F. Hill Slowinski, JD

Vacant Property Tax, ‘Economic Interest Tax' on Co-operatives

Focus Now On "Blighted" -- But Wait For Final Release

From October 1, 2008 to September 30, 2009, the District of Columbia taxed vacant properties at $10 per $100 of assessed value (rather than the residential tax rate of $.85 per $100 assessed value) , unless property owners applied for one of several exemptions within 30 days of the property becoming vacant. As of October 1, 2009, DC has changed its focus to ‘blighted' property, not merely vacant property. However, since DC has not released the relevant amendments and legislative language to the public, owners should continue to treat their ‘vacant' property as requiring a vacancy exemption or risk being re-classed at the higher tax rate.

Co-operatives Sales and Transfers Now Taxed

In another change, buyers of co-operatives in Washington had been exempt from paying transfer and recordation taxes because ownership of shares in a co-operative corporation was viewed as a security interest and not ownership of real property. This change is effective October 1, and the DC government has begun charging an "economic interest tax" on the sale and transfer of co-operatives. The rates are 1.1% on co-operatives with a market value of less than $400,000 and 1.45% for co-ops valued at $400,000 and higher.

Third Quarter Results Show Prices Stabilizing, Confidence Building

Led by a surge in single-family sales, new contracts for all residential properties jumped a very impressive 38% from last September. Nine months into 2009, combined sales are 13% ahead of those at this point in 2008 and the gap between the top of the market in 2004 and now has narrowed to 28%.

There was a slight (2.4%) increase in the number of properties on the market at the end of this September from the same point last year; but with the increase in sales, the effective inventory of homes and units on the market today is down to 3.7 months (higher for condos and co-ops than for single family homes) as compared to 4.9 months in September of 2008.

The average sales price of single family homes, condominiums and cooperatives declined slightly from mid-year but the decline was small enough (in the 2.5% range) to suggest that we may be approaching the bottom.

Single Family Homes

There was a sudden sharp upturn - up 40% from last September -- in the number of new single family contracts in September. Year-to-date, new contracts were up 21% from a year ago with these gains largely coming from homes priced under $800,000 (over 80%). Home sales are lagging above $800,000 and particularly those over $1,250,000.

Rather surprisingly, fewer new listings came on the market this September than a year ago and with stronger sales the inventory is down nearly 19% from this time in 2008. Some potential sale homes may have been diverted to the rental market for a year or two (See recent articles at: HillSlowinskiRealEstate.com and HillSlowinski.com). This has left only a 3.4 months supply of homes currently for sale, which is lower than it has been for years.

Average sale prices are presently off 16% from the end of last year but they are down only 1% from mid year. Median prices are down a similar amount from 2008 but they were actually up a fraction from the end of the second quarter in June.

Condominiums and Cooperatives

New contracts on condominiums and cooperatives rose 35% over September of 2008. The largest increases over last year were in the $200,000 to $300,000 range (up 48%) and the $500,000 to $800,000 range (up 52%).

Through nine months of 2009, contract activity on condos and co-ops is up 5% from the same point last year. Most price categories show slight losses or gains from 2008. The most activity for the year has been in the $300,000 to $400,000 range (28% of the market) and that range is ahead of 2008 by 12%.

The inventory of available units at the end-of-September is 13% lower than at the same point last year. The effective inventory actually went up slightly to 4.17 months. The average price of a condo/co-op in the District is even with 2008 prices at this point, while the median price is down 1%.

Summary

All of this strongly suggests that the decline in single family home prices is nearing an end, but it will take months, probably into next year, before we begin to see even small gains. With sales apparently on the upswing we can anticipate seeing prices stabilize by late this year or early 2010 but price increases are likely to be modest, at best, after that. Sales were stronger than any other month this year and all the way back to June of 2005. Favorable interest rates and concerns that the first-time buyer subsidy may not be renewed certainly contributed to this, but the strength of this upturn certainly indicates at least some improvement in consumer confidence about our local housing market.

"It's all about my clients ... "

When clients engage me, either with the renowned Washington brokerage of W.C. & A.N. Miller
REALTORS®, exclusive affiliate of Christie's Great Estates, or with Sloans & Kenyon in its marketing
association for their luxury real estate needs, they find my service levels cannot be matched.
My clients understand and appreciate the need for the extensive resources and professional services
of a full-time, experienced, dedicated REALTOR to purchase or market their largest asset.
I always have time to help you, your friends and neighbors, and family. My goals are to provide
excellent service, to fully represent you, and to exceed your expectations.

