Barry's Magic Shop-RIP

I read in today's Washington Post that long time downtown Wheaton instution Barry's Magic Shop is closing its doors after 38 years. It is a bit anticlimatic as the store's long term location on Georgia Ave was taken by the county a few years back-forcing the shop to locate to Rockville. Still those who know and love Wheaton will remember the shop well. I have stopped in a few times over the years ant the place was quaint and friendly. I still have my "foolbox" which I pull out at family gatherings to mystify the current generation of nieces and nephews with. I bought my first box at Barrys over two decades ago.

It is great to see tired old Wheaton get a face lift but I worry that so many of the quirky old stores and fine family owned ethnic restaurants that I have known for years will be phased out in favor of franchise "fat palaces" and more upscale stores. It seems to be the cost of progress when an area goes upscale. Rents go up too and many old timers get priced out of the market.

Condo Buyers Need to Beware

I am getting a lot of calls lately from first time buyers looking to buy condos. Primarily because so many people are priced out of the market for single family homes and townhouses. With the lower prices these days there seem to be a lot of good condo deals on the market these days. However, all is not as it seems and I caution  prospective condo purchasers to be careful. Right now, I can think of three problems associated with condos that are popping up and making it very hard to get loans to purchase or for sellers to sell.

Non owner occupancy. There has been a flood of investors snapping up condos for cheap. They are mostly all cash buyers looking for attractive short sales or bank owned properties. In the past many of these investors were rehabbing and flipping the homes-which is a good thing. However, with the low costs of units and cheap financing many are buying condos in order to hold and rent them out. Typically, rental properties get less care than owner occupied properties and if there are too many rental units in a condo development then it becomes very difficult to obtain financing for prospective buyers who are looking to use FHA or minimum down conforming loans. Currently FHA guidelines allow no more than 50% of the homes in a condo project to be non-owner occupied, and a lot of projects are failing to make the grade and losing FHA approval.

Delinquent condo association payments. FHA refused to approve a project where more than 15 per cent of the units are 30 days or more behind on the payment of condo fees to the association. With the state of the economy this is a growing problem as many condo projects are now falling above this level.

Condo projects that are entering a new maintenance cycle. During the last boom in the late 1980's many apartments were rehabbed and converted into condos. These units are now entering into a 25 year cycle where key upgrades and repairs are needed. Things such as expensive new window or roofs or parking lot repaving come at about this stage. These major repairs cost big money and a lot of condo projects have underfunded reserve funds and just do not have the money on hand to pay for this work. When this happens it usually means that special assessments are passed on to the current unit owners and these generally are added to the monthly condo fees. I am seeing some units in the area where the monthly fees are topping $1,000 per month. When faced with the reality of this tough market many sellers have to cough up the full balance for these assessment at settlement. Smart buyers are checking and passing up on projects have a history of passing large assessments to the owners.

This does not mean that all condos are a bad buy, and certainly there are some very nice condos in the area. However buyers need to be very careful when looking at that condo "deal' in today's market. The best bet are newer condos or units that have been recently rehabbed and converted. In this case, FHA financing is usually readily available and you are pretty sure that you will have at least two decades before serious physical upgrades are needed. I really like some of the condo conversions that I am seeing in the District these days. Some really fine older buildings with modern units inside. A nice mix in my opinion. 

Maryland homeowners beware! Homestead application deadline is coming.

If you own and occupy a home in Maryland, then you are probably eligible for a Maryland Homestead Exemption. This program designed for owner occupants and may cut your annual property taxes by 30% or more. The problem is that since 2007 what was once applied automatically is no longer the case. To get this exemption the homeowner has to make a one time application to tte Department of Taxation and the final deadline to do so is December 31st of this year. Most homeowners have already done so and you can check to see if you have the exemption by going to this site and pulling up your tax records by address. If you have already applied for the exemption then it will show up at the very bottom of you tax record. If it does not show up then you will need to make application before the deadline. If you own and live in a home in Maryland it is time to check...

One of the biggest shocks to home purchasers in the state of Maryland is the difference between the taxes currently being paid on the property and the increase in the new tax bill when the purchasers take title. This is usually due to the fact that the seller of the home has taken advantage of the tax credit. New homeowners may apply for the homestead exemption at the time of their settlement but will not be eligible for the homestead exemption until they have resided in the property for one calendar year, and will not see the credits appear on their tax bill until the following year.

Bear in mind the the homestead exemption is different from the Maryland Homeowners Property Tax Credit Program which is designed to give tax relief to households that meet certain low income requirements.

New Child Care Center comes to FDA White Oak

Employees at the FDA White Oak Campus will be pleased when the new child day care center operated by Children's Creative Learning Centers begins operation on January 30, 2012. CCLC is a private organization that runs over 100 centers nationwide. CCLC has an excellent reputation and the children's center at FDA/White Oak should be a good match and provide an attractive alternative for employees.

