According to the MRIS (Multiple regional information Service), the following real estate transactions have taken place in Georgetown during the week of 3/24-30:
11 new listings: 5 Single Family ($715,000-$7,900,000) and 6 condo/co-ops ($336,500 - $3,200,000)
4 properties came under contract: 2 SF ($1,575,000 to $1,699,000) and 2 C/C ($399,000 - $1,099,000)
0 properties went to closing.
3/30/2010
Inventory is low?
Given all the news about the glut of homes on the market as a result of foreclosures and short sales, there is a surprising dearth of houses for sale in our area, including Georgetown. The Greater Capital Area Association of Realtors reports that, compared to a year ago, inventory is down in all but one price range...from $150,000 into the millions. That seems counter-intuitive and is especially surprising in that we are going headlong into the Spring Market. Georgetown real estate is no different. I expect that to change in the next couple of weeks as both buyers and sellers gain more confidence.
3/29/2010
Georgetown Realtors finding a more active market
We are seeing more activity in all phases of the Spring market...open house attendance is up, there are some properties with competing offers, and maybe prices while not going up, are stabilizing. Still, the properties which are priced in line with comparable sales of the recent past, are the ones which are getting the best attention. Properties which are priced at "a reach" are taking a while to sell, and often at a price lower than they might have garnered had they been priced more realistically to begin with.
3/26/2010
Rise in DC population outpaces other regions
In an article by Carol Morello, in the Washington Post, it is noted that our DC region has lost fewer jobs, and has had a greater surge in population than other metropolitan regions of the US. "It's got to be people moving here for jobs," said John McClain, deputy director of the Center for Regional Analysis at George Mason University. "We are the healthiest economy of the whole country, in terms of how we have fared during the recession, relative to jobs." DC has an increase of 5% over the previous decade.
These are good signs for our real estate market, and should be percolating into Georgetown real estate as it progresses.
To read the entire article: http://www.washingtonpost.com/wp-dyn/content/article/2010/03/23/AR2010032301808.html?referrer=emailarticle
These are good signs for our real estate market, and should be percolating into Georgetown real estate as it progresses.
To read the entire article: http://www.washingtonpost.com/wp-dyn/content/article/2010/03/23/AR2010032301808.html?referrer=emailarticle
3/25/2010
Georgetown Stats - week of March 15-23
According to the MRIS (Multiple regional information Service), the following real estate transactions have taken place in Georgetown during the week of 3/15-23:
12 new listings: 6 Single Family ($799,000-$2,750,000) and 6 condo/co-ops ($369,000 - $699,000)
6 properties came under contract: 2 SF ($1,295,000 and $1,425,000) and
4 C/C ($499,000 - $1,295,000)
6 properties went to closing: 3 SF ($1,425,000 - $6,350,000) and 3 C/C ($995,000 - $4,200,000)
12 new listings: 6 Single Family ($799,000-$2,750,000) and 6 condo/co-ops ($369,000 - $699,000)
6 properties came under contract: 2 SF ($1,295,000 and $1,425,000) and
4 C/C ($499,000 - $1,295,000)
6 properties went to closing: 3 SF ($1,425,000 - $6,350,000) and 3 C/C ($995,000 - $4,200,000)
3/24/2010
‘Affordability’ index is at or near record levels.
This is an excerpt from an article written by Jeff Detwiler, President of Long & Foster Companies.
Housing Affordability – Whichever Index You Look at, The Value Story is Great for Buyers
First, there are actually several indexes out there from various sources. For example, the NAHB (National Association of Home Builders) has one they call the Housing Opportunity Index or HOI and the NAR (National Association of Realtors) publishes the Housing Affordability Index or HAI.
While both indicate we are at or near record levels, I want to focus on the NAR index as the topic of today’s note.
The NAR Housing Affordability Index – What is It?
Essentially, the index is a measure of the financial ability of U.S. families to buy a house.
In the simplest terms, an index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.
An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.
The NAR Housing Affordability Index – Trending Higher
The current index at the end of 2009 stood at 171.6, 56 points above where it was at the end of 2007!
What this shows is that the relationship between home prices, mortgage interest rates and family income is very favorable right now.
The NAR has said that it is the most favorable since tracking began in 1970!
The Impact of Mortgage Rates
While pricing is obviously important, mortgage rates drive a significant piece of the affordability puzzle. It’s important to keep in mind that for every increase of 100 basis points (or 1% in rate); the monthly payment goes up about $63 per month for each $100,000 borrowed. Over the life of a 30-year loan, that can add up quickly - to $22,680 for each $100k borrowed.
If you would like the actual reports, please let me know and I will forward a link. darrell@lnf.com
Housing Affordability – Whichever Index You Look at, The Value Story is Great for Buyers
First, there are actually several indexes out there from various sources. For example, the NAHB (National Association of Home Builders) has one they call the Housing Opportunity Index or HOI and the NAR (National Association of Realtors) publishes the Housing Affordability Index or HAI.
While both indicate we are at or near record levels, I want to focus on the NAR index as the topic of today’s note.
The NAR Housing Affordability Index – What is It?
Essentially, the index is a measure of the financial ability of U.S. families to buy a house.
In the simplest terms, an index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.
An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.
The NAR Housing Affordability Index – Trending Higher
The current index at the end of 2009 stood at 171.6, 56 points above where it was at the end of 2007!
What this shows is that the relationship between home prices, mortgage interest rates and family income is very favorable right now.
The NAR has said that it is the most favorable since tracking began in 1970!
The Impact of Mortgage Rates
While pricing is obviously important, mortgage rates drive a significant piece of the affordability puzzle. It’s important to keep in mind that for every increase of 100 basis points (or 1% in rate); the monthly payment goes up about $63 per month for each $100,000 borrowed. Over the life of a 30-year loan, that can add up quickly - to $22,680 for each $100k borrowed.
If you would like the actual reports, please let me know and I will forward a link. darrell@lnf.com
3/23/2010
Changes coming to FHA financing
In about a month or so, FHA is changing its financing guidelines, increasing the amount of the upfront mortgage insurance and reducing the amount allowed for sellers to credit buyers. If one is considering buying a property priced up to $800,000, now would be the time to act. With the home buyer's credit, and the more relaxed terms of the current FHA financing, there isn't likely going to be a better time in the near future.
3/22/2010
Recession easing?
This article from the San Francisco Business Times looks at commercial real estate as a bellweather for good signs that the recession has bottomed and is reflected in increased activity in commercial real estate. Not a quick road back, but definitely on the rise. Here is the article in its entirety.
Banks see signs that recession is easing
San Francisco Business Times - by Mark Calvey
Bankers grappling with the worst of the commercial real estate crisis are seeing signs that the cycle has hit bottom.
That’s good news even as bankers are hit with painful loan losses and tougher regulatory requirements.
