Valerie McNeal, CDPE, CRS, GRI,

		Valerie McNeal, CRS, GRI, CDPE RE/MAX Sails, Inc. Direct (443) 405-3587 Office (410) 814-2455 Cell Phone (301) 704-8129 Fax (866) 431-0427 Valerie@TheMACTeam1.com http://themacteam1.com
Setting The New Standard In Baltimore Real Estate

I hope you will find the following snapshot of local Real Estate inventory interesting. The table represents aggregated values based on MLS data for the specified date. Housing Inventory Snapshot November 28, 08 Average List Price Median List Price Average Days On Market Anne Arundel County, MD Single Family under $500K $342,451 $340,000 134 Single Family over $500K $1,048,864 $775,000 178 Condo/Townhome under $300K $207,885 $228,500 112 Condo/Townhome over $300K $493,437 $380,000 136 Baltimore County, MD Single Family under $500K $300,768 $289,000 134 Single Family over $500K $908,708 $699,900 146 Condo/Townhome under $300K $185,738 $185,000 118 Condo/Townhome over $300K $439,827 $374,900 132 Baltimore City, MD Single Family under $500K $260,451 $249,000 129 Single Family over $500K $851,310 $675,000 166 Condo/Townhome under $300K $134,973 $129,900 138 Condo/Townhome over $300K $566,621 $425,000 155 Howard County, MD Single Family under $500K $383,352 $387,500 117 Single Family over $500K $843,601 $699,900 150 Condo/Townhome under $300K $225,213 $235,000 111 Condo/Townhome over $300K $401,843 $368,000 114 Montgomery County, MD Single Family under $1M $501,407 $459,000 122 Single Family over $1M $2,038,248 $1,649,000 130 Condo/Townhome under $600K $263,489 $245,000 120 Condo/Townhome over $600K $1,018,109 $830,000 122 Prince Georges County, MD Single Family under $500K $295,143 $294,000 132 Single Family over $500K $756,465 $630,000 197 Condo/Townhome under $300K $207,255 $215,000 125 Condo/Townhome over $300K $350,956 $335,000 130 District of Columbia (DC), DC Single Family under $1M $419,556 $350,000 116 Single Family over $1M $3,216,233 $1,995,000 110 Condo/Townhome under $600K $318,211 $299,900 120 Condo/Townhome over $600K $1,161,982 $865,000 110 MORTGAGE. National Averages (November 28, 08)* 30-year fixed Rate - 5.73% APR - n/a% 15-year fixed Rate - 5.62% APR - n/a% 5/1 ARM Rate - 5.10% APR - n/a% * Mortgage rates were collected from publicly available sources (yahoo.com) on the date stated. The accuracy of the information and the availability of these rates are not guaranteed by the publisher. Rates are provided for informational purposes only and are subject to change without notice. Actual market interest rates may vary.

If you know someone who is considering buying or selling a home, please give me a call. I will provide professional & courteous service along with knowledgeable guidance through the process.

With very best regards, Valerie McNeal, CRS, GRI, CDPE RE/MAX Sails, Inc. Direct (443) 405-3587 Office (410) 814-2455 Cell Phone (301) 704-8129 Fax (866) 431-0427 Valerie@TheMACTeam1.com themacteam1.com

I am a Real Estate Agent in the Baltimore Metropolitan Area focused on keeping people updated on the current Real Estate Market. Feel free to respond to my blog to create a real estate educational platform. There is LOTS to chat about from loans to average sales prices, negotiating a good deal in this crazy market or deciding if this is the write time to sell to take advantage of low home prices to move to a larger house. Let me here your thoughts.

Valerie McNeal, CRS, GRI, CDPE, RE/MAX, 443-405-3587, or Valerie@TheMACTeam1.com, www.TheMACTeam1.com

By Lorraine Mirabella | lorraine.mirabella@baltsun.com December 11, 2008

Realtor Noelle DeLeon removes the sign after holding a broker's open house with associate Patricia Kallmyer Wednesday in Eldersburg. (Baltimore Sun photo by Doug Kapustin / December 10, 2008)

In a sign that more homeowners are lowering their expectations to sell in a difficult market, house prices in the Baltimore area fell last month to the lowest level in more than three years.

