Maryland Real Estate

Dale Thompson Builders -Dale called and I’ll quote him here

Dale Thompson called me today and left a message on my machine. Here it is word for word.
“Hello Pat, Dale Thompson calling. Just looking at the blog called Pat Hiban Tells the Truth. Well, you are going to have to update your blog cause you are not telling the truth, but I’m happy to tell you the truth. The truth is we have temporarily closed our doors, we have downsized our staff, we have not taken anything off of our jobs that has anything of value, THAT is a dis truth and a slanderous one at that, I would like you to change that one if you care to do so and if you don’t care to do so , than you will have to change the part about Pat Hiban telling the truth. Just wanted to give you an update. Have a good day.”

So I will recant the statement earlier about “taking things of value from the sites”.
A source told me that happened but I can’t confirm it and Dale says he didn’t so I’ll make a blog correction on that statement.

He was not upset or loud in his message, very calm,collective and nice.

Dale Thompson Builders Shuts it’s Doors!!

Just got word from 2 reliable sources that Dale Thompson-Howard County’s largest custom home builder shut it’s doors. Word is he came through his subdivisions yesterday and took out all the tools and anything of value from the homes, laid off all his employees and called his active clients for a meeting. Let’s see what happens next. Let’s see which builder is next to close…….. Let’s see if lot values in Howard County plummet now because the bank will forclose on all of Dale’s lots and sell them on the cheap.

Lucky to have a job in Maryland

Last year the number of jobs in Maryland decreased for the first time in 5 years. (BY 15,000).
That’s alot of neighbors. The national unemployment rate is 7.2% . Many economists feel the actual number is actually closer to 10%. Maryland’s unemployment is at 5.8%, which is the most it has been since 1993. Employers everywhere in the state slashed jobs last year in construction, manufacturing, professional services, financial services and hospitality. Some noted layoffs so far this year in 2009 include U.S. Food Service in Columbia which is laying off 147 people in the next few days. Merlo, a Baltimore City fragrance company is laying off 111 people this week, Legg Mason announced 200 layoffs last month and Constellation Energy announced 800 layoffs just a few weeks ago. Even the State of Maryland said it would need to slash 1000 jobs this year not to mention the county jobs like the teachers that work in 17 schools in PG county that are shutting down. What do you think the 2009 unemployment rate will be by years end? Nothing that Brac could even put a dent in.

Last night the Senate voted for a $15,000 tax credit in the new stimulus plan for first time home buyers, up from the already $7,500 tax credit. It’s honorable that they are trying but the reality is it’s a stupid fix. Most buyers don’t understand how it works, you have to pay it back and it’s not going to change some one’s mind who is worrying about losing their job. The only thing that’s going to fix the overall issue is MORE JOBS!!!

The Bank of England dropped their benchmark interest rate to it’s lowest point in 315 years!!!
(1694!!!!) I waiting to refinance as soon as 4.5 % comes around. I’m going to take some loans on rental properties and put them in my primary residence loan at a sweet 4.5 % for the next 30 should that come to play. Rates keep inching up though because the lenders are full of new refinances as it is.

I would rather blog about good news but I think it’s important for people to understand the reasons why home prices are plummeting and where all the buyers went.

FED SLASHES RATES!!!!!!! MORTGAGE RATES FOLLOW!!!!!

In an attempt to stimulate our self destructive failing economy once again, the Federal Reserve cut the federal funds rate by .75% !!!! This brings it to .25%. That’s right!!!. .25 ONE QUARTER OF ONE PERCENT. Normally this causes and inverse reaction to mortgage rates, however in the Fed’s statement today , Ben Bernanke emphasized once again the governments future plans to buy 500 billion dollars of mortgage backed securities and treasury bonds. The goal is to bring mortgage rates down to at least 4.5% in an attempt to stimulate housing’s burst bubble. Most economists agree that the housing sector recovery is the single most vitale component in the stabilization of the entire economy. The second most vitale component is of course jobs. Stay tuned let’s see where home rates go and let’s see if this diminishes the enormous inventory of homes on the market. WORD OF ADVICE: get your track shoes ready. You would be an idiot to try to time the bottom of this market as a buyer if you could get an interest rate in the mid 4′s on the largest loan of your life. STAY TUNED.

