Blog Category: housing values

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2023 Much Higher Conforming Loan Limits Announced

2023 conforming loan limits have been announced! The Federal Housing Finance Agency (FHFA) sets the loan size limits each year on conventional mortgages that Freddie Mac or Fannie Mae will buy from mortgage lenders. In 2022 the conforming loan limit for a single-family home was $647,800. This year, the conforming loan limit for a single-family home has increased to $726,200. A little over a 12% increase! Read More

ten percent off sale

Are Housing Values Dropping Now?

Are housing values dropping now? Potential homebuyers who contact me for a mortgage are now frequently asking if they should wait to buy a home. The implication is that people are now worried that housing values are going to fall. So why buy now? Isn’t it smarter to wait? Maybe, maybe not. It is understandable why everybody is asking the question, “are housing values dropping now?” Read More

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Do Internet Connections Raise Property Values?

Alexandria Virginia was hoping that Verizon would bring its high speed internet and video service called “Fios” to the area, and Verizon chose not to. Now Alexandria Virginia is hoping to be a test site for a new high-speed internet service being developed by Google. And anyone that owns real estate in Alexandria should hope this happens! Read More

House For Sale

Do Investment Properties Cash Flow?

Do Investment Properties Cash Flow? Has anyone else noticed that buying new investment real estate does not cash flow? At today’s prices, which are likely lower than in the last several years, you still seem unable to find real estate that can turn a profit as a rental property. I wonder why that is? Read More


Does Traffic In Washington DC Affect Real Estate?

Does traffic affect real estate in Washington DC, of course it does! We plan our lives around traffic, we look for the best routes to get where we are going, we think about the best times to come and go, we telecommute to beat traffic, we move into the city to beat traffic, and we work late to avoid rush hour. We do anything we can to avoid traffic! Read More

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Finding A Realtor To List Your Home For Sale

When you decide to sell your home you usually think you have a fairly good idea of what its worth, after all, you live in the neighborhood! Most of us schedule appointments with three local listing agents who we know, or we have been referred to, or maybe we have been getting their marketing material in the mail. Usually each Realtor will recommend a different sales price. Sometimes those prices are close together, but usually there are one or more Realtors who give you a much higher number, that excites you, and seems to agree with what you thought your place was worth.

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Help Entering The Home Buying Market

Many homebuyers need help entering the home buying market. They cite obstacles and problems that create fear in moving forward with buying a home. This is especially true of first time homebuyers. But with some research and patience, there are answers for a lot of these questions. And there are many ways to overcome fears of home buying.

See the list below of some of the most common fears, and answers to those fears. Read More

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Historical Real Estate Values

Do you know Historical Real Estate Values? I often have conversations with potential homebuyers in speaking with them about their mortgage financing. And they ask me about whether I think Real Estate is due for a correction. Let’s face it, Real Estate has been going up in value at a striking pace in the last few years. It’s a realistic question to ask if some of that increase is due for a correction to some degree.

Of course, I don’t have the answers. But we can have a discussion to give homebuyers a frame of reference. Read More

interest rates going up

Home Price Reduction and Rates

How do home price reduction and rates affect one another? I have clients who have reported seeing price reductions in the asking prices of homes for sale. This is the first time I have heard of this in years and years. So, are real estate values about to correct? It probably depends on where you live. And of course, as with many of life’s answers, the answer is a matter of degree. Some markets may be in for a large correction, some a small correction, and some markets may still experience price gains.

Are housing values dropping?

Should they adjust the price of their home due to interest rates rising?

I have heard of some home shoppers say they feel home sellers owe it to homebuyers to drop prices just because of the interest rates increase. Read More


Housing Prices Falling, Flat or Floating Up?

So where are housing prices going next? Everyone has an opinion, most based on emotion as opposed to facts. The facts are that real estate is local. If the state of Florida’s residential real estate is down 16% year over year, that does not mean that every house in the state of Florida went down exactly 16%. There may even be homes in the state of Florida where there is no price decrease year over year, and maybe even an increase! So always do your homework before stating an opinion about real estate. Read More

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How are property taxes calculated?

Property taxes are a part of the cost of owning a home. When you buy a home you not only have the cost of the monthly mortgage payment. You also need to consider property taxes, homeowners insurance, any HOA dues, maintenance, and utilities.

