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

On Vacation..

I will be on vacation for the remainder of the week and be back after Labor Day.

Have a nice and safe Labor day weekend!

Power Companies Granted More Power?

via Pepco

Another proposal for high-voltage lines is on the table. First, there was Dominion Virginia Power. Then this one. Pepco, wants to construct 230 mile high-voltage transmission line that crosses Northern Virginia and stretches to Maryland and Delaware.

The staff of PJM Interconnection recommended Wednesday that its board approve a proposal by Pepco Holdings Inc. to construct a 230-mile power line that would begin in Northern Virginia, cut across Maryland and Delaware and end in southern New Jersey, PJM spokesman Ray Dotter said. The board will vote in October.

...

The line would begin about 30 miles south of the District, at the Possum Point substation in Prince William County. It would cross the Potomac River and pass through the Burches Hill substation and the Chalk Point and Calvert Cliffs power plants in Southern Maryland. From there, the line would travel underwater to Maryland's Eastern Shore and through Delaware, ending at the Salem nuclear power plant in New Jersey.

via Washington Post

The power line crosses environmentally sensitive areas, much like Dominion's proposal. What really bothers me  - is this law. (Note: If you care to read the law, here.)
 

All three lines could test a new law that gives power companies the authority to bypass states and secure land through the federal government if their services are deemed vital to national energy interests. (emphasis mine)

via Washington Post

National energy interests? Puh-leeze.. It sounds like, giving an open-end power for the energy companies! Where is the line? Yikes... we, have to do something about this lame duck excuse of using 'national energy interests.' There should be a better way to preserve land, and conserve energy. And it's not only one side, but it requires the collaboration of all parties involved.

The next time, you're shopping for a house -- make sure you check zoning, proposals or anything weird -- on the table. Don't believe just one source, check and recheck. Talk to different sources. Poke into county's website, call the planning and development office -- check if there is any weird things that could potentially pop in your backyard...especially years down the road after you moved in.

Real Estate News Roundup

Full story, here. [NYT]

* House Sitters [Market Watch]
"Inventories of unsold single-family homes increased by 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years, the National Association of Realtors reported Monday."

* Getting Graphic: Getting Real Nominal on US Housing [Matrix]
"David Leonhardt of the New York Times, does a very cool breakdown of the Nation’s housing markets, to prove incorrect the mainstay argument that housing prices, based on OFHEO numbers (the official government stats), have not shown an annual decline since their inception in 1950."

* Condos, Brand-New Yet Not So Perfect [New York Times]
"WHEN dozens of buyers put down payments on apartments in the glassy new condominium tower called the Link at 310 West 52nd Street, they were looking forward to living with features like floor-to-ceiling windows and a meditation garden."

* Building the World's Largest Urban Rail Transit System [Planetizen]
"36 Chinese cities are on the fast track to building rail-based mass transit system. Within the next decade Shanghai's subway system is expected to become the world's largest."

* In this Civil War, It's East vs. West [New York Times]
"THE land around Unison, Va. — a clutch of homes 50 miles west of Washington, with no stoplight or commercial enterprise —looks much as it did around 145 years ago when Union and Confederate soldiers clashed in the fields."

* Kitchen Product Review: Faucet Fashion [Building Products]
"Many plumbing installers may be seeing a drop in business during the current housing market slowdown. But Brad Smith, chief operations officer for Kimbel Plumbing in Springdale, Ark., has actually found additional work because of the slow market."

* Some Home Buyers Gain Edge from Credit Crisis [USA Today]
"What credit crunch? Home buyers with solid credit and money for a down payment are now better positioned than they were a few weeks ago."

* Tax Deductions Under Fire for McMansions [Washington Post]
"To add to the mortgage meltdown miseries, the credit panic, the plunging home sales and the rising foreclosures, here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses with more than 3,000 square feet."

