Lower Limits for Veterans Affairs (VA) go into effect December 31st

Friday VA released a change that is effective December 31.  The maximum VA loan is decreasing from the current maximum of a little over $818k to a new maximum of $625,500 with 0 down.  

VA loans above $625,500 will still be available but they will require a 25% down payment for anything over the amount of $625,500.  As an example if the sales price is $725,500, the down payment would be $25,000.  This is the same as what has been done for loans above $818k.

Washington home prices up 5.7% since August

As reported in the Washington Business Journal, the average home price in the DC area is up 5.7% since August, compared to the national average of .06%.  Compared to last year, DC was only up 2.3%, so this is good news for people selling their homes. 

For those who wish to purchase a home, there are still some great deals out there, especially in Petworth, Ledroit Park, etc.  If you would like to know more about these areas, email me at david.corson@cbmove.com.

For more on this article, visit the Washington Business Journal.

New French Restaurant from Philly coming to the Old Shirt Laundry at 14th and Q

What was once the Old Shirt Laundry will now become a new french restaurant at 14th and Q Streets, NW.  This rapidly developing area is growing faster than any other area in the city, with some saying it will become the next Georgetown (more like restaurant/condo row).

Parc Deux Restaurant Partners LLC has filed for a liquor license application, shedding some new light on this former laundry building.  The company is from Philadelphia, and has as one of its restaurants the famous Parc Restaurant. 

The property is to be open for breakfast, lunch, and dinner and will have a total occupancy of 275.  This french style bistro will be a large restaurant, one of many opening on 14th Street.

Do you think this will be a good addition?

To read more from the Prince of Petworth, click here.

JBG Buys More Land in the U Street Area

The development company, JBG is everywhere in the U Street area.  From 14th and S with it's new condo project, to Atlantic Plumbing on 8th and V, to the new hotel site at 13th and U, to the new project at 14th and U, JBG is adding nearly 800 residential units and almost 80,000 square feet of retail.

Now the developer giant has recently purchased the three parcels of land along Florida, between 7th and 9th Streets, NW.  The highest bidder of the WMATA land at $10.2M, JBG is looking to add 250 residential units and up to 25,000 square feet of retail space to this area.

With all of these projects happening in the U Street/Shaw area, population growth will expand at an alarming rate over the next 5 years.  The increase in retail and convenience will most likely cause property values to sky rocket. 

Let's hope most of the people moving to the area don't have cars.  For more information on the Florida Avenue parcels, click here.

Utopia Project at 14th and U

Looks like we are more apartments and retail space coming to the corner of 14th and U Streets, NW.  The 9 stories high building will have about 220 apartments and 30,000 square feet of retail space. 

Many of the retail tenants along U Street (Coppi's, Utopia Bar, DC Noodles, etc.) and 14th Street (Chicago Dogs, Footlocker, Taco Bell, etc) will be closed but are slated to return once the project has been completed.  McDonald's will remain open since they have a long term lease.

Beginning in 2008, the project has floundered due to lack of financing but now they have that settled, the project is under way again.  JBG is the developer, the same company who now owns Atlantic Plumbing, the parcels at 8th and Florida, and the new condo project at 14th and S.

Of concern is the design of this large building and how it will blend in with the surrounding neighborhood.  Let's hope this project adds to the diversity of the neighborhood and doesn't take it away in the end.

Visit The Washington Business Journal for more information.

H Street NE, new Giant and Streetcars

The ever developing H Street corridor in NE continues to expand.  A new development just broke ground last week on the 300 block of H Street, NE, which will be home to a new Giant (a 42,000 square foot store), 215 housing units, and all of this will be completed by 2013. 

The streetcar project is well under way, but won't be ready until 2013.  While the tracks have been laid and the streetscape project is just about complete, DC announced it won't be ready to run the program until 2013.  DC is now in negotiations with Amtrak to use the area under the "Hop-Scotch Bridge" as storage for the streetcars, followed by construction of the storage facility.

Looks like 2013 is going to be a big year for the H Street Corridor!

DC Metro Area Considered Hottest Housing Market in the Nation

It is well known the DC metro housing market sustained the recession better than most markets, especially Las Vegas and Florida.  This is largely thanks to the federal government being the number one employer in the area.  With fewer lost jobs than other areas in the country, buyers' confidence continued to hold steady thus allowing housing prices to remain relatively stable.

