Charm City Baltimore Real Estate: Baltimore, Maryland Real Estate & Homes

This well-loved townhouse is conveniently located near Johns Hopkins Bayview, on the eastern edge of Baltimore City. Walk to shopping and Joseph Lee Park, or find yourself on several major public transit routes and near access to several major Interstate highways for commuting. Live in the recently updated two-bedroom Owners Unit, with a downstairs den, and rent out the two-bedroom second floor apartment, or rent both for more income. The shady corner lot is fully fenced and there is off-street parking for two cars behind the house.

Offered at $97,500

This property has a WalkScore ranking of 75 (Very Walkable).
Click here for more information and the location of local resources.

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As we head into spring, there’s some great news brewing in the housing market. But, don’t take my word for it, here’s what other news sources have to say.

First, the RE/MAX National Housing Report for March put it best:  “For the first time in 18 months, home prices in February rose higher… Prices in the 53 cities surveyed by the RE/MAX National Housing Report rose by 1.1% over February 2011. Home sales were even higher, up 8.7% from one year ago. With a positive sales trend of 8 straight months above the previous year, it’s looking like 2012 will witness a very strong home-selling season.”

That should be enough reason to set off some fireworks. But, there’s more. The Huffington Post uploaded an article on the housing market in early April under the headline, “Renting a Home Costs 15 Percent More Than Buying One.” That turns common wisdom on its head, since historically renting a home has been as much as 10 percent cheaper than owning one.

Not anymore. Because of very low vacancy rates — at a ten year low — rental rates have skyrocketed. In fact, a recent report by the National Low Income Housing Coalition found that it would take a minimum wage worker 100 hours of work per week just to afford rent. Even the average American renter, making a little over $14 per hour, needs a 29 percent raise to be able to afford an average apartment and have enough money left over for other expenses. Ready to ask your boss for a 29% raise?

With mortgage rates still very low for qualified buyers, its clearly time to buy. The website rentorbuybaltimore.com recently compared the costs of buying a $200,000 home against renting a $2,000 per month apartment — not uncommon these days in the harbor neighborhoods. The results, according to a New York Times calculator, showed that after just two years buying was better than renting. After five years, buying that home saved nearly $64,000 over renting.

Buyers are returning to the Baltimore area home market in droves this spring. There are even multiple offers coming in on desirable homes. If you were waiting for signs that the housing crash was over, then this is your time.

Recently renovated, this open, contemporary one bedroom/one bathroom home is completely detached and in great condition. Its also in a great location, just one block from the Square, one block from the Dog Park, and two blocks from the waterfront. Close to Canton Crossing, Brewer’s Hill and the Canton Safeway, there’s no better place for independent living! With wood floors, central heat and air conditioning, and a cathedral ceiling, this feels like a big house even though its just over 800 square feet. There’s even a private back yard for ‘container gardening’ or grilling! Put this one on your “must see” list!

Offered at $187,500

This property has a WalkScore ranking of 80 (Very Walkable).
This property has a TransitScore ranking of 57 (Good Transit).
Click here for more information and the location of local resources.

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When architect and interior designer Henry Johnson would work on a high profile, historic
restoration or renovation and it was necessary to remove an original element, it found its way
into this beautiful two bedroom, two bath condominium.

The result is a fully modern residence that has the authentic feel of a place much older and more grand.
Walls are upholstered in fine fabric, wood surfaces are hand painted in matching wood grained finishes,
with antique light fixtures providing just the right glow. Fine French draperies and the top grade carpeting
finish off the decor. Each bedroom has its own suite bath, and the views in three directions are stunning.

Bedrooms: 2
Baths: 2

Price Improved to $249,000!
Antiques and custom made furniture are available as a separate transaction. Please inquire for terms.

This property has a WalkScore ranking of 89 (Very Walkable).
This property has a TransitScore ranking of 81 (Excellent Transit).
Click here for more information and the location of local resources.