“The recession is over, and we’re now definitely in recovery,” said Mechanics Bank CEO Steve Buster. “The money that’s been sitting on the sidelines and waiting for two years is now moving into the market.”
“I see it every day,” Buster said, referring to investors calling his bank and other lenders seeking to buy troubled commercial mortgages and real estate as well as loan brokers with a growing book of business as more people with money are willing to finance distressed-real-estate transactions.
Other bankers echo Buster’s optimism amid the grim times.
David Greiner, CEO of Tri-Valley Bank in San Ramon, said his bank experienced a drop in non-performing loans in the fourth quarter for the first time in six months. In a promising sign for a banking industry that needs to heal, Tri-Valley Bank said this week that it’s being recapitalized with a $6 million investment that will eventually allow the $87 million bank to double in size. The money is coming from Robert Hirt, owner of Walnut Creek-based RPM Mortgage.
And J.P. Morgan Chase CEO Jamie Dimon, speaking at the Stanford Institute for Economic Policy Research’s 2010 economic outlook on March 12, said several more commercial-real-estate foreclosures lie ahead.
“But I don’t think this will stop America from recovering,” Dimon said. “When you think of real estate, you have the equity and I have the debt. When a foreclosure is over, I hold the equity.”
But the pace of foreclosures and loan losses will take their toll, especially on community banks that need to raise more capital or meet the ultimate fate of being shut down.
Several troubled banks nationwide are operating on borrowed time, with the Federal Deposit Insurance Corp. telling institutions to raise capital by a certain date or face closure.
Today’s 8,000 banks are likely to decline to 5,000 banks over the next five years due to failures and acquisitions, according to Gary Findley, president of the banking publication The Findley Reports. Findley was the keynote speaker at a March 11 distressed properties conference in Walnut Creek titled Fool’s Gold.
Today’s real estate cycle has followed a traditional pattern in which businesses hurt in the recession, shut down or negotiate better leases, which in turn hurts a building’s cash flow and market value. That, in turn, translates into pain for the banks that financed the real estate as borrowers have trouble repaying loans and refinancing existing debt on the building, which has fallen in value.
Buster, who was among the first Bay Area bankers to speak publicly about an approaching credit crunch in the fall of 2007, says he’s confident that we’re coming out of this real estate downturn.
“I’ve seen this movie several times before,” Buster said.
Banks see signs that recession is easing
San Francisco Business Times - by Mark Calvey
Bankers grappling with the worst of the commercial real estate crisis are seeing signs that the cycle has hit bottom.
That’s good news even as bankers are hit with painful loan losses and tougher regulatory requirements.
“The recession is over, and we’re now definitely in recovery,” said Mechanics Bank CEO Steve Buster. “The money that’s been sitting on the sidelines and waiting for two years is now moving into the market.”
“I see it every day,” Buster said, referring to investors calling his bank and other lenders seeking to buy troubled commercial mortgages and real estate as well as loan brokers with a growing book of business as more people with money are willing to finance distressed-real-estate transactions.
Other bankers echo Buster’s optimism amid the grim times.
David Greiner, CEO of Tri-Valley Bank in San Ramon, said his bank experienced a drop in non-performing loans in the fourth quarter for the first time in six months. In a promising sign for a banking industry that needs to heal, Tri-Valley Bank said this week that it’s being recapitalized with a $6 million investment that will eventually allow the $87 million bank to double in size. The money is coming from Robert Hirt, owner of Walnut Creek-based RPM Mortgage.
And J.P. Morgan Chase CEO Jamie Dimon, speaking at the Stanford Institute for Economic Policy Research’s 2010 economic outlook on March 12, said several more commercial-real-estate foreclosures lie ahead.
“But I don’t think this will stop America from recovering,” Dimon said. “When you think of real estate, you have the equity and I have the debt. When a foreclosure is over, I hold the equity.”
But the pace of foreclosures and loan losses will take their toll, especially on community banks that need to raise more capital or meet the ultimate fate of being shut down.
Several troubled banks nationwide are operating on borrowed time, with the Federal Deposit Insurance Corp. telling institutions to raise capital by a certain date or face closure.
Today’s 8,000 banks are likely to decline to 5,000 banks over the next five years due to failures and acquisitions, according to Gary Findley, president of the banking publication The Findley Reports. Findley was the keynote speaker at a March 11 distressed properties conference in Walnut Creek titled Fool’s Gold.
Today’s real estate cycle has followed a traditional pattern in which businesses hurt in the recession, shut down or negotiate better leases, which in turn hurts a building’s cash flow and market value. That, in turn, translates into pain for the banks that financed the real estate as borrowers have trouble repaying loans and refinancing existing debt on the building, which has fallen in value.
Buster, who was among the first Bay Area bankers to speak publicly about an approaching credit crunch in the fall of 2007, says he’s confident that we’re coming out of this real estate downturn.
“I’ve seen this movie several times before,” Buster said.
3/19/2010
What's happening in Georgetown Real Estate...
It's Friday and sunny and warm! Perfect weather for real estate! And as flowers, shrubs and trees begin to blossom in Georgetown, everything takes on a hopeful air.
Briefly, just as the weather is heating up, so is the real estate market. More people are coming to open houses, more properties are selling, the inventory is lower than it was this time last year, and there are even frequently, competing offers on properties. The multiple offer situation is concentrated more on the lower priced end of the market...which for us is $350,000 - $600,000. But, interestingly there have been some competitive situations in the next level up, $600,000 to about $1Million. Those are all good signs.
If you are considering putting your property on the market, keep in mind that though there is increased activity, it is still a "buyer's" market, and because our buyers are very well informed about the relative cost of housing it's important to be very careful to price with the market, so to speak.
One other thing... appraisals have become an issue in many cases. So even when properties are selling at higher prices, it has become increasingly difficult for appraisers to come up with enough comparable properties to justify the sale price.
Briefly, just as the weather is heating up, so is the real estate market. More people are coming to open houses, more properties are selling, the inventory is lower than it was this time last year, and there are even frequently, competing offers on properties. The multiple offer situation is concentrated more on the lower priced end of the market...which for us is $350,000 - $600,000. But, interestingly there have been some competitive situations in the next level up, $600,000 to about $1Million. Those are all good signs.
If you are considering putting your property on the market, keep in mind that though there is increased activity, it is still a "buyer's" market, and because our buyers are very well informed about the relative cost of housing it's important to be very careful to price with the market, so to speak.
One other thing... appraisals have become an issue in many cases. So even when properties are selling at higher prices, it has become increasingly difficult for appraisers to come up with enough comparable properties to justify the sale price.
3/17/2010
“If you’re at the cutting edge, then you’re going to bleed.”
This seemingly has nothing to do with Georgetown Real Estate but I find it interesting, and I suppose one could consider Georgetown on the cutting edge of the real estate market, and therefor likely to take longer to "stop the bleeding" of the slow real estate market.
