Category: Bussiness

The stock market has the Dow Jones Industrial Average, the S&P 500 and many sector indexes. Commodities have many indexes. Bonds have the Merrill Lynch Domestic Master.

How can we really track the performance of the many thousands of houses listed and sold (or not sold) in the United States.

Although we learned in 2007 and 2008 that, for the first time, we could have national real estate bubble in response to national real estate industry trends, home sales are still local.

Multiple listing services have the prices for local homes whether in Smalltown Wyoming or Manhattan New York City. Plus, a fair number of houses are sold by owner.

And although real estate agents can “compare” houses, they are different. Two houses in the same neighborhood may sell for the same price. The first one has an extra bathroom. But the other one has a bigger swimming pool. The first has a home theater. But the other one is in a quieter location. The first one had a more experienced real estate agent handling the sale. And so on.

The number of factors affecting a house’s final sale price are numerous and only the obvious ones are quantifiable.

However, two indexes have a go at it.

The Federal Housing Finance Agency (FHFA) puts out the Housing Price Index (HPI).

This index began with the Office of Federal Housing Enterprise Oversight (OFHEO) in the fourth quarter of 1995. But the OFHEO has been merged with Federal Housing Finance Board (FHFB) and the U.S. Department of Housing and Urban Development (HUD) government-sponsored enterprise (GSE) mission team to create FHFA. FHFA regulates Fannie Mae, Freddie Mac and the twelve Federal Home Loan Banks.

The Housing Price Index is weighted, seasonally adjusted and purchase-only. It’s calculated using sales price information from Fannie Mae and Freddie Mac conforming, conventional loans on single-family properties. This is about forty percent of U.S. mortgages.

(Therefore, it’s not a good guide for determining what’s happening in the luxury home market where prices are higher than the conforming loan limit.)

It’s based on over five million repeat sales transactions. And it’s compared with data collected by Fannie Mae and Freddie Mac since 1975. It divides the United States into Metropolitan Statistical Areas (MSA) and Metropolitan Divisions (MD) as defined by the Office of Management and Budget. It covers all nine census divisions, all fifty states and the District of Columbia and all MSAs except Puerto Rico.

The S&P Case-Shiller Index National Composite Index underlie futures contracts at the Chicago Mercantile Exchange. It’s based on a three-month rolling average of repeat sales in twenty metropolitan areas. It uses information obtained from county assessor and recorder records. But by focusing on large metropolitan areas, it captures 75% of home sales by dollar-volume. It also employs measuring repeat sales.

Fiserv Inc., a provider of IT services, is the calculation agent for the S&P/Case-Shiller indices. It goes back to 1987.

Both indexes no doubt provide a good approximation of the entire U.S. home market. However, those of us living in areas outside the twenty areas measured by S&P Case-Shiller should not depend on that to understand what’s going on in our local markets.

Buying a house close to the national capital always has some extra privileges- security, status, cleanliness, hustles bustles and it’s always in the news. But it has its own side of negative aspects as well: the threat of being a target town is just one of them. So, if you are relocated to the capital, the best option is to get yourself a home in nearby country and drive to your office. Howard County real estate can be a good choice as DC is well connected with frequent buses and trains from the towns here.

Howard County is known for the affluence. Important towns like Columbia, Clarksville, and Laurel are in this county. The condominiums are available from $150,000 up to $500,000. The price range of single detached Howard County homes starts from $250,000 and can go up to $1,200,000 and townhouses are priced between $250,000 to $650,000.

With a high budget, you can also look at the listings for Silver Spring homes. The townhouses in this region can be purchased at a price range of $225,000 to $500,000. Depending on the location, two-bedroom house of 1043 sq feet can be bought at $104,000 while one bedroom with one bath of 900 sq ft is worth $300,000. A single family home of 4,920 sq feet is still available at a price range of $925,000 and $1,524,000. That does not mean that there aren’t modest accommodations available in this region. Housing Opportunity Commission provides affordable homes to buy as well as rent for families with modest income and retired people. Also, as you move away from the downtown, the price lowers.

Columbia is an important town of Howard County. A house of 3144 sq ft with five beds and three baths can be bought for $482,500. Many of the Columbia MD homes are on foreclosure and the pre foreclosure list. People had bought homes at extravagant prices but failed to pay back the borrowed amount from the bank due to the sub-prime crisis. Now, banks are ready to let these properties go at unimaginable prices.

If you are considering buying a piece of Howard County real estate for yourself, you can go to a local real estate agency. It has the most updated list of houses-new, old, foreclosure, and pre foreclosure. They can be of real help if you are new in this state. Property laws are different in every state. Thus, a pro in the industry can help you get a good bargain and sail you through it smoothly.

You can also seek a realtor’s professional assistance if you want to sell of your property. They can help you get a good price for your property from the potential buyers willing to buy Howard County homes.

Brian is the founder and co-owner of Cornerstone Properties and Financial Services LLC. He is a licensed attorney in the state of Maryland and the District of Columbia. He is also a licensed real estate broker and serving the Howard County real estate industry. He has been actively involved in the affordable housing industry for a number of years, and has helped individuals and families in helping buying best Howard County homes and with their real estate needs in all walks of life.