U r b a n T r e k k e r

DC Folks Driving Baltimore Home Market Up

Baltimore finally caught the attention of wanna-be home buyers who escaped Washington DC looking for cheaper alternatives. Not long ago, you still can find $50,000 house in Baltimore. Not anymore now.

The Balto market is catching up with the Nation's capital home market. According to the Baltimore Sun, DC people are driving prices in Balto home market up. Baltimore has become the new suburbs of Washington DC - where people work in DC and live there. With low unemployment rate, an hour commute from DC, and prices still affordable (compares to DC), these factors help fuel the housing market growth there.

An analysis of five years of home sales and other data by The Sun found clear signs that proximity to D.C. is driving the boom in Baltimore and its five surrounding counties, over and above what extraordinarily low mortgage interest rates have achieved nationwide.

This region's fastest appreciation came in Howard, Anne Arundel and Carroll counties, which border the traditional edge of Washington's reach. Prices there jumped 75 percent combined during the past five years - compared with 41 percent nationally. Together, the average price in those counties rose to about $340,000 last year.
 

Happy Easter

I wish everyone who celebrates Easter.
Happy Easter.

On-Time Mortgage Payments

I found this interesting. In WaPo yesterday - a new study shows that homeowners in pricey markets pay their mortgage on time than homeowners in less pricey markets.

Homeowners in "bubble markets" such as metropolitan Washington, California, Nevada, New England and the mid-Atlantic region are more likely to pay their mortgages on time than homeowners in parts of the country with lower housing inflation rates.

In California, for example, where house prices have risen at double-digit rates each year for five years, just 2.04 percent of borrowers were behind on their payments in the final quarter of 2004, according to the latest loan delinquency data compiled by the Mortgage Bankers Association. The national average during the same period was 4.6 percent.

New Homes are Built on Less Land

Today's home owners are demanding more space for their homes. However, with the reduce supply of tract of land, builders and architects have to use their creativity to build new homes on less land. The new homes typically have more space than the older homes. We're talking about 3000+ square footage in a home with all the features to fit today's life style. For comparison, the average space of older homes typically is in the 2000-3000 sq. ft. range.

From Friday Wash Times Home Guide.

"Overall, I'd say urban planning has a lot to say about the trends of home designs today," says Bill Sutton, an architect and principal with Sutton Yantis Associates Architects. "What's fundamentally different is how a whole development is laid out, which dictates a whole different type of design."
    In Maryland, many new communities are so-called traditional neighborhood designs, Mr. Sutton says, "along the lines of Kentlands and King Farm, so the homes we design there are usually narrow houses with rear garages."
    Mr. Sutton points out that during the 1960s and 1970s, most homes being built in the Washington area were center-hall Colonial-style homes with about 2,400 finished square feet.
    "Basically, those homes were a box with a garage which would end up about 65 feet wide," Mr. Sutton says. "The house would be 40 feet wide, and the garage was 24 feet wide. In the 1980s, we were starting to see narrower lots come into the picture, but the homes were getting a little bigger, averaging 3,000 to 3,500 square feet for a single-family home."

Spring is Here

Today, is officially the first day of Spring.
The weather is getting warmer.

Welcome Spring.

Mortgage Interest Deductions

This is a follow up for my previous post (Feb 5, 2005) from today's Post - about the proposal to eliminate second-mortgage deduction interest that was recommended by Staffs for the Joint Commitee on Taxation in Congress. The main reason that motivated them to look into this option is because of the balloning of U.S. budget deficits and desperately in need of other sources of revenues! Also on the table is a proposal to eliminate the tax-free status of rental income for less than 15 days a year.

The curtailment of home equity deductions would raise an estimated $22.6 billion in federal taxes between 2005 and 2009, according to the committee staff. The home rental proposal would raise far less, an estimated $100 million

These proposals are worth watching for because it affects middle class Americans. Personally, I don't think that it will even make it to the floor for vote. Here is why - the banking industry is the big player on mortgage products.

Simple Bath Room

Simple design for bathroom from Residential Architect March '05 edition.

Powder room:

"...a piece of George Nakashima sculpture conceals a copper trough sink, and a flush mirror slips down to cover the faucet."