Now a report is stating the DC metro area housing market is to expected to end the year as one of the strongest in the country.  Even though the market suffered since the peak in 2006 (losing about 42% of its value), our market is expected to regain one third of that by the end of the year.

We all know that depending on the area, prices have gone up or down, but overall, the market is showing signs of improvement.  Now if you are looking to sell your home, this may be the time to consider.  People selling their homes are starting to see multiple offers and some are actually receiving the asking price for their homes.

As a buyer, the news isn't as positive since prices are beginning to go up.  Should you wait and see, I don't think that is necessarily a good idea since there are two factors at play here.  The first being interest rates have begun to increase again, so you have to be careful of being priced out different areas.  The second reason is the average sales price has increased since this past spring even though inventory is still not up to where it use to be in 2006. 

The good news for buyers is it's not to late to get into some great investment areas (up and coming with development such as Shaw, 7th and O Streets NW, H Street NE, Petworth) since housing values are increasing again.

For more information on the report, please visit dcist.com.

New condo building proposed for the corner of 15th and V Street, NW

Jair Lynch Development Partners, developer of Solea Condominium just a few blocks away, is proposing a 95-unit, 9-story residential building at the corner of 15th and V Street NW. The building, designed by WDG Architecture PLLC, is proposed on a portion of the existing parking lot for the Paul Lawrence Dunbar Apartment Complex which is home to affordable housing for senior citizens.

As part of the project, the developer will also be upgrading the exisiting Paul Lawrence Dunbar Apartment Complex with new kitchens, elevators, etc.  Also, a new common area park will be created between the two buildings.

Some other quick facts at a glance:

• Units 95 condos
• Affordable housing 9 in new building (normally 8%)
• 90 feet high
• Parking will be incorporated underground for 48 spaces and an expanded parking lot for the apartments which are currently 21 will be increased to 30
• Groundbreaking next summer
• Project will be at least lead silver

For more information on this project, please click here.

Brookland Development Looks in Doubt

A developer planned on a 61' high mixed use development (901 Monroe Street) opposite of the Brookland Metro stop.  The proposed site is now occupied by houses and a tavern, which the neighborhood does not want to loose. 

Many say if the proposed development is built, the neighborhood would loose its character.  The local ANC voted to designate the houses and tavern historical.  If this goes through, then the development will not be possible at all.

This may be an emerging trend as neighborhoods try to push back development in order to presere their local character.  So far, this is the only case, but we shall see as the economy improves.

Source: Washington Examiner

Another Round of Bids for the Florida Avenue Parcels

The Washington Business Journal reports that for a fourth time, Metro is once again looking for new bids to purchase the two parcels at 8th and Florida Avenue, NW, and one parcel at 9th and Florida Avenue, NW.

• 2002: Metro reaches a deal with Howard University to develop the property. The deal fell through in 2003 due to litigation with another bidder.
• 2007: Metro leases the land to Banneker Venture Group, LLC, but withdrew the deal in 2010 after Banneker filed two extensions.  
• 2010: Late in the year, Metro accepts three proposals after two extensions for the parcels.  JBG is published as the highest bidder by $6M higher than the other two bids, one being Howard.  However, the board voted to resubmit the bid since they site that none of the RFPs meet technical needs nor the assessed value of the parcels.
• 2011: Metro resubmits RFP in April

I spoke to Bob Burns back in January who was the contact for the RFP, he said there were three bids that were mixed use development. Later, it was published that JBG offered $11M ($6M more than the other two bids) to purchase the land.  Looking at the tax assessment records, the lots are assessed at roughly $3.5M.

So why did WMATA reject the JBG bid if:
It was higher than the other two (by $6M)
Higher than the assessed land value of $3.5M
What are the technical aspects that caused all the bids to be rejected?  Wouldn't these have been automatically removed before reaching the board for a vote?

Metro is bleeding money and this would have helped tremendously with its finances and helped the community by providing jobs and mixed use development.  Why has there been no community meetings about this, and worse yet, Metro doesn't even work with the community nor its elected officials to keep everyone up to date.

Source: Washington Business Journal

City Center DC Breaks Ground After 8 Years of Delays

The new CityCenterDC development finally broke ground after nearly eight years of the city deciding what should go there.

