Average prices for Maryland homes are down 10.7% year over year as of November 30, 2008. Good news for buyers. Home sellers, however, are going to need to consider either lowering their asking price or postponing the sale of their home until the market recovers. This might sound crazy coming from a real estate professional but let's look at the facts.
1. Only 2,740 homes sold in November of 08. That's 1,073 less than last year this time. Demand is down. There are many reasons for this including the country's current economic condition. But the bottom line is supply is high and demand is low - therefore sellers will have to offer a discount to get the property off the shelf, so to speak. If you can not afford to do that right now you may want to wait.
2. If you must move now consider renting your home. If done right renting will cover your mortgage and should provide some income as well. Before renting you must consult a professional, like the Keys2Day Team, in order to find out what your county requires you to do as a landlord. You may have to make modifications to your property, such as installing smoke detectors, in order to obtain the rental certification from your county. Renting is a viable option in many cases.
3. Is the end in sight? No one really knows. What we do know is this - rates on 30 year fixed mortgages fell to record lows this week. The average rate for the week ending December 26, 2008 was 5.14%. Buyers with decent credit will find these rates very attractive. Hopefully this will give the market a boost.
In addition, the current rates also make refinancing a money saving prospect for alot of homeowners. If you'd like to discuss a refi call us 2Day and we'll connect you with one of our qualified mortgage pros who will answer any questions you may have.
To sum it all up - relax. Housing, like the overall economy, will level off and rise again. Over time home values will continue to increase. The Keys2Day Real Estate Team will be here through thick and thin serving as your real estate resource.
Sunday, December 28, 2008
Tuesday, September 23, 2008
Take Me Drunk - I'm Home *hicup*.
From 2Day's Wall Street Journal: The success or failure of the U.S. Treasury's plan to spend up to $700 billion on soured mortgages may depend on whether it can stem the slide in housing.
Don't expect too much, said Douglas Elmendorf, a senior fellow at the Brookings Institution. The Treasury plan won't alter the fundamentals of falling home prices, because it can't alter the fact that many people can't afford to live in the homes they are in, he said.
Don't expect too much, said Douglas Elmendorf, a senior fellow at the Brookings Institution. The Treasury plan won't alter the fundamentals of falling home prices, because it can't alter the fact that many people can't afford to live in the homes they are in, he said.
Declining home prices have been at the root of the crisis gripping the financial market. Overextended borrowers who would have been able to refinance or sell their homes and pay off their debts had prices continued to rise have instead seen the value of their homes fall below what they owe. The number of homes going into foreclosure has risen, adding to a glut of unoccupied homes that has helped further depress home prices.
So where's the good news? Well let's consider all sides here. First of all the vast majority - somewhere around 98% - of all home owners are paying their mortgages on time. Secondly, lower prices are now the reality- if you're a buyer that is music to your ears. Prices rose at a stupefying pace for years. You remember - folk were bidding up houses as if they were at a cattle auction. Talk about irrational exuberance.
So what do we do now? 2 things are in order. #1 - Turn the news off. Their job is to sell advertising. They may have a tough time doing that if all they have to report about is good news. If you don't believe me consider this. When the media reports unemployment statistics they always tell you about the percentage of folk who are "unemployed". You never hear about the other side. "THIS JUST IN - UNEMPLOYMENT IS AT 5%!" OK so employment must be at 95%. That is excellent when compared to many other nations - France for example, has an 8.3% unemployment rate while Germany is at 8.4%. So remember to put things into perspective. The media would love it if aliens landed on the White House lawn and announced "We're here to enslave 50% of you and eat the other half."
#2 - The nation has seen its fair share of calamaties - financial and otherwise. We've snapped back each time. All of those in the media comparing this time in our history to the Great Depression are really displaying a ginormous lack of historical understanding. Today is NOTHING like the 30s. We don't have bread lines, we don't have Hoovervilles, we don't have 25% unemployment. In fact in the 2nd quarter we had 3.3% GDP. Unfortunatley the housing market got very drunk and now we're dealing with the hangover. Now it's time to take our medicine, get back up and move on.
