Real Estate Information

The real estate market outlook, based on results for the month of June 2009, appears to be transitioning to more of an even market. This is because of the shrinking inventory, and days-on-the-market which are reduced compared to last month as well as this time last year.  While much of the month of June has mirrored May statistics, there were some trends that show a strengthening.  There were 121 homes sold in Charles County during the month of June compared to only 109 homes sold this time last year. There is currently an overall inventory supply of 10.5 months based on the current level of active homes for sale, which is up slightly from last month.

Home prices continued to fall, as we find the average sold price down nearly 17%. In addition, there has been a very strong demand for lower priced homes, as indicated by the median price, which fell from $299,950 in 2008 to $265,000 this year.   Many buyers are attracted towards price points of Bank-owned properties and short sales.  There are some very attractive purchases, but they come with risks. In the State of Maryland, property owners must provide the buyer with full disclosure of property defects. Banks are exempt from having to provide disclosure.

While the Bank-owned departments seem to have adequate staffing to support the high level of sales activity, the short sale departments are failing miserably.  I have learned that many agents across the country have had difficulty in the responsiveness of bank short sale departments. Many agents, including myself, have written letters to Congressmen with specific issues regarding the lack of responsiveness from the banking institutions.  My letter to Congressman Steny Hoyer resulted in an immediate response from Chase Mortgage, and a resolution to the transaction. The letter campaigns from Realtors and home sellers from all across the Nation have resulted in getting the attention of Congress.  I would ask any homeowner who is experiencing difficulty in reaching a solution with their mortgage company to contact their representative immediately.  In any event, until responsiveness changes within the short sale department of mortgage companies, home buyers who are submitting offers are being held up for up to nine months before receiving a stamp of approval on the submitted offer.

As for properties in Foreclosure, Realtytrac.com reported 105 new properties in default for the month of June in Charles County. The bad news in all of this is that because of the  low number of available buyers, the total number of properties in Charles County that are in some state of Foreclosure (including Bank-owned) has risen to 887 properties, compared to just 849 during the month of May.  The number of properties in a state of Foreclosure continues to rise, and all these numbers are not reflected in the MRIS Trends Report because the majority of these homes are not currently being actively sold at this time.

A word for the buyers:  Interest rates have been inching up over the past several months.  List to sell ratios are up from last month and now sit at 92.10%.With the list to sell ratios increasing it means that buyers are paying closer to the list price than they have been in previous months.  We should see this trend continue.  Banks have also been tightening up on their negotiations, not dropping prices as quickly as they once had.  While the number of defaults are still up, the banking industry is gaining strength. This is a signal to buyers, if you have been waiting for the bottom to hit, now is the time to buy.

The real estate market outlook based on results for the month of May, 2009 comes with some renewed optimism, as we begin to see a trend of “units sold” over last year, reach a rate of 12.26% higher. There were 119 homes sold in Charles County during the month of May compared to only 106 homes sold this time last year. There is currently an overall inventory supply of 10.4 months based on the current level of active homes for sale. Be careful not to rely on this inventory statistic as it has a “false bottom” of sorts.  There is an increasing amount of Bank-owned property that is not currently on the market, and as a result, not reflected in the MRIS Trends Report.

The pick-up in home sales, as discussed in the previous paragraph, is likely due to a continued decrease in home prices. The year over year average sold price is down 11.3% in May, and the average list to sell ratio has dropped to 90.94%, meaning that a home listed for $400,000 sold for $361,600 based on the statistics in the May Trend Report distributed by the Metropolitan Regional Information System.

As for properties in Foreclosure, Realtytrac.com reported 118 new properties in default for the month of May in Charles County, which shows a downward trend based on the 246 we saw during the month of April.  As of June 15, 2009 Realtytrac.com reported 58 new defaults in Charles County.  The bad news in all of this is that because of the  low number of available buyers, the total number of properties in Charles County that are in some state of Foreclosure (including Bank-owned) has risen to 849 properties, compared to just 777 during the month of April.  Again, not all these numbers are reflected in the MRIS Trends Report because the majority of these homes are not currently being actively sold at this time.

Back in March, I reported to you that the $5.1 Million dollars allocated to Charles and St Mary’s Counties would soon be disbursed to assist the ailing housing market on a local level.  The commissioners have still not released these funds.  I urge all home owners to contact their County Commissioner and urge them to approve a plan that will aid us in the recovery of our housing market.

You may have also heard that HUD was in the process of approving the $8,000 tax credit to be used as down payment assistance.  In a recent letter, The Secretary of HUD, Shaun Donovan, has decided against this proposal, and not allowing mortgage lenders to use the tax credit as down payment assistance.  He cites the need for buyers to meet minimum standards in the loan process, and the need for “real equity” in the transaction.  A complete copy of this letter is available on my blog at www.waldorfhomesolutions.com.

