"Open House" - Maryland Real Estate Blog

Best way to search for Maryland and Baltimore properties on-line

One of the biggest problems with searching for real estate on-line (just like anything else) is the reliability of the information one finds. Many of the large, national search sites do not update their listings frequently. Therefore, home buyers are searching and finding properties that are no longer available, or aren’t seeing new, fresh listings. It is not uncommon to find listings that sold months before. This can be frustrating and a waste of time for both buyer and Realtor®.

The larger websites offer bells and whistles that are attractive, but are not always necessary. If you live in Maryland there is one site that is the perfect combination of informative and accurate, www.HomesDatabase.com. HomesDatabase is the ONLY property search site in Maryland that is directly linked to the same Multiple Listing Service that real estate agents use. If a property is no longer active and available, it is immediately removed from the HomesDatabase site. This site also allows buyers to save search parameters and properties. Therefore, when a new property is introduced or an existing property has a price change within the buyer’s parameters, the buyer and their agent are notified via e-mail.

Now is a great time to buy a house so click here to start your search.  Want to know why it is a good time to buy?  Click here to find out.

Below is a list of other common search sites.

www.remax.com
www.realtor.com
www.redfin.com
www.trulia.com
www.zillow.com

Your House is Not an ATM

As we near the end of this incredible buyer's market and head into a renewed period of  housing appreciation, there is something I need to get off my chest.

Your house is an investment in your future.  Something that should be nurtured and cherished for years and years.  As your home increases in value over the next several years, make me one promise.  Do not extract equity for trips, cars, paying of credit card debt, or any consumer purchase.  If there is one thing we should all have learned from these last few years of housing decline is that we can never predict the ups and downs of any investment.  During the years of prosperity, leave it alone and enjoy it from a far. 

I've sat down with so many homeowners over the last several years who could not sell their home because they owe more than the house is worth.  Some folks simply bought their house at the top of the market and were victims of the decline.  Others, however, who had bought earlier in the decade or sooner, used their equity for fun.  They were now stuck in a home they no longer wanted or could afford.  Some are sticking it out, many have gone to foreclosure and others sold and had to bring money to the settlement table to satisfy their debt. 

I hope this makes sense!  If not, don't be afraid to ask.

Foreclosure Bargains Getting Harder to Find

 
Home buyers hoping to snag a really good deal on a foreclosed home are finding it increasingly difficult because supply is shrinking.

The num ber of foreclosures that are available for sale nationwide fell to 617,000 in December, down from 845,000 in November 2008, reports Barclays Capital.

Not only have attractive homes in popular neighborhoods already been snapped up, but also government help for distressed buyers is delaying more foreclosures.

Demand is driving up prices. Investors say typical prices have climbed from 75 percent of appraised value to 85 percent or higher when there are bidding wars.

Source: The Wall Street Journal, James R. Hagerty (02/23/2010)

The End is Near

I don't mean to sound so dramatic, but the buyer's market is facing certain Armageddon.  It will come in three phases.

1.  Interest Rates - At the end of March, the stimulus money that has been allocated to keep interest rates low will run out.  Some economists predict the rates will go up as high as 1% over night.  It is more likely to be about .5% initially and then slowly works its' way up over the next 18 months.  I don't think that 7% interest rates are out of the question by the middle of 2011 to early 2012.  That means that a $200,000 house will cost almost $400 more per month then than it does now.

2.  Bandwagon - The job market will continue to improve slowly and steadily over the next several months which will have a cause and effect of increased sales over that time period.  The media will begin to report that housing is improving and since "everybody is doing it", then others will jump in the market.  As more people jump in, mortgages rates will increase because of the demand.  More people in the market place means no more great deals and a return of competing offers between buyers.

3.  Ease of Credit - As we continue to put time between the credit crisis, sub-prime mortgages, and other bad loans, credit and mortgages will become easier to obtain.  I hope to God that it is not as easy to get a mortgage as it was in the first six years of this century, but it is likely to ease a bit.  As credit eases, more buyers can enter the market place.  More buyers means multiple offers on properties and an increase in property values.

There are other factors, of course, that will lead to the end of the buyer's market, but these are the highlights.  The point is, if you can buy a house now, do it!  I will not tolerate anyone telling me in 2012 that they wish they bought in 2009/2010; especially if you are able to. :)

The good news is if you already own a home, you are likely to see improving values over this time period.  Especially if you own a home in the corridor between Washington D.C. and Philadelphia.  Tell all of your friends and family members to jump into the housing market now, before it is too late!

Jim Ellis - Re/Max Elite Realty

Are Interest Rates About to Rise?

Federal Reserve Bank of New York President William Dudley says the central bank will scale back its purchases of mortgage-backed securities late next month. While interest rates likely will climb when the program ceases, the extent of the rise remains to be seen.