Saturday, July 19, 2008
Keys2Day Team on HGTV
The Keys2Day Team recently appeared on an episode of HGTV's "Get It Sold"! It was fun to see the team on national TV - but it was even more fun participating in the filming of the episode.
We're excited to report that the team will be appearing on other HGTV programs in the coming months. HGTV's variety of home improvement and real estate informational programming combined with the Keys2Day Team's love of real estate equals a winning combination. So stay tuned to HGTV to catch the Keys2Day Team.
Friday, June 27, 2008
Don't Believe The Hype
Recently US News published an interestingly one sided article entitled “Rent, Don’t Buy, Your Home”. The article made the case that buying a home in today’s market made no sense and equated to “renting, from a bank”.
The most blatantly biased point raised in the whole article was one attributed to Fidelity – the big investment firm. According to them renting can actually be a “good investment”. Renting an investment? Fidelity says that “…if renters save even $300 a month—the difference, say, between their rent and a monthly mortgage payment—that money, invested in stocks growing at only 4 percent, could add up to $114,000 in 20 years.”
I’m surprised that this globally recognized investment firm did not illuminate the whole truth of the matter. Sure you can rent long term, as Fidelity suggests, but you need to know what that will truly cost you. For example, a $1,300 per month rent payment adjusted annually at 3% inflation will cost you $290,154 by year 15. Remember, Fidelity proposes you pay rent and invest $300 per month at 4%. So let’s go ahead and save $300 and invest that at 4% for just 15 years. Now you’ve spent $223,298 in rent and, because inflation grew at an average of 4% your $300 a month investment has returned 1% after inflation. I wonder how much in commissions Fidelity made over the course of the 15 years? Remember – they want you to rent for 20 years.
I’m not sure why Fidelity doesn’t just advocate purchasing a house that cost $300 less per month than the maximum of what one can afford and using that $300 to invest. Here’s another example of the hilarity of Fidelity’s advice. $1,500 in rent paid monthly over 15 years and adjusted upward for inflation at 3% annually will make your landlord one happy individual because you would have forked over $314,272 – in 15 years. The average mortgage term is 30 years.
Other facts the proponents of rent ignore are the plain realities of high inventories (which translate into more buyer choice), low home prices and low interest rates. When would be a better time to buy? Of course when it comes to stocks Fidelity will be the first to tell you – “Buy low – sell high.” If there is anyone waiting for a bottom then they will most likely miss out on these lower prices.
Real estate is not a national market. Although Florida is suffering from a glut of inventory and flat sales North Carolina is not. When you take it to the local level the differences become even more pronounced.
Buying still makes sense if you plan on staying in your home for 5 years or more.
The most blatantly biased point raised in the whole article was one attributed to Fidelity – the big investment firm. According to them renting can actually be a “good investment”. Renting an investment? Fidelity says that “…if renters save even $300 a month—the difference, say, between their rent and a monthly mortgage payment—that money, invested in stocks growing at only 4 percent, could add up to $114,000 in 20 years.”
I’m surprised that this globally recognized investment firm did not illuminate the whole truth of the matter. Sure you can rent long term, as Fidelity suggests, but you need to know what that will truly cost you. For example, a $1,300 per month rent payment adjusted annually at 3% inflation will cost you $290,154 by year 15. Remember, Fidelity proposes you pay rent and invest $300 per month at 4%. So let’s go ahead and save $300 and invest that at 4% for just 15 years. Now you’ve spent $223,298 in rent and, because inflation grew at an average of 4% your $300 a month investment has returned 1% after inflation. I wonder how much in commissions Fidelity made over the course of the 15 years? Remember – they want you to rent for 20 years.
I’m not sure why Fidelity doesn’t just advocate purchasing a house that cost $300 less per month than the maximum of what one can afford and using that $300 to invest. Here’s another example of the hilarity of Fidelity’s advice. $1,500 in rent paid monthly over 15 years and adjusted upward for inflation at 3% annually will make your landlord one happy individual because you would have forked over $314,272 – in 15 years. The average mortgage term is 30 years.