Originally under Mayor Williams, a new library was to be built on the former convention center site to replace the Martin Luther King Library on 9^th Street. 

The new project is one of the largest to date for DC, which includes 325,000 square feet of retail to be built during the first phase.  It looks like DC will finally get a decent shopping area which it once had before the riots of 1968. 

In addition to that, there will be a 350 room hotel, 443 apartments, as well as office space, all on a 10 acre parcel.  This is a great example of mixed use development.

For more information, visit http://www.oldconventioncenter.com/index.php

Source:  www.dcist.com

Howard University Presents Drafted Ten Year Plan

Last week, Howard presented its ten year plan to the ANC1b Design Review Committee.  While Howard was not seeking any votes, they wanted to begin sharing the proposed draft during the early stages to allow input.

All universities in DC are required to submit a ten year plan.  Howard has already shared it with DDOT in order to discuss closing a couple of blocks off to traffic, as well as new sidewalk routes for students.

Currently, Howard has about 10,000 students and has in the past been up to 12,000.  They have a serious shortage of housing for students, especially for freshmen and sophomores, with only a total of 4,600 beds available for all students now.  Three buildings are immediately off campus, two the south and one to the north.  Both are inconvenient for students to get to campus, and don’t even have air conditioning.

Howard is proposing to initiate a three phase process which will greatly revitalize its campus.  In order to prepare for this, Howard has done an extensive engineering study, worked with faculty, as well as local residents.  The result is a three phase program (see timeline below) that will address three crucial areas:

1)      Add more housing on campus for students and new faculty which will improve the student life experience

2)      Increase the number of labs for S.T.E.M. and other sciences so Howard can be ranked number one in research again (currently number two for its division).

3)       Address the crumbling infrastructure of existing buildings

The first phase will concentrate on adding student housing which will add 1,300 new beds.  Once they are completed, the three exiting dorms outside of campus will be repurposed, possibly for faculty housing (about 800 beds).  There are also two proposed research buildings.  All the new buildings are to be built on existing parking lots, and the goal is to begin to grow Howard more west of Georgia Avenue.

In order to address the possible growing parking problem in the community, Howard has already begun a transportation reduction plan.  However, the design review committee stressed Howard provides a more detailed parking plan in the near future.

It was also brought up by the committee to incorporate the buildings Howard owns outside of the immediate campus area, including the one on the 1800 block of 7^th Street, NW, as well as the CVS at 7^th and Florida, NW.  The committee stressed Howard should work more with the community with regards to its real estate holdings, especially since many of these properties are not being utilized in a way that benefits the community.  Many of their properties are underutilized, leaving them to be mostly empty buildings with little foot traffic.

Howard will be presenting to the committee with a formal plan in the near future.  At that time, the committee will vote on whether or not to recommend it to the ANC1b for a vote.

New Construction & Renovation Timeline

1-3 years: (Phase 1) 

1. Science, Technology, Engineering, Mathematics (STEM) Building
2. Computational Sciences & Retail
3. Underclassmen Dorm #1
4. Underclassmen Dorm #2

3-5 years: (Phase 2)

5. Wellness, Recreation, Residences, Retail
6. Blackburn Center Renovation
7. School of Communications, Retail
8. Support Services
9. Nursing, Allied Health, Pharmacy Schools
10. Nanotechnology Building
11. Biomedical Engineering, Retail
12. Upperclassmen Dorm #1, Retail
13. Miner Building renovation

5-7 years: (Phase 3)

14. Intercollegiate Athletics Complex
15. Graduate/Workforce Housing
16. Upperclassmen Dorm #2, Retail
17. Teaching and Learning Building

Future phase capacity:

18. Academic/Athletic space
19. Institutional Infill
20. Middle School
21. Academic/Research
22. Academic/Research
23. Academic/Research
24. Academic/Research
25. Academic/Research

Proposed Renovation Projects

• Howard University Hospital
• Howard University Hospital Cancer Center
• Residence Life
• Athletics
• Founders Library
• School of Dentistry
• Adams
• School of Engineering
• Biology
• Chemistry
• Seely Mudd
• Douglass Hall
• Locke Hall
• C.B. Powell
• School of Architecture
• School of Fine Arts
• Physics
• Rankin Chapel

Hotel Back on Track at 13th and U Streets, NW

Looks like JGB, the new powerhouse developer of U Street, is moving forward on the proposed hotel at 13^th and U Streets, NW.  Now the site of the Rite Aid and other retail, those tenants were told they could not renew their leases beyond June 2012, according to the Washington Blade. 

