Wayne Curtis

A Glimmer?

Published
by
Wayne Curtis
on December 10, 2008
in News & Updates
. Closed

Its mid-December, the darkest time of the year. Ancient cultures always had a Festival of Lights about this time of year, trying to lift spirits and look forward to the longer days and sunnier dispositions of spring.

So, perhaps it was a glimmer of light that came across the newswires this morning as the ZipRealty housing survey was released for November, showing that housing inventory in many metro areas, including Baltimore, shrank considerably for the month compared to inventory in October. Nationally, the traditional shrinkage of housing inventory from October to November averages just under two percent. But this year the national average was closer to 10%. The Baltimore numbers were just under 4% shrinkage.

Fewer homes on the market should result in some home price stabilization, especially as we move into spring. That, tied in with the pent-up demand I’m seeing in my practics — so many people just waiting… waiting for some kind of good news that will spur them to enter the market to sell, buy, or both — gives me some cautious optimism that once the bad news is all out we will have the beginnings of a recovery. That’s a holiday gift we could really put to use.

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Missing the Point

Published
by
Wayne Curtis
on November 18, 2008
in News & Updates
. Closed

Jay Leno does a series of jokes in his monologues with the premise that “I don’t think President Bush gets it…” and then goes on to crack wise on some verbal misunderstanding. But, more and more it seems clear that the current administration really doesn’t get a lot of things.

Like this news item, in an article in the Wall Street Journal written by James Hagerty, which covers the Department of Housing and Urban Development (HUD) introducing new forms and procedures to be followed at settlement “because ‘many people made uninformed decisions’ in taking out loans.’”

While I will agree that is the basis of many of our current mortgage related problems, putting the new “solution” to the problem at the settlement table shows a complete lack of understanding of the process. HUD needs to be more proactive and regulatory about the way the loan officers and mortgage brokers *sell* the loans on day one. By the time we sit down at the settlement table four or six weeks later, too much money has been invested, too many plans have been set, and the moving vans are waiting at the doors. To think that a buyer is going to be able to stand up and stop the entire process at that point without an enormous disruption and legal proceedings commencing proves that they just don’t get it.

Regulation has its place. And unless HUD is willing to step in and look over the shoulder of the loan officer during the loan application process, the root of the problem is not going to be addressed.

Replacing the old HUD-1 form could be a blessing if the new form is less confusing than the old one, but somehow I’m skeptical that it will be. Like I said, they just don’t get it.

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Equalize the Burden

Published
by
Wayne Curtis
on September 18, 2008
in News & Updates
. Closed

A recent Viewpoint essay by Keith Losoya and Paul Warren in the Baltimore Sun have brought to light and incredible and outrageous fact: “Baltimore is one of only three large cities in the United States where the disparity between residential and business property taxes is so great the homeowners are, in effect, subsidizing commercial enterprises.”

The real estate industry has been warning the government of Baltimore City for nearly a decade that the city’s rebirth, growth, redevelopment and repopulation are seriously jeopardized by the enormous difference in property taxes between the city and the surrounding county. City residential property taxes MUST be lowered, substantially, in order to bring residents back from the suburbs and keep the new residents within the city limits.

But this revelation — that they COULD be substantially lower if commercial property taxes were brought more into parity — is especially galling. The Sun opinion piece used three adjacent rowhouses on Park Avenue in Mt. Vernon as an example. These three houses were constructed simultaneously and have significant interior space. One is residential condos, valued together at $830,000 for tax purposes. The next two are residential rental apartments. So on the surface, you’d think that they should have similar values. Yet one is valued at $309,100 and the other is valued at $231,800. No where close.

Now, I know that rental apartments are probably not in as good condition as a renovated, condo conversion. But certainly those buildings in their current situation are worth more than THAT. The authors of the essay have researched the disparity and estimated that in the last six months of 2007, the “average underassessment” of 118 commercial properties that changed hands was over 23%, which would add up to nearly $75 million that the city is NOT getting. That’s only on 118 properties!

The Mayor may not be in a political position to piss off the commercial property owners given her own troubles right now, but certainly the citizens and the City Council should take note of this and demand action to take the political heat and spread it around a bit. Otherwise the citizens would be justified in rising up to force the issue.

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At the Bottom?