In any event, in an article from the New York Times, neuroscientist Nancy Andreasen is credited with this statement, “If you’re at the cutting edge, then you’re going to bleed.” In the article she is talking about depression and creativity. The larger article has to do with depression and what the possible "up side" of depression might be. Andreasen argues that depression is intertwined with a “cognitive style” that makes people more likely to produce successful works of art. I've quoted the remainder of her thought below.
Perhaps what I am about to say is a stretch...But, we have been going through a financial depression, and real estate depression. Not necessarily a big "D" depression, but certainly not something I would consider a pleasant experience. In real estate, our "work of art" is a completed, successful home-buying transaction. Maybe in the midst of our real estate depression we can, like artists, focus better on what we have to do, and maintain the persistence we need to maintain in order to achieve the work of art. In the creative process, Andreasen says, “one of the most important qualities is persistence.” Andreasen found that “successful writers are like prizefighters who keep on getting hit but won’t go down. They’ll stick with it until it’s right.”
That's a quality of a good real estate professional, and also of that professional's client. To my mind the market will begin to improve as more and more people...both agents and clients...keep getting back up and facing into the reality of our market.
Here is a further quote from the NYT article. [While Andreasen acknowledges the burden of mental illness — she quotes Robert Lowell on depression not being a “gift of the Muse” and describes his reliance on lithium to escape the pain — she argues that many forms of creativity benefit from the relentless focus it makes possible. “Unfortunately, this type of thinking is often inseparable from the suffering,” she says. “If you’re at the cutting edge, then you’re going to bleed.” ]
To read the entire article go to NYtimes.com, and look for "Depression's Upside..." by Jonah Lehrer. He is the author of “How We Decide” and of the blog The Frontal Cortex. This is his first article for the magazine.
In any event, in an article from the New York Times, neuroscientist Nancy Andreasen is credited with this statement, “If you’re at the cutting edge, then you’re going to bleed.” In the article she is talking about depression and creativity. The larger article has to do with depression and what the possible "up side" of depression might be. Andreasen argues that depression is intertwined with a “cognitive style” that makes people more likely to produce successful works of art. I've quoted the remainder of her thought below.
Perhaps what I am about to say is a stretch...But, we have been going through a financial depression, and real estate depression. Not necessarily a big "D" depression, but certainly not something I would consider a pleasant experience. In real estate, our "work of art" is a completed, successful home-buying transaction. Maybe in the midst of our real estate depression we can, like artists, focus better on what we have to do, and maintain the persistence we need to maintain in order to achieve the work of art. In the creative process, Andreasen says, “one of the most important qualities is persistence.” Andreasen found that “successful writers are like prizefighters who keep on getting hit but won’t go down. They’ll stick with it until it’s right.”
That's a quality of a good real estate professional, and also of that professional's client. To my mind the market will begin to improve as more and more people...both agents and clients...keep getting back up and facing into the reality of our market.
Here is a further quote from the NYT article. [While Andreasen acknowledges the burden of mental illness — she quotes Robert Lowell on depression not being a “gift of the Muse” and describes his reliance on lithium to escape the pain — she argues that many forms of creativity benefit from the relentless focus it makes possible. “Unfortunately, this type of thinking is often inseparable from the suffering,” she says. “If you’re at the cutting edge, then you’re going to bleed.” ]
To read the entire article go to NYtimes.com, and look for "Depression's Upside..." by Jonah Lehrer. He is the author of “How We Decide” and of the blog The Frontal Cortex. This is his first article for the magazine.
3/16/2010
Georgetown Stats - Week of March 8-14
According to the MRIS (Multiple regional information Service), the following real estate transactions have taken place in Georgetown during the week of 3/8-14:
12 new listings. 6 Single Family ($835,000 - $4,200,000) and 6 condo/co-ops ($310,310 - $2,495,000)
2 properties came under contract. One SF ($835,000) and one C/C ($350,000)
12 new listings. 6 Single Family ($835,000 - $4,200,000) and 6 condo/co-ops ($310,310 - $2,495,000)
2 properties came under contract. One SF ($835,000) and one C/C ($350,000)
Are we at the bottom?
This is a long article from Bloomberg regarding several positive signs for housing. Georgetown real estate will benefit from these changes if things move as projected below.
Darrell
Housing Real-Estate Recovery Signaled as Fed Unwinds
By Kathleen M. Howley and Rich Miller
March 15 (Bloomberg) -- The U.S. housing market is poised to withstand the removal of government and Federal Reserve stimulus programs and rebound later in the year, contributing to annual economic growth for the first time since 2006.
Increases in jobs, credit and affordable homes will help offset the end of the Fed’s purchases of mortgage-backed securities this month and the expiration of a federal homebuyer tax credit in April. Sales will rise about 6 percent this year, and housing will account for 0.25 percentage point of the 3.6 percent growth, according to forecasts by Dean Maki, chief U.S. economist for Barclays Capital in New York.
“I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months,” said Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College in Wellesley, Massachusetts.
An improving market would allay concerns at the Fed that sales will relapse after the tax credit expires. It would also give Fed Chairman Ben S. Bernanke and his colleagues, who meet this week in Washington, a freer rein to ultimately raise the interest rate for overnight loans among banks from near zero.
“They’re going to be tightening credit sooner than people expect,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. He forecasts that the Fed’s first increase since 2006 may come as soon as June.
Reflecting Optimism
Homebuilders’ shares reflect the optimism. The 12-member Standard & Poor’s Supercomposite Homebuilding Index hit a five- month high March 9 on speculation the expanding economy will boost sales. The index has gained 14 percent this year, led by a 41 percent jump in Columbus, Ohio-based M/I Homes Inc., a 31 percent increase by Standard Pacific Corp. in Irvine, California, and a 28 percent rise in Miami-based Lennar Corp.
Recent housing data have been mixed. Sales of existing homes fell 7.2 percent in January, while housing starts rose 2.8 percent, according to statistics from the National Association of Realtors in Chicago and the Commerce Department in Washington. Builder confidence declined unexpectedly this month to 15 from 17 in February according to a National Association of Home Builders/Well Fargo index, as traffic of prospective buyers dropped to a one-year low. A reading below 50 means most respondents view conditions as poor.
Rising Sales
Sales of new homes still are forecast to increase this year as the economy improves, according to David Crowe, chief economist for the association in Washington, probably totaling 459,000 in 2010, up from 372,000 last year, he said.
Employment is key to the outlook, according to Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts.
“When people get jobs, that’s when they move or decide to buy a bigger house,” he said.
The U.S. may add as many as 300,000 jobs in March, the most in four years, thanks to an improvement in the weather, government hiring of temporary workers for the census and a growing economy, said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. Payrolls dropped by 36,000 in February, according to the Labor Department, depressed in part by East Coast snowstorms that closed many businesses.
“The underlying trend is turning positive,” said Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York.
