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

Genius No More. A Roundup..

Oops, 'they' just missed the boat! These are people who think they're genius instead of locking the rates - floating the rates - waiting for rates to come crashing below 4.5%! Now, they might as well kiss goodbye to it. Interest rates spike up to float around 5.5% from under 'the rock' of five percent last week.

Here's a roundup of what's been happening on the market this week.

Mr. Mortgage Live: Potential Consequences of 5.5% Mortgage Rates

With respect to yesterday’s in the mortgage market — yes, it is as bad as you can imagine. No call can be made on the near-term, however, until we see where this settles out over the next week of so. If rates do stay in the mid 5%’s, the mortgage and housing market will encounter a sizable stumble. The following is not speculation.

This is what happens when rates surge up in a short period of time - I lived this nightmare many times. Yesterday, the mortgage market was so volatile that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. This is not uncommon over the past five months, but not that common either. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day.  

Jumbo GSE money — $417k - $729,750 — has been blown out completely with some lender’s at 8%. I have seen it all in the mortgage world — well, I thought I had.A good friend in the center of all of the mortgage capital markets turmoil said to me yesterday“feels like they [the Fed] have lost the battle…pretty obvious from the start but kind of scary to live through it … today felt like LTCM with respect to liquidity."

Bankrate.com: Mortage Rates Gone Wild 

Mortgage rates went up swiftly this week, and some would-be borrowers lost out dearly because they had not locked while rates were extremely low.

The question is: What should they do now?

When applying for a mortgage, borrowers are given the option of locking or floating. When you lock a rate, that's the rate that you will get if you close on the loan by the lock expiration date. A lock protects you against a rate increase. But it's also a commitment that you will pay that rate, even if rates fall between the day you lock and the day you close.When you float a rate, you're keeping your options open. If rates drop, you can lock then and brag about how smart you are. But if rates rise, you might get stuck with a higher-than-desired rate and monthly mortgage payment.

On Tuesday and Wednesday, mortgage rates went up half a percentage point or more. The increase was abrupt and startling. For people who had already locked a rate and who were on track to close on time, the jump in rates was no big deal. But for those who were floating, this week's rate rise could be costly.

Clusterstock: Your Field Guide to the Mortgage Collapse

The housing market is crashing, and it's taking us, our banks, our economy, and our government down with it.  Why?  Because of the debt!  The value of our houses is plummeting, but the value of our debt is staying just the same.

You knew that already.  What you didn't maybe know, or at least fully appreciate, is exactly what's happening in the mortgage market that's causing all this hideousness.

It gets pretty interesting from here.. 

Okay, if you're first time home buyers and qualify for the $8,000 credit,     probably this mortgage increase ain't that bad, if you have enough funds to cover your downpayment. The credit is extra money you can use the funds to buy down rates.

Today’s announcement clears the air about the use of the credit toward down payments. In addition to down payment purposes in excess of the minimum 3.5%, borrowers may apply the monetized tax credit toward other closing costs, which can in turn lower the interest rate obtained, according to HUD’s announcement.

[via HousingWire]

Building Green Floors and Closets

Continuation from the show Building Green via PBS that I've posted (among others) here, here.

Places Where You Can Buy Under $500,000 Garage Townhomes..

Some of my clients are very selective. They only wanted to see garage townhomes. You know why? Because garage townhomes are newer products  and tend to have better layout than townhomes that were built without it. We find not too many options in DC, because of scarcity of land. However, it's a different story across the river over at Northern Virginia. There are plenty of choices, depending on the neighborhoods and prices. But at least, if your budget is limited to $500k, you still have some choices...

First, we got to take a look at the form of ownership for these townhouses.

Condo vs. Fee Simple

As far as the type of ownerships for these homes, in legalese terms, it's a mix between condo and fee simple.  Condo is like condo, you pay monthly fee that covers basic maintenance of the building, master insurance policy, snow removal, and water. The association owns the land. What's inside your walls is yours, outside the wall you own partial ownership. On the other hand, fee simple is this: You own everything. Though, to complicates things further, some homeowners associations split up the maintenance fee into condo and HOA (homeowners association) fee for different kinds of service maintenance. 

