Rebecca & Tom Williams Real Estate Blog

Washington D.C. Area Tops Real Estate Market List

2011-01-26T09:27:00.000-08:00

TRUCKEE, CA – Jan. 6, 2011 – Clear Capital (www.clearcapital.com) released its monthly Home Data Index™ (HDI) Market Report, reporting a year-over-year national price change in 2010 of -4.1 percent, and expects another -3.7 percent year-over-year change in 2011. The HDI Market Report provides the most current (through December 2010) and granular analysis of how local markets performed compared to the national trend in home prices, as well as a 12-month forecast of what to expect in 2011. “In terms of home prices, this past year has certainly been characterized by uncertainty,” said Dr. Alex Villacorta, senior statistician, Clear Capital. “Tax incentives and high levels of distressed sale activity had counter effects on home prices which contributed to the fragility of the markets.”
Strong Market Contenders
Major cities in the western Gulf states, and Washington, D.C. are least likely to see high dollar declines in home values. Washington, D.C. follows-up its strong performance in 2010 with an expected 6.5 percent year-over-year price change in 2011. The District will be an interesting market to watch this year, though, because while it’s unlikely employment will fall, these numbers have been tempered with the added uncertainty due to the freezing of federal salaries, effective Jan. 1, 2011.

Owners’ Equity in Household Real Estate Heads Back Up

2010-02-17T06:33:00.000-08:00

The Federal Reserve's Flow of Funds Report shows Q2 and Q3 of 2009 trending back upward in terms of net equity in residential property across the country, which is another positive indicator that perhaps we have turned a corner.

Things seem to be loosening up a bit

2009-08-15T14:30:00.000-07:00

A lot of people have been lying low in terms of buying or selling real estate unless they were forced into action by hard to control factors like a job transfer. Just in the past several weeks there seems to be an across-the-board increase in people coming out to engage once again, sensing perhaps a safer environment in which to buy or sell. Buyers don't want to run the risk of their purchase losing value after they buy it. Sellers haven't wanted to walk through the fire of an aggressive buyer's market. Who knows what the future will bring, but it seems as if the cycle might be changing.

Termite Inspections

2007-07-16T09:36:00.000-07:00

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.

2007-04-09T09:09:00.000-07:00

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

2006-02-21T12:57:00.000-08:00

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!

2006-02-14T06:42:00.000-08:00

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

2006-02-10T07:08:00.000-08:00

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

2005-12-02T13:37:00.000-08:00

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?

2005-10-27T10:09:00.000-07:00

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."