* Condo Board Must Juggle Privacy, Openness [Washington Post]
" Q: I own a condominium unit in the District, and I believe that our association is having financial problems. Recently, I sent a letter to our board of directors, asking for a copy of the most recent monthly financial report, as well as the names and mailing addresses of all co-owners. The board responded that privacy laws prevented the board from providing that information."

* Washington Explores Help for Those Who Can't Pay Mortgage [US News and Report]
"Liquidate labor, liquidate stocks...liquidate real estate. It will purge the rottenness out of the system.... People will work harder, live a more moral life." That was how Herbert Hoover once described Treasury Secretary Andrew Mellon's unsympathetic attitude as the Great Depression began to unfold."

* Do Open House Help Sell Your House?[Zillow]
"Wow, talk about a controversial topic. Do open houses really work? Or is it a good idea that is no longer effective? Can your house get ripped off? Does a Realtor put themselves in danger — possibly killed?"

* Three Simple Ways to Use Solar Power at Home [Real Estate Journal]
"   Day in and day out through the summer I watch the temperature creep up and the   sun beat down on my yard and I wonder: what can I use the sun for? A great   source of cheap, green power, but without a roof full of solar panels, how can   I put it to use?"

* How to Bid Low on A Home Without Offending the Seller [Real Estate Journal]
" With stagnant prices and elevated inventory in many markets, home sellers are no longer automatically turning up their noses at offers that come in far below their asking price."

* World's Most Overpriced Real Estate Market [Forbes]
"Buy a home in  Monaco and you'll enjoy iconic beaches, glamorous casinos, a renowned arts and music scene, pulsating nightlife and boutique-packed boulevards."

Hikes for Urban Trekkers!

Here are Special Invitations from Prince William County Conservation Alliance for you.

Take a Hike - Dove's Landing on the Occoquan River

WHEN: Saturday, September 22, from 9:00 a.m. to 1:00 p.m.

Dove's Landing is a 235-acre undeveloped property with one mile of frontage along the Occoquan   River, upstream from Lake Jackson. The Prince William County Board of Supervisors acquired the property in March 2006 but has not yet opened the site to public uses. (emphasis mine)

The gently sloping landscape, open forest and scenic appearance create inviting and accessible conditions for residents of all ages. Dove's Landing is a high quality site for walking in the woods on natural trails, wildlife watching and other passive recreation opportunities. Read more about Dove's Landing...

Group size is capped at 30 participants, so register early! Preferred attire includes sturdy hiking shoes, long socks, long pants, hat and light colors. Bring a bag lunch, water to drink, bug spray, binoculars and cameras.

This program is open to the public and free of charge. For more information and to register, check online at   http://www.pwconserve.org,

email alliance(at)pwconserve.org or call 703.499.4954.

Take a Hike - Occoquan River, McCoart to the Town of Occoquan

WHEN:  Saturday, October 6, from 9:00 a.m. to 2:00 p.m.

Join us for this nine mile hike on the southern side of the Occoquan   River. Although we will encounter some sidewalks, most of this hike will be on natural surface tails. There are some hills to climb, stream crossings, areas than could be a little muddy and lots of beautiful scenery!

Transportation back to the starting point is provided at the end of the hike. Group size is capped at 25 participants, so register early! Preferred attire includes sturdy hiking shoes, long socks, long pants, and hat. Bring a bag lunch, water to drink, bug spray, binoculars and cameras.  

For more information and to register, check online at   http://www.pwconserve.org,

email alliance(at)pwconserve.org or call 703.499.4954.

Prince William County Housing is Clogged

Traffic going down I-95 on Friday

AMONG DC Metropolitan suburbs, there is an abundance supply of homes on the market in Prince William County. This is the place with the highest number of active listings. The market here moves so slow.. much like traffic going down I-95 on rush hour! Stop-and-go at 10 miles per hour.

