Out and About - Have you heard the one about location?

Of course, you have, but you're probably thinking of geography. As important as location is in a city, neighborhood, street or block, so is it crucial in determining the value of the apartments in a building.

Everyone knows that the highest floors command the highest prices. But what else affects the amount at which a condo or co-op is offered? Views leap to mind. What value has a penthouse that faces blank walls? Amenities also are critical: Are those cabinets solid wood? Is there a fireplace and does it burn wood? How is the flow? Has the developer skimped on hardwood floors, replacing them with carpeting instead?

Sometimes the floor level is disproportionately critical. It is one thing to be on the first rather than the 14th floor. It is quite another to be on the first floor or terrace level when the residents have to look way, way up to glimpse the sun.

Such is the case with one of at least two stylish apartments on the market in a fancy new building that they're saying is situated in Georgetown Heights. (Observatory Circle would be more like it, but no matter.) Both of the two-bedroom, two-and-a-half-bath apartments are expensively finished with plank hardwood flooring; custom moldings; recessing lighting; dramatic kitchens with Viking appliances and other high-end accoutrements, even a wine cooler, 42-inch cabinets, and granite breakfast bar; full-size washer/dryer; excellent closet space; and two garage parking spaces.

The second-floor apartment has 1,430 square feet, a generous balcony, walls of French doors and a condo fee of $423 monthly. The condo is a corner unit. Its price is $898,900.

On the terrace level, the 1,642-SF apartment is said to face south. Among its features are a whirlpool tub, separate glass-enclosed shower, walk-in closets, a walk-in laundry and a monthly fee of $368. The price: $799,900. The tradeoff: space for sun.

Other properties listed by other agents and previewed recently:

• A three-bedroom, three-and-a-half-bath duplex with one-car attached garage in the Waverly Hills neighborhood of North Arlington. A pot of dead flowers on the doorstep welcomes visitors to this 2,050-SF home, which reeks of nothing expensive or expansive. The rooms are small, the kitchen is dated, and the totally windowless basement is finished, though why is a mystery. The asking price of $760,000 is said to be nearly $100,000 below the last comparable sale. It may yet be too much.
  
• On the northern fringe of Shaw, a curious wedge-shaped detached and renovated rowhouse with odd-shaped rooms, two bedrooms plus den, two baths, a partly completed in-law suite, newer systems, a curious mixture of seemingly haphazard maintenance and impressive details such as custom front door, and what is a cozy deck. It has lingered on the market for more than three weeks at a not unreasonable price of $649,900.
  
• In Glover Park, an odd-looking little brick rowhouse with a bright living room and small dining room, white updated kitchen with decent appliances and ordinary cabinetry, sunroom with slate floor, little more than a patio for a backyard, a one-car garage, three bedrooms and just one bath upstairs, and a below-grade lower level with that inescapable knotty pine paneling in the rec room as well as a full bath. At $715,000, this 1938 rowhouse should have been listed in the high $600s.
  
• Near Pentagon City in Arlington, a spacious, 1,351-SF condo with two bedrooms, two baths, lovely hardwood floors, washer/dryer, balcony and an open '70s kitchen. The 1989 building has amenities such as pool, fitness center and dog run. This corner unit, which went on the market more than three months ago for $505,000, has had its price reduced twice, now to $458,000 with a $609 monthly fee that includes utilities.
  
• Four condos in a gut renovated building on a Columbia Heights block that defines transitional neighborhood – characterized in marketing documents as "on the cusp of the Georgia Avenue revitalization project." Still nearing completion, the units are nicely finished with granite and stainless, plank hardwood flooring, energy efficient windows, in-unit washer/dryers, baths with tumbled stone tiling and cherry or maple vanities, and parking available for additional cost. The apartments are listed between $315,500 for the 580-SF one-bedroom unit upstairs to $534,500 for a two-bedroom, two-bath condo. A downstairs one-bedroom unit is offered at $349,500, and its huge windows face nothing but parking spaces. Monthly fees are unusually high, ranging between $259 and $479. These places will be a tough sell.
  
• In Logan Circle, a supposed one-bedroom condo – the bedroom is separated from the living area by a partial wall and a platform – in a renovated 1920s auto showroom. This apartment is more authentically a loft than many others sold as such. With an entrance essentially into the open kitchen with the requisite stainless and a center island, this unit has soaring ribbed ceilings, exposed masonry, a dynamite bath with glass tiles and Euro-style shower, and views from industrial windows. . . of a brick wall opposite. Including reserved parking, decent closet space, an in-unit washer/dryer and large extra storage space, this apartment was listed at $529,900 more than a month ago and now is offered at $499,900, at which price it should not find a buyer.
  
• A standard 1933 colonial in American University Park with a front porch, rear deck and ready access to the Metro and the neighborhood amenities of Friendship Heights. The house features small living and dining rooms well matched to the upstairs three bedrooms, which share a single bath, and a 1970s kitchen. The attic is finished, though not glamorously, and the in-law suite downstairs is not half bad. Originally listed at $799,000 one and a half months ago, this vacant dwelling now is offered at $749,000, which is not nearly enough of a reduction in this market.
  
• In Dupont Circle, four apartments in a converted rowhouse. Rare is the gut renovation that is completed so exquisitely, and the developer spared no expense in creating the sleekest of units. The kitchens are gorgeous, including Italian cabinets, stainless-steel countertops, Wolfe dual-fuel ranges, Sub-Zero refrigerators and Bosch dishwashers. There is much to commend these condos, which have ceiling heights ranging from eight feet - for the English basement, which has a bedroom, one and a half baths, parking space and a den – to 11 feet - for the one-bedroom unit with balcony just above street level - or up to 14 feet in places – for the studio, which has a 315-SF deck. For units without parking, two spaces are available for $35,000 each. Yes, these are splendid apartments – each occupying one floor of an attached dwelling. But why pay from $650,000 for the studio to $815,000 for the one-bedroom when sums like that will buy an entire home?
  
• A Forest Hills 1952 Cape Cod cottage that has been expanded and renovated into a spacious and airy contemporary home on a cul-de-sac. The upscale kitchen opens into the family room added to the rear with huge windows looking over a memorably landscaped rear yard. The second floor was an attic, now transformed into a two-bedroom suite. The lower level has been turned into a pleasant enough subterranean media room, and there are guest bedrooms on the main floor. At $925,000, this home is priced correctly.
  
• In Mount Pleasant, a 1936 Tudor rowhouse adapted handsomely into an arts and crafts showcase inside. The galley kitchen has unusual Swedish beech wood cabinets that complete its excellent renovation. The two-story home features three bedrooms, two-and-a-quarter baths, covered front porch, rear deck, exposed beams, leaded glass windows, central air conditioning and a semi-detached garage. It should sell quickly at its price of $739,900.
  
• Four condominiums in Tenleytown that were mistakenly created from what apparently was a modest single-family home. These new units try hard, but they skimp on living room space, offer open kitchens and call enclosed porches "bedrooms." It's a stretch, but prices up to $495,000 for up to two-bedroom apartments, including parking spaces, with monthly fees up to $305 are not beyond reason.
  
• In Kalorama, a nearly 1,400-SF new condo half below grade with one bedroom and a second bedroom that technically is a den. Including a patio that, however, is overshadowed by nearby walls, nice flow, modern table-space kitchen, two baths with Durango stone tile, attached garage parking and pleasant flow, this apartment offers good value at $529,0o00 with a $226 monthly fee.

--M.C.

Assignment: still looking. . . for a single family house west of Rock Creek Park or close-in Montgomery County with three or more bedrooms and two or more baths in decent shape for around $750,000.

Lots to see in AU Park! The first is a 1922 bungalow with a charming front porch. It's listed at $745,000 (down from $775,000) for three bedrooms and two baths. Unfortunately, one of the bedrooms is directly off the living room, the other two are small, and the bathroom and kitchen are older. The family room addition off the kitchen would be well-used but the overall placement of rooms, the lack of a second bathroom on this floor, and the need to renovate the kitchen and bath all say no! On the market for a month so far.

Next is a tiny late 30s brick Colonial with three (tiny) bedrooms and one bath up, nicely done but smaller than many rowhouses. The lovely condition and great location can't make up for its size, and the $739,000 price (down from $749,000) is an added barrier. On the market for 70+ days and likely to stay there for a while.

A little old (1940) Dutch Colonial with three bedrooms and two full and two half baths with updates typical of years ago. Great location, loads of potential, too high at $775,000 for a month - and counting.

Another late 30s brick Colonial with three bedrooms and one bath up. This one features poor condition and cracked orange laminate counters in the kitchen. Priced at $730,000 and on the market over a month. 'Nuff said.

And finally, in AU Park, an early 30s Colonial with three small bedrooms and one bath up, a partially finished attic, and some updates. Originally priced at $799,000 and now down to $749,000 after two months on the market. Too small at too high a price.

Across Western Avenue to the Crestview neighborhood of Bethesda to another three-bedroom brick Colonial, this one with two baths up. Many updates over the years have made it impossible to tell where you are in the house when you come in the door – never a good start. Then there's the hideous new bumpy dark green tiled backsplash in the kitchen with the tacky green and black vinyl tile floor and the weird "loft" in one of the bedrooms. And the mystifying flow. On the market three plus weeks at $799,000.

