FHA Loan Limits Remain High

The loan limits for FHA are at a decent amount, thanks to Congress voting to reinstate the loan limits that had been in place before, but had lapsed.

Currently, the limit for an FHA mortgage in Baltimore County is $560,000. That was due to drop down to $494,500, which could have really hurt Towson house values, since there are many in the $500-$550,000 price range!

The reason this could hurt Towson house values, is that a buyer would have to get more of a downpayment (it could be 20% or more!), and get what is called a JUMBO loan, which generally has higher interest rates than standard Conventional or FHA loans. The loan limit for standard Conventional loans is $417,000, a large drop from the FHA limit.

There are many buyers who do not have 20% to put down on a house, in order to qualify for a Jumbo loan, which would leave them most likely unable to buy a house above either the FHA loan limit, or the lower Conventional loan limit.

I wrote about the potential issue of a Baltimore FHA loan limit drop in June, and used this possible example:

Today, you meet with a REALTOR(R), and after meeting, you determine that your house is worth around $525,000. A qualified buyer using FHA secured financing can currently buy your home.

As of October 1, 2011, that same buyer would not be able to buy your house. What do you think would happen? Might their best & highest offer be $494,500, then, since they need FHA secured financing?

These extended limits are not forever, so make sure you know what the limits are when you list your home.

For professional, knowledgeable Towson real estate needs, contact me!

Why Did My House Appraisal Come in Low?

Why did my house appraisal come in lower than contract price?

Even with comparable sales to your contract price on your house on record, if there are other homes in the area that have sold for less since then, that says to an appraiser that values are dropping in the neighborhood.

An appraiser’s responsibility is to the buyer’s bank, to show to the bank that if they had to foreclose, the value would be there to resell it.

If he or she interprets the market to be declining, it is his or her obligation to report it that way.

If there is a long time between the contract date and the settlement date, it can make this issue more prevalent, so be aware of settlement dates more than 60 days out. Appraisers right now are looking at data generally less than four months old. If your house goes under contract, and settlement isn’t due to happen for 90-120 days, then you really don’t know what the market will tell the appraiser, and you run even more of a risk.

What can you do to prepare for an appraisal?

If you have done a lot of work to your house that is outstanding and sets your home apart from others, make sure to have those receipts, so your agent can make copies of them to give to the appraiser.

Make sure your house looks good when the appraiser is due to come through. Appraisers do understand that you are moving, so some boxes are expected, but a nice, clean house helps!

Be sure to keep up on what is happening in your neighborhood even after you go under contract. Those list prices and sales WILL affect your value!

Having a professional real estate agent to guide you through this tough market is very important. Contact me for Towson real estate needs!

A New Low for Incorrect Zillow Zestimates

Last night, Zillow posted a tweet, inviting you to look at this glorious mansion on the market for $35,000,000. Please note, that is $35 MILLION.

The amusing part to me, is when I clicked on it, directly under the asking price is the Zillow Zestimate: $396,500. Yes, you read that right, Three hundred ninety-six THOUSAND, five hundred dollars.

Now, I realize Zillow’s algorithms have what they claim to be somewhere between a 7-11% margin of error, but this one is off by 88.27%. OFF BY ALMOST 90% OF VALUE. Hm. Think something might not be right?

Yet Automated Valuation Systems are the way banks are doing quick appraisal reviews, and no wonder they may be coming in low.

I’ve discussed the Zillow Zestimates in the past, beginning with Zillow Zestimates for Towson Real Estate May Be Misleading. I have come across a large number that were not close to a selling price of a home.

Then, I had communications with some Zillow executives, where some light was shed on why it is possible they are off in our area, which I discussed in Misleading Towson Zillow Zestimates Explained Further.

Zestimates started to complicate things further as the market began to drop, because banks began to reduce Home Equity Lines of Credit, and were using Desktop Valuations to do so. When one of my clients called his bank, his loan officer pulled up Zillow & told him that’s why it had been dropped. (See Incorrect Towson Zillow Zestimate Strike Again.)

Earlier this year, Zillow updated their Algorithms to try to correct some of the problems. For the Baltimore metropolitan area, according to the site’s “Zestimate Accuracy,” Zestimates are within 20% of an actual sales price only 78.3% of the time (with a 7.9% margin of error).

For a $200,000 house, being 20% below would bring the price down to $160,000. Above, that price (which would make a seller happy, but not a buyer or appraiser), would be $240,000. That’s a tremendous difference!

Real estate is very local. Even street-by-street or neighborhood-by-neighborhood within a zip code can have majorly different values.

If you would like an accurate Towson home value estimate, please contact me. I can help you anywhere in the Baltimore real estate market area, or if you are in a different state, I can refer you to an agent anywhere across the country.

