Happy New Year!

I hope everyone had a great holiday last week! I also want to wish everyone a Happy 2009! My hopes for 2009 are a recovering economy, more business and happiness for all.

On another note, my friends from First Financial told me that loans for condos over 419K have gone to 15% down. This hasn't hit purchases for houses...YET. Keep your eyes open for more lending changes as 2009 progresses.

Holy shmoly!

Rates have dropped on 30 year fixed mortgages to 4.75% because of the rate cut enacted by the Fed yesterday!

If you're STILL waiting for the rates to drop to 4.5%, you better start hoppin'. You (or a friendly seller) can buy down your interest rate to 4.5%. It's not going to cost too much with rates at 4.75%. Wahoo!

Articles you should read ASAP

There's a lot of bad economic news in the press. I know that, you know that, the whole WORLD knows that. BUT there are a few bright spots out there. Recently, two interesting articles were published about housing.

The first, which was published in the New York Times is titled "It May Be Time Think About Buying A House".
http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html?_r=1&emc=eta1&pagewanted=all

I think it's a must read for anybody considering purchasing a house in 2009. It brings up some valid points about purchasing: you must have a down payment, your credit score must be strong, and you must look at your purchase an investment. (ahem..all points I've been emphasizing in this blog. Just sayin'!)

The other article in the Wall Street Journal is about what would happen IF interest rates actually fall to 4.5%. This is a highly discussed possibility in real estate circles. Is it realistic to think it could happen? Maybe. Historically, rates have never fallen below 5.3%. My friends in the mortgage business have a hard time seeing HOW the Treasury and other entities can make this work. They think it's wiser to take advantage of the rates now then waiting for a pipe dream. But who knows? That's what's so bizarro about this market. Meanwhile, the article is very informative.

http://online.wsj.com/article/SB122842410459080525.html

Interest rates fall and taxes reduced!

I'm feeling refreshed from the Thanksgiving holiday and I'm back on the blog. There's been some interesting developments in the last week that make me feel more hopeful. SOME interesting developments. I also had a deal blow up so all is not rosy. Ho hum. That's life in the real estate world.

But onto the good news! Interest rates for mortgages dropped dramatically in the last two weeks. At one point during the week of Thanksgiving, my friends at First Financial were quoting 30 year fixed mortgages at 5.5%. Heck yea! I'm refinancing (to 5.3% from 6.1%...hurah!) and I emailed all my buyers. If the rest of the world wasn't so gloomy, I'd be doing a jig!
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/05/AR2008120501633.htmlews


Also, DC Gov just published the tax rate for real property for next year and it decreased from $.89 to $.85. Bad news for public services but great news for us.
http://otr.cfo.dc.gov/otr/cwp/view,a,1330,q,594394.asp

Oh..I just remembered that pesky deal that blew up. Dang.

Not feelin' the love...

I know..I know. I'm a huge slacker. No posts since mid October? Eek! But the news in the market has been incredibly bad and I couldn't keep up the rah rah routine.

Things have picked up since the election which has been great! But I really would like things to turn around...NOW. I think every person involved in the real estate sector feels the same way.

My new mantra is "It could be worse." I might have NO business. Instead, I have 4 listings and a couple of buyers. I have buyers looking at my listings. I have people attending my Open Houses. I am deeply thankful that I live in DC. The market has been tough this fall but it's much worse in other places.

SO..I'm going to take a deep breath and be thankful. I'm going to have a great Thanksgiving. I'm going to have fun with family and friends. I hope everyone else gets to do the same!

New listing! 86 P St, NW WDC 20001 Open Sunday 1:30-4pm

I have another new listing that's hitting the market this weekend. It's a 4 bedroom, 3 full bath rowhouse. It was built in 1900 but the current owner has remodeled with many modern details like bamboo floors, an open floor plan that's perfect for entertaining, granite countertops and SS appliances in the kitchen and a fenced back yard. The upstairs has new carpet and a master bedroom with it's own bath. The master bath has double sinks and a jacuzzi tub.

For virtual tour, click below:
http://slideshow.mris.com/slideshow.cfm?ListingKey=90076726810

Good news DC buyers!

The $5000 DC first time home buyers credit has been reauthorized for 2008 and 2009!! Yea! It was included in the Economic Stabilization Act which was signed into law by the President last week.