My next campaign is against the Charles County Commissioners Property Tax increase to begin July 1, 2009 for the fiscal year 2010.  The Commissioners have increased the rates from $0.968 per $100 assessed value to $1.026 per $100 assessed value.  This rate increase could not come at a worse time for Charles County homeowners and buyers.  A petition has been generated, and is being circulated by Southern Maryland real estate agents, in an attempt to have enough signatures for the general public to approve or reject the new tax rate at the next general election.  If you are interested in circulating this petition around your neighborhood, please contact me in my office at 301-870-1717 x106 or request  a petition via e-mail at don@DeHanas.com.

One of my Lender-Partners passed this information along to me concerning the $8,000 tax credit. At one point HUD came out and infered they were working on a way to allow the tax credit to be used as down payment assistance. The following artical is the most recent response from HUD.  Unfortunately it is not the best news for 1st time home buyers, and the rest of our industry.

HUD has republished Mortgagee Letter 2009-15. Mortgage lenders are not permitted to monetize the tax credit for meeting the minimum downpayment requirements. Below is a copy and link to the letter.

http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/LENDERS/MORTGAGEE_LETTERS/2009_MORTGAGEE_LETTERS/09-ML-15%20USING%20FIRST-TIME%20HOMEBUYER%20TAX%20CREDITS.PDF

At quick glance, FHA has changed the letter by prohibiting FHA approved lenders and FHA approved nonprofits from using the tax credit to meet the 3.5% minimum downpayment requirement. While FHA approved lenders can “purchase” the tax credit, “the proceeds of the sale of the tax credit… may not be used to meet the 3.5% minimum downpayment requirement”. The proceeds may be used for additional downpayment (above the minimum 3.5%), buying down the interest rate and closing costs. HUD also effectively capped the lender fee at 2.5% of the tax credit. In addition, HUD has added due diligence requirements for participating lenders.

The letter states:

“The homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.”

HUD will continue to permit “government agencies and instrumentalities of government” to offer tax credit advances with second liens that can be used for the downpayment, closing costs and prepaid expenses. Currently, ten state housing finance agencies have programs that will apparently monetize the tax credit. These states are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee. Information on these programs is available at http://www.ncsha.org/section.cfm/3/34/2920.

Analysis

Based on feedback from many of you, we are not sure how helpful this policy will be. The Department is clearly concerned about risk with this program. At a Congressional hearing last week, the Secretary mentioned the need for “real equity” in the transaction. In light of the current market situation and the push for “skin in the game”, HUD concluded, consistent with the language from last year’s bill on seller funded DPA programs, that the borrower must meet minimum downpayment requirements on their own before considering the tax credit and changed the letter accordingly. State and local government agencies may continue to be used for minimum downpayment purposes.

While some news sources are reporting an increase in consumer optimism for the Washington DC region, the recent publication of housing statistics remains grim.  During the first quarter, home values in Charles County had dropped into the single digits of decline, indicating signs that we were approaching a flattening of home values, but a huge spike in April’s statistics pushed the decline back into double digits.  Year-to-date median prices fell from – 8.6% over last year to – 12.1% as we saw a 20% decline of median sale prices during the month of April over last years data.

While there were 145 contracts written last month in Charles County, only 59% of them, or 86, actually settled.  Arguably, there are some longer-term contracts which will offset future statistics in this area, however, you should note that there is a percentage of contracts that never make it to settlement.  While the level of inventory remained consistent to the previous month, the fewer amount of sold properties increased the overall supply of inventory vs. demand ratio, which currently represents 14.3 months of inventory supply, up from 13 months supply during March.  Further indications are that the inventory supply continues to rise ahead of demand by about 1% per month.   There is a steady flow of Bank-owned inventory as well as preforeclosures hitting the market.  According to Realtytrac, there are currently 256 homes in Charles County in preforeclosure status.  During the month of April another 144 homes in the county went into default.

Another noteworthy statistic is the average sales price as a percentage of the average list price, which currently sits at 87.3%.  This percentage remains comparable to the previous month. For prospective purposes, a home is listed at $400,000. Market statistics tell us that a buyer will end up paying $349,200, which is 12.7% below the original list price.

Many buyer programs are still available, including the $8,000 tax credit for first time home buyers, and loan programs such as a rural development loan.  Many of my sellers will notice that we have begun advertising some of our homes with “100% Financing Available”. Any of our properties that qualify for the rural development loan have this banner in our ads. 