Bloomberg Reports Home Prices Likely to Rise

In a post today from CNN’s “State of the Union” interview with HUD Secretary Shaun Donovan, Bloomberg reports that house prices are unlikely to decline further, and they expect to see a rise in prices in the third quarter.

This is due to the reduction in number of people defaulting on their mortgages, down 40% over the same time last year.

Also, in general, across the U.S., home sales have risen over the past six months. See more details in the Bloomberg article and the CNN interview with Secretary Donovan.

Secretary Donovan said according to the CNN interview,

“Foreclosures are coming down. They’re down about 40 percent since last year,” said Donovan, who joined President Barack Obama’s Cabinet in 2009. “So, we are making progress, but rightly, the American people recognize we’re not where we need to be. We still have a ways to go.”

According to the Bloomberg article,

“Contracts to buy previously owned U.S. homes rose 8.2 percent in May, following a revised 11 percent drop in the previous month, the National Association of Realtors said on June 29. A separate report by the Chicago-based group on June 21 showed sales of existing houses, which make up about 96 percent of the market, declined in May to a six-month low.”

I will be curious to see the Towson real estate market update from June, because here in our area, we did not see increases, like the NAR’s statistics from May.

Contact me for details on your Towson house value, because each neighborhood is retaining or losing value separately.

Towson High Schools Rank in Newsweek Top 500

Towson High Schools were ranked in Newsweek’s Top 500 list on June 19, 2011, and Towson residents should be proud.

Seven Baltimore County Schools made the list (18 total for the State of Maryland). According to the Newsweek article:

…each school’s score is comprised of six components: graduation rate (25%), college matriculation rate (25%), AP tests taken per graduate (25%), average SAT/ACT scores (10%), average AP/IB/AICE scores (10%), and AP courses offered (5%).

Carver Center led the Towson pack at #232. Towson High School ranked #413, and Loch Raven High ranked #443.

Other Baltimore County High Schools that made the list were Essex Technical (#131!), Hereford High School in Sparks was #219, Pikesville High #388, and Dulaney High School in Timonium #446.

It goes to show why many feel living in Towson is great!

Baltimore FHA Loan Limits May Drop in Fall

FHA loan limits across the United States had been set at a higher level to help the housing market from further decline, and in September 2010 that was extended through September 2011.

The current loan limit in Baltimore County, Baltimore City, and Harford County is $560,000 for an FHA loan. This means that you can get an FHA loan of up to $560,000 for a house in Baltimore.

If the loan limit extension is allowed to expire, then that limit will be dropped to $494,500 (a drop of $65,500!)

When I think of the Timonium housing market, or Towson house values, many homes are in the $450-550,000 range, and if this extension were to expire, those from $500-560,000 no longer would qualify for FHA financing, which could hurt homesellers in a big way.

Many Towson homebuyers do not have a large percentage to put down on a home, and would need the low 3.5% downpayment program that FHA has to offer. If the loan limits drop, this could bring house values down. How?

Here’s a possible example:

Today, you meet with a REALTOR(R), and after meeting, you determine that your house is worth around $525,000. A qualified buyer using FHA secured financing can currently buy your home.

As of October 1, 2011, that same buyer would not be able to buy your house. What do you think would happen? Might their best & highest offer be $494,500, then, since they need FHA secured financing?

So what can you do? Read more details and information about the bill from the National Association of REALTORS(R). Find out who your local representatives and senators are here, and make your voice heard. Tell them that “H.R. 1754 has been introduced in the House by Reps. Miller (R-CA) and Sherman (D-CA) to make the current limits permanent. No similar bill has yet been introduced in the Senate” and that this bill needs to pass!

Towson Green Houses

Towson Green is a new neighborhood being built by Bozzuto Homes.

There will be 121 townhouses, plus a Brightview assisted living facility in the area just off Burke Avenue & East Susquehanna Ave just east of York Road.

Pre-construction starting prices range from the low $300-400,000′s. There will be small parks, a tot lot, and a rain garden, which will handle the runoff water in an environmentally friendly way.

There are four different floorplans for the houses, two with two bedrooms, two with three bedrooms. They each have garages on the first floor, and the three bedroom units will be wider than the two bedrooms.

The Allegheny is a 2 bedroom 2.5 bath home is about 1,607 square feet, with a one car garage beginning in the low $300,000′s. The Burke is 2-3 bedrooms and 2.5 baths with 1,780 square feet and a 1 1/2 car garage, from the mid $300,000′s. The Chesapeake has 3-4 bedrooms and 2.5 baths, a two car garage, with 2,030 square feet, and prices beginning in the upper $300,000′s. The largest model is The Dulaney, with 2,526 square feet and 3-4 bedrooms and 2.5 baths, and a two car garage. The prices for The Dulaney start in the low $400,000′s. Each one has an option for a fourth floor, adding additional square footage.

