Market decline in VA and MD markets have affected even some of the more popular developments and communities in the area. Developments which saw Phases 1, 2 and 3 sell out in record time are now having a hard time getting those projects to completion. This is as more concerned buyers pull out and cancel contracts and losing their deposits. While researching information for this article, we found more condos were converted to rentals as that's become more profitable for the builders. This is all due to an increase in cancellations and buyers become weary of taking the plunge on a new construction condo.

The Odyssey

The Odyssey is one of the more popular condos in Arlington, VA given the impressive views of the Washington Monument and the Capitol, quality high end architecture and sought after amenities. Who can resist that? Apparently, quite a few are resisting the Platinum Penthouse Suites with high end price tags that rival the Wooster and Mercer Lofts. Competition is fierce but the market simply won't support such pricing in a down market. Sellers need to be realistic or take the units off the market. Why? Condos here have been notoriously overpriced for some time and as the saying goes, what goes up must come down.

The Eclipse at Center Park

The Eclipse at Center Park converted to rental units in early 2007 due to cancellations and sluggish sales. Comstock sold a substantial amount of pre-sale units in 2005, however, sales started to slip and cancellations abounded, so the project headed down hill as they extended delivery dates due to slow sales. Their average sales for new orders decreased by $120,000 from $365,000 down to $245,000 which is a significant loss. The company was also especially hit hard in the Washington DC market where they experienced 122 cancellations on 625 contracts or 19.5%. Specific to the Eclipse project, they experienced 35 cancellations on 46 new contracts. Ouch! Still they state that most cancellations were related to contracts entered into during 2004. I'm not sure how much of a release that is because in 2004 the prices were lower given that many of those sales were lower do to those units being pre-sale inventory.

via Comstock SEC Filing

Fairwood, Bowie, MD

Some of Fairwood's "specuvestors" who got in early on the project made away like bandits, however those who got in to the market late are now feeling the pinch. Many of them unable to sell and break even, forget making a profit. And, that was in 2006-2007. Now, some sellers aren't able to refinance due to declining property values all around the Bowie and Glenndale, MD areas.

The DC Examiner reported: "No region in Maryland has been harder hit by the foreclosure crisis than Prince George’s County, and no neighborhood in the county has likely been rocked like the Retreat in Bowie’s Fairwood community.".

Those are pretty strong words but when you think that in just 2005 when this development was in its early stages, many potential buyers were being lured in with the idea they could own a luxury home just by signing a contract for an interest only loan or an ARM. Phases I, II, III and IV sold out in record time with prices increasing with each phase completion. Just three years later, many of them are in foreclosure, unable to sell or refinance. When talking with one of their Realtor's back in 2006, buyers were reassured that the market in DC was only on its way up because of all the developments in the pipeline.

Now, just 2 years later the Examiner notes... "In one four-block area, there are seven homes in various states of foreclosure, many others sit empty and others have sat with “for sale” signs on their lawns for months. Between 2005 and 2006, as developers Rocky Gorge and K. Hovnanian Homes put the Retreat’s condominium-town houses on the market, they snagged many buyers with no-money -own loans that residents and Realtors now point to as the primary cause for the neighborhood’s fast-falling market values.

I would also contend that greed got the best of all parties involved.

Clarendon 1021

Clarendon 1021 is another popular community, now dubbed "Flop City" due to flippers having a hard time turning a profit, has been plagued by foreclosures. Many "specuvestors" started selling at a loss in efforts to avoid a foreclosure with little success. Given the market climate this was bound to happen and now many are paying for it in lower comps, missed payments, and lost opportunity due to the increase in foreclosures. "Specuvestors" saturated and inflated the market along with builders offering pre-sale units at a substantial discount. Add to that, the abundance of sub-prime mortgage activity and you've got the perfect storm.

What are your thoughts? Have you experienced a foreclosure in any of these buildings or communities? If so, please share your story in the comments area. Alternatively, you can meet with Daniel to discuss your situation and he can answer any questions you may have around market concerns.

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With gas prices on the rise, communities near the metro are becoming more attractive to prospective buyers conscious about their commute. After all, it's no secret that living within walking distance to the metro can save money on gas and cut down on your commute depending on your destination. The good news is that we've done some of the leg work for you and below you will find just some of the communities within walking distance to the metro in MD and VA. Ditch the car and check out these homes which help you save on gas and shorten your commute!

Keep in mind that with recent volatility in the real estate market, there are quite a few condos that have gone the rental route. However as of this writing, the condos/townhomes listed below currently have new construction and/or resales on the market.

Maryland

Midtown at Largo Station, Largo MD

• Walking distance to the metro
• 1 BR- $250k-$311k
• 2BR- $385k-535k
• These units are situated right across the street from the metro in addition to being walking distance to the supermarket, bank, movies and the shopping center at the Boulevard.

