Real Estate Live

Maryann Haggerty
Washington Post Real Estate Editor
Friday, July 21, 2006; 1:00 PM

Welcome to Real Estate Live, an online discussion of the Washington area housing market with Post Real Estate editor Maryann Haggerty.

Maryann has been with The Post for 18 years and has served as real estate editor for the last five years. She's been a business and real estate editor and reporter for about 25 years. In all that time, she still hasn't figured out where you can find a lovely but inexpensive house in a charming neighborhood.

She's online twice a month to answer your questions about the local housing market -- from condos and investment properties to contracts and mortgages.

For more on local real estate, visit's Real Estate section .

The transcript follows.


Maryann Haggerty: Hello, folks. It seems summer has come to Washington for real this week.

I consider myself personally lucky because I have a very short commute--30 minutes door to desk via foot and Metro. That's a big part of what makes living in Washington work for me. But in tomorrow's Real Estate section, we have a story that features people who left Washington to live in Baltimore, mostly for cost reasons, and now consider THEMSELVES very lucky, long commutes and all.

I'll dive into answering your questions. Feel free to chime in with advice to others, or with your thoughts about what makes it worth your while to continue to live in this area.


Ashburn, Va.: There are 4,500+ units for sale in Loudoun County, Va. With only 400 or so sold per month, odds are that we in Loudoun have a 10 percent chance of getting a buyer. How long do you think this high inventory trend will continue? Will we be waiting until 2007 before this inventory is cut in half?

Maryann Haggerty: Can't tell you how long it will continue--greater economic changes can have effects, for instance. But 2007 isn't that far away anymore, so I think it's safe to say the wait is at least that long.


Your worst nightmare: Well, it's time for the weekly running of the bulls. I thought I'd start the show early with a little insight into your buyer market.

I'm a very well paid professional, who just crossed into a six figure income last year. I have basically no debt beyond my student loans. I rent. I'd be interested in buying.

But you see, I spent the past five years listening to all of you blather on about RE. The smug attitude. The snotty "oh you rent" comments. We warned you that this was a bubble. We told you that ARMs, or worse yet interest-only ARMs were amazingly stupid on historical low interest rates (which can only go up). We told you energy prices were skyrocketing, driving up inflation (and eventually interest rates).

But still you bought the condo for a half mil on $80,000 income. And were condescending about it.

So now I'm sitting back, putting a grand or two a month away. I have no pressure. I'm ahead of the game. I just have more downpayment. Rates going up? Who cares? NOW is when you use ARM loans, when rates are higher and going up ... by the time it resets rates are going back DOWN.

You on the other hand have an albatross. Those low, low payments die when your ARM (or god help your interest-only ARM, or worse yet your teaser) resets. Maybe you can afford it. Maybe you can't. A lot of you can't. Or you get a job elsewhere. Or whatever. The point being you are competing with desperate builders of new construction, and have a timeline. Or didn't you notice the backlog of properties?

I can wait you out.

I'm not buying your overpriced place on some silly discount. I'm buying at 2002 or earlier prices. If not from you, then from your bank when you foreclose. So keep dreaming about "soft landings." All the greater fools already bought ... the rest of us are those who could afford it, but weren't willing to mortgage our futures on crazy loans and overpricing.

Maryann Haggerty: Who is sounding a little, well, smug and condescending now?


Sterling, Va.: How successful are realtor open houses? Do you recommend them?

Maryann Haggerty: The conventional wisdom is that open houses don't directly sell houses.

Let me see if we can find a link to a recent story we did about that...

_______________________ Cooling Market Lifts Lid on Old Debate , (Post, May 13)

Maryann Haggerty: This is the link to the open house story


Baltimore, Md.: Hello Maryann,

What's do you think about Maryland's Baltimore's market? We can still find houses for under $150,000 in Baltimore, one hour drive to D.C.

Thank you for your response.

Maryann Haggerty: A Baltimore question: Having done a lot of Baltimore home real estate ad searches this week, I can tell you, yes, there is still stuff under $150,000, but I can't tell its condition or, more importantly, whether you would like the neighborhood. For that legendary big Victorian walking distance to a MARC station, you are going to pay more.