Where are the houses for sale?

A quick look at the listings for sale in the Silver Spring area shows a remarkable shortage of decent homes on the market. Interesting considering that this is considered a "buyers" market. A couple of reasons for this in my opinion. One is that rates are so low that the small amount of buyers out there are snapping up the small amount of decent homes on the market. And two, not only is there pent up demand these days but I think we are seeing a case of pent up supply. That is, with housing prices so depressed these days there simply a lot of potential home sellers who are delaying placing their homes on the market. This would include folks who have opted to retire a little later, thinking of buying up but are waiting for the market to improve, or who just refuse to sell and have placed their properties on the rental market for a year or two while waiting for some good news. There still are good deal of distressed properties on the market but a lot of folks are staying away from these homes because the sale can be problematical and very few of these homes are in what we call "market" condition.

What does this mean? Not really sure. However I think we might see home prices actually start to go up this spring. Not because of the booming economy but because the amazingly low rates combined with this shortage of decent homes might just create a supply problem and have buyers out there in competition with other buyers for a change. That generally means sellers will get better prices. We will just have to see how this plays out.

Mold in the home

Here is a link to a recent debate about buyer agency and mold in a home when there is a purchase contract. There are two lessons to be learned here. One is that it really is best for the buyers in a home purchase transaction to have their own representation. The seller's agent has an obligation to treat buyers fairly but whenever an agent is wearing "two hats" in a transaction there is always a greater potential for conflict. The second lesson is that if you are looking at a home and see mold, the a little red flag should go up in your head. Mold in itself is not necessarily a dangerous issue but if it is present in a home, then you need to be aware that the lender usually is going to have problems with it if the problem is not remediated before settlement.

Market update for Maryland

Here is a great site where you can stay in touch with the Maryland and Regional Markets.

It is called rbintel

Silver Spring Stage-a good cheap date.

Elizabeth and I have been to a number of performances at the Silver Spring Stage over the years and have always had a great time. Located in the lower depths of the Woodmoor Shopping Center in Four Corners, the SS Stage is an all volunteer troupe with a long history of providing excellent community theater. Tickets for adults run around twenty bucks which is a pretty fair bargain in today's market. We have never been disappointed by a show there and there is not a single bad seat in the house-primarily because it is a pretty small venue. We love it and you should see it for yourself.

Acorn Park in Silver Spring, MD

I took this from the offical Silver Spring web site.

Acorn Park1190 East West Hwy, Silver Spring, MD 20910Categories: Public Art in Silver Spring Historic Sites Parks and Plazas Public Art map it
Acorn Park is thought to be the location of the spring that looked silver in the sunlight, thus the name Silver Spring.
Murials of Historic Silver Spring
Artist: Mame Cohalon
Acorn Park is all that remains of Francis Preston Blair's estate, "Silver Spring," named after his discovery in 1840 of a nearby mica-speckled spring. This park might be small, but it is chock-full of good stuff to see. Nestled up to the first Silver Spring Discovery building (the old Caldor) is a quaint little park with an acorn gazebo and beautiful murals. Discovery Communications is trying to rid us of the bad habit of referring to the building as the "old Caldor," but in this case it was actually the Caldor Company that commissioned the five-panel mural by artist Mame Cohalon and restored the gazebo and park.

FDA at White Oak Continues to Grow

The growing FDA campus at White Oak has passed the projected halfway mark. There are now about 5,400 employees located on campus out of a projected total of around 9,000. Construction and planning continues on the project that is not slated to be completed for a few years yet. There was a lot of controversy over this project but in the end, it has proved to be a good thing overall for the East County and Hillandale area in general. Yes, traffic is heavier on New Hampshire Ave, but we have seen a influx of new businesses-especially restaurants over the past few years. Those who have lived here for a long time know just what a wasteland for good dining this area has been. The FDA has worked hard to be good neighbors and for the most part I don't have much to complain about.

Pizza Neopolitan Style

Yesterday, I heard a piece on NPR about best new pizza places in the Washington Area. One place that got a good rating was Pacci's Pizza on Georgia Avenue in downtown Silver Spring. (close to where Gifford's use to be) So last night after watching the excellent movie "Circo" at Silverdocs we walked the four blocks to Pacci's and gave it a try. We were not disappointed. The Pizza was just out of this world and I only regret I could not try two or three other types. We also shared a first rate salad that could, with a piece of bread, serve as a nice lunch meal on it's own. With my love for the AFI, I know that we will be eating a Pacci's a lot more in the future. This is great Neapolitan pizza cooked in a wood burning oven. Just the way I like it.