Real Estate Live

Maryann Haggerty and Elizabeth Razzi
Washington Post Real Estate editor and columnist
Friday, June 27, 2008 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.

Haggerty is joined by Washington Post columnist Elizabeth Razzi. Razzi is the Local Address columnist for The Post's Sunday Real Estate section in Business. She's written about real estate and other personal finance topics for magazines and newspapers since the days of double-digit interest rates. She is also the author of two consumer-advice books, The Fearless Home Buyer (2006) and The Fearless Home Seller (2007).

Today, they'll discuss the local housing market -- from condos and investment properties to contracts and mortgages.

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

The transcript follows.

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Elizabeth Razzi: Hello, everyone! Glad to see you here on a brilliant day. Is everyone's air conditioning turned on?

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Maryann Haggerty: Hi; thanks for joining us. Let's dive in...

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Arlington, Va.: A long-abandoned house has been on the market for several years in our neighborhood. Recently, the house was boarded up, and it has been cited by the county several times for too-high grass, and large trash items dumped on the premises. The house is still on the market, apparently at a price that is too high. Is there anything neighbors can do to encourage the seller (speculator) to sell so that someone can make use of this property instead of leaving it an eyesore?

Elizabeth Razzi: Aside from offering to buy the house?

Maryann Haggerty: It sounds like the county is already doing what it can. However, if the owner pays his taxes and pays those fines, they can't force him to sell.

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Northern Virginia: Some friends of ours are about to close on their first home. They recently told me that their closing costs will include realtors' commissions that will amount to approximately 6% of the home's purchase price for EACH realtor (both the buyer's and seller's agent)- so 12% of the home purchase price total. Is this right? (And if this is too high, would I be out of line if I were to give unsolicited advice advising them to walk?)

Elizabeth Razzi: That would be extremely unusual. Usually, when a home is put into the multiple listing service, the listing agent is offering to split (usually 50/50, but not always) his commission with an agent who finds a buyer. 6 percent TOTAL would be more likely than 6 percent EACH. The seller should closely examine the listing contract he signed with that agent and see just what it says. If the buyer signed an agreement with a buyer's agent, the buyer needs to review that. If the buyer did not sign anything with the agent, there's nothing calling for him to pay any commission whatsoever.

Maryann Haggerty: Yeah, that sounds odd. I would urge them to very carefully read what they are about to sign, and if there's ANYTHING they don't understand, at least have a more experienced person read it. Or even a lawyer. (I suspect they have misunderstood something they were told, but it's always possible they are getting ripped off by someone.)

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Arlington, Va.: Thanks in advance for your help! My lease is up in April and I would like to buy a condo. How long in advance should I start searching so I can time it, so I'm only making out one big check a month?

Maryann Haggerty: Well, it depends how picky you are. It's conceivable that you could see the perfect condo, buy it that weekend, get your mortgage approved Monday and move in 30 days later. Or you could be shopping for months.

Elizabeth Razzi: It's not too soon to start checking out neighborhoods, at least. Keep an eye on different condo buildings, and start your search in earnest in late fall/early winter if you're picky. As Maryann said....it all depends on how selective you are. If you can go on a month-to-month lease after one year of renting, that will make it all easier.

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Rockville, Md.: If I'm lying, I'm dying: A few weeks ago, I was driving up Rockville Pike in Rockville (ahem, I mean "North Bethesda") when I saw a guy on the sidewalk twirling one of those big red cardboard arrows. Now I am used to seeing this kind of advertising for "Furniture Closeout!" or "Discount Carpets!", but this one was different. This sign said "Condos, Up to $50,000 Off!" Even with my windows rolled up, I could smell the desperation. Last summer I was driving by River Road in Potomac by an ugly new McMansion development and they had a clown and balloons and a sign saying "Sale-a-bration! Final Closeout Sale!" Is this what we are resorting to? Twirling cardboard arrows, clowns and balloons?

