real estate Archives - Page 85 of 97 - Real Estate News and Commentary

March 23, 2012August 27, 2012

Finding a rental in a tight market

by Dan Krell © 2012
DanKrell.com

If you’re looking for a rental, you’re not alone. In fact, according to an October 28th (2011) commentary from National Association of Realtors® Chief Economist Lawrence Yun, there was an increase of 1.4 million renters in from the fall 2010 to the fall 2011; and as of the second quarter of 2011, there were about 38 million renters. As the economy and foreclosure crisis added to rental demand; Dr. Yun pointed out that the lack of multi-family construction (e.g., apartments) in the first decade of the new millennium also added to the falling vacancy rates (“Falling Rental Vacancies”; realtor.org).

Of course, as rental vacancies fall- rents increase. According to the National Association of Home Builders (nahb.org), the Multifamily Vacancy Index (MVI) fell in the fourth quarter of 2011 indicating fewer rental vacancies. Additionally, the Multifamily Production Index (MPI), which measures builder and developer sentiment about current conditions in the multifamily market, is at its highest since 2005. Furthermore, the MPI component gauging developer sentiment for market-rate rentals is at an all time high!

But don’t worry too much. Consider that while some have described falling nationwide home ownership rates and rental vacancies, the U.S Census data indicates that home ownership rates for the Washington DC region has not significantly changed during 2011. Additionally, rental vacancies increased throughout 2011 to rebound from some of the lowest vacancy rates in about ten years (census.gov).

So what does all this mean for you, the renter? First consider your budget, and then decide on your needs and preferences for your rental home. Since size, location, and amenities are some of the factors that dictate rent, you might be able to lower your rental costs by deciding which factors are more important to you. For example, renting a studio apartment close to a metro stop may be less expensive than renting a four bedroom bungalow about the same distance to the metro stop. However, if you want the four bedroom home, the rent may be less expensive as the distance from the metro stop increases.

The internet age has made finding a rental easier than ever, many apartment guides and MLS rental listings are now at your fingertips. Some apartment guides even provide virtual tours of available floor plans and amenities. The internet has many rental tools as well; one such tool is the “rentometer” (renotmeter.com), which can help you determine if your rent is in line with other area rentals. While hunting for your rental online- be careful of internet scams; Craigslist posts some very good safety tips for online home searching (washingtondc.craigslist.org/about/scams).

You might even consider hiring a real estate agent to assist you in your search. While some agents only focus on MLS rental listings, others may assist you in negotiating a rental rate and terms with rentals found outside the MLS. It should also be noted that some rental management companies also specialize in executive rental placements.

Once you found a suitable rental, be prepared for the rental application- which may include a credit check. If you’ve had financial challenges, such as a job loss or foreclosure, don’t be afraid to explain your situation; as some landlords may be willing to work with you if they have a vacancy.

As the housing market struggles to gain a foothold, the rental market remains strong. Finding your perfect rental may take a little time and effort.

More news and articles on “the Blog”
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of March 19, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

March 14, 2012November 7, 2019

Severe hoarding affects more than families and communities

Thanks to reality TV to bring about awareness to the nationwide hoarding problem; however, experts agree that chronic hoarding is still under-recognized. The Montgomery County Task Force on Hoarding Behavior Report (Prepared by Department of Health and Human Services February 2011) anticipates that the number of reported hoarding incidents will increase as awareness increases and the population ages. Awareness and recognition is paramount as there is a consensus that hoarding exists in most communities and has the potential to negatively affect the health and safety of those in the community as well as the environment.

Hoarding is often defined as the inability to discard large collections of possessions that appear to have little or no value/use. Additionally, clutter obstructs the use of the home or spaces within; and can pose a significant health or safety risk, as well as risk the maintenance of the home. Hoarders can accumulate things, trash, and even animals. Animal hoarding is a type of hoarding that is difficult to intervene for various reasons that include personal property issues.

In-home risks for hoarders and their families include: tripping, injury (or death) from falling objects, health issues that arise from pests and mold, delayed emergency care. As a result, utilities are often inoperable and the home can become condemned. Although neglect and abuse issues come to mind when you think about hoarders; however, Cristina Sorrentino Schmalisch, PhD, LICSW of the International OCD Foundation (ocfoundation.org) claims that hoarding is also a public health and fire safety issue “that can put the home at risk for condemnation.”

Of course, according to Dr. Schmalisch, the consequences of hoarding are not limited to the hoarder; the effects of hoarding often spill over on surrounding homes and the neighborhood, especially if the hoarder lives in a multi-family building (such as a condo or apartment). Pest infestation, structural problems, flooding, and electrical fires are just a few of the potential problems that have the potential for property damage and possibly lower the property value. In fact, long term effects of hoarding can also shorten the operational life of systems within the home as well as threaten the structure itself.