Further into Bethesda to Alta Vista Terrace and yet another brick Colonial with three bedrooms and one bath up, this one built in 1951. Originally priced at $819,900, now reduced to $759,000 after more than two months. This house has a small, but recently done, kitchen with granite counters, half bath and decent-sized living room with den on the first floor. An out-of-scale family room with access from the den and living room overlooking a lovely landscaped garden with walkout access to a patio is tacked on the back. The upstairs is small. A partially finished walkout basement has a full bath. Problems here: lack of a front hallway or foyer, three small bedrooms and one small bath up, and a family room with no access from the kitchen.

Over to Kensington to see a classic 1958 split-level with four bedrooms and three full baths, originally priced at $749,000, reduced to $695,000 after more than two months on the market. Tons of space but not laid out where you want it – the usual problem with split levels. Just waiting for someone to add a bit of charm!

And around the corner to a small fifties rambler with four bedrooms and three baths priced at $769,000 and on the market since March. This house has been renovated but high-end appliances, granite counters, wood cabinets in the kitchen can't solve the problem of a tiny space, awkwardly angled.

--A.M.

Items of Interest - July 29, 2006

PRICES OF EXISTING HOMES EDGE UP FROM 2005, BUT SALES DECLINE: Sales of previously owned home - including single-family, townhomes, condominiums and co-ops - declined 1.3 percent to a seasonally adjusted annual rate of 6.62 million units in June from May, reports the National Association of Realtors (NAR). Last month's sales were 8.9 percent below the 7.27 million-unit pace in June 2005. Commented David Lereah, NAR's chief economist: "Over the last three months home sales have held in a narrow range, easing to a level that is near our annual projection, which tells us the market is stabilizing," he said. "At the same time, sellers have recognized that they need to be more competitive in their pricing given the rise in housing inventories. Home prices are only a little higher than a year ago." The national median existing-home price for all housing types was $231,000 in June, up 0.9 percent from June 2005, when the median was $229,000. "The change in price performance is directly tied to housing inventories; a year ago, we had a lean supply of homes and a sellers' market, with monthly home sales at an all-time record high," Lereah said. Total housing inventory levels rose 3.8 percent at the end of June to 3.73 million existing homes available for sale, representing a 6.8-month supply at the current sales pace. By contrast, in June 2005, there was a tight 4.4-month supply on the market. Single-family home sales eased 0.9 percent from May to a seasonally adjusted annual rate of 5.81 million and were 8.2 percent below June 2005. The median existing single-family home price was $231,500, up 1.1 percent from a year ago. Existing condominium and cooperative housing sales fell 5.5 percent from May to a seasonally adjusted annual rate of 805,000 units and were 14.6 percent below the 943,000-unit level in June 2005. The median existing condo price was $226,900, down 2.1 percent from a year earlier.

SALES SLUMP OF NEW SINGLE-FAMILY HOMES: They were down 3.0 percent in June to a seasonally adjusted annual rate of 1.131 million units, following a downward revision to the sales rate for May, according to figures released by the U.S. Commerce Department. Year-to-date, actual new-home sales for the first half of the year were down 11.9 percent from the same period during last year's record year in new home sales. "The slowdown reported today, coupled with the downward revisions of the previous two months, indicates that we are well into the predicted cooling down process," said Michael Carliner, an economist at the National Association of Home Builders (NAHB). "We expect this to continue as the impact of recent increases in interest rates is fully reflected in sales." He added that NAHB's current forecast shows about a 12 percent decline in new-home sales for 2006 as a whole. "However, any further monetary tightening by the Federal Reserve would have a more severe negative impact on sales," Carliner contended. The inventory of new homes for sale rose to 566,000 units at the end of June, a 6.1 months' supply at the current sales pace. Almost all of the increase was for-sale units that were permitted but not yet started, representing nearly 20 percent of the inventory level. Units still under construction were almost 57 percent of the inventory, and completed homes for sale were 23 percent of the total - about the same as a year earlier. The median length of time that completed homes for sale were on the market was 3.8 months in June, compared with 4.0 months a year earlier.

AND SEE WHAT'S HAPPENING IN CALIFORNIA AND FLORIDA: Home sales there plunged 26.3 percent in June compared with last year while the median price of an existing home increased 6.2 percent, an industry trade association reported, according to Inman News. Closed escrow sales of existing, single-family detached homes in California totaled 483,690 in June at a seasonally adjusted annualized rate, according to information collected by the California Association of Realtors. That was down from the 656,310 sales pace recorded in June 2005. The median price of an existing, single-family detached home in California during June 2006 was $575,800, up from the $542,330 median for June 2005, C.A.R. reported. The June 2006 median price increased 2 percent compared with May's $564,440. Sales declined 29 percent from the year-ago level, according to the Florida Association of Realtors. A total of 18,089 existing single-family homes sold statewide last month, down from 25,552 homes sold during the previous June. Statewide, the existing-home median price rose 3 percent to $257,800 last month, up from $249,800 a year ago.

THIS IS ONE LIST TO AVOID: Forbes magazine factored in job-growth and cost-of-living rankings, then added to the mix a housing affordability index from research firm Moody's Economy.com plus a salary index from Seattle-based compensation collection firm PayScale, says Realtor magazine. The result was 10 metropolitan areas with the "worst" combined scores, reflecting the highest cost of living, lowest salaries, least job growth and least affordable housing. In order, the losers: Essex County, Mass., just north of Boston; San Francisco; San Jose, Calif.; Honolulu; New York City; Cambridge, Mass.; Tucson, Ariz.; Oakland, Calif.; Boston; and Los Angeles.

APPRAISALS COULD BE YOUR BANE: As the housing market cools, Americans are confronting a problem that was easy to ignore during the boom: inflated appraisals of home values, says the Wall Street Journal. Critics inside and outside the appraisal business have long warned that many appraisals are unrealistically high. That's partly because generous appraisals help loan officers and mortgage brokers, who often choose the appraiser, complete more deals. If a home is appraised at less than the buyer offered, the deal is likely to fall through. Inflated appraisals didn't matter much when home prices were rising at double-digit rates, since market values would quickly catch up. Now, however, prices are leveling off in many places and falling in some. Some homeowners are finding that the market value is below what past appraisals led them to believe. For sellers, that can mean being forced to drop their asking prices. Some people hoping to refinance, meanwhile, may be unable to lock in new loan terms because they have less equity in their homes than they thought. Lenders and mortgage investors, too, could take a hit if it turns out the collateral backing their loan is worth less than expected. Most homeowners have enough equity in their homes so they don't need to worry much about whether past appraisals were realistic. But dubious appraisals are a risk for the hundreds of thousands of people who in the past few years have bought homes with little or no down payment, or used almost all of their home equity to finance home improvements or other types of spending. That has left these people with little financial cushion to deal with rising interest rates. "Now it's pay-the-piper time for people, and they're finding out they don't have the value in the house they thought they had," says John Taylor, president of the National Community Reinvestment Coalition, a Washington-based nonprofit that supports low-income housing.

WHAT'S IN A NAME: If you're confused about the differences between "traditional" real estate firms and those that offer fee-for-service or limited-service advice, the Washington Post seeks to clear the air. Discount brokers, for example, claim to charge less than traditional brokers for either full-service treatment or only some of the services that a full-service real estate firm provides, according to the newspaper. Limited-service brokers and fee-for-service brokers typically charge by each task they do for a seller such as putting a listing on the multiple listing service or providing yard signs. The Federal Trade Commission offers help sorting out the options, which have become more popular as online research companies proliferate and as consumers balk at paying commissions of 5-7 percent. The agency recently established a Web site that focuses on real estate competition issues. The site ftc.gov/bc/realestate includes consumer publications and background on actions the commission is taking to promote competition.

THERE'S HARDWOOD AND THERE'S HARDWOOD: Unfinished solid wood floors are traditional and dependable, but they can be a hassle to install, notes the New York Times, which advises consumer not to discount automatically the value and durability of floors that look like solid wood but harbor high-tech secrets below the surface. Like plywood, engineered flooring is made from laminated wood layers and can be topped with a premium veneer, like oak. It resists warping and resembles wood slabs at a reasonable price - starting at around $4 a square foot. (Solid wood often runs more than $5.) Most engineered floors are factory finished, eliminating the hassle of surfacing the wood after installation. You can lay regular engineered strips traditionally, but herringbone planks from manufacturers like Mirage, at (800) 463-1303 or miragefloors.com are one way to make a decorative pattern. Much like parquet, engineered flooring can be glued to a cement slab or nailed to a plywood subfloor. To minimize the slight level changes or gaps between strips, manufacturers bevel away a little wood all the way around the top edge. As you shop, try running your hand across the joints between planks on the store's sample boards. If they do not meet your standards, you may be even less happy with your installation at home. Just as with solid wood tongue-and-groove boards, there is a limit to the number of times you can resurface; you will not want to sand so far down that you expose the tongues of engineered strips. Buying solid wood will sometimes let you sand a little further down, though it will not guarantee top quality. If you are buying prefinished boards from a liquidator, for instance, many of the boards may not match the color sample you approved. Or your installer may have to be creative to use a dismaying number of boards that are less than 18 inches long (in the closets, for example). The short pieces were probably culled from a more expensive grade of strips sold to someone else for a higher price.