Maryann Haggerty: That's new? There's been a pair of guys doing that on Route 7 in Bailey's Corner for more than a year. I think they're brothers--they have the arrow-twirling act down apt. As far as balloons and clowns--those are classics. Builders always have done that, except during those weird years when people were lining up to buy.

Elizabeth Razzi: And, of course, it did make you look...

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Washington, D.C.: When a house you were interested in goes under contract, how soon after closing can you find out the final purchase price? Where can you go to find out, the state/county tax assessment web site? Is it possible to find out about non-purchase price incentives also (e.g...... closing help)?

Elizabeth Razzi: Aha...that's the tricky stuff, the non-price incentives. They are supposed to be reported to the appraiser, but that info is not published. You won't find it on the tax databases. Real estate agents may be able to dish, in confidence, of course. How long does it take for the price to go into the records? That will vary by jurisdiction, but shouldn't be more than a few weeks.

Maryann Haggerty: Sometimes it will show up at the recorder's office within a couple days. But it can take a lot longer to get on the Web site. (I swear in a couple local jurisdictions that it takes 3 months.)

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Washington, D.C.: Hi! We city-dwellers have long dreamed of a cabin or small home on a few acres in western Maryland or the panhandle of West Virginia. Given plummeting prices in real estate generally, we're thinking this might be the time to go for it. Any thoughts on what the market is like for vacation/second homes? I would think it has to be even worse (for sellers) than the real estate market generally. Thanks!

Maryann Haggerty: Resort markets do tend to swing more dramatically, so yes, this could be a good time to go shopping.

Elizabeth Razzi: Some fundamentals still apply. Water-front keeps/increases its value best. Wooded lots in remote spaces don't do as well...because there's another one just like it the next hill over. Amenities (golf, skiing, shopping, medical care) always count.

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Moving to N.Y.: Hi Maryann and Elizabeth,

I love reading your chats! My husband and I are moving to New York next month and will be renting an apartment in Queens. Once we've moved and started our jobs, we'll be making over 120k and probably have around 42k in savings. We found out recently our credit scores are well over 800, and while we both have some student loan debt, we're hoping to be able to buy a place some time next year (possibly in NY, but more likely in N.J.). Given how thrifty we are, I'm sure we'll save up more cash this year, but I'm not sure it will be enough to have a 20 percent down payment and have some left over for emergencies, etc. Is it crazy to think we can buy a house or condo without a 20 percent down payment in the current market? or should we hold out until we can do that? I'm starting to feel like we'll never be able to save enough and we're already in our early 30s. Tell me I'm being irrational.

Maryann Haggerty: A lender won't require a full 20 percent down. The pendulum has not swung that far.

Elizabeth Razzi: Look at FHA mortgages. A down payment of 20 percent remains a very, very difficult hurdle for first-timers to accumulate, especially in an expensive place like the NY metro area. You'll get a better feel for that market after you've rented for a year.

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Silver Spring, Md.: Can you give us an overview of the current market? Are we still tumbling downward or are we bouncing on a bottom?

Elizabeth Razzi: Yes.

Maryann Haggerty: Or maybe no.

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Baltimore, Md.: I'm a first-time home buyer currently living in an apartment while I look for a home to buy. My lease just renewed itself at the end of May (automatically--don't ask me how that works, because I thought I had to sign something for that to happen), and the apartment office says I have to pay a $2000 penalty if I break the lease before next May.

My agent mentioned that some sellers will pay the penalty to break a lease. Have you heard of this before? Is it very common? Because honestly, I don't have much money up-front (though making mortgage payments won't be an issue) and that would be a big help.

Maryann Haggerty: First, go back and read your original lease. Most of them do not renew automatically; instead, they switch to month-to-month. Then ask someone in the office to show you, on paper, where anything that you signed mentions that the lease would renew. Unless your lease is a real anomaly, you may be able to make that penalty go away.

