John MacArthur

You went to bed last night, thinking that maybe it is time to buy a home. Maybe, you own a home and went to bed thinking, maybe it is time to take advantage of the market and sell and move up.

Then the sun came up and that queasy feeling returned.

You are not alone.

Do you feel like you just woke up from a restless sleep and the world is upside down?You look out the window and the sky is below you and terra firma is up? You check the calender to discover...yes it is 2008.

You venture forth and the world seems to have gone mad.

Headlines continue their seemingly never ending assault on all things you held secure.

You are not alone.

Maybe, you have become accustomed to the "sound bite" world that surrounds you. News stories come and go faster than a sailor hitting port and leaving during world war ii. Now, the veracity of headlines has always been suspect.

Remember seeing this one

By all standards, the current economic situation is unparalleled. Stocks are on a roller coaster ride. Banks are slow to lend money. Interest rates are sinking. Home prices are all over the board. Unemployment is rising. The queasy feeling follows sensory overload. You try to analyze all the data. It is overwhelming and contradictory and leaves you in a state of paralysis. We hip folks call it paralysis by analysis.

You are not alone.

Can we stop for a minute? Can we review history? Home buying history. In broad terms, but just a look back so we can see where we might be and discover the one constant saving grace.

Industrial Revolution

This is kind of where it all began. Factories were built. Homes were built near the factories. Folks needed a place to live near where they worked. How are you gonna keep them down on the farm? So, another industry became more prevalent to assist those that needed to buy and sell homes.

The real estate agent began his service to clients. Soon after, you had brokerages open to assist buyers and sellers. It was a new day. We were moving from an agrarian society to a society that made things as well as grew crops. It was probably very disconcerting to buyers and sellers. They were not alone.

They had a real estate agent to guide them through the process.

Cushman & Wakefield opened there doors just about 4 score ago. They are still doing business in the DC area. Real estate agents must be doing something important, they have survived through many crisis.

Times changed. We were hit with the great depression. People lost jobs. People lost savings. People lost homes. It was a terrible time. I have no doubt that all the media was sharing the horror on a daily basis. Soup kitchens opened and long lines of hungry, out of work Americans waited for help.

This was only 80 years ago. Maybe your father or your grandfather or an uncle or great uncle stood in lines like this. Today it seems like so long ago, but to those impacted...it was yesterday. Despite the terrible times, people still bought and sold homes. People still realized that they were not alone.

There was a real estate agent available that understood their challenges and their needs and was ready to guide them through the process. There was an agent that was well aware of the condition of the economy and how it related specifically to his clients.

The country recovered and the world went to war. The peace and security of living in America was shattered December 7, 1941. We were attacked. We were at war on two fronts. At home, supplies were rationed. Women went to work. We united in our focus to remain free. Then, the very act that ended the conflict, created a new sense of uneasiness in our lives.

The Bomb

Soldiers returned home. The G.I. Bill was passed. They returned to country they had defended. They returned to a world that had changed. They needed to find new homes. They were not alone.

There was a real estate agent ready to listen to their needs, walk them through the process and make sure that they achieved their goal. There was an agent that understood the current conditions and had the skill to put it all together for them.

It was only 20 years later that Kennedy faced down Kruschev, children of the depression grew up and the economy began to grow. Suburbs were born. Homes were built in once open areas and the day of the commuter began.

Builders and real estate agents saw the promise of housing for more people and began to create new communities for a new lifestyles. In this area, most people are aware of the vision and accomplishments of Jim Rouse.

Take a short drive up 95 from DC and see the wonder of

Columbia, MD. It is a vision come true and community

still thriving and growing and evolving.

It was only 20 years ago that the Savings and Loan's collapsed and the economy faltered. The very institutions that were trusted with our pennies and dimes shut down. Poor oversight, bad loans, bad credit and bad decisions all led to a body blow to our economy. Sound familiar?