GASOLINE PRICES COULD BE AFFECTING THE HOUSING MARKET: John Wasik, author of "The Merchant of Power," used data from the American Automobile Association and the National Association of Realtors (NAR) to conclude that, beginning in September 2005, home sales fell each time gasoline prices jumped, reports Bloomberg in Realtor magazine. Wasik believes that soaring gas prices are weakening the housing market, prompting the Federal Reserve Board to hike short-term interest rates to curtail inflation and subsequently boosting monthly payments for homeowners with adjustable-rate mortgages. If gas prices continue to creep above the $3-per-gallon mark, Wasik expects a more dramatic slowdown in housing markets where buyers are commuting the furthest. These markets include Los Angeles; San Diego; New York; Atlanta; Orlando, Fla.; Tampa, Fla.; Miami-Fort Lauderdale; and Denver.

D.C.'S POPULATION SPURTS: The U.S. Census Bureau has now acknowledged that it had underestimated the number of people living in Washington and revised its data to reflect the largest increase in the city's population since 1950, reports the Washington Post. The decision immediately adds more than 31,000 people to Washington's official population, increasing it to 582,049. William H. Frey, a demographer at the Brookings Institution, called the decision "a big deal," adding that "this is real." Said he: "D.C. is increasing its population at a very significant level. The addition of 31,528 people "makes up for all the losses of the 1990s and is equivalent to the loss in the 1980s as well." In its challenge to census figures, the city submitted building permits from 1999 to 2005, Phillips said, in addition to school enrollment figures showing that public charter schools had absorbed much of a decline in the number of students attending public schools. The city also submitted data showing that the number of people filing taxes in the District had remained steady between 2004 and 2005 and that Pepco was serving an increasing number of residential units. The revision marks the most significant increase in the city's population since it peaked in 1950 at 802,178. In every census since, Phillips said, the city has recorded a decline, although mid-census estimates during the late 1990s twice bumped population slightly upward.

ORGANIZATION CONTENDS THE FOX IS WATCHING THE HENHOUSE: State real estate commissions are dominated by practicing real estate brokers, according to a new study by the Consumer Federation of America (CFA). In most states, state regulators have failed to adequately inform, educate, and protect home sellers and buyers using brokerage services, and in some states these regulators have acted to restrict competition and consumer choice, the report found. "Several real estate commissions have supported controversial minimum service laws that have been actively opposed by the U.S. Department of Justice," said Patrick Woodall, CFA's Senior Researcher. "These laws were developed by traditional brokers who sought to restrict the services offered by nontraditional Internet-based or discount brokers," he added. "If insurance leaders were to serve as insurance commissioners or utility executives as public service commissioners, newspapers would report these blatant conflicts of interest on page one and editorialize against them," said Stephen Brobeck, CFA's Executive Director. "Governors and state legislators should support measures to prohibit practicing real estate brokers from serving as real estate commissioners," he maintained. Thomas M. Stevens, a Fairfax County broker who is president of the National Association of Realtors was quoted by the Washington Post as praising the services rendered to the public by the dozens of active agents who serve on state-appointed regulatory commissions, "just like doctors, lawyers and other professionals." CFA research found that nearly four-fifths of all commissioners earn a living through real estate transactions. Seventy percent of all commissioners are real estate brokers or salespeople. Another 9 percent are affiliated with businesses ? developers, appraisers, title agents, and real estate attorneys ? with direct ties to the industry. So says the consumer advocacy group.

MAKE THE MOST OF THAT SMALL BEDROOM: Need a guest bedroom and a den? asks Realty Times. These days with many people working from home, one challenge is finding space for both an office and a guest bedroom. Homeowners are utilizing Murphy beds and fold-up futons to save space and make the extra bedroom usable as a part-time guest bedroom/office. But the old style wall beds aren't the only way to save space. The Europeans have introduced the computer bed. This might be perfect for a dorm or a child's room. A bed folds out and beneath it is the computer center. Fold it back up and the bed is conveniently tucked away inside, leaving a computer desk exposed and accessible for study time. You can see other styles at flyingbeds.com.

WHAT SOME ARE DOING TO COPE WITH RISING RATES: As monthly payments on adjustable-rate mortgages are starting to balloon, many Americans have found a way to put off the day of reckoning, observes the New York Times. They are refinancing with new adjustable-rate mortgages that keep monthly payments low - for now, that is, though their payments will likely rise even higher in the future. Millions of Americans have turned to adjustable-rate mortgages, or A.R.M.'s, in recent years to afford a home as prices soared. Typically set at artificially low rates in the first years of the loan, these mortgages are then reset at the prevailing interest rates. For borrowers, the bet was that interest rates would remain low. Now, the first big wave of the mortgage boom is cresting as more than $400 billion worth of adjustable-rate mortgages, or about 5 percent of all outstanding mortgage debt, will readjust this year for the first time, according to Loan Performance, a research firm. Next year, another $1 trillion in loans will readjust. When that happens, for instance, a typical borrower with a $200,000 A.R.M. could see his monthly payments increase nearly 25 percent when the A.R.M. adjusts from 4.5 percent to 6.5 percent. In total dollars, that is an increase from $1,013 a month to $1,254. Yet instead of paying more now, many borrowers are refinancing into their second or third adjustable-rate mortgage, loan data indicate and industry experts confirm. So far, the number of borrowers refinancing this way is relatively small - several hundred thousand in the estimate of the credit ratings firm Fitch Ratings - but mortgage industry officials and analysts expect the numbers will surge next year. In doing so, these borrowers are pushing out any eventual shock of higher payments by another two or three years, if not longer. "They get another two- or three-year hybrid with a low introductory rate to keep payments down," said Frank E. Nothaft, a vice president and chief economist at Freddie Mac, the mortgage buyer. "They're trying to put it off forever, which is O.K. as long as interest rates are low. But when they start to spike, then it's going to be more problematic."

THERE GOES THE NEIGHBORHOOD: Many buyers choose a neighborhood before they choose a home, notes Realtor magazine. At least three Web sites point homeowners and buyers toward addresses where sex offenders live and work. The most sophisticated is Family Watch Dog.com, which uses a color-coded mapping system. Users can click on the identifying squares and see photos, addresses, convictions, and other information about the offender. The site was created by Julie Clark, founder of the Baby Einstein Co., and John Walsh, host of the "America's Most Wanted" TV show. Not quite so complete are Sex-Offenders.com and MapSexOffenders.com. Some states and municipalities have individual sites as well.

BYE, BYE KITCHEN, HELLO LIVE-IN ROOM: Gone are the days when rooms were named for their purpose, notes Remodeling magazine in Realtor magazine. Say goodbye to laundry rooms, studies, living rooms. Say hello to the "Live-In Room," where people do what they want to do without feeling limited by walls. Take the room formerly known as a kitchen. The new concept room features a professional cooking area, a less formal dining and entertaining space and a comfortable lounge area with sofas, a television and a beverage center. Electrolux debuted "Live-In Room" concepts at the 2006 Kitchen & Bath Industry Show. "We reviewed how the kitchen is used and developed a space that makes it a comfortable setting that encourages togetherness," says John Swenson, director of brand marketing for the company. Instead of walls, the room has "zones" that allow for residents to move into different areas seamlessly and perform different tasks, from paying bills to watching movies on a comfy couch. Then there's the room formerly known as the laundry room. Cabinetry manufacturer Merillat Industries showed off its ideas for multiuse layouts incorporating various types of cabinetry to bring together laundry, craft, office and other spaces. Design Services Director Paul Radoy says his team discovered that small kitchen spice drawers make great storage for sewing materials, fly-tying supplies or model-building parts. Pull-out desk surfaces double as sewing stations, and an island on casters is ideal for a laundry-folding table or gift-wrapping surface.

IT'S NOT ONLY THE WINDY CITY: It's also the Emerald City, reports Realty times. Industry group Green Roofs for Healthy Cities (GRHC) says, with nearly 300,000 square feet of rooftops newly cultivated in 2005 for a total 2.5 million square feet growing on more than 200 rooftops throughout the city, Chicago is the first city in verdant rooftops. The 2005 amount compares with 200,000 square feet in 2004. New York City, D.C., Boston, Baltimore, and Ontario across the border are other locales that boast substantial rooftop gardening acreage. Probably, they could say a lot about elevators as well.

THE REAL-ESTATE MARKET HAS A NEW CRY AND IT'S LAND HO!: As the nation's housing market cools, there's a rush to snap up undeveloped property as buyers stake their claim on everything from New England creek-front parcels, to mountainous woodlands in Tennessee, to big-sky vistas in Montana, says the Wall Street Journal. Some people are buying dream lots now, while the land is available and prices affordable, with plans to one day build a vacation or retirement home. Others are investing in recreational property they want to use today: In rural west Texas, for example, scrubland that wouldn't even sell a few years ago has become popular with deer hunters and the offroad-vehicle set. In the face of demand like this, prices for undeveloped land in many parts of the country are shooting up. Around the country last year, farmland values rose at their highest year-over-year rate - 11 percent - since 1981, according to the Agriculture Department. The U.S. has roughly 1.5 billion acres of rural land, excluding public lands, representing about 65 percent of the country. Prices vary widely: Rural land can fetch $250 an acre in the brush country of far southwest Texas, to $3,000 an acre for timber and pasture land in Iowa, to a scenic, 37-acre property in southwest Colorado straddling both sides of a river for nearly $27,000 an acre. Even before you buy, consider having a survey done of the land you're interested in, or at least work through a local land agent who knows the area and terrain. Property lines aren't always well defined, and soils may be too wet to support a building in the spot you really want to build. Also, pay attention to how you access the land. In some places, makeshift roads that cross a variety of property lines have become semi-permanent through the years - although nothing about them is legal. As a result, you may not have legal access to your property, resulting in lawsuits. With rural land, you could find one day that your dream property is bordered by a new mobile-home park; a local real-estate agent with land expertise will know the zoning and covenants in place. Land prices often don't move in the same way home prices do. Despite the run-up in recent years in some housing markets, home prices are typically expected to rise alongside the rate of inflation. But with land, price appreciation is traditionally more closely tied to how much money it can generate from activities such as farming or grazing. And in general, land prices, when they cool, don't tend to fall as much as an overpriced residential market might, largely because while a housing market can be overbuilt, land can't. Land might make a good investment, but it can be a lot harder to sell in a pinch than a house, since fewer people are looking for land.

