Driving Up Prices And Increasing Demand
The Cape Gazette reports from Delaware. “More than 200 Delaware Realtors from all three counties rallied on the National Mall in Washington, D.C., in support of the housing industry. They were part of an estimated 15,000 Realtors from across the country that converged on the grounds of the Washington Monument May 17 for The Rally to Protect the American Dream. ‘It is impressive that Realtors feel so passionately about the importance of homeownership that four buses from Delaware joined others from across the country to have the largest gathering of Realtors ever in one place in the nation’s capital,’ said Todd Stonesifer, president of the Delaware Association of Realtors. ‘Polling shows that over 80 percent of homeowners still believe that homeownership is a good investment. No one dreams of being a tenant.’”
The Gazette in Maryland. “Housing advocates and state lawmakers are hoping an almost $60 million payout as the result of a settlement with the nation’s five biggest mortgage lenders will assist in curbing the state’s foreclosure crisis. ‘I think this will help in a significant way in terms of reducing housing inventory in Maryland and helping people stay in their homes,’ said Attorney General Douglas F. Gansler (D).”
The Somerset Herald in Maryland. “Homebuyers in Somerset County and other targeted areas of the state will be able to take advantage of lower interest rates in the Maryland Mortgage Program, devised as a way to stimulate the housing market. Department of Housing and Community Development officials planned to announce today a drop in the interest rate to 2.875 percent. ‘It’s to assist people to get back into home ownership,’ said Bill Ariano, deputy director for the Community Development Administration, which runs the mortgage program. The 30-year fixed rate mortgages are available to anyone purchasing a house in a targeted area regardless of whether they are first-time buyers, he said.”
“‘That’s awesome,’ said Cindy Stevens, owner of Wilson Realty in Crisfield. ‘That will help us quite a bit.’ Lower interest rates could help sellers, too, by driving up prices and increasing demand, Stevens said.”
“The state has $30 million available for mortgages at the lower interest rates, which was raised through the sale of tax-exempt bonds. ‘We will hold at that rate — no matter what the real estate market does — until the $30 million is gone,’ Ariano said.”
“Maryland’s housing market continued to recover in May, so much so that one report on Monday cited a potential seller’s market this summer in the area that includes Montgomery and Prince George’s counties.”
“‘Inventory in the Washington region continues to shrink,’ says the report by RealEstate Business Intelligence, a subsidiary of Metropolitan Regional Information Systems of Rockville. ‘This price gain reflects the fourth consecutive year-over-year gain, and the second consecutive double-digit [percentage] increase for home prices in the region.’”
“Active inventory statewide was down 26 percent in May from a year ago. Montgomery County had a 21 percent jump in sales in May compared with a year earlier, and a 12 percent rise in median sales price to almost $400,000. Howard County saw a 40 percent leap in sales and the same median price of $365,000.”
“Sellers who have realistic expectations of what the market will bear have had good success, said Erik Windrow, an agent with Prudential PenFed Realtors in Ocean City. ‘I’ve been thoroughly pleased with this year so far,’ he said. ‘Last year, I was equally as busy. And it was a fantastic year for me.’”
“Many people buy homes in the Ocean City area as investments, Windrow said.”
The Washington Post. “Fairfax County will commit more than $500 million for subsidized housing in Tysons Corner but has yet to figure out how to pay for transportation and other infrastructure, a Republican supervisor said Wednesday. Supervisor Pat Herrity (Springfield), returning to a theme that has triggered the most persistent and heated clashes on the Democratic-led board, said the county should reconsider policies that require developers to contribute to workforce housing and other initiatives that he deems nonessential.”
“Instead, Herrity called for a return to the days when developers shouldered the expenses of transportation infrastructure in exchange for county approval to construct more dwellings, offices and stores on a site. ‘We’re putting a half-a-billion dollars into subsidized housing for people making $70,000 to $120,000 a year instead of handling a lot of our most important priorities, such as transportation in Tysons Corner,’ said Herrity.”
“Herrity has been especially critical of workforce housing subsidies for families that earn as much as 120 percent of the area median income, which is set by the federal government and is now $107,500 for a family of four. But supporters of such initiatives, including Chairman Sharon Bulova (D), argue that affordable housing initiatives cost taxpayers little but return substantial benefits. Providing affordable housing for teachers, firefighters and low- income families means that fewer of those workers will jam the roads commuting from less expensive homes in neighboring jurisdictions. Segregating lower-income people into enclaves can also concentrate some of the problems associated with poverty.”
