Archive for February, 2009

Brandon Green Companies is pleased to announce that one of our own, Ken Rub, is featured in the barbershop-singing school board in the Washington Savoyard’s production of The Music Man! The show is playing at The Atlas Performing Arts Center on H Street, complete with full orchestra. The Savoyards just announced a special online special for today only – get tickets for ANY show date today for $20 – over a 50% discount! This is a great production to bring your friends and family - enjoy!

Buy $20 tickets
to any performance of
The Music Man

That’s right,
on Friday, February 20,
12:00 am to 11:59 pm,
buy tickets to any Music Man performance online
for $20 or less!

(use discount code “$20for24″ at checkout)

Take full advantage of this chance to get tickets to
any performance of The Music Man
for no more than $20.

$10 student rush tickets are available with current student ID at the box office one hour before any performance, subject to availability.

The Washington Savoyards performs at the
Atlas Performing Arts Center, 1333 H Street, NE map

Another benefit from the stimulus package is the conforming and FHA loan limits move back up to $729,750 for most of our area through the end of 2009.  Those limits had expired in December of 2008.

Second, if you are buying in DC and don’t qualify for the national credit, you may still qualify for the DC homebuyer credit.  Click here for details: nationalanddchomebuyertaxcreditcomparison.pdf

Finally, there are a number of programs that states and localities can apply for to stimulate their local economies, such as: neighborhood stabilization (for areas with a high percentage of foreclosures); low-income rental housing; transportation; energy efficiency; tax-exempt housing bonds; and even a program to expand and upgrade broadband infrastructure.

Realtors are working very hard on behalf of everyone to push policies to get our housing market back on track!

So will the new stimulus package include enough meat to bounce the DC real estate market?  Everyone is hopeful, and I remain optimistic.  Here are six points, courtesy of Luke Mullins of US News and World Report.  Click here to see his blog. 

I’ve added my commentary to the points below to give you a sense of perspective in relation to DC Area homebuyers and sellers.

• Eight grand, new buyers: The tax credit included in the economic stimulus legislation is much narrower than the $15,000 proposal. This credit is equivalent to 10 percent of the purchase price of the home - although it’s capped at $8,000–and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid. 

The provision that this credit does not need to be repaid is particularly helpful.  We saw nearly no return from the previous “credit” because it really acted as a loan with the repayment provision.  $8000 is great – the tricky part is the income limitation below.

• First time buyers defined: For the purpose of this legislation, a “first-time home buyer” is someone who hasn’t owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you’ve owned a vacation home - but not a principal residence - within the past three years, you would still qualify for the credit. 

Fantastic!  The first time home buyers are powerful fuel in our market and this directly speaks to that large demographic.  Many of our clients are first time home buyers that now understand it is time to get into the game.  This should move more people into the market place.

• 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won’t be able to take advantage of it. 

Though I wish the credit were longer than one year, this can certainly be a short term shot in the arm.  Will the buyers that have been waiting on the sidelines for various reasons now move off the fence?  I think many will, yet some will wait until the best opportunity has passed.  It is easier to wait, rather than take action.  Those that take action are jumping far ahead of the pack already.

• Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that’s $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits. 

Many of our clients, and buyers in the DC area in general, will not qualify for the full credit because of the income limitation.  However, a reduced credit is still better than no credit at all!

• Refundable: Because the tax credit is “refundable,” qualified buyers can take advantage of it even if they don’t have much tax liability. 

This is very powerful – essentially cash in your pocket!

• Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.) 

This is a solid provision.  We want people to understand real estate is a long term investment – 3 years minimum.

What remains somewhat unclear is how this credit interacts with the already in place DC First Time Homebuyers credit of $5000.  Details to follow in the days ahead.

You have friends all over the country.  The housing market across the country is telling them to buy and they are asking for your advice.  Don’t you want them to have the same great service you received by working with Brandon Green Companies?

You know, we take pride in looking out for the best interest of our clients.  But did you know we also take pride in our national network of great agents who operate under the same principles of honesty, integrity, and exemplary knowledge that is the hallmark of Brandon Green Companies?

Let us find an agent for your friends anywhere in the country or the world for that matter.  At the same time you are ensuring your friends and family get great service you are helping our business grow.

If you know someone thinking of buying, send an introductory email to them and to Brandon Green Companies and we will ensure they get the same quality service you have come to know.

