Damages could be reduced under state-cap law, attorney for city housing authority says.
A city jury has found that the Housing Authority of Baltimore City should pay $4 million in damages to two siblings poisoned by lead paint in their publicly owned rowhouse in the 1980s.
The verdict - issued Thursday - directed $2.5 million to Joseph Avery Jr., 23, of the 3000 block of Rosedale Court and $1.5 million to his sister, Lisa Avery, 21, of the 1700 block of McCulloh St.
The family filed suit against the housing authority in 2005.
The damages could be reduced to a maximum of $350,000 for each sibling under the state payment caps in place at the time they were tested for lead poisoning, said J. Marks Moore III, the attorney for the housing authority's insurance company. The city may appeal the verdict.
But Bruce H. Powell, the Averys' attorney, said he plans on challenging the state cap in a post-trial hearing Aug. 29.
"You have a right to a jury trial, and you have a right to what the jury awards you," Powell said. "The jury thought that they were compensating these people in a way that was fair, and that's not the case."
Lead poisoning, which often occurs when children ingest chipped household paint, can cause mental problems, including cognitive deficits and aggressive behavior.
At the four-day trial, a vocational rehabilitation expert testified that the Avery siblings show symptoms of lead poisoning. Both were in special education, and neither earned a high school diploma.
Last year, 1,274 children in Maryland had lead poisoning, according to statistics from the Maryland Department of the Environment.
That figure includes 936 newly reported cases, 573 of which occurred in Baltimore.
As more research has emerged highlighting effects of lead poisoning, the amount in damages paid by property owners has increased, Moore said.
Since the early 1990s, Moore has handled at least 200 lead poisoning cases for the housing authority, with 10 reaching trial. When he started, a typical verdict ordered $200,000 in damage payments, he said.
"Now, you see just about all of them in the millions," he said. "They really don't have a basis in relation to the underlying facts of the case. I think they're excessive."
The housing authority deferred questions about its lead poisoning cases to Moore.
Ruth Ann Norton, executive director of Baltimore's Coalition to End Childhood Lead Poisoning, said that most current cases of childhood lead poisoning can be blamed on private landlords rather than public housing.
Many city houses built through the 1950s included lead paint. Since it was banned nationwide in 1978, the city has worked to repair lead-tainted houses it owns and reach out to poisoned children, Norton said.
"There has been much progress made there in the intervening 20 years, and so a child living in city-owned housing today would have hopefully a much different experience," she said.
The Averys' mother, Trina Ashley, moved into a Gilmor Homes rowhouse on Bakbury Court in 1984, shortly before giving birth to Joseph. The housing authority had built the home in 1940 with specifications that indicated that lead paint was used.
While living in the home, Ashley repeatedly complained about flaking lead paint, Powell said. In 1986 and 1987, the children were tested for lead and found to have levels that were acceptable at the time but later considered poisonous by Centers for Disease Control and Prevention standards.
In 1988, the Health Department tested the home for chipped lead paint and found it in five locations.
The only location where the lead concentration exceeded acceptable amounts was the front door, and whether the now-deceased surveyor's report indicated lead had been found in the other locations was a trial issue.
A month after the house was tested, the family moved. (baltimoresun.com)
Showing posts with label Baltimore. Show all posts
Showing posts with label Baltimore. Show all posts
Wednesday, August 15, 2007
Monday, July 16, 2007
For sale by lender
Foreclosed properties make up 10%-15% of local property listings
Thanks to a sharp rise in foreclosures, homebuyers are increasingly likely to encounter bank-owned properties in the housing market - listed for sale, offered at auction or even touted as a "good deal" on lenders' Web sites. But getting a bargain on a foreclosed home is hardly a sure bet.
Amid a housing slump that has pushed home listings to record numbers, lenders, too, are competing to sell homes, often through the multiple-listing service. Borrowers, in many cases, have been hurt in the slowdown by a loss of equity that could have helped them avoid foreclosure.
The increase in bank-owned properties comes as more homeowners, many in the suburbs, find themselves unable to keep up with payments on loans made during the housing boom, a time when low mortgage rates, relaxed lending standards and fast-rising home prices fueled a frenzied market.
Though it's difficult to track how many foreclosed properties are listed for sale, agents who sell homes for lenders estimate they represent 10 percent to 15 percent of active listings in the Baltimore area.
In June, nearly 20,000 homes were on the market in Baltimore and the five surrounding counties, according to statistics from Metropolitan Regional Information Systems Inc.
The number of lender-owned properties is expected to grow as billions of dollars in mortgages reset in coming months, triggering higher payments for homeowners.
Loans in the foreclosure process in Maryland soared nearly 30 percent in the first quarter compared with the first three months of 2006, and the number of borrowers at least 60 days behind on payments rose 20 percent, according to the most recent report by the Mortgage Bankers Association.
While Maryland is faring better than the nation as a whole, that still means about 5,700 Maryland homeowners were in danger of losing their homes in the first quarter.
Rising foreclosures could squeeze home values even more and prolong the slump, economists say.
"Eventually, foreclosures will be returned to the marketplace," said Celia Chen, director of housing economics for Moody's Economy.com. "Lenders have to take them back and sell them and try to sell them as fast as they can. ... It will keep price appreciation weak."
Local home listings, already at a record high, will climb even more, partly because of mounting foreclosures, said economist Anirban Basu, chief executive officer of Sage Policy Group Inc. of Baltimore.
"Inventory has been rising sharply, and it will continue to rise, with the impact of ARMs [adjustable-rate mortgages] resetting and foreclosure activity," Basu said. "I don't think we've begun to see that impact in a major way."
Real estate agents and brokers, too, worry that putting more inventory into an already sluggish market will bring down prices and cause houses to sit longer.
Jennifer Marshall, an agent with Maryland REO real estate brokerage, said she is seeing the number of foreclosure properties soaring in suburban areas.
"With more inventory, it's a buyer's market now," Marshall said. "People aren't going to offer what the house is listed for. ... It's more challenging for agents, and you have to think about different ways to get your properties out there and get them sold."
Banks are increasingly buying foreclosed properties back at auction as other bids fall short of the amount owed. That scenario has become more common as the number of owners with little or no equity - or even negative equity - has grown, particularly in cases of pricier homes with more recent mortgages.
"Because we're seeing more expensive homes, higher-end homes going to foreclosure, logic indicates that less of those are being sold to third parties," or buyers other than the lender," said Donald Miller, national sales director for Express Auctions, of Baltimore. Miller said about 30 percent of the homes sold through his company's foreclosure auctions go back to the lenders, but banks tend to buy back an even greater percentage at foreclosure auctions in general.
"As a general rule, the newer loans have less equity, so there's going to be a higher percentage of buy-ins" by the bank, said Daniel M. Billig, a partner in A.J. Billig and Co., the Baltimore auction house.
Lenders' bigger stakes mean they aren't likely to discount properties they buy back and subsequently list, agents said. And lenders can invest thousands more to repair properties.
As a result, like other sellers, they're looking to get top dollar, said David McIlvaine, an associate broker with Keller Williams in Ellicott City who sells foreclosure properties for lenders.
McIlvaine said when he began listing homes for lenders eight years ago, most of the homes were lower-end properties, typically city rowhouses.
"That's not the case anymore," McIlvaine said. "We're seeing a more representative group of inventory crossing all lines."
That's because borrowers who stretched to qualify for more flexible loans - including adjustable rates, no down payments and interest-only payments - have been added to the categories of borrowers who had lost their homes to foreclosure due to job loss, illness or divorce, experts said.
"You're seeing nicer homes, higher-priced homes," agreed Jeff Rogers, an associate broker with Coldwell Banker who lists homes for lenders, who said some of the borrowers have owned their homes for two years or less. "You sort of saw that coming. [Borrowers] were being set up for failure with some of these mortgages."
Miller, at Express Auctions, one of a handful of auction houses that handles the majority of foreclosure auction sales in the state, said investors continue to buy most auctioned properties that aren't bought back by lenders.
But individual homebuyers are starting to get into the mix, as investor Ed Kowalski has noticed.
"On a few occasions I have been outbid by owner-occupants," said Kowalski, who buys, renovates and resells homes in Baltimore and Baltimore County. "Generally, they'll pay more than I'll pay as an investment."
One homebuyer who came to an Express Auction in May beat out an investor on a three-year-old house in Hampstead, with a winning bid of $567,500. Before the auction, the owners had listed it for sale at $1 million, Miller said.
The buyer of the property got a sprawling five-bedroom house with a master bedroom, sitting room with coffee bar, workout room, library and a three-car garage, in a neighborhood where houses have sold for more than $700,000.
Buying at foreclosure auction is not without hurdles.
Successful bidders often must pay a cash deposit, typically 10 percent of the outstanding loan amount. The new owner must pay off any liens or second mortgages. And properties are sold as is. And an owner or tenant living in the house may or may not be cooperative about moving out.
Sihin Shiferaw, an investor who buys and rehabs homes in Baltimore City and Howard County, mostly at auction, recently took a chance on a bank-owned home listed for sale. After signing a sales contract, she discovered water in the home's basement and backed out of the deal, losing a $2,000 deposit.
Evelyn Ray, a real estate agent with Long and Foster in Bel Air, is hoping the increase in foreclosures might help some of her clients who are struggling to buy a house in the aftermath of a soaring market. Ray said she has begun looking for foreclosure properties to show her clients.
"Now, people just cannot afford the houses that are out there," said Ray. "I have about 30 buyers who are just waiting. They either can't afford the houses they want or are just scared or waiting for prices to come down, or they can't sell."
Cathy Holmes, a single mother of three who works as a biological lab technician at Aberdeen Proving Ground, hopes to find a deal on a foreclosed home as a last resort to finally be able to move from a rental apartment in Whiteford. Ray, her agent, has taken her to see several homes. But so far she hasn't been able to come up with the deposit that would qualify her to bid.
"I've been renting the same apartment for 11 years, it's just impossible to get out," said Holmes, who is looking for a single-family house with some land. "I just want to have a house where I don't have to hear the neighbors' telephones ringing and their conversations. I look and I look and I look. I just can't find anything that I can afford." (baltimoresun.com)
Thanks to a sharp rise in foreclosures, homebuyers are increasingly likely to encounter bank-owned properties in the housing market - listed for sale, offered at auction or even touted as a "good deal" on lenders' Web sites. But getting a bargain on a foreclosed home is hardly a sure bet.
Amid a housing slump that has pushed home listings to record numbers, lenders, too, are competing to sell homes, often through the multiple-listing service. Borrowers, in many cases, have been hurt in the slowdown by a loss of equity that could have helped them avoid foreclosure.
The increase in bank-owned properties comes as more homeowners, many in the suburbs, find themselves unable to keep up with payments on loans made during the housing boom, a time when low mortgage rates, relaxed lending standards and fast-rising home prices fueled a frenzied market.
Though it's difficult to track how many foreclosed properties are listed for sale, agents who sell homes for lenders estimate they represent 10 percent to 15 percent of active listings in the Baltimore area.
