A Beautiful Drive in Washington DC

One of the most underrated activities in Washington is the short drive on Ohio Drive Southwest starting from East Potomac Park, just before the East Potomac Park Golf Courses, and continuing around Haines Point until exiting East Potomac Park into West Potomac Park. A large swath of Washington can be seen in a very compact drive, with views of architecturally and historically significant sites.

To follow are a few of the many sites to be seen on the drive:

Southwest Waterfront and Marinas

Haines Point Golf Courses

Fort McNair

The War College

Buzzard Point

Boiling Air Force Base

The Wilson Bridge

George Washington Masonic National Memorial

National Airport

The Pentagon

The Air Force Memorial

Arlington House/Robert E Lee National Memorial

The Washington Monument

Give this short drive a try on a beautiful day. I promise you'll love it.

Some Thoughts on Real Estate Appreciation and Depreciation

Back in 2005, when the real estate market was steaming, one of the things that occurred to me was that real estate appreciation was driven from bottom to top. That is, it was the intense demand at the lower priced properties that pushed up the prices of starter homes that then pushed up demand at homes moving up the price ladder.

In 2011, it is still the lower price end of real estate that drives the overall market. It’s just that instead of driving the market up, for the past few years it’s been driving the market down.

If you remember when the market began to slide in 2006, it was the lower priced houses and condos, along with properties in new or unfinished developments that were the first to be affected by the downward trend. The higher end properties in economically established communities fared well for at least a couple of years longer, because the effects of the lower end slide hadn’t yet affected the higher priced properties. Recently, the price decline of the higher priced properties has been more noticeable because the decline happened in the more recent past.

Interestingly, it seems that most of the “bottoming out” in the real estate market has been happening at the lower price point. Hopefully, if recent history repeats itself, we’ll see the same “bottoming out” moving up the price ladder and the beginnings of real estate appreciation.

Condo Purchasing Tip

The most important and succinct information one can receive regarding the financial health of a condominium building is the information provided to lenders from a questionnaire. The questionnaire is often called Homeowner’s Association Certification or something similar, and lenders submit them to condominium buildings, as a condition of making a loan on a unit in the building. It’s very simple. If you’re a potential buyer of a condominium, you should demand to see the results of the questionnaire before your right to cancel a contract expires.

Don’t be confused. The questionnaire is not part of the condo docs one receives after a contract is ratified, in which there is a three-day review period (review period may differ in different jurisdictions). Your lender can get you the information from the condo questionnaire after he or she receives it. However, in most instances your right to cancel the contract will have expired before your lender receives the completed questionnaire and is able to get the information to you. There are ways (too numerous to mention in this blog) you can make sure you receive the information before your right to cancel expires. Your Realtor or lender should be able to help you regarding this matter. If needed, I’d be glad to help as well at joe@joeberman.com.

Now, why is the information from the questionnaire important? The following are 3 important items addressed in a condo questionnaire and not in condo docs and why they are important.

1) The number of owner occupied units verses investment units. These figures are very important. Getting a loan for a purchase in a building with an investor ratio over 50% is much more difficult than in a place where the investor ratio is under 50%. Usually, a down payment of at least 20% is required. Because buying in the building is more difficult, the value of all the units in the building goes down. The reason one would want to know the exact ratio, is that if the building has, for example, a 49% investor population, he or she would be eligible to buy the particular unit with a low down payment, an FHA loan (3.5% down payment) or something similar. However, at 49%, the ratio could easily advance to 51% investor. When the ratio flips to 51% investor, the ability to get mortgages diminishes, as does the value of the property.

2) The number of units sold/under contract. Absolutely essential information when buying in a new building. Developers of new projects generally do everything they can to guard their sales figures. If you’re buying into a new 100 unit building with, for example, only 2 units sold and 3 under contract, you better be getting a stupendous discount for the risk you are taking.

3) Number of units with delinquent condo fees. Another important piece of information in determining the financial health of the condo building. Guess who pays the fees of the people who are delinquent? That’s right, the rest of the condo association. Additionally, a high condo fee delinquency rate is usually a predictor of more bad news to come. When a person is in financial trouble, the condo fees go first, usually followed by the mortgage, meaning future short sale or foreclosure. There’s nothing worse for the value of a property than to be in a building with a lot of short sales and foreclosures.

There are many ways to reduce risk in the purchase of a condo. By being diligent and aggressively seeking pertinent information, one can make an informed and smart decision. Upscale finishes and fancy buildings begin to look downscale and dumpy when the financial situation is dire. Make sure you like the condo and the building is in good financial shape. Everything else will take care of itself.

Tomorrow’s blogpost – A review of cheap jug wines. Some are actually pretty good!

A Great Recipe - Bluefish Dijonnaise

If you're already a great cook, serving your guests this dish will solidify your standing as an accomplished chef. If on the other hand, you don't know the first thing about cooking, this recipe is so easy, you'll be able to fool people into thinking you know what you're doing.

Bluefish Dijonnaise

1/4 cup mayonnaise 3 tablespoons Dijon mustard 1/2 teaspoon dried thyme 4 - 6 ounce bluefish fillets (salmon or mackerel are the best substitutes) kosher salt ground black pepper 1) Place a large cast-iron or ovenproof skillet or griddle under the broiler and preheat until very hot; at least 10 minutes. 2) While the skillet is preheating, combine the mayonnaise, mustard and thyme in a small bowl. 3) Season the fillets with salt and pepper and paint one side of each fillet thickly with the mayo/mustard mixture. 4) Place the fish in the skillet, painted side up and broil until the coating is brown and bubbling, about 3 -5 minutes depending on the thickness of the fish. Serves 4. Adapted from Rick Moonen. Have the rest of your meal ready to go because you want to serve this as it comes out of the broiler. Make sure the oven mittens you wear to remove the skillet are extremely heat resistant because I promise, the cast iron will be super hot. Also, and this is very important, when you pull the skillet out of the oven, be dramatic. The fish will be sizzling and if you play it right, you'll look like you just did a show on the food channel. Enjoy.