Victory Promenade, Landover MD

• Walking distance to Morgan Blvd Metro and a short drive from Fedex Field
• 2BR/2BA-Starting from $299k
• 3BR/2BA-Starting from $330k-$356k

Metro Place, Suitland, MD

• Walking Distance to Branch Ave Metro
• Garage townhomes starting from mid $300ks
• The metro is situated right outside of the development and offers quick access to DC via 495, Branch Ave and Pennsylvania Ave.

Mica Condos, Silver Spring, MD

• Walking distance to Silver Spring Metro
• Starting from $200k-$600k depending on unit and floor plan

Virginia

Cameron Station

• Shuttle to Van Dorn Metro
• Starting from upper $300ks
• Resales:
  • Condos $315-540k
  • Townhomes $599k-$850k

The Phoenix at Clarendon Metro, Arlington, VA

• 1 block from Clarendon Metro
• Starting from $mid $300s

The Odyssey, Arlington, VA

• Walk to Courthouse Metro
• Resales starting in the $400s

Wooster and Mercer Lofts

• Walking distance to Rosslyn and Courthouse Metro
• Starting from $700k-$2 million

Keep in mind this list is in no way exhaustive and one should conduct further research to determine which home best fits their needs based on location, personal preference and finances. If you have questions and would like to discuss your strategy or perhaps borrow our free GPS machine to see one of these homes, give us a call!

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What are your rights with regards to Realtor representation agreements? Did you sign a buyer representation agreement? A seller representation agreement? If so, or if you're considering it, this article is for you.

Realtor representation agreements are legally binding agreements which inform the buyer and agent of their rights and responsibilities to each other while engaged in a contract for services. This is known as agency The buyer grants the Realtor agency and the Realtor provides a service within the bounds of the agreement. However, every agreement doesn't always end in a happy purchase or sale of a home. Sellers and Buyers may choose to terminate agreements for a myriad of reasons. Whatever the reasons, make sure that you read the fine print before signing the dotted line.

Let's reiterate: READ THE FINE PRINT.

Agency

Agency begins when one person, in this case, the Realtor, represents the interests of the other person, the buyer or seller. The responsibilities of the agent are defined by your local Realtor Code of Ethics, state law and general principles of agency law.

Buyer Representation

Buyer representation involves entering into an agreement with a Realtor who represents the buyer, exclusively. Everything they do with regards to a transaction should be to their client's benefit and not the opposing party or the seller. Buyer agent duties and responsibilities include but are not limited to:

• Represent the buyer as appropriate and required by their local laws and code of ethics in the transaction
• Evaluate the buyer's needs on an ongoing basis
• Present the offer and negotiate on behalf of the buyer
• Work with the buyer to determine the amount of house they can afford and provide them with the appropriate resources
• Accompany clients on home viewings and open houses

Seller Representation

Seller representation involves the seller entering into a contract with the Realtor to sell their home. Within this contract, between the seller and Realtor, the following information is detailed and specified:

• Home price
• Commission
• Duration of agreement
• Duties
• Rights & obligations

Cancellation of the Agreement

How To Cancel Your Realtor Agreement

This should typically be done in writing, not over the phone and not via email. If you do cancel your agreement via email, please be sure that you get confirmation and acknowledgement via email (or snail mail) of the Realtor's response and plans to terminate your contract moving forward. In some cases, your agreement is with the broker of the company your Realtor works for and you will need to make sure that the broker has agreed to cancel the agreement at your request. You will need to obtain proof of this as well.

We live in a litigious society and you need to make sure you have concrete proof of said cancellation, receipt confirmation and acknowledgements by broker and realtor that they will release you from the agreement and discussion of any potentials penalties for cancellation.

Your Rights

Read the fine print before signing any agreement as this is typically not done until something happens and the buyer or seller need to cancel the agreement. Does your agreement permit you to cancel within a certain time frame with no penalty? What about Realtor compensation upon cancellation? Legally a Realtor cannot continue to represent you once you have terminated agency; however this does not prevent them from holding you to penalties per the contract you signed.

This may include:

• Compensation fee
• Commission for the sale of the home said Realtor accompanied you on a showing or open house or a home said Realtor presented to you

Recourse Upon Difficulty Exiting The Contract

• Contact the broker
  
  • Most brokers are more than happy to discuss the situation with you and offer you another Realtor within the company or simply terminate the contract. After all, bad news spreads like wildfire and they would rather have your business or release you from the contract without issue
• Local Real Estate Board for clarification and/or complaint
  
  • If your broker (for whatever reason) refuses to release you from the contract then your next recourse may be to discuss the situation with your local real estate board for clarification on your rights and/or to make a complaint.
• Real Estate Attorney
  • When all else fails, consult with a real estate attorney

Contracts can be tricky, again read the fine print and understand each point within the contract as buying and/or selling a home is a large and important transaction. You'll want to make sure it goes as smooth as possible.