What amount will I owe?

Many people wrongly assume property taxes are a fixed cost. They believe whatever amount is billed when you first buy the house, is what the amount will be for the life of owning the home. However, property taxes can change quickly after buying a home. Most counties assess property value annually, and adjust the amount due annually. Read More


How Do Realtors Really Get Paid?

Does anyone know how Realtors really get paid? I know people love to complain about Realtors and how they “get 6%” of the sales price, but that is not the whole story. It’s barely any of the story. I love to beat up on any industry with grossly overpaid and inefficient workers as much as the next person, but only if it is merited. Read More

rich man

If I Were Rich I’d Buy An Expensive House

If you were rich, would you buy a huge, expensive house? Would you spend $39 million on a house?

I did a search for the most expensive home on the market in Washington DC, and came up with 1623 28TH ST NW, WASHINGTON, DC 20007. The asking price is $39,500,000. I have a lot of questions…

How do you come up with that asking price? Are there really comparable sales that can support a price of $39,500,000? Or are you pricing it to sell to a developer, and estimating the value as a developer would? Read More

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Interest Rates And Your Monthly Mortgage Payment

Many people are very focused on interest rates these days and are wondering where they are headed next and how it may affect their mortgage payment. Interest rates have been historically low for a very long time. And people are starting to fear that they may increase and have an outsized impact on the cost of purchasing a home.

You can see a chart of the long-term history of interest-rates by clicking here. This chart shows that we are definitely near the bottom of where interest-rates have been over a long period of time. On the other hand, if interest-rates start to go up does it have as much of an impact as people think? Read More


Is It Better to Overprice or Underprice Your Home For Sale?

When sellers set an asking price for their home I always imagine big dollar signs in their eyes. Most human beings suffer from wishful thinking and confirmation bias. How should you price your home: high, low or right at market value? In other words, should you overprice or underprice, or price it right at market value? If sellers are underpricing they may hope to sell faster, or hope for a bidding war. Overpricing a home may allow you to get more for your house than it’s really worth with luck and hope that one buyer loves your home. Underpricing or overpricing your home can be a gamble. And the best thing you can do is come to terms with how much your house is really worth. Read More

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Is It Cheaper to Rent or Own a House? Pros & Cons of Renting vs. Buying

Is It Cheaper to Rent or Own a House? If you are planning on moving and are financially stable enough to potentially qualify for a mortgage, there is a lot for you to consider. Buying a home usually requires a down payment plus closing costs. Renting also comes with its own fees, but those are generally less than you will need to buy a home. Here, we will explore whether it is cheaper to rent or own a house. And the pros and cons of both.

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Is It Time To Buy A House?

Is it time to buy a house? Isn’t it always a good time to buy real estate? There are hardly any Realtors, builders or other industry participants who have ever said it is NOT a good time to buy real estate. There are some very good Realtors and builders, I know many, but let’s not forget these people are ultimately salespeople, not investment analysts equipped with the tools to know the real value and direction of real estate. You hire a Realtor to help you buy and sell real estate, but you should make your own determination as to when is the best time to do so. So that means you are left to your own devices as to determining if real estate is a good investment.

We have to discern if we are talking about buying a primary residence or investment property. Since buying investment property is a simple cash flow numbers analysis, I’ll restrict this blog post to buying a primary residence. And when buying a primary residence your first concern should not be if it is a good ‘investment’. You should not go into it looking for investment returns. It is a home, shelter, a place to live, sleep, entertain, raise a family, and enjoy the community and neighbors. But you do want to make a careful decision and get the best possible financial gain from your home that you can. Read More

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Landscaping, Toilets And Brickwork…Oh My!

Most people that own a home make some home improvements. Some home improvements are modest and some are substantial. It is important to get some enjoyment from whatever improvements you make, but it is also important to remember to watch the economics of your projects. Many people don’t consider the return on investment when they take on a renovation project, and some people make poor assumptions about how much they will get back from their cost to remodel. Read More

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Here are my ten predictions for 2012. Some of these are mortgage/real estate related, and some are not. Some are serious, and some are not. And some are just wishful thinking. You figure out if you can tell which are real.

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Real Estate Prices, Up, Down And All Around!