Solid Footing
The Senate last week approved a $138 billion measure that would extend unemployment benefits and provide additional aid to states. President Barack Obama praised the bill’s passage, saying it will help put the U.S. back on a solid footing.
The economy is projected to grow 3 percent this year, according to the median forecast of 52 economists surveyed by Bloomberg News from March 1 to March 10. It expanded at a 5.9 percent annual pace in the fourth quarter, the most in more than six years, after a 2.2 percent increase in the third.
Credit conditions may also be improving. A net 13.2 percent of banks surveyed by the Fed in January reported that they tightened standards on prime mortgage loans in the fourth quarter, the smallest percentage since the central bank began tallying such data three years ago.
“This is an important step in the right direction,” Peter Hooper, chief economist at Deutsche Bank Securities in New York, and his colleagues wrote in a report to clients last month.
Mortgage originations for the purchase of a home will rise to $745 billion this year and $822 billion next year, the highest since 2008, from $740 billion in 2009, according to forecasts from the Washington-based Mortgage Bankers Association.
More Affordable
Falling home prices and low mortgage rates have made homes more affordable. The median price was $164,700 in January, matching the year-ago level, which was the lowest since May 2002, according to the Realtors’ association. The trade group will report February housing data next week.
The average rate for a 30-year fixed mortgage was 4.95 percent last week, up from a record-low 4.71 percent in December, according to Freddie Mac, the McLean, Virginia-based mortgage buyer.
The average household had 177.8 percent of the income needed to purchase a property in January, the highest since a record 184 percent in April 2009, when mortgage rates tumbled to 4.78 percent, according to data from the Realtors’ association.
First Hurdle
The housing market’s first hurdle comes at the end of this month, when the Fed completes its program to purchase $1.25 trillion of mortgage-backed securities and about $175 billion of housing-agency debt.
The move probably won’t have much impact, said Mahesh Swaminathan, a mortgage strategist at Credit Suisse Holdings USA in New York. Private demand will replace the central bank, keeping down the spread at which mortgage-backed securities trade to 10-year Treasury notes, he said. The spread on Friday was about 60 basis points.
“We don’t anticipate a massive widening of spreads once the Fed stops buying,” he said. “It will be a few basis points here and there.”
As a result, he sees mortgage rates remaining “about where they are now.”
Much of the private buying will come from money managers who are underweight mortgage-backed securities in their portfolios relative to their benchmarks, said Ajay Rajadhyaksha, managing director of Barclays Capital in New York, who sees spreads rising about 15 basis points in the second quarter.
Next Obstacle
Once the Fed completes its purchases, the next obstacle for the market is the expiration of the tax credit for first-time home buyers. The original credit helped boost existing-home sales by 4.9 percent to 5.16 million in 2009, the first increase since 2005, according to the Realtors’ association. The credit, which was slated to end on Nov. 30, was expanded and extended through April.
The Fed’s Beige Book business survey released March 3 found that some contacts in the housing industry are “apprehensive about future sales” of homes once the credit expires, even though the extension hasn’t helped as much as the initial incentive.
“A lot of people moved up their purchases to meet the original deadline and that used up a lot of the pool of potential buyers,” IHS Global’s Newport said.
The credit of as much as $8,000 stimulated only 180,000 extra sales from December to April, said Crowe of the home- builders’ association.
‘Certainly Positive’
It was “certainly positive, but it has not fueled a huge increase in sales,” Ara K. Hovnanian, chairman and chief executive officer of Red Bank, New Jersey-based Hovnanian Enterprises Inc., the nation’s seventh largest homebuilder by revenue, told analysts on March 3.
The final challenge for the housing market this year is the supply of available properties and the prospect that it may rise. Foreclosures may increase to 2.2 million this year from a record 1.7 million last year, according to a forecast by Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pennsylvania.
The number of vacant homes for sale rose to 2.09 million in the fourth quarter from 1.99 million in the prior period as banks seized property, the U.S. Census Bureau said Feb. 2.
An improvement in the job market would spur household formation and help absorb the excess supply, said Thomas Lawler, a former economist with Washington-based mortgage company Fannie Mae who now is an independent housing consultant in Leesburg, Virginia.
Living with Mom and Dad
There may be 1.25 million new households in 2010 if the economy continues to expand, he said. The number has stayed below 1 million for the last three years as adult children lived with their parents and Americans generally conserved cash, he said.
“If we get a rebound, you could see excess supply disappear very quickly,” Lawler said.
“The underlying trend in home sales is for gradual improvement,” Maki of Barclays Capital said. “While activity will remain at low levels for some time, the housing bust is essentially over.”
To contact the reporters on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.netRich Miller in Washington rmiller28@bloomberg.net
Last Updated: March 15, 2010 13:47 EDT
Darrell
Housing Real-Estate Recovery Signaled as Fed Unwinds
By Kathleen M. Howley and Rich Miller
March 15 (Bloomberg) -- The U.S. housing market is poised to withstand the removal of government and Federal Reserve stimulus programs and rebound later in the year, contributing to annual economic growth for the first time since 2006.
Increases in jobs, credit and affordable homes will help offset the end of the Fed’s purchases of mortgage-backed securities this month and the expiration of a federal homebuyer tax credit in April. Sales will rise about 6 percent this year, and housing will account for 0.25 percentage point of the 3.6 percent growth, according to forecasts by Dean Maki, chief U.S. economist for Barclays Capital in New York.
“I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months,” said Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College in Wellesley, Massachusetts.
An improving market would allay concerns at the Fed that sales will relapse after the tax credit expires. It would also give Fed Chairman Ben S. Bernanke and his colleagues, who meet this week in Washington, a freer rein to ultimately raise the interest rate for overnight loans among banks from near zero.
“They’re going to be tightening credit sooner than people expect,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. He forecasts that the Fed’s first increase since 2006 may come as soon as June.
Reflecting Optimism
Homebuilders’ shares reflect the optimism. The 12-member Standard & Poor’s Supercomposite Homebuilding Index hit a five- month high March 9 on speculation the expanding economy will boost sales. The index has gained 14 percent this year, led by a 41 percent jump in Columbus, Ohio-based M/I Homes Inc., a 31 percent increase by Standard Pacific Corp. in Irvine, California, and a 28 percent rise in Miami-based Lennar Corp.
Recent housing data have been mixed. Sales of existing homes fell 7.2 percent in January, while housing starts rose 2.8 percent, according to statistics from the National Association of Realtors in Chicago and the Commerce Department in Washington. Builder confidence declined unexpectedly this month to 15 from 17 in February according to a National Association of Home Builders/Well Fargo index, as traffic of prospective buyers dropped to a one-year low. A reading below 50 means most respondents view conditions as poor.
Rising Sales
Sales of new homes still are forecast to increase this year as the economy improves, according to David Crowe, chief economist for the association in Washington, probably totaling 459,000 in 2010, up from 372,000 last year, he said.
Employment is key to the outlook, according to Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts.