In June, nearly 20,000 homes were on the market in Baltimore and the five surrounding counties, according to statistics from Metropolitan Regional Information Systems Inc.
The number of lender-owned properties is expected to grow as billions of dollars in mortgages reset in coming months, triggering higher payments for homeowners.
Loans in the foreclosure process in Maryland soared nearly 30 percent in the first quarter compared with the first three months of 2006, and the number of borrowers at least 60 days behind on payments rose 20 percent, according to the most recent report by the Mortgage Bankers Association.
While Maryland is faring better than the nation as a whole, that still means about 5,700 Maryland homeowners were in danger of losing their homes in the first quarter.
Rising foreclosures could squeeze home values even more and prolong the slump, economists say.
"Eventually, foreclosures will be returned to the marketplace," said Celia Chen, director of housing economics for Moody's Economy.com. "Lenders have to take them back and sell them and try to sell them as fast as they can. ... It will keep price appreciation weak."
Local home listings, already at a record high, will climb even more, partly because of mounting foreclosures, said economist Anirban Basu, chief executive officer of Sage Policy Group Inc. of Baltimore.
"Inventory has been rising sharply, and it will continue to rise, with the impact of ARMs [adjustable-rate mortgages] resetting and foreclosure activity," Basu said. "I don't think we've begun to see that impact in a major way."
Real estate agents and brokers, too, worry that putting more inventory into an already sluggish market will bring down prices and cause houses to sit longer.
Jennifer Marshall, an agent with Maryland REO real estate brokerage, said she is seeing the number of foreclosure properties soaring in suburban areas.
"With more inventory, it's a buyer's market now," Marshall said. "People aren't going to offer what the house is listed for. ... It's more challenging for agents, and you have to think about different ways to get your properties out there and get them sold."
Banks are increasingly buying foreclosed properties back at auction as other bids fall short of the amount owed. That scenario has become more common as the number of owners with little or no equity - or even negative equity - has grown, particularly in cases of pricier homes with more recent mortgages.
"Because we're seeing more expensive homes, higher-end homes going to foreclosure, logic indicates that less of those are being sold to third parties," or buyers other than the lender," said Donald Miller, national sales director for Express Auctions, of Baltimore. Miller said about 30 percent of the homes sold through his company's foreclosure auctions go back to the lenders, but banks tend to buy back an even greater percentage at foreclosure auctions in general.
"As a general rule, the newer loans have less equity, so there's going to be a higher percentage of buy-ins" by the bank, said Daniel M. Billig, a partner in A.J. Billig and Co., the Baltimore auction house.
Lenders' bigger stakes mean they aren't likely to discount properties they buy back and subsequently list, agents said. And lenders can invest thousands more to repair properties.
As a result, like other sellers, they're looking to get top dollar, said David McIlvaine, an associate broker with Keller Williams in Ellicott City who sells foreclosure properties for lenders.
McIlvaine said when he began listing homes for lenders eight years ago, most of the homes were lower-end properties, typically city rowhouses.
"That's not the case anymore," McIlvaine said. "We're seeing a more representative group of inventory crossing all lines."
That's because borrowers who stretched to qualify for more flexible loans - including adjustable rates, no down payments and interest-only payments - have been added to the categories of borrowers who had lost their homes to foreclosure due to job loss, illness or divorce, experts said.
"You're seeing nicer homes, higher-priced homes," agreed Jeff Rogers, an associate broker with Coldwell Banker who lists homes for lenders, who said some of the borrowers have owned their homes for two years or less. "You sort of saw that coming. [Borrowers] were being set up for failure with some of these mortgages."
Miller, at Express Auctions, one of a handful of auction houses that handles the majority of foreclosure auction sales in the state, said investors continue to buy most auctioned properties that aren't bought back by lenders.
But individual homebuyers are starting to get into the mix, as investor Ed Kowalski has noticed.
"On a few occasions I have been outbid by owner-occupants," said Kowalski, who buys, renovates and resells homes in Baltimore and Baltimore County. "Generally, they'll pay more than I'll pay as an investment."
One homebuyer who came to an Express Auction in May beat out an investor on a three-year-old house in Hampstead, with a winning bid of $567,500. Before the auction, the owners had listed it for sale at $1 million, Miller said.
The buyer of the property got a sprawling five-bedroom house with a master bedroom, sitting room with coffee bar, workout room, library and a three-car garage, in a neighborhood where houses have sold for more than $700,000.
Buying at foreclosure auction is not without hurdles.
Successful bidders often must pay a cash deposit, typically 10 percent of the outstanding loan amount. The new owner must pay off any liens or second mortgages. And properties are sold as is. And an owner or tenant living in the house may or may not be cooperative about moving out.
Sihin Shiferaw, an investor who buys and rehabs homes in Baltimore City and Howard County, mostly at auction, recently took a chance on a bank-owned home listed for sale. After signing a sales contract, she discovered water in the home's basement and backed out of the deal, losing a $2,000 deposit.
Evelyn Ray, a real estate agent with Long and Foster in Bel Air, is hoping the increase in foreclosures might help some of her clients who are struggling to buy a house in the aftermath of a soaring market. Ray said she has begun looking for foreclosure properties to show her clients.
"Now, people just cannot afford the houses that are out there," said Ray. "I have about 30 buyers who are just waiting. They either can't afford the houses they want or are just scared or waiting for prices to come down, or they can't sell."
Cathy Holmes, a single mother of three who works as a biological lab technician at Aberdeen Proving Ground, hopes to find a deal on a foreclosed home as a last resort to finally be able to move from a rental apartment in Whiteford. Ray, her agent, has taken her to see several homes. But so far she hasn't been able to come up with the deposit that would qualify her to bid.
"I've been renting the same apartment for 11 years, it's just impossible to get out," said Holmes, who is looking for a single-family house with some land. "I just want to have a house where I don't have to hear the neighbors' telephones ringing and their conversations. I look and I look and I look. I just can't find anything that I can afford." (baltimoresun.com)
Thursday, June 7, 2007
Baltimore: 4-year low in home sales
Values in Baltimore rise, but pace slows.
Sales of existing homes fell more than expected in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market.
The National Association of Realtors reported that sales of existing homes dropped by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units, the slowest sales pace in nearly four years.
The median price of a home fell to $220,900, an 0.8 percent decline from the median price a year ago. The median is the point at which half the homes are sold for more and half for less.
In the Baltimore region, house values have continued to increase every month, though not at the double-digit rates registered during the height of the boom. The median price last month rose 2.61 percent to $275,000, according to Metropolitan Regional Information Systems.
But, as in the rest of the nation, Baltimore area home sales have been slumping for more than a year.
Last month, sales of homes sold through the multiple listing service sagged 11.23 percent from a year earlier. That was the fewest sold during any April since 2000, according to data from MRIS. Sales in Baltimore and the five surrounding counties have declined in 18 of the past 19 months.
The slide in existing home sales came after a report Thursday that showed a big 16.2 percent surge in sales of new homes in April that occurred as the median price of a new home fell by a record 11.1 percent from the previous month.
Analysts said the disparity in sales of new and existing homes for April reflected in part the decision by builders to aggressively cut prices to unload inventory while homeowners are still reluctant to lower their asking prices.
"The market is lousy," said David Sloan, senior economist with 4Cast, a market research firm in New York. "The overall economy is not growing particularly strong. The Fed is keeping interest rates reasonably high because it's worried about inflation. So I don't think much is going to change in the fundamentals of the housing market."
The supply of existing homes for sale shot up to a record total of 4.2 million in April, an increase of 394,000 from the March supply. Analysts predicted that this big inventory surge would act to further depress prices.
"We're swimming in supply," said Mike Larson, a real estate analyst with Weiss Research, who cited a number of factors for the unsold homes.
"Unrealistic sellers, stuck flippers, stretched borrowers, foreclosures. They're all contributing to a surge in homes on the market," he said. Flippers are investors who bought homes during the boom hoping to resell them for a quick profit only to be caught as the market softened.
Patrick Newport, an economist with Global Insight, said that the inventory bulge was "worrisome, since builders are less likely to start new homes as long as inventories are climbing."
A recovery in housing is being held back by a wave of subprime mortgage defaults, which is throwing homes back onto the market and prompting banks to tighten lending standards for borrowers with poor or limited credit histories.
Curbs on subprime lending "are expected to be a source of some restraint on home purchases and residential investment in coming quarters," Fed Chairman Ben S. Bernanke said May 17. Even so, Bernanke said he doesn't foresee "significant spillovers" from the subprime market to the rest of the economy.
Housing enjoyed an extended surge in which sales of both new and existing homes set records for five straight years until 2006. The Realtors are forecasting that existing home prices could decline by around 2 percent this year, which would be the first setback for an entire year on records that go back four decades.
But Lawrence Yun, senior economist for the Realtors, noted that the expected price decline would be modest in comparison with the 50 percent appreciation in home prices that occurred during the boom period.
It had appeared that housing sales might be hitting a bottom at the end of last year. However, since that time, the troubles in the mortgage market, which has seen many subprime lenders forced to stop operations, has worsened the housing downturn.
"We've been anticipating slower home sales because many subprime loan products are no longer available," Yun said. "Fortunately, a wide availability of conventional mortgage products ... will help stabilize the market going forward."
Yun said the big rise in unsold homes on the market could be an indication that sellers are testing the market in the early spring in hopes of selling their homes and moving up to larger units, which he said would be a positive sign of a rebound in housing.
But other analysts were not so optimistic, expressing concerns that housing could remain under downward pressure for the rest of this year and stage only a modest recovery in 2008.
"The continued decline in existing home sales and the huge rise in inventories put in doubt the hopes that the housing market is stabilizing," said Joel Naroff, chief economist at Naroff Economic Advisors.
The troubles in housing have acted to depress overall economic activity, which slowed to a growth rate of just 1.3 percent in the first three months of this year, the slowest economic growth rate in four years.
For April, sales of existing homes were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the South and 0.7 percent in the Midwest.
Housing accounts for about 23 percent of the U.S. economy, when taking into account purchases of furniture, appliances and other items for new homes, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts. (baltimoresun.com)
Sales of existing homes fell more than expected in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market.
The National Association of Realtors reported that sales of existing homes dropped by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units, the slowest sales pace in nearly four years.
The median price of a home fell to $220,900, an 0.8 percent decline from the median price a year ago. The median is the point at which half the homes are sold for more and half for less.
In the Baltimore region, house values have continued to increase every month, though not at the double-digit rates registered during the height of the boom. The median price last month rose 2.61 percent to $275,000, according to Metropolitan Regional Information Systems.
But, as in the rest of the nation, Baltimore area home sales have been slumping for more than a year.
Last month, sales of homes sold through the multiple listing service sagged 11.23 percent from a year earlier. That was the fewest sold during any April since 2000, according to data from MRIS. Sales in Baltimore and the five surrounding counties have declined in 18 of the past 19 months.
The slide in existing home sales came after a report Thursday that showed a big 16.2 percent surge in sales of new homes in April that occurred as the median price of a new home fell by a record 11.1 percent from the previous month.
