Recently I’ve had a hankerin’ for some good ol’ diner food.  Some people call it “comfort food”.  No matter what you call it, the experience usually involves heading down to a building that looks like an old RV and has a counter full of old guys shooting the breeze with waitresses that call you “hun”.  Recently, new upstarts have tried to capitalize on the diner experience: the Silver Diner is one which has evolved into a chain.

The Nautilus Diner is another with two locations -  Crofton, MD and Timonium, MD.  I checked out Crofton.

The morning I went it was a nice, sunny day about 10:30.  I had a couple of cups of coffee but I really had a taste for pancakes.  Since these diner places tend to sell breakfast all day, I thought I would check out the new diner (I would ride by it while it was being built while I was showing homes to my buyer clients).

The verdict — don’t bother.

Even though the diner wasn’t that busy it took a few minutes to get seated and a lot more minutes to wait for someone to come up and ask if I wanted to order or wanted some coffee.  Eventually the diner’s manager or owner — he was pretty official looking — came over and asked if I was being served.  I told him what I had in mind and as he turned away he relayed my order to a waiter in the area. I ordered the French Toast special which was supposed to come with a breakfast meat but, of course, no one asked me what kind.  The French Toast came out a few minutes later without butter or syrup.

After I asked, the sausage, butter and syrup and it came out pretty quickly.  The condiments were pre-packaged.  The French Toast itself was under prepared with a mushy taste and the sausage tasted like  a hot dog.

What About Lunch and Dinner?

I’m guessing that lunch and dinner might be a different experience.  They have this absolutely beautiful display of all  kinds of desserts and cakes right in the front as you come through the door.  If breakfast wasn’t already dessert I would almost feel compelled to order something.

However, the breakfast experience with the slow service, the food that was well below expectations (even for diner food) was enough for me to know that it’s not worth the trip back.  There are plenty of other nice diners — Plato’s Diner in College Park, MD, the Tastee Diner in Laurel, MD, Silver Spring, MD and Bethesda, MD as well as the Silver Diner chain — that have much better food, better service and, truth be told, better prices.

In today’s market most every one knows that the home buyer is in the driver’s seat. It’s simple supply and demand. There is a ton of supply (houses on the market) and very little demand (home buyers with the ability and desire to buy homes). So, in order to get rid of the supply and bring this whole housing market thing into better balance prices need to come down, interest rates need to stay low and lenders — banks, credit unions, mortgage companies — need to loosen up the money flow.

In the meantime, there are a ton of homes that are either in short sale or foreclosed status. In other words, the home owner has walked away from the house, has stopped paying the mortgage and the house is…just…sitting…there.  This wouldn’t be so bad except the banks are not selling. At least they’re not selling very quickly.  However, the banks are allowing the prices to be advertised at artificially low levels.  Why not?

How This Affects The Home Owner With Equity

If you happen to be one of the lucky few that own your home outright or have a mortgage less than what you can actually sell it for this means you need to have a price your home low enough to attract home buyers.  The few financially qualified home buyers in the marketplace are picky and persnickety and if the house down the street is $10,000 less than your house they may be able to see past the trashed carpet and stained walls.

It really means the home seller with equity in their house needs to “suck it up” and price the house aggressively and keep it in pristine condition.  It also means that when the time comes when an offer is made on your house, you should seriously consider it.  All of it.

• the price,
• the settlement date,
• the type of financing and who the financing provider is,
• the type of inspections being requested and any other contingencies in the offer,
• the request for a home warranty or anything else.

It really comes down to the question: “Do you want to sell your home?”

The Time Factor

Here’s a true story: I was working with a home seller toward the end of the housing “bubble”.  Things had started to slow down but they hadn’t fallen off the cliff, yet.  An offer came in from a buyer’s agent representing a financially qualified buyer (notice how I keep using the term financially qualified?).  The offer was low but really not unreasonable considering the market.  The home seller could have accepted the offer and still had money in her pocket at the settlement table.  It could have been a win-win.

But…she didn’t wanna give it away.  So we prepared a counter-offer which was very nearly her original list price and financial terms.  She gave a little but not that much.  Her message was loud and clear: “I want to sell the house on my terms!”

The potential home buyer decided that there were more houses where hers came from and walked away from the transaction.  Several months passes before another offer came in from marginally financially qualified home buyer. Marginally.  The offer was for $30,000 less than the offer she had turned down several months earlier. However, by this time, she really wanted to sell the  house and move on.  She took the offer.