“When people get jobs, that’s when they move or decide to buy a bigger house,” he said.
The U.S. may add as many as 300,000 jobs in March, the most in four years, thanks to an improvement in the weather, government hiring of temporary workers for the census and a growing economy, said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. Payrolls dropped by 36,000 in February, according to the Labor Department, depressed in part by East Coast snowstorms that closed many businesses.
“The underlying trend is turning positive,” said Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York.
Solid Footing
The Senate last week approved a $138 billion measure that would extend unemployment benefits and provide additional aid to states. President Barack Obama praised the bill’s passage, saying it will help put the U.S. back on a solid footing.
The economy is projected to grow 3 percent this year, according to the median forecast of 52 economists surveyed by Bloomberg News from March 1 to March 10. It expanded at a 5.9 percent annual pace in the fourth quarter, the most in more than six years, after a 2.2 percent increase in the third.
Credit conditions may also be improving. A net 13.2 percent of banks surveyed by the Fed in January reported that they tightened standards on prime mortgage loans in the fourth quarter, the smallest percentage since the central bank began tallying such data three years ago.
“This is an important step in the right direction,” Peter Hooper, chief economist at Deutsche Bank Securities in New York, and his colleagues wrote in a report to clients last month.
Mortgage originations for the purchase of a home will rise to $745 billion this year and $822 billion next year, the highest since 2008, from $740 billion in 2009, according to forecasts from the Washington-based Mortgage Bankers Association.
More Affordable
Falling home prices and low mortgage rates have made homes more affordable. The median price was $164,700 in January, matching the year-ago level, which was the lowest since May 2002, according to the Realtors’ association. The trade group will report February housing data next week.
The average rate for a 30-year fixed mortgage was 4.95 percent last week, up from a record-low 4.71 percent in December, according to Freddie Mac, the McLean, Virginia-based mortgage buyer.
The average household had 177.8 percent of the income needed to purchase a property in January, the highest since a record 184 percent in April 2009, when mortgage rates tumbled to 4.78 percent, according to data from the Realtors’ association.
First Hurdle
The housing market’s first hurdle comes at the end of this month, when the Fed completes its program to purchase $1.25 trillion of mortgage-backed securities and about $175 billion of housing-agency debt.
The move probably won’t have much impact, said Mahesh Swaminathan, a mortgage strategist at Credit Suisse Holdings USA in New York. Private demand will replace the central bank, keeping down the spread at which mortgage-backed securities trade to 10-year Treasury notes, he said. The spread on Friday was about 60 basis points.
“We don’t anticipate a massive widening of spreads once the Fed stops buying,” he said. “It will be a few basis points here and there.”
As a result, he sees mortgage rates remaining “about where they are now.”
Much of the private buying will come from money managers who are underweight mortgage-backed securities in their portfolios relative to their benchmarks, said Ajay Rajadhyaksha, managing director of Barclays Capital in New York, who sees spreads rising about 15 basis points in the second quarter.
Next Obstacle
Once the Fed completes its purchases, the next obstacle for the market is the expiration of the tax credit for first-time home buyers. The original credit helped boost existing-home sales by 4.9 percent to 5.16 million in 2009, the first increase since 2005, according to the Realtors’ association. The credit, which was slated to end on Nov. 30, was expanded and extended through April.
The Fed’s Beige Book business survey released March 3 found that some contacts in the housing industry are “apprehensive about future sales” of homes once the credit expires, even though the extension hasn’t helped as much as the initial incentive.
“A lot of people moved up their purchases to meet the original deadline and that used up a lot of the pool of potential buyers,” IHS Global’s Newport said.
The credit of as much as $8,000 stimulated only 180,000 extra sales from December to April, said Crowe of the home- builders’ association.
‘Certainly Positive’
It was “certainly positive, but it has not fueled a huge increase in sales,” Ara K. Hovnanian, chairman and chief executive officer of Red Bank, New Jersey-based Hovnanian Enterprises Inc., the nation’s seventh largest homebuilder by revenue, told analysts on March 3.
The final challenge for the housing market this year is the supply of available properties and the prospect that it may rise. Foreclosures may increase to 2.2 million this year from a record 1.7 million last year, according to a forecast by Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pennsylvania.
The number of vacant homes for sale rose to 2.09 million in the fourth quarter from 1.99 million in the prior period as banks seized property, the U.S. Census Bureau said Feb. 2.
An improvement in the job market would spur household formation and help absorb the excess supply, said Thomas Lawler, a former economist with Washington-based mortgage company Fannie Mae who now is an independent housing consultant in Leesburg, Virginia.
Living with Mom and Dad
There may be 1.25 million new households in 2010 if the economy continues to expand, he said. The number has stayed below 1 million for the last three years as adult children lived with their parents and Americans generally conserved cash, he said.
“If we get a rebound, you could see excess supply disappear very quickly,” Lawler said.
“The underlying trend in home sales is for gradual improvement,” Maki of Barclays Capital said. “While activity will remain at low levels for some time, the housing bust is essentially over.”
To contact the reporters on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.netRich Miller in Washington rmiller28@bloomberg.net
Last Updated: March 15, 2010 13:47 EDT
3/15/2010
DC scores high for "Young in the City"
G. Scott Thomas Mar 15 2010, from Bizjournals.com
(Darrell's editorial note: This article lists DC as second in the nation for cities appealing to young adults. This is good news all around for us, because these are the folks who are buying entry and mid-range properties, which help the entry level real estate market in Georgetown, and will eventually filter up to the upper-brackets.)
This may seem like a dumb question: where is it good to be a young adult? The easy answer is everywhere. But some metro areas, starting with Austin, are kinda awesome.
It’s no secret we live in a country of haves and have-nots. But did you know there’s a California city where nearly 29 percent of households earn more than $200,000 a year, while in one Pennsylvania city, not a single household makes that amount? Austin takes top honors, while Detroit lags far, far behind.
Strong growth rates, moderate costs of living, and substantial pools of the college-educated and employed all contribute to determining the best markets for young adults.
The Southwest is the new frontier for young Americans—the region where those in their 20s and 30s have the best chance of establishing themselves in a recessionary economy. Five Southwestern metropolitan areas, led by No. 1 Austin, rank among the nation’s 10 best places for young adults, according to a new Portfolio.com/bizjournals study.
Two qualities help Austin—the host of the annual South by Southwest music, film, and interactive conference and festival—to stand out among the nation’s largest metros:
— Two thirds of the nation’s major markets have fewer jobs now than five years ago, but Austin added 99,200 jobs during that span. Its annual employment-growth rate of 2.8 percent is the fastest in America.
— Austin has the strongest concentration of young people among the 67 metros. Twenty-eight percent of its residents are between the ages of 18 and 34. The median for the study group is 23.1 percent.
Washington, Raleigh, and Boston are the three runners-up in the study’s rankings of the best places for young adults. They’re followed by four Southwestern metros—Houston, Oklahoma City, Dallas-Fort Worth, and Tulsa—that occupy fifth through eighth place.