Analysts said the disparity in sales of new and existing homes for April reflected in part the decision by builders to aggressively cut prices to unload inventory while homeowners are still reluctant to lower their asking prices.
"The market is lousy," said David Sloan, senior economist with 4Cast, a market research firm in New York. "The overall economy is not growing particularly strong. The Fed is keeping interest rates reasonably high because it's worried about inflation. So I don't think much is going to change in the fundamentals of the housing market."
The supply of existing homes for sale shot up to a record total of 4.2 million in April, an increase of 394,000 from the March supply. Analysts predicted that this big inventory surge would act to further depress prices.
"We're swimming in supply," said Mike Larson, a real estate analyst with Weiss Research, who cited a number of factors for the unsold homes.
"Unrealistic sellers, stuck flippers, stretched borrowers, foreclosures. They're all contributing to a surge in homes on the market," he said. Flippers are investors who bought homes during the boom hoping to resell them for a quick profit only to be caught as the market softened.
Patrick Newport, an economist with Global Insight, said that the inventory bulge was "worrisome, since builders are less likely to start new homes as long as inventories are climbing."
A recovery in housing is being held back by a wave of subprime mortgage defaults, which is throwing homes back onto the market and prompting banks to tighten lending standards for borrowers with poor or limited credit histories.
Curbs on subprime lending "are expected to be a source of some restraint on home purchases and residential investment in coming quarters," Fed Chairman Ben S. Bernanke said May 17. Even so, Bernanke said he doesn't foresee "significant spillovers" from the subprime market to the rest of the economy.
Housing enjoyed an extended surge in which sales of both new and existing homes set records for five straight years until 2006. The Realtors are forecasting that existing home prices could decline by around 2 percent this year, which would be the first setback for an entire year on records that go back four decades.
But Lawrence Yun, senior economist for the Realtors, noted that the expected price decline would be modest in comparison with the 50 percent appreciation in home prices that occurred during the boom period.
It had appeared that housing sales might be hitting a bottom at the end of last year. However, since that time, the troubles in the mortgage market, which has seen many subprime lenders forced to stop operations, has worsened the housing downturn.
"We've been anticipating slower home sales because many subprime loan products are no longer available," Yun said. "Fortunately, a wide availability of conventional mortgage products ... will help stabilize the market going forward."
Yun said the big rise in unsold homes on the market could be an indication that sellers are testing the market in the early spring in hopes of selling their homes and moving up to larger units, which he said would be a positive sign of a rebound in housing.
But other analysts were not so optimistic, expressing concerns that housing could remain under downward pressure for the rest of this year and stage only a modest recovery in 2008.
"The continued decline in existing home sales and the huge rise in inventories put in doubt the hopes that the housing market is stabilizing," said Joel Naroff, chief economist at Naroff Economic Advisors.
The troubles in housing have acted to depress overall economic activity, which slowed to a growth rate of just 1.3 percent in the first three months of this year, the slowest economic growth rate in four years.
For April, sales of existing homes were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the South and 0.7 percent in the Midwest.
Housing accounts for about 23 percent of the U.S. economy, when taking into account purchases of furniture, appliances and other items for new homes, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts. (baltimoresun.com)
Friday, May 25, 2007
Baltimore City: Fire highlights lack of shelter for poor
The rowhouse fire in East Baltimore that claimed the lives of six people and left seven injured highlighted a hidden problem of Baltimore housing: poor families who are unable to find or afford decent shelter banding together under one roof.
Advocates said yesterday that the problem is the result of an acute shortage of adequate housing for the city's neediest residents.
They pointed out that the Housing Authority of Baltimore City's inventory has declined by more than 5,000 units in the past 15 years, and that as many as 3,000 other federally subsidized units have been lost during that time. They also said that the loss of permanent subsidized units is not being made up by increases in housing vouchers that allow low-income families to rent in the private market.
"The question I've always tossed out is, 'What happens to all these folks? Where are they?'" said Gregory Countess, assistant director of advocacy for housing and community economic development for the Legal Aid Bureau of Maryland. "The fact that you've got thousands of units of housing lost means that you've lost opportunities for people to live in places that are safe and decent and affordable."
Barbara Samuels, an American Civil Liberties Union lawyer who specializes in housing issues, said about 29,000 Baltimore families are on the waiting list for public housing - a number that is double the number of units available in the city's portfolio of properties.
"Certainly, it symbolizes the desperate need and demand for affordable housing and the diminishing supply of opportunities," she said of the number of people who were living in the Cecil Avenue rowhouse near Green Mount Cemetery. "You see that in the families that have doubled up, tripled up, in this case maybe even quadrupled up."
The loss of low-income units is not restricted to Baltimore. In recent years, Baltimore County has demolished or plans to demolish about 1,500 units in projects such as Kingsley Park, Samuels said. Because the housing market is regional, the loss of those units can also affect the demand for low-income housing in the city, she says.
"Was some of that housing bad?" she said. "Sure. But nothing is being done to replace it."
Nationally, the National Low Income Housing Coalition wants to create 1.5 million new rental units for needy families, a goal that carries a price tag of about $5 billion, said Nicole Letourneau, a spokeswoman for the advocacy group.
A first step toward reaching that goal was taken Tuesday, when the House of Representatives included $600 million over five years for a national housing trust fund as part of reform legislation for federally chartered private lenders, Letourneau said.
"From the standpoint of the NLIHC, doubling up and tripling up in housing is one of the effects of having a lack of housing that's affordable to people with the lowest incomes," she said.
In Baltimore, the practice - which appears to have been the case in the Cecil Avenue rowhouse - is nothing new.
"It's always been a problem," said Stanley Sugarman, a longtime property owner and manager who recently got out of the business. "I used to go around and see the tenants and you'd see people in the basement or my plumber would tell me there are people sleeping next to the hot water heater. They'd say, 'The people are just visiting.'"
The problem is partly a lack of money in a city where the poverty rate for individuals is nearly 23 percent and for families is nearly 19 percent, figures that are nearly double the national average, according the Census Bureau's most recent American Community Survey.
"A lot of people don't have the ability to pay for decent housing," Sugarman said. "They have to double up. They rent rooms."
The phenomenon is also reflective of broader problems in the city's low-income rental market.
In a 2005 study funded by the Abell Foundation and published by the Urban Institute entitled "Low-End Rental Housing: The Forgotten Story in Baltimore's Housing Boom," Sandra Newman found that the low-income rental market was in "poor shape."
Newman, the director of the Johns Hopkins Institute for Policy Studies, found that as of 2000, half of the rental units in the city were costing less than $400 a month.
"But because so many renters are poor, even these low rents are unaffordable to many," Newman wrote. "There are about two poor renters for every affordable housing unit in the city."
Advocates say the situation may be getting worse, as the gentrification of some city neighborhoods and the redevelopment of others have led to the loss of private low-end rental units.
In addition, the waiting list for the city's housing voucher program has been closed for four years. Exceptions, according to the Housing Authority's Web site, are made for families who fall into several categories, including being victims of natural disasters, being intimidated victims or witnesses to crimes, being displaced by public action or having a member with a disability.
Presumably, at least one of the families in the Cecil Avenue rowhouse would have qualified under these circumstances, because one of the children used a wheelchair.
But Lauren Young, of the Maryland Disability Law Center, said being on the waiting list is no guarantee of immediate housing.
"It's a long waiting list," she said.
The Housing Authority did not respond to a request for comment.
But in a March draft of its plans for the next two years, the authority said that its "fundamental problem" was "inadequate and unpredictable funding."
Over the past several years, the draft said, the agency's federal operating funds have been cut by $26.2 million and its housing voucher monies have been cut by $18.9 million.
"Maximizing the number of households served will be extremely difficult in light of the inflationary nature of the rental market," the report said.
But Samuels, of the ACLU, said the Housing Authority lost funding for 2,000 vouchers that it failed to use during a six-year period from 1997 to 2003, and that it was diverting millions of dollars worth of vouchers from 2006 through 2008 to other uses.
She charged that the authority is using federal regulatory flexibility to "downsize" its low-income housing assets and calculated that the agency is serving 750 fewer families with vouchers and public housing units than it did in 1992.
Samuels said the authority should be serving more families because of additional vouchers it received to compensate for the loss of demolished public housing and federally subsidized rental units.
"The need is always there," she said. (baltimoresun.com)
Advocates said yesterday that the problem is the result of an acute shortage of adequate housing for the city's neediest residents.
They pointed out that the Housing Authority of Baltimore City's inventory has declined by more than 5,000 units in the past 15 years, and that as many as 3,000 other federally subsidized units have been lost during that time. They also said that the loss of permanent subsidized units is not being made up by increases in housing vouchers that allow low-income families to rent in the private market.
"The question I've always tossed out is, 'What happens to all these folks? Where are they?'" said Gregory Countess, assistant director of advocacy for housing and community economic development for the Legal Aid Bureau of Maryland. "The fact that you've got thousands of units of housing lost means that you've lost opportunities for people to live in places that are safe and decent and affordable."
Barbara Samuels, an American Civil Liberties Union lawyer who specializes in housing issues, said about 29,000 Baltimore families are on the waiting list for public housing - a number that is double the number of units available in the city's portfolio of properties.
"Certainly, it symbolizes the desperate need and demand for affordable housing and the diminishing supply of opportunities," she said of the number of people who were living in the Cecil Avenue rowhouse near Green Mount Cemetery. "You see that in the families that have doubled up, tripled up, in this case maybe even quadrupled up."
The loss of low-income units is not restricted to Baltimore. In recent years, Baltimore County has demolished or plans to demolish about 1,500 units in projects such as Kingsley Park, Samuels said. Because the housing market is regional, the loss of those units can also affect the demand for low-income housing in the city, she says.
"Was some of that housing bad?" she said. "Sure. But nothing is being done to replace it."
Nationally, the National Low Income Housing Coalition wants to create 1.5 million new rental units for needy families, a goal that carries a price tag of about $5 billion, said Nicole Letourneau, a spokeswoman for the advocacy group.
A first step toward reaching that goal was taken Tuesday, when the House of Representatives included $600 million over five years for a national housing trust fund as part of reform legislation for federally chartered private lenders, Letourneau said.
"From the standpoint of the NLIHC, doubling up and tripling up in housing is one of the effects of having a lack of housing that's affordable to people with the lowest incomes," she said.
In Baltimore, the practice - which appears to have been the case in the Cecil Avenue rowhouse - is nothing new.
"It's always been a problem," said Stanley Sugarman, a longtime property owner and manager who recently got out of the business. "I used to go around and see the tenants and you'd see people in the basement or my plumber would tell me there are people sleeping next to the hot water heater. They'd say, 'The people are just visiting.'"
The problem is partly a lack of money in a city where the poverty rate for individuals is nearly 23 percent and for families is nearly 19 percent, figures that are nearly double the national average, according the Census Bureau's most recent American Community Survey.
"A lot of people don't have the ability to pay for decent housing," Sugarman said. "They have to double up. They rent rooms."
The phenomenon is also reflective of broader problems in the city's low-income rental market.