As far as the seller paying the penalty, I guess that's pssoble, as long as they aren't already throwing in so much $$$ toward closing costs that the lender objects.

Elizabeth Razzi: If you cannot find explicit language saying the lease renewed automatically, put up a fight. You can get some good information from the Maryland Attorney General's office: http://www.oag.state.md.us/Consumer/landlords.htm

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Washington, D.C.: The District has a huge flood of condo units coming on line, I've heard 5000 units around the new ballpark and another 5000 in Judiciary Square and 14th Street.

In my neighborhood these 900 sq. foot units are selling for about $700,000. Almost all of them are sold to speculators who turn around and rent them for $2000/mo. Assuming that the payments and condo fees are about $5000.mo, are these speculators really thinking these units will go up in value a lot? Can their tax deductions for the loss really make up anything close to the difference?

Maryann Haggerty: That math doesn't work for me.

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Washington, D.C.: We recently (2 months ago) purchased a home in the District. Contract provides that seller warrants all systems in "normal working order" upon delivery. After suffering a series of backed up drains, we learned that the pipe leading from just outside the house to main sewer line is almost completely occluded/overgrown with tree roots. The pipe will need to be dug up and replaced (probably about 10 feet of pipe, 7 feet underground - covered by bricks). Is seller responsible for this problem?

Maryann Haggerty: The general rule is that the seller is responsible for disclosing conditions of which he is aware. It sounds like this may be one of those you couldn't help noticing.

Elizabeth Razzi: Ask the plumber's opinion about how long this must have been presenting a problem. Keep your invoices and records of your service calls. And you might ask a real estate lawyer about the likely cost/benefit of pursuing the seller. By the way, if you bought that house as a foreclosure or short sale, forget about getting anything. They're as-is.

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Silver Spring, Md.: Thanks, re: market overview. That was very helpful.

Elizabeth Razzi: Sorry, couldn't resist. But, seriously, it is an unanswerable question.

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Washington, D.C.: What would you suggest for a young couple looking to buy their first home about a year from now? What should we be reading? Doing? Or am I totally over thinking this?

Maryann Haggerty: Check your credit files and credit rating now. See what condition they're in, and what you need to do to buff those numbers up. Pay down debt if you can. Don't incur new debt. (no new car now, please.) Save every penny you can. (Put away each month at least the difference between your rent and what you figure a mortgage payment will be.)Get a couple basic real estate books and read them. (Library books cost nothing.)

And then, on the fun side: Start looking at neighborhoods. Talk with each other about your visions of what you want a home to be.

But please: Don't obsess.

Elizabeth Razzi: All good advice, especially the "don't obsess" part. Two more ideas: Try not to buy furniture for your rental. No matter what, it won't fit right in the next place. And take time to walk/bicycle visit coffee shops, etc., in neighborhoods that might be candidates for your purchase. You have the luxury of time.

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Falls Church, Va.: Maryann and Elizabeth is there any advice you can give me on pushing Fairfax County to decide on our tax assessment appeal? I filed the appeal the first week of March and we still haven't heard anything. Got the form letter in April saying they got our stuff, their backed up, yada, yada, yada. And other than that another letter saying, sorry they haven't done it yet and to still send your stuff to the BOE if you want to have that option later. I've called several times and other then a nice man telling me that an appraiser has been assigned to our case, there is no other information. Truthfully, it should be cut and dry. We bought an 1,100 sf 3 bedroom, 1 bath SFH in Falls Church last April. FFX appraised it at $443,000, which happens to be $45,000 more than the house down the street that is 200 sf larger than ours. I cited this example along with six others from my neighborhood. I'm at my wits end waiting to see what will happen.

Maryann Haggerty: I don't really know any way to make a bureaucracy move more quickly, except possibly calling your elected representative (in this case, county supervisor) and urging him or her to push.

Elizabeth Razzi: No, you can't force it. But do file those documents with the BOE by its deadline.