People stood in line, hoping to recover money deposited. Bank holidays were called. The feds has to step in and change policy and regulations. Interest rates shot through the roof. Home buyers and sellers were faced with a impossible task.

They were not alone.

Throughout the country, a real estate agent was available to assist them. The agent was aware of the financial system. The agent took the time to listen to their situation, their dreams and hopes. The agent then guided them through the system. The agent worked with them every step of the way. Dreams were still realized.

So, here you are. You are over whelmed with information. You have more resources than anyone has ever had. Every home for sale is listed on the internet. Every possible loan is listed on the internet. You realize that it only takes a url to post anything. You drive down the street and see for sales signs. You read that we have not reached bottom. You hear interest rates are down but may go lower. You just want to either buy a home or sell the one you have and move up.

You are not alone.

Your solution today is the same solution that was used four score, three score, two score and one score ago. There is someone that understands your specific needs. There is someone that can separate the truth from the sound bite. There is someone the professionally deals with buying and selling homes. If you have to buy or sell a home, you really can't choose the time. You have to deal with the market as it is. If you are thinking about a move, it may or may not be a good time. Only a conversation will tell.

You need a real estate agent.

John MacArthur

Realtor

Now, let me confess. This blog is self serving. I want you to "get it". I want you to have a comfort level that I "get it'. I have lived in the DC area for over 50 years. I know DC and I know the Maryland suburbs. This is what I do. I will gladly sit down with you and go over your dreams and give you my opinion of how they can be accomplished. You are not alone. Give me a call 301-537-4377

Things certainly have changed since September 15th. I am sure most of you remember that we were in the midst of a Presidential campaign. There were concerns over the increased number of foreclosures. Wall Street stumbled and all the leaders in DC convened a meeting to determine what could be done to avert the end of capitalism. Poor John McCain offered a sound bite that included the statement that the "economy was basically sound." Obama seized the moment and won the election. I can still hear the hollow mantra that we were going to fix Wall Street but we were not going to forget Main Street.

At that point, no one seemed to be aware of how deeply the economy of the entire world was impacted by the existence of some very intricate and unregulated investment products. When AIG admitted just how dire their situation was.......the revelation opened Pandora's Box. It began the succession of events that put the worldwide investment markets on a reckless roller coaster ride where each bottom is lower than the one that preceded it.

Everything seemed to be impacted. Investors all over the world have been devastated by the crumbling of the value of their retirement. Home values began to fall. Credit dried up. It has only been a few short months but just last week, the experts released the information that we are in a recession. That little kernel of wisdom followed the jobs report which revealed that Americans were losing jobs faster than anyone imagined. Bad news keeps cropping up like new trees in a forest and we can not see either the forest or the trees.

So the President-elect has an ever changing to do list. Problems in the housing market are addressed one day and then put on the back burner the next. As quickly as one solution is proposed, things change and a new one is run up the flag pole. Nothing is happening. We are subject to paralysis by analysis.

I do not hear anything regarding accountability in any of the plans proposed to deal with any of the problems,

Fixing the mortgage/housing/financial Mess

This is a multi-faceted monster. It is not just folks can't pay, let's bail them out. There are several different types of situations out there and some of them are not new. There is not one solution. Each type must be identified and dealt with. We are not seeing a solution because the House and Senate keep offering a broad brush for a situation that needs the skill of pointillism.

We must first begin with.....there is a house (this can be anything from a condo to a detached home). The house is owned by the person residing in the house. This eliminates ALL investors including co-signers. We should only be dealing with people that borrowed money to buy the home as a principal residence.

We should only be dealing with loans that originated at the time of the purchase of the home. If the owner is in trouble because they took an equity line when prices shot up, the owner should not get any relief from a program designed to assist the housing industry.

