New Government Sponsored Website to Help Estimate Home Values

The Office of Federal Housing Enterprise Oversight has a new feature on it's website which shows property valuation trends around the country.  Although it's not as accurate as actually using our regional MLS statistical data for analyzing home values in our local area here in Montgomery County, Maryland; it's certainly interesting to view and "play" with the calculator they've posted.  Check it out here...

http://www.ofheo.gov/hpi.aspx#

For a free competitive home market analysis, just send me an email at Colleen.Barlow@LongandFoster.com

Enjoy!  Colleen Barlow, Realtor, W.C.&A.N. Miller Realtors, a Long & Foster Co., Potomac, MD 20854

Average Homes Sales Prices Have Increased Significantly in Many Areas of Montgomery County

I've been helping people appeal their property tax values lately by giving them a Competitive Market Analysis of their homes' values.  It's really surprising to almost everyone that home values have increased at double digit rates in many areas of Montgomery County.  The numbers are somewhat difficult to interpret since homes sales volume has decreased significantly over the last year.    Still, here's a sampling of how much the average home sales price increased or decreased in various zip codes locally between February 2007 and February 2008:

 Zip Code               Percent Increase in Ave. Home Sales Values 2/2007 to 2/2008

20854  (Potomac)                                                 15.58%          

20817  (Bethesda)                                                28.72%

20815 (Chevy Chase)                                           36.92%

20850 (Rockville)                                                  -4.56%

20874 (Gaithersburg)                                          -7.82%

20832 (Olney)                                                       -7.59%

For information on your neighborhood, please don't hesitate to email me at Colleen.Barlow@LongandFoster.com

Enjoy!  Colleen Barlow, Realtor, W.C.&A.N. Miller Realtors, a Long & Foster Co., Potomac, MD

Direct Phone:  301-717-1663 or Broker's Office Phone: 301-299-6000

Potomac, Maryland Real Estate Sales Statistics for the Past Week (ending 4/2/2008)

As of today, April 3rd, 2008, we have a total of 230 homes for sale in Potomac, MD. 

12 homes sold in Potomac in the last 7 days; and we have 75 homes "Under Contract" at this point in time. 

As of the end of February 2008, homes are selling, on average, for 90.48% of their list price. 

Compared to February 2007 when the average sales price in 20854 was $1,064,028; we've seen an increase in the average sales price which was $1,229,832 in February of 2008.  That's a 15.58% increase in the average home price in Potomac over the last year.  These are real numbers.  I realize that the media keeps touting doom and gloom, but the statistics seem to indicate that Potomac is not a declining market, as much of the country is.  For that, I'm grateful.

On the downside, however, in February of 2007 42 homes were sold in Potomac.  In February of 2008, only 17 homes were sold.  That's almost a 60% downturn in units sold.

The average number of days on market has gone from 112 in February of 2007 to 175 in February of 2008.  Still, I'm seeing many homes sell in less than 60 days over the last few weeks.  It seems like the Spring market is kicking-in.  6 of the 12 homes sold in the last 7 days were on the market for less than 10 days!

Certainly the Federal Reserve Chairman Bernanke's words yesterday were difficult to hear.  His belief that we might be slipping in to a recession, was discouraging; but he said that we could expect things to get better in the third quarter of this year.  We seem fortunate to live in Potomac where the real estate market is not what we all wish it was, but we are so much more fortunate than much of the country.  For that I give thanks.

Best wishes,  Colleen Barlow, Realtor, W.C.&A.N. Miller Realtors, a Long & Foster Co, Potomac, MD 20854 Phone: 301-717-1663

A Recession in 2008 Seems Unlikely in the United States

I'm thrilled by the Anderson Forecast's (out of the University of California at Los Angeles) conclusion this week that it's unlikely that the United States will slip into a recession in 2008.  Thank heaven!  Is anyone else relieved to hear some positive news about our economy? 

The stock rally today, following the Fed's announcement that they would pump $200 BILLION into the ailing mortgage back securities market; was more positive economic news.

Between these positive news items, and the crocuses blooming in my garden this week; I'm positive ecstatic!

Enjoy!

Colleen Barlow

Appeal your Property Tax Assessment and Save Money

Although I make my living buying & selling homes, I consider giving back to the community to be a very important aspect of my life.  Since so many homes are now selling for less than their assessed value here in Potomac and all of Montgomery County, Maryland; many homeowners are choosing to appeal their property tax assessments.  The process is not difficult.  One of the key components of the tax assessment appeal process is that the homeowner needs to attempt to "prove" to market value of the home is less than the current assessed value.  This is where I come in.  If you're in this situation, and would like a free Competitive Market Analysis for your home to help you with this process; pleaase don't hesitate to contact me.  It only takes me a few minutes to provide this service, and it might just save you significant money.

