Facing the Mortgage Crisis

Radio station WAMU (88.5) did a week long series of special programming last week entitled "Facing the Mortgage Crisis". I think the series was misnamed. It should have been called "Facing the Financial Crisis" as it covered a much wider array of information than just what's been going on in the housing industry. (Perhaps it's their nod to where it all started!)

You can listen to all the programs at their web site, as well as join in discussions on how all this is affecting you.

It's good stuff and well worth your time. I especially appreciated the replays of the "This American Life" series on the financial crisis. It's some of the best financial journalism out there.

Save The Ta-Tas

2008 was a year in which I lost three more friends to cancer. Several more were diagnosed with the disease for the first time. And then there are the friends fighting a new bout with this old foe.

I hate problems I can't do anything about.

I can't cure any of these people. I can pray. I can hold their hands, lend moral support and do whatever else they ask. But what I really want to do is beat this disease.

So, I've once again signed up for the Susan G Kommen 3-Day Walk to raise funds to cure breast cancer. I'll be walking 60 miles in three days. And, yes, this is my second time and, yes, I must be crazy!

But I'm hoping some of you also want to do something to change the status quo. Are you looking for a big challenge for 2009? I'd love to have you make the commitment to walk with me. Or, since I've committed to raising at least $2,300, I'd be very grateful for your financial support.

I'll be posting an update from time to time throughout the year on how both the training and the fundraising are going. So watch this space for more news!

P.S. The first time I saw a "Save the Ta-Tas" t-shirt was when I did my first 3-Day. I just about fell over laughing!

Disaster Prone Areas

For those of you who are wondering what's become of me, I've taken a break to help with some of the recovery efforts for Ike in the gulf coast. I worked initially in Louisiana and am now in Houston. It's been quite an experience!

When Katrina hit New Orleans it started a conversation about that city and whether it should even be rebuilt where it currently sits because of its vulnerability to flooding and hurricanes. But after a couple of weeks down here, I think the question is bigger than that.

Those who live in the most low-lying areas, who are most vulnerable to the ravages of nature, are very often the poorest. And, so many of the same people living between New Orleans and Houston have been hit by Katrina, Rita, Gustav and Ike. Who knows what comes next!

The local, state and federal governments rush in to help in these situations, which is what should happen. But it's a costly exercise. And, I wonder if it wouldn't be more prudent to simply offer many of these people incentives to move away from the areas of greatest danger. Since many of these individuals are in tough financial circumstances, some of them may welcome the chance for a fresh start elsewhere. Certainly I heard many express that they didn't think they could handle any more hurricanes!

And, maybe there are some areas where we should have a new designation. There are lands protected from development for all kinds of reasons. Why not some kind of "disaster prone" designation? I wouldn't say no one could build there because I don't want to tell people what to do. But they'd sign a waiver of any right to assistance, including government flood insurance, if they decided to build there.

Right now this seems like another case of working on eliminating the effects of the problem without ever getting at the root cause. It seems to me we're smart enough to do better!

Termites

Termites are one of those issues that can really throw a wrench in an otherwise beautiful contract! No one wants to see the termite report come back with bad news.

Here are some of the signs there might be a termite problem with a home:

Mud tubes: These are about the size of a pencil and are connected to infested wood. They may be visible on concrete foundations or hidden under floor boards or behind siding.

Swarms: Winged termites are attracted to lights and may be found around windows or exterior light fixtures.

Wood damage: Tap wood every few inches and listen for a telltale hollow sound or see if a tool easily penetrates the wood you're tapping. Dark areas or blisters in wood flooring may also be a sign of infestation.

However, don't assume that any of these are proof of an infestation. A professional will be able to tell you for sure. Most contracts in our area are written requiring the sellers to pay for a termite inspection. Most lenders will insist on seeing proof that the home is termite free.

If you're a seller, here are some of the ways termites can be drawn to your home:

• Cracks in foundation walls, even small ones, can provide entry for insects.
• Leaking pipes or faucets create an enivronment conducive to termites.
• Wood debris or firewood touching the structure provide a breeding ground for insects.
• Sprinkler systems that hit outside walls encourage insects and wash away treatments.
• Planters or wood trellises attached to exterior walls provide an access point for insects.

