River Hill's 9th Bank

Coming Soon!!! Tower Federal Credit Union to downtown Clarksville!!! Just what the community needs -one more bank!! Let's count:

1.Columbia Bank-River Hill Village Center
2. PNC bank-ATM-Giant-River Hill Village Center
3. M & T Bank-River Hill Village Center
4. Tower Federal Credit Union-River Hill Village Center
5. Chevy Chase Bank-River Hill Village Center
6. Sandy Spring Bank-directly across street from River Hill Village Center
7. PNC Bank-Clarksville Square-directly across street from River Hill Village Center
8. ATM in Sunoco-Directly across street from River Hill Village Center
9. Bank of America-2 blocks down on 108 from River Hill Village Center

I don't know what statistics support the need for so many banks in such a small amount of space but I'd sure love to hear the argument. I remember hearing outcries when Bank of America opened it's monster bank on the old car lot and then I remember the disappointment in the community when Chicken Out closed and M & T Bank opened up instead. And I remember the excitement when word got out that Starbucks was in negotiations with General Growth for the Blockbuster Video space but then more disappointment when General Growth refused to come down to the price that Starbucks wanted to pay for space. And now .............6 months later.......more than a year after Blockbuster closed.............what is it that the community of River Hill and Clarksville need and want most?........Answer: How about a 9th bank?

Baltimore Good Ole Boys get pummeled by FBI

Last week a few men in their 70's were indicted on Antitrust charges for price fixing real estate tax sales. Basically they allegedly colluded with each other to bid or not bid on certain properties so they wouldn't have to compete and the county would most likely get less money while they got a better deal. According to the papers they were witnessed by the FBI giving hand and face signals to each other like a 3rd base coach at a little league game in broad daylight at the auctions.





http://www.sun-sentinel.com/topic/bal-md.liens17jun17,0,3171016.story?track=rss-topicgallery





It reminds me of 2 stories. The first was in the early 2000's when 78 year old multi multi millionaire Alfred Taubman when to jail for price fixing auction commissions:








http://www.usdoj.gov/atr/public/press_releases/2001/8128.htm





I was also reminded of the story we were taught over and over again in real estate licensing class about the massive antitrust lawsuit involving the Montgomery County Board of Realtors.


Way back in the day several real estate brokers discussed fixing their commissions so as not to compete with regards to price, thereby causing the consumer to pay more most likely. I remember being told the story about one broker picking up his water glass, slamming it down on the table and walking out of the room. He did this to cause attention to himself so everyone would remember that he was the one that walked out. So that no one could say later........"i don't recall him leaving, he was still there when we cut the deal". That broker was the smartest realtor in the room that day because all the others faced misery after that.





After 22 years of being a full time realtor in this business I can remember only two times where I've been propositioned by another competitor to fix our commissions. Although I didn't slam any glasses down I quickly responded "We can't talk about this!!" "We can both go to jail for that!!" and quickly became paranoid that it was a set up and they were wearing a wire.





It amazes me that guys in the 70's with more money than most people will ever have get so caught up in the game that they allegedly break the law. Why risk it all to save a few bucks on a Baltimore City abandoned row house tax sale?

Unanswered Questions-Altieri Home's Demise-Harford County building inspectors-bank lien release policies-swaying houses and more!!

http://www.baltimoresun.com/business/realestate/bal-bz.altieri07jun07,0,3861250.story

Many questions remain unanswered after the recent Baltimore Sun article regarding Altieri Homes published on Sunday.

1. Why weren't lien releases given to deserving contractors before funds were given to Altieri for their own expenses?

2. Do beach homes really sway from side to side?

3. How did Harford County issue the proper structural permits on a house in Riverside where reinforced walls and a portal frame were missing? Is this something that can happen to anyone building a home? Are these things easy to miss?

4. Should a buyer of a new home ask for a "letter of good standing" from the bank the builder has the land financed with before they sign a contract to buy?


5. Wouldn't declaring bankruptcy protect your company from future legal liability? Why has Altieri Homes not done this?

My grandfather used to always say "A breakdown is a break through". What else needs to be asked here? What else can we learn from this?

Altieri Homes in News again. Whose fault is this anyway?

Altieri homes is in the Baltimore Sun today...





http://www.baltimoresun.com/business/realestate/bal-bz.altieri05jun05,0,2943742.story



the reporter of this article called me and asked me "who is to blame for breakdowns like these?"



