Who is your neighbor....?

I got a call yesterday from a client to tell me about her new neighbor who happens to be 'Obama's speechwriter'. She was 'Tres EXCITED'. She think she might invite him over for tea. How did she find out? This article in the New York Times. Hmmmmmm.... I wonder who my neighbor's are?

(An aside- the last two weeks have been insanely busy - and it is DECEMBER! Maybe this - and the fact that interest rates went down quite a bit
Location! Location! ... Obama!

THESE days, the capital’s top real estate brokers are keeping more secrets than usual.

Or trying to, anyway.

Driving around town on Tuesday, Terri Robinson, the longtime Washington real estate agent who was responsible for selling the Clintons their $2.85-million house on Whitehaven Street, said she has seen a trickle of high-profile newcomers in the early days of December.

“I have to be discreet, you know,” Ms. Robinson said, before letting it slip that she was en route to meet a client: Jon Favreau, the chief speechwriter for President-elect Barack Obama, who was about to sign the closing papers on a luxury condominium in the Dupont Circle neighborhood.

On Wednesday, Jim Bell, a broker who deals in some of the city’s most expensive enclaves, said he had just given a tour of a six-bedroom Spanish-style house on California Street in the exclusive Kalorama neighborhood — for the wife of a very important soon-to-be Washington official.

“I can’t tell you who it was,” Mr. Bell said conspiratorially. “But it was a $3-million showing. For someone coming in from Chicago.”

He continued: “Their advance people have already been inside the house twice. Two different groups.” (The second group, he said, was the Secret Service.)

There have been a lot of potential buyers from Chicago quietly descending on Washington this month, according to real estate brokers. Multimillion-dollar homes have been snapped up in all-cash deals. First-time buyers have toured apartments in the fashionable neighborhoods of Logan Circle and the U Street corridor. Big-money donors have gone house-hunting in the upscale blocks of Kalorama and Georgetown.

Yes, change is coming to Washington — at least it in the real estate market, which is loosely segregated by both race and party, and thus subject to abrupt shifts in population every four or eight years.

Take the last eight years of Republican rule. Georgetown, for decades the fabled center of the city’s power elite, was said to have been displaced by the bucolic Virginia enclave of McLean, or “the new home of America’s ruling class,” as The New Republic put it in a 2006 cover story.

Now as the Obama Democrats begin their move to Washington, they appear to be moving the center of power back to the district. Moneyed Democrats are still attracted to Georgetown and Kalorama, young families to Chevy Chase and Capitol Hill, and 20-somethings to Adams Morgan, U Street and Logan Circle.

In the last month, there has been a sharp increase in interest in properties across the district, in both upscale and gentrifying neighborhoods, said Jim Firkser, an agent with TTR Sotheby’s International Realty.

THE surge in interest, from Democratic administration officials, diplomats, journalists and big-money donors, has given real estate agents across Washington a glimmer of hope amid a cratering national housing market.

Fred Kendrick, a broker for TTR Sotheby’s who writes a monthly housing report on Washington, said the local market had remained relatively flat all year, until sales hit a wall in October — down 20 percent from the previous October. (So far in 2008, the average single-family house in Washington sold for $682,428, down 1 percent from 2007.)

But last week saw a trickle of significant sales, including five houses in Georgetown priced from $1.5 million to $5 million.

And Mr. Kendrick predicted there would be more to come from new members of Congress and the Obama administration, some of whom have recently purchased property.

“The assistant secretaries, the undersecretaries, they’ll buy,” he said, adding that some announced Obama Cabinet nominees — Senator Hillary Rodham Clinton, for example — already own homes in Washington. “I’m thinking: ‘Please, appoint some people who don’t live here. Help us out a bit.’ ”

Some Obama advisers — Chicago transplants like Valerie Jarrett, a senior adviser, and Desirée Rogers, the new White House social secretary — are starting from scratch in Washington. (After her appointment was announced Nov. 24, Ms. Rogers said in an interview that she had not found a place to live yet.)

Rahm Emanuel, Mr. Obama’s incoming chief of staff, lives in a basement apartment on Capitol Hill but has told friends that he will shop for a house when his family relocates from Chicago in the spring.

