Termite Inspections

Years ago, almost all, if not all, lenders required clean termite inspection reports for a property to proceed to settlement. These days, since it is not uncommon for the lender not to require a clean termite inspection report, the termite inspection is not as matter-of-fact as it used to be and is sometimes omitted, even though the buyer was entitled to have one performed. Buyers should be aware of whatever provisions are in their purchase contract, regardless of whether or not the lender requires a termite inspection. The Termite Inspection paragraph of the commonly used Regional Contract in the Maryland, DC and Virginia area offers protections for the buyer in case of termite infestation and/or damage.

The greater Washington DC real estate market seems to be a little schizophrenic right now. Homes in good locations and in good condition and that are priced well are often experiencing multiple offers and many time with escalation clauses resulting in contracts well over asking price. Homes that are lacking in any of the aforementioned area tend to linger longer and are more subject to traditional "buyer's market" dynamics.

2005 Job Growth Strongest in 5 Years

Washington Post, Monday, February 20, 2006; Page D02
The Washington area added 81,600 jobs in 2005, making it the strongest calendar year since 2000. But those jobs weren't created evenly across all sectors, and the differences in the pace of growth across industries provides a look at how the employment base of the region is changing.
The number of jobs in the area rose 2.8 percent for the year. Therefore, any sector with a higher pace of growth is expanding as a proportion of the local economy and any sector growing slower is shrinking in relative terms. By that measure, the big winner is the leisure and hospitality sector, which includes restaurants and hotels. It grew 4.7 percent. That reflects the rebound of the region's hotel and travel sector since tourism fell off in 2001 and 2002; more visitors means more people hired to take care of them.
The Washington area added 81,600 jobs in 2005, making it the strongest calendar year since 2000. But those jobs weren\'t created evenly across all sectors, and the differences in the pace of growth across industries provides a look at how the employment base of the region is changing.
Other big gainers were the construction sector, reflecting a booming residential real estate market, and professional and business services, which includes many companies that do information technology work for the federal government and have benefited from higher homeland security and defense spending.
Laggards include government jobs, which grew 1.5 percent. The federal government, it appears, is expanding by hiring contractors far more than it is hiring people directly. And the information sector, which includes telecommunications and publishing, lost jobs as the telecom industry continues to consolidate.
-- Neil Irwin

Multiples Live On!

What a surprise, after all the pundits downtalking the real estate market! We just had more than 10 offers on a listing in Bethesda which went for way over list price. Maybe you can't believe everything you hear or read.

DC Reduces Tax Rates, Increases Exemptions

The Tax rate for Class 1 Properties (Residential) has been reduced from $0.96 per hundred dollars to $0.92.

The Assessment Cap Credit, the cap on how much the taxes can increase per year on owner occupied properties, has been reduced from 12% per year to 10% per year.

The Homestead Exemption - the amount of assessed value exempt from taxation for owner occupied properties has been increased from $48,000 to $60,000.

If you have any questions about this information, feel free to check in with the people at RGS Title in Bethesda (301-654-9800) and mention my name (Tom Williams).

Fences Can Cause Problems

Not all fences are built on the right side of the property line and even when neighbors are extremely friendly problems can arise when one decides to sell the property. Say for example you decide to sell and your neighbor's fence extends onto your property. When the buyer of your property attempts to buy the title insurance required to obtain a mortgage, the title company may not fully insure the property because the fence encroaches upon it. So, even though the misplaced fence might currently represent no problem to either owner, it could be prudent to ward off future trouble by agreeing now to move the fence to where it should be.

No Bubble?

Ben S. Bernanke indicated last week in testimony to Congress's Joint Economic Committe that the price increases over the last few years have a solid foundation, but may not continue at the same pace, which wouldn't necessarily be a bad thing for the economy. Go tell Chicken Little.

"House prices have risen by nearly 25 percent over the past two years. Although
speculative activity has increased in some areas, at a national level these price increases
largely reflect strong economic fundamentals, including robust growth in jobs and
incomes, low mortgage rates, steady rates of household formation, and factors that limit
the expansion of housing supply in some areas. House prices are unlikely to continue
rising at current rates. However, as reflected in many private-sector forecasts such as the
Blue Chip forecast mentioned earlier, a moderate cooling in the housing market, should
one occur, would not be inconsistent with the economy continuing to grow at or near its
potential next year."