JGB has recently aquired many parcels of land in the U Street area, including Atlantic Plumbing, as well as 14th and S Streets, NW, and it looks like they may end up with the WMATA parcels at 8th and Florida (they outbidded the other two projects by $6M).

JBG is looking to build a 239 guest room, four star boutique hotel (my guess is a Kimpton), 4,500 square feet of meeting space, and 25,000 feet of retail space.

Although residents have expressed concern about the proposed building height (103 feet high), this would bring more daytime foot traffic to U Street, which is sorely needed in order for the businesses to continue to flourish.  Also, the added tourists and business travelers would continue to inject money into the local economy.

As expressed above, I think we might end up with a Kimpton since this boutique chain gravitates towards trendy locations.  For more information, check out the U Street Neighborhood Association’s story on this development.

What Phasing out Fannie May and Freddie Mac Means to You Part II

Last week, we discussed what the history and the proposals submitted to congress recommending changes to Fannie and Freddie.  Part II will discuss what this means for you.

What this means for you?

Through these two firms, the 30 yr fixes loan has been made readily available.  This has been important in terms of providing stability in terms of homeowners’ monthly budgets and housing prices. 

If the private sector took over mortgages, the 30 yr fixed loan could become more expensive.  There is debate regarding how much the interest rate could increase to cover the risk, but some say as high as 3%.  This would raise a monthly payment for every $100K borrowed to increase from $537 to $733 per month (an increase of $2,352 per year).

The bottom line is there will probably not be any significant changes during the next five years to these loans.  The other good news is other countries with a higher percentage of ownership are able to offer different alternatives to the 30 year fixed mortgage. 

The U.S. has a home ownership rate of 66.5%, down from 69.2% in 2004.  Yet some countries have a higher percentage of ownership then the U.S.:

• Ireland: 74.5%
• Australia and the United Kingdom: 70%
• Canada: 68.4%
• Japan: 61%

Source Whaton Business School

What Phasing out Fannie May and Freddie Mac Means to You Part 1

What Phasing out Fannie May and Freddie Mac Means to You

History:

Fannie May was a government agency created in 1938, and in 1968 was converted to a publicly traded company.  Freddie Mac was created by the government in 1970 as a publicly traded company to provide competition for Fannie May.

Their primary role is to buy and insure mortgages issued by private lenders, with most loans being bundled into mortgage securities sold to investors.  They basically provide investors a certain guarantee that interest and principal payments will be made even if homeowners default. 

Fannie May was a government agency that was federally backed at one time, so investors assume the government will make good on these two firms’ obligations.

Problem:

Mismanagement and guaranteeing risky mortgages issued by private lenders, led to Fannie and Freddie holding high risk loans.  When the housing bubble burst in 2008, many of these loans went into default and large losses were incurred by both firms.  The government took over the firms, wiping out the shareholders and costing the tax payers $130 billion in bailouts.

Proposal:

The Department of the Treasury and the Department of Housing and Urban Development sent Congress a proposal last month outlining three proposals:

1)      First option would dramatically reduce the government’s role insuring and guaranteeing mortgages. 

a.       This would be limited to government programs such as FHA and other programs targeted to creditworthy lower and moderate income borrowers.

b.      Private lenders would be responsible for providing and insuring mortgages.

2)      Second option is similar to the first option, but provides a mechanism to ensure access to credit during a housing crisis.

3)      Third option is also similar to the first option, but adds an insurance program that is privately funded to secure mortgages.

During the phase out period, the government would implement restrictions on loan amounts and increase fees to drive more people from Fannie, Freddie, and FHA loans to the private market.

What this means for you?

Visit my blog tomorrow to find out.

Question of the Day: How do you think this will affect you as a buyer or seller?

Please feel free to leave comments and I will use these in the article tomorrow.  Thank you!