Published
by
Wayne Curtis
on September 14, 2008
in News & Updates
. Closed

More and more real estate professionals are chiming in that they believe we are at or near the bottom of this housing downturn. Last week Standard & Poors’ economist Karl Case (he of the S&P/Case-Shiller Index of US Housing Prices infamy) noted cause for optimism. In a paper he presented before the Brookings Institution, he noted that of the 20 metropolitan areas covered by the Case-Shiller Index, nine have shown improvement in pricing in recent months. This gives him some hope that price stabilization is coming sooner rather than later (which is what his famous counterpart, Robert Shiller, is predicting).

Who is right in this battle of opinions can make a huge difference to the American economy. If Professor Case is correct and we are at or near the bottom, losses in mortgage foreclosures should stabilize somewhere around $500 billion. If prices come down another 10% that can boost the total losses in the mortgage fiasco to nearly $650 billion, which could have a significantly more serious effect on the national gross domestic product and the continued sick health of lending institutions. We need to hope that Professor Case got first billing for some substantial reason, and that he turns out to be correct.

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Mortgage Workshop scheduled

Published
by
Wayne Curtis
on September 10, 2008
in News & Updates
. Closed

A special non-profit foreclosure workshop, “Save the Block Party” (www.savetheblockparty.org – official event website) is coming to Prince George’s County, MD on Saturday Sept. 13 from 10:00 a.m. to 6:00 p.m. EST.

The event co-sponsors are the National Community Reinvestment Coalition (http://www.ncrc.org/) and the HOPE NOW Alliance (www.hopenow.com).

This is a unique opportunity for families and homeowners facing foreclosure or late on mortgage payments to meet in-person with professional financial advisors and representatives from the nation’s major lenders. Full details are as follows:

What: “Save the Block Party” Foreclosure Prevention Workshop

www.savetheblockparty.org

Questions and Directions: 1-800-846-0140

When: Saturday, September 13 2008 – 10:00 a.m. to 6:00 p.m. EST

Where: Watkins Regional Park, 301 Watkins Regional Park Drive, Upper Malboro, MD 20774

Lenders: Representatives from most of the nation’s leading lenders

RSVP: First-come, first served – arrive early, space is limited! Suggested early arrival two hours BEFORE the event begins without reservations.

Homeowners who need help, but are unable to attend the event, are encouraged to:

· Contact the HOPE NOW Alliance at 1.888.995.HOPE (4673)

· Contact their lender directly

· Access free information about options and alternatives to foreclosure at www.HomeSafePMI.com

Background:

According to a January 2008 study published by Freddie Mac, fewer than 50 percent of homeowners contact their lender prior to entering foreclosure. PMI Group’s non-profit workshops have successfully helped hundreds of families to keep their homes with specialized mortgage workout programs and unique financial arrangements.

In a casual, sit-down conference with a lender, homeowners can find solutions to foreclosure they often are unaware may be available to them.

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Overdue Mortgages Grow

Published
by
Wayne Curtis
on September 9, 2008
in News & Updates
. Closed

Several publications have reported disturbing trends, which may offer some insight as to why the Fannie Mae and Freddie Mac bailout has now taken place. The Saturday, September 6 issues of both the Baltimore Sun and Wall Street Journal reported an increase in late payments and foreclosure proceedings for PRIME loans, not the sub-prime loans that started this crisis rolling. It is this weakening of the payment record of borrowers previously considered A-paper — strong, qualified loans — that is the most troubling development. It also gives a sense of why the government felt it important to reorganize the two GSEs now rather than later.

The Journal reported that the worst states in the nation continue to be Florida and California, along with Nevada and Ohio. Second tier problem states included Maine, Rhode Island, Michigan, Indiana, Illinois and Arizona. All of these states had rates of foreclosures above the national average of 2.75%. The Mortgage Bankers Association reported that nationwide,  among mortgages on one-four family homes, over 9% were at least 30 days overdue or in the foreclosure process, up from 6.25% a year earlier. It was also the highest level since the Association started collecting figures 39 years ago.

Maryland, while not among the most troubled states, still has growing issues. Among these same “strong” borrowers, while we are among the states at or below the 2.75% rate of loans in foreclosure, the rate goes up to 4.3% when you include those who were at least 30 days late in their payment, according to the Sun.

Maryland looks worse when you turn to look at the sub-prime loans. According to the figures complied by the Federal Reserve Bank of Richmond (whose district includes Maryland), 5.84% of owner-occupied homes have sub-prime loans. Of those households, a troubling 10.55% are either in foreclosure or have already been foreclosed upon, and those houses are now sitting on the market for sale. Within the state, Prince George’s County is identified by the Fed as having the worst foreclosure problem. Other secondary foreclosure clusters pop up in sections of Baltimore City.