Woodbridge Va.: As the BRAC process moves forward and more defense jobs move from Crystal City to Dale City, do you see an opportunity for me to sell high in Woodbridge and buy low in Alexandria?

Maryann Haggerty: Not really. The most recent round of BRAC studies predict people won;t be making wholesales moves within Northern Virginia; rather, they will be adapting their commutes.


Washington, D.C.: I have a rental in D.C. where my tenant is on a month-to-month as his lease expired last August. Someone told me that tenants in D.C. are basically "tenants for life," and you just can't ask them to move unless they are not paying rent. You have to have a good reason. Is that true?

Maryann Haggerty: That can be pretty much true in practice.

The following is from the Georgetown University housing office's Web site: "You cannot be evicted or asked to leave because your lease expires. The terms of your expired lease continue to be in effect, except for the amount of rent paid. The amount of rent can increase as allowed by the rent control law. Your landlord must give you a written letter asking you to move. This letter is called a "Notice to Correct or Vacate." Any part of your lease that says you can be evicted without notice is invalid, unless it is for nonpayment of rent. You are not required to vacate, however, until a court orders your eviction. As soon as you receive a court notice about an eviction (called a "summons and complaint"), you should act immediately. The number of days notice is different depending upon the reason for eviction. The most common reasons (each requiring 30 days notice) are for nonpayment of rent, violation of the lease after receiving a 30-day written notice to comply with the terms of the lease, and a court decree that you have committed an illegal act in your apartment."


Kensington, Md.: I submitted an offer on a house I wanted in Kensington yesterday. The listing agent told my agent about an hour before she was to talk to the seller about the offers what it would take to get to the top of the other two offers -- full listing price and the seller would contribute closing costs. I told my agent to go ahead with that offer. After that, we heard nothing for three hours. It turns out that another offer MIRACULOUSLY showed up a few minutes before her (the listing agent's) talk with the seller, complete with escalator clause to assure the other buyer the house! My suspicion and that of my agent is that the listing agent simply used our offer to call the other buyer and see if they'd up their offer. I was told this is illegal and unethical. Of course I can't prove this but do I have any rights? Is it wrong for an agent to talk about other offers to the potential buyers? Do I have a case for a lawsuit? As a first time homebuyer, I thought I could stay in that house for 20 years and now I feel like I'll never see another house like that again.

Maryann Haggerty: It may feel unethical, but it's not illegal, as far as I know.

But calm down. Why even think about bothering with the hassle and expense of a lawsuit? Keep looking; there are plenty of other houses out there. Really, there are.


Washington, D.C.: Hi, Maryann. We are planning to put our 100 year old capitol hill row house for sale in early fall. It has been completely rehabbed. What would you say is the market outlook for capitol hill homes? Thanks for your response.

Maryann Haggerty: As with many other areas, there are a lot of houses on the market and prices are more rational than a year ago. (Which is not to necessarily to say they are much lower. Just not as laughable for wrecks that are barely standing.)


Washington, D.C. : Maryann -- My wife and I are about to make an offer on a house. In your opinion, is it stronger to offer the asking price and request seller's help with closing, or to offer less than asking and pay the full closing amount? I'm also interested in what my fellow Real Estate Live readers think about this. Thank you!

Maryann Haggerty: I guess it's the psychology of the thing. A cold, dispassionate analysis would tell you the lower price is better for both buyer and seller--slightly less taxes, slightly lower commission. Some buyers can't scrape together all the cash; those are the folks closing costs help. And some sellers may have pride issues and feel better about the higher price, no matter the real bottom line.


Baltimore, Md.: Happy Friday, Ms. Haggerty.

I hope you will take on this question, as I've not been able to get any advice or suggestions elsewhere. Here's the deal. I have this house in the Baltimore area. The reason for buying in Baltimore is because I didn't believe I could afford to buy in the area where I had been renting, which is P.G. County. It will be a year next month, and I want out. I can't afford to live there anymore. What with property taxes breathing down my back (I didn't include it in my mortgage because my realtor was not the best). Then there is the long commute to DC every morning. If you've been reading the papers lately, you'd know that the MARC trains have been delayed, put out of service and it is driving me crazy. What made me believe I could do that?