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Asheville, N.C.: My wife and I just signed a contract for the house of our dreams yesterday. We've applied for the mortgage loan with an interest rate of 6.875% (the house will be rented as an investment property for a while), but I wanted to let the rate float for a couple of days to see whether the market will bump up in confidence after absorbing the latest crop of bad economic news. We have a 7% rate contingency in our offer. Am I off-base in thinking that I might be able to lock in something as low as 6.5% by next week?

Elizabeth Razzi: You like to gamble, don't you? No one can predict where interest rates will go from day to day.

Maryann Haggerty: Really, those sorts of short-term market gyrations are impossible to predict. Stocks, for instance, seem to be stabilizing some after yesterday's mess. But mortgage rates have been heading up for 5 weeks now, and I don't think anyone can say whether they will turn in the opposite direction quickly.

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Washigton, D.C.: Hello, this is a question for all the realtors out there lurking on the chat. I am the president of a condo association in the area, and a number of units in our community are currently up for sale. Several of them are foreclosure sales. How do I know this? They have big "FORECLOSURE" signs attached to the For Sale signs in front of each unit. I think this makes our community look bad, and I think it creates problems for the owners who are trying to sell at the REAL market value of their home. Would it be terribly rude for me to call the realtors listed on the signs for the foreclosed units and ask them to remove the "foreclosure" signs? Any savvy buyer is going to know this by checking the comps anyway, and it at least gives the other sellers a chance to compete on a level playing field. Thanks for any and all advice!

Maryann Haggerty: I don't think it would be rude. I don't know what answer you would get, though. Folks?

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Maryland: A friend of mine received an odd counter-offer when she wanted to buy a house. The counter-offer wanted her to pay the Seller's transfer tax while the Seller would pay other closing costs. Any idea why they would choose the transfer tax specifically?

Elizabeth Razzi: They may just have wanted to be specific. It wouldn't make any difference if they had simply named a dollar amount. And as seller, your friend shouldn't care. The only thing that matters is the bottom line net proceeds.

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RE: MLS listings of sold properties: These do list what "subsidy" was given by a seller. Now, those listings would not show other non-purchase price subsidies like "rebates" from the buyer's broker, etc.

Question: Because of changes to our family, I am about to list my condo, hoping to buy something with a yard. I am listing for below what I bought 2 years ago and the place was totally remodeled and none of those costs are factored into the sale price. I have my eye on a new place...there have been a few foreclosures near the new place (short distance away in same "cluster" of homes), but in not as nice areas that I would not even consider. Is it reasonable to point to those comps when drafting an offer (if, fingers crossed, my place sells and we can move on)?

Maryann Haggerty: (But tax records don't)

You can point to the comps, of course. But whether the seller takes that into account is another story.

Elizabeth Razzi: If most of the recent sales in that area have been foreclosures, those comparables take on greater weight than if they were a rarity.

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Washington, D.C.: If you were the buyer, where would you buy a 1 bed/1 bath in the District? What would be the best investment? I'm looking to buy and I really enjoy the Cleveland Park neighborhood... but I think Columbia Heights or U Street might be a better investment?

Thanks so much!

Maryann Haggerty: I strongly believe that you need to buy based on where you want to live, not on where you foresee the best investment returns. That's particularly true if you're playing the speculate-on-gentrification game. (Actually, I suspect that you're more than a couple years late on U Street for that speculation.)Would you be happy living in Columbia Heights, or would you spend all your time kicking yourself because you're not at the Uptown Theatre?

Elizabeth Razzi: I agree. You could be living in that 1 br/1ba longer than you expect...Make it somewhere you love.

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Washington, D.C.: Just wanted to let you know it's not all doom and gloom - I managed to sell a 1-br condo in Takoma Park recently. It was on the market for three months, so it paid to start early. We took about 6% off the price and covered the buyers' closing costs, but ended up getting a decent price for it.