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You’ll love entertaining in this spacious three bedroom townhouse in Baltimore’s Fells Point neighborhood. Each of the three bedrooms has its own suite bathroom for convenience and privacy. Go up on the roof for a spectacular 360 degree view of the city and the harbor. Dual zone heating and central air keeps everyone comfortable, and after a hard day you can relax in the Jacuzzi whirlpool tub. On a quiet side street, but near the heart of Baltimore’s urban life, this house has it all for the city dweller!

Bedrooms: 3
Baths: 3.5

Price Improved to $269,900

This property has a WalkScore ranking of 91 (Walker’s Paradise).
This property has a TransitScore ranking of 60 (Good Transit).
Click here for more information and the location of local resources.

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The holiday spirit has ebbed away, and the outdoor lights are down (well, except at my neighbor’s house). Its time to take a look forward at the year to come. For the record, I do believe that the housing market will begin to recover this year — but there are even greater issues in play that will affect the home buyer and home seller for years to come. One of those is a brewing controversy over data mining and the internet.

The world wide web revolutionized real estate over the last decade. Lots of people, even those not interested in purchasing a home, love to surf home listing sites to see what their neighbor is asking for their home, or find evidence for appealing their tax assessment, or just to spend a spring afternoon visiting a few open houses. We take it for granted now that many websites will have home listings, virtual tours, value estimates, etc. That may not last much longer.

Here’s why: when the real estate business started, each broker controlled their own listings. If you were searching for a home, you would have to either rely on the yard signs you saw, or visit all your neighborhood real estate offices and ask to see their listing book. This meant you would sit down with a real estate salesperson and literally page through a book to become educated on what properties were available for purchase.

The Multiple Listing Services (MLS) in communities around the nation developed as a way to make it easier for home buyers and home sellers to get together. Each real estate broker who joined the MLS agreed to cooperate with other brokers in the region to show and sell each others’ listings. In exchange, they also agreed to split their commissions on cooperative sales. While this agreement made it easier to become educated on what was available, the public still did not have easy access to MLS listings. You would still have to go to one broker’s office and sit down with a Realtor, but that salesperson could show you 99% of what was for sale in the area. So, you saved time and trouble.

This is essentially what buyers had to do at the dawn of the internet age, although the listing book had been computerized. You and the Realtor would sit down at the computer or go over listing printouts from the MLS. This control over listing data reflected the fact that it is the essential business resource for our industry. Our listing information is the only “product” we make. We then provide the “service” of assisting home buyers and home sellers to negotiate and create a transaction that transfers property from one owner to another.

With the growth of the Web, MLS organizations and individual brokers took this business asset — the listing information — and put it online to make it easier still for buyers and sellers to become educated on what property was for sale. Through agreements with the MLS, other websites bought the right to display this information, too, and so you had the birth of Trulia, Zillow, and dozens of other sites that simply re-posted listing information. They were not brokers and did not create any new listings, so they added other services and trinkets to lure you to their site over their competition’s website. Like many other internet-based businesses, these websites were constantly looking for that special method to earn money: to draw traffic that advertisers would pay for, or to become so influential that the real estate industry itself would have to pay attention.

Here’s where the problems begin. More and more of these websites have found interesting ways to manipulate the listing data, and some have begun displaying this information in ways that makes it unclear who the original listing broker is. Others have begun enrolling potential buyers and selling those names back to Realtors, or gotten broker’s licenses and started asking for a percentage of the commissions from successful transactions where they referred the buyer. Brokers began to wake up to the fact that they have, to a great degree, lost control of their most basic business resource.

There is a growing movement among some brokers to reclaim this control, by once again restricting access to their listing data. If this trend continues and gains momentum, many of these third-party websites will disappear, and others may not be able to display all the properties available for sale in a particular region. Instead of visiting several broker offices, as buyers in the past needed to do, in the future they might have to visit a couple of different websites to be able to find all of the homes for sale. The problem of inaccurate listing data will grow, which can be very frustrating to potential buyers.

As always, a professional Realtor is your best guide as this marketplace changes and evolves.

