Dana Scanlon GRI

Several international investor clients recently asked me for information on the current market in the Washington DC area. Here are some of my thoughts, as presented to them in a longer study on the rental market in the area.

1. WHY NOW? THE BEST BUYERS' MARKET IN 10 YEARS

•· Huge inventory of unsold homes, more sellers competing for fewer buyers. This means more negotiating power for buyer.

•· Many foreclosures (bank-owned) and short sales (when owner cannot sell property for as much as he owes the mortgage lender)

•· These distressed property sales are exerting a downward price pressure on the "normal" sellers

•· The "normal" sellers will be putting their properties on the market soon, during the usual "spring market", thus adding to the inventory, and adding to price pressures

•· Prices have already returned to levels not seen in years. According to the 12/21/2008 Washington Post, average sale price in Nov 2008 for the metropolitain area was $343,000 which is a return to March 2004 levels. In Northern Virginia, prices are back to October 2003 levels. In suburban Maryland prices are back to Feb. 2005 levels. In Washington DC proper prices are overall quite stable, though there are distressed properties for sale as well. The farther away from the center of the metropolitain area, the more prices have dropped (inside Beltway/close to Beltway versus far from Beltway)

•· Interest rates are at an historic low and the federal government is committed to keeping them low for the foreseeable future

•· Lists of selected foreclosure and short sale properties, as well as other good opportunities, are available upon request.

2. WHY THE WASHINGTON DC AREA? STRONG LABOR & RENTAL MARKETS

•· Despite the recession, the Washington DC job market remains stronger than the rest of the country, and major cities around the world. The area's unemployment rate rose to 4.4% at the end of 2008, which is still enough to make many world leaders jealous.

•· Lower-paying jobs in the area are being replaced by higher-paying jobs for more skilled labor in the DC Metro area, according to the Center for Regional Analysis (Wash Post 12/21/08)

•· While the new Federal Base Closing (BRAC) legislation is shutting down many military bases nationally, it will add over 50,000 new jobs in Maryland in the coming years, including 2,500 in Bethesda.

•· The influx of professionals seeking employment in and around the new Obama administration, as well as the creation of more jobs in the Treasury Department and other sectors involved in the federal government "bail out" efforts, will add to the strength of the rental market.

•· The people who have lost their homes to foreclosure still need someplace to live, and are turning to renting

•· "Rents will continue to rise" in the Washington DC area, according to the Aug 30 2008 Washington Post, after posting an increase of 3.1% in 2007.

•· As for future resale values, our crystal ball is a bit cloudy. But according to a Harvard University study, home prices in the USA have increased on average 6% per year over the last 30 year period. Sooner or later we will return to a normal market with price appreciation. But we will not know we've "hit the bottom of the market" until prices begin to climb up,,,

For more information and a confidential consultation regarding your needs, please contact me at 301-575-4915 or email today.

I was recently asked by urbanturf.com to describe three Maryland areas that are up and coming and provide good investment potential. They specifically did not want to include well established and pricey areas such as Bethesda and Chevy Chase. Of course, I do not advocate anything but long-term investing, whether it is to buy property for a rental (buy and hold), or as a residence. The days of short term gains are not likely to be seen again for a long while, and this is probably a good thing.

To read the urbanturf.com article published Dec. 15 2008, click here. To search for homes and property values in any of these neighborhoods, click here.

Here is my two cents worth, as provided to urbanturf.com:

Northern end of Kensington: within walking distance of both the MARC train and the Wheaton stop of the Red line metro, this area is not as solidly upper middle class as the Kensington neighborhoods bordering Chevy Chase, but its far more affordable, and boasts proximity to Rock Creek Park as well as the Howard Avenue Antique Row.

There is a small pocket of this neighborhood that feeds to Bethesda's Walter Johnson High School, and that's especially prime real estate potential. The nearby Wheaton Mall has undergone a major facelift and upgrading in the past 5 years, and some of the region's most prized "cheap eats" as featured in Washingtonian magazine are just a few blocks away near Georgia Avenue.