“‘Pat’s objections are beginning to sound like a broken record,’ Bulova said Wednesday. ‘It looks like a not very scientific analysis of what the costs are for housing in Tysons.’”
The Falls Church News Press in Virginia. “Dr. Lisa Sturtevant of the George Mason University Center for Regional Analysis and Ken Billingsley, director of demographics of the Northern Virginia Regional Commission, made back-to-back presentations to members of Falls Church’s Economic Development Authority (EDA) and Planning Commission in what will be more fully reported in next week’s News-Press. In response to a question, Dr. Sturtevant was to indicate strongly that, quite different than the prevailing wisdom of the recent past, it is now recognized that residential housing construction is the key to economic development.”
“Citing the report last weekend in the Post on Washington D.C.’s efforts in this regard, and mirroring a lot of what was done in Arlington around the Metro stations, she said that the common view that commercial development is the key to bringing in new business is now ‘being turned on its head.’ ‘Companies come to where the workers are now,’ she said. The workforce decides where it wants to live, and the companies that want them follow them there.”
“Billingsley’s presentation showed a remarkable gap in the demographics of Falls Church, its lack of a significant population of 20-to-45-year olds. In fact, the City has the lowest percentage of its total population from that age group of any jurisdiction in Northern Virginia. So, here’s the rub: Falls Church has the highest median household values in all of Virginia, and the 11th highest in the U.S. It has no significant housing stock that workers in the 20-to-45 age range can afford, much less even lower cost housing for those needed for jobs serving new residents.”
“D.C.’s thrust for growth is to promote new, smaller rental housing units. It sounds like a plan that will work.”
The Virginian Pilot. “While the sales market for high-end homes in Hampton Roads is struggling to regain its footing, the rental market for those same homes is booming, real estate experts said. Part of the pickup in high-end rentals could be a result of the region’s foreclosure problem. Vinod Agarwal, an economist at Old Dominion University said he’s seen foreclosures happening at all price ranges. ‘If you get foreclosed on, you may not be able to buy a home even if you have a lot of cash coming in,’ he said. ‘If you can’t buy a good house, what would you do? You rent a good house. And the home-owners may not be as concerned about your credit rating as they are about your cash flow.’”
“Lending requirements for homes that require a jumbo mortgage are also stringent, said Steve Rockefeller, a mortgage banker in Virginia Beach. A jumbo loan in Hampton Roads is for any mortgage higher than $458,850. A typical buyer would need at least 20 percent as a down payment on a home in that price category, said Rockefeller.”
“For homeowners such as Bob Brunner, the demand for high-end rentals is welcome news. He had the home custom-built in 2006. But recently his wife, who is in the military, was transferred to the Memphis, Tenn., area. The 51-year-old retired Navy service member said he didn’t want to try to sell in a sluggish real estate market. ‘In this market, you really take it in the socks,’ he said. ‘My neighbors who have their home for sale already had to reduce the house $50,000.’”
“Roy Scott, a property manager for Rose & Womble Realty Co who has worked in the local rental market for nearly 20 years, said he has never seen things so busy. ‘You would think that if someone can afford that much in rent, they could afford to purchase a home,’ Scott said. ‘But they choose to rent, instead.’”
“Among those renters is John Shutack, a 42-year-old neurosurgeon who recently decided to move his family to Virginia Beach from St. Simons Island, Ga. ‘The reason we’re renting, quite honestly, is we have a home here in Georgia that we’re not so sure how long it’s going to take us to sell,’ he said.”
“The place he found was an 8,451-square-foot home in Virginia Beach’s Green Hill Farm neighborhood on the market for $5,000 a month. The owner of the home had tried unsuccessfully to sell the property between 2008 and 2010, listing it for about $1.18 million. ‘We didn’t really need an 8,000-square-foot with a pool,’ Shutack said. ‘I don’t think anyone does, but it just so happens that this place worked out.’”
“Hundreds of feet above Commerce Street at the Westin Virginia Beach Town Center, a 2,700-square-foot condo is up for rent for $8,000 a month. The condo, which has been on the rental market since December, is owned by former Virginia Beach residents Richard and Fay Kline. The Klines have tried for a year to sell the home. They put the condo on the market in March 2011 for $2.19 million. A year later, the property was relisted for $998,000.”
“John Savino, the agent with Prudential Towne Realty marketing the property, said the couple want to sell the property but have it up for rent to see whether there is any interest. ‘He is in Florida. He has no intention of coming back permanently,’ Savino said. ‘His children do not want it.’ But the hot rental market on the high end hasn’t reached as high as the Klines’ penthouse. So far, the property hasn’t had any takers.”
