SMHBN Industry Report Card

If you follow this blog you know that I have occasionally posted about the Southern Maryland Housing Bubble News and the posts of ‘Patch Tuesday’. There are times when we disagree, but lately we agree with each other more often then not. As real estate agents everything we do tends to be in the public eye since the public needs to see us to use us, and see our listings to buy them. Patch tends to point out the things he sees that are iffy, and I will never fault him for that. Some of the iffy things have logical explanations, some don’t. Sometimes I want to post about the iffy things, and can not due to confidentiality. We do interpret some of the market stats a bit different, but we are not polar opposites in that regard either.
The link in this post goes to Patch’s industry report card. I have some comments about his post, but I’ll tell you now, most of them could be boiled down to “me too”.

Insider Trading

I think that real estate agents should invest in real estate, and I have owned rental properties in the past, in the local area. Sara and I decided a little over a year ago that we would no longer actively invest in Southern Maryland. The reason for this is we don’t want to compete with our clients. We have investor clients that look for properties, and we have first time home buyer clients that buy properties that would make ideal investments. So, we decided any future investing will be done out of area. There is the occasional seller that says to me after I have told them the value of their home that they need to sell quick, and they are thinking about taking an offer from some investor that is pennies on the dollar. I have no problem with an agent buying a house in this situation as long as they put in writing that the house could, and would sell for much more on the open market. I have no problem when an agent buys a property that has been exposed to the market for a length of time. Meaning the property has been marketed, there were no buyers, and the agent decides it would make a good rental. Most of the guaranteed sale offers you see, are agents buying the property after it has been rejected by the market.
The Maryland Property Tax Records
I’m not sure why but our tax records are horribly inaccurate. Not the figures used over at SMHBN, the counties do tend to get transfer dates and prices right. However, none of the three Southern Maryland counties has bedroom counts on the tax rolls, bathroom count is usually wrong, and Calvert County doesn’t include lot size. It makes me wonder how they can do an accurate assessment of property value for taxing. Oh yeah, that’s right, they can’t. Of course, as a homeowner I was not real happy when Charles County assessed my home at near fair market value, so if they tend to be low, be happy. If you are in Charles County get ready for a big tax increase as they are assessing most properties close to FMV now. Our taxes doubled.
Patch pretty much nailed this one. Sara was a journalism major at the University of Maryland, and is fantastic at proof reading. I struggle still with grammar, and spelling. She keeps me in line. I have some other issues with things I see in the MLS, but I’ll mention that in the MLS post. (Sara is showing houses today, and I am home with our 2 year old Joey, so she can’t proof read this. Please don’t make fun of my errors!)
Flipping Houses
Is getting more and more complicated. FHA, Fannie Mae, and Freddie Mac are all putting in guidelines to prevent illegal flips. Yes, there are legal flips, but there are illegal ones also. The seller must of owned the home for 90 days, and if they have owned it for less than a year, they have to show receipts for the improvements made to justify their profit. There are legit reasons for a flip to happen. A seller that has to sacrifice his profit to stop a foreclosure is one. I have noticed these folks wait until the week before they lose the house to unload it, and if you only have a week, you are not making any money on your sale.
The MLS (or MRIS in our area)
Patch amazes me with his insite into our industry. As I posted on his blog I think that he may know more than the average agent about our industry. I suspect most agents don’t know about the myriad of lawsuits against MLS’s around the country now, or that the government is looking closely at our industry right now at this time of change. Some of the things they are looking at I think are a waste of time, and tax payers money, some of them make sense. I’ll let you decide. This link will take you to video of hearings on the Hill last week.
Agents, please take the time to fill out every field in the MLS, Sellers insist your agent takes the time to fill out every field in the MLS. Over the last few years you had to show buyers every home that was even close to their search criteria if they had any hope of buying one. Now I don’t want to show every house, nor do my buyers want to look at them. An accurate listing saves everyone time. Not to mention if the buyer doesn’t see the things in the listing that they are looking for in a house, they are not even going to inquire about the listing.
Home Prices
I’ll say it too Patch. There is a glut of inventory right now in most of the areas of the country where we have had a boom the last few years. If you are a seller with realistic expectation you have nothing to worry about. Some of our listings are still getting multiple offers, but hundreds of homes are failing to sell, and coming off the market every month. The rational of “last year my neighbor got $600K, and the year before the other neighbor got $550K, so I must be worth $650K” is not accurate. Last year it was. This year you will get the $600 your neighbor got last year, maybe a little more. In some areas prices have in fact gone down, and continue to do so. It takes home sellers about a year to adjust to a new market, that year is almost up, and inventories should come inline. For now be happy about the appreciation we have had. Our market was stagnant all through the 90’s.
I also have to say to Patch thank you for the kind words about Sara and I. I still think you should buy a house, but I’ll do my best to ensure you don’t over pay for it, get gouged by a lender, have a good appraiser, and a thorough home inspection. You did mention something on your post I have not thought about and will have to research. You said you could rent a home for half the mortgage payment. I understand that you didn’t literally mean half, but I wonder what those numbers really are…