down, credit scores take a hit-USA TODAY-September 22, 2009

DC Coop transer and recordation taxes start OCTOBER 1st, 2009!!!!!

Effective October 1,2009 the District appears to be out of the business of identifying merely Vacant building and lots

WALLS IN COVERAGE now REQUIRED on Condo Master Insurance Policy!!!

FHA CONDOMINIUM GUIDELINES...UPDATE!!!!!

Credit Scores and the 20% RULE!!!!!

Pepco announces that District of Columbia residents now have the opportunity to purchase Compact Fluorescent Light (CFL) bulbs at reduced prices

Inclusionary Zoning (IZ) LAW requires developers (10 units+) to offer affordable housing!

Looking Forward in the Mortgage Market -- August 11, 2009

New FHA Guidelines Could Change the Condo Market Forever!!!!

Government Regulation Clogs the (LENDING) Pipes; Looking at HVCC and HERA

DC transfer and recordation tax SURPRISE!!!!!!!

Lowball Appraisals Spark Uproar

**OFFICIAL REPORT on the DC Spring Market**

22WEST WINS 2009 RADA GRAND AWARD

Lance to become the "Mayor of U Street"??? Maybe not, but U does got sales!!!!

U Got Sales?

U Got Sales?

$15K tax credit for HOME BUYERS

Isakson amendment gives $15K tax credit to homebuyers

Atlanta Business Chronicle

If your buying a condo or loft in DC....you need to contact me!!!!

5 Top Blunders of Internet Home Buying

How to avoid the common pitfalls of online real estate searching

Washington, D.C. Tops List for Real Estate Buys (2009)

WOW what a few months it has been!!!! Great article from December 22nd Newsweek as well!

Plenty to Coax Home Buyers Back To the Market By Elizabeth Razzi

Interesting article from FORTUNE MAGAZINE..On the path to a housing rebound!

On the path to a housing rebound

The pain that homeowners and homebuilders are feeling now is a sign that things are going to get better.

DC spring market PLUS Location, Location, Location...

Condo Living-Spiffed Up For a Sale- Lance contributes

DC defies home-price drop

Decorate for SPRING!!!!

8 Home Organization Tips from Lowes

The MRIS Trends in Housing Year-End Report-2007

WOW! Fed slashes rates second time in just over a week! How this affects YOU!

Troubled Borrowers; Help from President Bush's initiative

How big did you say it was????

Ready for today?

Washington DC condo/coop statistics for 2007

What does 2008 have in store for the DC area loft/condo real estate market?

DELAYED FHA Condo Financing Changes

OFFICIAL REPORT on the DC Spring Market