Details were expected last month from the Charles County Commissioners on the money allocated to Charles County from the Governments Housing Relief Program.  The Southern Maryland Board of Realtors is contacting the Commissioners weekly for updates, and have been told that the commissioners are still ironing out details of the program, and are making changes to it.  Currently there is no estimated time for which this program will be in effect.  The $5.1 million allocated to Charles and St Mary’s Counties is expected to assist buyers with closing help and offer incentives to purchase Bank-owned homes.

 

DeHanas Real Estate Services has recently purchased the rights to syndicate DeHanas Teams listings on six new property search sites; Trulia  Real Estate Search, Zillow.com, Oodle, hotpads.com, propsmart, and CLR. Of course their own site, www.dehanas.com,  as well as Realtor.com remain to be the best sources for connecting with buyers in Southern Maryland.

 

DeHanas Real Estate also utilizes a number of other real estate search sites to promote their listings.  "Getting optimum exposure for a home for sale in todays market remains the key to finding and attracting a qualified buyer" says Don DeHanas, one of the Team's Listing Specialists.  "It is very expensive to advertise a home for sale, and we are in a difficult economic time where most agents don't have the budget to effectively market a home. Responsible budgeting and know-how is the formula for a successful marketing campaign. It is the "know-how" that the successful agent possesses that is often overlooked by sellers attempting to sell their home, which is why it more important now that ever before for a seller to align themselves with a seasoned real estate professional."

The DeHanas Team has been servicing home buyers and sellers in Southern Maryland for more than 30 years.

As reported by WTOP News, Prince Georges County will begin a stabilizing program aimed at helping area neighborhoods stop the growth of vacant properties, and the decline of dropping home prices. A big part of stabilizing the housing market is getting rid of all of those foreclosed homes. Starting May 1, one county will try to do just that.

With close to 7,000 foreclosed properties, Prince George's County is among the hardest hit areas.

"In order to stabilize these neighborhoods, we need to first get rid of these vacant homes," says Michael Chelst, vice president of America Home Key.

Prince George's County is teaming up with HUD and using federal dollars to sell vacant foreclosed homes at 15 percent less than the appraised value, Chelst says.

Selling homes less than the appraised value gives buyers instant equity.

The program in Prince George's County starts May 1. While the homes aren't limited to people with low incomes, there is a salary cap.

Some of the qualifications include first time homebuyer, or buying a home if you have not done so within the last 3 years.

For complete details on how to qualify and purchase a home using this program, please call DeHanas Real Estate Services at 301-870-1717.

 

With the housing crisis being at the forefront of  economic problems in Southern Maryland, an effort is underway to help curb the pain many home owners are feeling as their home values plummet. An array of programs are now emerging offering financial help to home purchasers in the form of downpayment  assistance.  While the details of these programs are not yet available, many home buyers in Southern Maryland may not have to wait.  A program called House Keys 4 Employees is already up and running, and may benefit prospective home buyers who are already employeed with participating employers.

House Keys 4 Employees is a financial assistance program enabling eligible homebuyers who are using a Maryland Mortgage Program loan to purchase their home to receive more down payment and/or closing cost assistance than is available through the standard down payment and closing cost assistance programs.

 

Any borrower who receives a contribution for down payment and/or closing cost assistance from their employer and is using a Maryland Mortgage Program loan to purchase their home may participate in House Keys 4 Employees.

 

 DHCD will match contributions dollar-for-dollar, up to $5,000, toward down payment and closing costs from participating employers. The employer’s contribution may also be combined with assistance from local jurisdictions, unions and/or nonprofit agencies; however, the House Keys 4 Employees match to the combined contributions will not exceed $5,000. The match is in the form of a 0% deferred loan that is repayable at the time of payoff or refinance, or upon the sale or transfer of the house. This assistance is over and above what is available through the standard down payment and closing cost programs, allowing some borrowers to have more choices in buying a home.

There are a large number of employers participating in this program throughout the State of Maryland. Some of the local employers who are participating include, Calvert County Government, Calvert ounty School System, Chaney Enterprises, Charles County Government, Charles County Public Schools, Cavista Medical Center, Prince Georges County Government, Prince Georges County Public Schools, St. Mary's County College of Maryland, St. Mary's County Board of Education, St. Mary's County Fire, Rescue & ALS, St. Mary's County Government, St. Mary's County Library, St. Mary's Hospital, and State of Maryland Government, just to name a few. A complete list of participating employers is available at http://www.mmprogram.com/hk4eParticipating.aspx.

For additional information on this program, please contact our office at 301-870-1717.