I know it's kind of confusing. But, that's the reality in the marketplace. 

For example. At Cameron Station, you'll find stacked-townhomes with condo ownership. Stacked townhomes are 2-level condos. Unlike some the other townhomes in that hood, the stacked townhomes owners pay monthly condo fee for the items mentioned above. The difference comes down to: Prices. Prices of regular townhomes (not condo ownership) are much higher than the stacked ones. On the flip side, yeah, you pay more for the regular townhouses, but your monthly HOA fee is one-half or one-third of the condo fee.

So there's  a trade off between buying condo vs. fee simple townhouse.

Here is a few examples that I can think of in Cameron Station, Alexandria.

Listing at 5201 Brawner Place, AX6930236 (left pix). A three level garage townhome in Cameron Station, custom-built that has 4 bedrooms, 3.5 baths in a 3,000 s.f. living space. This house is on the market for $795,000.

 Listing at 5004 Barbour #B (right pix), AX7056567. A three-level townhouse that has 3 bedrooms, 2.5 baths in 1924 s.f. of living space. This house is on the market for $479,000. Condo fee $260/ mo. 

For the most part, condo townhouses at Cameron Stations are on the market from $419,000 to $499,000. While the 'other townhouse, townhouse' are on the market from $539,999 to $849,900. It's like there's a six degrees of 'price' separation there. 

After tracking some of the hoods in Northern Virginia and DC that have garage townhomes for awhile, here are the subdivisions with their zipcodes, where you still can find garage townhomes under $500,000. 

Northern Virginia

• Arlington: Arlington Ridge (22206)
• Vienna: Townes of Moorefield (22180)
• Oakton: Barden Oaks  (22124)
• Burke: Caroline Oaks,  Oak Leather 
• Alexandria: Duke Street Square, Cameron Station, Towns of Hillwood, Summers Grove, Landmark Mews (22304), Kingstowne (22315), Quantrell Mews, Windy Hill at Lincolnia, Overlook, the Pinecrest (22312), Sunny Side (22305), Quaker Hill (22314), Stonegate (22311), Washington Square (22314), Pavilion at Huntington (22303), Georgetown Woods, Van Dorn Village  (22310), Huntington Grove, Huntley Meadows, Holly Acres, Groveton Woods (22306), Roxbury Mews, Mount Vernon Townes (22309) and tons more under $300k..
• Falls Church: Ellery Place (22041), Madison Lane (22041)
• Fairfax: Got tons of them in all of Fairfax and much newer than what you can find in other hoods. A lot of the new townhomes are around Government Center area. Here is some. Buckleys Reserve, Fair Chase, Fair Oaks, Fairfax Center, Ridge Top  (22030), Leonard Property, Birch Pond, Center Pointe, Fair Lakes Square, Fair Lakes Court, Fairfax Center Landbay, Stone Creek Crossing, Penderbrook, Greens at Fair Lakes, Fair Woods (22033), Kingsberry (22032).
• Lorton: Laurel Highlands, Laurel Hill, Lorton Station, Village of Mount Air, Worthington Woods (22079). 
• Reston: Reston, Bentana Woods (20191, 20190), Devonshire (20194).
• Springfield: Shadowbrook (22153), Hunter Village, Keene Mill Overlook (22152), Japonica (22150)

and in Washington DC: Capitol Gateway (20019), Fort Lincoln (20018), Dakota Crossing (20018).

For lower, lower end of the price spectrum, like under $200,000.. yup, you "still" can find them in Woodbridge, Manassas and Gainsville part in Prince William County. 

images, data: Homes Database, MRIS

S&P/ Case-Shiller: DC Home Prices Fall 18.4%

Oh gosh, just when you start to read good news about the market, market turnaround and stuff, this thing is out. Standard and Poors/ Case-Shiller national home price index falls 19%, which is the steepest in at least 21 years, according to Business Week. 

