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

Blogging Away.....

I'm taking a break from blogging till Labor Day. Will be back on regular schedule after Labor Day, Tuesday 9/5/06. In the meantime, hope you all enjoy the rest of summer.

Top 35 Real Estate Blogs

Urban Trekker is one of the "Top 35 Real Estate Blogs" according to biggerpockets.com?

I’ve decided to create a list of what I believe to be the top real estate blogs.  These blogs cover different areas of the real estate world, but they do have a few things in common.

• I read the blog regularly (when possible)
• They are updated regularly
• I generally respect the blogger/bloggers
• Their content is unique, timely, and relevant

Along with Matrix, Curbed, the numero uno visited sites for real estate? Wow...

* Top 35 Real Estate Blogs [Real Estate Investing]

Real Estate Links

Here are the links to selected stories from around the Web on real estate:

* In-law Suites Grow with Changing Families [WHG]
* Chances for Sales Fall in July [WHG]
* Housing: The Roof Won't Collapse on the U.S. Economy [Business Week]
* Vital Signs: A Soft Landing? [Business Week]
* Incentives Grow As Market Slow [Baltimore Sun]
* Rate Reset is The Latest Worry in Mortgage Markets [MND]
* Mortgage Rates Return to April Level [MND]
* Housing Market Will Deflate Economy, Economists Say [Real Estate Journal]
* Bistro at A Bus Station [Planetizen]
* Making Way for a Main Street, USA [Washington Post]
* Base Realignment Adds Urgency To Debate on Growth [Washington Post]
* Enjoying the Country Living [Washington Post]
* Can't Pay, Talk to a Mortgage Lender [USA Today]
* Freebies for Home Buyers [CNN/Money]

What's The Value of A Bathroom?

People always want to know what's the value of a certain room in the house. How much does it add to the home, etc? Here is something different looking at from builder's point of view. What do builders think about the values? The builder's economic approach is a little bit different than most home owners. Builders are concern about their bottom line -- how much more can they make by adding certain features.

According to "How Much is A Bathroom Worth?", Paul Emrath suggests, though it's not easy to come up with the numbers because of its complexity, however, he says "that when looking at the bottom line, a half-a-bath adds approximately 10.5% of home values. And a full bath adds a 20% to its home value." Wow. That's very good.

[W]hen the number of bathrooms is approximately equal to the number of bedrooms, an additional half bath adds about 10 percent to the home’s value, and converting the half bath to a full bath adds another 9 percent, so one additional bath adds about 19 percent to the value. Below this (that is, when the home contains fewer bathrooms than bedrooms) the percentage gains associated with an added bathroom can be somewhat larger.

In dollar terms.

[F]or example, adding a half bath to a standard new two-bedroom, 1,700 square-foot single family detached home in a Northeast suburb with one full bath changes its value from $180,710 to $201,576. That’s an increase of $20,866, or 11.5 percent. 

In "Cost. Vs. Value 2005," for midrange bathroom remodeling (ave. cost $10,499 and resale value $10,777), many home owners expected to recover their investment and some (102.2%). See how different the value that is. That's because builders are in the wholesale biz, and homeowners not. Homeowners pay retail. This comparison is only to give you a different way of looking at the value of a home feature. And by no means, you shouldn't expect more than what it is worth.

In a slow market, a remodeled bathrooms can certainly add more values to your home. You expand the pool of wannabe buyers. Because many of today's buyers want that "move in" condition.

* NAHB: How Much is a Bathroom Worth?
* Cost Vs. Value Report [Remodeling Online]

How Cool Is The Market?

It's been quite interesting to read all these
headline news on the direction of housing market.

BUILDERS CONFIDENCE IN CONDO MARKET DIPS AGAIN [NAHB]:

The component of the MCMI that tracks current condo supply conditions fell to an index value of 32.0, compared to a value of 61.3 during the second quarter of last year. It was the third time since NAHB began tracking this data that the for-sale index has fallen below 50. A rating of 50 generally indicates that the number of positive responses is about the same as the number of negative responses.

NEW INDEX SHOWS STRENGTHENING DEMAND FOR MULTI-FAMILY RENTAL APARTMENTS [NAHB]

Builder confidence in current rental apartment market conditions climbed to a new high in the second quarter of 2006, and their expectations for the next six months are even higher amid rising occupancy rates, rising rents, and increased traffic at all classes of rental apartments, according to results from the National Association of Home Builders/Fannie Mae Multifamily Rental Market Index* (MRMI), released today.

SECOND QUARTER STATE EXISTING-HOME SALES SOFTEN [NAR]

Existing-home sales, including single-family and condo, were down in the second quarter in contrast with a record set in the same period in 2005. Despite the overall decline, 20 states showed increases in sales activity from a year ago, according to the National Association of Realtors^®.