I want to get out without getting burnt too badly. Could I sell it and walk away with some money in my pocket? Should I rent it out to someone that lives and works in the area? I've even thought about a roommate, but I don't really want to go that route, because that spells more trouble.

An ideal situation would be for me to sell it (on my own, if possible). Move in with my boyfriend for a while until I can get something on my own. Tell me what the consequences of selling would have on me.

Thank you again.

Maryann Haggerty: Here is someone who isn't happy with the Baltimore decision.

If you can sell at even a small profit, then sell. If the house is pulling you further under each month, there is no plus to keeping it, and you risk real problems if you start missing payments, etc. Yes, if you make a profit, you will have to pay tax on the capital gain because you have been there less than 24 months (unless you can gin up some legal reason for a partial exemption, which I don't really see here.)

I that in order to make any money at all, you would have to go for-sale-by-owner; it is unlikely your property has appreciated sufficiently in a year to cover anything else. Remember, that is a lot of work. Being a landlord isn't worry-free either; you have to do those numbers, too.

Whatever you do, think through what will be best for you. If that house is making your life miserable, you may even want to take a small loss to sell it.


Washington, D.C.: Last year I bought a condo in a recently converted apartment building (24 units). Our management company is awful and our condo board, of which I am a member, is really inexperienced. We're starting to run into building maintenance issues and aren't dealing with them effectively. Any idea where a small building, with a lackluster management company, can go for help? We want to fire this company when the contract is up.

Maryann Haggerty: Immediately call the Community Associations Institute in Alexandria. ( They have a lot of information available and offer regular training for inexperienced board members. You can learn pretty quickly how to go about hiring a decent management company and overseeing them properly.


Long time TWP reader: Hi, Maryann. Interesting display piece on the Plaza Hotel selling timeshare condos in NYC in today's paper. It made me wonder if there might be any places in the D.C. area that are doing something comparable? Can you think of any? Thanks. Here's that story: Rawther Part-Time Plaza , (Post, July 21)

Maryann Haggerty: There don't seem to be any in the immediate DC area, according to one expert in the story & what I have seen over the last months. They're mostly in resort areas.


Washington, D.C.: My wife and I own a condo in McLean Gardens in N.W., D.C. We moved to Florida and have rented the place out. What rights do our renters have if we want to sell the place? Do they have first choice to buy the place?

Maryann Haggerty: If you own just the one property, I don't think you are covered by the law. You may want to double check with lawyer, though (or the landlord's association, the Apartment and Office Building Association of Metro Washington, There have been a slew of recent changes in these laws.


RE: Worst nightmare: Keep waiting for those pre-'02 prices. If you're looking in the better areas (Georgetown, Upper Northwest), chances are you'll NEVER own anything.

Maryann Haggerty: This is a valid point. Even if prices in some areas fall below year-ago levels, as they have, will they take a five-year fall? That would be very very steep by historical standards.


Washington, D.C.: Are there any neighborhoods left in the greater D.C. area that are affordable for first time buyers? I make $80,000/year, but short of finding a marriage partner with a similar income, I don't know how I would afford even the smallest of houses, which all seem to be more than $300,000, and thus unaffordable unless I do something unwise like an interest-only or ARM.

Are there any "gem" neighborhoods out there that first timers should know about?

Maryann Haggerty: Well, many of the gems have been picked over, but if you're going to find them, you're going to find them in Prince George's County, southern Maryland, West Virginia or Baltimore.

Now I'm going to repeat something that I know upsets a lot of people: It is nearly impossible to buy a home on one income, especially in a high-cost area such as Washington. Not many people can do it. You don't have to get married, but you may need to buy with a friend or relative.


Washington, D.C.: Well after more than four months of searching both Northern Virginia and Montgomery County, I have finally landed a single family home at a reasonable price. And I will tell you, that notwithstanding after having lived in San Diego and Hawaii before, this was by far the most challenging real estate chase I have ever had -- and given this was my sixth housing purchase in high-cost areas in the last 19 years, that is saying something!

