DC Real Estate News: June 2009

Here is the breakdown as of June 29th, 2009

Washington DC continues to see the number of properties Pending; as the highest numbers since 2007;  while inventory levels remain fairly steady.

Prince Georges County continues to show the most significant improvement.  The number of properties under contract are at the highest levels in over 3 years; while the number of properties on the market has dropped 2000 homes; the same level as last as June of 2007. 

Here are the number of homes on the market including the number of homes that were taken Off (EXPIRED) the market last week. 


 

Washington DC

Single Family:     Actives: 1864 (Down 25 from last week)      Expired: 16       Under Contract: 709 (Down 14)

Condos:              Actives: 1411 (Up 6 from last week)             Expired: 7         Under Contract: 572 (Same)  

 

Arlington County

Single Family:     Actives: 469 (Down 1 from last week)          Expired: 0         Under Contract: 239 (Down 12)

Condos:              Actives: 504 (Down 8 from last week)          Expired: 2         Under Contract: 230 (Up 5)

 

Prince Georges County

Single Family:     Actives: 5551 (Up 5 from last week)          Expired: 48         Under Contract: 1832 (Up 49)

Condos:              Actives: 813 (Down 6 from last week)        Expired: 11         Under Contract: 135 (Down 2)

 

Montgomery County

Single Family:     Actives: 3468 (Down 31 from last week)    Expired: 18        Under Contract: 2203 (Up 36)

Condos:              Actives: 1259 (Up 11 from last week)         Expired: 5         Under Contract: 445 (Down 18)

 

It is important to see the number of homes taken "Off" the market.  While many of these homes will return to the marketplace a week or two; seeing a listing "expire" means that the seller and agent thought or expected the home to be sold by now.

The Mortgage Interest Rates are still VERY low.  When I think back to buying my first home in 1996; I had an 8.75% interest rate.  Everyone congratulated me for such a great rate.

Now rates are hovering in the low 5%'s.  Pretty damn good if you ask me!

Everyday the rates change slightly; most sites are showing the average rate to be 5.51% with no points.  No this is of course assuming you have good credit and some money to put down.

Rates seemed to have ticked up .07% since last week; but down from the huge jump a couple of weeks ago when they were near 5.75%.

As always; when shopping for a mortgage - call 2 or 3 of your favorite lenders.  Ask your Realtor to recommend a couple.  STAY AWAY from the 'Lending Tree' people - they will just cost you headaches in the long run.

Compare the following:

- Rate (Important, but not everything)

- Fees (Anyone can give you a lower rate; but at a price)

- Service (you get what you pay for.  A slightly lower rate only saves you money if the loan actually closes)

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016

If you read my last post; you are seeing a trend.  Well it is not just a trend in what is on my mind this week, but a trend on what is happening in the Real Estate market in general.

Appraisers determine how much the home is worth and how much of a loan the bank will give.  Well in much of the DC Metro area; we are moving away from the crazy buyers market and homes are in fact selling.  Well; they are going under contract.  The "selling" part is what is the problem.

Low Appraisals are killing deals all over the place.  Buyers can't get financing, sellers can't drop the price to the low appraised value because of little equity - deals are falling apart.

Appraisers use comparable sales.  I get that.  But let's look at this senerio:   House for sale... in the 1st week they get 2 offers at (or damn close to) full 

price.  The seller selects an offer and the Appraiser swoops in.  He sees 3 homes in this neighborhood that sold for 20k less than this sales price and says "Poof" your home is worth 20k less.  Not what these 2 buyers were willing to pay (fair market value); but what the last homes sold for.  The seller lowers the price and this home sells for the lower price.

The house next door goes on the market.  Gets 2 offers; appraiser says "Nope" - it's only worth what your neighbor got.   

and so on  and so on ...

How do the prices ever change then ???

When the Appraiser can appreciate the fact that a home is getting multiple offers while new to the market.  Maybe - JUST maybe - he can consider "Fair Market Value".

Just my 2 cents.....

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016

As an experienced Realtor, this should be an easy question - right?  Well not-so-fast.

From Wikipedia:  Fair market value is an estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay ti a knowledgeable, willing, and unpressured seller in the real estate market.

The amount of money a knowledgeable, willing, and unpressured buyer would pay....

Well I can assure you; most buyers are willing, knowledgeable and unpressured in THIS type of Real Estate market!

From Business school to real-world use, I have always looked at the Fair Market of a good or service (or a house) as what a consumer is willing to pay.  The problem is, as we are all aware - is that banks and lenders are backing loans for these purchases.  In order to protect them - the banks charge a $400-$500 fee to the customer for an appraiser to assess if the buyer is paying too much and thus determines how much of a loan the bank will grant.

(Can you imagine what would happen if credit card companies did this for durable goods?  I'm sorry ma'am those Jimmy Choos are only worth $30 not $300 - you will need to use cash).

The Problem:

Stricter (and needed) lending standards have put in place a much more random system with regards to Appraisers.  Instead of Mr. Loan Officer calling the appraiser he always uses in NW DC; he "orders it" from a 3rd party.  The 3rd party then at random picks an appraiser to come out and tell the bank (and the customer) how much its worth.

So the likelihood of getting an appraiser from the burbs, who is not as familar with this neighborhood is MUCH greater.  Well does that make a difference?

Think about your own neighborhood you live in now.  Now think of a similar home a mile or two away in a different neighborhood.  Your home can look alike; be about the same size - but is the value the same?  Probably not - but you know that because why? You LIVE there - you KNOW the areas and you ARE an educated buyer or seller.

So here is a stranger who may be an expert on appraising a home - but does he 'know' the neighborhood differences?  Let's hope so - because he is one who decides what your home is worth.