In addition to the ample supply of homes there. There is simply - not enough buyers out there looking to PW.  You think traffic and housing connected? You bet. I know a few people I am working with right now, live in the county and work in DC. They ARE so desperately-- trying to move out of there and move close in, like in Alexandria, Falls Church or Arlington. These people have had it... with I-95 traffic!

According to the information gathers through MRIS, as of today (8/24), there are a total of 5,000 homes on-the-market with an average list price of $439,324. And a slice of PW market is foreclosures. Of the 5K homes on the market, there is a slice of the market under some sort of either pre-foreclosure, foreclosure or bank owned properties. There are 393 homes that fall under the category. What we don't know is -- how many of the homes on the market -- are owned by upside down owners?

There were 370 homes sold the past 30 days for an average price of $425,985. The highest home sold in PW last month, was $1.3 million. This property originally was listed for $1.52 M, then reduced to $1.45 M to finally sold for $1.3 M! A reduction of $150K in price alone. No (zero) seller's subsidy.

Meanwhile, only 536 homes went "under contract." Based on the information, market absorption rate for Prince William is 9.32 months. The data pointed to A STRONG buyer's market! Now, these numbers do not include new construction homes.

Here is a market stats for two of PW's neighborhoods: Woodbridge (includes Belmont Bay) and Manassas.

On the market: 2441 homes
Under contract (30+d): 258 homes
Sold (30+d): 160 homes
Average sold price: $390,232
DOM: 82 days

Absorption rate is 9.46 months = STRONG buyer's market

Manassas
On the market: 1062 homes
Under contract (30+d): 94 homes
Sold (30+d): 75 homes
Average sold price: $408,153
DOM: 87 days

Absorption rate is  11.29 months = STRONG buyer's market

There you go- Prince William is waiting for you, buyers. These days, however, you gotta get the financing part taken care of first before even going out looking.

Today, we are in a different market. More homes on the market. But, the money part.. financing the purchase - is an issue. It's a bumpy road. A dozen or so lenders have gone bankrupt. That leaves us with a few (major) players... with tighter standards.

Data: MRIS

Seriously Dude, Get the Financing First..

So- you want to buy a house? These days, more than ever- if you are looking to purchase a home, please get the financing part in order first. There's more reasons for taking the financing route first, even before you start looking for houses. Between lenders tightening their standards, lenders go belly up, lenders stop lending, and liquidity of the market. No money, no home purchase. That's it.

What I have been hearing from the lending professionals, lenders' rules changes by the day. One Realtor told me, that when one of her colleagues (she represents the buyers) and her clients was sitting at settlement table - they were told that their lender, could not financed their purchase. That is awful situation to be in! And the lender, happens to be American Home Mortgage. They were told at about the same time AHM folds.

I am amazed to learn that a number of my colleagues, don't see the seriousness of the liquidity problem! Hello... no money, no sale. Period. We, the professionals "owe" it to our clients -- buyers or sellers --  to be on top of what's going on in the market these days... and how's going to affect them.

The conforming loan market, that is capped for $417,900 is still fine. However, secondary market interest rates for loans over this amount, have gone up the roof!

Mortgage rates, especially for jumbo mortgages of more than $417,000, have soared within the past month as credit fears, stemming from a collapse in the subprime market -- those given to borrowers with checkered credit histories -- have spread to loans to higher credited borrowers. The average Toll home sells for more than $620,000.

via Reuters

If you are on the market over and above this amount, what do you do? Plain and simple - you need to come up with more money to the table. That is higher down payment. To get rid of the second trust higher interest rates, you want to have a 20% down payment.

And, make sure you know the lender (read: financial health) you're dealing with. Those fly-by-night (internet) lenders, can take you up for a ride. Be careful, it's a rough road out there. The back to basic approach would be: Deal ONLY with 'reputable' lending institutions.