Article in NYT about hot markets cooling

2005-10-04T03:59:00.000-07:00

New York Times - October 4, 2005
Slowing Is Seen in Housing Prices in Hot Markets
By DAVID LEONHARDT and MOTOKO RICH
A real estate slowdown that began in a handful of cities this summer has spread to almost every hot housing market in the country, including New York.
More sellers are putting their homes on the market, houses are selling less quickly and prices are no longer increasing as rapidly as they were in the spring, according to local data and interviews with brokers.
In Manhattan, the average sales price fell almost 13 percent in the third quarter from the second quarter, according to a widely followed report to be released today by Miller Samuel, an appraisal firm, and Prudential Douglas Elliman, a real estate firm. The amount of time it took to sell a home was also up 30.4 percent over the same period.
In another sign that the housing market might have reached a peak, executives at big home builders have sold almost $1 billion worth of company stock this year. [Page C1.]
Outside Washington, in Fairfax County, Va., the number of homes on the market in August rose nearly 50 percent from August 2004. In the Boston suburb of Brookline, Mass., where many three-bedroom houses cost $1 million or more, the inventory of homes for sale has increased in just the last few weeks, said Chobee Hoy, a broker there.
For-sale listings have also swelled throughout California, according to the California Association of Realtors. In the San Francisco Bay area, they have increased 16 percent in the last year, Coldwell Banker Residential Brokerage said.
"We are seeing a market in transition," Leslie Appleton-Young, the association's chief economist, said.
Brokers said that some houses seemed to be on the market longer because sellers priced them too high, assuming that their value was still rising sharply. In other cases, people who otherwise would have waited a year or two to sell their homes - like empty nesters ready to move into smaller quarters - had listed them now out of fear that prices would soon fall.
The question remains whether all of this represents a momentary cooling off of some overheated housing markets, or it presages a more pronounced downturn that would end a decade-long boom.
Some economists and commentators have for years predicted the bursting of a real estate bubble, and previous slowdowns have turned out to be relatively brief pauses before prices started accelerating again.
But with mortgage rates now rising, the cost of gasoline hovering at or near $3 a gallon and house prices in some areas out of reach for many families, brokers and analysts said they thought that this slowdown could be the real thing.
For now, the change remains a far cry from the bursting bubble that some have predicted.
In Massachusetts, for example, the median house price remained flat from July to August, and the median condominium price fell only slightly, according to the Realtors' association there. At the start of the year, prices had been rising at an annual rate of more than 15 percent.
If anything, some brokers said, the recent slowdown meant a return to a healthier, more sustainable market.
"What we had was abnormal," said Dottie Herman, chief executive of Prudential Douglas Elliman. "People get used to abnormal times and then when they're normal, they think there's something wrong."
Alexander Shakhov, 47, listed his two-bedroom house in Frederick, Md., an outer suburb of Washington, for $529,000 in July, and it remained unsold for the rest of the summer. A
month ago, he reduced the price to $499,000 at the suggestion of a broker. A week ago, Mr. Shakhov accepted an offer at the lower price.
The market "is not as hot as the last two years," Mr. Shakhov, a scientist at a biotechnology company, said, "but I'm pretty happy."
He bought the house three years ago for $230,000. He now lives in Cleveland, where he has bought a home that is nearly twice as large as his Frederick house for less money.
The cooling off has forced both sellers and real estate agents to begin changing their attitudes about residential property, many said.
Houses that are priced too high are sometimes on the market for weeks or months now, rather than fetching even more money than their owners had imagined they could get.
In Manhattan, the average sales price of co-op and condominium apartments fell 12.7 percent, to $1.15 million, in the three months that ended on Sept. 30 compared with the second quarter, according to the Prudential Douglas Elliman report. The median sales price - which means half of homes sold for more and half for less - fell 3.2 percent, to $750,000.
Still, the average sales price was 10 percent higher this summer than it was a year earlier, according to the study.
Nationally, housing prices rose at the fastest rates since 1979 in the 12 months through August, the National Association of Realtors said last week.
But the changes that real estate agents have seen in recent weeks - increased inventories and longer sales times - have often preceded market slowdowns in the past.
One reason properties are remaining on the market longer is that sellers still expect to reap double-digit price appreciation each year.
"What will slow this market down, and has slowed certain segments of the market down, is overpricing," said Pamela Liebman, chief executive of the Corcoran Group, a large real estate firm in New York. "Back in the spring, there was such a frenzy that very pedestrian product was drawing multiple bids."
Some of today's sellers appear to be pricing their homes as if the frenzy were continuing.
"Their neighbors sold their house when the market was red-hot, and everybody thinks their house is better than their neighbor's house," said Maggie Tomkiewicz, the president of the Massachusetts Association of Realtors and a broker in South Dartmouth. "But when the neighbor sold, there may not have been five other houses on the market" in the area.
The slowdown has also jolted the thousands of people who have become licensed brokers in the last few years. Until now, many of them knew only galloping price appreciation.
"I've gotten these calls from newer agents saying: 'I've had this property on the market for 60 to 90 days. What do I do?'" related Buzz Mackintosh, an owner of Mackintosh Realtors in Frederick, who has been selling houses for two decades. "And I say, 'It's called, 'Reduce your price.' "
Indications of a slowdown have appeared before. Jonathan Miller, president of Miller Samuel, said the last time that average and median sales prices dropped below those the previous quarter at the same time that inventories and sales duration rose in Manhattan was in the fourth quarter of 2002. But by the end of 2003, the market had come back.
An important difference now, though, is that mortgage rates are creeping up, whereas previous comebacks have been fueled by ever-lower rates.
On five-year adjustable-rate mortgages - a popular loan with a fixed interest rate for the first five years - the initial rate has risen to 5.59 percent on average, from 5.14 percent in June, according to BankRate.com.
What is more, some mortgage lenders have started to tighten credit standards, making it harder for buyers to get loans.
"Low interest rates and easy credit standards are just about over," said Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley.
Ron Nixon, in New York, and Matt Richtel, in San Francisco, contributed reporting for this article.
Copyright 2005 The New York Times Company

Market Continues Up

2005-09-26T09:36:00.000-07:00

Despite anaylists' predictions to the contrary, the national residential resale market was up in August by 2% in terms of number of homes sold. Median prices were up 15.8% over a year ago.

New Disclosure Law in Maryland

2005-09-19T11:13:00.000-07:00

According to an article in the Washington Post this weekend, Maryland home sellers must disclose latent defects on either the Property Disclosure Form or the Property Disclaimer Form, whichever they choose to utilize.