And I didn't repaint the walls white or bland-ify the decor, on our realtor's advice. She said the target market is young people so looking "hip and cool" (her words, not mine) is a plus.

Elizabeth Razzi: Ta-dah! Congratulations! And you were hip and cool, too. Doesn't get better than that.

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Montgomery County: I'll help Silver Spring. I think prices have a long way to fall because credit is going to get much tighter. And when prices do stop falling, they won't bounce back up because credit won't loosen up quickly. That doesn't mean you will be able to afford to buy anything because tighter credit means you will have to pay higher interest rates and have a larger down payment, but the prices will go down. Option ARM adjustments and Alt-A ARM adjustments have not hit the credit markets yet.

Elizabeth Razzi: Thanks for your two cents....I don't think anyone is talking about prices bouncing back up--at least not anytime soon.

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Maryland: Just FYI - don't assume that a few acres in western Md. is going to be a good deal. Things are still farmland out there in a lot of that part of the state, and you can't (usually) just buy a FEW acres. Farmland isn't as cheap as folks often think. a 200 acre farm can be worth millions.

Maryann Haggerty: Good point.

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San Francisco, Calif.: What do you think about groups such as the Nehemiah Corp., which somehow have 501c3 status? Apparently, they "pay" the buyer's down payment, but only if the seller makes an equivalent "donation" to their organization. It all sounds like a lot of money funneling to me.

Maryann Haggerty: The Department Of Housing and Urban Development hates 'em. But the law as it stands now seems to allow them to continue to operate, or at least that's what the judges said.

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Good neighborhoods in the city: Where are some neighborhoods in D.C. that a middle class family with two children can live? Houses between $300-$500k?

Maryann Haggerty: Look outside Northwest. For instance, I just did a quick search of Zip 20017 (Brookland, Michigan Park, etc., in Northeast) and 55 houses of 3-plus bedrooms for sale for between $300,000 and $550,000 (I put a little negotiating room in there!)

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Silver Spring, Md.: How do you find a good energy auditor? These utility rates are really taking a hit on our budget. If we are able to substantially increase our home's efficiency, will that help with resale? Or is it still better to put money into the kitchen?

Elizabeth Razzi: How bad is your kitchen? Seriously, energy efficiency is wonderful for your budget, the environment and your comfort. But few buyers will look at a house and say, "ooh, honey, it has a super-efficient furnace. Gotta have it!" So, I wouldn't invest lots of money mostly with an eye for resale value. Go for it, though, if you'll live there enough years to recover the investment yourself. And Jeanne Huber wrote in yesterday's paper that the Maryland Energy Admin., 410-260-7655, will make referrals to companies that do energy audits.

Maryann Haggerty: We have a link here to a recent article about the energy audit process...

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washingtonpost.com: Do You Need an Energy-Waste Sleuth?

Maryann Haggerty: Here you go...

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Arlington, Va.: Hi,

Maybe I shouldn't believe what's being said in the blog sphere, but do you think it's even slightly possible that piggy-back loans won't be available soon because nobody will be buying them? We're trying to buy within our means, but we only have saved up 10% for down payment, so without piggy-backing 10% 2nd loan our interest rate will be even more scary!

(I know some will say keep saving until you have 20%, but really it's very hard to do when rent is so high)

Thanks!

Elizabeth Razzi: I'll say it again....FHA. These government-insured loans may be just the thing. You can get mortgages of up to $417,000 now with as little as 3 percent down.

Maryann Haggerty: Actually, she meant to type $729,750--up from $417,000.

Elizabeth Razzi: Thanks for the catch, Maryann. Indeed that is what I meant. Three-quarters of a million dollars. That's why FHA is the hot mortgage product now.

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RE: "Foreclosure" Signs: What I would want to ask the realtors is this: why would you point out on your sign that buying this particular house is going to be a big hassle because you're going to have to persuade the bank to accept a short sale, so you may want to look at houses that are easier to buy?

