John Cunningham Homes

$26,730 Condo in Gaithersburg, MD

johncunninghamhomes — Tue, 01 Sep 2009 17:54:29 +0000

Yes, that is not a typo. You can buy property in Montgomery County, MD for $26,730. Maybe you can trade in your car for it:

http://www.homesdatabase.com/MC7139519

I’m sure it’s a complete dump and smaller than your walk-in closet, but just the sight of condos priced so low in this area make investors like myself drool. You could quite easily rent it out for more than the mortgage (if you even need one), taxes, and condo fees.

This reminds me of an old expression. “When there’s blood in streets, buy property.” And from the looks at prices like this, it looks like there’s been a real estate massacre. It’s a once in a lifetime buying opportunity.

The ABCs of School Districts and Home Values

johncunninghamhomes — Mon, 24 Aug 2009 15:57:50 +0000

The number one question I get from buyers with children is “What school district is it in?”. The address of your home generally determines the public schools children go to. Homes in top school districts generally hold their value better and sell for more money than those not in top school districts. The reason is quite simple. Parents want their children to get the best education possible and will pay more for a home in one of those districts. The Wooton district in Montgomery County is one those is highly sought after areas. It contains Wooton high school which consistently ranks among the best public schools in the DC area. In fact, Newsweek ranks it as the 59th best public high school in the country. Even if you don’t have children and you want to buy a single family home, I would recommend you look in an area with top schools. Because even if you don’t care about them, I guarantee you that many other buyers do. And come resale time, you will be be rewarded for it.

Here’s a handy link where you can look up Montgomery County schools based on an address:

http://gis.mcpsmd.org/gis/PublicLocator.asp

Montgomery County Housing Stats for July 2009

johncunninghamhomes — Thu, 20 Aug 2009 17:53:38 +0000

As some of you may know, I love to quote stats. Whether it has to do with fantasy football, or real estate, the numbers never lie. This month’s batch point to continued drops in home values compared with July 2008. It also points to an incredible drop in inventory compared with a year ago. If I had to choose just 1 metric that is the best indicator of future home prices, it is inventory…simply because it demonstrates the simple laws of supply vs demand. Raise the supply, and the demand will be spread thin, leading to lower prices. Lower the supply, and demand will be concentrated, raising prices. We saw amazingly low home inventory during the boom years which led to bidding wars and record price gains. On the flip side, we saw huge inventory overhangs in the last 3 years or so with corresponding price drops. Now this latest batch of data shows that home inventory is nearly half of what it was this time last year. That is an astonishing drop. Will that lead to price gains as demonstrated by past inventory drops? Time will tell. The wildcard this time around is the foreclosure problem that will not be going away anytime soon.

Here are the raw numbers for Montgomery County:

	July 2008	July 2009	Change
Closed Sales:	914	1,141	+24.8%
Median Sales Price:	$404,000	$375,000	-7.2%
Inventory:	6361	3600	-43.4%