It's a Buyer's Market Right?  Well not so fast.  Multiple Offers are back - and back in force.

It seems almost every offer I am writing now is in Multiple Offers.  One set of clients have lost 2 (damn close to full price) offers in the past week.  We are writing offer #3 on a new property and guess what - the agent just received another offer.

Now this is a part of the DC Metro area that I don't; nor do I think many would; consider it a "HOT Area".  It's just a plain old, close-in, suburb in Maryland.

Well we will be writing the strongest offer possible. This market is taking on a new face.  The bottom?  Been there - done that.

YOU MISSED IT.

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016

In Washington DC we have many Co-operatives.  Co-ops are not found all over the country; just mostly in cities like New York and Washington DC.  

One of the Major Benefits about Co-ops have been the fact that Buyers and Sellers have not had to pay the Washington DC Transfer or Recordation Tax. 

This has resulted in significant savings for both sides of a Co-op transaction and helped to make co-ops more attractive to buyers; many of whom are cash-strapped 1st Time Home Buyers.

You see in a Co-op; you are not actually 'transferring' or 'recording' the title of the property; because in a co-op there is no Title.  You are buying shares of a corporation.  (SEE COOPS for more details).

However; a NEW DC LAW; starting October 1, 2009: mandates these Transfer and Recordation Taxes for CO-OP Units.  This is HUGE!

For Sales under $400,000 the tax is 1.1%   for  sales $400,000 and above the tax is 1.45%

Example:

A co-op selling for $350,000 is taxed at $3850 - to BOTH Buyer AND Seller.  A co-op selling for $450,000 would be taxed at $6525 for BOTH Buyer AND Seller.

This is HUGE and I am sure it's all to try and increase the tax base to fight a slower economy.

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016

It seems every day a new Blog or Blog site pops up.  This is especially true in Washington DC.  Over the past few weeks; there has been a well written; and very sleek and sexy looking blog site that is growing.

This site sells ad space and promotes listings, open houses, talk about the local market and the like.  Well I heard yesterday that this site is going to be sending people (agents who write sometimes for them); to do a video tour of homes on the market - and then post them on their site.

HUH ?

My understanding is that these listings won't necessarily be that agent's or even his companies listing - but just some random (and I am sure sexy and pretty) property for sale in the DC area.  Will they have the owners permission?  My source says "No" - they are just going to film and post the listing.

I don't know about you - but I would have a FIT about this if this was my listing.  If it was my home - I would be calling my lawyer in about 10 seconds (and grabbing by favorite golf club and aiming it... well you get the picture).

I ask my source - so how can they do that?  Is that even legal?  He (who is not lawyer) said - I think they can.

Love to hear what my readers think?!

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016

Here is the breakdown as of June 16th, 2009

The number of properties under contract continue to be at higher levels than we have seen in many years.  Inventory levels; especially in the Single Family Home Category - continue to be stable or slightly decreasing overall.

Here are the number of homes on the market including the number of homes that were taken Off (EXPIRED) the market last week. 


 

Washington DC

Single Family:     Actives: 1862 (Down 2 from last week)      Expired: 50       Under Contract: 711 (Up 14)

Condos:              Actives: 1419 (Up 31 from last week)        Expired: 56       Under Contract: 520 (Up 24)  

 

Arlington County

Single Family:     Actives: 455 (Down 11 from last week)        Expired: 3         Under Contract: 252 (Up 8)

Condos:              Actives: 510 (Down 2 from last week)          Expired: 9         Under Contract: 209 (Up 7)

 

Prince Georges County

Single Family:     Actives: 5551 (Up 5 from last week)          Expired: 125        Under Contract: 1832 (Up 49)

Condos:              Actives: 813 (Down 6 from last week)        Expired: 42         Under Contract: 135 (Down 2)

 

Montgomery County

Single Family:     Actives: 3621 (Up 30 from last week)         Expired: 57        Under Contract: 2151 (Up 51)

Condos:              Actives: 1251 (Down 16 from last week)     Expired: 123        Under Contract: 433 (Down 1)

 

It is important to see the number of homes taken "Off" the market.  While many of these homes will return to the marketplace a week or two; seeing a listing "expire" means that the seller and agent thought or expected the home to be sold by now.

Today I was asked - when does the Tax Credit run out for 1st Time Home Buyers?  They wanted to know if it was the end of year or the end of November.  They also wanted to know if it was "Under Contract" or "Sold" ?

Well here are the answers: (from:www.federalhousingtaxcredit.com)

Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

So: you have just over 5 months to find a home and complete the sale; in order to be able to use the tax credit (other restrictions apply - see the website).

Keep in mind: Lenders are having issues closing loans in time.  I would not advise trying to plan on closing the last week in November.  If you want to "wait until the last minute" - I would plan on closing no later than mid-November.  

Happy Home Buying !

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016

We all read and hear the term "Motivated Seller".  Here is a seller that just makes me crazy!

I call her to make an appointment to show her $1.1 Million Dollar Home this week.  My clients arrived today and want to be in a contract to purchase by Thursday.

The seller says: "I have so much going on.  I simply can't be bothered this week."

Me: "We could come anytime Monday or Tuesday."

Seller: "No, maybe next weekend I will have things back in order."

Me: "Sorry, my folks only have the next two days to look."

Seller: "OK, goodbye."

Does this seller have a clue?!  I guess she doesn't want to sell it!  Needless to say - when I left the Listing Agent a message - she wasn't very pleased.  Not at all!

Sounds like time for this Seller to get a dose of Reality !

Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions!

Office: 202-362-5800   Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW  Suite 100 * Washington DC 20016