And the drop in home sales, which had been leveling off, accelerated in November, sliding nearly 33 percent on a year-to-year basis, according to numbers released yesterday by Rockville-based Metropolitan Regional Information Systems Inc.

Experts said the turmoil in the economy and tighter credit markets over the past few months continue to take a toll on housing values and sales, with rising joblessness adding to buyer anxiety.

In November, the U.S. lost the most jobs in a single month in more than three decades, and local employers have announced hundreds of layoffs in recent weeks.

"If people were nervous in August, they're now really, really nervous. Each month you hear about new job losses and people wonder is it going to be me," said Daraius Irani, director of applied economics for the RESI consulting arm of Towson University. "Everything is being driven by a lack of consumer spending, and housing is no different."

The average price of a home sold in November decreased nearly 8 percent to $284,129, the lowest monthly average price since spring 2005 and the largest percentage drop since the housing slump began.

"The real question is at what point does that price drop mean people start moving off the sidelines, because affordability has definitely improved," said John McClain, a senior fellow at the Center for Regional Analysis at George Mason University. He said he doesn't foresee an upturn in sales until at least spring.

In sheer numbers, fewer sales overall are occurring than at the height of the housing boom. Total home sales slid to 1,270 in November, down from 1,892 in November 2007, statistics showed. That contrasts with a peak of more than 5,000 sales in a single month in June 2005.

"It's a bigger decision than buying a flat-screen TV," Irani said. "When times are uncertain, people are not thinking about diving into the housing market."

With housing inventory at more than 19,000 properties across the metro area, the average time it took to sell a house lengthened to just over four months, a 21 percent increase in the average days on the market recorded in November 2007.

Real estate agents said they've seen sellers become more willing to accept offers well below asking price. The MRIS statistics show that November's sellers got, on average, 89 percent of their asking price.

"It's astounding what sellers are willing to take," said Patty Birth Kallmyer, an agent with Prudential Carruthers Realtors, noting that several recent sales had home sellers agreeing to accept as much as 15 percent below list price. She said the sellers who are finding buyers faster - and attracting more than one offer - are those who have priced at about 10 percent below market rate.

Many of the buyers out there now are first-time buyers taking advantage of lower prices and the many incentive programs to help people buy a first home, she said.

"Certainly the pricing is very attractive," Kallmyer said. "People are still trying to get deals," with buyers often looking at homes well above their anticipated price range with the hope of negotiating a lower price. "We have a huge pipeline of buyers contacting us, saying, 'We see these prices and can't believe it. I think we should start looking.'"

Other potential buyers are waiting for mortgage interest rates to drop further, after the Federal Reserve announced last month intervention designed to make financing less costly and more readily available for borrowers with good credit.

"There's a lot of tire-kicking going on," but many who want to buy simply don't have good enough credit to qualify for loans, said Meg Bober, an agent with Long & Foster Real Estate. "It's not a fun market by any stretch of the imagination."

Despite the market, Kevin Maggio and his wife, Karen, decided to put their four-bedroom Colonial in Eldersburg up for sale and move up to a larger home to accommodate their six children.

Because they have lived there eight years and upgraded with an addition and other features, the home has appreciated in value. Still, they didn't expect to bring in the average $550,000 that sellers in their neighborhood were getting a couple of years ago. They priced the home at $515,000 and recently lowered the price to $505,000.

"I'm not concerned so much" about the housing market, Kevin Maggio said. "I don't have to move, per se, but for me it's an opportunity to move into something larger."

He's also not too worried about finding a larger home whenever his house sells.

As a buyer, "there's a lot of deals because of what has happened with the mortgage crisis," he said. "There are a lot of short sales and foreclosures, and that's where the deals are. We're finding that out."

In the metro area, the average sales price fell the most in Baltimore County, which saw a 12.2 percent decline to $278,591. The average sales price rose only in Baltimore City, by 1.1 percent to $179,716.

1. What is a short sale?

A short sale is the process by which homeowners can sell their home for less money than they actually owe on the mortgage(s). This is accomplished by providing proper documentation to the lender(s) to convince them to reduce the mortgage balance to allow the sale. If the sale is approved, the mortgages lender(s) will actually take a loss on the mortgage.

If a bank approves the discount of a mortgage, the home can be sold for a price lower than the total debt on the property without the seller having to come up with cash to cover the shortfall. The mortgage is satisfied and any foreclosure process stops.