LOTS OF COMPETITION IN REAL ESTATE, SKEPTICAL HOUSE PANEL HEARS: In a hearing on Capitol Hill, members of a U.S. House committee looking into real estate competition and the effect of the Internet heard tales of the industry's rough-and-tumble character, but the House members appeared largely unconvinced by charges of anti-competitive behavior against Internet-based discount brokerages and skeptical of calls for federal intervention, according to Realtor magazine. "I don't see the rationale for the federal government to weigh into these issues," said Rep. Arthur Davis (D-Ala.), a member of the Financial Services Subcommittee on Housing and Community Opportunity, which conducted the hearing. Davis' remarks referred to a call by critics of the National Association of Realtors (NAR) for Congress to pass legislation giving all real estate business models equal access to multiple listing services and allowing the Federal Trade Commission to monitor and preempt state minimum service laws, which critics say are used to protect full-service real estate brokers and restrict consumer choice. Among recommendations by the Department of Justice are: Opening up MLS participation to brokers whose business model is based not on listing and selling real estate but on making money from the display of listings on their Web sites; prohibiting brokers from determining whether they want their listings advertised on other brokers' sites; and restricting state minimum service laws, which take aim at brokers that enter listings in the MLS, but leave deal particulars and risk to the selling agent.

EVEN REDUCED RATES FAIL TO EXCITE BORROWERS: For the week ended July 21, mortgage loan application volume slipped by 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the decrease was 1.2 percent compared with the previous week and 28.2 percent, with the same week one year earlier. Seasonally adjusted, purchase applications declined by 2.4 percent from the previous week and refinancings, 0.6 percent from one week earlier. Purchase loans have fallen to the three year low that occurred five weeks ago. The refinance share of mortgage activity increased to 35.6 percent of total applications from 35.0 percent the previous week, while the adjustable-rate mortgage (ARM) share declined to 28.6 percent from 29.0 percent the previous week.

AND BUYER INDIFFERENCE TAKES PRESSSURE OFF RATES: The 30-year fixed-rate mortgage (FRM) averaged 6.72 percent for the week, down from last week's 6.80 percent, according to Freddie Mac. Last year at this time, it was 5.77 percent. The average for the 15-year FRM this week was 6.34 percent, 6.41 percent a week earlier and up from 5.34 percent a year ago. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.35 percent this week compared with last week's 6.36 percent and up from 5.27 percent in 2005 at the same time. One-year Treasury-indexed ARMs were 5.78 percent this week, down from last week, when it averaged 5.80 percent. At this time last year, the one-year ARM was 4.46 percent. "Mortgage rates drifted lower this week on indications that economic growth is moderating, inflation remains under control and the Fed just may pause raising rates for awhile," said Frank Nothaft, Freddie Mac vice president and chief economist. "Meanwhile, recently released new homes sales for June fell to a lower than expected rate. That drop can be traced directly to higher mortgage rates, which are also helping to slow the growth of house prices in 2006."

Out and about - On goes the search

Assignment: find a single family house west of Rock Creek Park or close-in Montgomery County with three or more bedrooms and two or more baths in decent shape for around $750,000.

A well-priced ($749,000) 1940 colonial in Chevy Chase, D.C. With curved walk and welcoming front porch and four finished levels, this home has three decent- size bedrooms and two full baths. The nicely finished attic could be a fourth bedroom, playroom or office. The first floor has smallish living and eating areas, but the kitchen offers an eat-in/sunroom nook and begs for you to walk out into its huge back yard. The basement has a cozy family room and separate utility area. Other nice features include well-preserved wood floors and new (2003-2006) furnace, AC, hot water heater, dishwasher and storm windows. With a two-car garage, on a quiet street, but still on the market after almost a month, this one demonstrates the market slowdown.

An AU Park colonial, built in 1952 and listed at $799,000. Compared with the house in Chevy Chase/D.C., this one has three smaller bedrooms with two run-of-the- mill but clean bathrooms. The basement boasts decent spaces for both family lounging and doing the laundry. There is no real attic – at least not one that can be used for anything but boxes. There is no sunroom, but this house also has a two-car garage and a large and inviting backyard. A smaller house but priced at $50,000 more, apparently due to its reasonable proximity to Metro. Just five days on the market.

For a whopping $759,000 in Glover Park you can buy a two-bedroom and two-and-half-bath home. This light-filled house features hardwood, oversized windows and high ceilings throughout. The already small living room is an awkwardly shaped rectangle. It is unfortunate. The dining room flows nicely into a quaint and welcoming sunroom opening onto a lovely deck. Perfect for entertaining. There is parking for two cars. The large master suite and second bedroom would be perfect for a couple or a family of three. But overnight guests will be staying at a local hotel. On the market less than a week.

A second rowhouse in Glover Park - this one with three bedrooms and one bath plus an inlaw suite – is priced at $749,000. The main house is attractive, wider than the single family homes in Chevy Chase and AU Park, and has hardwood floors, an updated kitchen with black appliances and light- colored (almost pinkish) wood cabinets. The standard sunroom has access to a porch with small, grassy backyard. The upper level bedrooms are small but functional. The makeshift rental unit in the basement has a cozy living space with bedroom and kitchen separated by the fridge – not ideal but not unusual for the neighborhood.

Also in Chevy Chase/D.C., just off Connecticut Avenue and a quick walk to Politics and Prose, a 1939 rowhouse with three (small, smaller, smallest) bedrooms and two original baths upstairs, carefully preserved moldings, and a bad kitchen renovation, all for $739,000. This one has location and some possibilities but not at this price! On the market nearly 50 days.

Slightly off the track, a surprisingly good find in Adams Morgan. Listed at $749,000 and right around the corner from all the nightlife and restaurants, this wicked wide 1920s rowhome with high ceilings and hardwood floors feels larger than the three bedroom, two-and-a-half-bath home that it is; a little loving care would make it into something amazing. With precious off-street parking, a front porch that begs for rocking chairs and potted plants, a second porch off the master bedroom and tons of space throughout the house, it's hard to believe there isn't someone out there for this gem!

Also off the track, but worth a thought, a gorgeous renovation in Ledroit Park, listed at $749,900. This home, six blocks from the Metro, has light pouring in all of its many windows. Everything is new. All the ceilings are high and all the wood floors, shining. The three large bedrooms and two and a half baths in the upper part of the home are complemented by a huge one bedroom/one bath rental unit in the basement. It is all done and done well.


AB/AM

Items of Interest - July 22, 2006

FED CHAIRMAN NOTES COOLING OF HOUSING MARKET: In congressional testimony, Ben Bernanke observed that the market for residential real estate has been cooling, as can be seen in the slowing of new and existing home sales and housing starts. "The downturn in the housing market so far appears to be orderly," the chairman said during a hearing before the House Financial Services Committee. Some of the recent softening in housing starts may have resulted from the unusually favorable weather during the first quarter of the year, which pulled forward construction activity, he said, adding that the slowing of the housing market appears to be more broad-based than can be explained by that factor alone. "Home prices, which have climbed at double-digit rates in recent years, still appear to be rising for the nation as a whole, though significantly less rapidly than before," Bernanke declared. "These developments in the housing market are not particularly surprising, as the sustained run-up in housing prices, together with some increase in mortgage rates, has reduced affordability and thus the demand for new homes."

FANNIE MAE ECONOMISTS PROJECT 10 PERCENT DROP IN SALES: The number of homes changing hands in 2006 could decline by up to 10 percent next year, the top economists at Fannie Mae project, according to Inman News. Economists David Berson and Molly Boesel said in a report that a weakening investor demand and a lack of affordability could bring sales volume down 8-10 percent next year, to 7.61 million units. That would still be the third-best year ever for home sales, the report noted. "The surge in the number of immigrants over the past 25 years, the age-structure of the population and continued job and income growth as the overall economy grows around trend rates should partially offset the drop in sales related to affordability and investors," the report said. The falloff in sales will be most pronounced in areas with weak economies and where the decline in investor demand creates a large increase in the supply of homes for sale. Home prices could fall in those areas, slowing overall home-price gains to 3 percent in 2006, ending two years of double-digit growth. "Even though new sales have increased, the level of unsold inventories has continued to climb to record highs - clearly a warning sign for home prices should sales slip in coming months," the Fannie Mae report said. "We think that sales will decline over the rest of the year, as leading indicators of sales continue to weaken."