Now, just what is it that needs fixing? I have read reports that over one million homes are in danger of foreclosure. The one million number sounds very scary when it fills a 12 point bold headline. The impression is given that all of these homeowners are in a pickle because they used a sub-prime mortgage product to finance their home. Inside labels are tossed around like ingredients to a poisonous salad. Guidelines for relief include terms like 2/28 arm or 3/27 arm. The feds bandy about the term teaser rate and loan modification. Not one plan includes the term ACCOUNTABILITY.

Mixing Apples and Oranges?

Mixing apples and oranges only works in fruit salad. Any program that will truly resolve the crisis has to identify the problem (anyone with half a brain can see that there are diverse problems). Once each problem area has been identified and labeled, a specific solution for that problem can be used.

The focus must be narrowed to home purchases that occurred in a specific time period. I would guess that you could narrow the focus to mortgages rendered from 2001 through 2008. I know it is hard to believe, but there are still some lenders using alternative financing despite the fact that their losses are staggering.

Deal with homes that have only one mortgage in one way. Deal with homes that have a first and second trust in another way. Deal with homes that have a first trust and a HELOC (home equity line of credit) in another way.

When dealing with homes that have only one mortgage, break them down into those that have a fixed rate, those that had a teaser rate (these would include the various buy downs eg. 3-2-1) and those that have an ongoing adjustable rate.

When dealing with homes that have a first and second trust, break them down into specific categories as well. Each loan will have it's own peculiar nature that must be identified and dealt with on it's own merits.

We need to toss all interest rates out the window.

Current interest rates on existing loans only obscure the issue. It does not matter what interest rate was set on the initial loan/loans. It is not being paid and therefore is not really a factor in the solution. The fact that there are no payments has frozen assets. The ultimate goal of any plan must include the understanding that frozen assets have no practical value.

This is not a right. This is a privilege.

Home ownership may be many things. It is the American Dream. It is not a right. It should only be accomplished through accountability. If you can pay, you can stay. If your personal situation has changed, you must deal with that in the same fashion others have dealt with changing situations. Homeowners have always been faced with possible health issues, job loss and market fluctuation. The government can not create a massive home ownership entitlement program. The government can only try to correct a problem that exists because the government failed to exercise proper oversight and regulation.

I would humbly suggest that once the various problems are identified, the government step in with a plan that will deal with each type of situation in a unique fashion. There can not be one interest rate chosen for the plan. Research should be done to determine the lowest fixed rate interest that was available in the year that the loan was originated.

Each homeowner that wishes to remain in their home will have to go through a screening process. This process would include the providing the same data provided for a new mortgage. The key factor would be how much monthly income is available to pay the mortgage. Percentages are bandied about and the figure should be in line with reasonable lending guidelines. For purposes of this idea, I shall pick 30%. If 30% of the take home pay can pay the principal and interest (at the lowest fixed rate available in the year the loan was originated) on a 30 year fixed rate loan, the homeowner can be refinanced through Freddie Mac or Fannie Mae or a new entity set up to handle the program. If the homeowner can not qualify for the 30 year loan, they can then see if they would qualify using a 40 year term. If a 40 year term does not lower the payment sufficiently, they can then be qualified under a 50 year term. If they do not earn enough under any of those three options, they do not earn enough to own the home. Foreclosure is not the only viable option. The home can be sold and the mortgage holder would take the loss, just like they did on homes in the past.

If a homeowner can not qualify, accountability indicates that the homeowner losses the home and the credit grantor(s) take a loss for a bad loan. These outcomes can not be avoided totally. We have always had situations in which some mortgages went bad. The problem we need to solve is outside changing situations.

What about those homeowners that don't meet the guidelines?

Folks that refinanced have to accept that they are responsible for their financial decisions. The decision to do a "cash out" refi always carries the risk that the property value may decrease. Loans that carry the caveat of an adjustable rate are always subject to increasing when rates reset. Resolving a housing crisis can not include bailing out those that used their homes as a "cash cow" or "ATM". The decision to use resources always carries the risk that a bad decision is being made. If this sort of decision has made it impossible to stay in your home, you will have to seek another resolution to your problem, sell or accept foreclosure.