The quarterly report on total state existing-home sales shows that the seasonally adjusted annual rate* was 6.69 million units in the second quarter, down 7.0 percent from the record 7.19 million-unit level in the second quarter of 2005.

WEEKLY APPLICATION SURVEY [MBA]

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.38 percent from 6.54 percent, with points remaining at 0.98 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. 

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.04 percent from 6.15 percent, with points increasing to 1.12 from 1.09 (including the origination fee) for 80 percent LTV loans. 

The average contract interest rate for one-year ARMs decreased to 5.91 percent from 5.97 percent, with points increasing to 0.82 from 0.80 (including the origination fee) for 80 percent LTV loans.

SALES OF NEW HOME SALES DOWN 21.6% in PAST YEAR. Inventories of unsold homes rise to 11-year high [Market Watch]

Sales of new homes dropped 4.3% in July to a seasonally adjusted annual rate of 1.07 million, the Commerce Department said Thursday. New-home sales are down 21.6% in the past year, the biggest drop since late 1994.

Inventories of unsold homes rose to an 11-year high, while median prices flattened out. The report confirms a dramatic decline in real estate in July. Existing home sales fell 4.3% in July, the realtors reported Wednesday. Total home sales fell to 7.4 million annualized in July, the lowest since January 2004. Total sales are off 12.9% in the past year.

HOUSING STOCKS TAKE HEAT AFTER CHILLY DATA [Market Watch]

Shares of U.S. residential builders fell Wednesday after an economic report showed sales of existing homes falling to their lowest level in two years, heightening concerns that the U.S. housing market is slowing dramatically.

IS ECONOMY HEADED TO A SOFT LANDING [USA Today]

In the past several weeks, a slew of data on housing, manufacturing and employment has bolstered Federal Reserve Chairman Ben Bernanke's forecast for moderating growth and diminishing inflation that should eventually eliminate the need for interest rate increases.
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The other big variable is housing. After adding to growth in the past several years, the sector has become a drag, with the drop in home construction shaving as much as 1 percentage point off gross domestic product, says economist Peter Morici of the University of Maryland. The impact could be far greater if the market falls faster.

The slowing housing market will affect construction, employment and consumer spending, as people are less able to draw on the rising equity in their homes.

Conclusion: These are signs for buyers market. Locally, the condo market in close-in burbs like Arlington, Alexandria, and Fairfax still holding. We have to see how the August number is going to come out. August, is traditionally the slowest month for housing. People who are shopping for homes and have children -- are done with the moving. Only other kinds of shoppers, i.e. relo, renters still on the market. With sellers, builders anxious to get their supplies sold, interest rates still low, high inventories, sellers help with closing cost, strong rental market....buyers -- you might as well take advantage of this opportunity, via Real Estate Journal.

If you're in it for the long haul -- that is, buying a home with the intention  to live in it for years -- a home is still a decent investment.

This market is not for flippers! But for those who want to stay for the long haul. Don't be concerned with price fluctuations. It is only on paper. Much like if you have stocks or mutual funds portfolio, your market value goes up and down daily. Unless you sell it, no gain or loss realizes.

Now, the good news. For the Washington DC region that includes the DC-VA-MD-WV, according to HousingEconomics.com (part of NAHB), at 3% -- this region has one of the lowest unemployment rate in the nation. Compares that to 4.6% average nationwide! Employment is one of the most important indicators for the housing industry. That means, locally...we're still fine .

* Buying vs. Renting [Ginnie Mae]

Images: Bankrate.com, CNN/Money.

Seven Ways to Accumulate a Down Payment

One of the biggest problems facing potential home buyers today is coming up with enough money for the down payment and closing costs. The amount of money you have available can greatly limit or increase your purchasing power. Rather than saving all of the money yourself, there are option that may help. Here are some ways to accumulate the necessary funds that are acceptable to most lenders.

1. Have your parents give you the money as a gift.
Documentation will be required to prove that the money is actually a gift and not a loan. Any taxpayer is permitted to give up to $10,000 per year to another person without having to pay a gift tax. Technically, your mother could give you $10,000 and give $10,000 to your spouse. Your father could do the same. This would give you $40,000 for a down payment and closing costs. (NOTE: Unless you are putting down at least 20 or area obtaining government-insured loan, 5 of the sales price must be your own money.)

2. Borrow against your 401K or insurance policy.
You can also cash out your 401K but you will be subject to withdrawal penalties and payment of taxes. If you borrow against it, the loan payment will be counted as a debt.

3. Sell or borrow against an asset.
Selling an asset such as a car can help increase the amount of money you have available. Borrowing against an asset is also acceptable as long as you qualify with the additional debt.