No one has been more affected by the last few years of real estate devastation than my old friends, the Sellers. If its been more than five years since you’ve sold property, then you really need to forget much of what you thought you knew about the process. Its a new world out here. So as we approach the beginning of the Autumn selling season, here are four points that every Seller needs to take to heart.

1. You were never as rich as “they” said you were. Who are “they”? Appraisers, bankers, even the algorithm at Zillow… but its not their fault. In most cases (except probably Zillow) they were giving you valuations on your home based on what was current market price. Unfortunately, most property owners took this inflated value and carved it in stone under the heading of “Personal Net Worth” and — even to this day — are having a difficult time adjusting to the fact that those monumental numbers just are not true. But if you own a stock and you want to sell it, you ask the question, “What is Triple Y Corporation stock selling for today?” Not last year. Not in 2007. If you try to place a sell order on Triple Y that is based on what the stock sold for in 2007, your stock broker will laugh you out of the office.

Selling your home works exactly the same way. And just like the stock market, that valuation is different today than it was three months ago, as values have continued to go down in most markets. If you list your home for sale today, you need to think about what the value of it is TODAY, and kiss farewell to what you thought it was worth yesterday. You’ll also likely have to re-think the asking price if you should be on the market in two months, because the market may continue to decline.

2. You are selling a product and a lifestyle — not just a house. You need to find out what the competition looks like. Get your Realtor to take you through the properties that you’re going to compete with in the marketplace — certainly every one of your potential Buyers will have seen them, so you need to see them too. The Buyer doesn’t really care how you’ve lived in the house, they want to see how they might be able to live if they bought your house. By comparing your home to the competition, you get to see the competing visions that are out there, and you can craft your product presentation to outshine the rest. This is the basic philosophy of staging, and you can use it to varying degrees, but if you’re not actively trying to change the way you think about and look at your home and trying to see it through the eyes of the Buyers who tour it, your home will likely be one of those that sit on the market for awhile, with multiple price reductions, and a sales price much lower than you had hoped.

3.  Some of your competition isn’t trying to turn a profit. Now, this is a tough one to wrap your head around if you’re a Seller. Every individual Seller approaches a real estate transaction with visions of finally-realized equity with which they will fund something, whether its a bigger house purchase, a downsizing with money left over for a new toy or a beefed up IRA, or at the very least, a clean balance sheet with debts paid off. In this market a significant number — if not a majority — of your competitors have already given up on making a profit. These could be residents approved for a short sale, or banks and mortgage companies — even the government — selling foreclosures, or people who have been on the market so long that they are desperate just to get to that new job in another city. This is yet another argument for getting to know your competition, and if you can’t compete with their prices, then figure that out before you list and save yourself a lot of heartache.

4. Buyers don’t shop for homes the way they used to. The process that Buyers use to become educated on the market has been completely revolutionized in the last few years. The National Association of Realtors conducts a study every year that asks successful homebuyers questions about the process of buying their home. The results are important because they point out the most successful ways to market a home — and marketing a home is THE most important task that a listing agent performs. In just the last decade, the percentage of Buyers who found the home they purchased on the Internet has skyrocketed from 8% to 37%. Those who found it in print advertising, such as newspapers, has gone from 7% down to only 2%, and if you look just at those slick homebuyer magazines, the current number is below 1%. Even the trusty yard sign, which accounted for 15% of discoveries in 2001 has declined to just 11%.

So, what does this mean if you’re the Seller? It means that among the most important qualities you need to look for when selecting a listing agent is that agent’s comfort level with mobile technology and the Web, because that is where most homebuyers are hanging out, looking around, and eventually deciding on which homes to visit. And don’t doubt that you DO need an agent. If you combine the Buyers who found their homes on the Internet and those who found them through the recommendation of their agent, you account for 75% of successful home purchases in 2010.

That’s a chunk of the marketplace that you must be able to access if you wish to sell your home in 2011.

