Real Estate Information

It may not be the most widespread measure of housing prices, but if you want to follow a powerful driver, look at rents.

Specifically, it's the rents Americans pay on condos, apartments or houses that are about the same size, and share the same neighborhood as your ranch or colonial, that in the end determine what your house is worth.

"If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure," says Yale economist Robert Shiller.

Deutsche Bank demonstrated, in a 63 page report released on Thursday, how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease. That's a golden mean that America hasn't seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.

Housing Outlook for 2010

Before I get to the numbers, let's examine why rents exercise a kind of gravitational pull over home prices.

In normal times, people won't pay much less to lease a house than to own it. After all, if you're paying rent instead of a mortgage and taxes, you still get to enjoy the same rec room and chef's kitchen. So the surest sign of a frenzy appears when owning becomes far more expensive than renting. That's precisely what happened during the last bubble.

And the surest sign that prices have fully adjusted arrives when the ratio of what people pay in rent versus what owners spend on the same property returns to its historic average.

That brings us to the Deutsche Bank studies. Its REIT research team first established a benchmark for a "normal" ratio of rents to ownership costs -- what it calls ATMP, or after-tax mortgage payment -- for 53 U.S. cities.

On average, DB found that families across America were spending about 87% as much to rent as to own in 1999. Hence, they were traditionally willing to pay a premium as homeowners, though not a big one.

But by mid-2006, with the craze in full swing, the figure fell below 60%. At that point, Americans were spending an incredible 66% more to own than to rent. It was far worse in the bubble markets: In Las Vegas, Phoenix and Miami, homeowners were paying twice as much as renters, and in San Francisco and Orange Country, owners' monthly payments were triple those of their neighbors with leases instead of mortgages.

So how did that happen? During the bubble, rents -- the real engine that drives values -- were inching along at more or less their usual pace. From 1999 to 2007, apartment rents increased only 32%. But home prices jumped more than three times as fast, around 105%.

DB reckoned that housing prices are more or less reasonable when the ratio returns to its 1999 level. Why 1999? Because the ratio was relatively stable throughout the 1990s, and it was the year the steep rise in prices began in earnest.. At the end of the third quarter of 2009, the overall number stood at 83%, meaning renting was just a tad more attractive than owning.

But the picture varies widely from city to city. In 15 of those 53 metro areas, including St Louis, Indianapolis, and remarkably, Phoenix and San Diego, it's now higher than in 1999, meaning that homeowners' costs actually dropped versus what renters pay, courtesy of the steep decline in prices. In California's San Bernadino and Riverside Counties, it now costs 10% less to own than to rent; in 2006, owners paid more than twice as much as renters.

In another 14 cities, a list encompassing Boston, San Jose, and Chicago, the cost of owning exceeds that of renting by 6% or less. In the remaining 24 markets, housing is still moderately to extremely overpriced. The biggest problem areas are Baltimore, Long Island, and Seattle, where the ratio is still between 24% and 32% above the 1999 benchmark.

What does that mean for future prices?

Given that analysis, it's likely that prices will fall another 5% or so nationwide. The drop could even be slightly greater. One reason: Rents, the force that govern housing prices, are still falling.

In 2009, apartment rents dropped 2.3%, and the fall continues. And enormous adjustments are needed in still-exorbitant markets such as New York and Baltimore. Thankfully, the improving economy and decline in the rate of job losses means that rents should soon stabilize and could even start increasing by the end of 2010.

But fortunately, for most of the U.S., the sudden, terrifying fall in prices worked its own black magic. The numbers are back in alignment, or close to it. It had to happen. That's what rents, housing's great master, were telling us all along.

Nick Gioia | www.ngrealtygroup.com

Foreclosures in Maryland fell by 23 percent in January from December but were 41 percent higher than a year ago, according to the latest survey by Irvine, Calif.-based RealtyTrac, a foreclosure research company.

Nationally, foreclosures fell 10 percent in January from December but were 15 percent higher than a year ago, RealtyTrac reported.

Foreclosures in neighboring Washington, D.C., rose by 12 percent from December, but were 7 percent lower than one year ago. Similarly, Virginia foreclosures rose 14 percent in January compared with the month before, but were 2 percent lower than in January 2009.

