Archive for August, 2011

So what are you supposed to do after the hurricane?  After a week’s worth of The Weather Channel nonstop, a lot of time has opened in my schedule and so I put together this list.

1. Inspect your home.  Take note of any damage or maintenance issues that have appeared like hanging gutters, missing shingles etc.
2. Look for any leaks or erosion around the base of your house.
3. Think twice before calling your insurance company.  You probably have at least a $1000 deductible, and minor damage is likely better paid out of pocket than risk increasing your insurance rates for 10 years for a $5000 claim.
4. Eat all the food you bought last week!  By the looks of the lines at Harris Teeter on Friday (yes, I too was in that line with my bottled water), you probably went overboard and have enough bread and milk to last you through Halloween, so eat up!

You deserve it after all – you survived the earthquake and the hurricane.  Let’s hope this week is less eventful.

I never thought I’d say an earthquake would remind me to send out an email about a hurricane, though it seems like this is a special week indeed!  In light of the possible impact of Hurricane Irene this weekend, I’m writing to remind you to prepare your homes now.  Basements can flood in a simple thunderstorm, let alone a hurricane, so take some time to ensure your exterior drains are clear, your gutters and downspouts are free of leaves and debris, and that your roof and windows are in good condition.  You might also remove deck furniture and other exterior items that can blow around in heavy wind.

Check out this website for more helpful information.  http://www.ready.gov/hurricanes

At BGC we stand ready with a vast contact list of excellent vendors for any home improvement projects you may want to take on now, or this fall.  Simply call or email me and I can help.

We appreciate your referrals this summer and look forward to a robust fall market.

Now batten down the hatches!

The new FHA limits are about to take hold on October 1! The new loan ceiling limits will decrease from $$729,750 to $625,500.

What does that mean?  Buyers financing $625,499 or more will have more difficulty.  If you are borrowing more than $625,499 you won’t be able to benefit from the low down payments offered through the FHA programs at 3.5% and other low down payment programs and you will need at least 20% in down payment. It doesn’t matter how good your credit is or how much money you make.

There is a lot of uncertainty in the lending world and also whether this new ceiling will end up happening.  There is a bill in Congress right now to try to extend the current ceiling until 2013, but will it pass? We will likely need to wait until the end of September to find out.

Financing just keeps getting more and more difficult. Did you think it was already hard? We believe buyers will soon need larger down payments, better credit scores, and show more reserves. It won’t get easier, that’s for sure. So if you are thinking about buying, this may be the best time and don’t forget about the amazing interest rates we still have.

For the last few months I continue to hear from our buyer clients “There just aren’t that many properties to see!”

This morning I pulled the July stats for Washington DC single family houses (found here http://gcaar.com/uploadedFiles/PDF/ToolKit/Research/Home_Sales_Statistics/DC_Single_Family/dcsf0711[1](1).pdf)
and the numbers tell a clear story.  Inventory is down a whopping 20% from this time last year.  Sales activity is essentially the same so this is translating into extremely competitive bidding for the few properties that are good buys in the market place today.  Condo inventory is down 10% so we’re feeling the pinch there as well, though not as much as in the $500-$1 million price point for houses in the city.

If you’re thinking of selling, and have enough equity to do so, it is time to list – now more than ever before.  If you’re buying, be prepared to act quickly and aggressively.  The best homes are selling within about a week and in some cases for more than list.

If you’d like to talk about your specific situation, call me and I can guide you through a step by step plan to help you move forward.

America, wake up, it is time to stop moping around like a wounded puppy.  It is time to focus on how good things really are.  Sometimes the best way to gain perspective on just how good we have it, is to travel to a place where that is not the case.  For anyone complaining about the hard economic times, I encourage them to book a ticket to Addis Ababa, the capital of Ethiopia, and take a long, hot, bus ride to the famine and war stricken boards of Somalia where tens of thousands of people are dying of starvation.

And we’re worried about a nick on our credit?

Our culture, form of government, and history – though messy at times – has created an environment where anyone can feel empowered and succeed at the highest levels possible.

Since this is a real estate blog I feel it necessary to point out real estate examples of extraordinary success, despite the prevailing economic winds.  We recently sold 1300 Fairmont for $1.4 million, $400,000 more than any other residential property in Columbia Heights.  Keller Williams Capital Properties (with whom I’m affiliated) has been profitable every month since it opened in 2005 and is growing rapidly every month with nearly three hundred agents – all in a “down” market.  I know a number of agents who are having their best year ever.  Many properties are selling with multiple offers.  Interest rates are at around 4%!  It is again possible to purchase an investment property and rent it out and cash flow.  Commercial development is booming throughout several economic sectors in the city.  90% of the country is employed. 

Let’s choose to see opportunities instead of obstacles.  Change the way you look at things and the things you look at change.

Spring sales numbers were up in many categories across the DC metro area though the combination of 120 degree heat indices, and all the hot air steaming from the Capitol Dome has resulted in a summer slowdown which I believe will be reflected in the July and August numbers.  Our market tends to slow down this time every year though this year might be different.

As I write this article the weekend before the August 2nd deadline there still is no agreement in Congress about the debt ceiling, and this week GDP numbers were revised downward for 1st qt 2011 and were miserably low in 2nd qt 2011.  I believe this all spells some seriously good buy opportunities this fall!  According to the analysts who run numbers on these things, a .5% interest rate hike in the next couple weeks is likely as our credit rating takes a hit – which seems likely even if the debt ceiling is lifted.  If we do indeed default, an interest rate hike of 1% or more is probable.

Luckily interest rates are already very low so going from 4.5% to 5.5% isn’t likely to have a long term negative effective on the market.  5.5% is still a fantastic rate though we have been lulled into a sense of normalcy with rates in the 4% range which will cause 5.5% to seem painfully high for a little while.

I predict this fall will be somewhat challenging in the real estate markets across the country as at a minimum our confidence in the trajectory our economy (and our country) has taken a hit.

We will continue to bounce back however as fundamentals that drive real estate markets such as supply and demand and affordability are well in alignment (and in some cases downright crazy good) with “normal” trend lines.

If you’re a buyer, you may have a chance to make a purchase in a market that is advantageous to you (depending on what/where you’re looking).  Fall 2010 was a much better time to buy than spring 2011 and I suspect fall 2011 will be a much better time to buy than spring 2012 and beyond.