Dudley says the Fed will act if rates spike too much. Still, analysts worry that the end of the MBA purchase program and expiration of the home-buyer tax credit, along with higher premiums and tighter underwriting of FHA mortgages, will work together to stifle home sales and price stabilization in the coming months.

Source: Inman News (02/08/10)

How to be a Victim of the Federal Government While They are Trying to Help You

Let's say you have a 730 credit score, an established credit history, and over $20,000 in cash. Let's say you want to buy a house and are approved to purchase a home over $200,000. Let's say you make an offer on a condo around $150,000 and get a great deal to include all of your closing costs, a reduced price and other favorable terms. You are very excited about the purchase of this home and can't wait for a pre-Christmas settlement.

Then along comes the big intrusive monster; the Federal Government. For the purposes of this blog we will call them Grendel.

The $8,000 tax credit, while a great opportunity for many of my clients, may not be the best way to help the housing problem. I believe we would all be better served if Grendel would make an investment in easing lending guidelines. Obama has asked banks to lend more money, but isn't investing anything into helping them do so. Also, rumors have it that the Federal Housing Administration (FHA), the government organization responsible for backing today's most viable first time home buyer loan, is poised to make lending of their backed mortgages more difficult over the coming months.

In the example above, this buyer was unable to secure a conventional mortgage because the tightening of guidelines didn't allow her to use lottery winnings as part of her required money needed for the transaction. Plan B: We try for an FHA backed mortgage. Because of a complicated and unnecessary red tape scenario with Grendel, my buyer isn't able to purchase this property with that mortgage either.

This is a HIGHLY qualified buyer who can't purchase a home well within her price range. There is something wrong with this picture. Before the housing market will turn around, mortgage guidelines have to be at a place where people who SHOULD be able to buy are able to secure a loan. The housing inventory has been shrinking over the last few months, but it still remains near record levels. Want housing prices to go up again? Then the inventory must be shrunk. Want the inventory to shrink? More potential buyers need to be eligible to receive financing. I'm not suggesting that my two year old be able to get a mortgage (like 2004-2006), but easing the guidelines a little, could have a dramatic effect on getting this market turned around faster.

My two cents . . .

This blog entry was written by Jim Ellis of Re/Max Elite Realty in Baltimore, MD. Jim can be reached at jim.ellis@remax.net.

 

Report: Home Prices Likely to Hit Bottom in March - National News

Home prices in 45 of the largest housing markets are expected to fall another 4.2 percent before they hit bottom in March, according to First American CoreLogic’s LoanPerformance Home Price Index.

By October 2010, prices are expected to be heading upward again by about 1 percent compared to 2009.

The report warned that this progress could be jeopardized by an increasingly large “shadow inventory” of homes owned by banks but not yet on the market. The problem is particularly acute in Michigan and Ohio cities, the report said. It projected a 12.7 percent further decline in values in Detroit, an 11.4 percent decline in most of the rest of southeast Michigan, and a 6.3 percent fall in Cleveland.

The report expects the strongest recoveries next year in California cities. These include:

1. San Francisco, up 5.7 percent
2. Los Angeles, 5 percent
3. San Diego, 4.7 percent
4. Sacramento, 4.6 percent

Source: Inman News (12/21/2009)

Mortgages Becoming Easier to Obtain - National News

In some parts of the country, borrowers with good credit are more likely to be able to borrow 95 percent of the purchase price than they were just a few months ago.

In Florida and other troubled markets credit remains tight and mortgage companies continue to scrutinize property appraisals, which makes it difficult for some borrowers to get financing. But in most areas of the country where prices are stabilizing or falling only slightly, standards are relaxing.

“We are starting to see...moderation," said Neil Librock, head of credit risk for Wells Fargo & Co.

Source: The Wall Street Journal, Ruth Simon (12/19/2009)

The Magic Window?

So we may be in the absolute magic window for real estate.

As I've written before, interest rates are at historic lows, availability is at an all time high, prices are low, sellers are willing to negotiate price and closing costs, availability of home buyer tax credits, blah, blah, blah.  This is not groundbreaking information by any stretch.

However, the last 6-8 weeks of the year are ALWAYS the slowest time in real estate.  This year will be no different.  I've always told my clients that if you want the best deal of the year, write an offer in November or December.  Write an offer this year and it could possibly be the best six week period to write an offer for the next several years.

Interest rates are expected to steadily rise as the economy recovers.  Some are speculating that the next 18-36 months could bring us double digit mortgage interest rates.  I wouldn't be surprised to see rates around 8% two years from now (or sooner!).  Home prices are expected to bottom out in the next 12 months.  The market will become more competitive and lower prices and closing costs will be hard to come by.  Good luck.

Thanks for reading!

Home Buyer Tax Credit - Easy to Understand!

Here is a link sent to me by my good friend at Sun Trust Mortgage, Patrick Dodson.  This site makes understanding the home buyer tax credit a piece of cake.  

Tax Credit Information

By the way, the tax credit is free money.  If you have questions, contact a CPA to make sure you qualify.