Maryland continues to have a highest mortgage default rate of the three jurisdictions with 5,229 homes in foreclosure, or one in every 446 households. The greater majority of these foreclosures came from Baltimore City and Howard County.

D.C. has the fewest number of foreclosures among the three jurisdictions with just 192, or one in every 1,486 households. Virginia has surpassed Maryland for the total number of foreclosures with 5,236, or one in every 631 households.

Nationwide, there were 315,716 foreclosures in January, one in every 409 households.

Nick Gioia | www.NGRealtyGroup.com

Many sellers think that the short sale process is simple. Unfortunately, this is far from the truth. To compound matters, many "professional" real estate agents really do not understand how to execute a successful short sale. It is the sellers ultimate responsibility to ensure that their agent understands the process. As a result, I have outlined the short sale process for agents as well as consumers.

1.  The very first step is to decide if you can sell the home for enough money to pay off the mortgages. If so, list it at that price, even if it is debatable. Some lenders ask for a history of the marketing of the property. If you can show that you tried to sell it for enough to pay off the loans, that will help your presentation for a short sale. In other words, your first step is to try to avoid the short sale all together.

If it is clear that the market will not support a regular sale, explain the entire process to the seller to be sure they are willing to go through everything it takes to get it sold. There is nothing worst than doing all the work of a short sale, then failing to close. Even before you list the house have the sellers get everything they will have to submit to the bank.  Many times it is the same information they gathered to get a loan. 

2. The sellers have to qualify for the short sale. Before you list the home, be sure they have the financial hardship that will enable to lender to cooperate with the short sale. If the sellers have plenty of income, and plenty of assets, the bank will not be cooperative, asking the sellers to bring money to closing to pay off the rest of the debt, or to sign a note to make payments after the sale closes. If the sellers have no way to pay the balance of what is owed to the bank, you will have an easier time convincing the bank to accept the short payment.

Even before you put the house on the market, ask the seller to find all the financial information that you will need to supply to the bank. Every bank ask for different items, but typically they want a hardship letter, a financial form showing their assets and liabilities, two month of bank statements, their last two pay stubs as well as copies of the mortgage statements. If the sellers are self employed, you may need two years of tax returns.

3.  Get a letter of authorization that allows the bank to talk to you in the same manner that they would talk to the seller.  Send it to the bank when you list the house, as most lenders take days and sometimes weeks, to review these documents.  Some banks have odd requirements for what those letters have to say, and the only way to find out about those requirements is to send in the letter and have them respond to it.

4. Find who you will be dealing with at the bank.  Some are Loss Mitigation departments, others have different names.  Most of them will not talk to you until you have an offer.  If they will, find out what they want, how they want it done, and how you can make their job easier.   Try every way you can to avoid dealing with the collections department, they get bonuses for getting the loan reinstated but get penalized if the property does not get back into performing status, so they usually are not helpful for short sales.

5. Research the title to the property to find out all the liens, judgments, unpaid taxes and assessments.  Get the amount necessary to pay off each of the liens, e.g. order the payoff statements from the mortgages and contact the attorneys for the other lien holders.  Many Realtors will not do short sales if there is more than one mortgage.  My record is three mortgages, one judgment and unpaid property taxes, the second place finisher was one mortgage, four judgments and unpaid property taxes.   If the situation is too complex, either walk away, or call me.

6.  When you put the property in the MLS, you have to price it in accord with the time you have .  If the seller is facing foreclosure, you do not have time to test the waters, just price it aggressively.  Even if you are not pressured, you still want to be competitive.  Look at the recent sales in the last three months, so you are aware of what it takes to be sold.  Also look at the homes for sale to be sure you stand out from your competition.  You need a reason for a buyer’s agent to put up with all the trouble that comes with a short sale, so you need at least an appealing price.

7.  Get a buyer, and you hope for a fair market value.  But, take the best you can get.  The review time by the lender is long, so get it started with any reasonable offer.  If you get a better offer during the review period, you can submit it.  The contract provisions have to include a Short Sale Addendum that provides that the sale is contingent on the approval of the lender.  If you do not have that provision in your contract, your sellers are signing a contract that obligates them to pay the “short” amount at closing. 

One of the ironies of a short sale is that lenders take long to review them, but when they approve them, they want them to close quickly.  So, try to get a contract that has a quick closing, but have the time for the closing start when the bank approves the sale. 

