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

The internet has certainly revolutionized the way that people shop for real estate. It has also made it much more likely that inaccurate, out-of-date, and even fraudulent information makes it into your inbox. Here’s a primer for the homebuyer in the Internet age.

The MLS
Before the Internet was born, listings were literally kept in a book — available at each real estate office — containing the listings that office’s agents were presenting to the public. Searching for a home meant a lot of driving around looking for signs, visiting offices to look at the listing books, and a reliance upon the agent knowing what was available that met your criteria.

Once the Internet was widely available, the real estate industry was one of the earliest players and multiple listing services quickly got their member brokers to agree to make everyone’s listings available to the general public. Brokers also wanted to make the MLS available on their own websites, and so an Internet Data Exchange agreement let the number of sites who carried listing data multiply quickly. National search sites, such as REMAX.com and Realtor.com, started to bring together listing data from all across the country. Others came up with the idea to offer computerized property evaluation services, and another group of sites let customers who had visited certain properties blog about their impressions of it, so that the next buyers who came along could read about the property’s weaknesses and strengths without stepping foot inside it themselves. The modern Internet is bulging at its virtual seams with real estate related data of all kinds.

Buyer Beware
The problem is that some of that information is garbage. While many sites are great at importing new data, old data sits around long after its useful. Buyers I work with will often come to me with questions about a property they found on one website, but not on another. When I investigate on the MLS directly, I’ll find that the property isn’t actually for sale. Sometimes it was withdrawn, or the listing expired, months ago. In one recent case, the property had been sold two years earlier!

Another major source of inaccurate information are the property evaluation websites. Several recent studies have found large margins of error in these computerized estimates of value. On the largest of these sites, their zesty evaluations were routinely off by over 7%, and you had a one in eleven chance that your estimate would be off by a whopping 25% or more. Now, if your house is worth $200,000, a 7% routine error equals $14,000!

The newest trend in real estate sites are the blogging sites where, in theory, you learn details about properties that the bloggers have visited. However, there are no methods to prove that these visits actually took place, or that the blogger might not actually be the seller of a competing property down the block who went online to trash the competition.

The Solution
The best way to make sure you do not use wrong information in your home search is to ask your real estate professional for the sites that offer data of the highest integrity. In my practice, the sites I recommend are all ones that I know import information on a daily basis directly from our MLS and routinely remove listings that are sold, withdrawn and expired, such as the two largest national sites I’ve mentioned above, Realtor.com and REMAX.com. If you’re looking primarily for local data, then the best site is HomesDatabase.com.

A new service from our local MLS offers even better data, however. Many local real estate agents have subscribed to Listingbook, which taps directly into the very same MLS data that agents themselves use. I’ve been making this available to my buyers for about six months, with great satisfaction. Data is refreshed every 15 minutes, and the interface is intuitive and flexible. You’ll find many links here on www.charmcityrealestate.com that will allow you to open your own search using Listingbook. (Including that one!)

When this townhouse is your home, shopping, fine dining (or a quick meal), museums, theatre, concerts, and more are all just a short stroll away. Whether your itinerary includes the newest exhibit at the Baltimore Museum of Art, the String Quartet that’s performing the next Shriver Hall concert, the latest literary sensation at Barnes & Noble, or just a cup of Starbucks Latte, everything is so closeby. And so is the quiet of your backyard garden!

Bedrooms: 3
Bathrooms: 1

Offered at $249,900

This property has a WalkScore ranking of 92 (Very Walkable).
Click here for more information and the location of local resources.

Slide Show:

As we begin the last month of the year, I wanted to review where we stand in the real estate world, both nationally and in Maryland. 2010 will be a critical year for many of us, not only for those involved with property, but for the economy in general.