Many Republicans who are out of official power will stay in Washington, and many incoming members of the Obama administration (Eric H. Holder Jr., Bill Burton) already have homes here.

But the younger set is settling in Melrose Place-like proximity around 16th Street in Dupont Circle, one of the city’s grander thoroughfares that also happens to lead directly to 1600 Pennsylvania Avenue, a mile away.

After a weekend of searching in mid-November, Mr. Favreau bought a condominium in the Chastleton, an eight-story Gothic-style luxury building, where Gen. Douglas MacArthur once lived. It will be a dramatic switch from his most recent housing situation, where he shared a house in Lincoln Park with other Obama staff members.

“In Chicago, we lived in a house with seven people,” Mr. Favreau said. “Everyone’s pretty much staying close together here.”

Ben LaBolt, an Obama spokesman, moved into an apartment several blocks away from Mr. Favreau. A short stretch from there is the apartment shared by Katie McCormick Lelyveld, a spokeswoman for Michelle Obama, and her boyfriend, Tommy Vietor, a spokesman for Mr. Obama.

And supporting the old real estate adage that Democrats rent and Republicans buy, a healthy number of young Obama staff members will settle into rentals. Reid Cherlin, another Obama staff member, has moved into a rental in the Dupont Circle neighborhood.

“A lot of the people who are coming in are kids,” said Pat Kennedy, a Washington broker who also writes Capital Homes, a real estate blog. “I think they’re going to be looking for rooms and group houses on Craigslist.”

One broker cited the hangers-on, Democrats who don’t work for Obama but just want to get in on the action. “Three weeks before the election, several Obama-related people, big-money supporters, started buying properties here,” said the broker, who asked to remain anonymous because the deals were confidential. “These are people who aren’t even working for the administration. They just really want to be a part of the movement and a part of this moment in time.”

While it is still too early to tell if the change in administration will have a lasting effect on the real estate market, one broker said that the last time there was such a potentially large swing was when the Republicans seized control of Congress in 1994 and the Democrats left town en masse.

“People are predicting that there are going to be 40,000 transactions,” Ms. Kennedy said. “And people who have houses on the market or are about to put them on, think the Obama people are going to be their salvation.”

But the people who may suffer the most are the Republicans who are leaving town and trying to unload their properties. After all, home prices have stalled, Ms. Kennedy said. “I do have one listing from a Bush administration official, who’s going back to California,” she said, clucking her tongue at the timing. “I guess the Bush people’s loss is the Obama people’s gain.”

NEW YORK TIMES. PUBLISHED DEC 5th by By JULIE BOSMAN

Happy homeowner and their happier dog :)

Occasionally, when dealing with the first time homebuyer programs that are administered by the government or a non-profit, the process can be 'a tad bit' aggravating. However, most of the time, these are the best financing deals in town. As an agent, I have learned to keep things in perspective, remember the eventual goal, and keep calm when working on a transaction that involves these programs. And I love that my clients remembered to 'Keep Calm, and Carry On.

Here is a lovely referral from my clients- TL and ND.

When my partner and I met Atieno, I was just starting to warm up to the idea of purchasing a home—it seemed like such a big responsibility. And, we had some serious hurdles to jump: our liquid assets were minimal after paying off debts; we didn't want a lot of out-of-pocket expenses at closing to ensure we had a buffer should something go wrong; we had a price range that was a squeeze considering our very specific needs including a central location in the DuPont/Logan/U St area; my partner's wants were very different than mine, if not contradictory; and, we were scared to leave our home and neighborhood in the West End after four years of residence.

These were just some of our many concerns. Ati took on us and all of our challenges—I would be the first to say how scary it must have been. She dedicated the time up-front to learn about all of our needs and wants. As a result, the first condo on our second day out, she hit the nail on the head. She found a place on which my partner and I somehow both agreed, which lived up to our picky expectations. And, it had several bonuses: a wood burning fireplace, a courtyard, a private back patio, and an extra 250 sq ft.

