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

Blogging Break

Summer is almost over. The pace been slow. Typical August month in real estate. So I'm going to take the remainder of this month off (blogging). I may still post here and there, but it may be very very light.

Enjoy the rest of summer..

Investors Flipping 'Their' Properties Back to Market

TREND watching. Lately, we've seen a number of listings (on MLS) that look like investors flipping 'their' properties back into the market. Case in point: Del Ray (a section of Alexandria City) and Manassass in Prince William county.

Del Ray vs. Manassas it's like inside vs. outside the beltway. It's true, some hoods in Del Ray, prices have come down to 50% off from what it was in 2005. The houses are smaller, uhm, maybe tiny in comparison to - McMansions. But, hey, it's close to DC.

Del Ray and Manassass, are the two places, where not too long ago distressed properties were selling in the $100's to $200's. Because they're distressed (need some fix-up), many first time buyers 'stay away' from the deals. Too scared to jump in and buy as-is. Right now, if you look at listings for the two areas you won't find anything decent for $100's to $200's anymore. They're all taken. Prices have been trending up.

So, investors walked in to seal the deals. Fix up these properties and put it back on the market (for twice the amount they paid for - and some!)...just in time for market madness.

Here is the market madness indicator: inventory of homes in July '09 drops from 5.39 to 3.62 months in Northern Virginia and from 6.6 to 4.19 months if we include the exurbs. Less than 6 months supply of homes - is a seller's market. 

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Weekly Roundup

The Strongest U.S. Housing Markets

They're easy to overlook, with home prices plunging from Manhattan to Los Angeles and almost everywhere in between. But look at the smaller metros where housing bubbles never took shape, and you'll find some of today's strongest markets.

Home Prices: There's no Quick Recovery Ahead
So, is our long national nightmare over? Has the housing market finally hit bottom?

Home Buyers Want a Bargain: Are Sellers Getting the Message?

Real-estate agents are offering the same refrain: home sellers who are serious about selling have to price their homes properly (read: make the buyer think they’re getting a bargain).  Those who do, they say, are selling their home much faster.

U.S. Homeowners Cut Asking Prices $27.8 Billion, Led by Nevada

U.S. homeowners cut their asking prices by $27.8 billion with some of the biggest reductions in Nevada and Florida, states hardest hit by the property slump, Trulia Inc. said.

For Homeowners Underwater, Help is Near

FOR ALL THE GOVERNMENT’S work, the climate for buying a new home remains much better than the climate for paying one off. But the gap is narrowing.

Are attic fans effective in reducing air conditioning bills?

In general, attic fans are not effective at reducing air conditioning costs. The benefit from lowering temperatures in the attic (and thus reducing heat gain from the attic into the house) is usually off-set by the electricity use by the fan and the increase in air leakage from the house into the attic that can result from the pressure drop created by the attic fan.

 The Minimalist Kitchen: Declutter Your Kitchen

Sarah Susanka, architect and author of the The Not So Big House books, thinks kitchens are out of control. Oversize appliances and gadgets that do everything we once did by hand now clutter our countertops and eat up storage.

Why should you ask for lower rent

Ask Mike Haskins, a Raleigh, N.C., resident who recently was able to lower his rent. The vacancy rate had risen in his neighborhood after two other apartment complexes had been built. He knew that the complex in which he was renting wasn't at capacity, and rent for a similar unit on the first floor was set at $650; his rent was $750.

News from around DC Region:

• Lawyer's Road 'diet' unpalatable for some [Fairfax Times]
• Pedestrian Eats: Food Carts in DC [We Love DC]
• Report: Fewer D.C.-area home sellers reduce their asking prices [Washington Business Journal]
• Home Sales up 6.6% across Fairfax in July [Fairfax Gazette]
• More myths about driving vs. transit [Rebuilding Place in the Urban Space]
• Nearly-Done Turnberry Tower Expected to Add Sophistication to Rosslyn [Arlington Gazette]
• House for $100 -- sort of [Real Estate Wonk]
• The Life Aquatic [Northern Virginia]
• Activists Push I-270 Alternative [Gazette]
• Plan targets train delays [Richmond-Times Dispatch]
• All Aboard? [Arlington Connection]
• Rail Station at Heart of Plan to Remake New Carrollton [Washington Post]
• Streetcar tracks under construction, years away from running [Examiner]

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• Home Prices: No Quick Recovery Ahead (huffingtonpost.com)
• Business Week: Boulder Strongest Housing Market In Country (huffingtonpost.com)
• The 10 Most Dollar-Discounted Housing Markets (usnews.com)
• Analysis: Housing begins long, slow rebound (msnbc.msn.com)
• Home foreclosure filings up more than 100 percent in Seattle area (seattlepi.com)
• Feds seeking brokers to sell Madoff properties (cnn.com)

Friday Fun: Yaaay.. We Sold Our House!!

image: Slate

N.Va July Homes Sales Stats

In one word, this is what sales for Northern Virginia in July, looked like: number of homes sold up, sales price (still) declining, listings stay shorter on the market, and inventory of homes drop. That's why we see multiple contracts' back - on the table.