It was a bit of a struggle but the transaction made it to settlement.  She was able to sell her  house and because she had enough equity in her house, she came out OK.  She could have come out a lot better and a lot earlier.

The Many Reasons For Not Taking A Good Offer

When home sellers tell me they don’t wanna give it away they almost always have other reasons.  After all, no one really ever gives away a house.  Here are a few I’ve heard (many times):

• we’ve spent lots of money fixing the place up with [fill in the blank] …new bathrooms, new ht water heater, new kitchen…whatever
• we really need a certain amount of money to buy our next home … or whatever else they need the money for
• we didn’t get closing help when we bought the house so we’re not giving it
• we have the largest yard in the neighborhood or there’s a pool right down the street or it’s close to the METRO
• more

The fact of the matter is that nothing really matters except what the market is willing to say your house is worth at any given point in time.  The market doesn’t care about how much home improvement you’ve made or how much money you need to move.  The market cares about supply and demand.  The market cares about current pricing of comparable homes in your neighborhood including all those short sales and foreclosures.

It’s a bitter pill to swallow.

There is a new program that just rolled out in Prince George’s County, MD that can help first-time home buyers purchase a home with virtually no money down.  The program has a few guidelines:

• the homes must be vacant
• the homes are all foreclosed homes
• there is a sliding scale as to how much down payment assistance is available based on income
• there are incentives for purchasing a home in certain zip codes.

If you would like to learn more about the program you can visit the website for the Prince George’s County Association of Realtors.

There are only a certain number of lenders that have been qualified to provide the funding and support for this program.  I’m proud to say that one of them is Rob Mercer of First Home Mortgage.  I’ve know Rob for years and he is a man of integrity and experience.  I’m glad he is one of the “go to” lenders for this important program that can help a lot of first time home buyers realize their dream of home ownership.

Check out this short video of a newscast from last night (with a short sound bite from Rob Mercer).

In early December 2008 the Treasury Department “leaked” a plan that it was considering  lowering mortgage interest rates. On December 16th the Federal Reserve (FED) dropped its target for the Federal Funds Rate from 1% to between 0 and 0.25%. In addition the FED pledged to use “all available tools” to fight the current downturn in the economy. Based in it’s statements the FED plans to keep interest rates at “exceptionally low levels: for some time to come.

The effect of these actions was to move mortgage interest rates lower. They bottomed in mid January before rising a little bit through the end of February. Interest rates then started moving down again and by mid March they reached a low point which held relatively stable through May 27th. Despite predictions that interest rates wou ld move lower, on May 27th the market panicked and rates shot up peaking on June 10th. Since that time the trend in interest rates has been moving down.

So where are we headed? The other day Mark Zandi, chief economist with Moody’s Economy.com, changed his forecast slightly. He had been leaning towards an interest rate of 4.5 percent by the end of the summer. Now, “4.5% seems increasingly less likely,” Zandi acknowledged. “I’m hoping rates move back to below 5 percent in the next few weeks.”

As we have seen in the past predicting the movement in mortgage interest rates can be a tricky business. For those who are considering buying a new home or refinancing their current mortgage it appears this summer will a good time to accomplish either.

Thank you to mortgage professional, Alan Gross of National City Mortgage, for supplying this timely information.

One of the nice things about Twitter is that you occasionally come across something useful.  That was the case recently when one of my Twitter buddies (I follow him, he follows me back) posted a link to a four page flier about the $8,000 First-Time Home Buyer Tax Credit. This particular flyer was produced by the National Association of Home Builders.  These are the fine people who want you to buy all those new homes that are in the process of completion or may have even been sitting around for a bit.

The nice thing about this information piece is that it actually shows you the effect of the $8,000 First-Time Home Buyer Tax Credit for five years after you’ve actually purchased your home. The beauty of this is that it shows that the tax credit is not just a one time event.  It actually has a longer, beneficial effect.

If you want to learn more…Click Here…download and print!

Many time you will see ads that say something like “Own for the same amount you’re paying for rent”.

In the case of this beautiful, single family home in the Marlton section of Upper Marlboro, MD that would be completely true!