Do you think real estate prices are on a straight line down? Wrong. Remember when everybody thought real estate prices were on a straight line up? Wrong! Real estate prices are up and down, and all-around. They are up in some places, down in others, and up and down in others. And of course real estate is very local, down to the state, county, community and sometimes even down to the street. You really have to dig down into the details to find out the true value of a house. Read More

Reversion To The Mean

We can have a “reversion to the mean” discussion on real estate, stocks, or just about anything. What is Reversion to the Mean? This is a theory suggesting that prices and returns eventually move back to the mean or average.

If you want to be a successful investor of common stocks conventional wisdom says you should spend lots of time analyzing companies or mutual fund managers and then try to pick the best ones. That is fine, but is a mistake if you are solely relying on that. If you want to be a successful investor of common stocks forget about using solely conventional wisdom, and also focus on reversion to the mean. You can be lucky and pick stocks and mutual funds without doing a lot of analysis. Or you can build a diversified portfolio with a clear understanding of the role that reversion to the mean plays in the stock market. And this also holds true in the real estate market and with many other things. Don’t rely solely on professionals, do your own research on the house or assets you may want to buy. Read More

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Shopping for a Mortgage

Let’s go mortgage shopping! Who doesn’t want something cheaper? But who doesn’t want it faster, better and delivered on time as well? It is life’s constant struggle. We work very hard for our money and want to be judicious in spending it. People want the $5 hamburger for $4. Some people want the $35,000 car for $32,000. We want the $500,000 house for $485,000, and if the same house were priced at $485,000 we’d arbitrarily want it for $470,000. We always want a deal! But are we just creating our own problems? And should we be shopping for the best price or the best value? There is a big difference between price and value when it comes to mortgage shopping. Read More

interest rates going up

Should I Buy Now And Avoid Higher Interest Rates?

Should I Buy Now And Avoid Higher Interest Rates?

This is a common question I get. Potential home buyers will worry that rates are going to spike, after all, “how long can they stay this low,” goes the logic. So some buyers assume they should buy now, at any price, and avoid a future rate increase. I am not sure how long rates can stay low, they have been low for almost two decades in Japan! But, I thought for fun, we’d look at some different numbers. Keep in mind the below are based off of broad assumptions of my own: Read More

day of the week

The Best Day Of The Week To List Your Home

I recently read an article in the Wall Street Journal about the best day to list your home for sale. It turns out it is Friday. To be specific, the article said that Friday is the one day of the week that beats any other in terms of capturing online viewers. But it went on to say Tuesdays are best for scheduling and taking home tours. I am guessing that as with anything in real estate, this is market specific, and even house specific. Read More

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VA Cash-Out Refinance To 100% Loan-To-Value

A VA cash-out refinance can be used for many reasons. There are a few important things to know about cash-out refinancing to 100% loan-to-value (LTV) when using your VA eligibility.

On a VA cash-out refinance to a 100% LTV the 100% must include the VA funding fee. Read More

House For Sale

Valuing a House Using Price Per Square Foot

I commonly hear realtors and homeowners use price per square foot calculations when assessing the value of a home. But using per square foot home values as a shortcut to determining the value of a home is flawed. Price per square foot is not a reliable indicator of market value. When you only calculate the relationship between size and sales price you are ignoring all the other variables of a home that a potential home buyer analyzes. These are thing like view, lot size, level of finish, location, and much more. Read More

us capitol building

Washington DC Real Estate Is Pretty Strong!

The statement that all real estate is local is shown to be true by taking a look at the Washington DC real estate market. This is the market I work the most in mortgage business, and I see the data first hand. Real estate prices seem to be holding up except for a few pockets in some neighborhoods on the edge. Condo sales, as an example, are way up, a 34% increase for 2009! Read More

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Washington DC Real Estate Prices Are Strong

I could tell you how Washington DC had an influx of population in 2009. I could tell you how strong the job market is in Washington DC. Or I could even tell you how real estate prices were up 2.9% in Washington DC last year. Instead I am going to regale you with some anecdotal stories to illustrate what is going on here in the real estate market. Washington DC Real Estate Prices Are Strong. Read More

Real Estate Prices

What Affects Real Estate Prices?