The "big" news should be this: 77.4% (1,590 units) of homes sales in July are homes under $400,000!

Here's the stats  for July:

                                                       2009                            2008                % change

Total sales                            2,053                            1,857                    +10.55%

Under contract                 2,266                            2,056                    +10.21%

Active listings                    7,439                          10,002                   -25.62%

Sales price                         $460,807                    $485,225               -5.03%

Median price                    $410,000                    $399,000             +2.76%

On a YTD (year-to-date), here is the stats:

Homes sold                         11,018                           9,871                      +11.62%

YTD sales price              $423,048                    $482,767               - 12.37%

In today's market, a  minimum of 30 days is needed for people still in the stage of looking. After contract ratification, another 45-60 days is needed to closing. The process of getting a lender approved your loan - takes 'longer' time than before (2005).

Oh, and there are other things buyers will have to clear up with lender's underwriting (like credit dings) before finally can go to closing.

The message here: if you're still looking and haven't come up (close to) with making the decision yet, with November 30 first-time buyer tax credit deadline coming up soon, you really don't have much 'leeway' time to be in multiple contracts situations...

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Translation Help to Crack-the-Code on "Lying Listings"

Okay, get your antenna ready. And smell the BS. There are so many lying listings out there, especially in foreclosure and short-sale. Some listing agents don't even know what's inside the property until you tell 'em. This is especially true with foreclosures and short-sale.

This  description of  'lying-listing' from Bankrate.com just nailed it: "Most homebuyers have encountered a "lying listing" -- the house for sale that doesn't even remotely resemble its colorful description in the Multiple Listing Service or classified ad."

Yes, Realtors are desperate to sell homes in a stagnant market with mounting inventories. But descriptions of houses these days can be flat-out inaccurate."

We routinely run into transactions now where the listing agent hasn't physically been in the house," Boyd says.

This is especially true in short sales and foreclosures, he says.

"On foreclosures, the bank that's in another state will often pick a low-bid real estate company that is in a different community than the house is," Boyd says.

"The bank hires a property management company to put a lock box on it and the real estate company writes up their description based on whoever they sent to take a few photos of it."

Because most agents represent buyers and sellers, they know how to write -- and how to translate -- the code words."

- emphasis added

S-t-r-e-t-c-h-i-n-g it, would be pretty accurate in today's market..

This translation guide will help you go past the smell test. (compiled by the National Association of Exclusive Buyer Agents to help their agents go past the listings BS.) It's so true and hilarious!

• Grandma's house: Realtors interpret this to mean a) the house hasn't been updated since Grandma moved in or b) it still smells like Grandma.
• Great potential: The operative word here is "potential." The "potential" in one case pointed to the fact that there was a large crack through the center of the foundation caused by an earthquake.
• Light and bright: Bring your sunglasses because everything in this baby will be white: walls, cabinets, tile. Where have you seen this before? Oh yeah, the hospital.
• Meticulously maintained: It could mean the owners never bothered to update the property. Maintenance is admirable for plumbing and HVAC, not so much for cabinets, carpets and windows.
• Mile to the beach as the seagull flies: And you'll wish you had wings. Those straight-line calculations can mean some pesky traffic lies between you and the lifeguard shack.
• Needs TLC: You may freely substitute "OMG" for "TLC" here. Boyd says the phrase "TLC" often means the house has been abused and requires more than mere redecorating. "The average homebuyer who sees HGTV a couple times before they go looking is not sensitive to that," he says.
• Newer furnace and AC: "Newer" has a certain "truthiness" to it. In one case, both units were 25 years old. When the listing agent was asked why she made such an audacious claim, she replied, "Because each one of them had received a new part within the last year."
• Retro decor: It's '60s flashback time. Can you dig the original paisley vinyl floors and avocado appliances, man? Groovy!
• This house just had a total facelift: Loosely translated, it means the seller painted everything. But paint, like a facelift, can only hide so much.
• This house will go fast: Might have been believable in the first 30 days on the market, but not anymore. One home with this description had been on the market 247 days.
• Turnkey: Meaning they don't want to have to haul away all that orange-and-brown-plaid-polyester-covered furniture.
• Very bright, sunny home : Often true because there's not a tree in sight.
• Water view: Of course, you'll need to stand on the upper deck railing and crane your neck. With binoculars. On an extremely clear day.

                [via bankrate.com]

I love it when I see the remark on a listing that says, "this house will go fast.." You looked at the days on the market - s%^&, it's more than 60 days!! And the funny thing is, the listing agent don't even bother to 'update the remarks.'