Beware Armchair Realtors

johncunninghamhomes — Mon, 17 Aug 2009 14:49:49 +0000

Just like any other profession, there are some bad apples practicing real estate. Because of this, many people feel they are better at giving real estate advice to their family and friends who think they know more about local market conditions than us. Everytime I come across individuals like this, I take it as an opportunity to show why I am a highly trusted professional who protects his clients interests above all else. Knowing that some people don’t trust Realtors immediately, I advise clients to get advice from everyone closest to them when it comes to major life changing events such as buying a home, but when it comes to getting expert advice on the local housing market, I want them to trust my professional opinions. I never pressure clients into buying or selling. My job is to present information and provide guidance through the buying and selling process. I will tell you what the local market conditions are, but in the end, the final decisions are all up to the client. Sometimes I advise clients to accept offers, sometimes to wait. Sometimes they need to offer more than asking price, sometimes under. My most recent experience came from a lawyer who gave her “expert” experience to a client of mine. Apparently, the lawyer friend was amazed that I advised my client to offer more than asking price on a bank owned home in Rockville. What escapes her (and many others), is that asking prices are simply one indicator of a home’s value, but you can’t use asking price as your only guide when making an offer. That way of thinking can cost you a lot of money. If I buy a home for $400,000 when it was listed for $500,000, did I get a good deal? Many uneducated people would unoquivically say “yes” without doing more research. But if recent sales in the area show that comparable homes sold for only $350,000, how does that “good deal” look now? The point is, you can’t rely on asking prices to determine what to offer on a house. You must look at comps and market trends. If the specific market you are looking in has a lot of buyer demand and houses are selling after just a few days on the market, then you are buying in a rising market and must offer a little bit above what the comps are. If there are many houses for sale, price reductions, and stagnant listings, then you are in a declining market and you can afford to offer less than the comps. The lawyer friend said that we should never go over asking price because the market was so soft when she bought her million dollar home just a month ago (which she got below asking price). What she doesn’t realize is that the 1M+ Rockville market is lightyears different than the 300,000 and under market. They are almost complete polar opposites in fact. The high end is still very slow and succeptible to more price drops in my opinion. The lower end is on fire, especially bank owned homes which are priced at extreme discounts. Multiple offers, sometimes going over asking price, is the norm.

Bottom line is, listen to everyone in your inner circle and trust their opinions, but at the same time, listen to the professionals when they present you with the facts.

DC Foreclosures Jump In July

johncunninghamhomes — Thu, 13 Aug 2009 14:56:07 +0000

Remember when Obama’s “Making Homeownership Affordable Plan” was in the headlines back in March? Well I do because I thought it would mark a turning point in this forclosure crisis. But here we are, 4 months after that program was introduced and foreclosures are still rising. 25% more of them in DC compared with July 2008. From others I talk to in the business, lenders are very slow to adopt the plan and they are taking every distressed homeowner request for help on a case by case basis. And the reason for that comes down to the almighty dollar. Banks want to make money. Period. If you can’t pay the mortgage, they will find the best way to cut their losses. They don’t care if you lost your job or are suffering from an illness. If the financial incentives granted lenders for modifying a mortgage are not greater than a foreclosure, then they will foreclose. It’s that simple.

Short Sales: Good Deals or Waste of Time?

johncunninghamhomes — Wed, 12 Aug 2009 19:13:34 +0000

Want a 5br/4ba single family home in King Farm (Rockville) with 2 car garage in walking distance of metro for under 500k? No problem, just buy a short sale listing there!

If only it were that easy. I’m a big believer in the phrase “you get what you pay for”. But that phrase doesn’t even apply to many short sales since so many don’t even make it to settlement! I have closed short sales before, but that’s because I know how to weed out the promising ones from the pipe dreams. First a little primer:

Short sale: A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage.

The problem with short sales is not getting the seller to accept an offer. They will not be walking away with any cash at the settlement table so they don’t care how high the offer is. Of course, the higher the better for the seller since it stands a better chance at getting bank approval. Which leads me to the difficult part of a short sale. Getting bank approval is not easy. Many times, the offer will be submitted to the bank where it seems to fall into a black hole. The bank may hold the offer for anywhere from 1-6 months depending on the circumstances. Most short sales fail because the buyer simply gets tired of waiting. But if you have the flexibility to wait for that bank approval (also called 3rd party approval), short sales can offer an excellent value. Just be sure to follow the following guidelines:

“Approved” short sales are the best. They have already gone through the difficult part of getting bank approval.
If bank approval has not been given yet, be sure your agent screens the listing before wasting your time. They should make sure the listing agent has short sale experience. Ask how far along they are in the process. Has there been a negotiater assigned yet? BPO done? The further along in the process, the better chance of actually closing a short sale.
Make sure to put a reasonable short sale deadline, after which you (as the buyer) has the option to terminate the contract.