HOUSING STARTS TAKE A DIVE: Total housing starts dropped 5.3 percent in June to a seasonally adjusted annual rate of 1.850 million units, according to figures released by the Commerce Department. That number was 11.0 percent below the pace of a year ago. Single-family starts were down 6.5 percent for the month, a 13.8 percent drop from June 2005. Multifamily housing construction was up 0.3 percent for the month. "The June declines in single-family starts and permits clearly show that the housing downswing still is under way, a pattern consistent with our signals from the field," said Chief Economist David Seiders of National Association of Home Builders (NAHB). "Builders are reporting not only systematic declines in home sales, but also increases in sales cancellations and inventories - due to eroding affordability conditions as well as a withdrawal of investors/speculators from the market." Issuance of total building permits decreased 4.3 percent from May to June, 14.9 percent below a year ago. Single-family permit issuance was down 6.3 percent on a national basis to a pace of 1.395 million units for the month, reflecting declines in all regions of the country.

YOU CAN TELL A HOUSE BY ITS COVERS: Stone and brick are marvelous means of sprucing up the appearance of a home, notes the Associated Press in the Washington Post in a piece about improving the appearance of dwellings. An essential part of any facelift plan, lighting not only is a decorative element but can improve safety and security. Replacing an old, worn-out three-tab shingle roof with an architectural-grade laminated roof can have a tremendous impact on a home's appearance. Plus, replacing a leaking roof can prevent water damage and rot that could threaten the safety and integrity of the home. A fresh coat of paint can do wonders, with the right combination of colors dramatically transforming a home by accenting certain elements such as shutters, the entry door, trim or other architectural elements. Where the exterior cladding has been neglected and is too far gone, new siding presents the opportunity to tweak the architectural appearance, add insulation and install a more maintenance-free finish such as a vinyl, fiber-cement or a composite material. And trim around windows and doors, window shutters, or shingle mold at barge rafters are subtle elements of that much-needed touch that may have been missing. A new entry door can do wonders in improving the curb appeal of a home. Add decorative glass, one or more sidelights with decorative glass, a decorative glass transom, energy-efficient and maintenance-free fiberglass construction, and a new decorative lockset. A garage door can account for up to 40 percent of the exterior appearance of your home. If your garage door is one of the old one-piece, tilt-up-style doors or if it is a "sagging sectional," consider replacing it with a new sectional door constructed of steel or fiberglass. If your entry path, porch or driveway is cracked, discolored or otherwise unsightly, there are several "fixes" that you can consider, including a self-leveling concrete caulk or a vinyl concrete patch, penetrating concrete stains, paint and architectural coatings that consist of polymers offering a "stamped" finish in a host of colors that can transform virtually any concrete finish into a thing of beauty. Finally, when it comes to curb appeal, not enough can be said about the importance of a well-manicured yard.

READING, 'RITING AND REAL ESTATE: Student scores on state proficiency tests can drive up housing prices, a new study suggests, according to Realtor magazine. A study of Ohio school districts showed that an increase of about 20 percentage points in the proficiency test "pass rate" increased home values in a school district by about 7 percent - even after considering other factors that can have an impact on home values. "In Ohio, there are districts with 20 percent pass rates and some with 85 percent pass rates, so based on our findings that would result in about a 23 percent difference in house values solely because of the schools. It is not [a] trivial amount," said Donald Haurin, co-author of the study and professor of economics at Ohio State University. More complex measures such as how much proficiency test pass rates improved between the 4th and the 9th grades didn't have much impact on home values.

TENANTS, DON'T OMIT INSURANCE: Renter's insurance is a protection against losses suffered by the tenant caused by his or her negligence or by factors beyond the control of the tenant but for which the tenant could be blamed, says the Washington Post. Landlords like the protection because, without the insurance, they cannot rely on the tenant to cover significant damage. Instead, they or their own insurance would be forced to pay. Tenants should like renter's insurance since it not only covers damage to property but also pays them for losses occurring from theft or other incidents (for example, fire or water leaks). The downside, of course, is the cost of the policy, which just increases the monthly cost of living. The good news is that this cost is pretty low and is for a service and protection that can be of great value to the tenant.

PULL UP A ROCKING CHAIR: A city council member in Tampa, Fla., feels so strongly about front porches that he wants to change the city's zoning code to encourage home owners to add the feature, says the St. Petersburg Times in Realtor magazine. Councilman John Dingfelder says the city would benefit from the sense of community that porches encourage. Life is better, he says, "when you sit on the front porch and watch your kids play and wave at your neighbors." Dingfelder's plan would change the city's zoning code to allow for an open porch that could extend up to 8 feet into required setback space. Tampa currently requires a 20- to 30-foot setback in front of homes. The Tampa Bay Builders Association doesn't think it's such a good idea because it could increase home costs and there is no indication that buyers are eager for porches. But Tampa police spokesperson Laura McElroy says the department is in favor of passage. "We love front porches," McElroy says. That's because porches encourage people to watch for suspicious cars and people in the neighborhood.

ARE DEVELOPERS BRIBING MUNICIPALITIES: In the frenzy to build subdivisions in Northern Virginia's exurbs, one of the nation's largest housing developers has offered to write the small Fauquier County town of Warrenton a $22 million check, an unprecedented cash donation, according to Virginia real estate specialists, the Washington Post reports. In exchange, Centex Homes of Dallas would get permission from county and town leaders to build a subdivision just outside Warrenton with nearly 300 luxury homes for seniors starting at $850,000. Town and county leaders have given their initial approval to Centex's proposal, which involves asking Warrenton to annex property so the builder can connect to the town's sewer system. Development specialists say the unusually large promise of cash highlights a disturbing trend in Virginia's booming housing market. Developers eager to plant new homes in exurban locales are building roads, establishing parks and offering money - all in an effort to appease increasingly resistant communities. The result, the specialists say, is more expensive homes. In Loudoun County, the developer Greenvest has offered to spend $192 million on road improvements in exchange for permission to build 15,000 homes near Dulles International Airport. Toll Brothers, another developer, plans to contribute 233 acres of parkland to Prince William County so it will rezone rural land to build 420 houses near Silver Lake.

BUILDER CONFIDENCE SINKS AGAIN: Increased concerns about interest rates and housing affordability caused builder confidence in the market for new single-family homes to slip three more notches to 39, a 15-year-low, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for July. "The HMI is down from its most recent cyclical high of 72 in June of last year and reflects growing builder uncertainly on the heels of reduced sales and increased cancellations related to eroding affordability as well as an ongoing withdrawal of investors/speculators from the marketplace," commented Chief Economist David Seiders of the National Association of Home Builders (NAHB). "But just as concerning to many builders is the potential for more monetary tightening by the Federal Reserve that could drive interest rates, and thereby homeownership costs, even higher. Ironically, the Fed's inflation-fighting moves have helped firm up the rental market and raise the 'owners' equivalent rent' components of the core inflation measures that the Fed is seeking to contain." With the seasonally adjusted index, any number over 50 indicates that more builders view sales conditions as good than poor. "In terms of historical comparison, the HMI's movement is essentially in line with readings from the 1994-95 period, when the Federal Reserve tightened monetary policy and a fairly orderly cooling-down process occurred in the nation's housing markets," Seiders continued. "That is what our forecasts anticipate happening in the current period, provided the downside risks of rising interest rates and a bail-out by investors/speculators do not become too pronounced. With respect to interest rates, we expect the Federal Reserve to maintain the current 5.25 percent target for the federal funds rate for some time, and we're projecting only modest increases in long-term interest rates from current levels."

FAIRFAX SUPERVISORS END HIATUS FOR ZONING CHANGE: The Board of Supervisors approved new rules last week to satisfy the court and homeowners that will allow the limited approval of variances to resume after a two-year hiatus, according to the Washington Post. The new system, approved unanimously, allows homeowners to seek a special permit or exception from the Board of Zoning Appeals. The size of a house can grow up to 150 percent if the expansion cannot be completed within the neighborhood's limits on setbacks and lot lines. The renovation cannot, however, raze more than half of the existing house. Rules on setbacks and lot lines vary among neighborhoods and depend on the density allowed. Planning and zoning officials devised the new system after 18 months of community meetings.

BASH-AND-BUILD IS WHAT THEY CALL THEM IN NEW JERSEY: In Colorado they're called "scrape offs." Here, they're "teardowns." An "orgy of irrational destruction" is how Richard Moe, president of the National Trust for Historic Preservation, characterized the trend in a speech before the Commonwealth Club of California, says Realtor magazine. The practice of demolishing an existing home to make way for a much larger one on the same lot is the "biggest threat to America's older neighborhoods since the heyday of urban renewal and interstate highway construction," Moe declared. "From 19th-century Victorians to 1920s bungalows and 1950s Eichlers, the older houses that grace our communities are valuable historical documents in brick and wood, steel and glass. Without proper safeguards, historic neighborhoods will lose the identities that drew residents to put down roots in the first place." In the Chicago suburb of Kenilworth, Ill., 50 of the town's early 20th-century homes, many designed by notable architects such as D. H. Burnham, have been demolished. In the Dallas communities of Highland Park and University Park, more than 1,000 historic homes have been replaced, and in Palo Alto and Menlo Park, Calif., more than 450 older homes were torn down. Even classic Modernist homes, many the work of prominent architects, have been under siege in New Canaan, Conn. For communities, effective strategies to slow the teardown trend include set back requirements, open space standards, and local ordinances requiring owners to get permission before demolishing or altering older or historic builders. Cities as diverse as Atlanta, Chevy Chase, Md., and Palo Alto, Calif., have adopted moratorium measures to give civic leaders time to assess their land-use and zoning practices.

