The Washingtion, DC metro area, which includes relatively large portions of suburban northern Virginia and Maryland, has clearly benefited from increased government spending, especially as the federal government is the regions largest employer. It is also the driving force behind various ancillary industries for defense contractors, legal and lobbying firms, and numerous foreign companies, all desirous to be close to the powers of influence. Accordingly, the unemployment rate for the DC metro area remains under 6%, one of the lowest rates in the country, and this has allowed for relatively strong housing demand.

An interesting feature of the S&P/Case-Schiller home-price report is that Washington, DC is the only “Top 10” performing residential real estate market that would considered a major metropolitan area. The other “Top 10” markets include small-to-medium sized cities such as Buffalo, NY, Des Moines, IA and Portland, ME. Notably missing as top performers are large cities such as Chicago, New York City, Los Angeles, Denver or Atlanta.

The issue of whether the comparatively strong performance of the Washington, DC housing market is a healthy sign for the country at large is an entirely separate matter. While there is no doubt federal government spending is a current boon to the Washington, DC metro region, I am personally concerned this may simply be a short-lived, short-sided benefit to the chimerical, yet seemingly prevalent philosophy and belief of many politicians that we as a country can spend our way to prosperity.

For the past six years I have had the opportunity to work at the Annapolis office of Prudential Carruthers Realtors. I will miss my colleagues at Prudential Carruthers and leave with much respect for the owners, management and agents of that company. At the same time, I am very excited with the new opportunities available for me at Coldwell Banker.

As a result of this move, some of my contact information has changed. Below is my new office information:

Branden Schroeder -- Associate Broker, LEED AP
Coldwell Banker Residential Brokerage
107 Jennifer Road, Suite 102
Annapolis, Maryland 21401
Direct: (443) 333-9060
Cell: (443) 995-7931
Office: (410) 224-2200
Fax: (410) 224-2258
Web: Maryland Homes and Property (www.MHAP.com)

To reduce SPAM and phishing attempts, I will not publish my new email address here, but I can be reached via email through my website and replies through this blog post.

A recent announcement of my new affiliation was recently published in The Capital newspaper, a local Annapolis and Anne Arundel publication. The text of the announcment is provided below, along with a link to a display of the announcement itself:

"We [Coldwell Banker] are pleased to announce the affiliation of Branden Schroeder as an Associate Broker with the 170 Jennifer Road, Annapolis Plaza office. In addition to his expertise in real estate, Mr. Schroeder is a licensed attorney and a US Green Building Council LEED Accredited Professional, a credential that provides a standard for industry professionals with advanced knowledge related to the design and construction of high-performance buildings. Prior to his career as a commercial and residential real estate broker, Mr. Schroeder worked as a corporate attorney in a law firm."
The Capital Newspaper, March 12, 2011

The previous phone number (410) 571-1378, will continue to be operable for a short time, but will most likely be discontinued as of the end of February.

Featuring industry-leading property search functionality and advanced user panel control tools, the aim of the site is to provide users with extremely efficient access to information about Multiple List System (MLS) 'For Sale' properties throughout Maryland.

Most individuals conducting searches enjoy being able independently begin the process of finding properties, but at some point may decide to enlist the services of a real estate professional. To that end, I would of course welcome the opportunity to answer any questions regarding the site, provide additional information regarding specific properties, and help consult buyers and sellers about real estate transactions.

As with any website, this will never be completely a 'finished product' and additional content will be added on an on-going basis. Accordingly, I would welcome any comments, suggestions and critiques. Thank you.

Other big changes for FHA loans are in the works. The first change is the reduction of a maximum seller concession from 6% down to a max of 3%. Although the timing of this change has not been confirmed, it is likely to be implemented sometime between late spring and mid-summer. Once the policy is formally announced there will be a mandatory 30 day Q&A/comment period before implementation. The other major FHA loan changes will be establishment of a minimum credit score and an increase of the mandatory down payment. It is not yet know when these changes will become policy, but it may correspond with the late spring to mid-summer timeframe of the anticipated changes above.

Finally, as many readers are likely already aware, the Federal Homebuyers Tax Credit is ending very soon. To qualify for the credit, buyers must have a signed contract by April 30th and settle no later than June 30th. With less than 60 days to complete contracts, the race is on for value priced properties in the $200k-$300k range. If you have any questions about the specifics of this program go to http://www.federalhousingtaxcredit.com or please contact me any time.

Some information in this market update was provided by Brent Ellwood, Regional Manager of PCR Mortgage Services, who can be contacted at (410) 991-9595.

Some information in this market update was provided by Brent Ellwood, Regional Manager of PCR Mortgage Services, who can be contacted at (410) 991-9595.

* Remove the per se blocking of sales on 'flipped' properties by offering a waiver to borrowers interested in pursuing flips in the marketplace, although there will be very specific circumstances under which the transaction will be allowed to occur under FHA guidelines. A proposed waiver form has already been circulated.

* Increase the minimum FHA down payment amount from 3.5% to 5%.

* Decrease the allowable amount of seller contributions (closing cost credits) from 6% to 3%.

* Require the FHA Upfront Mortgage Insurance (MIP) premium to be paid at closing by a buyer and no longer allow the MIP to be rolled into the loan amount.

Clearly these FHA changes could significantly impact homebuyers, especially first-time homebuyers most likely to explore the FHA loan option. Stay tuned for updates.

This post is the first of a series of entries that will report on important changes impacting the Maryland residential real estate and home mortgage markets.