Other facts the proponents of rent ignore are the plain realities of high inventories (which translate into more buyer choice), low home prices and low interest rates. When would be a better time to buy? Of course when it comes to stocks Fidelity will be the first to tell you – “Buy low – sell high.” If there is anyone waiting for a bottom then they will most likely miss out on these lower prices.
Real estate is not a national market. Although Florida is suffering from a glut of inventory and flat sales North Carolina is not. When you take it to the local level the differences become even more pronounced.
Buying still makes sense if you plan on staying in your home for 5 years or more.
Sunday, June 8, 2008
The Fire Museum of Maryland's Upcoming Bull Roast
The Keys2Day Team was out and about in Towson yestersday. You may have seen (or heard) us. We were hard to miss in a 1927 fire engine courtesy of the Fire Museum of Maryland. We were letting any and everybody know about the museum's upcoming Bull Roast and Steam Show which will be held Sat. June 14, from noon until 3pm.
The event will feature a fire engine muster, steam show and antique fire aparatus on display. If you love good food you're in luck - the event will feature pit ham, pit beef and pit turkey as well as pepper turkey shredded beef, hot dogs, hamburgers, sodas and beer.
The Keys2Day Team is a proud sponsor of the event. If you'd like to attend please give us a call at 866.KEYS2DAY - the tickets are only $35.
Thursday, May 29, 2008
Keys2Day on HGTV
If you watched HGTV's 'Get It Sold' progam on the evening of May 28th you may have seen a familiar face or two. That's right - members of the Keys2Day Real Estate Team were featured on the show. We took a look at a property that had been staged and gave our opinions of the redecorations. It sure was alot of fun to be on the show.
Stay tuned to HGTV to see more shows featuring the Keys2Day Team.
Stay tuned to HGTV to see more shows featuring the Keys2Day Team.
Saturday, May 24, 2008
God Bless Our Service Men and Women
On this Memorial Day weekend the Keys2Day Real Estate Team would like to thank all of our proud United States service men and women, past and present, for their hard work and dedication to making America a great country.
We'd also like to remind active service personnel and veterans about the Veteran's Administration mortgage loan program. The VA loan allows veterans 100% financing without private mortgage insurance or 20% second mortgage.
If you are a veteran or the spouse or widow of a veteran and would like to learn more about this program contact us today so that we can put you in touch with a qualified VA loan administrator who will be able to answer all of your questions.
Thursday, May 22, 2008
Dealing with Declining Home Prices in MD
According to the Baltimore Sun Maryland home prices declined more in the first quarter than in all but seven other states, the federal government said yesterday.Home sale prices in the state fell 4.8 percent in the first three months of the year from the corresponding period in 2007, according to the Office of Federal Housing Enterprise Oversight.
So as a home owner, buyer or seller how are you to take this news?
Well if you are an owner with no intention of moving anytime soon sit tight. While it is true your home may have lost value in the past few years that fact should not bother you unless you intend to sell soon or take out some equity.
If you are buying a home this news could mean that you're shopping at the right time. There are bargains to be had right now and as the old adage goes: buy low and sell high.
Selling a home? Well in order to make that happen you need to be realistic. It's a competitive market with alot of inventory. Good news is buyers abound. The national news media would have you believe no one is buying homes. In fact 4.89 million homes sold in America in April. While that's 1.04 million less than sold in April of 2007 it's still indiciative of the fact that people are buying.
Sellers need to seriously consider price. If you are looking for top dollar chances are you may be dissapointed. In order to sell that home you will have to stay mindful of the simple law of supply and demand which dictates that when supplies increase prices fall. Another alternative is to sight tight and wait it out if you can afford to. If you're not in a situation where you need to relocate it may be advantageous to wait this market out and sell when prices rise a bit.