8. Develop a HUD-1 closing statement.  If you are in an area that does not use a HUD-1, get some software and develop one.  You are dealing with a bank that is reviewing massive numbers of short sales, so you have to put the information in a format that is easy for them to review.  Put the HUD-1 in with the rest of the short sale package. 

9. Send the short sale package to the bank.  How you send it is extremely important, and we will discuss it elsewhere in more detail.  Watch out for a bank that requires you to fax it to a number that is constantly busy.  If they do, fax it in the middle of the night, or send it to one of the supervisors in the loss mitigation department.  Send a separate copy by registered mail, requiring a signature to prove that it was received.  This prevents the loss mitigation department from claiming that they never received your short sale package.

10.  Some of the traditional documents for a short sale package are the following:
a. Fax transmittal

b. Letter of Authorization (to talk with you)

c. Cover letter discussing the offer

d. The complete contract of sale

e. HUD 1 with an estimate of the payment to the bank

f. Listing agreement

g.  History of the Listing: Dates of the listing and price reductions

h. Form showing the seller’s financial condition, such as a financial statement or worksheet

i. Hardship letter describing the reason for the financial problems

j. Last two pay stubs. if employee, profit and loss if self employed

k. Last two bank statements for every bank account, include all pages

l. Last two years tax returns, particularly if self employed, including all schedules

m. The pre-approval letter for the buyer’s loan or verification of funds on deposit for a cash buyer

n. recent mortgage statement to help identify the loan.
This is where you have to know what the bank wants.  For example, Bank of America normally wants only the hardship letter, letter of authorization to talk to the Realtor, the HUD-1 and short financial statement.  Give them what they want, and no more. Some lenders will ask for statements of all accounts, such as IRAs, stock brokerage and similar accounts. If they ask, provide them. If they do not ask, do not volunteer them.

11.  If there are judgement liens, send the purchase contract as well as the HUD 1 to the lien holders along with a letter describing your offer to pay their debt for less than the amount owed.

12. Call to see if the package has been received and put into the system. You will need the loan number,  name of the seller/borrower,  the address of the property,  and sometimes the last four digits of the seller/borrower’s social security number to get past the initial person that you talk to.  You have to be sure your package gets into the system.  My record is sending the package four times before it was finally registered properly. 

13.  Call regularly to see when the package is assigned to a loss mitigation negotiator.  The lender will tell you it makes no difference if you call.  In fact, your package will languish unless you see that it is moved along, and each time you call, someone will look over what you sent to tell you if they need something more.

14.  Hopefully, the lender will order a Broker’s Price Opinion (BPO) before the case is assigned to a negotiator.  Some will only order the BPO when the negotiator takes the case.   The BPO is what the negotiator will use to determine if the price offered is close to the market value, so the lower the BPO price, the more likely your offer will be accepted.   Be sure to point out the issues with the property and problems with the market to try to get the BPO price to be reasonable.  The best practice is to have pictures of the problems and two bids for repairing them.

15.  Occasionally, you get to talk to the negotiator.   Other times, they only send emails.  Other times, they will have no contact with you at all, so be sure that your letter explaining the transaction is clear and complete.

16. Sometimes you can learn the BPO price.  Most of the time, you cannot.  If you can communicate with the loss mitigation negotiator, show the merits of the offer and how it gets the bank a better result than all their other choices.  The negotiator has a huge effect on your offer, so try to get their support, and definitely do not alienate them.

17.  Find out who is taking the loss.  If you are dealing with a bank, is it their loan, or are they representing an investor.   Is there a guarantor or mortgage insurance, so the bank will get paid but the guarantor will take the loss.   You need to know who is making the decision, so you can appeal to them.

18.  Keep calling to see how it is progressing.  Many banks will not notify you of their decision.  The only way you will find out is when you call the loss mitigation department.
 
19.  Get the response to your proposal.  First mortgage holders will generally take 80 to 100% of the value established by the BPO.  The second mortgage will generally take 5-20% of the outstanding balance of the loan.  The third mortgage holders will generally accept 5 to 10% of the balance owed.  Depending on the priority of a lien, they will typically take 5-10%  of the debt.