In a 2005 study funded by the Abell Foundation and published by the Urban Institute entitled "Low-End Rental Housing: The Forgotten Story in Baltimore's Housing Boom," Sandra Newman found that the low-income rental market was in "poor shape."
Newman, the director of the Johns Hopkins Institute for Policy Studies, found that as of 2000, half of the rental units in the city were costing less than $400 a month.
"But because so many renters are poor, even these low rents are unaffordable to many," Newman wrote. "There are about two poor renters for every affordable housing unit in the city."
Advocates say the situation may be getting worse, as the gentrification of some city neighborhoods and the redevelopment of others have led to the loss of private low-end rental units.
In addition, the waiting list for the city's housing voucher program has been closed for four years. Exceptions, according to the Housing Authority's Web site, are made for families who fall into several categories, including being victims of natural disasters, being intimidated victims or witnesses to crimes, being displaced by public action or having a member with a disability.
Presumably, at least one of the families in the Cecil Avenue rowhouse would have qualified under these circumstances, because one of the children used a wheelchair.
But Lauren Young, of the Maryland Disability Law Center, said being on the waiting list is no guarantee of immediate housing.
"It's a long waiting list," she said.
The Housing Authority did not respond to a request for comment.
But in a March draft of its plans for the next two years, the authority said that its "fundamental problem" was "inadequate and unpredictable funding."
Over the past several years, the draft said, the agency's federal operating funds have been cut by $26.2 million and its housing voucher monies have been cut by $18.9 million.
"Maximizing the number of households served will be extremely difficult in light of the inflationary nature of the rental market," the report said.
But Samuels, of the ACLU, said the Housing Authority lost funding for 2,000 vouchers that it failed to use during a six-year period from 1997 to 2003, and that it was diverting millions of dollars worth of vouchers from 2006 through 2008 to other uses.
She charged that the authority is using federal regulatory flexibility to "downsize" its low-income housing assets and calculated that the agency is serving 750 fewer families with vouchers and public housing units than it did in 1992.
Samuels said the authority should be serving more families because of additional vouchers it received to compensate for the loss of demolished public housing and federally subsidized rental units.
"The need is always there," she said. (baltimoresun.com)
Wednesday, May 23, 2007
Baltimore: Tax sale proceeds amid fairness concerns
Baltimore's annual sale of rights to collect back property taxes proceeded as usual Monday despite pending city legislation that would keep homes from being included in the process over unpaid water bills and Mayor Sheila Dixon's suggestion of amnesty for such debts.
Stanley Milesky, chief of the city's Bureau of Treasury Management, said he didn't yet have information on how many of the 7,699 liens sold to investors involved water bills or other small municipal liens. About 750 such liens changed hands in last year's tax sale.
Rather than trying to collect back taxes themselves, many Maryland jurisdictions sell the collection rights to investors in annual auctions. Those investors buy the right to charge interest and fees that often amount to thousands of dollars, and the right to sue to seize the homes through foreclosure if the debts aren't paid. Some jurisdictions include debts other than taxes in the lien sale process, though that is rare outside of Baltimore.
The Sun reported in March that 400 city homes have been lost to foreclosure over debts other than property taxes in the past three years. Most stemmed from unpaid water and sewer bills, though some also included alley repaving charges, sidewalk repairs and even fees to register rental property. About half involved unpaid charges of $500 or less.
Milesky said city officials have been meeting weekly to discuss tax sales and are expected to make recommendations to Dixon within the month on possible improvements to the system.
"All the other issues with tax sales notwithstanding, it still remains a really effective means for the city to collect the amounts due," Milesky said.
The status of the mayor's amnesty idea, which she brought up during an interview with The Sun for the March story, is unclear.
"That wasn't necessarily the course of action that she charged the work group with," said Demaune Millard, a spokesman for the mayor's office. "The mayor is looking for more than a short-term fix. She's looking at a long-term solution."
City Councilman Bernard C. "Jack" Young, the 12th District councilman who has twice proposed a bill to end tax sales stemming from water bills, is frustrated by the slow pace of reform. City officials have contended that many people would not pay their water bills without the threat of a tax sale and potential foreclosure.
"Working with the Finance Department to get a remedy is just not moving fast enough," he said yesterday. "They're talking about it hurting the bond rating, but I just don't buy that. I'm still concerned about people losing their homes over water bills and especially such low water bills."
Young said he also is considering proposing bills to reduce the amount of interest that can be charged by people purchasing tax liens.
City Councilwoman Mary Pat Clarke, of the 14th District, has introduced a bill to keep liens of less than $1,000 out of tax sales. She also has said that she does not think that water bills, alley pavings and other small bills belong in tax sales.
Yesterday, Circuit Court Clerk Frank M. Conaway Sr., an announced candidate for mayor, sent a letter to the attorney general's office asking him to look into what "seems to be a consumer rights problem." Conaway said that people whose homes are put into tax sale might not realize that they can receive the difference between taxes owed and the bid price minus interest and expenses.
"I think there are millions of dollars that have been taken away from people," Conaway said in an interview yesterday. "It bothers me that people might be getting ripped off - that they aren't getting proceeds they should be getting."
State Sen. George W. Della Jr., who has introduced legislation to reform tax sale law, said he does not know of any summer study planned. But he intends to introduce legislation next session.
"I don't get disappointed nor do I get discouraged," he said. "It's not a fair way for local government to do business. I understand they want to get paid, but let's do it in a fair and equitable way."
Della, too, is concerned about the inclusion of water bill liens in tax sale.
"I think it's ludicrous for residential properties," he said. "It shouldn't be. Is that going to break the back of the city of Baltimore, if they don't get paid their water bill? I don't think so." (baltimoresun.com)
Stanley Milesky, chief of the city's Bureau of Treasury Management, said he didn't yet have information on how many of the 7,699 liens sold to investors involved water bills or other small municipal liens. About 750 such liens changed hands in last year's tax sale.
Rather than trying to collect back taxes themselves, many Maryland jurisdictions sell the collection rights to investors in annual auctions. Those investors buy the right to charge interest and fees that often amount to thousands of dollars, and the right to sue to seize the homes through foreclosure if the debts aren't paid. Some jurisdictions include debts other than taxes in the lien sale process, though that is rare outside of Baltimore.
The Sun reported in March that 400 city homes have been lost to foreclosure over debts other than property taxes in the past three years. Most stemmed from unpaid water and sewer bills, though some also included alley repaving charges, sidewalk repairs and even fees to register rental property. About half involved unpaid charges of $500 or less.
Milesky said city officials have been meeting weekly to discuss tax sales and are expected to make recommendations to Dixon within the month on possible improvements to the system.
"All the other issues with tax sales notwithstanding, it still remains a really effective means for the city to collect the amounts due," Milesky said.
The status of the mayor's amnesty idea, which she brought up during an interview with The Sun for the March story, is unclear.
"That wasn't necessarily the course of action that she charged the work group with," said Demaune Millard, a spokesman for the mayor's office. "The mayor is looking for more than a short-term fix. She's looking at a long-term solution."
City Councilman Bernard C. "Jack" Young, the 12th District councilman who has twice proposed a bill to end tax sales stemming from water bills, is frustrated by the slow pace of reform. City officials have contended that many people would not pay their water bills without the threat of a tax sale and potential foreclosure.
"Working with the Finance Department to get a remedy is just not moving fast enough," he said yesterday. "They're talking about it hurting the bond rating, but I just don't buy that. I'm still concerned about people losing their homes over water bills and especially such low water bills."
Young said he also is considering proposing bills to reduce the amount of interest that can be charged by people purchasing tax liens.
City Councilwoman Mary Pat Clarke, of the 14th District, has introduced a bill to keep liens of less than $1,000 out of tax sales. She also has said that she does not think that water bills, alley pavings and other small bills belong in tax sales.
Yesterday, Circuit Court Clerk Frank M. Conaway Sr., an announced candidate for mayor, sent a letter to the attorney general's office asking him to look into what "seems to be a consumer rights problem." Conaway said that people whose homes are put into tax sale might not realize that they can receive the difference between taxes owed and the bid price minus interest and expenses.
"I think there are millions of dollars that have been taken away from people," Conaway said in an interview yesterday. "It bothers me that people might be getting ripped off - that they aren't getting proceeds they should be getting."
State Sen. George W. Della Jr., who has introduced legislation to reform tax sale law, said he does not know of any summer study planned. But he intends to introduce legislation next session.
"I don't get disappointed nor do I get discouraged," he said. "It's not a fair way for local government to do business. I understand they want to get paid, but let's do it in a fair and equitable way."
Della, too, is concerned about the inclusion of water bill liens in tax sale.
"I think it's ludicrous for residential properties," he said. "It shouldn't be. Is that going to break the back of the city of Baltimore, if they don't get paid their water bill? I don't think so." (baltimoresun.com)
Tuesday, May 22, 2007
Maryland: area home prices still rising
Region holding its value, while U.S. overall loses 1.8%
Baltimore's housing market is holding up better than the nation's as a whole, with the price of an existing single-family home rising nearly 5 percent in the first quarter over a year earlier. The gain in median price put the region among the top quarter of 145 metro areas surveyed by the National Association of Realtors and contrasted sharply with a 1.8 percent nationwide decline.
And the Cumberland area in Western Maryland, which has become one of the last markets in the country to experience a housing boom, registered the biggest increase in the nation, with the median price of a single-family home soaring 17 percent in the first three months of the year.
The Baltimore area's relative affordability in the pricey region surrounding the nation's capital helped drive demand, real estate experts said, fueling the association's reported 4.9 percent increase in median price to $278,900.
By contrast, the median price - or midpoint - of an existing single-family home in the United States slid 1.8 percent, to $212,300, the association said. Half of homes sold for more and half for less.
The Baltimore area ranked 34th among the 145 statistical areas in home value appreciation, NAR statistics showed. Eighty-two of those areas saw prices increase over a year ago, including 11 areas with double-digit gains, while 62 experienced price declines; one was unchanged.
In the Cumberland region, prices jumped by the biggest percentage increase, to a median of $100,000 from $85,400 in the first quarter of 2006.
"What this comes down to is affordability," said Joseph T. Landers III, executive vice president of the Greater Baltimore Board of Realtors. "When you look at [the Baltimore-area]market, ... it is largely affordable when you compare [it] to most of the rest of the state and Washington and Virginia. And interest rates have stayed relatively low, helping to fuel demand."
Areas that are benefiting now experienced less speculative buying, and in turn less of a huge spike in prices over the four-year housing boom, experts said. .
"The focus has turned to value," said Anirban Basu, chief executive officer of Baltimore-based Sage Policy Group Inc.
"Many prospective home buyers sought to place as large a bet as possible on the housing market. Today, that speculative aspect of the housing market has effectively been extinguished and now the buyer is focused on ... making a good deal and buying as much house as possible for their money," Basu said.
Buyers perceive value in Baltimore's market, Basu said. "That explains why Baltimore-area prices have held their own, even as Washington-area price changes have in many instances turned negative,"
Cumberland, too, benefited from the perception of value and is just now seeing the effects of a housing boom that had previously swept through the Baltimore market, economists said. As prices have risen in adjoining Washington and Garrett counties, buyers have been attracted to lower prices in Allegany County, Basu said.