This is a much better option for buyers than the $7500 tax credit for first time home buyers that was also recently signed into law by the President. The biggest difference between the two: you have to PAY BACK the $7500 to the IRS. Basically, it's an interest free loan of $7500.

And no, for the crafty folk, you can't use both programs!! Refer to my previous post about Elizabeth Razzi's article. (Best Time to Buy? This fall...)

Interestingly, Elizabeth stated that both of the credits were available at the time. Not so and I never issued a correction. (whooops. sorry.) The $5000 DC first time home buyers credit had expired in 2007. GCAAR (Greater Capital Area Association of Realtors) had lobbied hard to get this credit reinstated to boost sales in DC. And it worked. Finally, some GOOD news for buyers! Let's hope it also boosts sales.

New rules for real estate investors

My lovely friends at First Financial Services, Inc. just told me that Fannie Mae and Freddie Mac are tightening the rules on investor mortgages. Previously, as an investor, you were allowed to have up to 10 mortgages plus your primary residence loan. They changed it to FOUR last week or the week before. That's a big difference!! And it's open to interpretation. Some banks are allowing the primary residence mortgage plus four investment mortgages and other banks are saying four mortgages INCLUDING your primary residence mortgage. Oh boy. It's about to get crazier out there.

BTW-my broker recently sent our offices an email about one of the public perceptions of the financial crisis: that there's no money out there for mortgages. Simply: this is NOT TRUE. There is money out there and there's even decent rates. IF you have a good credit score, money for a down payment, and a reasonable debt/income ratio. Which you should have ANYWAY if you're buying a property. Remember..this is an investment. Let's say it together: "AN INVESTMENT".

New listings! Open tomorrow from 1:30-4pm at 1221 Harvard St, NW

I have two new listings at 1221 Harvard St, NW! They're 2 bedrooms, 2.5 baths, and they're two levels. They are located minutes from the Columbia Heights Metro and the DC USA shopping complex that includes Target, Bed Bath & Beyond, and the Washington Sports Club. Also within walking distance is a bevy of new restaurants and bars: Commonwealth, the Heights, Rumbas, Pete's Pizza, Five Guys, Red Rocks, and Wonderland. Unit 1 is , $698,380 and Unit 2 is $749,523.

Unit 1 is approximately 1800 sf, has bamboo floors, granite counter tops, custom cabinetry, SS appliances, spa master bath, a deck of the kitchen, a back yard and one parking spot. Click below for the virtual tour:
http://slideshow.mris.co/slideshow.cfm?ListingKey=90076187119

Unit 2 is approximately 1500 sf, has bamboo floors, granite counter tops, custom cabinetry, SS appliances, a deck of the second bedroom, the master bedroom suite is on the second level of the condo and has built in storage, a spa master bath, a roof deck and parking! It's perfect for entertaining. Click the link below for the virtual tour:
http://slideshow.mris.com/slideshow.cfm?ListingKey=90076193347

More development for 14th St, NW

As I've said repeatedly, I love my 'hood. I do tend to get *a little* excited when good things are coming my way. This is no exception! (http://dcmud.blogspot.com/2008/09/whitman-walker-goes-high-rise.html). A new condo building is going to replace the Whitman-Walker clinic on the corner of 14th and S St, NW. They'd like to build 120-130 units. We'll see what actually gets approved. Best of all, the developers are in talks with various prospects like a drugstore, grocery store or a restaurant! Yipee! Options. I like options. Can you tell I'm more excited about the retailers than the condos?

BTW-I have to give a shout out to DC Mud. It is an amazing blog with a comprehensive list of the development happening in the DC Metro area. If you want to be in the know, bookmark their blog. (And mine, of course.) My last post was based on one of their blurbs and so is this one. http://dcmud.blogspot.com.

Yea Shaw!

A recent post from the DC MUD people is making me see $$ signs. (http://dcmud.blogspot.com/2008/09/shaw-redemption.html)


The development that is detailed in the post (converting the Wonder Bread factory into Radio One headquarters..here's the proposed look... and other projects) is down the street from my condo. I love living in the U St. corridor for many reasons: the diversity, the shops, restaurants, bars, and convenient metro stop. I really love living here when I know development down the street means that property values will rise. Don't forget, real estate is an investment!