2. Why would a bank or mortgage lender want to cooperate with a short sale?

A common saying is that banks are in the business of lending money and do not want to own real estate. While this is a little misleading, it is essentially true. When banks foreclose on a property it is a long and expensive process and generally means holding the property in their inventory as a non-performing asset. Banks have a limit to the amount of non-performing assets they want to hold. Once this limit is exceeded, they have strong incentives to get rid of the properties at discount prices.

For a lender, agreeing to a short sale avoids many of the costs associated with the foreclosure process. Attorney's fees, delays from borrower bankruptcies, damage to the property, costs associated with resale, property tax, insurance, etc., must all be paid by the bank during a foreclosure. In a short sale scenario, the lender is able to cut its losses by getting rid of the property faster and at a lower cost.

3. How does a bank determine the price it will accept on a short sale?

Every bank has a specific method of deciding how much they'll accept on a short sale. Give me a call, Valerie McNeal, Certifed Distressed Property Expert at RE/MAX of Baltimore, 443-405-3587 and I'll explain it to you.

4. Can I really get a deal on a short sale home?

Yes, you can, but not every short sale is a deal. You still have to do your research and estimate the current market value of the home. This is one of the areas where a knowledgeable real estate agent's level of experience really pays off.

5. Who pays the real estate commissions on a short sale?

In a standard sale, commissions are subtracted from the seller's funds and paid out of escrow to the Realtors. In a short sale, the seller has no funds in escrow which means the commissions end up being subtracted from the monies that would go to the lender. So, the lender ultimately is the one paying the entire sales commission.

6. Are short sales guaranteed to work?

No. All of the criteria must be met before a bank will even consider a short sale. Even then it isn't easy to convince a bank that the market value of the home is lower than what they are owed.

Even if all the paperwork has been correctly completed it can take several weeks, or even months, only to be denied. If the lender does not approve the short sale, no transaction occurs. The Purchase Agreement becomes void and the listing continues. There are, however, ways to put a time limit on the lender's time to issue approval.

7. How long does a short sale take to complete?

From a few weeks to several months. All cash purchases can move rather quickly through the transaction.

8. What if the house I want needs repairs.

Remember, when an owner short sells their home it's because they are suffering a financial hardship. This means there is no money for repairs and as a buyer you can't reasonably expect the seller to do much in the way of repairs. The good news is we have had some success convincing lenders to repair termite damage and to make reasonable repairs relating to safety. But, this type of cooperation is dependent on the expense involved, the nature of the repair and the purchase price being paid.

9. What if the house I want has liens on it?

Liens can complicate matters because the owner will not have the financial capability of removing them. Depending on a number of factors, including the real estate market and the purchase price, the lender might be persuaded to clear the liens. Or, sometimes the lien holders themselves might be convinced to reduce their liens. A short sale in this circumstance will take substantially longer.

10. I'm an investor, can I buy a short sale?

The simple answer is yes, you can. However, there can be serious complications. Give me, Valerie McNeal, Certified Distressed Property Expert at RE/MAX of Baltimore, 443-405-3587 and we can discuss the issues which apply to you.

11. Can I buy the short sale for the price stated in the listing?

An experienced Realtor can quickly tell you whether or not the property is priced unusually low. If so, the home was probably intentionally priced that way to attract offers and to prompt the lender into letting the Realtor know what price it will accept. In which case, the chances of buying the property at the asking price may not be very good.

On the other hand , the property might be priced correctly and your chances of getting the property at the asking price will be reasonably good.

12. How long will it take to get bank approval of my offer?

The answer to this question depends on the expertise of the listing agent, which banks are involved, and how many loans are on the property. Once approval is obtained, the property can go into escrow which takes no longer than a standard sale.

14. Will the banks negotiate on price?

Yes, to a degree. The price accepted is dependent the most recent sales in the neighborhood of the subject property as well as property condition and location.

15. Do I get title to the property when I buy a short sale?

Yes, title is transferred to the buyer at the close of escrow, just like a standard sale.

For additional information regarding Short Sales, Please call:

Valerie McNeal, Certified Distressed Property Expert of RE/MAX of Baltimore at 443-405-3587, or visit www.TheMACTeam1.com.