Portfolio.com/bizjournals analyzed the 67 U.S. metropolitan areas with populations above 750,000, searching for qualities that would appeal to workers in their 20s and early 30s. The study’s 10-part formula gave the highest marks to places with strong growth rates, moderate costs of living, and substantial pools of young adults who are college-educated and employed. (See the methodology sidebar for details.)
Here’s a quick look at the very best places—the top-10 metros for young adults.
1. Austin: Its attractiveness to young adults is broadly based, and it ranks among the 10 leading markets in five of the categories that were analyzed. This isn’t the first time Austin takes top honors in a Portfolio.com/bizjournals analysis. Earlier this year, the city was named the best city in which to launch a small business.
2. Washington: Educated young adults flock to the nation’s capital, where 35.8 percent of all 18-to-34-year-olds hold bachelor’s degrees. The study group’s median is 23.2 percent. Per capita income ($56,510) is well above average.
3. Raleigh: This is the fastest-growing major metro in the nation. The population of the Raleigh area is increasing by 3.9 percent per year. That’s more than triple the pace for the typical market, 1.2 percent. Another North Carolina metro, Charlotte, placed at 28 in the rankings.
4. Boston: Elite universities such as Harvard and MIT give Boston its intellectual cachet. The local share of young adults with college degrees (37.6 percent) is the highest in the country.
5. Houston: Employment opportunities abound in Houston, where the job-growth rate (1.7 percent per year) ranks among the five best in the nation. And so does its annual upswing in per capita income (6.6 percent).
6. Oklahoma City: The unemployment rate for young adults is lower here than anywhere but Salt Lake City and Tulsa. Oklahoma City also enjoys the nation’s third-best pace for annual income growth, a rapid 7.2 percent.
7. Dallas-Fort Worth: The recession caused some backsliding in 2009, but Dallas-Fort Worth still has 206,000 more jobs than it did five years ago. Local population is zipping higher by 2.4 percent per year.
8. Tulsa: Here’s an area that’s a true bargain. Median rent is $508 per month in Tulsa, the third-lowest figure in the study group. Compare that to such budget-breakers as San Jose (median rent of $1,334) or Honolulu ($1,227).
9. Seattle: This high-tech metro offers a wide range of good-paying jobs. Seattle ranks among the 10 markets with the largest per capita incomes ($50,471) and smallest unemployment rates for young adults.
10. Baton Rouge: Louisiana is on its way back from the wrath of Hurricane Katrina, and this is one of its success stories. Baton Rouge boasts a high concentration of young adults (26.1 percent) and a strong rate of income growth.
The least desirable market for young adults, according to the Portfolio.com/bizjournals study, is Detroit, which shares the pain of the major automotive corporations based there.
Detroit is saddled with the nation’s worst unemployment rate for young adults, the slowest rate of income growth, and the biggest decline in overall employment. A total of 343,700 jobs have disappeared from the Detroit area during the past five years. This isn’t the first time Detroit has come up short this year in a Portolio.com/bizjournals study: It came in last in the January analysis of small-business vitality and was the lowest-ranking major city in February’s review of U.S. wealth centers.
Two Midwestern industrial markets and two Sunbelt metros round out the bottom five. These areas may differ in geography, but they share a lack of attractiveness to young adults: Cleveland (66th place), Dayton, Ohio (65th), Tampa-St. Petersburg (64th), and California’s Riverside-San Bernardino area (63rd).
(This analysis is part of the Portfolio.com series U.S. Uncovered. To get more in-depth reports exploring the best places to work, play and retire, go to Bizjournals.com)
(Darrell's editorial note: This article lists DC as second in the nation for cities appealing to young adults. This is good news all around for us, because these are the folks who are buying entry and mid-range properties, which help the entry level real estate market in Georgetown, and will eventually filter up to the upper-brackets.)
This may seem like a dumb question: where is it good to be a young adult? The easy answer is everywhere. But some metro areas, starting with Austin, are kinda awesome.
It’s no secret we live in a country of haves and have-nots. But did you know there’s a California city where nearly 29 percent of households earn more than $200,000 a year, while in one Pennsylvania city, not a single household makes that amount? Austin takes top honors, while Detroit lags far, far behind.
Strong growth rates, moderate costs of living, and substantial pools of the college-educated and employed all contribute to determining the best markets for young adults.
The Southwest is the new frontier for young Americans—the region where those in their 20s and 30s have the best chance of establishing themselves in a recessionary economy. Five Southwestern metropolitan areas, led by No. 1 Austin, rank among the nation’s 10 best places for young adults, according to a new Portfolio.com/bizjournals study.
Two qualities help Austin—the host of the annual South by Southwest music, film, and interactive conference and festival—to stand out among the nation’s largest metros:
— Two thirds of the nation’s major markets have fewer jobs now than five years ago, but Austin added 99,200 jobs during that span. Its annual employment-growth rate of 2.8 percent is the fastest in America.
— Austin has the strongest concentration of young people among the 67 metros. Twenty-eight percent of its residents are between the ages of 18 and 34. The median for the study group is 23.1 percent.
Washington, Raleigh, and Boston are the three runners-up in the study’s rankings of the best places for young adults. They’re followed by four Southwestern metros—Houston, Oklahoma City, Dallas-Fort Worth, and Tulsa—that occupy fifth through eighth place.
Portfolio.com/bizjournals analyzed the 67 U.S. metropolitan areas with populations above 750,000, searching for qualities that would appeal to workers in their 20s and early 30s. The study’s 10-part formula gave the highest marks to places with strong growth rates, moderate costs of living, and substantial pools of young adults who are college-educated and employed. (See the methodology sidebar for details.)
Here’s a quick look at the very best places—the top-10 metros for young adults.
1. Austin: Its attractiveness to young adults is broadly based, and it ranks among the 10 leading markets in five of the categories that were analyzed. This isn’t the first time Austin takes top honors in a Portfolio.com/bizjournals analysis. Earlier this year, the city was named the best city in which to launch a small business.
2. Washington: Educated young adults flock to the nation’s capital, where 35.8 percent of all 18-to-34-year-olds hold bachelor’s degrees. The study group’s median is 23.2 percent. Per capita income ($56,510) is well above average.
3. Raleigh: This is the fastest-growing major metro in the nation. The population of the Raleigh area is increasing by 3.9 percent per year. That’s more than triple the pace for the typical market, 1.2 percent. Another North Carolina metro, Charlotte, placed at 28 in the rankings.
4. Boston: Elite universities such as Harvard and MIT give Boston its intellectual cachet. The local share of young adults with college degrees (37.6 percent) is the highest in the country.
5. Houston: Employment opportunities abound in Houston, where the job-growth rate (1.7 percent per year) ranks among the five best in the nation. And so does its annual upswing in per capita income (6.6 percent).