Elizabeth Razzi: Foreclosure and short-sale are two different things, of course. They post "foreclosure" signs to signal bargains. Some buyers think that's the only way to get a deal now. Imagine a busload of bargain-shoppers pouring into an outlet mall. They're a lot of today's home buyers.

Maryann Haggerty: (Actually I suspect that not all homes advertised as foreclosures really are...)

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Laurel, Md.: I need a list of properties for Baltimore City that sell under $50,000. I need this information for an appeal on a tax appraisal on a house. I have a downtown rental house which has been reappraised from 32000 to 133000 - a ridiculous sum for this semi slum neighborhood. I cannot locate an internet site to obtain this information - perhaps you can suggest some sites for me.

Maryann Haggerty: I'm not sure if you can sort data on the state web site that way directly. (www.dat.state.md.us/, and I've never seen a site that allows such a sort. Or you can buy the data from them and sort yourself, I guess. Anyone else have any ideas? You may want to talk with an appraiser...

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Maryland: Maryland tenant and landlord laws:

http://www.peoples-law.org/housing/ltenant/llt.html

Maryann Haggerty: Thanks. This for the Maryland tenant who was wondering why his/her lease automatically renewed.

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Falls Church, Va.: Re: I think this makes our community look bad, and I think it creates problems for the owners who are trying to sell at the REAL market value of their home.

That person is in denial. The REAL market value IS what the house sells (or does not sell) for.

Elizabeth Razzi: But a slew of signs can be alarming. Some condos have rules restricting placement of for-sale signs. Perhaps you'd want to bring it up with your condo association.

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Hyattsville, Md.: Shows that I watch about real estate always illustrate that the thing to look for when buying property is location. I have been looking around for potential area to buy. But, the areas that are the most affordable are not prime areas. Is it ever a good idea to choose affordability over location? What is your opinion?

Elizabeth Razzi: For all but the wealthy, it's always a compromise between the two. Start with affordability, of course. Looking around at the credit mess, there's proof that you just shouldn't buy more than you can really afford. Then scout the nicest locations you can find in that affordability range. You can expand your options by being open to more communities, more types of transit, more styles of house. We have a funny resistance to moving across jurisdictions in the Washington area.

Maryann Haggerty: I think you need to take something else into account: How much house to buy. Perhaps you can afford a more desirable location if you consider a smaller house.

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Montgomery County: Thanks for taking my comments. Love your chats. My house has been on the market 4 months in Montgomery County. Only reason I'm selling is because I got married last year and my husband and I don't need 2 homes. My house has quite a bit of equity in it and it took 11 years to build up the equity. I know buyers are looking for the best deals possible but it would be helpful if they realized that not every house is in foreclosure or having a short sale. I priced my house 10K below the appraised value of 2 years ago because we are no longer in that kind of market. As a matter of fact the appraisal was, I believe, well within reason for the market. In other words, no fluff. What occurs to me is that a good number of buyers really may not be able to afford to buy at listed (non-fluff) prices. I've reduced the price by 7K in the hopes that I could get an offer within maybe 5K of the reflected price on my net sheet. But what I'm being told is to lower it more and be prepared to possible give some closing help. All that lower and helping is basically telling me that buyers do not have the income or cash to buy and if that is the case, why are they looking in these price ranges? The difference in price is basically settling for 1 1/2 baths and an unfinished basement rather than 2 1/2 baths and a finished basement. And they still want a relatively non-existent new home "as seen on TV". My son is currently living in the property. I pay mortgage and he pays utilities. It's hard trying to tell realtors/buyers that I'm not just going to give away my equity. And the realtors don't seem trying to educate buyers of this fact. Everyone is not losing their homes. It's a crazy market. Glad I can make the decision to take the house off the market if I want to.