We’re certainly better off in this holiday season than we were a year ago. At the end of 2008 the country felt like a roller coaster car speeding down the tallest slope with no brake and nobody at the switch. Right now, 2009 looks like the turning point, with the economy beginning its long climb up the next hill, real estate stabilizing and just in need of a little push to get back on the track. But there are several issues looming for next year which will really determine how things go for the forseeable future. Here are a few lumps of coal for your stocking:

• A recent Washington Post article quoted a national survey by the Mortgage Bankers Association which found that more than 14 percent of borrowers were in trouble on their mortgage. That translates into 7.4 million households either currently delinquent or in the foreclosure process, the highest level this particular survey has ever recorded. That means we have not seen the peak of foreclosures — and with unemployment continuing to rise the numbers will only get worse.
• The Baltimore Sun, again using information from the Mortgage Bankers Association, reported that in Maryland roughly 10 percent of homeowners deemed good credit risks were in trouble with their mortgage. We’re not talking subprime mortgages here, the widely known source of the financial troubles, but prime borrowers. Again, blame rising unemployment which has destabilized the family budgets of people who have had a history of prudent financial management. In round numbers, this adds 77,000 homeowners to the list of those at least one month behind on their payments.
• Recent widely reported gains in regional home sales and a decrease in the housing inventory seems to be coming from short sales and foreclosures going under contract (and not necessarily going to settlement). From my anecdotal sources, traffic on regular owner-occupied listings — where a bank is not involved — is practically non-existent. This means that unless you’re in distress and buyers smell blood, they aren’t interested in seeing your listing. And, as we saw in the last item, there could be 77,000 more properties on that distressed list that we have to work through next spring.
• Most of our buyers, especially first time homebuyers,  in the last year have used FHA loans because they had the least stringent requirements for credit score and money down, and allowed more generous assistance from Sellers. So while the extension of the tax credits until the end of June, 2010 is a wonderful thing, it seems to be coming with a simultaneous tightening of credit from the FHA. The Washington Post reports that new FHA guidelines currently under development will raise the amount of money required from buyers — from 3.5% of the purchase price to 5% of purchase price — while cutting the allowed Seller contribution in half (from 6% to 3%). Not only will this shrink the pool of qualified buyers considerably, the FHA will also raise the capitalization required from lenders who issue FHA insured loans — a move that will most likely cut the number of loans available, if not the number of lenders who will consider issuing them.

Certainly the situation in residential real estate is worrysome as we head into the new year. But it might not be the most dangerous. Many experts are warning that the biggest problem looming on the horizon is in the commercial real estate market, as last week’s potential meltdown at Dubai World illustrated. While that particular sovereign wealth fund made European markets tremble, and we were told that the US market has little exposure to it, there are enough potential problems here at home to make us weak in the knees. Moody’s Investor Services reported last week that it expects the value of US commercial real estate to continue to fall well into 2011. This is on top of losses in this sector which have already totalled 42.9% since the peak in 2007. The total devaluation from the peak may well reach 55% before things begin to turn around.

The determining factor in these losses? Yep, you guessed it… unemployment. With fewer people working, office spaces and commercial spaces don’t need to be as big. Demand for office buildings drops, and fewer companies are growing and demanding more space from their landlords. Also, with more people encouraged to buy homes and get their tax credit, demand for multifamily rental units has also dropped, hurting landlords’ cash flow and making it more difficult for them to keep up on their mortgages.

Now, with all this coal in your stocking, remember you can’t really burn it anymore to lower your heating bills. Global warming, you know. Ho, ho, ho.

First of three podcasts presenting an overview of the material presented at an in-person buyer seminar. In this episode: evaluating and selecting your real estate agent and loan officer.

For a transcript of this podcast, please email me at charmcityrealestate [at] verizon [dot] net.

Second of three podcasts presenting an overview of the material presented at an in-person buyer seminar. In this episode: searching for the right home and writing the offer to purchase.

For a transcript of this podcast, please email me at charmcityrealestate [at] verizon [dot] net.

Last of three podcasts presenting an overview of the material presented at an in-person buyer seminar. In this episode: the period between contract signing and settlement day.

For a transcript of this podcast, please email me at charmcityrealestate [at] verizon [dot] net.

First in the Mortgage Financing series of podcasts. In this edition, guest podcaster Richard Pazornik of SunTrust Mortgage talks about the loan application process, how to prepare for it, and what to expect.

For a transcript of this podcast, please email me at charmcityrealestate [at] verizon [dot] net.

Second in the Mortgage Financing series of podcasts. In this edition, guest podcaster Tom Latta of Prosperity Mortgage talks about the choice of loan product, downpayment options, and other sources for financial assistance.

For a transcript of this podcast, please email me at charmcityrealestate [at] verizon [dot] net.

First in an ongoing series of podcasts, containing an overview of market conditions as we enter the Fall 2009 market.

For a transcript of this podcast, please email me at charmcityrealestate [at] verizon [dot] net.

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.