Fortunately there are blurbs of good news. On September 9th’s edition of PBS’ Nightly Business Report, the CEO of Coldwell Banker Real Estate confirmed nationwide what I reported a few days ago from my own experience — activity in the last few weeks has picked up in real estate offices around the country. With the bailout of Fannie and Freddie expected to make mortgages more affordable and hopefully easier to obtain, at least for a few months, we should be able to work out of some of the excess inventory and stabilize home prices. Not a moment too soon.

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Signs of Hope

Published
by
Wayne Curtis
on September 6, 2008
in News & Updates
. Closed

Most Realtors I’m in contact with on a regular basis here in Baltimore are seeing some positive signs as we head into autumn. August has been the busiest month this year, perhaps in the last several years. The phone is ringing, buyers are beginning to come back to the marketplace, and a few are even writing contracts. August, even in good years, can be slow because of family vacations and of the heat — who wants to see houses when its 95 degrees with 80% humidity in Baltimore? But this year, that didn’t stop people.

And in mid-August, the large new-homebuilder — Toll Brothers, Inc. — publicly released statistics that were some of the most hopeful we’ve seen in two years. Their quarterly guidance talked about a declining rate of cancellations, and signs of “growing pent-up demand” from people who have delayed buying while the market was crashing and financial institutions were imploding. (Wall Street Journal, August 14)

We’re not out of the woods yet, as today’s continued bad news from Freddie and Fannie clearly remind us, but its nice to see both local and national signs that we *may* finally be bottoming out.

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Et tu, Alan?

Published
by
Wayne Curtis
on August 22, 2008
in News & Updates
. Closed

You have to feel sorry for Ben Bernanke… He finds himself in the unenviable position of following one of the most well-known and (still) respected Fed Chairmen in the history of the organization. But you especially have to sympathize when the aforementioned Wise Old Man criticizes you in public.

A recent headline in the Wall Street Journal — page one, above the fold — said it all. “Greenspan Sees Bottom in Housing, Criticizes Bailout.” Ouch.

Now, I’m pleased that someone of Mr. Greenspan’s reputation sees the end of this coming in the next few months — actually sometime in the first half of 2009. (I think Baltimore is in the process of seeing it now, but that’s just my opinion.)

The real knife in the back came later in the article where Mr. Greenspan takes issue with the entire Fed-backed, Treasury-backed bailout of Bear Stearns and Freddie and Fannie. The two mortgage giants, the Government Sponsored Entities (GSEs) Fredde Mac and Fannie Mae, should have been nationalized, he argues. Shareholders should have been wiped out, assets taken over, and their function split up into as many as ten separate entities and then sold off to individual investors.

Ya know, at this point, I don’t think that TOTAL reliance on the private marketplace would reassure ANYONE. After all… wasn’t it the private marketplace that got us IN to this mess in the beginning?

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Renters Not Moving Up

Published
by
Wayne Curtis
on August 18, 2008
in News & Updates
. Closed

If you’ve noticed that the rental market seems to be tightening, you’re right on the money.

In a survey taken by the National Multi Housing Council (as reported in The Real Estate Professional, a trade magazine), the owners of the nation’s largest apartment buildings are confirming that occupancy rates remain high and that the number of tenants moving out to become homeowners is very low. More than 80% reported a significant decrease in the number of renters leaving to purchase their own home.

But the number of tenants moving from investor-owned properties into larger professionally managed buildings has increased, most likely because of rising foreclosure rates on investor-owned buildings.

Obviously, for the housing market, this isn’t good news. New homeowners coming into the market are the ones that allow current homeowners to sell and move up, setting off the domino chain reaction into bigger and more expensive houses. Government policy makers who are looking for ways to shore up housing need to take a look at this statistic and work on encouraging the renters to take the leap.

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Garden Condominium

Published
by
Wayne Curtis
on August 13, 2008
in Property Listings
. Closed

Spacious two bedroom, one and a half bath condominium in the heart of the popular Tuscany-Canterbury neighborhood. Enjoy a private porchfront entrance overlooking Stony Run Park, and deeded parking in the garage. Parquet wood floors throughout and great architectural detail will make you feel like you’re in your own elegant Guilford home, but with condo convenience!

Offered at $199,900

SLIDE SHOW TOUR

 

VIDEO TOUR

 

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