AFFORDABLE HOUSING FACILITATED IN MONTGOMERY COUNTRY: Officials took steps to address the scarcity of affordable housing by trying to make it easier for middle-class workers to buy and rent homes in Maryland's largest jurisdiction, reports the Washington Post. Unlike past programs that have targeted the county's poorest residents, the latest initiative is aimed at helping workers such as teachers, firefighters and county employees who are increasingly being priced out of the housing market in one of the nation's wealthiest suburbs. The measure, passed unanimously by the County Council, would lead to the construction of as many as 2,500 units over 20-30 years in urban areas surrounding Metro stations, officials said.

MONTHLY PAYMENTS WORRY MANY AMERICANS: One out of three worries that rising monthly payments - especially property taxes and energy costs - will force them to sell their home and buy a less expensive one, according to a study by the National Association of Realtors (NAR). According to the study, high real estate taxes are most prevalent in states with high home prices and also in states such as New Hampshire that don't have a state income tax. New Jersey, with an average real estate tax deduction of $6,000, was the highest, followed by New York ($5,181), New Hampshire ($4,830), Connecticut ($4,769) and Texas ($4,501). Soaring energy costs affect an even wider swath of home owners. According to estimates by the Energy Information Administration, from February 2005 to February 2006, the cost of electricity was up 12 percent; natural gas, up 28 percent; and home heating oil, up 25 percent. Six in 10 of the survey's respondents said that high property taxes and rising energy costs could cause them to sell their home. Nearly four in 10 were worried about rising home interest rates. Three in 10 were worried that they or members of their family may have their home repossessed because they are unable to pay rising monthly mortgage payments. More than 20 percent of respondents reported not seeing friends and family, not being involved in neighborhood, missing out on promotions, lack of productivity and missing out on vacations because they have to work too much to pay for their home or they don't have the money because of high home costs.

THERE'S NO CONCEALING THE STEADINESS OF THIS MARKET: Much of the real estate near St. Petersburg, Fla., has been selling slowly, but there's one niche hasn't been hit by the slowdown: nudist resort housing, according to the St. Petersburg Times in Realtor magazine. Paradise Lakes nudist resort put 39 new 1,167-square-foot condominiums up for sale late last year for $200,000 each. The units aren't scheduled for completion until October, but all 36 are sold. Property at the Oasis, a 28-home gated community for those who prefer life in the buff, doesn't turn over often. In the last 12 months only one home has changed hands - an 1,800-SF property sold for $360,000. "The slowdown really didn't worry us," said Joe Lettelleir, Paradise Lakes' owner. "We are fortunate that we are somewhat insulated from the mainstream market." Insulated by what, he didn't say.

FORT COLLINS TOPS THE LIST, COLUMBIA/ELLICOTT CITY ARE 4TH: On its annual "Best Places to Live " list, Money magazine awarded the No. 1 ranking to Fort Collins, Colo. for its city offerings but suburban feel, good schools, plenty of parks and open space and a solid economic base with large employers like Colorado State University and Hewlett-Packard, observes the Wall Street Journal. However, this town made the news in 1997 when a flash flood derailed a train, ravaged two trailer parks and killed five people. Other towns making the top 10 (Nos. 2 to 10, in order) are: Naperville, Ill.; Sugar Land, Texas; Columbia/Ellicott City, Md.; Cary, N.C.; Overland Park, Kan.; Scottsdale, Ariz.; Boise, Idaho; Fairfield, Conn.; and Eden, Prairie, Minn.

MORTGAGE VOLUME DECLINES FOR THE WEEK ENDED JULY 14: It decreased by 4.6 percent on a seasonally adjusted basis from one week earlier, says the Mortgage Bankers Association. On an unadjusted basis, volume increased 36.4 percent compared with the previous week, which included Independence Day, but fell 31.3 percent compared with the same week one year earlier. Seasonally adjusted, purchase applications dipped 6.2 percent from the previous week, and refinancings went down by 1.6 percent. The refinance share of mortgage activity increased to 35.0 percent of total applications from 34.0 percent the previous week, while the adjustable-rate mortgage (ARM) share edged up to 29.0 percent from 28.7.

NEW ENGLAND EXPERIENCES DISTINCT CHILL IN HOUSING MARKET: A persistent exodus of residents and a stagnant economy across the region are depressing home sales, the Wall Street Journal reports. The real-estate landscape in New England is diverse, of course. Even so, sales volume across New England fell sharply in the first five months of the year, with the region's biggest states posting broad declines. In Massachusetts, single-family-home sales fell 9.3 percent through May compared with the same period a year earlier, according to figures from Warren Group, a Boston real-estate news publisher that compiles housing statistics. Sales in the Cape Cod and Worcester areas saw steep drop-offs, 17.8 percent and 12.5 percent respectively. In Connecticut, sales volume fell 11 percent in the first five months of the year compared with the same period a year earlier, Warren Group reports. Fairfield County - home to pricey towns such as Greenwich, New Canaan and Westport - saw a 17 percent sales drop compared with the same 2005 period. The factors behind New England's slowdown are complicated. For starters, its economy appears to be stalling, researchers say, at a time when the country as a whole maintains a relatively strong economic outlook. A recent report issued by the New England Economic Partnership cites continued weakening in the manufacturing, leisure and hospitality industries, three of the region's important economic engines, through 2010, resulting in slightly higher unemployment numbers. Growth in total employment is expected to average 0.9 percent per year, as opposed to the national average of 1.3 percent over the forecast period. Meanwhile, the pool of potential home-buyers in the region is "falling like a stone," says New Hampshire-based demographer Peter Francese. He cites U.S. Census Bureau data showing almost 200,000 residents between 25 and 44 years of age left the region between 2000 and 2004. All six New England states show declines in that category, with Maine, Vermont and Connecticut far outpacing the national average. No wonder the real-estate scene in New England - where home prices climbed at least twice as fast as household income during the run-up - is frosty. The population flight "weighs on the region's economy and housing market," says Mark Zandi, an economist with Moody's Economy.com. The collapse in housing affordability, he says, has driven out first-time home-buyers.

WHILE DOWN SINCE MAY, FORECLOSURES ARE UP OVER 2005: The number of U.S. properties entering the foreclosure process dipped in June from the previous month but were considerably higher than a year ago, according to an industry report, notes Inman News. A total of 88,195 properties entered some stage of foreclosure in June, down 5 percent from one month earlier, but the sum was 17 percent above the June 2005 level, according to RealtyTrac's June foreclosure market report. The report shows a June national foreclosure rate of one foreclosure filing for every 1,311 U.S. households. "New U.S. foreclosures dropped to their lowest level of the year in June, despite some of the sensational and misleading figures that we've seen reported recently," said James J. Saccacio, chief executive officer of RealtyTrac. "We think it's irresponsible to present falsely inflated numbers to the media for commercial gain as we've seen happen recently. The fact is that most states, with the notable exception of California, Ohio and Nevada, reported decreased numbers of foreclosure filings in June."

SOME BABY-BOOMERS WEARY OF BEING LANDLORDS: As investors in apartments, some are plain tired of the hassle of fixing leaky faucets and responding to other tenant complaints. The Wall Street Journal says they are starting to sell these investments as they get closer to retirement. In a survey conducted for the newspaper, Marrcus & Millichap found that its apartment-investor clients who have recently sold their assets plan to move 59 percent of that equity to other properties, investments and cash. The results are based on an analysis of 700 apartment transactions ranging from $1 million to $10 million in the 12 months ended May 31. Harvey Green, chief executive officer of the Encino, Calif., real-estate investment brokerage firm, says the overwhelming majority of its private investor base is 50 and older. Many bought their properties between 1990 and 2000. It took awhile to build up equity because of the real-estate downturn of 1991 to 1993 and the slow recovery in the following years. As a result, many held on to their properties longer than they originally expected, Green adds. In recent years, however, apartment investors began to experience tremendous equity growth. The median price per unit of apartments in the U.S. rose 87 percent to $112,000 from 2000 to 2006. "A number of them found that they were 10 years older and had a much larger tax liability because of the tremendous amount of appreciation," Green says. "Now, they are thinking of the tax impact and coming up with exit strategies." They are also just looking for less-intensive investments. In addition to myriad tenants' service complaints, frequent apartment turnover requires repeated and expensive painting, cleaning and carpeting. Some investors who are cashing out "are more passive in terms of management," Green says. They are seeking stable, long-term cash flow and not necessarily as much equity buildup.

MORTGAGE RATES TURN UP AGAIN: The 30-year fixed-rate mortgage (FRM) averaged 6.80 percent for the week, up from last week's 6.74 percent and last year's 5.73 percent, according to Freddie Mac. The last time the 30-year FRM was higher was the week ending May 24, 2002, when it was 6.81 percent. The 15-year FRM this week was 6.41 percent, up from 6.37 percent the previous week and 5.32 percent a year ago. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.36 percent, up from last week, when the average was 6.33 percent. A year ago, the five-year ARM was 5.26 percent. One-year Treasury-indexed ARMs were 5.80 percent this week, up from 5.75 percent. At this time last year, they were 4.42 percent. "Financial markets were a bit jittery after core Consumer Price Index (CPI) figures for June were released that indicated inflation might still be a potential threat," said Frank Nothaft, Freddie Mac vice president and chief economist. "If this were the case, the Fed would be more inclined to continue to raise rates this year. Mortgage rates reflected that thinking and rose accordingly. However, Fed Chief Bernanke, in his semi-annual speech to Congress, hinted that another rise in overnight lending rates might not be imminent and financial markets breathed a collective sigh of relief, which should be reflected in the results of next week's survey."

