Jon Rudick, Realtor
Jon Rudick, Realtor

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Interest Rates: Falling

The better Wall Street does, the higher rates go. Likewise, if the market loses 1,000 points in a month, then interest rates tend to plummet with it.

Thanks to Ebola (and a number of other factors), the market has dropped 1,000 points in the past month. While that might push retirement off a little bit, it should move up your plans to buy that retirement home. Interest rates have crashed below the 4% barrier to their lower points of the year.

As of press time, a 30-year, fixed-rate loan is at 3.75%, with a 30-year FHA loan even lower at 3.25%. Yes, for real.

What does this mean in terms of monthly payments? If you purchased a $500,000 home a year ago and paid around 5% in interest, your monthly payment would be around $2,891 per month.

If you were to buy that same home today, you'd only be paying around $2,596 per month. That extra $295 per month translates to $3,540 per year or $106,200 in savings over the 30 years of the loan.

Inventory: Rising

Sales slowed in September, but they also were down when compared to September of 2013. That, coupled with inventory coming on the market at the same rate as last year, leaves us with a 30% increase in the number of listings over this time last year.

Currently, there are more than 12,100 active listings in the DC metropolitan area. That's the highest number since November 2011. And this month isn't a fluke. Year-over-year inventory has increased for every month of 2014.

This is great news for people who have wanted to buy but weren't comfortable fighting it out in a multiple offer situation.

But, so are prices...

While there might be more inventory to choose from, it isn't really helping buyers. Median home prices rose slightly from $387,000 to $390,000.

If we drill deeper into the numbers, we can see even more increases. The Greater Capitol Area Association of Realtors report that single-family homes in DC are going for an average of $620,000 - that's about 3% more than a year ago. Condo prices in DC are up just 1% this year.  

And that's good news for sellers. 

The Return of the DC First-Timer Credit?

Urbanturf reported on Tuesday that DC Councilman David Grosso (I-At Large) introduced legislation to bring back DC's tax credit for first time homebuyers.

The last time first-timers enjoyed a $5,000 credit was back in 2011 but the legislation expired and it went away just in time for the inventory crunch we've been experiencing the last two years. Now that more homes are coming on the market, it might be the perfect time to jump in.

The new credit would change the recordation tax rate from 1.45% to .75% of the purchase price and would take effect September 30, 2015.

Top of the Market: Wardman Condos

This is probably a bit outside the range for your average first time homebuyer but it's news nonetheless. The historic Wardman Tower of the Washington Marriott Wardman Park Hotel is converting from hotel rooms to high end condos.

And when I say high end, I mean high end. The condos will range from $2 million to $8 million.  

150,000 square feet of the tower is currently under construction to transform the space into the 32 luxury condos ranging from 2,200 to 4,600 square feet.

They go on sale later this year and you should be able to move in to your new home sometime in 2015.

Whats Going On at the Hilton?

Cranes are going up at the Washington Hilton in Dupont Circle/Kalorama/Adams Morgan this week. So, what's going on?

Condos! Prince of Petworth mentions that this project from Lowe Enterprises could be the 230-condo project that stalled out in 2007 thanks to the bubble bursting.

This is just the latest large building popping up around town and another sign of the recovering, if not totally recovered, DC condo market.

This week we're looking at a popular price point. Here's what you could get around the DC area for $300,000:

Address Size Price
Steps to Metro

3446 Connecticut Avenue NW, #305
Washington, DC
1 bedroom, 1 bath
 507 square feet
 Hole in One

2600 16th Street South, #716
Arlington, VA
 1 bedroom, 1 bath
 712 square feet
 Low Fees and ICC

35 London Bridge Court 
Silver Spring, MD
 3 bedroom, 3 bath
 1,800 square feet
 Shiny and New

4503 Sellman Road
Beltsville, MD
 4 bedroom, 2 bath
962 square feet
Water Views

8304 Claremont Woods Drive
Alexandria, VA
 3 bedroom, 3.5 bath
 1,670 square feet
 Spacious near Dulles

13339 Shea Place
Herndon, VA
 3 bedroom, 2.5 bath
 1,728 square feet

(Click the pics to see the listings!)

As of yesterday, there were more than 200 properties in DC, Montgomery, Arlington, Alexandria, Prince George's and Fairfax Counties at this price, so you certainly have some options. Here are some mortgage estimates:

At 20% down

At 10% down

And at 3.5% down (FHA Loan)

Union Station...on the move!

Next time you're at Union Station, whether you're catching a train or catching a Shake Shack, you might want to take a picture. It's going to change.

Last weekend, the Washington Post had an excellent article detailing the future of the 100-year-old transit hub and details on the new neighborhood that's going to pop up.

Named "Burnham Place" (after the architect of Union Station), the new development is going to be built on top of the current rail lines. More than 3 million square feet of retail and residential space will be created on 20 new acres of real estate that hasn't seen residents since President Taft was in office.

It's still years away from being realized, but Burnham Place, along with the 2.2 million square foot Capitol Crossing Development on top of I-395, is going to go a long way to reconnect the city.

A New Mortgage Option

There's no denying that homes are expensive around Washington. In July, almost one out of three homes sold was over a million dollars. However, saving up for a downpayment for one of these beauties is hard to do. If you write a contract with a home-sale contingency in order to pay for that downpayment, you'd likely be put to the bottom of the stack in a competitive situation.

What's a buyer to do? Prosperity Home Mortgage (a Long & Foster affiliate company) has a new option that might work for you.