Answering Your Questions

One of the things I enjoy most about blogging is the interaction with readers. Whether it's your comments or your questions, I enjoy hearing what's on your mind. I thought I'd take a little time today to respond to some of what you've been saying.

Someone used the Meebo functionality on the right side of the page to chat with me about Fauquier County tax assessments. The question was has the county delayed the assessments so as not to take a revenue from the reduced values of area homes.

According to the County Commissioner of Revenue's office, the assessments have been done every four years, for at least the last 20 years. Prior to that assessments were done every six years. So it appears there's no change in policy at this time. The next assessments would be done in 2009 with the new rates to go into effect in 2010. The problem with that, of course, is that current values are no where near current assessments. There's a case to be made for appealing your current assessment.

"Sarah" recently reminded me that while the decline in home prices is bad for sellers, it's a great thing for buyers. That's very true. In every market there are winners and losers.

To be honest, I probably feel the sellers pain now more than I felt the buyers pain when they were desperately trying to buy a house and were one of 20 offers (or more)! The truth is I wasn't worried about them being thrown out on the street. I did worry that some of them were taking out mortgages that weren't in their best interest, but I was usually told that they knew what they were doing. These days, some of the sellers I work with are in very serious difficulty and I do worry about them!

So, if as a potential buyer you don't feel I'm sufficiently celebrating your ability to buy a house at a more affordable price, never fear! Prices actually still need to come down more. I'll do a post next week on affordability in our area. But I rejoice for every buyer who gets a great deal on the home they want!

And for my fellow agents who read this and keep me honest, thanks!

Keep those comments coming!

Nobody's Playing Outside

There's an interesting article in Slate, the online magazine about the disappearing lawn. I thought this exerpt was particularly interesting.

A Few Odds and Ends

Did you know that only 2% of homeowners ever challenge their property tax assessments? But the ones who do have a 75% success rate!

What if the dying inner cities of a generation ago will now be replaced by dying suburbs as gas prices soar? We're already seeing evidence of revitalized city centers and emptying suburbs full of McMansions. Temprorary blip or permanent restructuring?

A court in California ruled that the clause in a new home purchase contract mandating that disputes after settlement go through binding arbitration rather than court was "unconscionable" and therefore unenforcable. The court said it was unconscionable because of "oppression" and "surprise". According to the court "oppression arises when the parties have unequal bargaining power, leading to no real negotiation and lack of meaningful choice. Surprise may arise when challenged terms are hidden in a 'prolix wordy or long-winded printed form' drafted by a party in a superior bargaining position." I find the rationale in this as interesting as the decision itself. What does this say about builder's contracts in general?

Three Media Outlooks on Real Estate

The Virginia Association of REALTORS has an excellent blog. Their CEO, Scott Brunner, has written a very interesting post highlighting some recent media stories. I very much appreciate our state association's willingness to look at the facts rather than to always spin the data and dispense happy pills!

Charlottesville REALTORS Target First Time Buyers

The Charlottesville Area Association of REALTORS has a great plan for giving first time home buyers a little additional help and incentive to get out there and buy.

It's proactive, targets the right group and isn't based on hype. That's a great plan!

Rural Connectivity

There are many wonderful things about living in this rural paradise that I call home. Easy and cheap availability of high speed internet access would not number among them!

But the options are increasing and since this is a topic that's almost always of interest to potential buyers in this area, I thought it rated a blog post.

DSL and cable are most people's first choice for high speed internet. Unfortunately, both are difficult to find out here. DSL is the rarer of the two. Cable is available in most of the villages such as Flint Hill and Washington in Rappahannock County. You'll find cable available in some of the larger subdivisions such as South Wales, Quail Ridge or Wildwood Forest.

Broadband wireless cards are good in certain areas. I recently tried Sprint's card, which is supposed to have good coverage in Rappahannock County and had no success at all from my house. A neighbor about two miles down the road from my house has terrific access using the same card.

VABB (Virginia Broadband) has some installations in the county. They provide high speed wireless connectivity using radio frequency technology. Your ability to use them will vary depending on your proximity to one of their towers and the site line.

The most widely available solution is satellite. We're currently using HughesNet at  our home in Amissville. It's expensive, but customer service and connectivity (outside of heavy thunderstorms and snowfalls) has been very good. While it's technically high speed, it does not rival what you experience with DSL or cable. And the price is very high compared to other alternatives.