For those that know me, you know I’ve been in the middle of a renovation  for the last 4 years and we are about to finish the last room.  Hooray!!!!

Many of our BGA customers are starting to do some remodeling and may not be sure where to start.  Well, I’ve learned a lot of things and I’m going to start to share some of them with you.  This will include helpful hints as well as places I’ve found where you can get some great deals.  Some of it will seem like common sense but sometimes these things bear repeating.

Let’s get the big one out of the way:  Budget
Set a budget you can live with and try to stick to it. You know what you can afford and what you feel comfortable spending.  That is your number!

One general rule of thumb – your budget should be about 15 % of your home’s market value for your kitchen project and 5 to 10% on a master bathroom project. A realistic budget helps you put together a rational materials list that not only fits your needs, but also your budget. For those clients who have champagne tastes and beer budgets,  find ways to economize on one material and splurge on others but keep the style/look of the project congruous.

We are seeing a lot of movement in the market right now with buyers taking advantage of historic low interest rates and a large inventory of property to make this one of the strongest buyer markets in recent history.

Sounds great doesn’t it!  But there is a deeper story not being told.  If you are looking for a good quality property with little work at a great price you just maybe @#!!%% out of luck.

The BGA Team got together early in the week to talk about what we are seeing.  While prices are down at around 2004 or 2005 prices there is a worrisome trend happening.

If a property comes on the market, is priced right and is in decent to good condition, we are seeing multiple contracts, bidding wars and properties moving in just a few hours.  If the property needs work or is overpriced it will sit and potentially will sell far below what it would have potentially in a market at equilibrium.

Banks, God love ‘em, have caught a clue.  In the foreclosure market, their pricing strategies have taken into account the condition and location of the property.  In some cases they are pricing aggressively to get a bidding war going and escalating the price much higher than it would have sold for just a couple of months ago.

Will interest rates remain at these lows?  The past few weeks, we have seen them inching higher than the historic 4.9% we reached.  Right now mortgage rates have been range bound for the past few weeks (between 5 percent and 5.5 percent — assuming 1 point). With refinance volume booming, the Fed should soon start yielding the results of lowering rates to historic levels. Expect a temporary pause in price declines and a reduction in the excess inventory in part stimulated through a reduction in delinquencies.

In Bankrate.com’s weekly polling of economists, a little under one-third of the panelists believe mortgage rates will rise over the next 35 to 45 days. The same percentage think rates will fall. A little more than one-third believe rates will remain relatively unchanged (plus or minus 2 basis points). (These are) still historic lows, and remember, a 1 percent difference in rate for $150K loan amount only equates to a $100 difference in payment. If it makes economical sense, lock and close now.

Well, honestly, who knows.  But I can offer some insight into four new trends that might give us all an indication of where things are headed. 
 
Multiple offers on bank owned properties and some traditional sales:
We are now seeing multiple offers on many bank owned properties and even some very well priced traditional sales.  This could be an indication that the buyer feels the floor has been established.  In a correcting market it is often the bank owned properties that set the new floor for the market. Buyers bidding up prices on some of these amazing deals leads me to believe that the value has returned to the marketplace and the prices can’t go much lower.  The affordability matrix is back in line in most places (income vs price of housing) which is a solid indication of coming stability.
 
Incredibly low interests rates:
No matter how you slice it, 5% is an amazing rate - especially on a 30 year fixed loan.  Current homeowners know this, thus the huge rush to refinance; yet, the buyers in the market have yet to understand how incredibly powerful a 5% rate is versus even 6%.  We are seeing some indications that it has become cheaper to buy than rent and that balance needs to tip before the buyers flood back in.
 
Fewer unrealistic sellers:
Indeed there are a lot of houses on the market, yet most of them are way over priced with sellers who don’t understand the market, or hope it to be different than it is.  However, we are seeing fewer sellers trying to “see what they can get” than last year at this time.  More realistic pricing will mean more transactions in the marketplace.  Prices are generally back to late ‘04 to early ‘05 pricing.
 
Real Estate recovery first:
It seems most people in the Obama administration understand that the path to economic recovery begins with a solid real estate market.  That premise of understanding should lead to some important government programs to incentivize buyers into the market place.  We have to be careful, however, not to create a false environment that is not sustainable.  4% interest rates, for example, may be nice, yet are unlikely sustainable - which would be damaging to the market when the rates return to “normal”.