If your situation has changed because of health, loss of wages or complete loss of employment, you will have to seek aid via the same route that people in your situation have sought aid in the past. Resolving a housing crisis can not include assistance for those that are in danger of not paying their mortgage due to reasons outside of those that created the crisis.

If the Federal Government truly wants to resolve the crisis, they will have to slow down, and come up with a plan that is comprehensive and just. They can not just throw money at the problem. They must be sure that any solution includes the accountability of those that lent the money and those that borrowed the money.

I think the decision on the puppy can wait.

The sky was not falling all over America. Big chunks may have fallen in Florida, Nevada and California, but there were only minor specks descending on the rest of the county.

OVER THE LAST 5 YEARS THE OVERWHELMING MAJORITY OF MARKETS CONTINUE TO SHOW A CUMULATIVE VALUE GROWTH. THOSE ARE THE FACTS.....HOME VALUES HAVE INCREASED IN MOST MARKETS.

The Federal Housing Finance Agency released a report right around Thanksgiving. Most headlines focused on the financial mess or the bailout or the increase in foreclosures. This report was overlooked and under reported. It stated that out of 292 metropolitan markets, 273 showed positive net home values over the course of the previous five years. The survey did verify that prices were down 4 percent over the last year but still showed a gain of 29 percent over the last five years.

These are just the facts. If you bought a home in 2003, today it would most likely be worth 29% more than you paid. All the wheeling and dealing that occurred at the end of the boom have created a cloud that obscures reality.

Now, here is the pertinent fact about the study. It only covers conforming loans. It does not cover those jumbo products. It only covers loans backed by Fannie Mae and Freddie Mac. Homes financed via sub-prime financing are not included.

This report should offer comfort to first time home buyers. Most of them will be using loans that are backed by Fannie Mae or Freddie Mac. Most of them will be seeking property that is priced within conforming loan guidelines and limits. Most of them can ignore the ramblings of all the Chicken Little's out there.

Buying a home now is not the risk that the media portrays. Buying a home is not an investment decision but it is nice to know that there is a very good chance that five years from now your home will be worth more than it is today. Buying a home is realizing a dream, security and shelter.

First time buyers should be delighted. Inventory is up, prices are down and interest rates are affordable. It is truly a great time to buy a home.

If you would like to discuss your goals and dreams regarding the purchase of a home, call me at 301-537-4377. It would be my pleasure to share the truth about the market with you.

I don’t really have any.

Oh, I know that the media has painted my future with a broad brush of gloom and doom. It would only seem reasonable to think that my ability to earn a living or continue living in a style that I have grown accustomed to in recent years may not be in the cards for the foreseeable future.

The frequency of deals has diminished over the last eighteen months. Things have changed in the market. There are fewer buyers available. In this area, it seems that at least half the homes for sale are not really for sale. Referrals from outside sources have become a trickle. The real estate atmosphere has taken on a pale that is far from conducive to supporting optimism.

So, why should I or any other Realtor keep plugging along?

It is who I am ! ! !

I have not been a Realtor forever. I imagine my tenure is minute compared to many that are still efforting in this arena. I have been a pump jockey, mechanic, deliveryman, retail manager, roofer, builder, preacher, bill collector, wholesaler, banker, printer and artist/poet. Trust me…the artist focus created all the ancillary jobs to support my art. I am a grandson, son, brother, father, husband and friend.

I was never seeking to have my art grace the walls of the MOMA or have my prose included in textbooks. I was merely moving through life trying to share my visions of the world around me in visual and written media. I was serving that little ego voice that tells us all that we are making an impact on the world.

Then ………………………… ….someone blew up my world and yours. The world that existed before 9/11/2001 was forever changed. The boogey man that hid under our bed, the monster that hid in our closet, the self doubts that churned in our mind all combined to slam into the World Trade Center. Every day since then, that dramatic reality has been part of our existence.

