About District of Columbia, DC

Home affordability moved higher last quarter, boosted by the lowest mortgage rates in history, a rise in median income, and slow-to-recover home prices throughout the country.

According to the National Association of Home Builders, the quarterly Home Opportunity Index read 75.9 in 2011′s fourth quarter. More than 3 in 4 homes sold between October-December 2011, in other words, were affordable to households earning the national median income of $64,200.

Never in recorded history have U.S. homes been as affordable on a national level. Even on a regional and local level, affordability soared.

Affordability was highest in the Midwest; 7 of the 10 most affordable markets nationwide were in the nation’s heartland.

The Top 5 most affordable U.S. cities in Q4 2011 were:

1. Kokomo, IN (99.2% home affordability)
2. Fairbanks, AK (97.5% home affordability)
3. Cumberland, WV (96.9% home affordability)
4. Lima, OH (96.0% home affordability)
5. Rockford, IL (95.5% home affordability)

These are each considered “small markets”. The most affordable “major market” was the Youngstown, Ohio area, where 95.1% of homes sold were affordable to households earning the area’s local median income.

Not surprisingly, America’s “least affordable cities” were regionally-concentrated, too, with 7 of the 10 least affordable markets located in either California or Texas.

San Francisco (#3), Santa Ana (#4), and Los Angeles (#5) led for the Golden State but, for the 15th consecutive quarter, the New York metropolitan area took “Least Affordable Market” honors.

Just 29 percent of homes in and around New York City were affordable to households earning the area’s median income last quarter. It’s a large jump from the quarter prior during which 23 percent of homes were affordable.

The rankings for all 225 metro areas are available for download on the NAHB website.

Whether you rent or buy here in the Metro DC area, you pay for the house you occupy.

You must live somewhere and there's a price to pay for it. A simple analysis will show you whether it's cheaper to rent or buy.

Some people don't have a choice but to rent because they don't have the means to qualify for a loan. But for those who do have a down payment and good credit, they actually have a choice of whether to rent or buy. In some cases, owning will cost significantly less than renting.

Rentals are in high demand here locally and rents are going up. People who have experienced foreclosures and short sales have increased the demand for rentals as most times they cannot qualify for financing.These former distressed property owners are crowding out the usual renters – i.e. students, recent college grads, temporarily assigned workers and transitional residents. The first comparison a discerning buyer needs to make is whether the house payment is lower than what they'd have to pay in rent. A mortgage calculator will help you determine what your buying power is.

The next comparison needs to consider the other benefits that accrue to an owner such as principal reduction, appreciation and tax savings. These can dramatically weigh in favor of owning rather than renting.

Tenants have made the decision to buy a home. The decision currently facing them is whether to buy it for themselves or their landlord.

With interest rates at an all-time low and many lenders offering incentives for first time home buyers, we have a “perfect storm” for folks with decent credit scores who are tired of making their landlords rich. Besides, there’s something to be said for being able to paint your kitchen lime green, planting a vegetable garden or remodeling your ugly kitchenif that’s what you’re inclined to do to make your home your personal castle.

Recently I helped a first time home buyer purchase a condo in her “dream” building.Her financing, taxes, insurance and condo fee added up to less than she would have been paying to rent the same unit. She has a pride of ownership that can only be accomplished through homeownership.

If you're contemplating renting versus buying, I can certainly help you through this process.

We're conducting FREE Home Buying Happy Hours - click here to get more information.

Some of the pitfalls that clients and homeowners would have while negotiating for a short sale in Georgetown, DC are maintaining the utilities especially when a closing has been extended out a few weeks and utilities have been planned on being switched over to the new homeowner. A delay sometimes becomes inevitable and these delays can become costly to everyone involved in the short sale process. Appraisers are tasked to go back to the property a second or even third time and sometimes even a day before closing.

If the appraiser goes out to the property being sold on short sale in Georgetown, DC and finds out that utilities are no longer on then this can be another extra 3 days coordinating with utility companies and will cause for the appraiser to go back the third or fourth time.

What this can do is push everybody up against the wall because the seller's lender has an approval deadline and everybody has to make that deadline work.

The best you can do is make sure that utilities are on at all times up to a day or 2 after closing.

So if you have a specific situations and are considering a short sale for your property in Georgetown, DC please call 855-835-5473 or email direct at dan@greetingsvirginia.com. Our team of short sale experts in Georgetown, DC will contact you shortly and will help you stop foreclosure.

As our federal government continues to flail and waste time disputing who caused the housing market collapse, I just sit here wondering what we're going to do when Fannie Mae And Freddie Mac finally crash.