 

Charles County home values continue to be in a state of “free-fall” in spite of optimistic projections that March real estate statistics would be more favorable than in the preceding quarter.  There continues to be an overall supply of inventory in Charles County that extends more than 13 months. The surplus of supply, increased by 11% during the month of March, adding further pressure to already falling prices. 

Hardest hit price points seeing the most price pressure, as well as days-on-the-market, are homes priced over $400,000, where there is a 26 month supply of inventory compared to the rate of sale.  Homes priced at $600,000 and above saw no sales activity during the month of March. Homes priced between $200,000 and $400,000 are sitting in a 14 month supply of inventory.  A healthy real estate market sees an inventory of 3-6 months. Only one category is currently considered healthy which are homes priced below $200,000, where there is a 4 month supply of inventory, creating multiple offer situations.  This category is largely investor driven due to the fact that rental prices and monthly mortgage payments have equalized.  While this may seem to be a silver-lining, an overwhelming majority of these homes are Bank-owned foreclosures, and are not producing any move-up buyers to stabilize home prices over $200,000.

The median sales price also continues to fall.  The largest drop of the first quarter was seen during the month of March, down 9.2% over last year, and down 8.6% year to date.  The median sales price currently stands at $270,000.  For prospective purposes, a house valued at $400,000 a year ago, now hold s a value of $365,600, according to current market statistics.

Another noteworthy statistic is the average sales price as a percentage of the average list price, which currently sits at 87.76%.  For prospective purposes, a home is listed at $300,000. Market statistics tell us that a buyer will end up paying $263,280, which is 12.24% below the original list price.

While this is a difficult market to be selling a home in, it has never been a better market in which to buy a home. First time home buyers are receiving an $8,000 tax credit, interest rates are as low as 4.5%, and Government money from the Housing Relief Fund will soon be hitting Charles and St Mary’s Counties creating down payment assistance for specific Bank-owned properties. Details are still emerging on this program which was expected to be released at the beginning of April.

There remains a strong demand for affordable rental properties which have seen little to no negative impact on monthly rental rates, creating a comfort-zone for investors.  The quickest moving rental rates are $1,800 and below, and most affordably priced rentals are seeing occupancy within 30 days.

SEARCH FOR HOMES

Rachel DeHanas, Broker/Owner of DeHanas Real Estate Services in Waldorf is proud to announce the affiliation of Liz Benitez.  Liz has joined the DeHanas Team as a full time, full service Realtor, servicing home buyers and sellers in Southern Maryland.

Liz was born and raised on a small family farm in southern California. She has moved across the US five times in support of her husband’s military career. Prior to real estate, Liz was a full-time mother and CEO of her home. She has two kids in the Charles County School system, works with children every Sunday at her church, is an assistant coach in the Waldorf soccer club, and Cub Scouts den leader for pack 901. Liz understands the need to have a home where a family can grow and find comfort. Her experience in military relocation is invaluable.  

 

DeHanas Real Estate Services is family owned and operated, and has been a leader in Southern Maryland Real Estate for more than a decade. The DeHanas Team not only services Southern Maryland home buyers and seller, but also is licensed in Virginia and Washington DC.  For a free home buyer or seller consultation, please call The DeHanas Team today at 301-870-1717 or 800-842-0190.

 

SEARCH FOR HOMES

The answer to that question depends on your unique situation.  For the first two months of the year Charles County homeowners overall are seeing a decline in property values again this year. Multiple Listing statistics place the decline, year-to-date, at -8.6% compared to this time last year.  A home for sale in a healthy market is on the market between 3 and 6 months. The overall Supply and demand ratio for Charles County suggests a years worth of inventory is currently on the market, with a move towards more supply than demand by 2.5% per month.  Homes priced at over $500,000 are siting in an inventory that will last 7 years at the current rate of sales.

There is however a silver lining in all this not-so-good news.  The homes priced below $200,000 in Charles County and most of Southern Maryland are seeing multiple offers. Mainly we are seeing investors making these purchases.  When a homes value reaches a price point equal to what you might pay in a monthly rental fee for that home, it is considered a good investment.  There are many of these home now available, and many of them are Bank owned or pre-forclosures, also known as short sales.

According to Realtytrac.com more than 100 homeowners every month in Charles County Maryland are receiving Foreclosure notices.  There is a huge need for affordable rental homes and the investors are answering that call.  DeHanas Property Management has seen a dramatic swing in the number of rental applications from prevcious homeowners who have lost their home to Foreclosure.

OK, so I have gotton off track, but my point is, the market is still moving, and perhaps the beginning of the end is rearing its head.  The trickle up affect will begin once we have cycled through all of the inventory of Bank owned properties.  This is a very good sign and once that has been long awaited.

 

SEARCH FOR HOMES