If this is an important issue to you, make sure you ask about this BEFORE you buy your house! Many people now depend on high speed access to work remotely. The options available to you will vary depending on which house you choose. Each county has their own challenges. As with most things related to buying a house, do your homework!

Vote!

Tomorrow is the Virginia presidential primary. Whatever your political persuasion, please take time to vote.

I was raised in a family that believed that voting was a responsibility. And, I still believe that!

So, please, go do your patriotic duty tomorrow!

And, yes, this is related to real estate. Whoever ends up in the White House will certainly still be dealing with fallout from the subprime debacle!

And, if you don't participate, don't be complaining to me about our government!

Back to topics more directly related to real estate tomorrow!

Pets Need Help

I saw today that a TV station in Charlotte, NC did a story on how the real estate market is increasing the numbers of homeless pets. As families are forced to leave their homes they often can not take their pets with them. Sometimes that's because they have to move into a rental that won't accept pets. Some families are moving in with family members and the home can't accomodate any more pets.

I've got calls into the local shelters to try and get a feel for whether we're seeing that same effect here locally. My suspicion would be that we are.

If you're thinking of getting a pet it's an excellent time to check out the local shelters. Here are links to some of them.

Rappahannock

Fauquier

Culpeper

Warren

Too many pets end up here in the best of times. In hard economic times it gets worse. If you can adopt a pet or just help them out with a donation, now's the time.

Northern VA Market

An assortment of tidbits today.

Here's an interesting overall look at the Northern VA real estate market. It only comes out as far as Loudon and Prince William but you can extrapolate from there.

Bank of America appears to be set to buy Countrywide. This is good news. Countrywide appeared to be headed for bankruptcy which would have been unbelievably disruptive to the industry.

Zillow has announced that the number of homes it covers and the accuracy of it's estimates are greatly improved. You could have fooled me. When I took a look at where I live there was no Zestimate at all for our home or any of our neighbors.

This blog post if right on in pointing out that REALTORS should be the first ones objecting to NAR's absurdly rosy predictions. Credibility once lost is hard to regain.

Ben Bernanke appears set on cutting interest rates again this month. A half point cut now seems entirely possible. The effect on the mortgage interest rate remains to be seen. However, LIBOR, a rate used to set interest rates on adjustable rate mortgages fell this week. Good news if you've got an ARM due to reset soon!

Dogs and Rentals

I've been working with a young couple over the last couple of weeks, working to find them the right rental property. What has consistently disappointed me are landlords reactions to their dog.

By the way, none of these people have met the dog in question. I have and she's a peach!

Many of the rentals are listed as "no pets." I understand the reasons behind that. Pets can definitely be destructive. And your average security deposit does not cover entirely replacing all the carpeting. On the flip side of that, the numbers show that more and more of us have pets and that we're very attached to them. I had one agent admit to me this week that not taking pets had definitely hurt their ability to rent a specific property.

What's been more challenging to me has been the numbers of landlords who don't want a big dog. They'd be fine with a small dog. They'd be fine with a cat. They just have some idea in their heads that a big dog is trouble.

In fact, I'd argue that big dogs in general are less destructive than either small dogs or cats. Small dogs are more likely to have problems with bladder control. Cats are often purposefully destructive and will urinate outside their litter box to express their displeasure with their owner's behavior. I've seen more carpets ruined by cat urine than any other substance that exists!

So, why the problem with big dogs? I can only speculate here. I'm sure some of them are saying no big dogs to try and rule out dogs that may be banned by their insurance companies. It's easier to say "no" to all big dogs. People worry that some breeds are more prone to anti-social behavior and could cause lawsuits.

Some people worry that large dogs need more exercise and that a rental townhouse is not a good environment for a dog. So, theoretically, the dog will become destructive due to lack of exercise. There are certainly breeds for whom that's true. But some of those breeds are small dogs. And some large breeds dogs are very mellow and would be happy to sleep for hours every day.

In the end, I'd like to see a little more flexibility on the part of landlords. I think there's money to be made by advertising that a rental property is pet friendly. In fact, I think you could build an apartment complex designed from the beginning to be pet friendly and command a premium for those units. Face it, we're a nation that's gone to the dogs, and cats, and mostly, we like it that way!