Home prices tumbled by 19.1% in the first quarter, the most in the 21-year history of the Case-Shiller index. Home prices have fallen 32.2% since peaking in the second quarter of 2006 and are at levels not seen since the end of 2002.

The 20-city index fell by 18.7% in March from the year before and the 10-city index lost 18.6%. Those declines were a bit better than February's and marked the second straight month the indexes didn't post record drops.

Falling home prices is good for buyers. At least buyers benefited from the changes. The Washington DC region is not as bad as some other places in the nation, where they've seen prices declined more than 30%.  Places like Phoenix, Vegas, and San Fransisco. Though, Phoenix has turned into a wild market. 

Nationally, according to S&P, prices is back to 2002 levels. A closer look at this table, the change from Q4 2008 to Q1 2009 is minimal only decline 1.2%. One year change, DC market decline 18.4%. That sounds about right...Though, some pockets you've seen more than -30% change.

For us here in DC region, in some pockets of the neighborhoods, it's just crazy market! This is the case, where the number of listings drop dramatically, buyers are out competing and as a result - multiple contracts back on the table.

More details from S&P, here..

Memorial Day Weekend Roundup

Low-VOC Paints

On two occasions in recent months we've needed painting done in our apartment -- once due to water damage and another time because we enlarged a room. For the first job, we got low-VOC paint; for the second one -- completed last night -- we forgot.

Is Cork Laminate A Realistic Option for a Kitchen Countertop? 

Question: My husband and I want to replace our kitchen countertop. We are considering traditional and non-traditional options. One of our most unconventional ideas is cork laminate—a material usually used for floors. Should we even consider this option, or is it completely unrealistic?

More Takers for 15-Year Loans

THE 30-year fixed-rate mortgage has traditionally been the go-to loan for borrowers who want stability and lower payments. Adjustable-rate mortgages, by contrast, are often seen as more suitable for risk takers and those who expect to sell their homes in a short time.

A Home with Fearless Color 

If Doug Meyer had an aura, it would certainly not be neutral. He would be surrounded by the blues, greens and turquoises he so favors, and the colors would shimmer in an ever-moving energy field. 

Real Estate Short Sales: The Shortcomings

DEALING WITH THE BURDEN of owning a home that's underwater, or worth less than the underlying mortgage, can be financially devastating. Go into foreclosure and the blemish will stay on your credit report for the next seven years. Try to eke by and you put the rest of your finances in danger.

Blast from Past: Lennar Advertising No-Money Down Homes

Home builder Lennar Corp. is offering some buyers a deal that might bring back memories of the housing frenzy: No money down. No closing costs.

Emeryville's platinum-certified neighborhood, on its way

While at the AIA convention (I'm not an architect but still want to be one when I grow up) last week, I attended a presentation on the redevelopment of the Marketplace site in Emeryville, California, right across the Bay Bridge from San Francisco, north of Oakland.  The new project, planned as a walkable, mixed-use, transit-accessible development, was the first of the participants in the LEED for Neighborhood Development pilot program to achieve platinum certification, the highest level.

Managing the Tenant Screening Process

Occasionally, I hear from landlords who have absolutely no problem marketing their rental units.  They put a sign out front, get a couple ofcalls and rent to the first likely prospect. 

12 tips to buying home at an auction

Foreclosure filings soared a staggering 81 percent over 2007, according to RealtyTrac, as one in 54 U.S. homes suffered the dreaded "Notice of Assessment Lien Foreclosure Sale" stigma.

ADDITTIONAL NEWS FROM AROUND WASHINGTON DC REGION: 

•  Area Jobless Rates Stable in April, but Expected to Grow [Washington Post] 
• Toll Brothers sales improving [Washington Business Journal]
• New York Avenue Corridors TMP Meeting [WashCycle]
• Where are the Region's traffic chokepoints? [WTOP]
• Transit authority opposes Purple Line tunnel [Gazette.net]
• Arlington approves towing fee hike [Examiner]
• ArchiCritic: Tiber Island [DC Metrocentric]
• Where we live: Capitol Hill [We Love DC]

Solar Energy in the City

This is something that any of the high rise buildings, especially the ones that have condo fee to include utilities (and there are plenty of them!) can use their rooftop to house solar panels. I could name names here. For example, Watergate at Landmark, Skyline, Pimmit Hills. To name a few. You can find many of these condos are located in Alexandria, Arlington, Falls Church, and all around DC region, incl. Maryland. They have 'unused' rooftops.