20.  If they do not accept your offer, see if they will give you a counter offer.  Some lenders are extremely difficult when they just turn down your proposal and give you nothing to aim at.  If you get a specific counter offer, see if your buyer will accept it.  If so, send the revised contract to the loss mitigation negotiator.  If not, see if the buyer will give you a counter offer to present.  The revised offers will need a revised HUD-1. 

21.  During the negotiations, you may need to escalate to the supervisors and their supervisors.  Remember, if you do that, you will alienate the loss mitigation negotiator, so figure you have lost their support by going over their heads.   If you cannot get the bank approval and their is a guarantor (or mortgage insurance) move your negotiations to the guarantor.  If you have problems with the bank, find the investor who actually owns the loan, and negotiate with the investor.

22.  As a part of the negotiations, you will also negotiate how the lender will report the short sale to the credit reporting agencies.  This is covered in more detail on this site.   You will also be negotiating whether your short payment will be in full satisfaction of the debt, or if the lender will be able to pursue the seller after the sale closes.  Occasionally, the lender will want the seller to execute an unsecured note promising to pay some of the balance due.

23.  Watch out for commissionectomy!  Many banks will try to take your money, even after you have done all this work to get them paid. Look at all these steps that you are doing to make the sale work, but many banks only look at their loss.  To counteract this tactic, refer to the Servicing Guide of Fannie Mae saying it is against their policy to reduce the commission on a pre-foreclosure.

24.  If the offer is approved, you must get the approval in writing with all its terms, then give it to the attorney or escrow that is closing the sale.   The lender will require that they approve the final HUD-1 before the closing of the sale, and specify how the funds will be sent.  If the settlement will not only release the lien but also eliminate the balance of the debt, be sure to get that in writing.

25.  If you do not get an approval, but learn what the lender(s) will accept, adjust your asking price to make it more likely that you will get offers that match the lender(s) requirements.

26.  Once the bank has approved the sale, all the items that are normally done when a seller signs the contract are accomplished.  Most of the time, the bank will insist that the buyer take the property “as is” because they do not want to have any more money taken out of their proceeds.  You may have a problem closing if the buyer objects to the condition of the property and the seller has no money to do the repairs.

27.  Have the attorney or the escrow officer close the sale and pay off the mortgages and liens.  The seller will probably receive a 1099 from the transaction reporting to the Internal Revenue Service how much of the loan was not paid off.  There may be tax consequences from having a portion of the debt forgiven, which is covered in detail in the post Income Tax and Short Sales.  There may also be tax consequences from the sale itself, unless the gain is not taxed due to Section 121 of the Internal Revenue code (sindle tax return can make $250,000 and joint tax return can make $500,000 profit and pay no tax)

28. Celebrate your success.

Nick Gioia | www.ngrealtyGroup.com

Homes sales across Greater Baltimore Metropolitan region continued to improve in January, rising 9 percent, according to a report released Wednesday from Rockville-based Metropolitan Regional Information Systems Inc.

The median sale price, however, declined 2.2 percent compared with the same month last year, according to the market research firm.

The average home sold for $225,000 in January, compared with $230,000 during the period last year.

In January, 1,103 homes were sold in Greater Baltimore — Baltimore City, Anne Arundel County, Baltimore County, Carroll County, Harford County and Howard County. That’s up from 1,015 during January 2009.

Another bright spot was the number of days homes stayed on the market, which declined 19 percent. The average home sold in January was on the market 112 days, compared with 138 during January 2009.

Nick Gioia | www.ngrealtygroup.com

In Anne Arundel County, Baltimore County, Baltimroe City, Howard County, Harford County and Carroll County lenders use judicial foreclosure.

• The foreclosure begins with the petition in equity filing an order to docket.

• If no notice is given, the foreclosure may begin within 90 days from the date of default. If the lender provides notice, an action to foreclosure can begin with 45 days. In some cases, e.g. the loan was obtained by fraud or deception, the foreclosure action can commence immediately.
• The homeowner has the right to cure the default and stop the mortgage by paying all past due payments, penalties and fees and reinstate the loan up to 1 business day before the foreclosure sale occurs.
• A deficiency judgment may be obtained.

• The redemption period is decided by the court.

Explanation -  Process and Terms: 

In Maryland, deeds of trust are foreclosed judicially "like a mortgage" if the lender is seeking a deficiency judgment. A judicial foreclosure is a court action. A complaint is filed and a judge supervises the entire process.