The national hoarding problem is very much a local problem as well. Because local incidents of hoarding have been increasing, the Montgomery County Task Force on Hoarding Behavior was established in 2009 by the Department of Health and Human Services to address the complex issues associated with the disorder. The mission of the TFHB was to “coordinate all County actions related to severe hoarding cases in Montgomery County and develop comprehensive long term, proactive strategies to prevent and remediate hoarding situations.”

If you’re unsure how to tell if someone has a sever hoarding problem, common signs include (but not limited to): clutter that blocks windows and doors; clutter that makes it difficult or impossible to use the kitchen, bathroom, or bedroom for their intended purposes; repairs are not made to the home to avoid having visitors; clutter/trash related pest infestations; clutter is unsafely stored close to heating and cooking areas.

Hoarding intervention is commonly approached through both mental health services and building code enforcement. Although it is often difficult to force a hoarder to receive mental health services, the home condition can be addressed through code enforcement citations. For more information or seek help contact the Montgomery County Department of Health and Human Services.

Original published at https://dankrell.com/blog/2012/03/14/severe-hoarding-affects-more-than-families-and-communities-homes-and-real-estate-at-risk/

By Dan Krell

March 8, 2012March 12, 2012

Buying a home when you’re short on cash

by Dan Krell ©2012
DanKrell.com

Given how the lending industry has changed, it’s easy to understand that you might think you need perfect credit and a 20% down payment to buy a home. Although credit requirements have been tightened, buying a home with little or no money is still possible.

Yes, it’s true that the financial and housing crisis forced banks and mortgage lenders to re-think the idea of easy money. Sure minimum credit scores have been raised to qualify for a mortgage, and you better believe that increased underwriting scrutiny and due diligence is the rule (rather than the exception). But, that doesn’t mean that you can’t get a mortgage if you don’t have a lot of cash. Depending on your situation, you may find yourself comparing conventional loans to FHA and VA.

Conventional mortgages have been traditionally thought of as requiring a 20% down payment; however, you may obtain a conventional loan with as little as a 5% down payment. The misconception that a conventional mortgage requires such a high down payment may have stemmed from the fact that you need a 20% down payment to circumvent private mortgage insurance. Additional confusion about conventional mortgages arises from the distinct programs that Fannie Mae and Freddie Mac offer for specific home buyers. For example, Fannie Mae offers a mortgage for as little as a 3% down payment through their “HomePath” financing– but this is only available to purchase Fannie Mae owned foreclosures.

Conventional financing typically allows you to receive financial assistance in the form of a gift and/or seller closing cost assistance. The documented gift must be from a relative. Although gift guidelines for some conventional programs have recently become more lenient; generally, you may be required to have a “minimum borrower contribution” (from your own funds) as your down payment decreases. However, a minimum borrower contribution may not be required if your down payment is 20% or more. Seller closing cost assistance may be limited depending on your down payment.

As conventional mortgage credit requirements became increasingly strict, more home buyers found that the FHA mortgage remained somewhat flexible. Certainly, buyers with credit dings found that FHA underwriting is more forgiving (provided borrowers provide substantiating documentation) than conventional; but another attraction to FHA financing is the low down payment. Although FHA increased the required minimum down payment- you may find that the current 3.5% down payment is still relatively low. Not having the 3.5% down payment does not have to deter you either; your down payment can be from a documented gift of funds. If you’re still short of funds, FHA allows the seller to assist with your closing costs (not to 6% of the sale price).

If you’re an eligible veteran or active duty service personnel, you may find that the VA offers a very good mortgage. As a benefit to your service, you could buy a home with no down payment (provided the purchase price does not exceed the VA appraisal of reasonable value and loan limits). Additionally, the VA allows the seller to pay your lender’s fees. Eligibility and other information can be checked on the VA website (www.benefits.va.gov/homeloans/veteran.asp).

Even though mortgage options exist, program guidelines change frequently- so check with your lender about qualifying. One final word: be prepared to document everything and follow your lender’s instructions.

More news and articles on “the Blog”
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of March 5, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

February 29, 2012March 7, 2012

Housing takes a backseat in election year politics

by Dan Krell ©2012
DanKrell.com

It’s an election year and the spin is increasing. As the Republican primaries are focusing on economics and jobs, there has not been an honest discussion about the current state of the housing market and how to revive it. As the election cycle heats up, expect to hear increased rhetoric and spin about housing from pundits and candidates.

One hotly debated issue is government involvement in the housing market. The roles of Fannie Mae, Freddie Mac, and FHA in the housing bubble and recovery will undoubtedly become part of the election debate. However, the talks of winding down Fannie and Freddie’s operations continue, while secondary markets continue to rely on the mortgage giants for growth and stability.

