“Desktop Valuations” are a quick way to look at the potential value of a home, but they do not take many factors into consideration, and some of the things they DO use to determine a value should not be used!

I answer questions on the Zillow site, and so many times the questions come from a place of, “Why, in my townhouse community where the houses are very much the same, is my neighbor’s worth $XXX and mine is worth $45,000 less despite mine being an end unit with an additional bump-out?”

That is a very good question, and one that doesn’t have a good answer. The algorithm takes into account the taxes you pay and when the house last changed hands. If a house hasn’t changed hands in some time, the taxes generally are lower, and that would bring the “value” of that house down. That just doesn’t seem right, does it?

Next to this is an example of the “range” of value for one house I found. If a professional real estate agent walked into your house and told you they thought it might sell for somewhere between $391,000 and $740,000, would you feel comfortable that the agent knew your market?

How about the houses “for sale nearby.” Do these look like they belong together as a picture of a particular Towson community to you? They seem to be a random selection of homes that happen to be in the same zip code.

The biggest issue is the quality of the Baltimore Zestimates.

As you can see here, Baltimore Zestimates are within 5% of an actual sales price only 42.6% of the time. They are within 10% of an actual sales price 66.4% of the time. They are within 20% of a sales price 83% of the time. These are with a median error of 6.1%.

Think about what that means.

On a $400,000 sales price, the Zestimate may show $380,000 or $420,000 — but again, that is only 42.6% of the time.

To get above 50%, you have to go within 10% of the actual sales price. So on that same $400,000 house, a Zestimate 66.4% of the time will be from $360,000-440,000.

To get to the closer 83%, you have to bring that out to 20% of a sales price. That could drop the Zestimate down to $320,000. Would you as a Baltimore seller be happy with that if your house were truly worth $400,000? How about a homebuyer? Would a Baltimore homebuyer be happy to pay $480,000 for a house that is really worth $400,000? Probably not. And the buyer’s mortgage company most likely wouldn’t let it happen, because an actual appraisal would most likely be close to the true market value of $400,000.

And don’t forget — that is with a median error of 6.1%, or approximately $24,000 give-or-take, on that $400,000 house.

Real estate everywhere is LOCAL. Hyper-local even.

Baltimore real estate values can be different street-by-street!

For a true understanding of your house’s value, don’t count on automated valuation websites. Contact me for a true idea of you Baltimore house value. I’d love to help!

Would you like to know more and see additional Zillow issues in the Baltimore area? See my past posts on incorrect Towson Zillow Zestimates for details.

Photo Courtesy Curry Architects and Towson Patch

The development is being put together by Heritage Properties of Towson and leasing will be done by The Cordish Companies.

Towson Circle III would be located on the 4.2 acre lot at the corner of East Joppa, Virginia, and Pennsylvania Avenues. There is currently a building there and the now-closed Burger King also sits on the lot. Here is how it looks today:

Not only will there be things to do and places to eat, there will be a 862 space parking garage to handle the expected large volume of cars.

Here is a draft of plans from the Greater Towson Council of Community Associations.

So far, according to Cordish, five bistro-type eateries have already agreed to move into the space. There will be some chain restaurants, as well as individually owned & operated ones.

This could be a great way to rebuild that area of Downtown Towson that is currently wasted space. Hopefully this will be a good & successful fit!

The new members need to sign up by Feburary 29, 2012 or the project will be terminated.

According to the Towson Patch article about the issue, the Club has $318,000 in funds raised by members joining, but in applying for a new loan, plus paying for an engineering contract, they need to secure more members to make it happen.

The cost, according to the paperwork from their website, is $1,975 per household plus $250 application fee and $275 initiation fee. The charter membership may be transferable when you sell your Towson home.

Summer fees range from $495 individual memberships to $685 family memberships, with lower Senior memberships also available.

The Towson Swim Club was originally slated to open Memorial Day 2011. It was then postponed to Memorial Day 2012 when a private investor backed out. Now the opening has been pushed back another year to 2013, and only if 135 new members join by February 29, 2012.

I do truly hope that West Towson homeowners can come together and get this pool financed. It would be a wonderful additional bonus to living in West Towson.

According to an article in the Baltimore Business Journal, the Greater Baltimore region jumped 40%, while the more local Baltimore-Towson region rose 6%.

The December 2011 data for contracts for future residential construction rising a very large amount — $116 million versus $39.2 million in December 2010.

Towson new homes under construction, I am sure, helped a lot with these local numbers. The Towson Green community is well under way and should be delivering new homes in the upcoming months.

New construction tends to be a good indicator of a recovering market because builders won’t build if buyers aren’t there to buy them.