If they're unused, why not use it to house solar panels then?

There are many benefits to have installed the panels on the roof. Among others is reducing their utility bills. Some of the high rises tuck in all utilities into their monthly fee. As a result, the condo fee is so high. Depending on the square footage, a one bedroom condo fee at one of the buildings I mentioned could range anywhere from high $400 to $800 a month!

Net metering is when you send electricity back to the grid, thus, spin the meter backwards. Each jurisdiction has its own regulations. (I've written extensive posts on the this topic before, here and here.) Updated version of net metering for DC, Maryland, and Virginia.

When it comes to residential incentives, Maryland offers the most to its residents. So, why not condo owners co-op and fund solar energy for their buildings.

 Just a thought..

[Video via Talking Green]

Bromptons to Finish or County will Demolish..

 Finally. Blighted Bromptons saga finally coming to an end: it's either Ed Peete, developer/owner,  finish the project and bring it up to Code or Arlington County will demolish it. The Bromptons is located in Cherrydale neighborhood off Lee Highway, Arlington county (across from Safeway).

Pictures I took a while back.

 

After so many years of hanging,  County  Court got its message word. Finish it or demolish. That's the tone coming from the County. And builder agrees with the timeline. 

Here is the background of this project, via Arlington County.

The County Board approved the Bromptons at Cherrydale site plan project in July 2002.  The single family homes and townhouses that were part of the project were completed.  Work began on the mixed use building but ran into design and construction problems when it was nearly halfway built.

The County’s Building Official issued the stop work order in 2006 after County building inspectors found serious building code violations. The Building Official followed that action in November 2007 with an unsafe structure notice and order to demolish or repair the building within 60 days.  Peete appealed the order, and received an extension of the demolition deadline by the local building code appeals board until late July 2008.  No action was taken by Peete to demolish the building however.

In September, 2008, the County authorized the County Attorney to take legal action against the Bromptons at Cherrydale LLC to compel the owner to comply with the Building Official’s order to demolish or repair the building or, alternatively, to sell the property and use the sale proceeds to demolish the building.  A suit was filed shortly thereafter and the case is scheduled for trial next week in the Arlington Circuit Court.  The settlement agreement makes trial unnecessary.  Instead, the settlement agreement will be incorporated into a court order enforceable by the Court.

Survey Says, the Average 30-Year Fixed Mortgage Rates is..

According to the latest survey by Freddie Mac, 30-year fixed-rate mortgage is 4.86% with an average of 0.6% point for the week ending May 14, 2009. For a comparison, for the same time last year, the average rate was 6.01%. (I didn't know that mortgage rates vary by region until I stumbled into this data from Freddie).

Via Freddie Mac.

click on image for larger (+) view

Compare that to this, via Wells Fargo.

So if you get a quote somewhere between Freddie's national average and Wells Fargo's, you're okay..

HUD Allows $8,000 Tax Credit for Downpayment

Saw this on NAHB.

HUD Secretary Shaun Donovan’s decision to allow consumers to use the $8,000 first-time home buyer tax credit to help cover their downpayment and closing costs on FHA-insured mortgages will be a big boost to the housing market, according to the National Association of Home Builders (NAHB).

“The biggest obstacle for first-time buyers is coming up with a downpayment,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We commend Secretary Donovan for acting decisively to enable buyers to access the tax credit at the time of closing. This will help to stimulate home sales, stabilize housing and get the economy back on track.”

 

The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or “bridge loans” up to the amount of the $8,000 first-time home buyer tax credit.

 

Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.

(emphasis added)

If buyers can use the credit up-front for purchase, that will give boost to housing sales. What am not sure is how would lenders, government agencies and non-profits distribute the funds? Will keep you posted as more details become available..

Monday pm Cartoon

 

image: Slate