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Yesterday morning, I came across an article on the online version of the USA Today. It wasn’t in the real estate section or investment section. It wasn’t even an article. It was an advice column in the small business section. It answered a concern about how to market to younger generations and what works best with these post Baby Boomer generations. Should house sellers be aware of the changing market? You better believe it.

When the housing preferences of a new generation hit the real estate market, you can guarantee that it will have both a significant and lasting effect. Generation Y has now reached the age to buy their own homes.

Still think that they are too young? Current numbers show that the average age for the first time home buyer is 26. This is 3 years lower than Generation X and the Baby Boomers.

Who are these people? Generation X, born between 1965 and 1979, make up 20% of the total U.S. population. The subsequent generation, Generation Y (also known as the Millenials) is those born between 1980 and 1994. They make up 25% of the population. Combined, these people make up 45% of the U.S. independent consumer population. That means that a market is flooded with younger buyers.

What explains this demographic change? The younger generations live in the “urgency of now.” Don’t get me wrong—they are still putting off marriage and having children, but buying a home is viewed as an independent, professional investment. A good portion of them have had everything instantaneously provided for them while growing up. They demand equal treatment at work and tend to not stay long in one job before making a quick career advancement to another position. They show a pattern of wanting everything now---and that is including a home. Now, this generation is now entering the workforce in full force.

Where are they buying homes at? They are already showing signs of deviating from the Baby Boomer generation. According to the Urban Land Institute, the Millenials do not crave the suburban sprawl patterns of the Baby Boomers. They are showing signs of buying houses inside metropolitan areas. For this reason, houses that are closer to city centers are maintaining their value during the current down market and are expected to be the quickest to gain value once the market recovers (see related post).

They are still buying in the suburbs too. However, a lot are attracted to more mixed-use developments such as the Reston Town Center (Virginia). In developments like this, they were planned to resemble a sort of downtown in the suburbs that offered retail, office space, dining, transit and affordable housing all within a walking distance.

Christopher Leinberger, a fellow at the Brookings Institution, claim that Millennials are attracted to urban centers because of the high cost of gas and since they grew up on shows such as Sex in the City, Seinfeld and Friends which depicted urban life as trendy.

They are also different types of shoppers. The Millennials have spent all of their life with a computer and internet, which means they know how to research everything. They know how to look for a house, learn the closing process and keep alert to market changes. Therefore, without having real estate license, these potential buyers are already housing experts.

When listing the features of your house, make sure to mention the amenities of the community. What is the closest major highway? Is there a metro station nearby? What is a great coffee shop in the area? Are there some nice public parks nearby? What about retail within close proximity? Remember, the new generation likes mixed-use and transit oriented developments. If you don’t put this, they might think that this is just another house out in suburban sprawl, which will require lots of driving.

Pay attention to how your house looks online. Even if your house has been listed for months, take down that photo of your house in the snow and replace it with a fresh one. When online shoppers see this, they will automatically realize that it has been listed for months and think that something must be wrong with the house.

Also, you must take photos of rooms, backyard and features that will make the online virtual tour of your home look attractive. Are you photos free of clutter? Do they show depth?

Here are a few other suggestions to help with your online listing, whether you do it through and agent or a real estate blog that lists houses of For Sale By Owners (FSBO):

• Properly prepare you home for a photo shoot. Is your lawn mowed? Did you trim the bushes? Are your walls free of extra junk? Are those windows sparkling?
• The newer generation is a lot trendier than previous generations. Lots of these buyers will prefer hard wood floors since it seems metro. If you have any hardwood floors in your house, make sure you shine them up for some photos.
• Make sure furniture is placed in your photos. Potential buyers like to see how a room looks with furniture in it. Be careful not to place too much furniture since too much will make the rooms appear smaller. Try to get a friend or family member, who knows a lot about digital photography, to take some photos that will show space and emphasize depth.
• The kitchen is a huge selling point of a house. You want to capture the essence of this area. Take pictures of your kitchen appliances and cabinets. Again, try to get some good shots that emphasize depth. People love huge kitchens.
• The bathrooms are important to sellers as well. Make sure that chrome shines and the towels match the shower curtain. Make sure to include photos of the cabinets and fixtures.
• When taking photos of the bedrooms, make sure you open the closet doors and try to capture their size.
• When taking pictures of the living room, family room or den, make sure to include special features in your photos. This includes, built-in book shelves, vaulted ceilings, ceiling fans, fireplaces and bay windows.
• When taking pictures of your home’s outside, get a wide shot of the house and yard from different angles. Make sure to take photos of the garage and porches.
• Is your home part of a community? Go ahead and take those pictures of the pool, tennis courts and bike paths.

Remember to pay attention to how your house is viewed online. The new generation of buyers are doing their own homework, so if your home is not trendy enough for them, you might just lose out to a huge demographic who is ready to buy.

Related Posts:
Selling in a Down Market: First Tip, People Don’t Want a Fixer-Upper
Selling your home, what works (and what doesn’t)

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