While I believe that capitalism is in essence a game.........and in games you lose as well as win, I also believe that more than just a builder can be blamed for such massive breakdowns such as this one. I really believe the banks hold some responsibility for loaning out so much money with so little collateral. A great question is "What was the Altieri family's net worth when they borrowed these tens of millions of dollars?" Could it have been much more than 10% of what they were borrowing?. Many times loans were given at 10 times a company's or individual's net worth.

I would guess that most readers of this blog have a brokerage account with a company like Merrill Lynch etc.

On my brokerage account if I want to borrow money to buy more stocks or investments (margin), I can only borrow up to 50% of the account's value. So if there is 100k in the account I can borrow 50k more on margin. Borrowing 10 million with a company worth or personal worth of one million is the same as using a margin draft of 1000%.

I understand that in a builder's case the land is collateral where in a trader's case the only collateral is the current account value but still................... the land is not great collateral when your dealing with appraisals that weren't worth the paper they were written on.





I'd love to hear your thoughts...

only 38% of sellers making a profit

Here's a link I actually found on http://weblogs.baltimoresun.com/business/realestate/blog/ , Jamie Hopkin's blog . It is the percent of homeowners who sold for more than they paid .

She got it from the Washington Post.
http://www.washingtonpost.com/wp-srv/business/graphics/2009/homeprices/

Looney's in Maple Lawn packs the house while Bellisimo Flowers and Daily Grind bail out

Maple Lawn in Fulton saw the departure of two major tenants recently with Bellisimo Flowers packing it's bags and the Daily Grind coffee shop breaking camp as well. While both businesses opened with major fanfare it seems that the traffic count just wasn't enough to stick around. Maple Lawn's website http://www.maplelawnmd.com/ advertises "the ultimate in urban life without the traffic". That got me thinking.........traffic........that's not good if you have little kids running around outside but it's a bad thing for retail business. I guess if I were a home buyer I would like that advertisement but if I were a small business owner it might not be as attractive.


Seems that the retail part of Maple Lawn was premature. In hindsight all these businesses would have survived better if the critical mass of the neighborhood had been in place when they opened. I'm sure everyone thought that all the new homes in Maple Lawn would all have been sold by now . Surprising to many the Howard County home market came to a halt and Maple Lawn had tons of great retail with no consumers to spend money there yet. I've been told that the landlord has allegedly been bending over backwards to help the retail tenants out with their plight but for these two tenants it obviously wasn't enough of a cure.


Looney's Pub on the other hand is creating traffic of it's own. I went there with my daughter on Saturday night to try to get a quick plate of chicken fingers and fries around 6.00 p.m. and the hostess told me the wait for a table of 2 was over an hour. I saw my sister and her husband there sitting at the bar. They were on the waiting list too and from the looks of it there wasn't a single open bar stool and that is at two massively long bars. So it looks like Looney's won't be needing any rent concessions this year and it looks like good news for the tenants that are still active , hopefully Looney's will help draw business to them. I know I went and spent some money at Pizza Fresco because we didn't have time to wait.


N.V. homes recently filled a ton of vacant lots with for sale signs and opened a sales center near OZ Chophouse and Ranazul. Looks like they are coming in starting in the mid 400's for a 2300 square foot town home. Since 87% of the homes in Howard County are selling under 600k now , it's seems that N.V. is taking on the same strategy that Looney's took on.


Giving the average person what they want and what they can afford.

the lower end is stimulated while the upper end needs defribulation

I just got off the phone with a reporter from Patuxent Publishing and he asked me "Why do you think the lower end is doing so much better than the upper end?". My response was "It's stimulated". Yes. The stimulus of 4.75% interest rates and an $8,000 cash bonus if you buy are working!!!! 442 home sales YTD in Howard County for homes under 600k. That's alot of people moving in what some would consider a terrible real estate market. But as the chart on the previous blog showed, that's 87% of the entire market. The 13% of unstimulated price range languishes on the market......................(41 long months of languish for those homes over a mill) . You see the 8k credit is only available to first time buyers and the 4.75% is only available to loans under 417k. So it's simple stimulation. Many question what will happen when the 4.75% rates rise to 7 or 8 % which they will eventually do (the 40 year average is 9.25%) and what will happen when the 8k cash bonus goes away in November?

We got a little help for the higher price range last week when the Feds came out with the "AGENCY JUMBO". This raised the conforming loan limits to 560k. Bottom line, if you borrow 417k or less you can get a 4.75%, if you borrow between 417k and 560k you can get about a 5.25% and if you borrow more than 560k you are at 6% roughly. I think everything helps , the only caveat with this new "Agency Jumbo" or as some call it the "jumbo lite"loan is the home must be appraised 3 times!!! Twice by independent appraisers and once by the automated appraising computer.

Good luck with that.