For more information on the tax assessment appeal process please click on this link to the State of Maryland's Department of Assessments and Taxation Website:

http://www.dat.state.md.us/sdatweb/hog.html

For a Competitive Market Analysis of your home, please email me at Colleen.Barlow@LongandFoster.com .  In most cases, I can email it back to you with a day or so.

Enjoy!

Colleen Barlow

W.C. & A.N. Miller Realtors, a Long & Foster Co., 10200 River Road, Potomac, MD 20854  (301) 299-6000

Reduce your Property Taxes in Montgomery County, Maryland - Homestead Credit

Just in case you're overwhelmed by the plethora of incoming news, I want to be certain that everyone knows this:

If you live in Montgomery County, MD you get a fairly big discount or credit on your property taxes if you claim the home you live in as your residence or "homestead".  Up until recently, the state property taxing authority's way of determining who should get this credit just wasn't working.  As a result, the state of Maryland decided that EVERYONE who lives in Maryland will need to file a one-time "Homestead Tax Credit Application."  

Here's a link to the state's website with all of the information you need to be sure that you get this tax credit:

http://www.dat.state.md.us/sdatweb/homestead_app.htm

 Enjoy!

Colleen Barlow

www.ColleenBarlow.net 

Should a home sell for more or less than the Tax Assessment value?

I'm pondering and researching tax assessment values vs. sale prices of homes recently sold in Potomac today. 

I've got a beautiful home listed at $789K*.  It's 2008 tax assessment value is $871K.  It's been on the market about 27 days now.  We've had LOTS of showings, and I expect that it will be under contract any day now.  However, we had one "low-ball" offer of $699K.  When I asked the agent why her client could possibly have thought that they would sell this home for so low, his answer was, "because of the assessment value".  Naturally, I countered with, "but it's assessment value is $871K?"  He didn't seem to care, as he believed that home should sell for well below assessment value.  Although this was a ridiculous offer, it did spark my interest, so I thought I'd dig through recent Potomac home sales to see what the relationship between assessment values and sales prices was.

The home right next door to my listing was on the market for 105 days before it went under contract about a week ago with a final asking price of $739K*.  Rumor is that they got just slightly below the asking price.  This home's assessed value in 2008 is $775K - almost $100K below my listing next door.  My listing has a larger, beautifully landscaped backyard, a larger garage, more than 1000 square feet of living space (per the tax record), and features tastefully updated baths and a renovated kitchen with a huge addition.  This explains the huge delta in assessment values between the two homes.  If you assume that they got around $730K, this home sold for $45K less than the 2008 assessed value or about 6% less than assessed value.

A third home in the same neighborhood sold in the beginning of this year for $735K with a 2008 assessed value of $771K.  That's a sales price about 5% less than it's assessed value.  I hope the new owners will appeal their tax assessment to get the reduced rate.

Yet a home on Democracy recently sold for $750K with a 2008 tax assessment value of $631K.  It sold for $119K OVER the assessed value or about 20% OVER the assessed value.

A home just sold on Cherbourg for $815K.  That's 11% over it's assessed value of $737K.  Interesting.

So, it seems that here in Potomac, assessed values have little relationship to the market value of a home.  From this small sample, we've got a spread from 6% under assessed value to 11% over assessed value. 

I've had several friends ask me to do Competitive Market Analyses for their homes recently.  They are going to ask the tax assessor to reduce their assessments, and thereby hope to significantly reduce the amount of property taxes they will need to pay.  Please feel free to contact me if you'd like me to do the same for you.  Maybe I can save you some money? 

Warm regards,

Colleen Barlow

www.ColleenBarlow.net

 *Names and figures in this paragraphs have been altered to protect the privacy of certain buyers & sellers.

New Loan Limit for Both FHA & Fannie/Freddie is $729,750 in Montgomery County, MD

The Federal Housing Authority (FHA), Fannie Mae (FNMA) and Freddie Mac (Federal Home Loan Mortgage Corporation - FHLMC) have set a new loan limit for Montgomery County, Maryland of $729,750. This came about as part of the Economic Stimulus Package of 2008.

So what does this mean to you?  If you're looking to buy a home and you want a loan for $729,750 or less to purchase that home; you're going to get a better deal than you would have up until now.  Lenders offer "conforming" and "non-conforming" loans.  Conforming loans are easier to sell in the Secondary Mortgage Market than non-conforming loans.  That's why conforming loans offer lower interest rates than non-conforming loans.  Also, if you're looking to refinance your current conforming mortgage (maybe you've got an ARM that's about to come due?); this new limit should help you, too.

