DC market rated #1 by Forbes

Finally -- it's not just me. Forbes magazine is letting its readers know that the DC market is on the upswing. Take a look at the link above for the Top 10 as rated by Forbes.com

Are You Reading The Signs?

By M. Anthony Carr

I’m in the middle of jury duty. As you approach the courthouse entrance there is obviously a very long line to check in. In a post 9/11 world, those of us in the Washington, D.C. area have become accustom to security forces rifling through our bags, computers and the like for entrance into any public place, including courthouses and ball games. It’s just a matter of life, these days. Yesterday, there were hundreds of us answering the cattle call from the district court. We had to walk through the metal detectors. You know the drill…open your bags, empty your pockets, remove your belt, turn on your computer-pda-cell phone.

As we came through the check-in, there were hundreds of us in line. We passed by signs in various languages directing those with cell phones that have cameras to turn them in to a sheriff’s deputy for safekeeping. No phones with cameras allowed. Period. So by the time anyone got up to the metal detector you have read the signs and there have been plenty of verbal instructions from the security team that phones with cameras must be turned in. The security team was also directing people who were not potential jurors that they may not need to be in the long line, but could use another, shorter entrance to get to court.

So let me set the stage – signs – about 3 x 5 feet big – were hanging in the hallway; deputies (2 – 3 at a time) were constantly giving verbal direction to us all of these instructions. However, you would have been amazed at how many people were “surprised” when they were turned back from the metal detector to the cell-phone station or had their phones confiscated because they didn’t read the signs about the limitations of camera phones. Were they illiterate? No, couldn’t be – otherwise how would they be there with the Juror Summons in their hands? Could they not understand the instructions because of a language barrier – not with what I could observe. Were they just tuning out anything that they had no interest in? Ahhh – that’s what it was. They weren’t paying attention.

The same is happening with those on the side lines of the real estate market.

Let me ask you something – as a buyer or seller are you doing the same thing when it comes to the state of the real estate market? Are you ignoring the signs that are there screaming that now is the time to buy?

Fact: The number of existing homes sold rose 0.4 percent nationally in November. (buyers are out there)

Fact: Month-to-Month prices have stabilized in most markets across the country. (Yes, they are down if you look year to year, but when you want to buy, you want to know when prices have hit bottom, not how much less they’re selling for than last year.)

Fact: Job growth continues (meaning more wealth)

Fact: Population is still growing (more need)

Fact: Interest rates are still at historic lows (cheap money)

Fact: Inventory is dropping steadily across the country (Houses are selling, sellers are taking them off the market, builders aren’t building as many houses)

Fact: Seller are providing buyers with closing costs so that buyers can move in with little or no money down (This is a temporary situation!)

Now let me ask the agents: Are YOU ignoring the signs? Do you see more buyers coming out to opens; more calls at the front desk; discussion coming up in social events…but are you armed to respond? Do you know the message? Do you know where you stand in your market? Can you answer immediately the condition of your individual market? Sales are down 11 percent for the year, but prices are at the same level? Can you say that? If not, you’re not the agent of change necessary to help buyers get the best deal they’re going to get in the next decade.

For more information on real estate investing, resources and news, check out my Commonsense Real Estate Blog at http://commonsenserealestate.blogspot.com/.

How to Tell Where Your Market's Headed

by M. Anthony Carr

I've had several friends come up to me in the last few weeks and ask: "Is this a good time to sell my house?" or "Is this a good time to buy a house?" Let me preface my 700-word answer with this: If nobody panics, we'll all get out of this alive.

Many readers have accused me of being too optimistic on the real estate market. What they see as optimistic is actually an attitude steeped in the belief that you can make money in real estate in any market, you just have to know how to operate when the market's moving up, leveling off, or cooling down.

When prices are up -- sell. When prices are leveling or dropping -- buy (or sell). When rents are moving up, don't play Mr. Charity, raise your rents. When you enter this field of real estate as a wealth-building business investment, that's exactly how you have to treat it -- like a business.

When the market shifts, that's okay if you're looking at the market as a way of making money and building wealth. So last week when I read some reports from federal agencies that appreciation had slowed, I didn't panic with many of the market prognosticators, I just shifted my business plan. Real estate investors and property owners can make money in any market, you just have to be wise on the market and be flexible on how much profit you want to make.

Consumers are definitely confused on whether they should buy a piece of property when many numbers are pointing at a housing market that is slipping in prices. Today's tip is to approach it from a non-emotional business perspective. Watch these segments of the economy in your local area to determine if you should buy in your market:

A - The local economy

What's happening? Are jobs growing? Are businesses opening? Are current businesses investing in themselves? What are the economists saying in your area? Research this data by a simple Google or Yahoo search of "economic report." Through that search, the astute investor will find out where economists are predicting growth in suburban business centers and where the jobs are coming and going.

Forget what you're hearing nationally and look for the growth on the local level -- where you want to buy a house. Just like politics, real estate is local, which moves us to B.

B - The local real estate market

What's happening? Are prices booming, leveling or slipping? This has to be researched on various levels. Start on the state level, drill it down to your county and then get a granular look at the zip code and community level.

These numbers can easily be found through your local Realtor association. For a list from across the country, start at Realtor.com and click the links to local real estate associations at the bottom of the page. Most local associations (definitely state groups) keep a public area on their web pages with local statistics on the number of homes sold, sales prices and year-to-year appreciation.

Look up government information as well on job growth, economic plans and forecasts. If the state and county governments are playing their role appropriately, they're creating jobs AND allowing development of housing to house the workers who come along for those jobs.

If they haven't come up with the latter, then you might have a good investment opportunity on your hands. More jobs and fewer houses spell lower supply and high demand, meaning equity growth and high rents.

And don't forget the rental market. Is it growing? Are there a lot of vacancies? How much are the rents going up? Down? If rents are up, then you may be able to cover your monthly expenses. If they're dropping, it could be because the location is down economically or because housing is so affordable (but appreciating) that renters are getting out of the rent track and buying a house instead.

C - The financial market

This market is actually the only real estate component that is usually measured on a national basis. It's all about the cost of money and most interest rates are within a basis point or two from each other nationwide. Currently, they are still historically low (under 7 percent) which can be had for 1 or less points.

If you find that A is chugging along, B is still affordable and C is also affordable -- then buy, buy, buy. A strong economy with a growing real estate market and strong rates, means you can buy a house for relatively little money down as an investor, put a renter in the house and obtain it with cheap money that the rent will pay for.

If you find you're in a positive A situation, but B is unaffordable and C is still affordable, then you may need to wait or jump in the flow before B gets even more unaffordable.
If A is great, B is leveling and C is still affordable, and A looks like it's going to keep growing -- then buy while you can, because B is going to move up right after the break.

Finally, get a team together to help you analyze the data you've just researched. Are the prices trending upward? (And is that really a good thing right now?) Or are the prices dipping, meaning I should get in while I can because the jobs are coming? Work with your agent, lender and accountant to figure how the market can help you with your wealth-building goals.

Published: October 13, 2006