Interest Rate Deduction and the Obama Budget Proposal

If you are following the news that is beginning to leak out about President Obama’s budget proposal you may be aware of a small section of the budget plan that may affect all homeowners, or potential homeowners.  As the plan is currently drafted the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000.   This begins to chip away at the most substantial deduction most taxpayers have, and could conceivably lead to further erosion of home values.  Expressing your opinion directly to representatives in Congress might be a worthwhile few minutes of your time.

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Why 2009 is the best time in 5 years to Purchase Real Estate

So, you ask, why now? What makes 2009 different than 2008? What has changed? Why should I invest in a home?

1. Interest rates are at ALL TIME lows. NEVER have we seen 30 year fixed mortgages obtainable in the low 4% range. With our without continued government assistance, these are truly remarkable interest rates.
2. Lenders are protecting buyers. No longer are lenders relying on the borrower to tell them what they can afford. Lenders are qualifying  buyers based on facts, and putting them into mortgages they can afford, now and for the future. If you are qualified, we have loans and money available.
3. As David Bach (Noted financial guru and author of multiple books on creating personal wealth) states, “Homeownership works over the long term.” Housing and Real Estate, much like other investments, is cyclical. We are in the trough of our Real Estate cycle and have begun to climb up out of our downturn.
4. Another David Bach truism: “Real Estate is a great inflation hedge.” Daily, the Federal Government remains focused on flooding our financial economy with liquidity and bail out programs. Sooner or later, one (or all) of these programs will work, and liquidity will cause inflation!! Maybe not today, or next year. But, if you buy real estate for the long term (4-7 years), there will be many astute buyers gloating that they “bought back in 2009!”.
5. It is a buyers market, though well priced homes are selling — many with multiple offers.  Today is a great time for first time homebuyers!
6.  With the large decrease in home values, many homes can be purchased for what most renters pay in rent. Today is a great time for first time homebuyers! (hmmm, did I mention that already?)
7. TODAY IS A GREAT TIME FOR FIRST TIME HOMEBUYERS!

(Commentary provided by Carl Mazzan with Choice Mortgage, an affiliate of Wells Fargo Home Mortgage. To contact Carl about information specific to your personal situation, call 703-761-1190)

A Mortgage Banker’s Take on the $8000 Tax Credit

There has been a lot of interpretation and paraphrasing on the new Tax Credit. Below, for your information, is the mortgage bankers take.

A couple points of interest:

1. Iit is NOT a loan, and cannot be used for down payment money.
2. It DOES have a limit, based on the sales price of the property. Typically (but not always), in this area the maximum will be available.
3. It DOES have an income limit for full availability. Limits on both single and married buyers. It does phase out the more your earn.
4. It CAN be accelerated for use in 2008, or 2009 taxes.
5. There IS a “first time homebuyer” requirement, defined as 72 months (3 full years) of non-home ownership.
6. There ARE stipulations on the future use and sale of the home.

Overall, this is a tremendous benefit to first-time buyers, and just one of MANY reasons to that 2009 can be a banner year for first-time home purchasers!

(Commentary provided by Carl Mazzan with Choice Mortgage – an Affiliate of Wells Fargo Home Mortgage.)

The Housing Industry will lead our Economic Recovery

President Obama gave his first official address to a joint session of Congress last night. I, much like many others, blocked aside time to watch President Obama address the nation, and more specifically, address the state of the overall health of our economy in general.

President Obama understandably focused the majority of his speech on the economy—the issue that is on the minds of every citizen of this great country. He laid out an economic recovery plan that was large in scope and complex in nature; an aggressive plan that has the hopes of a nation riding on it. After listening to his speech and subsequent rebuttal by Gov. Bobby Jindal (R), I am fairly certain of one thing- I firmly believe that the housing and Real Estate industry will help lead the United States out of its current recession.

The Real Estate industry saw its downturn hit roughly 2-2.5 years before we saw a downturn in the overall economy; our industry is now about 4 years into its downturn. Thankfully, there seem to be some signs of life in the marketplace in 2009.

First-time homebuyers, and home buyers in general, seem to be out in much greater numbers. Prices have adjusted, and many purchasers who were priced out of the market 3-5 years ago are now able to purchase a home, and in many cases, for equal or less than what they would be paying in monthly rent. As consumers begin to move back into purchasing Real Estate, it should percolate throughout the overall economy, and in time, begin to forge a path to recovery. This is obviously an oversimplification of an issue that is both multi-faceted and complex in nature, but I believe the underlying principles are sound.

I am energized about 2009 and excited for the possibilities and hope that Real Estate brings to so many. Here is to an interesting, and exciting, 2009 in Real Estate.