Rockville Musings

johncunninghamhomes — Wed, 12 Aug 2009 17:11:56 +0000

I’ve lived in Rockville my whole life, except for four years at the University of Maryland…Go Terps! In that time, I’ve seen a lot of Rockville stay exactly the same with established neighborhoods and traffic on the Pike, but we’re also on the verge of urbanization. If you live anywhere near the Red line in Rockville, chances are you’re seing construction cranes dot the skyline. In 5-10 years, White Flint is going to look more like downtown Bethesda than the sea of strip malls it is today. What does that mean for homeowners? In the short term, it will mean a lot of confusion and traffic headaches (e.g. the intersection of Montrose Rd and Rockville Pike). In the long term, I think we’ll see ourselves transformed from a car dependent sea of merchants and parking lots, to smartly designed, denser developments with jobs, entertainment, and homes close to metro. Personally, I can’t wait to see things unfold. Similar development is going on around many other metro stations in the DC area (Tysons Corner, Nationals stadium, etc). It only makes sense to build around mass transit as traffic chokes the area and gas prices start moving back up. I think the majority of Rockville house hunters will always want the traditional American dream of a house on .25 acres with a 2 car garage no matter what. It is something that Rockville does quite well and it’s hard to deny the benefits of having your own land, without sharing walls with neighbors. But as time goes on, it will only get more and more expensive to live that way.

Silver Spring Townhouses

johncunninghamhomes — Wed, 12 Aug 2009 15:58:35 +0000

Something hit me recently. If you’re looking to buy a townhouse in Montgomery County, don’t even bother with Rockville or Bethesda unless you want to shell out 500k+. Don’t get me wrong. Rockville and Bethesda have excellent townhomes and their proximity to top schools will always remain a big draw, but many buyers don’t have the budget for those areas. But if you take a quick drive up Georgia Ave, you can get a decent townhouse for half as much. I recently showed a 3br/3.5ba townhouse with a 1 car garage near Leisure World that was listed at 195k! Sure it was a foreclosure. Yes it was dated. And of course there were multiple offers, but I’ll take that discounted price anyday.

Just be careful when researching townhouses (or condos for that matter). HOA fees can be outshined by the glimmer of that gorgeous brick front with wide 2 car garage and gourmet kitchen. I’ve seen those fees range anywhere from $45 per month up to $400. I’m sorry, but you should not have to take out a second mortgage to pay for things like snow removal and landscaping. Be sure to check those HOA docs carefully before going thru with purchases. Perhaps even have a CPA or financial analyst look at them. You don’t want to move in and suddenly get hit with special assessments.

Given all that, I would highly recommend the Longmead neighborhood of Silver Spring. Nice, well kept neighborhood, low prices, and low HOA fees.

Northern VA is HOT

johncunninghamhomes — Wed, 12 Aug 2009 14:53:05 +0000

Literally and figuratively. I was showing homes on a 100 degree August day in North Arlington praying that the AC would be working at each house (some were vacant). Thank God it was on in all but one, although that last one was pretty rough. There were some strong “pet smells” which seemed to be extra strong due to the hot/humid air permeating throughout the house. At one point, I think I saw odor trails, or maybe it was heat trails, or maybe I was having a heat stroke.

But sure enough, many of the houses I’ve been following in Arlington are under contract now, many with multiple offers. I’ve notived an amazing shift in the market since Feb/March of this year. The pendulum has swung almost completely back in favor of sellers in prime neighborhoods such as Arlington. They are selling for less than the boom years for sure, but they have little competition out there. In fact, there is a only a 3.5 month supply of homes in Arlington now (a balanced market has 6 months). It will not be long before we see year over year increases there. Vienna, Annandale, Alexandria are all showing similar inventory reductions. I should be clear however, that the upper end of the market (1M+) is still slow as lenders are still fairly risk averse when it comes to jumbo loans. It would not suprise me to see prices remain stagnant in that segment for quite some time. But in the lower end of the market, I expect first time buyers to buy homes at a voracious pace at least until the 8k tax credit expires in November. Bidding wars over well priced homes in the first timer segment will remain common. (Although there is some speculation that Congress may extend the tax credit into 2010.)