I write to tell you that besides the overall boom-factor and seller greed, I must attribute it also to the quality of the realtors and the overall intelligence in the marketplace out there. On the former, I have engaged realtors (on both sides) who were lacking experience, uninformed, incompetent, unprofessional, and downright lazy when it came to setting valuations and representing their client. Moreover, I am quite certain that in some cases, agents are just taking listings at whatever exorbitant asking price just to get the business. This of course does nothing other than drag out market time, and in most cases, ultimately results in even lower return for the seller. I have also personally witnessed agents acting with incomprehensible indifference to the transaction (by going on vacation in crunch time, or recklessly encouraging offers to just get something going, or acting merely as a paper-pusher and not diligently nor professionally stewarding an offer). On the buyer/seller side, I am amazed at how many people do not even know how sales comps, Zillow-type analytics, tax assessments, physical characteristics and location, or condition inspections should influence the price determination of real estate.

Just my two cents ... and I really enjoy your column. For those of you out there still searching to buy or trying to sell a home, I offer the following suggestions: (1) Do your homework before setting a price ... if you over-value the house from either buyer or seller side, it just hurts everyone in the long run. (2) Pick the right agent ... if you are a buyer and they do not adequately represent you, get another agent. If you are a seller, and they do not adequately counsel you before setting a price nor exude diligence during the listing period, get another agent. (3) Buyers -- NEVER get emotional about real estate. Be passionate about the pursuit, but be willing to walk away at some point. It took four offers (and six realtors) before I landed this home, and it was clearly worth the wait.


Maryann Haggerty: Thanks for all the good advice.

Can I ask a favor of you, and of all the rest of you smart people who have recently bought or sold? Can you e-mail me directly at sometime soon? I am trying to recruit a handful of local people to offer advice to others as part of a package of stories I'm planning for this fall. Thanks!!!


RE: Mr. Nightmare: I bought a condo a couple of years ago because I was renting one in a neighborhood that I loved, but I wanted to live in a place that I could make my own. My landlord was great but she wasn't going to take down the kitchen wallpaper, tear up the old carpet, or repaint in colors that I preferred. So I bought a place in the same neighborhood and I'm slowly making upgrades and I love it. The mortgage is a little higher than the rent was, but not much, and I've already got some decent equity. I'm actually very happy, thanks for asking.

Maryann Haggerty: Happy is good.


D.C.: In your opinion, does NoVa. (i.e., Fairfax) have a different feel or vibe compared to Maryland (i.e., Montgomery County)? To me, it seems like a different dynamic, but I can't pinpoint what it is.

Maryann Haggerty: Well, this is a totally unanswerable question!

To me, every neighborhood seems to have a different vibe; places in Montgomery County can be as different from each other as they are from places in Fairfax. (And I say this as someone who has edited more than 350 Where We Live profiles over the years!)

That said, there are verifiable political differences between the two areas, and of course big differences in "urban" planning over the years. one thing that has always struck me: All major roads in Fairfax are congested. Montgomery County just doesn't have major roads.


D.C.: Given the choice, would you rather live in Western Montgomery County or NoVa, with schools, quality of life, jobs, and congestion vs. price being the main factors?

Maryann Haggerty: A similar question, of course.

What I would prefer has little bearing--as I've said many times, for now I've made my choice, and that is Capitol Hill. I'm not at a point in life where the suburbs attract me.

But others are at a different point. What works for you is what is important, not what works for me, or for the guy at the other cubicle.


Chevy Chase, Md.: We are seeing more FSBOs on the market in our desired neighborhood. Is there a different set of negotiating techniques for these types of houses? Also, it seems that one of the FSBOs we are interested in does not want to work with our realtor or any realtor for that matter. What is your opinion on dealing directly with the seller?

Maryann Haggerty: One of the two of you had better know what you are doing.

Often, negotiating directly with the owner is going to be a more emotional situation. If you are a good, calm negotiator, you may be able to navigate that.

But please--if you do this, hire a lawyer to review the contract, etc...


RE: Your Worst Nightmare: Ok, the guy (or gal) is a bit smug and condescending but I have to give him an AMEN. My husband and I have lived in the area for three and a half years and decided when we first married to work on car and student load debt. Now, we're debt free and saving a good portion of our wages, with a nice money market account interest rate. Of all the times we've been told we should buy and we're wasting our money on rent - I can't tell you how many times we've heard that. Actually, everyone should just mind their own business and let us decided what's best for our future. Thanks for your chat!