Home mortgage interest rates leading up to the 2009 Holidays were especially volatile. The 10 year treasury yield index (ticker TNX) moved from its recent lows in December of 32.5 up to 38.15 as of Friday, January 8. This, along with other key economic factors have caused 30 year fixed rates to climb from 4.625% to 5.25% in just a few weeks.

Yes, rates are still very attractive but many buyers seem to be emotionally attached to sub 5% rates and are back in a "wait and see" mode. Keep in mind that the Federal Reserve said it will discontinue its practice of purchasing mortgage backed securities after 4th quarter 2009. It remains to be seen if the investment community will have an appetite for these very low yielding long term bonds. If they don't, expect rates to climb rapidly.

One of the major changes to the real estate lending industry for 2010 will be implementation of the newly modified Good Faith Estimate (GFE) and HUD-1 Settlement Statement forms. There are a variety of new changes which if not properly adhered to could delay or ultimately derail real estate settlements.

For example, the Truth In Lending (TIL) disclosure Annual Percentage Rate (APR) must be within .125% (1/8 of a percent) of the final closing amounts provided in the TIL. If the amounts are not within the allowed .125% (up or down) tolerances it is required that there be a 3 day review period for the borrower, which potentially can delay a settlement. In this Real Estate Settlements Procedure Act (RESPA) change, the borrower is allowed to waive this review period if said borrower writes a letter explaining financial hardship. Investors are still NOT allowing for this 3 day period to be waived regardless of the circumstance. There are a number of sections of the new forms that have a ZERO tolerance. If the HUD-1 is off by even a penny in these sections the settlement cannot occur unless the violating party agrees to "cure" this with the borrower. The definition of "cure" is for the lender to pay the borrower the difference. It is doubtful the fly by night and internet mortgage companies will agree to pay $3k or even more if they misdisclose transfer taxes to the buyer. Other sections of the HUD-1 have a 10% tolerance. Successful settlements will only happen if the real estate agent, mortgage company and title companies work well together from the beginning.

These changes cannot be ignored and real estate professionals cannot just hope to get it right. Some lenders don't even have the new compliance software yet, which is why it is important for homebuyers and borrowers to make sure they work with reputable real estate professionals and lenders who are up-to-date on the latest regulatory changes.

Some information in this market update was provided by Brent Ellwood, Regional Manager of PCR Mortgage Services, who can be contacted at (410) 991-9595.

Although mercury is a naturally occurring element, accumulation at certain levels in humans can be toxic. Efforts are underway to reduce the necessary amounts of mercury in these bulbs, but the nature of CFLs will likely always require some trace of mercury.

So, what are homeowners to do with these bulbs once they burn out? Are they considered hazardous waste?

Unfortunately, there are no widespread recycling or disposal programs established specifically for CFLs. Accordingly, at this point in time, disposal procedures vary on a state-by-state and even county-by-county basis. In some states it is illegal to dispose CFLs with the regular trash, but in most areas it is permitted.

In Maryland, each county sets its own recommended procedures for disposal of the CFL bulbs. Anne Arundel County, for example, suggests the CFLs be dropped off at the Household Hazardous Waste facilities on the scheduled collection dates during the year. Given the obvious significant inconvenience of hauling such a small item to the dump, most people simply dispose of the bulbs in the regular trash, which is permitted.

To confirm Anne Arundel County policy on CFLs, I called the countys Waste Management Division and was told that although the county would prefer disposal at the hazardous waste facility on the scheduled collection dates, residents can simply place the bulbs in the regular landfill-bound trash. They do recommend, however, that the burned out CFLs are wrapped in plastic so if they break in transit the mercury is not easily released.

Given the wide variance of CFL disposal guidelines in different jurisdictions, homeowners should check with their local waste collection administration office for more information applicable to their area.

Clearly the currently available disposal methods are less than ideal and the EPA is working with manufacturers and retailers to address the obvious problem related to CFL mercury content.

But, given the mercury issue, it begs the questions: Are CFLs better for the environment than incandescent bulbs?

Most experts agree that because CFLs use far less electricity, produced by power plants that emit mercury as a coal-burning by-product, it is still probably better for the environment to make the switch to CFLs. And, of course, they have the benefit of helping reduce your electric bill, too.

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UPDATE: There has been some uncertainty regarding the process of applying for the Homestead Tax Credit. The specific application deadline for homeowners depends on when their property is due for reassessment, as set forth below:

*If your property was scheduled for reassessment in January 2008, your assessment packet should have included an application for the Homestead Tax Credit. In order to continue to receive this credit, your application should have beeen returned to the State by April 1, 2008.

*If your property was scheduled for reassessment in January 2009, your assessment packet should have included an application for the Homestead Tax Credit. In order to continue to receive this credit, your application must be returned to the State by April 1, 2009.

*If your property is scheduled for reassessment in January 2010, your assessment packet should include an application for the Homestead Tax Credit. In order to continue to receive this credit, your application must be returned to the State by April 1, 2010.

Homeowners may also apply for the Homestead Tax Credit online once they receive their assessment packet at https://sdathtc.resiusa.org/homestead.

To determine when your property is scheduled for reassessment, if you believe you may have missed the filing deadline, or have specific questions about your eligibility for the Homestead Tax Credit, consult your tax assessment packet or contact the Maryland Department of Assessments and Taxation by calling 410-767-2165 in the Baltimore metropolitan area or 888-650-8783 toll free elsewhere in Maryland.