The Towson Green neighborhood is located in the old Towson Manor Village community. The houses that used to occupy the area have long ago been torn down — many of them were falling down and vacant for years.

Towson Green is right near Downtown Towson with the library across the street, plus plenty of eateries, the Towson Town Center, with its’ new luxury wing with stores and restaurants, plus local shopping nearby.

The Towson Farmer’s Market is just across York Rd, for fresh fruits, vegetables, and flowers from June through November.

The Towson Green location is a very convenient one!

Model Homes for the Towson Green neighborhood should be built by this Fall, and the first homes should be finished by early 2012.

Contact me For more information on living in Towson and the Towson Green homes. I live and work nearby!

Should I Wait for House Prices to Drop?

A question that many buyers have been asking is whether they should buy a house now, or wait until prices drop.

Guest blogger, George Kennedy, of Wells Fargo Home Mortgage, offers some thoughts in his post.

Should I wait for prices to drop?

The question should not be whether or not house prices will fall, but whether your purchasing power will fall. A slight increase in interest rates can cost you tens of thousands of dollars on the life of your loan.

Take a look at the following example. A $250,000 loan at today’s 30 year fixed interest rate of 4.75% will have a monthly payment of $1,304. If the interest rate should rise to 5.5%, the same $250,000 house will have a monthly payment of $1,419. That is an increase of $115 per month. Over the life of a 30 year loan that is nearly $42,000.

So, the real question to ask is this….Do I think it is more likely for that house to drop in price $42,000 or that interest rates will rise by .75%?

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Thank you, George! Contact me for more information on Baltimore house values, and what an increase in interest rate versus a lower price can mean for you.

602 Meadowridge Road Towson

602 Meadowridge Road is a five bedroom cape cod in the Riderwood Ridge neighborhood of Towson, MD.

**UPDATE! House went under contract in less than a week on the market!**

Meadowridge Rd is a cul de sac street located just off the bridge from West Joppa Rd that crosses N. Charles St. The next street over is Greenwood Rd, where the Baltimore County Board of Education sits. It is on the cusp of both the Ruxton neighborhood and the West Towson neighborhood.

602 Meadowridge Rd had recent work done, including a large kitchen with beautiful granite counters and cabinets, and a mud room with built-in cabinets. An addition was done to create three bedrooms on the second floor, one of which is a master bedroom with bath, and laundry room.

It has a screened porch overlooking the large, level back yard.

602 Meadowridge Rd is the first house to come on the market on the street since the last house sold in 2002!

Contact me for more information on 602 Meadowridge Rd or other West Towson homes for sale. I live in the area and know it well!

Listing Courtesy of Long & Foster Real Estate, Inc.

Tags: Baltimore, Baltimore County, Ruxton, Ruxton Real Estate, Ruxton Towson, Towson, Towson house for sale, towson house value, Towson Real Estate, West Towson, West Towson House Value, West Towson Real Estate

Towson High School Named Blue Ribbon School of Excellence

February 11, 2011 by Marney Kirk  
Filed under Baltimore County, Blog, Towson, West Towson

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Towson High School was named a Maryland Blue Ribbon School of Excellence.

It was one of six named in Maryland in 2010, and is the 15th school in Baltimore County to receive the honor, and the third Baltimore County High School to do so.

According to the Baltimore County Public Schools article:

Blue Ribbon School designation is a state and national program that recognizes schools that meet rigorous standards developed by the Maryland State Department of Education and the U.S. Department of Education.

Towson High School students are 98% proficient or above in Mathematics and 99% in English, according to the Maryland State Department of Education tests, and even Newsweek has named the school to its annual list of the best high schools in the nation for the past few years. In 2010, it was ranked #334.

This could help Towson house values as many homebuyers may look to the high school’s current zoning district to try to send their children to the school.

What buyers need to be aware of, is that school districts can be adjusted at any time, as many Towson homeowners found when West Towson Elementary School was opening.

Meanwhile, CONGRATULATIONS to Towson High School students and staff! Your hard work is definitely shining through!

Tags: Baltimore County, Baltimore County Public Schools, BCPS, Maryland Blue Ribbon School, Maryland State Department of Education, Towson, Towson High, Towson High Blue Ribbon, Towson High School, towson house value, Towson Real Estate, West Towson, West Towson Elementary, West Towson Elementary School, West Towson Elementary School boundaries, West Towson House Value, West Towson Real Estate

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