Some bought duct tape, some joined a church, some joined the military… as for me, I became a real estate agent. I can look back and see all the pieces that fell into place that led to my entering this profession. I can see that all the different jobs and homes in my past led to the natural immersion into this profession.

I have been told that I got in when the getting in was good. The market was hot, prices were going up and interest rates were falling. To be honest, I was too dumb at the time to understand. I was not part of the real estate history. I was not cognizant of the past or what was occurring. I was too busy trying to establish a career to notice.

I quickly discovered that I truly could make a difference in the world, one family at a time. I did not know that anyone was ranking agents. I did not understand production levels and splits and any of the trappings surrounding the profession.

I had but two major focuses in the beginning……….

The Law The American Dream

I learned real estate law. I saw the simplicity of the process if you just used the law as a basis for every action. It was very simple. It was black and white. It was comforting. I listened to my clients and learned that owning a home remains a major piece of the American Dream. I learned that if I listened to their needs and used my new skills to accommodate their needs, I was making a difference in the world. I had a purpose beyond ego gratification.

I soon saw the freight train of financial market disruption coming down the tracks. I noticed that the number of agents in my office was decreasing. I felt the impact of a changing market.

I did not lose my desire to make a difference.

Next week, Americans will celebrate Thanksgiving. I still remember Thanksgiving in 2001. I was thankful that my niece working in the World Trade Center area was safe. I was thankful that the attack, as horrific as it was, opened all of our hearts to a rededication of purpose in many facets of our life. I had many jewels in my thankful crown that day. I worked serving the homeless in Washington DC. I made a personal decision that I would find a way to give back to a society that had given me so many opportunities. I would find a way to repay all the strangers that stopped and admired a painting in progress or dropped a dollar in my guitar case as I sang on a street corner.

This market may be tough. It is no different than any other market. People still dream. People still need to change housing. People still need advice and guidance.

The people that have crossed this six plus decade path have never given up on me. I will not give up on them. I will sit down to a fine turkey dinner this year and I will recommit myself to working harder to become available to those that need my services. I will work harder to become an even better listener. I will work harder to understand the constant flux of my market.

I will not quit. I will become better. After six years, it is who I am.

If you would like to chat about the DC market, if you would like to know how your tiny piece fits in the overall puzzle, if you would like to sit down and talk with someone that will actually listen to your dreams and focus on your desires in real estate, call me. I can be reached at 301-509-5111. If you would prefer, you can drop me a note at macarthurgroup@gmail.com It is my privilege to continue offering my service to you.

Olney Golf Park is located just south of town on Georgia Avenue. The actual address is on Emory Church Road. It is a short drive for any golfer in the area. There is plenty of free parking.

The Golf Park has a fully stocked pro shop. The staff is well versed in all of the merchandise and there are actually professionals that offer club fitting. Other amenities of pro shops are also offered including club fitting.

It is not a driving range. It was never intended to be a place where folks could just let out the shaft and bang golf balls for thirty minutes. If that is your pleasure, you will be accommodated.

If you want to maintain or improve your game…this training facility is for you!

The above picture gives an overview of the site. You don’t see the large practice putting green. You don’t see the smaller green used for chipping. You don’t see the bunkers for working on sand play. You have to see it to experience it.

The good folks at the Olney Golf Park have a website which is http://www.olneygolfpark.com

Now, there are many that are aware that very quietly, the ownership at the park has offered their facility as an avenue for recreation to our wounded troops recuperating at Walter Reed. This has been featured in the Army Times http://www.army.mil/-news/2008/05/08/9056-salute-military-golf-helps-wounded-get-back-in-swing/

If golf is your game, you can sharpen all the tools right here in Olney. Your support of the Golf Park will also enable them to continue their support for our troops as they come home.

Now, that with a lower handicap, is a WIN WIN situation.