When the real problems cropped up with financing(we were looking to get a complicated loan in the midst of the largest financial crisis of our lives), my partner and I were tense and frustrated trying to keep things moving along—trying to manage tight deadlines, our landlord, work responsibilities, and a week-long trip out of the country. Ati worked through our many complications and even our own meltdowns as we tried to figure it all out. It wasn't long before she kept repeating the somewhat unknown motto of King George VI during World War II, "keep calm and carry on". She lightened things up in the midst of drama, maintaining her wits, humor and calm while providing an ear to listen and words of wisdom.

In the end, it all worked out near seamlessly. The seller paid our closing costs. Through the DC Bond program Ati suggested, we were able to obtain a down payment. We kept our cash in hand. Now, just two short months from where this all started, we have settled into our gorgeous new condo in Logan. We have already begun to make it our own. Our Chihuahua puppy is enjoying the courtyard. We are looking forward to utilizing the fireplace throughout the winter and the private patio in the summer. The neighbors are friendly and welcoming. We couldn't be happier!

We have Ati to thank for changing our lives for the better. She not only walked us through the seemingly impossible process, she nudged us when we had trouble making decisions. She listened to our concerns. She made sure we were always comfortable. And, most importantly, she got us a home and investment for our future. I am pleased to consider Ati not only my agent and real estate mentor, but my friend.

How to raise your credit score

The folks at Money Magazine put together this great article on credit scores. Check it out:

To borrow as cheaply as possible, it helps to nudge your score from good to fabulous. Hoisting your number from 650 to 770 can save $3,100 a year on a 30-year, $300,000 mortgage.

Here's how your score is sliced and diced - and how to kick it up a notch. Remember: The bigger the slice, the more it affects your score.

• 35% Your payment history Pay your bills on time. Automating payments online can help.
• 30% How much you owe Keep balances on credit cards and other revolving accounts below 50% of your credit limit (lower is better).
• 15% Length of your credit history Rather than let old cards go dormant, charge a latte a month (then pay it off). No activity lowers your score.
• 10% Your new credit Don't open unnecessary new accounts. And if you're rate shopping for a mortgage or an auto loan, do it within two weeks; multiple requests could ding your score.
• 10% Your mix of loans You can't do much to change this (except get a credit card if you don't have one).
• Bonus Request a free copy from each of the three major credit-reporting agencies at annualcreditreport.com. Then tell them about any mistakes you find that are not in your favor.

Showing Instructions

Every so often there is something really funny on the Multiple Listing Service (MLS). Most of the time it is a really poorly worded, or the spelling is atrocious. For some reason, folks CANNOT spell the word STRICTLY. (always misspelled STRICKLY/STRICLY!) Sometimes the person just plain failed out of grammar school- like this posting that I borrowed from fellow realtor buddy's blog- James Downing:

REMARKS
General/Agent:
Very clean and shine condo for a piggy buyer, totally renovated and new appliance: stove, ground count, 2 sinks, dishwasher, microwave , wall to wall paint and fresh, molding, 2 bedrooms, new a/c school and bus stop cross the street, and more. Show and sale

Today, I saw yet another 'strange but funny' entry in the agent's remarks on an MLS listing:

REMARKS
General/Agent:
There are 2 small dogs-1 in kennel, 1 roaming free. Free 1 is "Jack." When you enter the condo, acknowledge Jack by saying his name and act like you know him. Take a milk bone from the box on your right as you enter, drop it on the floor and say, "Good boy Jack." He will follow you around. Don't pet him, just ignore him after that or say, "you're a good boy, Jack." Ignore the one in the kennel.

That's it.... no details on the condo listed.

Hmmmmmm..... I wonder if Jack's for sale.

Just Sold! LARGE 1 BEDROOM IN LOGAN CIRCLE for 383,900.

This gorgeous immaculate 800 SF 1 BR condo in located one block from Logan Circle. The boutique building- DownTown 1 & 11 is in the heart of the city, and has low condo fees of $152 monthly, a lovely courtyard, and it is a pet friendly building.

The condo features crown molding, a renovated kitchen with granite counters, a wood burning fireplace, washer/dryer, hardwood floors, Closet and storage space galore and high ceilings. And added bonus is the private terrace- perfect for grilling and sangria. You are right in heart of the city and can walk to shops/metro/restaurants. Zipcar has a spot right behind the building.

Sold for $383,900 with the seller paying $18,900 in concessions.