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You've heard it before, the three most important attributes of real estate -- 1) Location, 2) location, and 3) location. Real estate is local. In these economic times, some experts will tell you that in your neighborhood or general location now is not the time to sell your home.

But selling might be the only option if you have to move for work, are selling an unused family or vacation home, or are committed to another new home elsewhere.

Fortunately, most clients I serve in Northwest DC, Montgomery County, and Northern Virginia are seeing stabilization in prices. But no matter where you are, it is wise to consider the following tips to help you get the most in your transaction:

• Call me first rather than simply posting "For Sale by Owner" signs in your front yard. The commission I earn is worth its weight in the assistance and advice you'll receive in return. I have experience selling in these markets and I offer a free Homesellers Handbook to get you started.

• You'll also want to make sure your house is priced correctly, that is, priced for the current market regardless of what you think its true value is. Although it can be tough to take a loss, your house may never sell if it's priced incorrectly. To offset this, I can help your house sell faster by being more proactive about marketing. I use Voice Pad technology and additional Internet resources such as Craig's List and YouTube, my real estate blogs and websites, and many secondary internet sites to reach a much wider audience.

• For further assistance, you may want to think about enlisting a staging company or an interior designer. This can seem counterintuitive when money is a concern. But studies show that staged houses typically sell in less than half the amount of time as their unstaged competitors - and for more money. In other words, your small up-front investment in new paint, accessories, and landscaping can end up saving you money in the long term. I have a special list of proven contractors and vendors I and my W.C. & A. N. Miller Realtor colleagues have used for recommendations to you. You can do a simple search for a provider in your area on our website.

• Even with the help of a staging company, however, you will still need to make any necessary improvements and repairs to your house to keep it competitive with other houses on the market. Again, I can recommend many proven, established contractors and vendors W.C. & A. N. Miller Realtor colleagues and I have used. Be sure these changes have a good return and will not cost you more than they're worth. If they do, you may want to consider offering the buyer a cash allowance toward the repair instead.

You may believe now may not be the best time to sell. But that doesn't mean good home sales aren't made every day. Contact me to help ensure your home is ready for a good offer by making smart choices.

Hill Slowinski, licensed in DC, MD, and VA

W.C. & A.N. Miller Realtors, A Long & Foster Company

4701 Sangamore Road, Bethesda, Maryland 20816

Cell: 301-452-1409 Direct: 301-320-8430 Ofc: 301-229-4000

Email: hslowinski@longandfoster.com or Hill@HillSlowinski.com

Early 2009 Market Results: Increased Activity for Buyers and Sellers

We are two-thirds of the way through of the 2009 Spring Market, and we have had a roller-coaster of regional activity - some areas have popped up in sales, others suddenly are flat - on both sellers' and buyers' sides. The news on the economy swings daily from good to bad to good. Nevertheless, I have more successful sales transactions!

The popular price ranges of interest have dropped some 20%, and sometimes more, depending on the location. Real estate is local.

For my clients, the real bottom line has been price, and price alone. This month, for example, my newest listing received multiple offers and was under contract in just 7 days! And, one of my older listings had a significant price improvement, received an offer within 3 weeks, and settled two weeks later!

Buyers will buy homes that are priced correctly. They have researched the market and know what is available. Owners of homes not yet sold and whose price has remained unchanged 30+ days must make the next price change significant and noticeable to a new set of buyers as all potential buyers at the current price have passed them by and bought lower priced homes. At the least, they have rejected the current price, and there is more inventory from which buyers can chose their next home. Buyers can lose interest in a particular home quickly in this market.

For sellers, it is no longer a matter of ‘leaving money on the table' or ‘giving the house away'. There is nothing on the table or being given away when there are no offers to begin with. The market will establish the price for the home, not the seller, and not the seller's agent.

The difficult challenge is finding the right price at which it will sell. So I deeply research the market and listen to all comments on my listings, and I present successful selling strategies fresh from today's market reality and experiences. And I get results for my clients.

Hill Slowinski, licensed in DC, MD, and VA

W.C. & A.N. Miller Realtors, A Long & Foster Company

4701 Sangamore Road, Bethesda, Maryland 20816

Cell: 301-452-1409 Direct: 301-320-8430 Ofc: 301-229-4000

Email: hslowinski@longandfoster.com or Hill@HillSlowinski.com