For the last few years, there’s been a real decision for consumers, especially younger consumers who might never have owned a home before, as to whether it made economic sense to buy a home. Home prices have generally fallen all over the country since 2006 or 2007, depending on your region, and many buyers decided that the possibility of buying a house as it was losing value was too scary from their perspective. Some consumers who were homeowners and had to move for their job sold their home and rented in their new city.

The Rent vs. Buy contest is now beginning to tilt back toward the Buy side in many areas. Trulia, the well-known real estate website, publishes a Rent vs. Buy Index every three months. On that list, they rank the fifty largest metro areas in the country, based on a ratio comparing the costs of home ownership with the average cost to rent. In their First Quarter 2011 Index, thirty-six of the fifty regions qualified for the “Much Less Expensive to Buy than to Rent” classification, including Baltimore (#11) and Washington (#13).

Renting a home in this region has gotten comparatively more expensive in the last few years as vacancy rates have declined and landlords have enjoyed stiff competition for their properties. But there are also several reasons why now may be the best time in many years to consider purchasing a home.

1. Prices in the greater Baltimore-Washington region have begun to stabilize. Especially on the Washington DC end of the region, as prices in the District have actually increased 8% in the last two years. One of the biggest advantages Baltimore had in the last decade was its affordability when compared to Washington. If prices have begun to rise in DC, Baltimore will once again start to look like the bargain it still is (even with much publicized commuter rail problems between the two cities).

2. Interest rates have started to rise, and are about .5% higher than at their low point last fall. We’ve been hearing about how interest rates have tumbled to low points not seen in fifty years, and while they continued to fall or held steady, there was no motivation to buy. In fact, many buyers watched falling home prices and decided to wait, no matter what the interest rates were doing. But now, with prices starting to stabilize and interest rates actually rising again, we may be at the most affordable point in the cycle.

3. Interest rates are predicted to be yet another 1% higher by the end of 2011. For an idea of what that might mean to a potential buyer, I used one of my own current listings and calculated the principal and interest payment that would be available today to a qualified buyer, and then did the same calculation adding 1% to the interest rate. With everything else staying the same, the mortgage payment went up by about 5%. On a $1,500 a month payment at today’s rate, that means the buyer will pay another $900 every year just on principal and interest on their loan.

To me, that says it may be time to get off the rent bandwagon and start looking to cash in on the bargains that the housing crisis has created.

There are quite a few good signs that 2011 will be a better year for real estate, and the economy in general, than was 2010. If you’re one of the many potential buyers that are holding back, waiting for some positive signs that the worst is over, then I hope you’ll find what you’re looking for right here.

1. Improving employment picture. While the Baltimore and Maryland economies have fared better than the overall national picture, there have been some very encouraging signs nationally. For the last few weeks of December, initial jobless claims fell to levels not seen for several years, and the January employment report actually dropped the unemployment rate by a tenth of a point. Every prediction from economists has pointed to a slow, steady improvement through this year and these figures would confirm that is actually taking shape.

2. Consumer spending is increasing. The holiday shopping season was better than most retailers expected, and recent figures on the number of new automobiles being sold gives added strength to the fact that Americans are coming back to the marketplace and buying big ticket items. When consumer spending increases, businesses feel more comfortable adding inventory, placing orders, and restocking shelves, which has a positive ripple effect down the supply chain. Jobs result. Even sales of existing housing went up in December, and as an unscientific measure, my colleagues and I saw an increase in the number of people out looking, coming by open houses and setting up appointments with their agents.

3. Interest rates remain near historic lows. The cost of borrowing money is an important factor in determining how many people can afford to be in the housing market in the first place, and for the last few months mortgage interest rates have been cheap. Homeowners can refinance into 15 year mortgages for under 4%, while new 30 year mortgages have remained under 5%. As spring approaches, however, rates always tend to increase, so its not clear that these bargains will be available for much longer.

4. Housing prices have fallen dramatically. Along with the cheap cost of mortgage money, this increases the number of potential buyers who can qualify for a home purchase. With more buyers looking, and home sales beginning to pick up, its most likely that prices will stabilize and not fall much farther.