6. Oklahoma City: The unemployment rate for young adults is lower here than anywhere but Salt Lake City and Tulsa. Oklahoma City also enjoys the nation’s third-best pace for annual income growth, a rapid 7.2 percent.
7. Dallas-Fort Worth: The recession caused some backsliding in 2009, but Dallas-Fort Worth still has 206,000 more jobs than it did five years ago. Local population is zipping higher by 2.4 percent per year.
8. Tulsa: Here’s an area that’s a true bargain. Median rent is $508 per month in Tulsa, the third-lowest figure in the study group. Compare that to such budget-breakers as San Jose (median rent of $1,334) or Honolulu ($1,227).
9. Seattle: This high-tech metro offers a wide range of good-paying jobs. Seattle ranks among the 10 markets with the largest per capita incomes ($50,471) and smallest unemployment rates for young adults.
10. Baton Rouge: Louisiana is on its way back from the wrath of Hurricane Katrina, and this is one of its success stories. Baton Rouge boasts a high concentration of young adults (26.1 percent) and a strong rate of income growth.
The least desirable market for young adults, according to the Portfolio.com/bizjournals study, is Detroit, which shares the pain of the major automotive corporations based there.
Detroit is saddled with the nation’s worst unemployment rate for young adults, the slowest rate of income growth, and the biggest decline in overall employment. A total of 343,700 jobs have disappeared from the Detroit area during the past five years. This isn’t the first time Detroit has come up short this year in a Portolio.com/bizjournals study: It came in last in the January analysis of small-business vitality and was the lowest-ranking major city in February’s review of U.S. wealth centers.
Two Midwestern industrial markets and two Sunbelt metros round out the bottom five. These areas may differ in geography, but they share a lack of attractiveness to young adults: Cleveland (66th place), Dayton, Ohio (65th), Tampa-St. Petersburg (64th), and California’s Riverside-San Bernardino area (63rd).
(This analysis is part of the Portfolio.com series U.S. Uncovered. To get more in-depth reports exploring the best places to work, play and retire, go to Bizjournals.com)
Price reductions nationally less frequent, but not so much in DC.
This is a National and overall-DC view of price reductions. In doesn't tell us how this applies specifically to Georgetown real estate, but as usual, is a positive sign about the market in general (which is of course good for us!)
Some 19 percent of U.S. listings currently on the market as of March 1, 2010, experienced at least one price cut. This represents a 10 percent decrease from the previous month and the first time price reduction levels have dropped below 20 percent, according to Trulia.com.
The total dollar amount slashed from home prices dropped to $21.6 billion and the average discount for price-reduced homes continues to hold at 11 percent off of the original listing price. While many states are seeing lower levels of price reductions, sellers and buyers in the following states continue to disagree more frequently on what is fair for home prices in their respective states:
* Arizona - 25%
* Massachusetts - 25%
* Washington D.C. - 25%
* Hawaii - 24%
* Maryland - 24%
The average amount slashed from homes listed at $1 million above is 14 percent off of the original listing price.
Taken from REAL Trends E-mail Update #1186, March 12, 2010
Some 19 percent of U.S. listings currently on the market as of March 1, 2010, experienced at least one price cut. This represents a 10 percent decrease from the previous month and the first time price reduction levels have dropped below 20 percent, according to Trulia.com.
The total dollar amount slashed from home prices dropped to $21.6 billion and the average discount for price-reduced homes continues to hold at 11 percent off of the original listing price. While many states are seeing lower levels of price reductions, sellers and buyers in the following states continue to disagree more frequently on what is fair for home prices in their respective states:
* Arizona - 25%
* Massachusetts - 25%
* Washington D.C. - 25%
* Hawaii - 24%
* Maryland - 24%
The average amount slashed from homes listed at $1 million above is 14 percent off of the original listing price.
Taken from REAL Trends E-mail Update #1186, March 12, 2010
3/12/2010
THOUGH WE ARE SEEING SOME IMPROVEMENT in the market, i.e. more sales and more activity in general, it is still very much a buyer's market. Even in situations where buyers are competing for entry level properties, they are competing for these properties at a much lower price point than was the case two years ago. The competing offers act to drive up the selling price to a degree, but still not where an owner would consider it top dollar for his/her property. Granted, a certain percentage of these properties are short sales or foreclosures. The majority however, are not. It's possible of course that the owners are facing financial troubles and are therefor willing to price their properties in such a way as to give them the best chance to get it sold in this market.
3/10/2010
Georgetown Stats - week of March 1-7
Activity in Georgetown residential real estate for last week:
3 new active listings at $379,000, $589,000, and $1,395,000
2 properties under contract with list prices of $828,000, $1,299,000
6 settled properties at $239,000, $489,000, $719,900, $1,160,000, $2,295,000, and $4,950,000
3 new active listings at $379,000, $589,000, and $1,395,000
2 properties under contract with list prices of $828,000, $1,299,000
6 settled properties at $239,000, $489,000, $719,900, $1,160,000, $2,295,000, and $4,950,000
News from "the front".
One of the questions repeatedly asked of Realtors is one about the state of the market in Georgetown, and the predictions of things to come. Well-informed Realtors can answer that first question with great certainty and with an unequalled view of the market. Predictions of the future are another matter.
Because Realtors are on the front lines of the real estate business every day, they know better than any other group of people (including economists, politicians and soothsayers) what the current state of the market is. Every article written in every publication about the residential real estate market is based on information gleaned from active Realtors...what's selling and what's not...is activity up or down...are prices rising or falling, etc, etc. Also every article is "old news" by the time it reaches us. In the case of the internet, it may be only a day or two old, but unless the article is being written by a Realtor, it is of necessity at least "yesterday's news".
But when it comes to predictions, my crystal ball isn't any better than Bernanke's. I, and other Realtors however, can make as good a guess about the future of real estate...and probably a better one than many. Realtors who are active in the profession, and who have lived through real estate cycles have a visceral knowledge of the market. Or maybe that's an intuition or instinct. In any event, it does give them a long view on a very specific industry which few outsiders possess.
Because Realtors are on the front lines of the real estate business every day, they know better than any other group of people (including economists, politicians and soothsayers) what the current state of the market is. Every article written in every publication about the residential real estate market is based on information gleaned from active Realtors...what's selling and what's not...is activity up or down...are prices rising or falling, etc, etc. Also every article is "old news" by the time it reaches us. In the case of the internet, it may be only a day or two old, but unless the article is being written by a Realtor, it is of necessity at least "yesterday's news".
But when it comes to predictions, my crystal ball isn't any better than Bernanke's. I, and other Realtors however, can make as good a guess about the future of real estate...and probably a better one than many. Realtors who are active in the profession, and who have lived through real estate cycles have a visceral knowledge of the market. Or maybe that's an intuition or instinct. In any event, it does give them a long view on a very specific industry which few outsiders possess.