Hyattsville/College Park with revitalization projects around two neighborhoods: First, Hyattsville around the new and very hip Arts District, with townhomes and condos being built by EYA. EYA is also bringing in new retail establishments, restaurants, and shops. The neighborhood is right next to DeMatha HS, which is a sports power-house. Close to Route 1 and Riverdale MARC train.

Second, College Park redevelopment plans near the University's "East Campus" spear-headed for a time by Doug Duncan in his brief tenure as VP of the University of Maryland. The redevelopment project is centered around bringing in high-quality mixed use to the Route 1 corridor, which is still rather shabby.

When these two poles of development really build up steam, which will probably take a few more years than expected due to the downturn, the values in this entire area should really begin moving up. There is already The MAll at Prince George's County, with a Metro stop right there. There are always large numbers of people in the area needing to rent, from college students to graduate students and young professors. Its a perfect mix, all this defines an area where values logically should go up.

-Garrett Park/N Bethesda near Grosvenor Metro: where Garrett Park, the Garrett Park Estates section of Kensington, and a little portion of Rockville come together near the intersection of Strathmore Road and Rockville Pike. A cultural mecca with concerts and cultural events all year long at the newly expanded Strathmore Hall. The surrounding grounds host summer movies on the lawn and outdoor free concerts. Within a short distance of White Flint Mall. Centex Homes is slated to build over 100 new townhomes there in a subdivision called Symphony Park. Fantastic location!

http://dc.urbanturf.com/articles/lists/where_to_buy_maryland_neighborhoods_with_the_best_investment_potential/

For more information contact me today by email or phone 301-575-4915

This is an oh-so fantastic time for first-time home buyers who were priced out of the market and bidding frenzies of 2-3 years ago to buy their stake in the American Dream. With a knowledgeable, patient and informative agent at your side, to guide and educate you about all stages of the home-buying process, this is the time to take a deep breath and start planning to make your move.

First-time home buyers may also be wondering how their agent gets paid. With the passage of "Buyer Agency" regulations over 10 years ago in most jurisdictions, the law allows an agent to fully represent the interests of their buyer client, upon the signing of a buyer-agency agreement - even though the seller is paying all the commissions! Now how is that for a good deal! Your agent's duty is to you, and they are supposed to promote your interests in all negotiations, from price, to home repairs after inspection, and so on. If you don't sign the buyer agency agreement, the agent showing you properties can still get paid by the seller, but they are not obligated to promote your interests. The agent must be honest with you and can provide you with objective information, but you are "only" a customer at that point, not a "client". Big difference!

You can read more about me and a few testimonials from first-time home buyers and others.

Programs to assist first time home-buyer programs - who will live in the home as their primary residence -- exist in just about every jurisdiction, but they do fluctuate according to what's happening in the financial markets, and may suffer from budget cuts in the near term. Which means that right now, some programs are undergoing changes, or being eliminated. So this guide is not intended to be the final word, just a snap shot of programs that as of this writing (11/20/2008) appeared to be still available. Information is deemed reliable but not guaranteed ... as there are many changes happening quickly!

FEDERAL PROGRAMS

As part of the recent government efforts to stabilize the real estate market, there is a $7500 federal government tax credit available to many first-time buyers. You must close on the purchase by July 1 2009 --- so this is the perfect time to be out looking! To qualify you must earn no more than $75,000 per year (single) or $150,000 (married with joint return). Higher income than that, and the amount of the credit declines. This would come in the form of a tax credit, and if an interest free loan repayable over 15 years. It can be used for fixing up and improvements, new furniture, you name it. The buyer repays it in $500 increments in future years, with no interest, when filing tax returns in later years - or it is repair in full upon sale of the property.