You want to know how bad the crisis is and how is it going to affect your home purchase? Read more, here:

* FDIC Eyeing Big Banks as Troubled Home Loans Rise [Reuters]
* Investors Gauge Fed's Plans as ECB Acts Again [Reuters]
* Accredited Home, HSBC Close Offices as Subprime Crisis Spreads [Bloomberg]
* Overdue Real-Estate Loans Jump at U.S. Banks [CNN/Money]
* Housing Woes Hit High End [Money]

Image: CNN/Money

 

When Money is Not a Problem

You read about the housing market slump. There's plenty of negative news coming out on the news line up, every time you turn around. New York housing market tells a different story than the rest of the nation, including Washington DC.

Cut to Manhattan. After a boom with annual price increases of 20 percent or more ended in mid-2005, prices have continued to rise over all, but not as sharply. In the second quarter of 2007, Miller Samuel said the average sale price of a Manhattan studio climbed 16.5 percent compared with the second quarter of 2005. The average for a one-bedroom climbed by 18.4 percent and a two-bedroom by 5.9 percent.

Apartments with three bedrooms, which make up about 6 percent of the market but appeal to an ever-more-moneyed class of buyers, rose by 17.9 percent in the same period.

Major brokerages, including Halstead Property, Bellmarc Realty, Brown Harris Stevens, Prudential Douglas Elliman and the Corcoran Group, say they are recording sales and profits that rival boom-time results. In fact, Douglas Elliman and Corcoran predict that this will be their most lucrative year by far.

via New York Times

This is why, all real estate is local. It doesn't really matter what's happening around the country. What matters is the strength of its local economy. Unless, the subprime saga brings down some of the well-heeled financial firms, the NYC market will stay strong. And- you gotta remember, land is very valuable there. When DC gets to that point, we'll see the local housing prices up the roof, too.

New York, is the one place where money is not a problem -- for SOME. Buying a condo or apartment in the seven figures is a s-t-r-e-t-c-h for most Washingtonians, but not for a few New Yorkers. The richie-rich now needs to spend $50 million to what NYT writes, as "a one-kind-of property."

For example, property records show that in June the developer Harry Macklowe closed on the purchase of seven contiguous condominium apartments at the newly refurbished Plaza, with more than 13,000 square feet of space. He paid the sponsors a total of $52 million in two separate transactions, but his total costs were closer to $60 million.

via New York Times

It costs the developer $4,615 per s.f.!! For comparison, in Ballston, price per s.f. goes from $500 and up. 

Oh what money can buy...

Region Community News Roundup

Arlington Commuter Page Mobile

* Arlington Set to Roll Out New ART Buses [SunGazette]
"County government officials this week were slated to roll out new Arlington Transit (ART) buses, designed to help the local bus service keep up with what lately has been record demand."

* Compromise Work Out on McLean Library Renovation [SunGazette]
"Fairfax County Public Library officials and neighboring residents reached a compromise last week that would save more trees and reduce storm-water runoff and stream degradation at the soon-to-be-renovated Dolley Madison Library in McLean."

* Lorton Equestrian Center Ready to Move [Fairfax Times]
"Next month the Fairfax County Park Authority Board will consider demolition plans for the long-awaited Equestrian Center at Laurel Hill. At this point there is not a lot to see at the site. Rolling hills surround collapsed dairy farm buildings (those will go) and three silos (those will stay)."

* Wetlands Restoration Plan in Store for Huntley Meadows [Alexandria Times]
"When Holly Franz and her dog Puppers run in the morning through Huntley Meadows Park behind her townhouse, they have company on the trail in the form of a fox."

* Light in August [DCist]
"For much of the past year, this column has taken a hard look at many aspects of District life, from crime and schools, to transportation planning and development, to the uneven distribution of growth in the city, and found them wanting."

* New VRE Modifications May Push Price Tag Past $86M [DC Examiner]
"A fleet of 61 new train cars expected to modernize the Virginia Railway Express fleet could cost more than expected thanks to cost-cutting measures and surprising additions."