Shower room:

"..FSC-certified teak cabinets flank the full-length vanity, its aluminum piping doubling as towel bars. The cabinets roll wherever they are needed, and the welded aluminum frames are repeated on cabinetry throughout the house."

Luxury Townhomes

Who would have thought years ago that we would see the trending up of luxury townhomes (read: over a million dollars selling price) in Washington DC region? These luxury townhomes are selling like hot cakes!

By the way, you're looking at the picture of Evans Farm townhouses (more about Evans Farm as you continue reading).

Just the other day, I drove by a townhouse project across the street of East Falls Church Metro, the sign reads: "SOLD OUT"! And yet, these properties are still in construction phases and - not even ready for delivery until spring-summer '05.

The high-end townhouses are attracting new type of home buyers: the empty-nesters. According to today's real estate section of the WaPo:

From McLean to Bethesda, from Alexandria to Potomac, this housing style is attracting the wealthiest of the wealthy, the soon-to-be or already empty nesters, the older couples "downsizing" from, say, 9,000 to 6,000 square feet, the occasional young family with more money than time to maintain a mansion.

How hot is the townhouse market? Let's look at market activities around town.   

• One hundred and five would-be buyers in January each plopped down a $60,000 deposit, merely to enter a lottery for the first 15 "brownstones," 12 of them priced from $1.1 million to $1.4 million, at Park Potomac, a project that Eakin/Youngentob Associates plans off I-270 and Montrose Road in Montgomery County. EYA was among the pioneers of the million-dollar market locally a few years ago, with some townhouses at its Ford's Landing development in Old Town Alexandria and at Monument Place, near the Iwo Jima Memorial in Arlington.

• In the first month of sales at Bethesda Crest, from mid-December to mid-January, seven of the 24 planned $1 million-plus townhouses were snatched up. At another Craftmark Homes community, Evans Farm in McLean, all 64 townhouses have been sold at prices ranging from $1 million to $2.3 million.

Popular Neighborhoods in Washington DC

I picked up Washingtonian magazine the other day. By the way, the magazine is available by subscription only or you can get it from the store. This month's edition featured article is about "Great Places to Live" around Washington DC area. It covers 20 neighborhoods for families, 12 hot scenes for singles, 50 golden zip codes and 8 upcoming neighborhoods. Plus- where to find bungalows, colonials etc.

A few of these neighborhoods for families are:

• Parkwood, on the border of Bethesda and Kensington. Parkwood backs up to Rock Creek and its trails, playgrounds and creeks. Prices ranging from high $200,000 to $750,000. It's hard to believe that you still can find properties at $200,000s price range in this area.

• Jefferson Park, Braddock Heights and Beverly Hills, these three neighorhoods are clustered around George Mason Elementary School in Alexandria. Home styles mostly colonials in Braddock Heights with prices range around $400,000 to $550,000. And in Beverly Hills and Jefferson Park typically houses price range is around $600,000 to $900,000 but- can go as high as $2 million.

• Crosspointe, in the southeast corner of Fairfax County. Crosspointe is a newer neighborhood in Fairfax, where homes were built in the 1980's and early '90s. There were only two homes sold in the last 6 months within the $800s thousands range. (MRIS data)

More on Second Home Trend

From REALTOR magazine online.

A new study shows sales of second homes surged in 2004, and that investment property and vacation homes make up a significant portion of the overall housing market, accounting for more than one-third of residential transactions, according to the NATIONAL ASSOCIATION OF REALTORS®.
 
The new study, based on two surveys, shows that 23 percent of all homes purchased in 2004 were for investment, while another 13 percent were vacation homes. In addition, there was a record of 2.82 million second home sales in 2004, up 16.3 percent from 2.42 million 2003. The investment-home component rose 14.4 percent to 1.80 million sales in 2004 from 1.57 million in 2003, while vacation-home sales rose 19.8 percent to 1.02 million in 2004 from 850,000 in 2003.
 
David Lereah, NAR's chief economist, says earlier studies underestimated the number of second-home sales because a very small percentage of surveys mailed to second-home addresses were returned. "We found excellent results for studies looking at owner-occupied homes, but this is the first time anyone has come up with a methodology for capturing a representative market share for vacation- and investment-home owners," he says. "In fact, given the size of the market, we can assume that many individual owners have more than one investment property."