4. Obtain low point or zero point loan.
This will reduce the amount of your closing cost substantially. In some instances, the lender can also pay all or a part of your non-recurring closing costs.

5. Ask the seller to pay for all or a part of your non-recurring closing costs.
Your real estate agent can assist you with this when you make an offer on a home.

6. Ask the seller to carry back financing.
If the seller does not need all of the equity in their property, they may be willing to carry some of the financing which will reduce the amount of your down payment.

7. Consider different loan programs.
Your loan officer can help you in determining the best loan program to suit your needs. There are a wide variety of programs that require lower down payments and assist with closing costs. There are also city and county down payment assistance programs you can check into.

Sandy Potterfield
Intercoastal Mortgage

Real Estate Links

Here are the links to selected stories from around the Web on real estate:

* This Old House [Fairfax Connection]
* Beyond the Gateway - Hope or Despair [Mount Vernon Gazette]
* Why Is Illegal Flipping a White Collar Crime? [RealtyTimes]
* Sub-6.5% Mortgage Deals May Be on Horizon [Inman News]
* Giant Food to Close, Open Stores [Washington BizJournal]
* Lenders Work Out Program Offer Help to Borrowers in Trouble [Real Estate Journal]
* In It for the Long Haul, Might As Well Buy [Washington Post]
* Let's Make a Deal [NYT]
* Why Some Home Owners Might Not Be Smiling for These Cameras [NYT]
* Wanted: Good Tenants [MarketWatch]
* Before You Buy that Vacation Home [CNN/Money]

New DC Rent Control Law

Around the VA/MD/DC region, the District probably has the most rigid tenant law here.  According to RealtyTimes, on August 5, another amendment become law. The gist:

If you are a landlord -- which the law calls a "housing provider" -- you will no doubt be concerned about the major changes in the law. If you are a tenant, however, you will probably be delighted with the scope and effect of Act 16-391.
........
Exemptions include rental units built after 1975, and federally or District subsidized rental units. Perhaps the most important exclusion is for individuals who own four or less rental units in the District of Columbia.

It should be noted that corporations, including limited liability companies, are not "natural persons" and thus even if a corporation only owns one residential unit, it is not exempt from the coverage of the Act.

It should also be noted that these exemptions are not automatic. The landlord must file an exemption form with the Department of Consumer and Regulatory Affairs (DCRA) and must also obtain a business license authorizing the rental of the unit or units.

If you are a tenant, you may get some breaks. For example, senior citizens and disabled tenants regardless of income can't have their rent increases by 5 percent per year. The whole rent control thing is so complex, to learn more about it, read here.

* Housing Counsel: New Landlord-Tenant Law In Effect in the District [Realty Times]
* What You Should Know About Rent Control in the District [DCRA]

Real Estate Links

Here are the links to selected stories from around the Internet on real estate:

* An Eye to the Iconic [Washington Post]
* Designer Solutions [Washington Post]
* An Adjustment on Their Own [Washington Post]
* Home Building Nears 2 Year Low: 5th Straight Monthly Drop in Housing Starts [BBOL]
* Interest Only Loan May Start Cheap, Reset 'Scary' [Baltimore Sun]
* Homes Proposed Near Ft. Meade [Baltimore Sun]
* Wholefoods - Negotiations Continue [Columbia Heights News]
* Reston Town Center: The Upside of a Suburban Downtown [Planetizen]
* The Beginning of the End for Suburbia? [Planetizen]
* Option ARMS Remain Popular Despite Risks [Real Estate Journal]
* Top Cities Where Mortgage Rates Hit Consumers the Most [Real Estate Journal]
* Renting Condos That Don't Sell [Realty Times]
* American Foursquares - The Anti Victorian [CNN/Money]

Seller Financing

A must read if you are selling. Seller financing is when a seller decided to become your lender in your home buying process. This wasn't common thing to do in a frenzy market. But, in the market we're in today, sellers will do anything to attract buyers. Via Washington Post.

Here's how it works.

Let us assume that you either have no mortgage on your home or that it is relatively small. Your house should sell for $450,000. You enter into a contract with potential purchasers under which they give you 10 percent down ($45,000) and you take back the balance -- $405,000 -- by way of a first deed of trust or mortgage. The buyer will sign a promissory note committing to paying you back.

In a seller's financing situation, the seller taking big risks: legal ramifications in case of foreclosure and your own tax consequences. However, not so much risk for buyers with exception that you might be paying a higher interest rates in exchange of quick process. You won't have to go through the process of qualifying for the loan, especially if your credit is bad or you are self-employed.

* Sellers Financing Might Attract Buyers Who Won't Bite Otherwise [Washington Post]
* Sellers Financing Can be A Boon to Buyers [Real Estate Journal]
* Six Sellers Financing Pointers [Realtor.com]