A judicial foreclosure begins with a lawsuit filed in the proper court in the county in which the property is located.

A complaint is filed with the county clerk and served on all the parties. Usually a legal document called a lis pendens is recorded. A lis pendens is common in lawsuits involving real estate. It provides notice to any person interested in the real property that their rights in the property will be subject to the outcome of pending litigation.

A lis pendens puts a cloud on the title to the property and makes it extremely difficult to market.

Generally, an attorney prepares the complaint. In order to determine who to name as defendants, the attorney will order a foreclosure guarantee report or a report entitled a litigation guarantee from a title company. The title report shows who need to be named in the lawsuit. If you are on the title to property and are not named in the foreclosure lawsuit, the suit does not affect your interest.

If a junior lender is not named, that lender’s lien is not affected by the lawsuit and the lien remains attached to the property. If a husband is named and his spouse is not, only the husband’s interest is foreclosed.

With a judicial foreclosure you have the right to reinstate the loan by paying back payments and interest until the time that a court judgment is rendered that orders sale of the property.

Because a foreclosure action that is contested can take well over a year to makes its way through the court system, you will have plenty of time to cure your default.

Right of Redemption - You also have the right of redemption after the sheriff’s sale. This requires you to pay the full outstanding loan amount with costs, interests and other charges. The right of redemption is not used that often, because it requires full payment of the loan and because the right to reinstate the loan runs to the time of judgment.

Notice of Sale - If the lender does not seek a deficiency judgment, then the lender cannot begin to take your house away until after you have been notified that the suit is filed. After the statutorily mandated number of days has elapsed of the notice of sale is published for three to four weeks, depending on your state. Because of these statutory time constraints the minimum time from the filing of a judicial foreclose lawsuit until the sale can be substantial.

Default Judgment - A default judgment can be heard within a couple of months. A contested hearing can take six months to eighteen months or longer to get to trial.

Deficiency Judgment - Where the lender has not sought a deficiency judgment, the sheriff’s sale is final. There is no redemption period, and the sheriff issues a deed to the purchaser.

If the lender seeks a deficiency judgment when the lender initially files the lawsuit, the sheriff follows a special levy procedure. There is no waiting period after the levy, but in many states you get a period to redeem the property by paying the purchase price plus fees, cost, etc.

At the sale, the buyer receives only a certificate of sale, not a deed.

If the lender sought a deficiency judgment, but it turns out that there is not one because the winning bid exceeds the loan amount, the redemption period can be short or nonexistent.

Nick Gioia | www.NGRealtyGroup.com

"How do I write a short sale letter?" This question comes up weekly when speaking with sellers in Anne Arundel County, Baltimore County, Baltimore City, Howard County, Harford County and Carroll County.

We have provided two sample short sale hardship letters to get you started. Use a short sale letter when a buyer makes an offer on your house, but the offer is less than you owe.

 If you don't have a buyer, use a Deed-in-Lieu of Foreclosure letter. (Some seller's are now putting their house for sale without pre-approval, hoping their bank will approve a short offer once it's obtained.) Keep in mind your situation is unique. Therefore, you will need to make modifications to fit your individual situation.

 A strong letter is important. Many short sale request letters fail because they ramble. Keep your letter simple and make your case quickly.

 Sample Short Sale Letter #1

This letter is a request for your cooperation in a "short sale" of our home located at ___________________.

[Sample text regarding reason for request: My husband has been laid off from his job because of a work injury. He worked at Acme Manufacturers for twenty-five years. On June 15, 2006 a forklift ran over his foot and he has not been able to work since then. He receives $2,200 disability every month.]

I work at ______________ but only make ___________a month. Combined we both take home _________ which is not enough to cover our bills and the house payment.

The house is vacant. We are living with my elderly parents.

We have a real estate agent and she has found a buyer for the property with a purchase agreement offer of $__________(its current market value). This offer will not be enough to pay off our existing first and second loans on the property. It is a good offer and the buyer is anxious but I will need both the first and second existing lenders on the property to agree to cooperate in a short sale and therefore accept short payoffs. 

Attached is my written authorization for you to speak with my real estate agent, ___________and my escrow officer, __________, at _____________Title Company about this matter. [Ask your real estate agent and escrow officer for their forms.]