"Cumberland is, from a Western Maryland perspective, the oasis of affordability," he said.
Prices have held up despite slowing sales. In Maryland, the report said, sales, including single-family homes and condos, dropped 10 percent in the first quarter, to 115,000 from 128,400 in the year-earlier period.
Nationwide sales dipped to 6.41 million, down 6.6 percent from 6.86 million sold in the first three months of 2006, the NAR report said. But an NAR economist said the market has likely bottomed.
Fourteen states and Washington showed an improvement in sales in the first quarter, said Lawrence Yun, NAR senior economist, compared to six states posting increases in the fourth quarter. On a quarter-to-quarter basis, sales rose in the United States by 2.4 percent, the NAR said.
The numbers suggest the market is stabilizing, thanks to job growth and relatively low mortgage interest rates that have hovered at just above 6 percent.
"We are encouraged by the fact that there is modest improvement in our quarterly figures, less of a decline in prices and a modest uptick in sales," Yun said. "This is positive compared to what we had experienced before."
He said he would not be surprised to see sales volume increase, on a year-over-year basis, by either the fourth quarter or the first quarter of 2008. (baltimoresun.com)
Baltimore's housing market is holding up better than the nation's as a whole, with the price of an existing single-family home rising nearly 5 percent in the first quarter over a year earlier. The gain in median price put the region among the top quarter of 145 metro areas surveyed by the National Association of Realtors and contrasted sharply with a 1.8 percent nationwide decline.
And the Cumberland area in Western Maryland, which has become one of the last markets in the country to experience a housing boom, registered the biggest increase in the nation, with the median price of a single-family home soaring 17 percent in the first three months of the year.
The Baltimore area's relative affordability in the pricey region surrounding the nation's capital helped drive demand, real estate experts said, fueling the association's reported 4.9 percent increase in median price to $278,900.
By contrast, the median price - or midpoint - of an existing single-family home in the United States slid 1.8 percent, to $212,300, the association said. Half of homes sold for more and half for less.
The Baltimore area ranked 34th among the 145 statistical areas in home value appreciation, NAR statistics showed. Eighty-two of those areas saw prices increase over a year ago, including 11 areas with double-digit gains, while 62 experienced price declines; one was unchanged.
In the Cumberland region, prices jumped by the biggest percentage increase, to a median of $100,000 from $85,400 in the first quarter of 2006.
"What this comes down to is affordability," said Joseph T. Landers III, executive vice president of the Greater Baltimore Board of Realtors. "When you look at [the Baltimore-area]market, ... it is largely affordable when you compare [it] to most of the rest of the state and Washington and Virginia. And interest rates have stayed relatively low, helping to fuel demand."
Areas that are benefiting now experienced less speculative buying, and in turn less of a huge spike in prices over the four-year housing boom, experts said. .
"The focus has turned to value," said Anirban Basu, chief executive officer of Baltimore-based Sage Policy Group Inc.
"Many prospective home buyers sought to place as large a bet as possible on the housing market. Today, that speculative aspect of the housing market has effectively been extinguished and now the buyer is focused on ... making a good deal and buying as much house as possible for their money," Basu said.
Buyers perceive value in Baltimore's market, Basu said. "That explains why Baltimore-area prices have held their own, even as Washington-area price changes have in many instances turned negative,"
Cumberland, too, benefited from the perception of value and is just now seeing the effects of a housing boom that had previously swept through the Baltimore market, economists said. As prices have risen in adjoining Washington and Garrett counties, buyers have been attracted to lower prices in Allegany County, Basu said.
"Cumberland is, from a Western Maryland perspective, the oasis of affordability," he said.
Prices have held up despite slowing sales. In Maryland, the report said, sales, including single-family homes and condos, dropped 10 percent in the first quarter, to 115,000 from 128,400 in the year-earlier period.
Nationwide sales dipped to 6.41 million, down 6.6 percent from 6.86 million sold in the first three months of 2006, the NAR report said. But an NAR economist said the market has likely bottomed.
Fourteen states and Washington showed an improvement in sales in the first quarter, said Lawrence Yun, NAR senior economist, compared to six states posting increases in the fourth quarter. On a quarter-to-quarter basis, sales rose in the United States by 2.4 percent, the NAR said.
The numbers suggest the market is stabilizing, thanks to job growth and relatively low mortgage interest rates that have hovered at just above 6 percent.
"We are encouraged by the fact that there is modest improvement in our quarterly figures, less of a decline in prices and a modest uptick in sales," Yun said. "This is positive compared to what we had experienced before."
He said he would not be surprised to see sales volume increase, on a year-over-year basis, by either the fourth quarter or the first quarter of 2008. (baltimoresun.com)
Friday, May 18, 2007
A better balance
If you are a tenant down on your luck and unable to pay your rent, Baltimore is not a great place to be. You may or may not receive notice that you are about to be evicted, and the landlord can toss all your belongings onto the street. City Council member Kenneth N. Harris Sr. and Mayor Sheila Dixon have done a service by bringing landlords and tenants together and pushing legislation - introduced in the City Council yesterday - that strikes a better balance.
The changes are welcome and long overdue.
About 50 percent of Baltimore families were renters in 2006, and many use so much of their monthly income to keep a roof over their heads that any crisis or emergency leaves them behind in rent payments. The result: about 7,000 evictions a year, with no formal requirement for notice to the tenant of when the eviction will take place.
Sometimes a tenant leaves things in the dwelling while trying desperately to scrounge up back rent money, and sometimes the tenant intentionally abandons unwanted items. In either case, the landlord may be left to dispose of the items. And while many landlords are responsible enough to take them to a storage facility or to the dump, many others simply junk them on city streets.
For a tenant who is trying to comply, it's a slap in the face and an affront to basic dignity. The 2,900 tons of furniture, clothing and other belongings tossed outside are also major eyesores that blight many neighborhoods. In addition, it costs the city's Department of Public Works more than $800,000 a year for proper pick-up and disposal - money that could be used more productively to achieve Mayor Dixon's goal of a "cleaner, greener" city. Those are among the reasons the mayor's office worked with Mr. Harris to come up with the new bill.
The bill would give tenants more formal notice of when the eviction would take effect and would prohibit landlords from dumping the evicted tenants' possessions on city streets. Tenants would also have three days in which to reclaim their belongings.
Many other major cities provide storage for seven to 60 days; Baltimore would better serve all its residents by following those examples.
In a city where the median income for renters is less than $25,000 and a two-bedroom unit typically rents for more than $1,000 a month, the larger solution is more affordable housing. But offering a little more protection for tenants' belongings while keeping city streets cleaner is at least one step in the right direction.(baltimoresun.com)
The changes are welcome and long overdue.
About 50 percent of Baltimore families were renters in 2006, and many use so much of their monthly income to keep a roof over their heads that any crisis or emergency leaves them behind in rent payments. The result: about 7,000 evictions a year, with no formal requirement for notice to the tenant of when the eviction will take place.
Sometimes a tenant leaves things in the dwelling while trying desperately to scrounge up back rent money, and sometimes the tenant intentionally abandons unwanted items. In either case, the landlord may be left to dispose of the items. And while many landlords are responsible enough to take them to a storage facility or to the dump, many others simply junk them on city streets.
For a tenant who is trying to comply, it's a slap in the face and an affront to basic dignity. The 2,900 tons of furniture, clothing and other belongings tossed outside are also major eyesores that blight many neighborhoods. In addition, it costs the city's Department of Public Works more than $800,000 a year for proper pick-up and disposal - money that could be used more productively to achieve Mayor Dixon's goal of a "cleaner, greener" city. Those are among the reasons the mayor's office worked with Mr. Harris to come up with the new bill.
The bill would give tenants more formal notice of when the eviction would take effect and would prohibit landlords from dumping the evicted tenants' possessions on city streets. Tenants would also have three days in which to reclaim their belongings.
Many other major cities provide storage for seven to 60 days; Baltimore would better serve all its residents by following those examples.
In a city where the median income for renters is less than $25,000 and a two-bedroom unit typically rents for more than $1,000 a month, the larger solution is more affordable housing. But offering a little more protection for tenants' belongings while keeping city streets cleaner is at least one step in the right direction.(baltimoresun.com)
Thursday, May 17, 2007
The Color Of Credit
Just a few years ago, there were only two ways to get a home loan: a fixed rate or a basic adjustable rate mortgage. Now consumer groups estimate there are more than 200 different types of loans out there and ABC2 News Investigator Tisha Thompson discovered too many people in Maryland may end up with high-risk loans not because of how much money they make, but because of what they look like.
For Chenea Carter, foreclosure was something she never thought would happen to her. “Utter panic,” she says went through her when she received her foreclosure notice. “Utter, utter panic.”
It started when Carter refinanced the mortgage on the home her family had owned for 50 years. “The furnace went up,” she says. “The heater went up, things that just required attention and money.”
But, a few years into her new loan, the interest rate on her mortgage exploded. “I didn’t know that after the first three years it would happen like that,” Carter says. She didn’t know it when she signed her paperwork, but Carter’s broker signed her up for what’s called a “subprime loan.” It’s a loan that’s more than 3% higher than the typical loan. It’s supposed to help people with a low credit score to buy a house. The problem is we’ve found that too many people in Maryland got a subprime loan not because of how much money they make, but because of what they look like.
Our ABC2 News investigation found that one out of six Maryland homes used a subprime loan in the last few years. "A lot of them qualify for conventional loans,” Congressman Elijah Cummings (D-MD) says. “That's the part that eats away at my heart."
Phillip Robinson of Civil Justice Network says brokers push people into these loans because that’s how they make their money.
“Subprime loans are not necessarily predatory loans,” he says. “What makes it predatory are the extra fees that are charged.” He explains that the bigger the loan, the bigger the commission. So, to get people qualified, Robinson says some brokers combine subprime loans with high-risk options like 100% financing, an adjustable rate, paying only the interest or paying just a minimum payment similar to a credit card, and all of the debt that comes with it.
"Few of these borrowers can afford to make monthly payments that in year three skyrocket 30 to 50 percent higher than the first two years," says Allen Fishbein, Director of Housing and Credit Policy at the Consumer Federation of America.
Some consumer groups say some brokers decide if they’re going to push you into a subprime loan based on what you look like.
When we went through the more than 1.7 million loans made in Maryland in 2004 and 2005, the ABC2 News Investigators found minorities ended up with a subprime loan two to three times more often than their white non-Hispanic neighbors, even if they made the same amount of money. The hardest hit? The elderly, Latinos and African-Americans, including those who had a family income of more than $100,000.
"I find it offensive that 'oh, upper income African-Americans must have credit problems,’” says Secretary Thomas Perez, the head of the Maryland Department of Labor, Licensing and Regulation. “That's an offensive notion to me."
Perez is in charge of regulating Maryland’s mortgage industry. “One of the things we can't currently do that I would like to see changed,” he says, “is to be able to develop the capacity to identify mortgage brokers who have a disproportionate number of loans that go into foreclosure.”
