Loan Limits Slashed

Happy Monday!!!!

Locally the market feels pretty good especially for Thanksgiving around the corner. Just about every agent on the team was out with buyers this weekend. I hope activity like this weekend keeps kicking through the month of December. Many listings are pulling off the market too so we are witnessing a peal away of "want to" sellers , leaving an inventory of motivated sellers and forclosures.

I took a call recently where the seller wanted to list their house with us and scheduled a listing appointment. The day before the appointment she canceled it and said she was mailing the bank back the keys. I tried to talk her into doing a "short sale" which is where the bank takes an amount less than her loan amount and forgives her the difference, but she refused. She said she researched short sales on the internet and didn't want to hassle with it!!! Don't quote me on this but what I've been told is the difference between a short sale and a forclosure on your credit is about 300 points. Meaning, if you short your house your credit will get dinged by about 150 points and if you let the bank forclose on it, you can expect a 450-500 point drop. I'm sure the credit reporting agencies are still trying to figure out how to readjust scores for these and like I said my numbers are heresay.

I just was told that conforming loan limits are being slashed in the Baltimore metro area down to $494,000 from $560,000. What does that mean?

It means if you are borrowing over 494k to buy a home after January 1st 2009, your interest rate will be about 1% higher than if you stay under 494k. Today , you can go up to 560k with the lower rate. On a 500k house what does another percent in payment mean? About 500 duckets a month.................or 6 thousand a year or $180,000 over the term the loan.

SO BUY SOMETHING NOW IF YOU ARE IN THE 500-600 LOAN ZONE!!!!!!

If you are buying in Montgomery or P.G. County you are luckier because those limits will drop from 729k to 625k. Howard and AA County get lopped in with Baltimore City where the average price is much less where in D.C. it's much more and the Southern Counties get lopped in with D.C.

Anyway, let me know what you think.

It's Official-we are worth less than 2005

http://hcar.org/statistics/2008-home-sales/hcsf1008.pdf


It's official.
According to the October statistics from Howard County Board of Realtors, the average sales price in the county is lower today than it was in 2005.
See the chart for some other interesting news:

1. 70% of all homes sold were between 200k and 600k.
2. Only 10 buyers and sellers came to contract agreements on homes priced over 700k. Last year in October 31 homes sold over 700k.
3.The listing inventory plummetted by 21.8%..........less new listings and more people giving up.
4. Sales declined 17%.
5. The total settlements in 2008 is down close to 20% compared to YTD last year.

I believe the trend of listing inventory decreasing will continue next month but the sales trend will go the opposite way. I'm feeling now that the election is over and there are some great loan products still available homes are selling more briskly. We have had 9 go under in the last 7 days.

Obama Real Estate

What will the election results mean for real estate? for home prices? for sales statistics? for interest rates? I won't pretend to know. All I can tell you is what I'm feeling as a local realtor on the East Coast. It feels as if sales are increasing and listings are decreasing which is the best equation for the overcompetitive market that most home sellers face today. Yet just because activity is on the rise doesn't mean that prices are as well. Forclosure listings are popping up everywhere and although most are not in model home condition, their prices tend to out compete what else exists in their price range. That means they price based on active competition and price themselves lower than active competition to win the race.

We redid an ad last week in the Baltimore Sun and put our forclosures at the top of the page in big blocks. We got an amazing 15 times as many calls as the week prior. The forclosures actually helped generate calls on the non forclosures too. With that strategy in mind we decided to start a
SATURDAY MORNING FORCLOSURE TOUR!!!!!!

Please join us Saturday, November 15th from 10.00 a.m. to NOON for a tour of the top 5 forclosures in Howard County. Tour leaves from our offices at 6011 University Blvd. St. 120 Ellicott City Maryland 21043. If interested email Mike Sloan at mike@hiban.com or call 410-241-7904 to reserve your spot today!!!

Home Sales Soar!!!!!!!!!!!!!

Home Sales Soar!!!! My friends in Prince William County , Va don't even have time to talk to me these days. They are as busy as all us agents were about 5 years ago. Their average sales price is slashed in half but they are moving and grooving and making some deals daily. That's starting to happen around here a bit. We just sold a forclosure on it's first day on the market and we got contracts on 3 more listings today. I don't think we have enough Howard County foreclosures or enough Anne Arundel County forclosures or even enough Baltimore City foreclosures yet to spur this multiple bid activity. I hope we do on one hand and hope we don't on the other. Read this article if you haven't yet.....


http://www.washingtonpost.com/wp-dyn/content/story/2008/10/16/ST2008101604149.html

Geterdone!!!

For the last 3 years the last quarter of the year has been the slowest for sales of homes in Maryland. I don't think this year will be much different. In fact I think this year will be even slower. I think the funk of the election (funk meaning inactivity caused by preoccupation) will merge into the funk of the holidays. That being said , if you are a buyer this quarter you are smart. You are smart because rates just dropped again and because the seller's left during the holiday season are "have to" sellers. The "want to " sellers will start peeling off of the market in the next few weeks. If you are a "have to" seller, you can still sell before 2009. You just need to be smart. Good homes with smart sellers are still selling, we've sold several in the past few days.
Listen to Eric Black and find out how.
http://www.youtube.com/watch?v=QcU-wSRJA18

Local Market Surge

Why is the stock market crashing today? Why did it soar on Monday? Why do I have 3 recent sales (within the last 4 days) and have offers on 5 other properties? I can't explain anything anymore and I won't try. All I can tell you is that for some reason , things are happening now.

SAVE ME!!!

Everyone wants to be saved from the impending doom. I have a few favorite sayings as of lately:

1. "Capitalism without bankruptcy is like Christianity without hell."
2. The die is cast for the next 12 months.
3. Rates are going nowhere but up.
4. Prices are not at their bottom yet.

Now let me comment on them:

1. Let some of these big players fail. If we don’t, history will just repeat itself.

2. The federal stimulus package is not going to make a difference today. For the next 12 months if you are in trouble… you will still be in trouble in April of 2009. It’s going to take at least a year before we see a difference or some sort of aid being utilized in our community.

3. In early 2000, rates were at 8.4%. That wasn’t that long ago and the real estate market was humming along fine then and the stock market was stable. I wouldn’t be surprised if once the stock market rebounds you see rates begin to rise and by end of 09 be close to February 2000 levels.

4. Prices will continue to come down in pockets where potential for foreclosures exist. No one prices homes more aggressively than banks and a foreclosure sale is no different in determining value than a relocation sale, a divorce sale or a move up sale. The reason behind the sale does not change the fact that the house sold and if your neighbor gets foreclosed on and his or her bank sells the house they will price it strategically lower than all the competition to get it sold. Foreclosures and short sales will determine the bottom.

On the local front, Maryland reached a landmark number last week with record inventory levels of 50,000. 50,000 homes for sale in the state of Maryland and 5,000 sold. So last month was a 10% month. 1 in 10 sold. Howard County housing inventory actually dropped where several other counties increased in inventory.