When $1 costs you $1400 dollars

I spent last week Friday morning tying lose ends on a contract that I was negotiating for a buyer client. After going back and forth all week, I thought we had come to some kind of agreement when I got a call from the listing agent. Turns out, the seller would not move on the price on his last counter-offer. He was stuck at $400,000. The last offer that we had sent was for $399,999- and we were 1 dollar away from an agreed upon price. The seller (and agent) was insisting on this price OUT OF PRINCIPLE (His words, not mine), and was willing to walk away if we did not pay the extra dollar.

Needless to say, I was a little blown away. Actually, I was A LOT blown away. I just could not imagine that in a week where the Dow Jones had dropped by 700 points in one day, a 'motivated' seller (he was being relocated), would 'walk away' over ONE DOLLAR!

Eventually, I had to spend some time explaining to the listing agent (and eventually the seller) why we had insisted on $399,999 price tag. Because in reality it would cost both the seller and the buyer more money if we agreed on a $400,000 price tag. The property is located in DC, and so at closing, the purchaser would be paying the recordation tax, and the seller would pay transfer taxes. (This can always be negotiated differently, and there are certain exemptions- but that is an altogether different blog entry). DC government has set that number to 1.1% for each, if the sales price is less than $400,000. That number changes to 1.45% if the sales price is at $400,000 or more. Therefore, that $1 difference could actually cost the seller and the buyer an additional $1,400 each!

$1,400 buys plenty of shoes!

Another happy homeowner :)

I love going to closing. But even more than that- I love it when I talk to my clients a week/month/year later- and they are still basking in their home buying experience- and loving their new home. It gives me the most fulfillment in my work.

Here is a nice testimonial I just got:

More than two years ago, we took your excellent workshop for First-time homebuyers. The market was a bit different then and my husband and I weren't quite ready to get out there just yet. But because that class was so thorough and informative, we knew when it was time to buy our first home, you would be our realtor and I can say having just bought our house in Petworth, we are so glad we did. I honestly cannot imagine anyone else as our realtor. Right from the beginning, you listened to the things we were looking for, and even helped us figure out some of what we didn't really know. You quickly narrowed the property search so that we were looking at the right kinds of properties, and answered all my dozens and dozens of questions patiently and with a sense of humor. I can actually say that it was FUN to look for a house with you. Your knowledge, experience and confidence put us at ease, and got us through all the various steps with few surprises. We love the new place and have tons of ideas to improve it and make it our own, and we could never have done it without you! Thanks.
LS and DZ.

So .... are they REALLY giving me $7500 in free money?

Buried in the recently enacted federal housing legislation- 2008 American Housing Rescue and Foreclosure Act- is a First Time home buyer 'tax credit' for up to $7500. The credit is only available for purchases made between April 9, 2008 and July 1, 2009.

There are a few limitations to receiving this 'credit':
• It is limited to first time homebuyers
• There are income limits: $75,000 for single purchasers, $150,000 for couples. (The amount starts being reduced if you make over $75,000 and phases out at $95,000 for singles, and $170,000 for couples)
• The credit is not issued as a check. It is an itemized deduction on your federal tax returns.

• It is for 10% of your purchase price up to $7500.

One thing that needs to be made clear however, is this 'tax credit' has to be paid back over the next 15 years or if you sell your home. The credit works more like an interest-free loan. Two years after you have claimed this credit, you will have to start paying it back.

There is a lot of buzz –both positive and negative about this 'credit'. My take- despite having to pay back the credit, I would be VERY HAPPY to take a 0% interest loan of $7500 from Uncle Sam. Even if I invested it in a 'safe vehicle' at a compounding 5% interest every year, I would make about $4,343.30 in real dollars (adjusted for inflation and taxes)– and $4,343.30 would buy a heck of a lot of shoes!

DISCLAIMER: I am NOT an accountant- and I don't play one on TV. To find out how this tax credit would affect your particular situation, please talk to your accountant. I would be happy to refer one to you.

Home Buyer Commandments- Thou shalt leverage the market!

Every time I get a call from a new client or a referral from a friend, I typically like to meet with them one on one in order to get a better idea of what they are looking for. During our first meeting, I learn about their expectations and get to know their "want" vs."need" list when it comes to what they're looking for in their new house. I also discuss what they need to do to prepare for the home buying process. Sometimes we start house-hunting immediately, sometimes they need to do a little more prep-work (getting financing in order etc) before we can look at places.