"I said you couldn't have bought my home!"
Carter says she barely managed to pay off her ballooning mortgage, but her mortgage company still sold her house at a foreclosure auction anyway. She sued the company in court.
"The judge said, I rule in your favor, the foreclosure is cancelled, the selling of the home is canceled,” Carter says. “I won."
(abc2 news.com)
For Chenea Carter, foreclosure was something she never thought would happen to her. “Utter panic,” she says went through her when she received her foreclosure notice. “Utter, utter panic.”
It started when Carter refinanced the mortgage on the home her family had owned for 50 years. “The furnace went up,” she says. “The heater went up, things that just required attention and money.”
But, a few years into her new loan, the interest rate on her mortgage exploded. “I didn’t know that after the first three years it would happen like that,” Carter says. She didn’t know it when she signed her paperwork, but Carter’s broker signed her up for what’s called a “subprime loan.” It’s a loan that’s more than 3% higher than the typical loan. It’s supposed to help people with a low credit score to buy a house. The problem is we’ve found that too many people in Maryland got a subprime loan not because of how much money they make, but because of what they look like.
Our ABC2 News investigation found that one out of six Maryland homes used a subprime loan in the last few years. "A lot of them qualify for conventional loans,” Congressman Elijah Cummings (D-MD) says. “That's the part that eats away at my heart."
Phillip Robinson of Civil Justice Network says brokers push people into these loans because that’s how they make their money.
“Subprime loans are not necessarily predatory loans,” he says. “What makes it predatory are the extra fees that are charged.” He explains that the bigger the loan, the bigger the commission. So, to get people qualified, Robinson says some brokers combine subprime loans with high-risk options like 100% financing, an adjustable rate, paying only the interest or paying just a minimum payment similar to a credit card, and all of the debt that comes with it.
"Few of these borrowers can afford to make monthly payments that in year three skyrocket 30 to 50 percent higher than the first two years," says Allen Fishbein, Director of Housing and Credit Policy at the Consumer Federation of America.
Some consumer groups say some brokers decide if they’re going to push you into a subprime loan based on what you look like.
When we went through the more than 1.7 million loans made in Maryland in 2004 and 2005, the ABC2 News Investigators found minorities ended up with a subprime loan two to three times more often than their white non-Hispanic neighbors, even if they made the same amount of money. The hardest hit? The elderly, Latinos and African-Americans, including those who had a family income of more than $100,000.
"I find it offensive that 'oh, upper income African-Americans must have credit problems,’” says Secretary Thomas Perez, the head of the Maryland Department of Labor, Licensing and Regulation. “That's an offensive notion to me."
Perez is in charge of regulating Maryland’s mortgage industry. “One of the things we can't currently do that I would like to see changed,” he says, “is to be able to develop the capacity to identify mortgage brokers who have a disproportionate number of loans that go into foreclosure.”
"I said you couldn't have bought my home!"
Carter says she barely managed to pay off her ballooning mortgage, but her mortgage company still sold her house at a foreclosure auction anyway. She sued the company in court.
"The judge said, I rule in your favor, the foreclosure is cancelled, the selling of the home is canceled,” Carter says. “I won."
(abc2 news.com)
Wednesday, May 16, 2007
Baltimore City: Affordable housing at a premium
The Baltimore region lacks a supply of affordable housing, a local housing official said. BALTIMORE (Map, News) - Work force housing is a key to the future of Baltimore-area real estate. For the housing market to be successful, it must create a system to support people moving from low-income housing to moderate- and then high-income homes, Ilene Kessler, president of the Maryland Association of Realtors, told The Examiner.
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
“This is something [everyone working together] has to address and can’t say another community will handle it,” Kessler said. “It affects all of us and is a pressing issue.”
People who read this also read:
Kettler buys Pentagon City parcel for $220M
Potential neighbors to relocated clubs to get $3.6M in road improvements
Tanker driver in fiery crash was carrying ethanol
Housing Slump Continues in April
Richardson holds stock in oil refinery firm
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
“This is something [everyone working together] has to address and can’t say another community will handle it,” Kessler said. “It affects all of us and is a pressing issue.”
People who read this also read:
Kettler buys Pentagon City parcel for $220M
Potential neighbors to relocated clubs to get $3.6M in road improvements
Tanker driver in fiery crash was carrying ethanol
Housing Slump Continues in April
Richardson holds stock in oil refinery firm
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
NovaStar accused of redlining Baltimore row houses
Subprime lender NovaStar Financial Inc. has been hit with a Fair Housing Act lawsuit charging that it refused to make mortgage loans for purchases of row houses in Baltimore.
The lawsuit, filed Wednesday by the National Community Reinvestment Coalition (NCRC), also alleges that NovaStar had a written policy instructing loan officers to reject mortgage applications involving property on American Indian reservations or homes used for adult foster care.
A NovaStar spokesman did not immediately return a call from Inman News, but reportedly called the claims without merit and said NovaStar will fight them.
In its complaint, NCRC said that on two occasions in 2006 it used a "tester" to call NovaStar about obtaining a loan on a row house in Baltimore.
In the first call in January 2006, "After the tester stated that the house was a row house, the agent stated that the company had stopped financing row houses a few months before the tester's call," the complaint alleged. "The agent asked where the house was located, and ... after looking up the address, the agent informed the tester that 'we don't do row houses in Baltimore.' "
A call the following month produced similar results, and the complaint alleges that "NovaStar has continued to enforce this policy up to the present time."
The policy is discriminatory because of the high concentration of African Americans and Latinos in Baltimore, the suit alleges.
"A loan applicant in Baltimore with a row house, despite having substantial assets, a strong FICO score, a low LTV (loan-to-value) and or/DTI (debt-to-income) ratio, and steady income, would not qualify for a loan of any size," NCRC alleged.
The suit said NCRC filed a complaint with the U.S. Department of Housing and Urban Development on March 16, 2006, alleging that NovaStar's no-row-house policy violated the Fair Housing Act, which HUD has not acted on.
NCRC -- a coalition of 640 nonprofit organizations that promotes the investment of private capital in underserved communities -- was awarded $500,000 in September after filing a similar complaint with HUD about the lending practices of SouthStar Funding LLC. HUD negotiated a settlement in which SouthStar agreed to fund NCRC programs over a four-year period, including training seminars for housing counselors.
As part of its lawsuit against NovaStar, NCRC cited as evidence a manual issued to company employees that listed "unacceptable property types" for loans, including "properties located on Indian reservations" and "properties used for adult foster care."
NCRC said the alleged "no Indian reservation policy" has "the purpose and effect of limiting access to capital for Native Americans," noting that Native Americans make up more than half the population of reservations nationwide. The alleged policy against financing properties used for adult foster care "excludes homes typically licensed for people with disabilities" resulting in an "adverse impact on loan applicants associated with, or living with, persons with disabilities."
The lawsuit seeks an injunction against NovaStar forcing it to halt its alleged discriminatory practices, and also seeks compensatory and punitive damages
The lawsuit, filed Wednesday by the National Community Reinvestment Coalition (NCRC), also alleges that NovaStar had a written policy instructing loan officers to reject mortgage applications involving property on American Indian reservations or homes used for adult foster care.
A NovaStar spokesman did not immediately return a call from Inman News, but reportedly called the claims without merit and said NovaStar will fight them.
In its complaint, NCRC said that on two occasions in 2006 it used a "tester" to call NovaStar about obtaining a loan on a row house in Baltimore.
In the first call in January 2006, "After the tester stated that the house was a row house, the agent stated that the company had stopped financing row houses a few months before the tester's call," the complaint alleged. "The agent asked where the house was located, and ... after looking up the address, the agent informed the tester that 'we don't do row houses in Baltimore.' "
A call the following month produced similar results, and the complaint alleges that "NovaStar has continued to enforce this policy up to the present time."
The policy is discriminatory because of the high concentration of African Americans and Latinos in Baltimore, the suit alleges.
"A loan applicant in Baltimore with a row house, despite having substantial assets, a strong FICO score, a low LTV (loan-to-value) and or/DTI (debt-to-income) ratio, and steady income, would not qualify for a loan of any size," NCRC alleged.
The suit said NCRC filed a complaint with the U.S. Department of Housing and Urban Development on March 16, 2006, alleging that NovaStar's no-row-house policy violated the Fair Housing Act, which HUD has not acted on.
NCRC -- a coalition of 640 nonprofit organizations that promotes the investment of private capital in underserved communities -- was awarded $500,000 in September after filing a similar complaint with HUD about the lending practices of SouthStar Funding LLC. HUD negotiated a settlement in which SouthStar agreed to fund NCRC programs over a four-year period, including training seminars for housing counselors.
As part of its lawsuit against NovaStar, NCRC cited as evidence a manual issued to company employees that listed "unacceptable property types" for loans, including "properties located on Indian reservations" and "properties used for adult foster care."
NCRC said the alleged "no Indian reservation policy" has "the purpose and effect of limiting access to capital for Native Americans," noting that Native Americans make up more than half the population of reservations nationwide. The alleged policy against financing properties used for adult foster care "excludes homes typically licensed for people with disabilities" resulting in an "adverse impact on loan applicants associated with, or living with, persons with disabilities."
The lawsuit seeks an injunction against NovaStar forcing it to halt its alleged discriminatory practices, and also seeks compensatory and punitive damages
Monday, May 14, 2007
Fall in Maryland home sales reflects trend across nation
Houses sitting longer on market.
The insider jargon is little consolation to apprehensive homeowners who are tired of seeing ‘‘For Sale” signs languish in their front yards.
Average time on the market for a Montgomery County home was 93 days in March, compared with just 50 days in March 2006. In Prince George’s County, time on the market increased from 40 to 76 days and in Frederick County from 65 to 110 days, according to data from Metropolitan Regional Information Systems Inc.
And the U.S. Commerce Department last week reported that new home sales in March declined by 23.5 percent from March 2006. The news mirrors a similar picture in existing home sales, also released this week by the National Association of Realtors. The group reported an 11.3 percent drop from last March.
Still, housing experts who worked through the 1980s housing slump remain optimistic.
‘‘The drop in existing home sales in Maryland in the first quarter this year from a year ago was a ‘correction’ to a more normal homebuying market,” said Ilene Kessler, president of the Maryland Association of Realtors.
‘‘In 2005 and 2006, there was a lot of interest in buying,” Kessler said. ‘‘It’s now a more balanced market. A lot of people have already bought.”
The market is finding equilibrium, said Frank Armantea, vice president for mortgage lending at Mid-Atlantic Federal Credit Union in Germantown.
‘‘You have to look at it as situational,” Armantea said. ‘‘There are some areas of [Montgomery County] that are quite robust. Some are drawing multiple contracts in the more moderate price ranges.”
Mortgage lender Glen Lazovick with Mid-Atlantic said there are pockets of the county with a shortage of inventory in the $500,000 range, particularly in ‘‘down county Potomac and Bethesda.”
The housing boom that ended last year was unprecedented, in that lending rates did not change much, Armantea said.