RESTON BUILDER REPORTS DECLINING SALES: NVR, the Reston home building company, said that its profit rose in the second quarter, according to the Washington Post. The company, parent of Ryan Homes and NVHomes, said orders for new homes in its 23 major markets were down 13 percent in the quarter compared with a year ago and declined even more markedly in the Washington area, where they dropped 27 percent. Share prices for home building stocks as a group have fallen 50 percent in the past 12 months, according to the Dow Jones U.S. Home Construction Index. Also acknowledging fewer home orders was D.R. Horton Inc., one of the nation's largest home builders, which said they had fallen 4.4 percent in its fiscal third quarter, less sharply than at NVR. M.D.C. Holdings Inc. of Denver, which operates in the Washington area and elsewhere under the name Richmond American Homes, reported that home orders were off 43 percent.

D.C. Market Update - The market is adjusting

Condos and co-ops

With inventory growing and sales slipping, prices in June have fallen below last year's levels but remain well above 2004.

There were 44.7 per cent more new listings last month than in June of 2005, with at least double-digit increases at every price point but two - $700,000-800,000, which had 19 percent fewer, to 17; and $1 million - $1.25 million, which was off 25 percent, to 6. The bulk of condos and co-ops put on the market – 669 of the 890 total – occurred between $200,000 and $600,000, with 225 of them at $200,000-300,000. By the end of the month, there remained 1,684 active listings, 275.9 percent more than at the same time last year. Some categories experienced huge triple-digit growth. The biggest was at $200,000-300,000, which shot up 480 percent! At $100,000-200,000, the increase was 456.5 percent, and it was 411.5 percent at $300,000-400,000. Consequently, supply is greater than it has been in each of the preceding 12 months.

Sales activity was down 16.9 percent on average, with most of the decline recorded between $200,000 and $700,000, where the 291 ratified contracts of a total 370 compared with 384 a year earlier. June sales were a bit below May's, above April's and below March's. For the year to date, sales volume was off 16.1 percent at most price levels with the exception of the following: 224 at $150,000-200,000, up 44.5 percent; 26 at $800,000-900,000, up 4 percent; 17 at $900,000-1 million, up 30.8 percent; and 13, unchanged at $1.25 million-$1.5 million.

The market absorbed just 18 percent of the available units, below the pallid 19 percent in May. Not surprisingly, the average price has dipped from $426,576 in 2005 to $411,398 this year. In 2004, the average was $364,460. As for the median, it has gone from $375,000 to $359,900. It was $325,000 in 2004.

Single-family homes

Supply is beginning to taper off. The number of new listings in June was only 7.4 percent higher than one year earlier in contrast to May, when there was a 23 percent gain over the previous May. Surprisingly, there were in June actual double-digit declines ranging from 8.3 percent ($1.25 million-1.5 million) to 72.7 percent (under $150,000). Other price levels posting fewer homes added to the market were at $150,000-200,000 (down 65 percent to 7); $600,000-700,000 (down 12.9 percent to 74); $700,000-800,000 (down 12.5 percent to 56); and $800,000-900,000 (down 44 percent to 28). Although all increases were in the double digits, the price point with the most new listings was $1.25 milion-1.5 million, up 75 percent to 28. In all, there were 744 homes put on the market. At month's end, 1,381 homes were still seeking buyers, 109.2 percent more than in 2005 at the same time of year, when they numbered 660. At prices between $200,000 and $900,000, there were triple-digit increases up to 232.5 percent ($200,000-300,000). Above $900,000, the changes were in the solid double-digits, but June's inventory was very slightly lower than May's, the first reduction, however small, since fall into winter. By far the most supply was attributable to the 282 homes active at $400,000-500,000.

Meantime, declining sales volume at every price level but one contributed mightily to the growth in inventory. A total of 376 homes went under contract in May versus 496 in 2005, off 24.2 percent. At $1.25 million-1.5 million, there was a gain of 21.4 percent in sales activity, to 17. The $300,000-400,000 level was essentially unchanged, with a 1.1 percent decline to 86 from 87. Every other price level went down in the moderate double digits, and June sales were lower than they were all spring and most of the fall. They averaged 19 percent lower for the year to date, to 2,238, than in 2005. Homes listed at more than $1 million displayed the most stability, either slightly rising in sales volume or edging down a little. The absorption rate has slid from a low 22.3 percent in May to a lower 21 percent in June, but high-end sales apparently boosted the average price slightly, from $628,179 in 2005 to $646,817. Yet the median has slipped from $489,000 to $486,770.

What it all means

The markets for apartments and single-family homes clearly are diverging. It seems as though single-family home sales and inventory figures may be showing the earliest signs of a slight move toward normal equilibrium. As for condos and co-ops, that market is some distance from balance, as supply keeps climbing and sales fail to recover. In general, buyers have taken to the sidelines, waiting to see whether prices will continue to fall and whether the risk of interest going ever higher is worth taking. The rental market is tightening up in the region, and cautious buyers are the chief reason. This market has firmly entered a time of wait and see.

Transitional neighborhoods - Plus ça change

This screed is not about good neighborhoods or bad neighborhoods. It's about neighborhoods that have gained in popularity beyond the hottest neighborhoods as prices escalate. Is it not logical that buyers seeking value will venture into territories with the potential to enjoy the halo effect of the areas they adjoin? Where blocks may have been burdened with neglected properties, perhaps some that have been abandoned, first one house is gut renovated, then others. In neighborhoods with few amenities, an old rental building is converted to luxury condos and there follow a spiffy new restaurant and a new fitness club. Inconvenient public transportation may be bolstered by a new Metro stop as well, making a less accessible area suddenly prime.

Call the process gentrification or transition, these are neighborhoods undergoing change. The question for buyers and developers always is whether the transition from outré to outtasight will ever be complete. Will those neighborhoods progress or regress?

In markets with falling prices, guess where the prices fall quickest and farthest. Yes, it's in transitional neighborhoods. The reason hinges on risk. In fully transformed neighborhoods, the assumption can be made that their popularity will continue and that any investment will be safe for a time, at least relatively speaking. As buyers hang back and interest rates rise, the cautious money will flow to the neighborhoods with futures that are pretty much beyond question. That's how it has been in the past, and the past is bound to be precedent. (Of course, neighborhood popularity always ebbs and flows but generally in decades-long cycles.)

What prompts this discussion is a new condominium now marketed as being situated in the U Street Corridor. Truth be told, the building is two ugly blocks north of U Street and four or five blocks east of the trendiest boutiques and restaurants. The open question is whether the heat of U Street action will cause the blocks dominated by that condominium and one being constructed across the street ever to catch fire. The company trying to unload the apartments is predicting five years – five! – for the change to occur. Is it because of the length of the span, or the uncertainty of its duration, that prices are generally lower than in some other parts of the District? Either way, it's the gamble that provides the value for buyers who are willing to take a chance on transition or who are indifferent to the current paucity of trendiness at their front doors.

For apartments as small as a 580-SF junior one bedroom to as big as a 1,500-SF three bedroom, prices per square foot run from about $580 to $660, depending on views, level and upgrades. Only the biggest and most expensive units will have much appeal – for example, the three-bedroom fifth-floor condo with a view of the Washington monument for $549,900. A two-bedroom on the ground floor looks onto an alley and faces a loading dock, but it's listed at just $469,900 with a $352 monthly fee. A one-bedroom being offered by an investor for proportionately more than others in the building feels more like a studio, boasts views of only a courtyard and has a single closet besides a slim hall closet. It is listed at a reduced price of $359,999, which still is too high by $20,000 or $30,000. All of the units have at least some hardwood floors, maple cabinetry, marble countertops, stainless appliances, washer/dryers and garage parking.

Time will tell, but the forthcoming statistics on the second quarter will doubtless provide illuminating insights into price changes by zip codes. Look for the numbers in a month or more, after they are issued by Metropolitan Regional Information Systems.

Following are some properties offered by other real estate agents and seen in the past week:

• A lovely detached single-family home in 16th Street Heights. With four bedrooms sharing one bath on the second floor and a finished attic, this four-square house also has an inviting front porch across the front, pleasant rear yard and deck, a parking area and a finished basement with ill-used space, a half bath and low ceilings. The kitchen is well designed with the exception of the center island, which seems homemade. On the market for a month, this 3,300-SF home is overpriced by approximately $25,000.
  
• In Cleveland Park, a poorly maintained one-bedroom co-op without parking. Although it has an eat-in kitchen with only a semblance of modernity, plus a solarium and an ineffable charm, this 750-SF apartment in a 1928 building does not impress. It does not have central air conditioning, and it will be the rare buyer, indeed, who is taken with the mural of blue sky and clouds in the entry hall. But the price of $319,000 from $330,000 with a $500 monthly fee half a block from the Metro is not half bad.
  