The 'Want Vs. Need' process is typically very interesting. Here is an example:

One client I met with recently said:

OK... I would like to spend less than 300K on a place. I don't have a lot of cash, so my preference would be that the seller pays for my closing costs. I would like the place to be in Northwest DC. I would prefer a condo with fees less than 300 dollars per month. It would be nice to have a full-service building with a doorman, and some amenities (but the condo fees have to be low!) I have to be able to walk to metro. Oh.... and it would be nice if the condo was GREEN!

We were eventually able to score a place with everything on her list- a darling condo in Logan Circle at the Alta (which is a green building)- and the seller paid for her closing costs and contributed towards her down payment. For a nice sum of 254K. If you had asked me if there would have been a place that met the above price/concession/location/terms and features criteria a year ago- I am not sure it would have been possible.

However, this is a unique market in that there is a huge inventory of houses and condos for sale. You have the luxury of choice. If your 'dream place' does not work out the first time, there will be another 'dream place'. Leverage the fact that there is tons of inventory. Start attending Open Houses to get a better idea of what is important to you. Alternatively, arrange to do a 'house tour marathon' with me, to get a better definition of what that criteria will be. It is a BUYER'S MARKET. You have choices, and you can drive a hard bargain.

If you would like to schedule a 'no-pressure, get prepared, get educated' consultation meeting with me- please e-mail me on ati@districthomebuzz.com

When all else fails.....

A tad bit crazy... but hey....! What do you think:

COURTESY: WZZM13.com

The housing market may be suffering right now but, one woman is using a creative twist to sell her home. She is planning to raffle off her condominium to a lucky winner. Angela Schaab is selling raffle tickets for a chance to own her condo in the Boardwalk complex in Grand Rapids.

She loved the condo, but moved out of state for job related reasons. So now she wants someone else to be able to enjoy it. Schaab explains, "With Michigan's job market and rate of foreclosures, I thought it would be a great way for someone to get into either a first home or to acquire a rental property."

Schaab plans to sell 2,500 raffle tickets for $100 each. Right now she is just taking reservations for the tickets. Once they have all been sold, she'll hold a live drawing. Whoever wins will own the condo free and clear.

Schaab is also planning to give at least ten percent of her profits to charity. You can take a look at pictures of the condo at http://sites.google.com/site/rafflemyboardwalkcondo/. This story has generated so much traffic that this website is often un-available.

Just Sold- 1 bedroom, 1 bath luxury condo- in Columbia Heights

There are not a lot of warehouse style loft buildings in DC for sale, but this is one of them. I just sold two units at the Lofts at Columbia Heights. The lofts were built 2 years ago, and are very tastefully done for new construction.

Both units were gorgeous 1 bedroom condos, a little over 730 square feet (big for a 1 bedroom condo in DC). They both have tons of light from the huge windows spanning across one side of the condo. They feature walk-in closets, an open floor plan, maple cabinets and ceramic tile in the bathroom.

The pet-friendly building has an awesome roof deck, with beautiful views of DC, fitness room and a serviced front desk. I had to mention that there is a dunkin' donuts right outside the building. (Good thing I don't live there!) It is a short walk to the metro, Target, Best Buy, all the awesome new restaurants, coffee shops and other retail in the Columbia Heights area.

Sold for 299,000 with no down payment and the seller paying all closing costs! Gotta love it :)

An excerpt from my buyer's email:

So I've decided I don't want the condo anymore....

Just kidding: I love it!! Thank you so much for all your hard work (as well as the great gift, which has come in quite handy so far)! I want you to know that I really appreciate it.
Thanks again for everything (I'm still in blissful disbelief).

Beltway 'take-out' and 'take-overs'.

So, with the federal bailout of Fannie and Freddie, I found it a little disturbing when I came across this article in the Washington Post.

Also with reluctance, Senators (last week) voted to privatize their restaurant and food services.

Year after year, decade upon decade, the U.S. Senate's network of restaurants has lost staggering amounts of money -- more than $18 million since 1993, according to one report, and an estimated $2 million this year alone, according to another.