3/08/2010
And the Oscar goes to...
From what I have seen before, during and after the Oscars ceremony, people are more interested in what the actors were wearing, than what they had accomplished in film. Whatever one thinks about those priorities, it is a good reminder that when putting one's house on the market for sale, looking good is important. So today's Oscar goes to the owners of currently listed properties in Georgetown, who have spent the time and effort to make their properties appealing to would-be buyers. And hopefully the beauty isn't just skin deep!
3/05/2010
Modest "feeding frenzy" in full swing
In some price ranges, the competition for properties is beginning to look like the real estate market of three or four years ago. This is happening mostly with entry-level condos/co-ops ($300-500,000), but has begun to push up into higher-priced properties($500,000 - $1million). In the past couple of weeks we have seen 3-4offers on many properties as investors and first-time buyers compete to buy well-priced properties. This seems to be happening in the Georgetown environs as well as across the City.
Don't get caught in this trap!
One of our buyers recently ratified a contract on a condominium property. The contract called for FHA financing, and the building appeared to have been approved for FHA loans. It took nearly until the day of settlement to obtain loan approval, at which point it was discovered that the building was not approved for FHA financing. Now the settlement date has passed and both buyer and seller are worried about how to work things out.
The reason this got to the place it did is that new FHA guidelines were recently established, one of which was to increase the loan limits to accomodate DC prices, and one of which changed the way the buildings are approved.
Given the higher loan limits for FHA loans, many more of our DC properties have become eligible for FHA. However one of the stumbling blocks for condos is that many buildings are not FHA approved. In the past, one could get this approval using “spot approvals” which would allow financing for the unit under contract. Under new FHA guidelines, that is no longer possible. Thankfully, though there is another way. It’s called DELRAP (I didn’t choose the acronym!). It’s the name of the process through which a direct endorsement lender is required to approve the entire building for FHA financing. I am told that Wells Fargo can do this within 7-9business days of receiving all documentation necessary for review.
If you would like more specific information about this process, let me know and I'll send more. darrell@lnf.com
The reason this got to the place it did is that new FHA guidelines were recently established, one of which was to increase the loan limits to accomodate DC prices, and one of which changed the way the buildings are approved.
Given the higher loan limits for FHA loans, many more of our DC properties have become eligible for FHA. However one of the stumbling blocks for condos is that many buildings are not FHA approved. In the past, one could get this approval using “spot approvals” which would allow financing for the unit under contract. Under new FHA guidelines, that is no longer possible. Thankfully, though there is another way. It’s called DELRAP (I didn’t choose the acronym!). It’s the name of the process through which a direct endorsement lender is required to approve the entire building for FHA financing. I am told that Wells Fargo can do this within 7-9business days of receiving all documentation necessary for review.
If you would like more specific information about this process, let me know and I'll send more. darrell@lnf.com
3/03/2010
Several hopeful signs…and other interesting housing developments.
One of the first questions I am always asked when talking with people about real estate is, "Have we hit bottom?". I wish I knew the answer, but as I have said before, we won't know until we have left the bottom behind (no pun intended). But here are what some sources have to say about the current state of our market.
1. Investors are competing with first-time home buyers for entry level properties. This is one of the reasons the number of sales is holding steady or going up, while prices have not gone up. Many agents in our Georgetown office have experienced this first-hand when working with first-time buyers. The competition for these properties has been fierce with three and four competing offers on a given property. There is an interesting article at RealEstateEconomyWatch.com, Steve Cook, (2/26/10); and another at NAR.org.
2. Warren Buffett thinks the housing market will recover by 2011. Good article at Bloomberg.com, Andrew Frye, (03/01/10)
3. The Obama administration is apparently working on an idea which would prohibit lenders from foreclosing on a home under certain circumstances. See an article at DSNews.com, Carrie Bay, (02/26/2010)
4. The Lender Processing Services (LPS) organization doesn’t think the “recovery” has begun. By that I think they mean that we haven’t hit the bottom of the market. Another way to look at things is that working through the inventory of foreclosures and short sales is the first part of the recovery. The fact that there is a concerted, successful effort at solving the housing problems is a positive sign, especially when the opposite possibility would be throwing up our arms and letting everything go to the dogs. Read the article at DSNews.com, Carrie Bay, (02/25/2010)
1. Investors are competing with first-time home buyers for entry level properties. This is one of the reasons the number of sales is holding steady or going up, while prices have not gone up. Many agents in our Georgetown office have experienced this first-hand when working with first-time buyers. The competition for these properties has been fierce with three and four competing offers on a given property. There is an interesting article at RealEstateEconomyWatch.com, Steve Cook, (2/26/10); and another at NAR.org.
2. Warren Buffett thinks the housing market will recover by 2011. Good article at Bloomberg.com, Andrew Frye, (03/01/10)
3. The Obama administration is apparently working on an idea which would prohibit lenders from foreclosing on a home under certain circumstances. See an article at DSNews.com, Carrie Bay, (02/26/2010)
4. The Lender Processing Services (LPS) organization doesn’t think the “recovery” has begun. By that I think they mean that we haven’t hit the bottom of the market. Another way to look at things is that working through the inventory of foreclosures and short sales is the first part of the recovery. The fact that there is a concerted, successful effort at solving the housing problems is a positive sign, especially when the opposite possibility would be throwing up our arms and letting everything go to the dogs. Read the article at DSNews.com, Carrie Bay, (02/25/2010)
African-Americans who lived and worked in Georgetown
Following is an announcement from "thegeorgetowndish.com". Good opportunity to learn about some of the history of the Georgetown community and specifically some of the former property owners.
Postponed, due to Snowmageddon, Black History Month lecture by best-selling author Breena Clarke will take place Saturday, March 6th at Dumbarton House starting at 1:30 pm. Celebrating Washington's rich history of African-American life and contributions, Ms. Clarke will discuss her novels Stand the Storm, set in Georgetown during the Civil War, and River and Cross My Heart (an Oprah’s Book Club selection). Ms. Clarke will share her research about the enslaved and free African-Americans who lived and worked in the Georgetown community. Sponsored by The DC Society of The National Society of The Colonial Dames of America. Fee: Non member $10; Members free. Rsvp@DumbartonHouse.org or 202-337-2288.
Postponed, due to Snowmageddon, Black History Month lecture by best-selling author Breena Clarke will take place Saturday, March 6th at Dumbarton House starting at 1:30 pm. Celebrating Washington's rich history of African-American life and contributions, Ms. Clarke will discuss her novels Stand the Storm, set in Georgetown during the Civil War, and River and Cross My Heart (an Oprah’s Book Club selection). Ms. Clarke will share her research about the enslaved and free African-Americans who lived and worked in the Georgetown community. Sponsored by The DC Society of The National Society of The Colonial Dames of America. Fee: Non member $10; Members free. Rsvp@DumbartonHouse.org or 202-337-2288.
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