Loan Limits Slashed

Home Sales Soar!!!!!!!!!!!!!

Home Sales Soar!!!! My friends in Prince William County , Va don’t even have time to talk to me these days. They are as busy as all us agents were about 5 years ago. Their average sales price is slashed in half but they are moving and grooving and making some deals daily. That’s starting to happen around here a bit. We just sold a forclosure on it’s first day on the market and we got contracts on 3 more listings today. I don’t think we have enough Howard County foreclosures or enough Anne Arundel County forclosures or even enough Baltimore City foreclosures yet to spur this multiple bid activity. I hope we do on one hand and hope we don’t on the other. Read this article if you haven’t yet…..

http://www.washingtonpost.com/wp-dyn/content/story/2008/10/16/ST2008101604149.html

Senate passes landmark housing bill. Will Bush sign!?!

Looks like Bush will be signing this real estate bill that will help out borrowers and buyers. Some highlights of the bill include a $7500 TAX REFUND for 1st time home buyer’s….NICE!

Also, the bill will PERMANENTLY increase the conforming loan limits from $417K to $625K. Great news for areas with higher values.

One of the negative aspects of the bill is that it will eliminate programs that allow sellers to provide buyers down payment assistance. These programs like Nehemiah and Genesis which have become hugely popular and allowed many buyer’s an opportunity to get up to a 6% contribution will be ELIMINATED.

We hope to see some positivity and some buyer’s moving off the fence with this great news. Bush should sign the bill immediately!

Why Guaranteed Buy Programs don’t work

I got a call today from a potential client. She’s listed with another company and is settling on a 1.5 million dollar home tomorrow. In order to settle she needs either and offer to purchase her current home or a guaranteed buy from a real estate broker. Without looking at the house I gave her an idea of what we might pay for the house. Of course she wasn’t pleased at our offer nor was she pleased at the other 2 offers she got from other guaranteed buy brokers. Why not? Because they stunk!!! Most guaranteed buys (at least all the one’s I’ve seen in the last 21 years selling homes) end up roughly around 80% of the home’s market value. What’s the market value?

Well …that’s up to the agent…but most agents offering such a program are risking their own cash so they low ball the “market value” to begin with and you as the seller potentially get a “guaranteed buy offer” of 70-75% of the real value.

The caller on the other line was confused…….one broker offered her 83% with a 6% commission and split the transfer tax, while another offered 85% with her paying both sides of the transfer tax and a 7% commission. Who was more?

Of course that depends on the market value they come up with…at a later date…

I know her current agent well , so I called her and talked to her about it and told both her agent and herself that she would be better off stalling the builder for a month or so and dropping the price on the home 50k and selling it without a guarantee.

Guaranteed buys are really for those seller’s who are desperate. Who need cash NOW, who can’t wait another day and are willing to take a major hit to get instant money. In these parts we don’t run into many of those…at least we haven’t lately. If we did , we’d probably buy the house and then flip it and make some cash. I have friends that did this all day long when the market was ascending.

Why do we as Realtors advertise these programs then?

Because it brings in seller calls. Seller’s call in…we give them the low offer…they say, “No Thank You,” and we talk them in to listing with us anyway (without using the program)…the old bait and switch.

That’s why.

BRAC, BRAC,BRAC,BRAC,BRAC!!!!

I just returned from the Brac presentation at Anne Arundel Community College. Here’s two things I know and one thing I think.

I know:

1. The Maryland Base Realignment and Closure is going to be a slow process that will take until 2015 to completley feel economically.
2. The impact will be a local impact affecting some very specific areas and not affecting others at all.

I think:

• All of the statistics used at this presentation (which I have the power point for and will share them with you a few at a time) do not include the rates at which the state is losing households and do not include the 20,000 job decrease in jobs to the state when comparing 2006 to 2008.

Because these negative statistics are a moving target no one really knows if BRAC will save us from the real estate recession that we are currently living in.

Look at this first graph showing the amount of new jobs……..this is good, absolutely good. I am very happy that my kids will have so many great jobs available to them locally. I have friends whose children have gone to other States for the type of job they wanted and here we have some great quality opportunities right in our backyard that didn’t exist before.

This graph shows that 42% of the new jobs will go to Ft. Meade and 56% to Aberdeen Proving Grounds in Harford County.