Maryann Haggerty: If you're not willing to sell at the price buyers are willing to pay, it's not the buyers' fault, I'm afraid. (Nor is it yours.) Sounds like renting to your son might in fact be the right thing for you to do right now.

Elizabeth Razzi: The market is talking to you. You just don't like what it's saying. Maybe you could set up a rent-to-own situation with your son, so he can build some equity?

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Re: condo association president and foreclosure signs: Are you sure the list prices of the foreclosures aren't the REAL market prices these days?

Elizabeth Razzi: a reader weighs in...

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Shirlington, Va.: Hi,

I am looking at a short sale house that has had two steep price drops already and is still on the market six months later. I read recently that low ball offers shouldn't be less than 85% of asking price. I have also seen projections that our market will go down another 12-13% by May 2009.

How low can I go on making an offer that might really be considered by the bank? What is being accepted in this area?

Randy

Elizabeth Razzi: Banks, like any other seller, don't want to give this stuff away. What do you think this home is realistically worth, right now, based on recent comparable sales? That's your starting point. You might offer less than that, maybe 10 percent, maybe something else. Maybe you'll have to raise your offer if you shoot too low.

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New York: I am looking to buy my first property in the next year and after reading your advice on checking my credit score I just did so. I find that three different bureaus are reporting very different scores. Two of them are reporting high scores, within 10 points of each other, while the third one is reporting a score that is 100 below the other two.

Can you please tell me why this is? When I will apply for a mortgage which score will they look at?

Thanks!

Maryann Haggerty: The scores do indeed differ. I think they still pick the middle one. (But the lender will look at your FICO score, not the credit bureau's proprietary version.)

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Arlington, Va.: Guys, When is this area going to get some "realistic" pricing models. Washington and NOVA were 2 areas that had just as many speculators as Miami, LA, Phoenix and if you look at the map of foreclosures, this area is starting to light up pretty badly. The Arlington area, especially the condo surge, caused everything to over-value. Now that we know for a FACT that the Arlington condo market was pretty much speculation (the amount of condos going rental is staggering and foreclosures on these are up and climbing), we know that not only that condos are over-valued but SFH also because the relative price of a SFH is related to the condos pricing in the area. If this area wants to keep people in it, it's going to need to bring housing back into realistic levels for those working here. No single young adult with any amount of common sense is going to plop down $350,000 for a 1BR, 650sq feet condo with fees when in 2001 a 1BR new condo was $150,000. Time to come back to earth.

Elizabeth Razzi: You seem to think there is some entity out there that can be lobbied to become "realistic" about prices. The market's going to do what the market's going to do, one seller/buyer pair at a time. I disagree on two points: Speculation in Miami..and probably L.A. (not sure about Phoenix)..was much greater--more widespread--than in the DC area. And the price of detached houses is not pegged to condos. Buyers are not necessarily the same folks.

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Elizabeth Razzi: This Sunday's column has reader mail in response to recent columns. Condo associations were a hot one! Everyone enjoy the Independence Day holiday (not that far off!)--and I'll catch you here next time.

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Washington, D.C.: You keep pushing FHA loans, when you don't have a 20% down payment (and who does unless they have a wealthy mommy and daddy or make megabucks), but that still leaves you with hundreds of dollars of PMI which really loads down a mortgage payment.

Elizabeth Razzi: oops, one more! You don't have to pay PMI on FHA loans, though there is a different insurance fee worked into the program. It's a good alternative to waiting until you've built up 20 percent cash!

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Maryann Haggerty: Wow! It's 2pm already. We have to go, and there are dozens of questions we didn't get to. As usual, we'll try to answer a couple of them in print over the next two weeks.

Tomorrow, the Saturday Real Estate section takes a close look at some of the options you can consider if you're building a home and want to cut your energy costs to a minimum. On Sunday, Elizabeth shares some of her reader mail from recent weeks. She got a bunch of responses, not surprisingly, to her recent column about condo wars...

Thanks for joining us, and have a lovely weekend.

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