What about this. This house has been remodeled. Remodeled means different thing to different people. The listing says 'sellers just remodeled the house"' could mean to you "they painted and replaced the appliances.. like 3 years ago?".. And don't even look for granite there. (Don't even go there). People remodeling standard might be 'different' than what you have in mind.

So, what's your favorite?

Do You Know Who Your Agent Works For - 'Exclusively'?

Image by Kathy McGraw via Flickr

We skip weekly roundup for this more important topic.. - dewita

---

There are three types of representations (agency relationships) for buyers and sellers in any real estate transaction. 

Agency relationships in residential real estate transactions involve the legal representation by a real estate broker (on behalf of a real estate company) of the principal, whether that person or persons is a buyer or a seller. The broker (and his/her licensed real estate agents) then becomes the agent of the principal. [wiki]

Buyers: do you know if your agent "only" represent you exclusively, as your buyer agent?

Buyer agency can exist exclusively (where a brokerage firm chooses to only represent buyers and never sellers, as an exclusive buyer agent) or, in a full service company, by offering buyer agency to buyers who become clients. [wiki]

Or, does your agent also work for the sellers as their "listing agent?" Sellers: the same question goes to you.

If your agent is working both sides of the transactions, we call this 'dual agency' or 'dual representation'. Many states, including Virginia, allows dual agency. Most agents only represent one side at a time, but, there are agents out there who are doing both sides.

The 'dual agency' transactions might not happen so much in resale. But it's not so with the new homes.

Before you walk into any new homes' sales office, you need to understand this: that builder's sales reps work for the builder to represent the builder - and "not" you, the buyer! Their sales agents work exclusively for the developer to protect builder's interests. So, if a builder sales rep writes a sales contract for you, and you are not represented by any Realtor - that means you have "NO" representation - at all! Nothing. If they write contracts, they're just doing admin stuff for you. And they have no fiduciary responsibilities to you, other than "you are" the company's customers. Yup- you read that right.

 To put it in perspective, here's something worth reading. (I'm putting it in its entirety). Via MarketWatch e-newsletter (subscription):

When home prices are rising and houses are selling like hot cakes, realty agents don't have to worry so much about where their next commission check is coming from. In the boom times in the middle part of the decade, the market pretty much maximized incomes.

Not so today. Commission checks are much harder to come by and they are way smaller when they do come, given the drop in home prices across most of the country. That can lead to shenanigans among unscrupulous agents as they try to pocket as much cash as the can from deals, including the unethical practice of favoring buyer offers from their own clients or their brokerage-represented buyers, practices that let them keep both sides of a commission split.

That's why this is a good time to remind home buyers -- and sellers -- what the concept of agency means and why it is critical that you know who your real estate representative really works for. That's especially important when you are dealing with situations of dual agency, in which a broker is acting for both sides -- a situation ripe for abuse. (emphasis added)

Not that there weren't plenty of nasty tricks going on in the boom, too, especially in the sale of mortgages. But in the bust the financial incentive to stray can be boosted by desperation as well as greed.

-- Steve Kerch, assistant managing editor/personal finance

6 Acre Living Roof

This is amazing.. 

Maryland OKs Red and Purple Lines

Governor O'Malley (D-MD) announced a few days ago, that the two projects - the 14-mile of east-west light rail red line connecting the existing Baltimore Light Rail system with MARC stations and 16-mile Purple line that connects Bethesda to New Carrollton - will now be submitted for Federal approval. The two projects are part of Maryland's smart growth plan.

 

 

[via One Maryland]

Water-cooler Conversation: Appraisals

 Yesterday, over watercooler conversation two agents were sharing stories about appraisals. One agent said that in her case the "buyer's lender did a second appraisal - after they did the closing!" The other one said, that "mine have to have second."

The first agent story line goes like this. They went to closing without funds' confirmation from the buyers' lender of either the funds is en route or something in that nature.

Typically, a settlement company (that does the closing for you) would confirm "that funds is in" before we proceed with the closing. So for a title lawyer to do the closing 'before' buyer's funds is available, is a pretty 'sloppy' job. What if- there's no funds transfer at all? It turns out to be, according to the listing agent (to follow- up the story) the lender transferred the funds (finally!) - after they did a second appraisal! - which happened "after" the fact.

The second agent talks about how lender ask for a second appraisal for above $400k house.  Because the first one came in lower than sales price.

Facing with the prospect of under-appraisals - if later lender would require for second appraisal to be done - we can see why listing agents should price the property more in line with market conditions. It's not easy. I understand, though, sometime seller/s have 'unreasonable demand' when it comes to pricing their house. Their thinking it's like "my house is better than that house... blah blah blah.." so, it should be higher ..and so it goes..

The truth of the matter is: these days, it's more challenging for Realtors to come up with the fair-market-value of a property. (remember we're not appraisers) Because we have foreclosures, short-sale mixed in with regular properties (resale or new homes) - in the pipeline. 

So, there's concern among Realtors about how under appraisals might be the next shoe to drop...