Freddie Mac (FHLMC) and Fannie Mae (FNMA) are the big players in the Secondary Mortgage Market.  What they do is they buy loans from lenders and then "package" them into "pools" of mortgages.  They sell these "pools" as securities on Wall Street.  Think of it like this (a simplified example):

You know that most people pay their mortgages on time, since their home is really important to them.  If you loaned a new homeowner your own money in the form of a "mortgage" loan;  you could get about 6% interest income on your money.  Not only that, your investment is pretty secure and safe; considering that people usually pay their mortgage on time AND homes generally don't go down in value significantly over time.  Your interest is "secured" by a lien on the home, AND the new homeowner put 20% down so the value of the home would need to go down 20% for you not to be able to collect your money, should they default on the loan.  Seems like a great deal, right?

So why don't more people do that? 

The Secondary Mortgage Market does just that, but takes it one step further.  They pool together mortgage loans in packages, and sell them as securities on Wall Street.  You could invest in one of these relatively low risk "Mortgage-Backed Securities" or MBSs and you'd think you could expect somewhere near the 6% the homeowners are paying minus some fees for the Secondary Mortgage Market player's efforts.  In all actuality, the returns on MSBs are not that high; and you like anything, you can get a better return on your investment by taking more risk by buying riskier stocks.  However, MSBs are very popular; and many people have a chunk of their retirement monies invested in them.  Insurance Companies often invest in MSBs.

What's going on with Mortgage-Backed Securities (MSBs) now?  They are still popular, and pools of traditional 30-yr fixed loans with 80% Loan-to-Value rates are still decent and pretty low risk investments.  However, since in many areas, home prices have dropped and many loans were made for more than 80% of the price of the home; many people have been defaulting on their mortgage loans.  For example, if you bought a home for $100,000, and you took out a loan package totalling $95,000; your home would only have to drop $5,000 (5%) in market value and you would owe the lender more money for your home than it was worth.  You might sell your home as a "Short Sale".  You'd sell their home for less than 95% of what you bought it for, and then you ask the lender to accept less than the amount you owe them for the loan. 

What happens when you can't sell your home at "Short Sale"?   That's when the lender might foreclose on the loan.  After a lot of legal process, the home is sold by the lender.  The lender collects their expenses for the sale and hopes to re-coup most of the amount of principal that was due to them.  Unfortunately, they usually do not actually re-coup the full amount owed to them; and the loan yield a loss to the lender.

Obviously, if you owned a MBS that consisted of these riskier types of loans; you might expect that in this market, the MBS is losing money.  This is a very over-simplified explanation of our current mortgage crisis.  There are many other factors involved in the mortgage crisis, such as ARM loans which are coming due and a whole world of factors which even the "experts" don't understand.  However, please don't let the media make you think that the sky is falling.  According to the Mortgage Bankers Association, "the delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.82 percent of all loans outstanding in the fourth quarter of 2007." The fact is, most Americans still pay their mortgages on time.  Most of us are NOT in default on our mortgages. 

Good home loans are still available, and interest rates on these loans are still hovering around 6% --- historically a very good rate!

For more information or to discuss, please post your comments below or visit the websites listed below.  As always, feel free to email me at Colleen.Barlow@LongandFoster.com

Colleen Barlow's Potomac, MD Real Estate Website:  http://www.ColleenBarlow.net 

Mortgage Bankers Association:  http://www.mbaa.org/

FHA:  http://www.fha.gov

Fannie Mae:         http://www.fanniemae.com/

Freddie Mac:         http://www.freddiemac.com/

Lots of LOOKERS out there the past couple of weeks in Potomac and Bethesda

It's amazing how many people (i.e. potential buyers) are out looking at homes now (2/11/2008).  This past weekend, I went to show one of my new listings at 802 Twin Oaks Drive in Potomac to a couple who called me from an internet ad.  When I got to the home, there were 2 agents in the home already with their groups of buyers.  My couple came, and then another agent came with his buyers.  It was like a party -- there were 16 people there seeing the home at the same time.  When I tried to leave, more people came.  The home for sale next door was open (it was Sunday).  People naturally tried my home next door to see if they could see that, too, since they were there.  My clients did not want me to hold their home open to the public, but since there were so many people already coming through, and they were out of town, I went ahead and stayed there for a couple more hours.  I had over 40 people come see a home that wasn't even advertised as being open.

Let's hope that this means that buyers are going to start buying homes again in significant numbers.  This particular home is priced well ($799,000) and looks great.  It's my hope that it will be under contract within a couple of weeks.  In this market, or at least over the last couple of months, it's been the case that a home has to really sparkle AND be priced well to sell.  Maybe we're headed back to a more balanced real estate market here in Potomac.

Best wishes,

Colleen Barlow

The Average Home Sale Price in Potomac Maryland Increased 3.49% in 2007!