Starting today, they're offering as little as 15% down for jumbo loans up to $1.5 million with no mortgage insurance. This can save you thousands of dollars a year, not to mention the tens of thousands in dollars you would save on that downpayment.

And this isn't limited to single-family homes. It's also available for condos and multi-family properties with up to four units.

Crunch the numbers yourself (I suggest using the Zillow Mortgage App at first). If the numbers work out for you...give me a call!
Sales Down, Inventory Up (Again)
Last month was good for the DC housing market, but not as good as July 2013. That means for every month this year, sales have been slower than the same month last year.

What do you need to take away from that? For starters, don't freak out if you're thinking of selling your home. 2013 was a pretty insane year for the area - the best in about a decade. Also, while 2014 might be a bit slower, it's still better than 2010, 2011 and 2012.

While things have calmed down, inventory has gotten better, which is what buyers have been waiting to hear. Active listings are up 33.5% from last July. That's the 10th consecutive month where listings have increased from the previous year.

What could be the cause? Rates are higher, so that might be scaring some potential homebuyers off - but those rates are still near historic lows. More on that below...

Waiting = Fewer Lattes

Rates today are around 4.125% for a 30-year, fixed-rate mortgage. They've been holding steady there for the past several months ... but they are up from last year's record lows.

What has waiting cost you? If you had purchased a early last year, you probably were able to lock in a rate of around 3.5%. That would make a mortgage payment on a $500,000 home with 20% down of $2,149 per month.

That exact same home with the exact same loan at today's rates would cost you $2,292 per month. That's a difference of $143 or a little more than 33 grande lattes from Starbucks per month.

If you keep waiting, you could loose even more. At 5.125% interest rate you'd be looking at paying $2,531 per month. That's $382 more per month than at the beginning of 2013. That's a lot of lattes!

Zillow Buys Trulia

Last Monday it was announced the real estate colossus Trulia was being purchased by real estate behemoth Zillow. The deal (valued at $3.5 billion) is estimated to account for 61% of all real estate searches after the merger is all said and done.

Here's why that may be bad for you.

It may be surprising but their search results simply aren't that good - and the lack of competition in real estate search engines isn't going to help. The real estate market in the DC Metro area is insanely fast in some markets, with some properties going under contract a couple of days after being listed.

However, Zillow (and Trulia) are often a couple of days late to the party. They may only update their search results every 3-4 days, and that could be too late.  

This is an example of what a Realtor sees with our live search results:

Now, here's the same listing but with Zillow's seemingly minor delay:

What the what!? How'd that happen? You didn't even get a chance to see it!

This delay in listing data is not done on purpose - just a limitation because the data Zillow and Trulia access are so voluminous. They're updating tens of thousands of listings nationwide and that takes a while.  

In a slow market where an average house sits on the market for a month or more, it's not a big deal. But in the DC Metro area, it's enough for you to miss out completely on what might be your dream home. Even if you see the new listing on the 5th, chances are you're seeing it after the offers were due.

So, what's your alternative?

That's me! Working with a Realtor to find your home costs you nothing. We can show you every listing that's out there and we can get you in the door when it's convenient for you.  

We can also set you up for automatic emails that will alert you the instant a home hits the market.  

Another disservice Zillow does to the average homebuyer or seller is their "Zestimate," which estimates the value of a home using a top-secret calculation. They won't say how the home value is determined and their website even says it is "computed using a proprietary formula." In their defense, Zillow does explain why their Zestimate is often off the mark. The biggest variable (which Zillow will never have access to) is the inside of your home.

The only real way to get an accurate analysis of your home's value is to invite a Realtor in. Not only can we better value your home by assessing the interior and all the work you've put into it, we also know the local market conditions that could affect the value of your home. Zillow does not.

Don't get me wrong. Sites like Zillow have a lot of great feature, have a very user-friendly environment and may be good enough for the causal looker. However, I can provide you with the most accurate and up-to-date information on the market. Let's talk about how I can best help you!

Prices Down...

Finally, some good news for home buyers. For the first time since February 2012, year-to-year home prices last month were down slightly.

All Residential

June 2014

Monthly Change

May 2014

Yearly Change

June 2013

Units Sold (Closed)






Median Sales Prices (Closed)






Pending Sales (New)






Active Listings






New Listings






Median Days on Market






Listing Discount






Average Sales to Original List Price






That being said, it's still very much a seller's market, meaning the home seller is the one in control.  With the exception of June 2013, last month still had the highest average sales price since 2007.  Also, the data could point more to how insane it was out there in 2013, more than a significant shift to the buyer's advantage.

Inventory Up!

One reason why prices are down (slightly) is that there's more out there to buy. There's more coming, too.

Over the past couple of weeks, I've told you about large condo projects along the U Street Corridor and just this past week, The Wharf along the Southwest Waterfront announced it's getting into the new condo boom by releasing renderings for a new 108-condo project at 600 Water Street SW.

Developer PN Hoffman says the building should be ready for occupancy in 2016. They're going to have competition. In Shaw, about 85 condo units are planned for a vacant lot at 8th and O Streets NW. Check out those plans here.
What does this mean? Starting next Spring (when these condo projects will start to deliver), the stories you've heard about multiple offers and homes selling significantly over list price will probably be a thing of the past. With condo projects sprouting up in Adams Morgan, U Street, Shaw and now Southwest ... it could make it easier to get into other red-hot neighborhoods like H Street and Columbia Heights.

With more than 1,500 condo starts this year and almost 2,500 projected for next year, buyers might be able to take a breath and have more flexibility. And sellers should get their units on the market now to take advantage of the market before things swing to buyers' advantage. Good news for everyone!