What affects real estate prices? Perception. The macro-economy. The city. The neighborhood. The street. The curb appeal. The house. The square footage. The bedroom count. The view. The neighbors. The local economy. The condition of the house. Local zoning issues, if any. Access to transportation. Marketing. Government. Tax breaks. Interest rates. Rents. The weather. The landscaping. The Realtors involved. The sellers. The buyers. Emotion. Local income patterns. Local employment. Competition. Supply. Demand. Chocolate chip cookies…and more?

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house for sale

What Are Home Sellers Waiting Around For?!

Markets react and fill holes, they never stand still. Markets change and go up and down. Knowing all of this, it makes you wonder what home sellers are waiting for! Where are all the home sellers? All we hear about in most real estate markets is the lack of inventory. We hear that sellers are still stung by the real estate correction and are waiting “a bit longer” for values to recover before selling. I would advise people that are thinking of selling to call a realtor and list their property for sale. Read More

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What Portion of My Income Should I Spend on a Mortgage?

What portion of my income should I spend on a mortgage? Deciding on how much mortgage you can afford is very complicated with several things to consider. Before you plan to spend the maximum amount you’ve been approved for, consider what you feel comfortable with. And don’t treat your home purchase like a zero-sum game. Consider spending a sufficient amount to buy enough house to keep you happy for a longer period of time. This is due to the hefty transaction costs of real estate. Read More

duplex entrance

When is a 2 unit a 2 unit?

A 2 unit home, sometimes referred to as a duplex, is a home where there is a rental unit. The renal unit is usually in the basement. Over the years I have seen much confusion surrounding what officially defines a home as a 2 unit. I can tell you that an appraiser, banks and Fannie Mae will be looking for the following: Read More

home interior

When Selling a Home First Impressions Are Everything

When selling a home first impressions are everything? We all love pictures, graphics and colors. As the saying goes, a picture speaks a thousand words. We would rather watch a video blog than read six paragraphs of text. Visual should be emphasized over text detail. When we shop for a car, we spend most of our time looking at the pictures first. Then we think about and research details, engines, performance, etc. If we like the way a car looks and we feel we look good in a car, that is far more than half the battle in selling the car. It is the same thing with Read More

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Where Are Real Estate Prices Going Next?

Most everyone knows low inventory is keeping real estate prices high. But why is inventory low? Because 90% of US homeowners have a 6% or lower mortgage rate. 62% have a rate below 4%! No one wants to give up their great rate for a much higher rate. They won’t move! But how does this end? When does it end? It can’t stay this way forever. Eventually people must move. People will move due to retirement. Or families will need larger homes. Or sometimes they are ready to downsize.

My theory is inventory will increase over a long period of time, and that may bring prices drops. But when? Interest rates going up has not stopped housing demand nor price increases. Rates going down won’t cause real estate prices to spike. And rates going up even more than they are now won’t cause prices to tumble. Historically low inventory will see to that. Read More


Who Knows More About Home Values, Appraisers or Realtors?

Who knows more about a home appraisal? Realtors often think appraisers are not the most accurate assessors of real estate values. And appraisers often think realtors know less than they do. Maybe they are both right? I have had appraisers admit that a good realtor will likely know more than an appraiser about the value of a certain home. This is because most appraisers are appraising a wider geographic area a than a realtor may specialize in. Many appraisers cover a multi-state area. Whereas a lot of realtors specialize not only in one state. Also maybe only in one city or town. So, it is hard to expect Read More

dress store

Would A Dress Store Do A 1.5% Off Sale?

Would A Dress Store Do A 1.5% Off Sale? I saw a house recently that was priced at $659,000. This house had been on the market for 60 days, with no offers, at $659,000. I noticed that they did a price reduction of $10,000 to $649,000 after they were on the market for 60 days. And this begs the question, “is a ‘1.5% OFF SALE’ going to draw buyers into the store?”

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House For Sale

Your homeowner’s insurance coverage is too low!

Your homeowner’s insurance coverage is probably too low!

Check your home value annually

You should annually check your house value by having a local realtor pull comparable sales. Or use resources like this home valuation tool from Redfin. Or this one from Zillow. These tools will help you to adjust your home insurance as needed. Or you can ask a local realtor you trust to send you comparable sales. After a certain period you may find your existing insurance coverage is insufficient.

And let’s face it, who checks their house value annually? Who makes increase and adjustments as needed? Not many of us. Read More