I have enclosed a Borrower's Financial Statement and Explanation of Hardship Form for your consideration. [You should ask for these forms from the lender.]

Thank you for your prompt attention to this matter.

Sample Short Sale Letter #2

[Name and Address of your lender]

Attention: Loss Mitigation Department

Re: Loan _____________________

Dear Sir or Madam:

As you are aware, I have not made payments on the above-reference loan for the last ____months. I am providing this letter to explain my circumstances and to ask that you accept a short sale of my house.

My husband left me six months ago for another woman. At first, he sent money for me and our three children and helped out with the house payment. He works for the electric company and three months ago he tried to rescue a cat and touched a live line. Now he is on permanent disability and can’t send me any money. His girlfriend left him and he needs financial help from me. I work at the cosmetic counter at Nieman Marcus and the $3,500 I make each month barely covers our basic living expenses.

I put our house up for sale as soon as my husband stopped sending me money. It’s listed with ___________ Real Estate Company. My agent is _______________ and her phone number is __________________. I have enclosed an authorization allowing you to speak with her. [Note: your agent will be able to provide you with an authorization form.]

We listed the house for $250,000 which is what we owe you. In the l ast three months we have had one offer. Unfortunately, the buyer has only offered $210,000. I am asking you to forgive the $40,000 difference and to accept the $210,000 (less commissions and escrow expenses) as payment in full on the note. If you can do that I will be able to avoid foreclose and bankruptcy. My agent says she will accept a reduced commission if necessary to facilitate this deal.

Sincerely,

[homeowner]

Sellers, please share your experiences with short sales. We would like to hear from you!

Nick Gioia | www.NGRealtyGroup.com

"What are the 3 bigest challenges we are going to face in the 2010 housing market?" A good friend and VP at SunTrust Bank, Bill Peele, asked me this very questions at lunch today. My reply was as follows: 

1) Unemployment over 10% and around 20% if you account for the “Under-employed” or those who have given up looking.

2) Fannie Mae and Freddie Mac are still in trouble receiving over $500 billion dollars of Bail out money.

3) Payment Option ARMs are due to reset within the next 2 years with most borrowers being unable or unwilling to take on a higher payment.

I feel that Challenge #3 is the biggest problem of the 3 numbered challenges. Subprime mortgages almost brought down the country and financial system in 2007 and 2008 followed closely by Alt-A Mortgages (No Documentation, Stated Loans, and Little Documentation loans). This year starts the massive challenge of dealing with the Payment Option ARM loans or the so called “Pick a Payment Loan” that Wachovia was still running commercials on television in late 2008. If you are unfamiliar with this type of loan, the borrower gets a choice of whether they want to make a full payment, an Interest Only payment, or a “Minimum monthly payment”. The Minimum monthly payment is the MAJOR issue as in most cases it was 1%-2% of the loan amount which in turn leads to negative amortization which increases the mortgage balance instead of decreasing it. Couple that with Real estate values decreasing and you have a recipe for disaster.

I would love to hear what you think we will face in 2010!

Nick Gioia | www.ngrealtygroup.com

Jamie Smith Hopkins of the Real Estate Wonk wrote a very informative neighborhood review of Lock Raven Village and Knettishall that home buyers searching in Towson and Parkville may find helpful.

Neighborhoods: Loch Raven Village and Knettishall

Location: Mostly in Towson (Baltimore County)

Average sales price: $219,000 (January through June)

Notable features: Loch Raven Village and Knettishall have 1940s and '50s brick townhouses with more personality than most of the newer stuff. The yards are large enough for flower gardens, as you can see above, and Interstate 695 is less than a mile away. (Why "mostly in Towson"? Because the eastern half of Loch Raven Village is in Parkville.)

You've got all the locational benefits of Towson here -- malls, colleges, recreation -- without the usual Towson price. The 380-acre Cromwell Valley Park, which has a demonstration farm illustrating "sustainable" and organic practices, is a short drive from the neighborhood.

Of course, this is all true of fellow gem Lake Walker, a short drive to the south and just over the city line. So why pick Lake Walker and these twin Towson neighborhoods if they're so close together? Simple:

Because some people want to live in the city and some don't. The property tax rate is a common point of contention -- it's a little more than twice as much in the city as it is in the county.