There's also other fun projects coming to the neighborhood: a 45,000 square foot YMCA at the corner of 14th and W and a new parking garage/retail space behind the Floridian. Hurrah! It's good to live on U St., NW.

Best time to buy a home? This fall..

According to Elizabeth Razzi at the Washington Post, this fall is THE time to buy especially if you're a first timer. That's exciting news for buyers, especially in these confusing times.

With the take over of Fannie Mae and Freddie Mac, you might be reluctant to throw your hat into the ring. What does that mean exactly? Nobody is sure how the government take over will effect buyers in the near future but we do know a few things:

Earlier this year, the FHA (Federal Housing Authority) boosted it's loan limits to $729,750 in expensive areas. Before this boost, FHA loan limits started at $419,000. There's a big difference between those two numbers! On Jan. 1, the loan limit drops to $625,500.

Due to the current lending market (discussed in a previous post), 10% down is now the rule of thumb for any conventional loan. But there's also the option of the FHA loan. The FHA loan allows you to put down only 3%, which is a godsend in DC where prices for a studio often start at $185,000 in desirable NW neighborhoods. But Oct. 1, the FHA raises their down payment requirement to 3.5%.

Two other things to consider as you start your home search: the expiration of the new $7500 tax credit on June 30, 2009 and the $5000 first time home buyers credit in DC. You can only take one. If your adjusted gross income is $90,000 for a single person or $130,000 for couples, take the DC tax credit! You don't have to pay it back like the new $7500 tax credit.

The inventory of homes, condos, and coops is still high in DC so take advantage! Good luck in your search!



To read Elizabeth Razzi's article, click below:
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/06/AR2008090600164.html?referrer=emailarticlepg

Open House #2 from 1:30-4pm

Yes, I'm going to be a busy bee tomorrow!

This 2 bedroom, 2.5 bath townhouse condo is located a stone's throw from the Takoma Park metro station. (Red Line). It has bamboo floors, SS appliances, granite counter tops, a glass tile back splash, custom cabinetry in the bathrooms, a custom built closet in the Master bedroom and a private patio off the second bedroom. It also included one garage parking spot. It's listed for 412K. Please stop by tomorrow afternoon to take a look!

Open House tomorrow 10:30-1pm

It looks like Hurricane Hanna has finally left us alone. I'm glad! I hope that means people will come to my Open Houses tomorrow. (Yep..doing two.) This is the first one at 1860 Wyoming Ave, NW. This is a very cute 2 bedroom/1 bath coop in the heart of Kalorama/Adams Morgan. It has a new kitchen with SS appliances and granite counter tops, fresh paint, a new w/d, and a parking space! For 399K. The coop is pet friendly too.

Lending in today's market

August is traditionally a month of vacation and that's evident by my lack of posts! But Fall is about to begin and the market is starting to pick up. As I get ready to wade back into the market, let's talk about lending. It's the most important part of any deal.

One thing I wanted to address are the changes occurring in the lending market. A year ago, I had a client close on their condo with no down payment and a rate of 6.1%. Today, you must have a minimum of 10% down payment and the rates vary dramatically day to day. (Currently, the rate for a 30 year fixed rate loan is 6.4% and that's a drop from last week). Your credit has to be impeccable. There is no automatic underwriting.

Underwriting requirements are the rules that the lenders impose to make sure that the loan will be paid off. Before the current lending meltdown, if your credit was good, you were approved automatically and off you went to home ownership. As I noted earlier, a minimum of 10% down payment is required and some banks are implementing requirements of 20% down. Your credit needs to be in the 700's for a good rate and you have to fully document your income. There a no zero down loans anymore except from the Department of Veterans or VA loans. VA loans are the loans available only to veterans of the Armed Forces.

Another option available to new buyers is the FHA loans (Federal Housing Authority). Instead of 10% down, they allow a 3% down payment. This is the direction a lot of buyers in DC are going. There is one glaring problem with FHA loans: they're best with single family homes not condos. If the condo project isn't FHA approved, you can't use an FHA loan. A lot of the older building in DC are not FHA approved. What I am seeing in the market is a lot of the new condo projects getting FHA approval. For example, Madrigal Lofts and the Floridian are two new condo projects that recently received FHA approval.

My advice to a buyer is to talk to a lender ASAP! There's a lot of things happening in the lending world. You need to make sure you have the correct qualifications for a loan before you can make a purchase.