“UP and COMING” and still Coming Up, Some DC neighborhoods buck the trends…

The greatest fear that hits most home buyers is the loss in value of their home so quickly after purchasing it. It makes them feel as if they didn’t bet the best deal possible, and many times can reflect poorly on the performance of the Realtor, even though these are issues beyond their control. Especially after reviewing some of the price trends in Metro DC, it can be a hard sell to motivate a buyer when they consider the real possibility that they may end up “paying too much.”

There is still hope. Some areas have not had any decline, rather, have seen an increase in home prices recently. What are commonly referred to as “up and coming” neighborhoods are doing just that- realizing capital gains for home owners now selling their property in those areas. Three zip codes, according to MRIS statistics, have shown an increase in home values in DC: 20008, 20009, 20010 (20007 also showed an increase, but modestly at 3%, and for an average of over $1,000,000 per home is not for the average homebuyer). Those areas include Van Ness, Dupont, Columbia Heights, and Kalorama- along with some sections of Glover Park and Cleveland Park.

This is significant because many of the properties available in these neighborhoods include many condos (which have been hit the hardest in these times) and many rehab properties. New homes buyers and investors can start to explore areas that are currently undergoing gentrification, which will potentially continue this upward swing. Realtors and home buyers SHOULD take advantage of rehab loan programs currently available, and conduct rigorous due diligence in the process of buying that “fixer-upper” property.

There are other neighborhoods to watch along the Blue Line. Eastern Market, Naval Yard, and the old location of DC General are all going to change or have already begun to change. Thanks to the Nats Stadium, the worn down waterfront is experiencing a renaissance of new construction while home values continue to be depressed by the bad housing market. DC General is going to be redeveloped soon, and its proximity to the Potomac Ave Metro doesn’t hurt either. Eastern Market and the area around Capitol Hill is continuing to improve thanks to many policy decisions by DC Government.

Let’s not forget Green Line neighborhoods. Logan Circle and areas close to the Shaw Metro, along with the aforementioned Columbia Heights, are all important places to watch. I have a client who keeps calling me to ask if the prices in Petworth and Brightwood have fallen significantly enough to buy a single family detached home (which are very hard to come by in the District, especially near a Metro). Even though the trend is currently down in most of these places, encourage buyers to look to the future here.

Buyers can easily track where home values are going. Simply pick a home you find on Multiple Listings Search, enter the address, and you can get a map and statistics for any neighborhood at you fingertips. I have a search feature like this on my website.

Keep an eye on other neighborhoods rebounding. 20016 has lost significant value, but I believe this to be partly to blame for the many condos with skyrocketing condo fees. American University Park/Tenleytown has, in my opinion, some of the best values for homes per square foot. Despite their age (built between 1930-1945), the detached homes in this neighborhood (as well as neighboring Spring Valley) have lasting appeal with hardwood floors, garages, basements, solid brick exterior, and colonial styling. Some of these homes will require some modern improvements (such as Master Baths, larger kitchens, and main floor powder room/half bath), however, the value hunter will see the benefits of renovations to these homes. Investors should also look closely at this neighborhood with the vast number of potential renters that range from foreign dignitaries to American U. students.

Keep Watching and Keep Looking! Great Homes are on the market NOW that may not be there tomorrow.

Justin Walls is a Realtor with Avery Hess Realtors, and operates out of their Rockville Office. He can be reached at jwalls@averyhess.com for comments and questions.

Text-on-Demand on every listing available in the Washington DC Market

About 4 months ago, we unveiled our text-on-demand technology available for all consumers who list their home with Avery-Hess, Realtors. This service has worked out tremendously, adding yet another avenue with which to share information about your home for sale with the ever-increasingly tech-savvy homebuying public.

We are currently working on making this tremendous technology available on every lsiting available in the Metropolitan Washington, DC area including Maryland and Northern Virginia. This technology will enable a prospective home purchaser to text the keyword AVERY to 59559 from their mobile device and receive information about any active property, instantly, via text message delivered to their mobile device. How does this technology work?

Here are the steps:

1. 1. Text the keyword AVERY to 59559
2. 2. A message stating “Please respond to this text message witht he number of the house you are interested in” will be sent back to your mobile device
3. 3. Reply back to that message with the house number. For example: for a listing located at 123 Main Street, text back 123.
4. 4. You will receive a text message back with the following information about the property you are interested in:123 Main St.
   $204K
   3bd/4ba
   Listing courtesy of: Avery-Hess, Realtors
   Contact Avery-Hess for Info: 866-239-5089

This technology from Avery-Hess is absolutely free for everyone to use (disclaimer here: standard text message rates still apply and vary carrier by carrier). We hope to have this technology in place in the next 10-14 business days – stay tuned…