* Army Put $10 Million to Fort Belvoir Fixes [DC Examiner]
"The Army has committed more than $10 million over the next four years to environmental and historic projects that will accompany the relocation of 19,000 workers to Fort Belvoir, a base spokesman said Friday."

* F.C. Council Jittery as Housing Slump Portends Fiscal Squeeze [FCNP]
"Six major mixed-use development projects worth a half-billion dollars have been OK’d, completed or are under construction in the City of Falls Church since 2001, and in the fiscal year ending June 30, they contributed tax revenues the equivalent of 10 cents on the real estate tax rate."

* DC USA and Ellwood Thompson's: Prospects [Columbia Heights News]
"It is refreshing to have a company show so much interest in bringing a specialty grocer to Columbia Heights.  The fact that the CEO of Ellwood Thompson's made numerous trips to Columbia Heights to get a first-hand sense of the vibe of this neighborhood is a testament to the kind of company this is."

* Envisioning City Life Along the Rivers [Washington Post]
"..And in Washington, perhaps the world capital of festivals and celebrations, one of the more heralded annual events that focuses a spotlight directly on its waterfronts is . . . a cleanup project."

* A Striking Pied-A-Terre [Washington Spaces]
"When Omar Maden decided to buy a pied-à-terre in Washington, DC, he immediately called fellow Cuban Nestor Santa-Cruz, an interior designer with whom he’d previously collaborated on two other projects."

*Rule Of Thumb #6 - Size Matters [Fresh AIRE]
"When we bought our house in Arlington in 2000, our agent noted the outside air conditioner and commented, "I like to see these big air conditioners.  They really keep the house cool."

Bold Moves: Fed Cuts Discount Rate

Yesterday, I talked to a number of fellow professionals who don't think that the liquidity crisis caused by bad investments into subprime loans - is a serious problem. What were they thinking?

Buying a home needs financing either cash or borrow from lenders. And if lenders don't have the funds to financed the purchase, there won't be any closing/ settlement. Market liquidity have big impact to the housing industry.

This news came out this morning that the Fed decided to cut discount rate - that is the rate that big banks pay to the Fed for the money they borrow. The moves show the seriousness of the problems.

The Federal Reserve on Friday said it cut the primary discount rate by a half point as the downside risks to growth have increased "appreciably", a surprise move aimed at calming jittery global markets.

Here's the big reason why they're doing it.

It's a problem due to illiquidity so it's an appropriate response from the Fed. This will help the credit problem is in short end such as ABCP (asset-backed commercial paper), but it doesn't address the long-end such as mortgage lending." 

via Reuters

This is 'band aid' solution to help companies run their business but not the mortgage problems. Some public companies run their operations with money raised from commercial papers. The Fed's action even goes further to take papers that banks can't sell for 30 days. That serious...

For the present time, conforming loan still okay and have favorable interest rates. The max loan for conforming is $417,900. The type of loans when securitized (sliced and diced to become CDOs) that Fannie and Freddie will buy.

Buyers, there's a price that you will have to pay: More money for downpayment.

Looking for New Construction Condo? Keep Trying

There's been a number of new development cancellation because of market shifts. At the current market conditions - rentals might be a more healthier position for developers. And some buyers, who only wanted to find new condos - can keep trying until they find one.

Even the luxury condo lofts like Mercer & Wooster in the Rosslyn-Courthouse corridor of Arlington, that were priced from $800's to over S 1 million dollars - the phase I is..SOLD OUT!

A growing number of condominium developers are backing out of projects as the worsening real estate market causes lenders to tighten their standards.

........

In the past 12 months, nearly 20,000 condo units have been removed from the glutted local development pipeline, said Gregory H. Leisch, chief executive of Delta Associates, a real estate research firm in Alexandria. By Delta's count, in the second quarter of this year, developers abandoned plans for 22 local condo projects.

via Washington Post

And that -- explains why prices of condos in immediate close-in neighborhoods remain strong.