A long time buddy of mine send me a link to an article that really summarizes this concern for me. Christopher Whalen wrote a commentary on HousingWire titled On GSE reform: Be Careful What You Wish For that should make all tax-paying US citizens scratch their collective heads. I want to share a few quotes from Mr. Whalen about Fannie Mae And Freddie Mac.

Who Really Controls Fannie Mae And Freddie Mac?

Think about it. These are organizations that are funded by the government, so their accountability for profitability (think survivability if they are private businesses) is very loose. Who needs to profit when the government is backing you. So what motivates the GSEs (Government Sponsored Enterprises) if not sound financial decision making? Mr. Whalen points out:

... the close operational integration of the top four banks and the GSEs, including Fannie Mae And Freddie Mac and the Federal Home Loan Banks, which are the largest GSEs of all. You cannot separate the GSEs from JPMorgan Chase, Citigroup, Wells Fargo and Bank of America — the four horsemen of the financial apocalypse that exercise illegal cartel control over the secondary market for residential mortgages. The big four zombie banks run the GSEs in the same way that they exercise control over special purposes entities and the private mortgage insurers.

Fannie Mae And Freddie Mac Only Exist On Public Funding

The road to hell is said to be paved with good intentions, and Fannie Mae And Freddie Mac were established with good intentions in mind. But they have evolved to a cancer that is killing housing, and I believe is holding back the economy. Mark Calabria of the CATO Institute notes:

“By focusing on ‘the role of government’ in housing, [Nocera] moves the debate away from the reckless immoral behavior of Fannie Mae And Freddie Mac. He can claim this is about social policy and paint himself as a caring progressive, despite the massive regressive theft that Fannie Mae And Freddie Mac have actually been.”

Fannie Mae And Freddie Mac Performance: Far Worse Than The Catastrophe Reported

Everybody knows that Fannie Mae and Freddie Mac have been hammered. Nobody argues that they are a viable, economic entity. But did you know that the reality of their financial situations is far worse than what most are reporting? On this, Mr. Whalen observes:

In the case of the GSEs, the loss on a bad loan is not recognized until the underlying collateral is sold — meaning that there are tens if not hundreds of billions of losses embedded on the balance sheets of Fannie Mae and Freddie Mac in the form of bad loans.

Fannie Mae And Freddie Mac Reality Awaits

What is going to happen when the proverbial s#*t hits the fan? If hundreds of billions of loans go bad, will our banking system survive? Or will the next administration (we know Obama is going to continue to ignore this through elections) decide to bail out the banks by printing another trillion dollars?

I know there are "way smarter" people out there who pay attention to this, I'll be looking for their thoughts and ideas. I can promise you this, the lack of leadership in Washington today might be causing a problem that could collapse our economy. It has happened elsewhere. Are we just a "Super-sized" Greece?

If we do not put some bright, non-politically charged minds, on the task of reforming and dissolving Fannie Mae And Freddie Mac, then what we know of the housing market collapse will pale in comparison to what is ahead.

After a half-decade of tightening mortgage guidelines, banks are starting to “loosen up”.

The Federal Reserve conducts a quarterly survey of its member banks and, last quarter, not a single responding bank reported having tightened its mortgage guidelines for prime borrowers.

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.

53 banks responded to the Fed’s survey and none said that mortgage guidelines “tightened considerably” or “tightened somewhat” between September and December 2011; 50 said that guidelines remained “basicaly unchanged”; 3 said that guidelines “eased somewhat”.

Mortgage applicants sometimes remark that the mortgage approval process can be challenging. Last quarter’s Fed survey hints that looser standards are coming.

Not since before the recession have banks lowered mortgage approval standards like this and it bodes well for this year’s Houston housing market. Real estate agents report that 1 in 3 home sale contracts fail with “declined mortgage applications” as a leading cause.

Looser mortgage lending standards should mean more home loan approvals for buyers, and fewer contract cancellations. This can spur the housing market forward.

Make note, though. “Looser standards” should not be confused with “irresponsible standards”. It remains more difficult to meet bank standards as compared to 5 years. Today’s underwriters are more conservative with respect to household income, overall assets and credit scores.

Even as compared to one year ago:

• Minimum credit score requirements are higher
• Downpayment/equity requirements are larger
• Maximum allowable debt-to-income ratios are lower

For buyers and refinancing households gaining approval, though, the reward is the lowest mortgage rates in a lifetime. Mortgage rates in Texas continue to fall, helping home affordability reach new highs.

If you’re in the market to buy a new home or refinance one, your timing is excellent.