Maryann Haggerty: Good for you: You set your priorities and stuck to them. It's a great feeling to be out from under debt and have some cash in the bank, isn't it?

Now, you need to decide FOR YOURSELF whether you want to buy or not. It may work for your life, it may not. Generally, for most people over the years, homeownership has been a very effective hedge against inflation and an important part of a balanced life financial plan.

(However, if you hang out on real estate chats, funny thing, people are going to talk about real estate.)


Washington, D.C.: My fiancee and I will soon be moving in together, so I've been thinking about what to do with my condo, a modest one-bedroom in the Hill East area of Capitol Hill.

Should I rent? Sell? Or put it on the market for rent or buy? There are some other condos for sale near me and two new buildings in progress.

We don't need the capital just yet, but a recent conversation with a lawyer with experience in the landlord-renter court, had a strong caution about making sure I find a good tenant.

Maryann Haggerty: If you can carry it off financially, and you're ready to deal with the challenges of being a landlord, maybe you want to consider renting. But, especially in DC, you want to make sure you get a good tenant. I have a copy on my desk of a new book that looks like it might be a lot of help: Nolo Press's "Every landlord's Guide to Finding Great Tenants." It's more than 400 pages long (!!) with lots of forms, checklists, etc....


Falls Church, Va.: Finding a home in the D.C. area to meet the needs of a growing family is so difficult. Is it worth buying a smaller/less expensive home and putting on an addition?

Maryann Haggerty: If you like the neighborhood, and it's legal to build on, that can be a good choice. Especially if the family is still small and still growing!


Washington, D.C.: What is the best way to determine how much house you can afford? My partner and I are considering buying, and we don't know whose estimate to trust: the realtor's, the lender's, an online calculator's, or another source altogether. We have no outstanding debt, a combined income of nearly $200,000 per year, but we keep hearing wildly different numbers as to what range we should look in. Help!

Maryann Haggerty: Ask a mortgage lender/broker. You can afford different amounts depending on what kind of loan you're talking about. The rest are just guesses, but they can help you narrow things down. (For the most conservative estimate, use one of the on-line calculators that takes taxes & insurance into account, and does the calculations based on a fixed-rate loan and a reasonable down payment.)


Hyattsville, Md.: What is the best way to determine how a remodel will effect the value of our home? Real estate agents have not been helpful. We recently purchased a house that requires quite a bit of work. We'd like to completely renovate the kitchen, but aren't sure what kind of impact that will have on the home value. The home is on the low end of recent sales in the neighborhood, but I'm not sure if that's because of the shabby state of the interior or because of the square footage. Any suggestions?

Maryann Haggerty: Improve enough to get you roughly in line with the neighborhood. A kitchen improvement, dollar for dollar, is likely to give you the best return. It will also make you life much more pleasant.


Bowie, Md.: Hi. We are having a home built in a new subdivision in Bowie and are supposed to go to closing next week. Just a couple of weeks ago it has come to our attention that the developer plans to install a Tree Protection Fence on our property that will not allow us access to approximately two thirds of our property. This was never disclosed to us by the builder (they claim they just found out themselves even though the plan was dated in 2003) and we never signed anything to accept this condition. Of course they're scrambling now to assure us that they're going to request a waiver from the county and or developer and that everything will be fine. Do you think we should continue with the purchase or should we try to terminate this contract? Or are we forced to continue with transaction? We have considerable concerns also about the possible resale of this property in the future as to whether this will decrease the value of the property. Your thoughts please.

Maryann Haggerty: Wow, that has the potential to become messy. I'd try to find a lawyer now.


Bethesda, Md.: RE: Condo management companies -- There are a few management companies in the area that specialize in 'small' (under 100 units) condos. I suggest visiting condos in your neighborhood that are similar to yours and finding out who they've hired. And don't be afraid to fire the company you have now if they aren't doing the job.

Maryann Haggerty: Thanks for the advice.