Another unusual sign was that traditional pricing trends, such as proximity to Washington, D.C., did not hold, he said. For example, in 2005 some 2,800- to 3,800-square-foot homes in Frederick were selling for the same prices as similar houses in lower Montgomery County, he said.
Last month’s slowdown in Maryland was strange, said Kenneth Wenhold, regional director of Metrostudy of Fairfax, Va., a nationwide housing market survey service.
Sales in January and February were ‘‘considerably stronger” than a year ago, he said. But the last two weeks in March were much slower than expected, possibly due to bad weather and Easter, he speculated.
By last week, though, the number of visitors to model homes and the number of signed contracts had picked up again to about 8 percent higher than the previous week, Wenhold said.
A March 31 survey by Metrostudy showed the inventory of available single-family detached homes and townhouses in Montgomery County was ‘‘very supply-constrained” at 700 units, compared with 1,026 in mid-2004, at the height of the boom. But the inventory had actually increased by more than 10 percent from Dec. 31. Meanwhile, inventory in Prince George’s and Frederick counties decreased considerably since December, Wenhold said.
Metrostudy is ‘‘really quite hopeful that the summer will increase sales as we burn through the remaining inventory and builders have more starts,” he said.
The resale market is down by 15 percent in Maryland and 18 percent in Virginia from the same time last year, according to Metrostudy.
This report originally appeared in The Business Gazette.
Falling Market
In Maryland, existing home sales in March fell 15.7 percent from a year ago, with the following decreases:
Montgomery County:16.4 percent
Frederick County:21.6 percent
Prince George’s County: 31.4 percent
Baltimore city: 8.5 percent
Source: U.S. Commerce Department
(gazette.net)
The insider jargon is little consolation to apprehensive homeowners who are tired of seeing ‘‘For Sale” signs languish in their front yards.
Average time on the market for a Montgomery County home was 93 days in March, compared with just 50 days in March 2006. In Prince George’s County, time on the market increased from 40 to 76 days and in Frederick County from 65 to 110 days, according to data from Metropolitan Regional Information Systems Inc.
And the U.S. Commerce Department last week reported that new home sales in March declined by 23.5 percent from March 2006. The news mirrors a similar picture in existing home sales, also released this week by the National Association of Realtors. The group reported an 11.3 percent drop from last March.
Still, housing experts who worked through the 1980s housing slump remain optimistic.
‘‘The drop in existing home sales in Maryland in the first quarter this year from a year ago was a ‘correction’ to a more normal homebuying market,” said Ilene Kessler, president of the Maryland Association of Realtors.
‘‘In 2005 and 2006, there was a lot of interest in buying,” Kessler said. ‘‘It’s now a more balanced market. A lot of people have already bought.”
The market is finding equilibrium, said Frank Armantea, vice president for mortgage lending at Mid-Atlantic Federal Credit Union in Germantown.
‘‘You have to look at it as situational,” Armantea said. ‘‘There are some areas of [Montgomery County] that are quite robust. Some are drawing multiple contracts in the more moderate price ranges.”
Mortgage lender Glen Lazovick with Mid-Atlantic said there are pockets of the county with a shortage of inventory in the $500,000 range, particularly in ‘‘down county Potomac and Bethesda.”
The housing boom that ended last year was unprecedented, in that lending rates did not change much, Armantea said.
Another unusual sign was that traditional pricing trends, such as proximity to Washington, D.C., did not hold, he said. For example, in 2005 some 2,800- to 3,800-square-foot homes in Frederick were selling for the same prices as similar houses in lower Montgomery County, he said.
Last month’s slowdown in Maryland was strange, said Kenneth Wenhold, regional director of Metrostudy of Fairfax, Va., a nationwide housing market survey service.
Sales in January and February were ‘‘considerably stronger” than a year ago, he said. But the last two weeks in March were much slower than expected, possibly due to bad weather and Easter, he speculated.
By last week, though, the number of visitors to model homes and the number of signed contracts had picked up again to about 8 percent higher than the previous week, Wenhold said.
A March 31 survey by Metrostudy showed the inventory of available single-family detached homes and townhouses in Montgomery County was ‘‘very supply-constrained” at 700 units, compared with 1,026 in mid-2004, at the height of the boom. But the inventory had actually increased by more than 10 percent from Dec. 31. Meanwhile, inventory in Prince George’s and Frederick counties decreased considerably since December, Wenhold said.
Metrostudy is ‘‘really quite hopeful that the summer will increase sales as we burn through the remaining inventory and builders have more starts,” he said.
The resale market is down by 15 percent in Maryland and 18 percent in Virginia from the same time last year, according to Metrostudy.
This report originally appeared in The Business Gazette.
Falling Market
In Maryland, existing home sales in March fell 15.7 percent from a year ago, with the following decreases:
Montgomery County:16.4 percent
Frederick County:21.6 percent
Prince George’s County: 31.4 percent
Baltimore city: 8.5 percent
Source: U.S. Commerce Department
(gazette.net)
Friday, May 11, 2007
Region's home prices rise just 1.8% in April
Baltimore records first decline in 4 years.
Amid a continuing slowdown, home prices in metropolitan Baltimore eked out a slim gain in April, thanks largely to strength in Baltimore County. The city recorded its first decline in more than four years.
The average sale price in Baltimore and the five surrounding counties rose 1.88 percent from $310,323 in April last year, Metropolitan Regional Information Systems Inc. reported yesterday.
Half the jurisdictions in the region registered an increase, and half a decrease.
Baltimore County posted the strongest appreciation at over 6 percent, with slight gains in Howard and Carroll counties. Anne Arundel County had the biggest drop, at nearly 5 percent.
The mixed-price picture came as home sales continued to stumble. The 2,831 homes sold last month were 11.23 percent fewer than the 3,189 homes sold in April 2006, according to MRIS. Sales declined in each jurisdiction except Howard and Carroll counties.
In Baltimore City, the average price fell a little more than $3,000 - or 1.79 percent - from April a year ago, the first drop since January 2003. Average gains have soared by double digits through much of that time as homebuyers sought cheaper alternatives to the counties and an urban lifestyle.
But as the booming real estate market has cooled, the pace of price appreciation has been shrinking since the middle of last year. The city's price drop likely reflects a slump in once rapidly appreciating, expensive waterfront neighborhoods such as Canton and Federal Hill, rather than a broader drop, said one economist yesterday.
"Those were areas seen as very hot markets," said Daraius Irani, director of the applied economics group at RESI, Towson University's research and consulting arm.
"People rushed into those markets and housing prices were bid up substantially. As the market has softened, and there is a decline in demand and tightening credit restrictions, those are areas that are likely to see slowdown. If you're not selling as many $500,000 units as you did in years past, that's going to tend to pull down overall averages."
While April's settlements reflect contracts signed in preceding months, the arrival of spring hasn't brought the boost to the housing market that typically comes with the season, agents said. And some believe that tightening credit requirements - the result of problems with subprime loans and rising foreclosure rates - will reduce the pool of buyers.
"It is somewhat of a random market," said Tom Mooney, a partner with O'Conor & Mooney Realtors in Baltimore. "We're getting showings, but buyers are not as quick to pull the trigger. There's very little impulse buying any more."
While 6,524 homes were listed for sale in April alone, contracts and contingent contracts were reached on just over half that number, or 3,536, properties, the MRIS said.
The number of homes for sale topped 17,000, nearly three times as many as were listed two years earlier at the height of the housing boom. Homes stayed on the market an average of three months, compared with the average of two months it took to sell in April 2006, MRIS said.
Buyers are holding out, expecting that prices will come down more.
"The market has not stabilized to the point where everybody is on the same page yet," said Sharon Martin-Sims, a broker with S. Lee Martin & Co. in Baltimore. "For this time of year, we should have been a little stronger by now."
With homes staying on the market longer, buyers have more to choose from, she said.
"Since buyers know it's a buyers market, they want to offer much lower than what sellers are asking for," Martin-Sims said. "Sellers, on the other side, don't want to understand the fact that prices should be coming down a little bit."
Offers tend to be for less than asking price, by 5 percent to 10 percent, on average, Realtors said. Martin-Sims said sellers are beginning to adjust prices more quickly.
A four-bedroom Colonial with a two-car garage in the Ten Hills neighborhood of Baltimore went on sale for $499,000 in September and has now been reduced to $399,000. Another house in Randallstown, a three- bedroom rancher, went on the market at $314,500 and was reduced by $10,000 after 30 days, Martin-Sims said.
Diane Boynton said she worried when she and her husband decided in April to sell their Timonium townhouse so they can move to a retirement community. "The bad part was the market," Boynton said. "We thought this is going to be a mess. We just missed the right time."
Boynton said the couple followed their real estate agent's advice to price the home within a certain range and listed the two-bedroom townhouse at $305,000, below prices neighbors got last year. The house sold in just five days for the asking price.
(baltimoresun.com)
Amid a continuing slowdown, home prices in metropolitan Baltimore eked out a slim gain in April, thanks largely to strength in Baltimore County. The city recorded its first decline in more than four years.
The average sale price in Baltimore and the five surrounding counties rose 1.88 percent from $310,323 in April last year, Metropolitan Regional Information Systems Inc. reported yesterday.
Half the jurisdictions in the region registered an increase, and half a decrease.
Baltimore County posted the strongest appreciation at over 6 percent, with slight gains in Howard and Carroll counties. Anne Arundel County had the biggest drop, at nearly 5 percent.
The mixed-price picture came as home sales continued to stumble. The 2,831 homes sold last month were 11.23 percent fewer than the 3,189 homes sold in April 2006, according to MRIS. Sales declined in each jurisdiction except Howard and Carroll counties.
In Baltimore City, the average price fell a little more than $3,000 - or 1.79 percent - from April a year ago, the first drop since January 2003. Average gains have soared by double digits through much of that time as homebuyers sought cheaper alternatives to the counties and an urban lifestyle.
But as the booming real estate market has cooled, the pace of price appreciation has been shrinking since the middle of last year. The city's price drop likely reflects a slump in once rapidly appreciating, expensive waterfront neighborhoods such as Canton and Federal Hill, rather than a broader drop, said one economist yesterday.
"Those were areas seen as very hot markets," said Daraius Irani, director of the applied economics group at RESI, Towson University's research and consulting arm.
"People rushed into those markets and housing prices were bid up substantially. As the market has softened, and there is a decline in demand and tightening credit restrictions, those are areas that are likely to see slowdown. If you're not selling as many $500,000 units as you did in years past, that's going to tend to pull down overall averages."
While April's settlements reflect contracts signed in preceding months, the arrival of spring hasn't brought the boost to the housing market that typically comes with the season, agents said. And some believe that tightening credit requirements - the result of problems with subprime loans and rising foreclosure rates - will reduce the pool of buyers.
"It is somewhat of a random market," said Tom Mooney, a partner with O'Conor & Mooney Realtors in Baltimore. "We're getting showings, but buyers are not as quick to pull the trigger. There's very little impulse buying any more."
While 6,524 homes were listed for sale in April alone, contracts and contingent contracts were reached on just over half that number, or 3,536, properties, the MRIS said.