So as a home owner, buyer or seller how are you to take this news?
Well if you are an owner with no intention of moving anytime soon sit tight. While it is true your home may have lost value in the past few years that fact should not bother you unless you intend to sell soon or take out some equity.
If you are buying a home this news could mean that you're shopping at the right time. There are bargains to be had right now and as the old adage goes: buy low and sell high.
Selling a home? Well in order to make that happen you need to be realistic. It's a competitive market with alot of inventory. Good news is buyers abound. The national news media would have you believe no one is buying homes. In fact 4.89 million homes sold in America in April. While that's 1.04 million less than sold in April of 2007 it's still indiciative of the fact that people are buying.
Sellers need to seriously consider price. If you are looking for top dollar chances are you may be dissapointed. In order to sell that home you will have to stay mindful of the simple law of supply and demand which dictates that when supplies increase prices fall. Another alternative is to sight tight and wait it out if you can afford to. If you're not in a situation where you need to relocate it may be advantageous to wait this market out and sell when prices rise a bit.
Steak or Burgers
McDonald’s – ahh the golden arches. They’re the biggest restaurant in the world. Billions and billions served. That’s quite an accomplishment that came out of Ray Kroc’s dream. I still stop by for a Big Mac and fries every now and then. People always talk about the fries – and they are great – but you know what? Mickey Dees has always had the greatest fountain sodas. They always get the mix just right. So what’s this got to do with real estate?
Well it has a lot to do with the Keys2Day Team’s philosophy of real estate. But before we get into that one more great restaurant recommendation. Morton’s. If you like steak you will LOVE Morton’s. Mind you – it’s a different price point than McDonald’s but it is my personal belief that they have the best steaks.
So back to the Keys2Day philosophy. We believe in individualized service tailor made to each unique situation. No two home buyers or seller are alike. It doesn’t matter if you live in the same style house on the same street. Since we are talking about the most expensive single transaction most folks will make wouldn’t you rather get personal attention?
Oh and did I mention Morton’s staff is specially trained to provide you with the best dining experience? Now don’t get me wrong – I’m not taking anything away from McDonald’s. In fact I used to work there in high school. It was a great opportunity that more young people should take advantage of. However, McDonald’s is geared toward being the biggest. Volume sales. They have a $1 menu that’s cookie cutter. That works in fast food because you know you’ll get the same taste from every McDonald’s. I was in Paris once and had a Royale with cheese, our version of the Quarter Pounder. It tasted exactly the same. But I also know what I am getting at Morton’s – top shelf.
Well it has a lot to do with the Keys2Day Team’s philosophy of real estate. But before we get into that one more great restaurant recommendation. Morton’s. If you like steak you will LOVE Morton’s. Mind you – it’s a different price point than McDonald’s but it is my personal belief that they have the best steaks.
So back to the Keys2Day philosophy. We believe in individualized service tailor made to each unique situation. No two home buyers or seller are alike. It doesn’t matter if you live in the same style house on the same street. Since we are talking about the most expensive single transaction most folks will make wouldn’t you rather get personal attention?
Oh and did I mention Morton’s staff is specially trained to provide you with the best dining experience? Now don’t get me wrong – I’m not taking anything away from McDonald’s. In fact I used to work there in high school. It was a great opportunity that more young people should take advantage of. However, McDonald’s is geared toward being the biggest. Volume sales. They have a $1 menu that’s cookie cutter. That works in fast food because you know you’ll get the same taste from every McDonald’s. I was in Paris once and had a Royale with cheese, our version of the Quarter Pounder. It tasted exactly the same. But I also know what I am getting at Morton’s – top shelf.
What’s the morale? Biggest and best are very often two totally different things serving two totally different purposes. Sure – if you’re hungry Morton’s and McDonalds can solve that. But if you want a higher level of individualized service tailored to your needs and wants – then there is no question. The Keys2Day team will never be the biggest – that’s not our goal. We strive to be the best by providing quality service, home buying and selling education and service tailored to meet the needs of individuals.
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