5. The Washington DC housing market has already stabilized and started to show price increases. Washington was one of only four metro areas in the country to show housing increasing in price in December. In the last decade, more and more homebuyers have been priced out of the DC market and have turned to Baltimore as a potential place to live. In fact, if the 2010 census shows that Baltimore has gained population (which many believe it will), that result can be attributed to the increase in Washington commuter traffic between the two cities.

So, if the DC market has improved and started to rise, can Baltimore be far behind?

Every real estate agent I know is thankful that 2010 is nearly over. When the year began there was a lot of hope that the housing market would begin to recover by year’s end, and the Federal Homebuyer Tax Credit was stirring people to buy — boosting that hope.

But when that credit expired, hopes for the recovery began to expire as well. One of the hottest summers in memory kept people inside, and the economic news kept us all sweating. Late summer and early autumn sales numbers retreated back to levels that were equal to the worst of the housing slump.

Never mind that housing prices continued to fall and started to look like good values again, or that mortgage interest rates had fallen to levels that hadn’t been seen since our grandparents had been buying homes. No amount of good news could convince the buying public that it was time to make a purchase.

One of the most important trends of 2010 is only now beginning to become plain: the huge number of properties in distress — either 90+ days late on the mortgage, listed as a short sale, in pre-foreclosure, or actually foreclosed upon and bank-owned — was creating a large “shadow inventory” of homes that lenders were not listing for sale because buyers were not absorbing the distressed properties that already were on the market.

There are a couple of sources for this information. In late November, CoreLogic released a report on the large increase in the “shadow inventory” in 2010. As of August, there were 2.1 million units of housing classified as being in that shadowy group, up more than 10% from the previous year. When added to the 4.2 million “visible” units currently for sale, that constitutes a distressed property glut that isn’t moving. According to CoreLogic’s report, Maryland has a two-year supply of such distressed properties; the figure for Baltimore-Towson is only slightly better, with an 18-month supply.

While the sharp and rapid rise in the number of properties included in this category is alarming, at the same time overall sales figures were falling, and the proportion of distressed homes within the number being sold also fell. According to the National Association of Realtors’ 2010 Homebuyer Survey, only four percent of buyers purchased a home that would be categorized as “distressed.” Nearly 40% of those buyers did not even consider a distressed property among their home choices. Of the remaining 60% who at least considered such a home, one-third decided against it because the process of dealing with the lender as seller was too difficult or complex. One-fourth decided against it because the house was in poor condition; the remaining buyers just couldn’t find a distressed property that they liked.

What does this mean? Different professionals will come to different conclusions about this data, all of which was just released at the end of November, but here are two things that I believe are clear:

1. Buyers are learning that purchasing a distressed property, especially a short sale, is not easy and the vast majority of them are opting not to do so. Since half of all homebuyers in 2010 were first-time homebuyers, it might be that the uncertainty of how long it will take to settle such properties makes them impractical. While these first-time buyers don’t have a home to sell, they do have a landlord who requires a set amount of notice to get out of their lease — give notice too soon, they might become homeless; give notice too late, and they might be required to pay extra rent. If lenders want to make these distressed properties more attractive to these buyers they have to standardize the short sale process and get it done in a predictable amount of time.

2. Lenders may have to hold back millions of dollars worth of ‘shadow inventory’ well into the future. That means maintaining these properties in liveable condition for an extended period of time. Most lenders are NOT good at this. While they want to get their money back on these properties, they cannot flood the market with them all at once. Not only will that drive down the price on the properties for sale, it will also drive down the values on the neighboring properties, putting more homeowners “under water” and destabilizing the neighborhood. Since that lender may also hold the mortgages on a significant number of properties in the vicinity, flooding the market with bank-owned properties just drives down the values of the rest of their investment portfolio. So, while they won’t like the idea of holding on to these properties, self-interest will demand that they do.

There are many indicators that actually give hope for a much better 2011. I’ll cover those in January’s post.

I hope all of my readers have a peaceful holiday season, and best wishes for a prosperous new year!

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