Source Whaton Business School

DC Metro Area Housing Market Has Mixed Results

Sales of existing homes in the DC metro area are up compared to last year (5.8%), however home prices are slightly down.  The median price of an existing home sale in the Washington area was down to $287,500 (a -1.1% change compared to last year).

Even with the economy improving, housing prices are still not rising as fast as some hope, although they are higher than during the lowest point of the housing slump (July 2010).

Still people are having problems purchasing homes due to tight credit restrictions, and cancellations from appraisals not supporting prices negotiated between buyers and sellers. 

The good news is the market is definitely improving, but it is at an erratic rate with ups and downs.  With raising interest rates, it is important not to wait too long to act.

Source: Washington Business Journal

What's New on U Street

March seems to be a busy time on U Street.  People are out and about enjoying the warmer weather, but what are they going to find when they go to U Street?


What's Coming Soon:

• Duncan Donuts and Subway will be next to Marvin on 14th Street
• Lost Society (a boutique steak house) will be on 14th and U
• Habte Sequar of Loford LLC has purchased land at 11th and V with plans for a new residential building

What's Newly Opened:

• Touchdown, a new sports bar where Momo's use to be opened Tuesday
• Divine Shine, a new shoe shine, handbag, and repair shop, opened at 723 T Street

What's No Longer There:

• Results has closed their doors on U Street, but will soon be replaced by a newly remodeled Vida Fitness
• Greater Goods at 1626 U Street has closed its doors

For more information, please view the source listed below.

Source: U Street Neighborhood Association

Wonder Bread Factory's Uncertain Furture

With the development boom finally starting to reach Shaw, it is a shame that the Wonder Bread Factory faces such a bleak history.  Douglas Developement who owns the property, has put virtually no money into mantaining the structure, yet want top dollar for it.

The Wonder Bread Factory is located at near the corner of 7th and S Streets, NW, and directly adjacent to the new Progression Place currently under construction (new home of the United Negro College Fund). 

DCRA has deemed the property structually unsafe as of March 14th and requires significant work before it can be used again.

With all the developement happening in the area, it would be a shame if the building was lost for good.Source: Prince of Petworth

Energy Efficient Tax Deductions Reduced for 2011

During the last month of 2010, President Obama singed into law a bill which would allow unemployment benefits and the Bush era tax breaks to continue. 

What wasn’t publicly promoted was that the law:

·        Slashed the popular tax credits for energy-efficient remodeling from the current 30 percent of an improvement's cost ($1,500 maximum per taxpayer) to a 10 percent credit, with a $500 maximum for expenditures on insulation materials, exterior windows and storm doors, skylights and metal and asphalt roofs that resist heat gain.

·        New dollar-specific limits on key improvements that had been eligible for 30 percent credits. These include a $150 tax credit limit on the costs of energy-efficient natural gas, propane and oil furnaces, and hot water boilers, plus a $300 credit limit on the costs of central air-conditioning systems, electric heat pump water heaters, biomass stoves for heating or water heating, electric heat pumps, and natural gas and propane water heaters.

·        Limits allowable tax credits available for energy-efficient windows installed during 2011 to a total of $200, compared with the previous $1,500. On top of that, it prohibits taxpayers who have taken total tax credits in past years exceeding $500 from claiming any additional credits on energy-conservation projects they undertake in the coming year.

It is likely this new law will move people away from doing energy efficient improvements to their homes and more kitchen and bathroom remodeling projects like before.  However, as energy prices continue to increase, taking on these types of projects may be enough of a reward if it means people can save on their energy bills.

Washington Post

Federal Government Extends Deduction of Mortgage Insurance

Just another example of how the Federal Government is trying to entice more people to buy homes by extending tax incentives.

Federal Government has extended the mortgage insurance (MI) tax deductibility to 2011.

Here is a quick breakdown of what it is, how much the average home owner can expect, and how long it will be extended for:

• The law provides for an itemized deduction on federal tax returns for the cost of private mortgage insurance paid by eligible borrowers.
• The law allows qualified borrowers with adjusted gross income of up to $100K to deduct 100% of their MI premiums on the federal tax returns.
• According to an analysis by Bankrate, a leading source of consumer financial information, a homeowner with a $180,000 mortgage would save about $351 in taxes a year.
• This law applies from 2007 – 2011 and may be extended if congress chooses to do so.

Click here for more information on mortgage insurance deductions