The financial condition of the world's most exclusive dining hall and its affiliated Capitol Hill restaurants, cafeterias and coffee shops has become so dire that, without a $250,000 subsidy from taxpayers, the Senate won't make payroll next month. The embarrassment of the Senate food service struggling like some neighborhood pizza joint has quietly sparked change previously unthinkable for Democrats.

Last month, in a late-night voice vote, the Senate agreed to privatize the operation of its food service, a decision that would, for the first time, put it under the control of a contractor and all but guarantee lower wages and benefits for the outfit's new hires.

You can read the rest of the article on: http://www.washingtonpost.com/wp-dyn/content/article/2008/06/08/AR2008060801765_2.html?hpid=topnews

Uncle Sam 'babysitting' Fannie and Freddie!

Yesterday was a whirlwind day in the mortgage industry. I spent some time analyzing reports on the government takeover of Fannie Mae and Freddie Mac.

I’m sure the first question many of you are asking is, “Who are Fannie and Freddie anyway?”

Fannie Mae is the ‘nickname’ for the Federal National Mortgage Association and Freddie Mac is the Federal Home Mortgage Corporation. Both organizations were created after the Great Depression in an attempt to help bolster the housing industry at the time. Both were “government-sponsored” enterprises, but they were both privately owned and run.

These two entities are absolutely critical to the mortgage industry. Although they do not actually lend money, they buy mortgages from banks and institutions that originate loans and repackage them as bonds OR keep them on their own books. As of 2008, they own or guarantee about 50% of the entire 12 trillion dollar US mortgage market.

What does the government takeover mean on the MACRO-level?
Our national debt ceiling will increate US$800 billion, to a total of US$10.7 Trillion in anticipation of the potential need for the Treasury to have the flexibility to support the federal home loan banks.

The bottom line is that US taxpayers are now on the hook to pay the billions of dollars of losses these two companies have incurred by purchasing bad mortgage loans from other banks.

And on the MICRO-level?
This move has provided some much-needed reassurance to mortgage companies and investors that their investments will hold value. Already this morning, most lenders decreased their mortgage rates by approximately 3/8%, saving people applying for mortgages thousands of dollars over the life of their loans. Existing homeowners could benefit as well, as lower rates would permit troubled homeowners to refinance into less costly mortgages. Presumably, this may stimulate increased buying activity in the housing market and may help reverse the decline in home values.

I was talking to a loan officer yesterday morning, who told me that 30 year fixed rates have been hovering at 6.25% for quite some time. This morning they are at 5.75%. A half point drop in one day is BIG. On a $300k loan that translates into $125 less per month.

The downside is that many credit and lending guidelines will be tightened even more than we have seen this past year. Mortgage underwriters will be CRAZIER than ever.

Hopefully all of this will translate into solid lending guidelines that don’t change week to week or even day to day. The uncertainties in the mortgage approval process in the recent months has been a nightmare so it will nice to see a return to stability and “normalcy.”

Finally got started.....

Fall brings new things every year, and this year- one of my 'new things' is getting started on this blog. 

It has been one crazy summer in DC's real estate market. Who would have ever thunk:

1. There would be more than 10 ACTIVE listings in Dupont Circle under 300K. (There is a lot more ACTIVE inventory in DC than there has been in the last five years)

2. There would be more distressed sales, than 'regular' sales in DC. (There are tons more short-sales and foreclosure listings than we have ever seen)

3. Builder's are offering more than the complimentary flat-screen TV (or PRIUS)- and you are now seeing some builders who are willing to negotiate price and concessions.

4. Financing guidelines would be changing every waking second. (100% financing is ALMOST gone, and the underwriting guidelines are getting more stringent every day)

  

The wonderful thing about this summer was that it was still wonderfully busy.  And in my business, busy is good. One of the things that I noticed was that this year brought a different 'breed' of buyer clients. Most of my new clients this year were strong 'numbers' people who were very focused on taking advantage of the market to find a really good deal. A lot of them had been timing the market, they wanted to get into real estate when interest rates are low, and prices are at their low end. Right now is that time!

I can't wait to share my real estate adventures with you.

I love a good bargain, and I love numbers- so I am loving this market!