The number of homes for sale topped 17,000, nearly three times as many as were listed two years earlier at the height of the housing boom. Homes stayed on the market an average of three months, compared with the average of two months it took to sell in April 2006, MRIS said.
Buyers are holding out, expecting that prices will come down more.
"The market has not stabilized to the point where everybody is on the same page yet," said Sharon Martin-Sims, a broker with S. Lee Martin & Co. in Baltimore. "For this time of year, we should have been a little stronger by now."
With homes staying on the market longer, buyers have more to choose from, she said.
"Since buyers know it's a buyers market, they want to offer much lower than what sellers are asking for," Martin-Sims said. "Sellers, on the other side, don't want to understand the fact that prices should be coming down a little bit."
Offers tend to be for less than asking price, by 5 percent to 10 percent, on average, Realtors said. Martin-Sims said sellers are beginning to adjust prices more quickly.
A four-bedroom Colonial with a two-car garage in the Ten Hills neighborhood of Baltimore went on sale for $499,000 in September and has now been reduced to $399,000. Another house in Randallstown, a three- bedroom rancher, went on the market at $314,500 and was reduced by $10,000 after 30 days, Martin-Sims said.
Diane Boynton said she worried when she and her husband decided in April to sell their Timonium townhouse so they can move to a retirement community. "The bad part was the market," Boynton said. "We thought this is going to be a mess. We just missed the right time."
Boynton said the couple followed their real estate agent's advice to price the home within a certain range and listed the two-bedroom townhouse at $305,000, below prices neighbors got last year. The house sold in just five days for the asking price.
(baltimoresun.com)
Baltimore: Affordable housing at a premium
The Baltimore region lacks a supply of affordable housing, a local housing official said.
BALTIMORE - Work force housing is a key to the future of Baltimore-area real estate. For the housing market to be successful, it must create a system to support people moving from low-income housing to moderate- and then high-income homes, Ilene Kessler, president of the Maryland Association of Realtors, told The Examiner.
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
BALTIMORE - Work force housing is a key to the future of Baltimore-area real estate. For the housing market to be successful, it must create a system to support people moving from low-income housing to moderate- and then high-income homes, Ilene Kessler, president of the Maryland Association of Realtors, told The Examiner.
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
Thursday, May 3, 2007
Baltimore City pairs with BHPC to reduce foreclosures
BALTIMORE - Since last year, 50 families a week have lost their homes to foreclosure in Baltimore City — depressing real estate values by $900 million.
Baltimore City and the Baltimore Homeownership Preservation Coalition have partnered to help homeowners and buyers spot predatory lenders and practices before they become their victims.
“Home foreclosure is an issue that can easily undermine the great success realized in neighborhoods throughout Baltimore City,” Mayor Sheila Dixon said. The pair have produced a new educational DVD titled “Judge Smartt,” which is designed to help consumers identify lending practices that can lead to excessive housing costs, potential foreclosures and predatory real estate practices. “Judge Smartt” uses a Court TV format and a humorous approach to get the information across to viewers.
Last year, lenders filed more than 3,200 foreclosure procedures in the city, according to the Baltimore Neighborhood Indicators Alliance. Of that number, 75 percent went to foreclosure. That translates to 2,500 homes lost in 2006.
“Luring uninformed families into loans that are unaffordable from the get-go is a disaster for the families who wind up in foreclosure and the neighborhoods that are left with abandoned houses,” said Vincent Quayle, executive director of the St. Ambrose Housing Aid Center.
With the aid of a $400,000 grant from Baltimore City’s Housing department and matching private support from sources such as the Baltimore Neighborhood Collaborative, more than 1,200 homes have been saved since the program was launched in September 2006. In addition, the city has lent its 311 helpline to provide residents to access a 24-hour toll-free hotline that connects them to free counseling services.
“Homeownership is not just an end in itself — it is a vital element of neighborhood stability and statistically the best means for helping lower- and moderate-income families build substantial assets, so we need to focus on making homeownership sustainable,” said Carol Gilbert, GHPC co-chairwoman.
The DVD will be distributed throughout community groups, housing counselors and other partners in the coming year in order to help prevent foreclosures.
(www.examiner.com)
Baltimore City and the Baltimore Homeownership Preservation Coalition have partnered to help homeowners and buyers spot predatory lenders and practices before they become their victims.
“Home foreclosure is an issue that can easily undermine the great success realized in neighborhoods throughout Baltimore City,” Mayor Sheila Dixon said. The pair have produced a new educational DVD titled “Judge Smartt,” which is designed to help consumers identify lending practices that can lead to excessive housing costs, potential foreclosures and predatory real estate practices. “Judge Smartt” uses a Court TV format and a humorous approach to get the information across to viewers.
Last year, lenders filed more than 3,200 foreclosure procedures in the city, according to the Baltimore Neighborhood Indicators Alliance. Of that number, 75 percent went to foreclosure. That translates to 2,500 homes lost in 2006.
“Luring uninformed families into loans that are unaffordable from the get-go is a disaster for the families who wind up in foreclosure and the neighborhoods that are left with abandoned houses,” said Vincent Quayle, executive director of the St. Ambrose Housing Aid Center.
With the aid of a $400,000 grant from Baltimore City’s Housing department and matching private support from sources such as the Baltimore Neighborhood Collaborative, more than 1,200 homes have been saved since the program was launched in September 2006. In addition, the city has lent its 311 helpline to provide residents to access a 24-hour toll-free hotline that connects them to free counseling services.
“Homeownership is not just an end in itself — it is a vital element of neighborhood stability and statistically the best means for helping lower- and moderate-income families build substantial assets, so we need to focus on making homeownership sustainable,” said Carol Gilbert, GHPC co-chairwoman.
The DVD will be distributed throughout community groups, housing counselors and other partners in the coming year in order to help prevent foreclosures.
(www.examiner.com)
Low appraisals hurt subprime borrowers
BALTIMORE - You face foreclosure. You quickly move to refinance but qualify only for a double-digit subprime rate. You take it, pay for an appraisal and learn your house is worth $425,000. Then the lender reduces your appraisal by $100,000.
That’s the situation Mark Allen, of Gwynn Oak, faced after being downsized at work.
“I took a part-time job to feed my family, keep gas in my car and continue my job search,” said Allen, a single parent of three. “When I finally got a full-time job, I was so far behind I couldn’t catch up. I had to refinance to save my home, but when they dropped my appraisal by $100,000, I was floored.”
Allen accepted that his monthly mortgage payments would go up by $1,000 and that he would only receive 70 percent loan to value, but he questions whether dropping his appraisal was legal.
A loan officer from Quality Home Loans, a lender that downgrades appraisals, said, “Appraisals can be downgraded for a lot of reasons, like market saturation, houses that stay on the market too long, or if when doing a public records search we see that though additions were made to a residence, the proper permits were not obtained. So then we disallow those additions.”
Real estate lawyer Stephen Greenwood said he thought lenders are “being oversensitive” to avoid financial problems such as those that affected New Century Financial, which went bankrupt.
“I don’t know if it is actually legal to decide to reduce somebody’s appraisal,” he said. “Then again, the lenders are the ones loaning the money, and they want to make sure their risks aren’t worse than what they already are.”
Ashidda Khalil, executive director of the Baltimore branch of the Neighborhood Assistance Corporation of America, was familiar with the practice. “Imagine your neighbor with the identical house in the same condition gets 100 percent LTV, and not only do you get double-digit interest rates and only 60 to 70 percent LTV, but now they drop the value of your home by tens of thousands of dollars,” she said.
Khalil cautions borrowers to steer clear of lenders that drop appraisals. “There is legitimate help out there that doesn’t seek to further victimize the borrower,” she said.
(www.examiner.com)
That’s the situation Mark Allen, of Gwynn Oak, faced after being downsized at work.
“I took a part-time job to feed my family, keep gas in my car and continue my job search,” said Allen, a single parent of three. “When I finally got a full-time job, I was so far behind I couldn’t catch up. I had to refinance to save my home, but when they dropped my appraisal by $100,000, I was floored.”
Allen accepted that his monthly mortgage payments would go up by $1,000 and that he would only receive 70 percent loan to value, but he questions whether dropping his appraisal was legal.
A loan officer from Quality Home Loans, a lender that downgrades appraisals, said, “Appraisals can be downgraded for a lot of reasons, like market saturation, houses that stay on the market too long, or if when doing a public records search we see that though additions were made to a residence, the proper permits were not obtained. So then we disallow those additions.”
Real estate lawyer Stephen Greenwood said he thought lenders are “being oversensitive” to avoid financial problems such as those that affected New Century Financial, which went bankrupt.
“I don’t know if it is actually legal to decide to reduce somebody’s appraisal,” he said. “Then again, the lenders are the ones loaning the money, and they want to make sure their risks aren’t worse than what they already are.”
Ashidda Khalil, executive director of the Baltimore branch of the Neighborhood Assistance Corporation of America, was familiar with the practice. “Imagine your neighbor with the identical house in the same condition gets 100 percent LTV, and not only do you get double-digit interest rates and only 60 to 70 percent LTV, but now they drop the value of your home by tens of thousands of dollars,” she said.
Khalil cautions borrowers to steer clear of lenders that drop appraisals. “There is legitimate help out there that doesn’t seek to further victimize the borrower,” she said.
(www.examiner.com)
Baltimore Housing Turning To Buyer's Market
(WJZ) BALTIMORE Sales are down and prices are up this spring, according to housing market specialists in the Baltimore region.As Derek Valcourt reports, the trend is painting a different picture of the Baltimore area's housing market than in the past few years, and analysts think it's a good thing for buyers.For Sale signs go up everyday in Baltimore and the surrounding area. Some are only there for a few days before homes are sold. Others take months.But, analysts are now saying houses are spending more time on the market than last year. Statistics show houses are taking between an average of 41 to 104 percent longer to sell."What's happened here in the last year or so is that the market has stabilized and it has gone to more of a normal market or more of a buyer's market," said Long and Foster realtor Sharon Blough.In addition, not as many homes are selling. Right now only about one out of five homes currently on the market sell each month."The number of properties sold were less than in previous years but at the same time the properties are still holding their value," said Blough.The sales slowdown, according to Blough, is due in part to the cost of home prices rising.In Carroll County average sale prices are up nearly 12 percent from this time last year. In Baltimore City prices are up nearly 10 percent, while other surrounding counties have seem more modest gains.Howard and Anne Arundel Counties have seen prices fall, but only slightly.Economist Anirban Basu said Baltimore's proximity to Washington and its affordability have helped keep prices rising."Actually, I think that the adjustment from the hot seller's market of 2004 and 2005 to a buyer's market has been as smooth as one could have hoped for," said Basu.Although other East Coast cities are suffering, the Baltimore region is holding its own."This could have been predicted because right now the buyers are focused on value," said Basu. "But they are looking for a place to live and they are looking for value and Baltimore offers that."According to experts, the best bet on selling a home quickly is to make sure it is priced reasonably--at or below comparable homes in the area.Spring usually sees an increase in home sales as many people get their tax returns and children prepare to finish up the school year.
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)
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