Falls Church, Va.: I am a first-time buyer and have been looking to buy since Jan. I have noticed the only way to work in this market where list price is inflated is to give sellers lowball offers. The sellers who are realistic will work with you, the greedy ones will continue to sit and lose out. I got one seller to accept a contract from me for 40,000 below list price, knowing full well the seller would still make double the profit what they paid four years ago. If sellers would be a bit more realistic than buyers would be back in the market. My advice to sellers is lower your price now, so you get buyers interested and sell before the market gets worse in 2007.

Maryann Haggerty: Price negotiation used to be very common, you know. Maybe we'll soon get back to seeing this process for what it is: A business negotiation that, with luck, makes both parties feel as if they got the best deal they could.

If the amount you offer is realistic and in line with the market, then I wouldn't call it a lowball. It's what it is, an offer. But if it is way out of line with the market, I wouldn't jump to call the sellers greedy, either. Just not willing to negotiate at this point.


Shirlington, Va.: I'm under contract for a new condo being built in Shirlington. Some of the buyers in my building organized a listserv to chat about the status of the building, etc.

Based on current prices of other condos on the market, some people in the group say we should try to collectively renegotiate our prices with the builder (and threaten to walk from our deposits if they won't).

Could that possibly work? Won't they laugh at us? These same listserv-ers say that even if renegotiating doesn't work and we had to lose our deposits, we might still get better prices after construction is complete (there are still unsold units). They think the prices could be lower I guess. Help!

Maryann Haggerty: Well, they might laugh. Or might just accept your deposits. Or might negotiate. It all depends on the developer's financial situation and outlook on the market.

But just let me point something out--don't fall into listserv group thought. Think for yourself whether you want this condo, how it compares with others, etc.


Vienna, Va.: For all the people who are gloating over not bowing to the pressure to get into the market in light of the bursting bubble, be reminded that there are tons others who did get into the market and didn't get ARMs and made plenty of cash from flipping and/or are sitting on nice equity increases even if they have to sell. Others who can survive this bubble are enjoying their homes and don't care about the market conditions because they're firmly planted into their communities while their kids are growing up with their neighborhood kids, with freedom and room to run and play, and plenty of space to have cookouts/BBQs and are enjoying their living conditions. Enjoy your stay at your apartment complex while we're enjoying our stay in our McMansions.

Maryann Haggerty: Let's be nice to each other, folks!


For the most conservative estimate: Hah! The fact that an RE reporter states that rational, sound planning for the majority of people is "the most conservative" says a ton about why we have a bubble.

Maryann Haggerty: Well, it's actually a true characterization of how you determine how much you can afford. Unless you wanted me to advise a first-time home buyer to count the money under the mattress.


Hanover, N.H.: I grew up in D.C. and am moving back but it seems like all the new developments for townhomes are 3,000+ sq. ft. monsters. What ever happened to the 1,200+ sq. ft. townhome?

Maryann Haggerty: Sorry, they're just not building them anymore. Lots of reasons--we don't have much time left, but there was a Page one story a couple weeks ago about this phenomenon. can we find it real quick???


Vienna, Va.: There seems to be daily news report about the slow down in the real estate market from sources like the WSJ. However, I'm not seeing prices for single family homes dropping widely. Even with reduced prices, homes are still significantly more expensive than they were one to four years ago. Is there any sign of an accelerated slow down? Benanke said there is an orderly slow down in the real estate market. What do real estate professionals think about that comment?

Maryann Haggerty: Overall, the market is slowing down. There are pockets in this area and nationally where it is slowing more than in others. As you can tell from this chat, some people perceive a crash in progress, others don't. Bernanke said yesterday that he sees an orderly slow down. Those actually in the real estate business tend to be optimists, in my opinion, and economists are split between slow and not-so-slow. We'll see.


Very, very steep by historical standards: Actually, not at all. Five-year value fall about exactly the mark from the last bubble, back in the 80s. It took approximately three to five years to happen, but that was the final bottom to the bubble pop.

Maryann Haggerty: Not on most studies I've seen for the Washington region. (That folder is here on my desk somewhere, but time is running out.)


Maryann Haggerty: Ladies and gentlemen, I have to leave. It has been fun, as always.

And to repeat: If you're interested in sharing more of your hard-earned buying or selling wisdom with other readers, drop me a line at I'm trying to pull somethings together for the fall.

In the meantime, enjoy the summer, and stay cool!


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