I'm on a roll!

This is what I'm talking about in my previous post. This is a photo of my friend Jennifer Landgraff's loft style condo. It was recently featured in the Washington Post Express in an article about loft living. Jennifer has a great eye for detail and for making her place stylish but comfortable. Notice the lack of porcelain dogs.

Photo by Abby Greenawalt. http://www.abbygreenawalt.com

Selling your property

In Saturday's Washington Post real estate section, there was an excellent article about sellers who are successful because they think like buyers. This is SOOOOO important! All sellers are emotionally attached to their places. In my own case, our condo is the first place my husband and I purchased. We were engaged when we bought it and it's where we'll reside for the first years of our marriage. It's SPECIAL. OK..not that special but it does have meaning to us. But none of our memories matter to a buyer. They're more interested in what they're going to change and how their furniture is going to fit into the space. They don't care if your favorite color is blue and that you're unable to throw away your collection of porcelain dogs. Buyers want what they see on HGTV and those other home shows. To help your property sell, throw away the knick knacks. Paint. Take down your photos. Clean up and hide the toys. Put an air freshener..PLEASE. Bad smells are a big turn off. Not everybody loves how Zazu's litter box smells. If you make it look like a spread in the Pottery Barn catalog, you're more likely to sell your place.

To read the article in the Post, http://www.washingtonpost.com/wp-dyn/content/article/2008/07/24/AR2008072403625.html

Pesky taxes!

Watch out real estate owners! The DC Council has voted to DOUBLE the tax rate on vacant properties. OUCH.

Starting in October 2008, the tax rate is going from $5 per $100 of the assessed value to $10 per $100 of the assessed value for vacant properties. (It still has to be approved by Fenty and Congress to become a permanent increase but STILL!) DC Gov implemented this "temporary" change early this year to increase it's coffers .

For the last several months, DC agents have been keeping a close eye on the legislation. Why do we care about this factoid? Because it can really mess up a closing! For example, if I'm representing any new construction condos, houses that have been renovated or sellers that have moved into their new property and are selling their old property, they can be hit with this vacancy tax. Non vacant properties are taxed at $.85 per $100 of the assessed value. That's a BIG difference. There are many exceptions to the rule BUT that means you have to gather paperwork and take the time to interact with DC Gov. Booo.

Check out the article from The Washington Business Journal: http://washington.bizjournals.com/washington/stories/2008/06/02/daily36.html?surround=lfn

The low ball offer

There's a great article today in the Real Estate section of the Post: "The Art of Lowballing": http://www.washingtonpost.com/wp-dyn/content/article/2008/05/30/AR2008053001502.html

I can't tell you how many of my clients have tried this tactic this year. It's a frustrating process for an agent because we know how it's going to be received by the seller...they're going to be pissed! It also might ruin the chances of the deal being successful. I think all buyers need to realize that the sellers are emotionally attached to their property. They love their place. That's why they bought it. That's why they are selling it for "x" amount. "Don't insult me by offering 100K less than the listing price."

Realistically, these offers are happening A LOT in this market. As I mentioned, I've written a few. Since I work with sellers and buyers, I know the emotions and logic behind the writing of the low ball offer and the rejecting of a low ball offer. It's tough to negotiate this type of situation on either side.

The article has several great points:
1. The low ball is NOT going to work in a popular neighborhood with a lot of competition. (Yep..that neighborhood is popular for a reason and they will laugh at your offer. Loudly.)
2. The low ball WILL work if the property has been on the market for a lot of days and the seller is becoming desperate. It will work with new construction projects in SOME instances.
3. If you're employing the low ball strategy, count on writing a number of offers before you're successful. And listen to your agent. We do actually know what we're talking about when it comes to these situations.

The Team

Yep..this is the Murphy Team. Aren't we a distinguished bunch? I joined the Murphy Team in 2006 and it was a very good decision. Tom, our fearless leader in the front, has been in the real estate business for over 25 years. He knows EVERYTHING. It's always nice to have that kind of guy in your corner.

The whole point of this blog is discuss what's happening in DC real estate market. If you read the newspaper, any respectable website or blog, you know there's considerable upheaval happening in the housing market. I've gotta admit..this year has been tough. Not one deal has been easy. Don't even get me started on the lenders. But more on that later.