MARYLAND

The state of Maryland offers some programs available in all counties, such as first-time buyer assistance offered by the Community Development Administration (CDA). Buyers with moderate income and moderate credit scores can qualify, and the program is offered through select lenders approved by the state. This can assist with downpayment and settlement costs, and loans can also be 40 year fixed to make the monthly payments more affordable.

Maryland also eliminates 0.25% on the transfer tax on the sale for first-time buyers - it may not sound like much, but on a $200,000 purchase, that's $500 less you do not need in cash for settlement.

MONTGOMERY COUNTY

The Montgomery County Housing Opportunity Commission (HOC) program seemed to have an uncertain fate but is apparently back on track at this time. This program is only available through specific County-approved lenders. I can put my clients in touch with a good lender who works on this program.

In the past, this program has provided several options involving below-market interest rates, only the first of these 3 is available right now, but lets keep our fingers crossed that :

• Below market rate for a 30 year fixed loan, with 0 points
• (A step loan with 0 points, which provides for significantly reduced interests rates for the 1^st and 2^nd year of the mortgage, then becoming a fixed rate for years 3 through 30, at a very competitive rate.)
• (3% purchase assistance.)

WASHINGTON DC

For properties under $320,000 to be occupied by a first time home-buyer, the DC Tax Abatement program provides an exemption from the DC Recordation Tax of 1.1%, and an allowable credit from your seller equal to 1.1% of the DC Transfer Tax. It also provides a 5 year tax abatement that begins October 1 following your closing or settlement date. To qualify, total gross household income must not exceed $51,660 for 1 person, $59,040 for 2 persons, $66,420 for 3 persons etc,

Washington DC's unique $5000 first time home buyer tax credit (this is not a loan, so it does not have to be repaid like the federal credit) is also still available, having just been renewed in October 2008. It is available to single tax-payers with income under $70,000 (it gets phased out between $70,000 and $90,000) and for joint-filers with income under $110,000 (phased out after that).

The DC government just recently suspened the HPAP program which assisted low- to moderate-income level DC residents with homes purchases. The local association of Realtors is appealing to the Mayor to reinstitute this important program.

AND EVERYWHERE...

There are many more programs out there, in Arlington VA, Prince Georges County MD and the list goes on. Many programs will require the buyer to take a workshop to become more familiar with the home buying process, costs involved, and debt management. There are also non-profit groups such as NACA, the Neighborhood Assistance Corporation of America, that do an outstanding job of assisting the first-time home-buyer.

So what are you waiting for?! Send me an email or call 301-575-4915

Short sales and foreclosures are becoming a more common occurrence now in Bethesda, and many of them are selling briskly after only a few days on the market. They offer the savvy buyer with an opportunity to buy into one of the most sought-after locales in Montgomery County at significantly reduced prices.

Call me or email for more information and for updates. We can discuss your needs and schedule a visit to any of these properties.

Partial list of Bethesda short-sales or foreclosures

Dana Scanlon GRI 301-575-4915 send me an email www.danascanlon.com

The Diplomatic Duo is a team of Keller Williams real estate experts that have joined together in order to serve the needs of the International Diplomatic Community and all Foreign buyers and investors in the Washington DC area and New York. With over 40 years of combined sales and marketing experience, they have the ability to use their superior skills, knowledge and customer service in order to surpass their clients expectations.

The Keller Williams Diplomatic Duo is comprised of Dana Scanlon in the greater Washington DC area and Terry Henry in New York and Connecticut.

Dana Scanlon GRI 301-575-4915 Terry Henry MBA 203-912-5772

Together we have forged an alliance to allow us to better serve the needs of the diplomatic and international community of buyers and investors in the United States. Find out what the Diplomatic Duo Team can do for you.

Dana has created special relationships with strong and reputable private investors allowing her to get her diplomatic clients (even with A1 and A2 Visas) into home mortgage programs. Call us for a consultation today or send us an email with your question or query.