Another issue that is certainly a hot potato is the mortgage interest deduction (MID). Argued by some as a government subsidy, the elimination or limitation of the MID has been recommended by the likes of the Congressional Budget Office and the National Commission on Fiscal Responsibility and Reform (also known as the President’s Deficit Reduction Commission) to reduce government budget deficits.

The fight to save the MID has become a local issue as Governor Martin O’Malley’s recent budget proposes to limit the deduction. Commenting on the Maryland MID limitation, Mary C. Antoun, Chief Executive Officer of the Maryland Association of Realtors® stated in a recent press release that, “Maryland is one of the most real estate tax dependent states in the country”… “The state has one of the most aggressive real estate tax structures in the country, ranking 11th among all states in terms of total real estate tax burden. And taxes on real estate are the primary source of revenue for Maryland’s local jurisdictions.” She added, “If tax deductions are capped, as proposed by the Governor’s budget, many Maryland homeowners will lose some of the value of their mortgage interest deduction and the deductibility of state and local property taxes…”

As the benefits of homeownership are questioned, the MID has remained a major home buyer incentive; as demonstrated by a survey commissioned by the National Association of Realtors®. The 2010 Harris Interactive survey indicated that of the nearly 3,000 homeowners and renters who responded, about three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.

Will the recent positive and optimistic housing figures recently released by the National Association of Realtors® (Realtor.org) and increased new home builder activity put the housing market in the back seat to other issues? Maybe, but positive housing news has been reported throughout the financial crisis and recession. Increased home sales were reported in the summer of 2008, which combined with optimistic housing and financial reports from many sources gave hope to a housing recovery. Likewise, positive housing reports in the fall of 2009 indicated increased activity with expiring home buyer credits. Optimism for housing in 2010 and 2011 was also reported because of activity spikes.

Traditionally, housing has been a major component of an economic recovery. This recession has been different such that housing has remained a drag on the economy. And even though our region has boasted impressive housing numbers compared to the rest of the country, issues remain (such as sliding home values, underwater mortgages, vacant homes, etc).

Yup, it’s an election year. Will we hear a viable solution to improving the housing market?

More news and articles on “the Blog”
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of February 27, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

February 23, 2012March 9, 2012

Housing shortage concerns; supply and demand

by Dan Krell © 2012
DanKrell.com

Exactly two years ago, I wrote about the possibility of a housing shortage. In February 2010, Montgomery County’s housing inventory of homes for sale hit a two year low and was almost cut in half from the previous year; most likely due to a respite in the foreclosure tsunami. However, home inventories remained relatively low through 2011; as some looked forward to a renewed seller’s market, if not a balanced market.

So here we are in February 2012, and home inventory in the county is just about where it was in 2006- which is the consensus peak of the housing market. You might think that because home inventories are at a five year low, it might be a good time to jump into the market and list your home for sale.

Not so fast. Consider that the average time it took to sell a home during the peak of the market was no more than two months; much sooner in many cases. However, the current average time on the market is almost 30% longer today than what it was at the peak; much longer in many cases. Additionally, even though home inventory is similar to the peak market, the number of units sold compared to that time is about half; and keep in mind the average home sale price continues to fall.

For a home owner thinking of selling their home, it’s still a precarious market regardless of the reduced inventories. Although eager home buyers lament the limited choice of homes for sale, they are still demanding and selective. For home owners preparing their home to sell, the market is still about price and condition; make your home look its best. Keep in mind that about one-third of the home buyers in the market are first-time home buyers looking for their “perfect” home.

As I concluded two years ago, it’s not so much of housing shortage, but rather a market seeking equilibrium. Clearly, a market shift has taken place- but where?

As the number of single family homes listed for sale declines, the number of single family home listed for rent increases- as does the average rent. Supply and demand; another option for home sellers may be renting their home.

The up side of leasing your home is that you can move on and have cash flow from the rental. To assist in determining an appropriate monthly rent, your Realtor® can provide neighborhood rental data. You should also consult with your accountant to make sure that leasing your home is an option; considerations in calculating rent may include (but is not limited to): tax implications, your mortgage payment, HOA/condo fees, property taxes, insurance, and maintenance.

Of course, solving one issue opens the door for others; there are disadvantages to renting your home as well. Other considerations might include (but not limited to) daily rental management, what to do if the tenant does not pay, and cost of repairs after the tenant vacates. Also, if you plan to rent your home to buy another home, don’t commit mortgage fraud; your lender may require extensive documentation on the rental – including an established rental history.

Although a balanced housing market may include increased rental inventory; do your due diligence before you decide to rent your home, and make sure it’s right for you.

More news and articles on “the Blog”
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of February 20, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.