If you’d like more information on Towson new homes or Baltimore new homes, contact me. We’d love to help!

The article does clarify, though, that prices are still expected to drop in many areas, but there should be more home sales, and more houses being built, which are usually indicators of the beginnings of a recovery.

The reason prices are expected to fall in many areas would be due to the large number of foreclosures still out there. Many were delayed because of the “robo-signing” scandal last year, but will be moved forward this year.

The economy is an important piece in the housing recovery. Last month, the unemployment rate dropped to 8.5%, and 200,000 jobs were added. These are good signs for the economy, and housing usually follows economic recovery.

There are many factors that affect the housing recovery, and Baltimore real estate is extremely local. Some neighborhoods, like those I’ve noted in Towson home sales in December and Timonium December home sales, have seen some increases or at least stabilization.

Real estate is extremely local — as much as street-by-street or neighborhood-by-neighborhood.

To find out where your Baltimore house currently stands in the housing recovery, please contact me. I would be happy to help!

Average sales price was actually UP in 21286 to $330,255 from $246,288 last December. Sales were down slightly, with only 11 homes changing hands versus 15 last year, but that makes the average price even more significant.

Three townhouses in Towson sold with an average price of $181,667, but again, just one foreclosure or short sale could bring the average down tremendously when so few homes sold.

Eight detached homes sold, with an average sales price of $385,975. This tells me that the homes sold were most likely in Towson neighborhoods like Hampton, Wiltondale, Temfield, or Hunt Crest Estates.

Here is the detailed 21286 home sales report for December 2011.

Towson 21204 has also held its’ value, and had a good December, as I wrote in my Towson Patch post.

For more information on your Towson house value, contact me. I’d be happy to help!

FHA loan limits via hud.gov

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!

A few years ago, prior to the internet being a terrific place to find information about a house, I would have said Tuesday night or Wednesday. Why? In the past, Broker’s Opens, generally held on Wednesday afternoons in central Baltimore County, were the “first showings” for houses. Owners got their places spiffed up, listing agents got sandwiches and cookies to share for lunch, and agents from many different brokerages were out to view the new inventory on the market.

At that time, the MLS allowed for 1-5 photos, the internet was a new thing, and Broker’s Opens were the best way for agents to get out and see the new places on the market to let their clients and potential clients know what is out there.

Now, with the internet being such a large part of the homebuying experience, data research has shown that best day to list is Friday.

Why?

Most homebuyers look at houses on the weekends. Many do not have to work, or have more flexibility or availability on weekends. The theory is that therefore, they choose which houses they want to see on Fridays, and they place them in order of newest to the market to oldest, making those that come on the market Fridays at the top of the list.

This does not mean that listing paperwork or photos should wait until Fridays. That is the day the data shown by the Redfin study say it should hit the market and websites. Note, though, that many websites do not catch up right away, and some take 24-48 hours to hit the internet. That being said, buyers who are working with a buyer’s agent get up-to-date information, and will have that data right away.

So, if you are looking to sell your Towson home, contact me to get things started, so we can plan to have it on the MLS for Friday!

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!

The main story is about the top things buyers are looking for in their home.

First, Jay Papasan goes over the numbers. The home sale pace rose to 5 million, up from the pace of 4.7 from This Month in Real Estate September 2011. The median price range dropped from $174,000 to $168,000 — continuing the price drop trend across the US. According to Freddie Mac, average interest rates were about 4.09%, another drop (this one at least is positive!) from last month at 4.15%.

Back to the main story, one of the top things home buyers are looking for in their new home is an affordable price. As the numbers have shown, the median price has been dropping over the past few months. One surprise the researchers found was that sometimes price was even more important to home buyers than location!

The second thing buyers are looking for is a well maintained home. Make sure to have repairs done as needed so when you are a seller, you showcase pride in your home, and buyers can see it. If you need recommendations on handyman services in Towson, please let me know. I know a number of licensed contractors who have done good work for my clients!

In News You Can Use, Bryon Ellington discusses how to keep your home warm this winter.

1) Insulate pipes in crawl spaces and attics.

2) Caulk or insulate cracks around windows and doors. Keep the warm air in — and the cold air out!

3) Change or clean your furnace filters. This should be done on a monthly basis, but in case you have forgotten (as many of us do!), now is the time to get on track to do it! Dirty filters restrict air flow, so more energy would be needed/used to push heat out throughout your house.

4) Drain your sprinkler and hose pips so the underground pipes don’t freeze and burst over the winter.

5) Keep your thermostat at a lower temperature when you are not at home, so you don’t overwork your system!

For more information on selling a house in Towson and referrals for contractors, please contact me. It would be my pleasure to help!