Assuming that you have good credit and qualify for a 5.125% mortgage interest rate and an FHA mortgage, your monthly payments would be approximately $1500.00. Compare that against many 3 bedroom, 2 full bath apartment homes (or any other home, for that matter) and you can see that owning can be just as inexpensive as renting.  If you factor in the $8,000 first-time home buyer tax credit and the mortgage interest tax deduction you really come out way ahead.

Check it out!  You will be pleasantly surprised how easy it is to say “good-bye” to the landlord.

This month the Spotlight shines on — Jennifer Grant

Jennifer is another one of my clients from the early days of my career.  Originally, her home search started off like a lot of others — looking for homes that were available for sale and ready to be moved into.  Jennifer had been renting and this would be her first home so it was important to get it right.

We looked and looked and I even remember one weekend marathon where we toured almost two dozen homes. Whew!  Sure.  It was lots of fun because Jennifer is the definition of “fun client”.  But it was exhausting and I’ve learned never to do that again.

Jennifer eventually decided to buy new construction.  New townhome style condos were being built  in Wheaton which is a great location its proximity to METRO, the shopping and the vast array of ethnic restaurants.   So Jennifer moved into a sparkling, brand new home.

Wheaton is a great part of Silver Spring, MD.  It’s close to METRO, great shopping and restaurants as well as parks and other great recreational facilities.

Today we celebrate the founding of the United States of America through its Declaration of Independence from Great Britain, then ruled by King George III. While many of us will be enjoying this day with cookouts and fireworks, it is important to remember that our Independence and beginning as a nation was marked by war and the death that comes with war. Memorial Day should not be to only day to remember those who serve in our military services who protect our independence.

It is equally important to honor those who assure that our system of representative democracy continues to work so well even 233 years after the signing of the Declaration of Independence — the legislative branch made up of the House of Representatives and Senate, the Judiciary with the United States Supreme Court as the ultimate arbiter and the Executive Branch headed by the President of the United States, Barack Obama.  It is this system of checks and balances, while often ridiculed, that assures that no single person or group can threaten our freedom.

Here are some links –

• The Declaration of Independence
• The US Constitution
• The Bill of Rights
• History of the Fourth of July

Here is a quickie overview of what is happening in one little part of Silver Spring.  The zip code - 20901 - takes in a large area including such hot spots as:

• Four Corners (a great, older community with lots of trees and close to the commuter routes)
• White Oak Shopping Center
• the new Food and Drug Administration (FDA) office facilities
• Westfield Wheaton Shopping
• the Wheaton METRO station
• Sligo Creek Park (great for biking and walking)

So….What’s going on in the real estate market?

It’s still not a pretty picture. However there seems to be signs of improvement:

• Median Sales Price is moving up slightly.
• Days on Market seems to have stabilized a bit. It’s still a long time but, at least, it’s not getting any longer.
• Inventory is getting bigger — this is the number of homes currently on the market. This means more people are feeling good about selling their homes.

It seems that the housing market decline is no respecter of persons.  People who are in high positions of power and authority as well as people who have plenty of money are running into the same problem the rest of us have — they can’t sell their homes.

Two recent articles help to highlight this situation:

• Shelia Bair Can’t Sell Her House as reported on The Business Insider

evidently the Chair of the Federal Deposit Insurance Corporation (FDIC) can’t get her house sold even after dropping the price $100,000.  So she has decided to rent it out until the market turns around.  My only hope is that she lets the rest of us know when that happens.  I know a lot of people who would love to sell their home “when the market turns around”. When?

• For Sale, Still: Grander Homes in Gracious Neighborhoods as reported in today’s Washington Post

this is a story about homes in the $1,000,000 and more category in the DC Metro area that are really having a tough time of it.  Part of the challenge with selling homes in this price range is the mortgage situation.  Jumbo loans are hard to come by and the interest rates and credit requirements are prohibitive.  Not everybody has the actual cash to plunk down on these homes and a lot more have their money tied up in the stock market which has seen a huge decrease over the past couple of years.

I don’t know about you but I take a small bit of comfort in knowing that even if you have lots of money and a great, high profile job (note: Secretary of the Treasury, Timothy Geithner can’t sell his place either) it’s just as hard to sell your home as it is for the rest of us.  Hopefully, they’ll have some empathy for the “little guy” and get this economy back on track knowing that as soon as they do they’ll be able to sell their homes.  This might be a little bit of “enlightened self interest”.  You don’t need an expensive lobbyist to tell you the real estate market is in the tank when you can’t sell your own home!