So, to each his own. Loch Raven Village and Knettishall don't have the variety of housing types you can find in Lake Walker, but they're well-kept and wear their neighborhood pride on their sleeve, or rather their utility poles:

   
Here's an example of the architecture in Loch Raven Village, which the neighbors describe as "Georgian colonial":

Patriotic front yards:

And depending on the time of year, you might just happen across a farm stand on Putty Hill Avenue:

Wonk reader bryanintimonium nominated Loch Raven Village and Knettishall without comment, so I went hunting for details that could confirm or deny their hidden-gem status. I drove past both for years without realizing they existed, so that seemed a good start.

Mrs. Kirk, a real estate agent in Timonium, said she's been selling homes in the neighborhoods for 11 years and considers them gems.

"People love living there," Kirk said. "It's definitely a good area."

It reminds Kirk of Rodgers Forge, except less pricey. You'll also spend less than you would have before the housing slump ate away at home values. Homes in Loch Raven Village and Knettishall were going for more than $250,000 a few years ago, she said.

The two neighborhoods have a similar feel, but the Loch Raven Village homes are generally larger and the styles are a bit different. Ralph Simmers Jr., who built Knettishall with his father, based his design on the English townhouses he saw while in the Air Force during World War II. Knettishall is named after the village where he was stationed.

Leslie Jackson-Vallade, a mother of two who's lived in Loch Raven Village for 10 years, says lots of families live in the neighborhood because the townhouses are big enough to accommodate the space-eating needs of kids. Her home has three bedrooms, two bathrooms, a "huge" attic and a finished basement.

"We're a very close-knit group," added Jackson-Vallade, treasurer of the Loch Raven Village Community Association. "It's really conducive to young families."

Other residents have deep roots. Janice Krach grew up in Loch Raven Village, went away to college and came back. Since 1975 she's lived in Knettishall.

"It's a nice location," she said. "It's so easy to get to all the places in the Baltimore metro area."

Have personal experience with Loch Raven Village or Knettishall? Do share.

Nick Gioia | www.ngrealtygroup.com

The committee charged with mapping out new boundaries for Riderwood and Rodgers Forge elementary schools, as well as the new 451-seat West Towson Elementary School scheduled to open in August, has voted to recommend Scenario G -- the only one of the four proposed scenarios on the table that was one of four options that would keep the 1,777-townhouse community of Rodgers Forge intact -- to the Baltimore County Board of Education for its approval.

At a meeting on Wednesday evening, the 10 members of the West Towson Boundary Study Committee who were eligible to vote initally cast 7 votes for Scenario G and 3 votes for Scenario A-1, which would have removed 400 houses north of Stevenson Lane from the Rodgers Forge Elementary School district.

They then voted as a group to recommend G to Barbara Walker, central area assistant superintendent for Baltimore County Public Schools.

Walker cautioned the process is far from over.

She can accept, reject or amend the committee's recommendation when she makes her own recommendation to Superintendent of Schools Dr. Joe Hairston by next Wednesday, she said.

In fact, members of the committee asked her to consider amendments for Scenario G that would include Gaywood's 140 homes in the Rodgers Forge district and Ruxton Ridge children in the West Towson district.

The Board of Education will review the committee's recommendation, Walker's recommmendation and Hairston's recommendation before holding a public hearing Feb. 24 at 7 p.m.at Loch Raven High School.

Nick Gioia | www.ngrealtygroup.com

Greater Baltimore’s home foreclosures increased nearly 28 percent in the past year, but the region’s housing market has weathered the storm far better than some hard-hit parts of the country, according to California foreclosure tracking firm RealtyTrac.

The Baltimore City and Baltimore County ranked 108 out of 203 metro areas examined in RealtyTrac’s Year-End 2009 Metropolitan Foreclosure Market Report released Thursday. There were 15,064 properties that received foreclosure notices in 2009, or nearly 1.4 percent of the region’s housing market. That’s up 27.9 percent from the year before and up 88.7 percent from 2007.

Carroll County, Howard County, Harford County and Anne Arundel County posted a combined 16,260 foreclosure notices in 2009, for a rate of 2.6 percent of housing units. That’s up 1.4 percent from 2008.

In the Baltimore Metropolitan area, the hardest hit housing market was Howard County  where 9 percent of all homes received foreclosure notices in the past year.

Nick Gioia | www.ngrealtygroup.com