• A winning two-bedroom, two-bath condo that is agreeably dominated by a 700-SF wraparound terrace in the heart of Bethesda. This handsome apartment has hardwood floors, new carpeting, Italian marble foyer, remodeled spacious kitchen and garage parking. But room size is affected, not severely, by the presence of the terrace. Among other things, this secure building offers guest parking, a gym and a storage room. Listed at $950,000 with a $572 monthly fee that excludes utilities, the unit was on the market for a bit more than two weeks before receiving an offer this week.
  
• In Adams Morgan, a condo with parking in a three-year-old building. The unit's virtues include 1,203 square feet and 14-foot ceilings. Unfortunately, they are that high because the apartment is way below grade, and the windows in what are called the two bedrooms would be reachable only with a ladder – meaning that technically, they are not bedrooms. Still, it's a decent amount of room for the money, reduced from $589,900 when it was listed in April to $539,900 now, plus $5,500 in closing help, with a $281 monthly fee that covers nothing of importance.
  
• A Chevy Chase, D.C. red-brick colonial the owner of which is overly fond of vivid contrasting colors such as mauve and purple in the dining room. The 1948 home has the usual three bedrooms and one dated hall bath on the second floor, a nicely finished attic, a second bath off a fourth bedroom/office on the main floor, a merely serviceable kitchen with laminate counters, an unfinished basement, sunroom, pleasant rear yard with deck, carpeting in the living room, which has a fireplace, central air conditioning and a one-car garage. The offering price of $719,000 is appropriate.
  
• South of Logan Circle, a handsome two-bedroom, two-bath condo with three exposures, modern kitchen with both a Viking and a SubZero, cherry floors, crown molding, built-in bookshelves, gas fireplace, custom sound system, decent closet space and a washer/dryer. The 1,000-SF apartment, which is up on the third floor in a boutique building, looks onto other buildings. It is listed a bit too high at $549,000 with a $325 monthly fee. And on the first floor, another two-bedroom apartment with perhaps 855 square feet and less drama. With built-ins and a fireplace, it is on the market by the owner for too much at $465,000 with a $270 monthly fee.
  
• An oppressive brick colonial on a busy thoroughfare in the Glenbrook Village neighborhood of Bethesda. This 1946 home with three bedrooms and a hall bath, a dank basement, dated kitchen and a driveway that challenges oncoming traffic to hit the vehicle backing out has been decorated with too much heavy, dark furniture and painted with colors only Dracula would find amusing. That its most attractive feature is the fish pond and fountain near the patio in the rear yard tells you all need to know. The property's proximity to the National Institutes for Health is a bonus as well. This ugly duckling without central air conditioning will never sell at the offering price of $725,000.
  
• In Dupont Circle, a stylish 1941 detached home with two bedrooms, two and a half baths, impressive landscaping, a narrow galley kitchen with cabinets that could be taller and parking for one car. All the rooms have been improved beautifully, including skylight, extra closet space and expensive details. The wow factor may attract a buyer willing to pay the $879,000 asking price, but this house on just two levels is not worth that much money.
  
• A 1926 semi-detached Tudor in 16th Street Heights a short distance from Carter Barron Park. This 2,500-SF house on three finished levels features a new kitchen, an oversize yard and, upstairs, three smallish bedrooms and two baths. The master bedroom suite is appealing and offers good closets, and the lower level with recreation space, a third full bath and partial kitchen is mostly above ground. On a street with a majority of single-family houses, this property is attached to three others in a triplex arrangement. Its price of $669,000 is within reason.
  
• In Dupont Circle, a one-bedroom apartment of perhaps 600 square feet. It has a small dated galley kitchen and an owner whose favorite paint colors are pumpkin and blue. There are a wood-burning fireplace, high-end washer/dryer, extra storage and pet-friendly neighbors. Such as they are, views are from the short end of a U-shaped courtyard. This apartment is somewhat overpriced at $369,000 with a $189 monthly fee.
  
• On Capitol Hill, a paucity of properties priced under $450,000 in decent condition with (preferably) three bedrooms and some proximity to Metro. Forget central air conditioning. The first prospect, on an improving stretch of a major avenue within sight of RFK Stadium, is a classic '20s front-porch row with three bedrooms and old bath upstairs and a partially renovated basement with full bath. Decent bones, but the exterior condition, outdated fixtures and elderly possessions strewn everywhere say $450,000 is way too high. This one will sit for a while longer in this market. Next up on a numbered street around the corner, a smaller (only two bedrooms) but nicely done 20s row with roof problems priced at $429,000. It's very sweet, but the lack of a third bedroom is a deterrent. Finally, a 1900 rowhouse with a one-bedroom English basement rental and three bedrooms and one bath on two floors above. One step into the lower level and you are assaulted by the smell of mold and the squish of water-logged carpet - no need to go any further. But its price (down to $499,000 from $625,000) and days on the market (140 and counting) are illustrative of transitional neighborhood issues as well as the danger of overpricing.
  
• A Kalorama mansion worthy of its description. Built in 1908, the stunningly renovated house features five bedrooms and three and a half baths, including the in-law suite, period details such as oversized moldings, stone fireplace mantels, parquet hardwood floors (the good kind), a knockout eat-in kitchen, stupendous master suite, outdoor patio with little in the way of garden space, rooftop deck, two-car attached garage and a wonderful location. The price: $3.495 million.
  
• In Georgetown, a two-bedroom bayfront dollhouse with cozy basement family room or in-law suite, a kitchen that is only halfway there (enjoying the only, and thus wasted, direct access to a little garden), two bedrooms upstairs and a single but pretty bath, the second one being downstairs. Offered at $1.295 million, this place is significantly overpriced, especially since an essential parking space is absent.

Items of Interest - July 15, 2006

WHEN DID YOU LAST YEAR ABOUT A HOUSING CRASH: Housing sales and starts are down from last year's peaks, will continue to decline in 2007 and may do so into 2008, economists at Fannie Mae, Freddie Mac and the National Association of Home Builders concurred this week, says Inman News. Although the housing market is slowing down with the economy, there are no signs of recession or a bursting bubble, they maintained. A slowdown in the economy could cushion the decline in the housing market by bringing an end to a series of 17 quarter-point, short-term interest-rate hikes by the Federal Reserve, the economists said. While housing prices aren't expected to appreciate as rapidly as they did at the height of the 2002-2005 boom, overall they're not expected to fall either. "Though the direction of housing activity is unambiguously heading cooler, we remain confident that the climate is still temperate and that 2006 will finish as the third strongest year ever for the national housing market," Freddie Mac's office of the chief economist concluded in its semi-annual economic outlook. Added David Seiders, chief economist at the National Association of Home Builders (NAHB): "We're going from unsustainable heat in 2005 . . . to a more sustainable pace of economic growth." Freddie Mac's chief economist, Frank Nothaft, acknowledged that some homeowners with adjustable-rate mortgages could be vulnerable to rising interest rates but noted that mortgage debt is largely protected by the value of housing stock, with homeowners continuing to build equity. Freddie Mac's economists said rising mortgage interest rates and waning demand for housing will slow the appreciation of home values to an annual rate of 7 percent in 2006 and 6.2 percent in 2007. The top economists at Freddie Mac, Freddie Mae and the NAHB all expect interest rates on a 30-year fixed rate mortgage will average 6.8 percent for the rest of the year.

AND NAR FORECASTS A MARKET AT OR BELOW CURRENT LEVELS: Home sales are projected to ease modestly but should stay within a relatively narrow range during the balance of the year, according to the National Association of Realtors. "The major housing indicators have been moving up and down within a reasonable range, which means the market should even-out just below present levels," says David Lereah, NAR's chief economist. "At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate. We should see home sales rise and fall month to month, but don't look for any big shifts one way or the other." He expects existing-home sales to decline 6.7 percent from 7.08 million last year. That would still be the third-highest level on record. New-home sales should fall 12.8 percent from 1.28 million, Lereah projects, adding that housing starts could decline 6.8 percent to 1.93 million. The 30-year fixed-rate mortgage is likely to reach 7 percent by the end of the year. "The uptick in interest rates has been slowing home sales," Lereah says. "We remain concerned about the potential impact of higher interest rates in some of the more expensive areas of the country." The national median existing-home price for all housing types is expected to rise 5.3 percent to $231,300 in 2006. With more construction in lower-cost regions as well as price incentives that are helping to clear unsold inventory, the median new-home price should increase 1 percent this year to $243,300.

QUALITY IS QUESTIONED FOR CONSTRUCTION OF NEW HOMES: Quality Built, a risk management services firm in San Diego, studied new homes and condos in 27 states that were constructed by more than 900 different builders, says Realty Times. The company commonly found window flashing problems, improper roofing, missing structural hardware and other defects to be most prevalent in the eastern and southern states. Data were gathered on 20,867 single-family and 11,128 multi-family homes inspected in 2005. Among all homes, the three most common construction risks discovered in single-family homes were in the building envelope (41 percent), a defect that could lead to moisture intrusion and mold; framing and structural elements (34 percent), which can affect a building's integrity during rough weather conditions or earthquakes; and in the plumbing and electrical systems (8 percent). Using up-close, multi-family home inspections, Quality Built said life-safety defects appeared 29 percent of the time; framing and structural problems were in 26 percent of the homes; and building envelope issues existed in 23 percent of homes. The finding means some homes likely had two or more of these defects. The single highest risk problems identified in single-family homes included improper framing around windows and doors (a structural issue), building paper and house wrap installation flaws (moisture intrusion and energy loss), and missing structural connections, a major hazard.

NATIVE AMERICAN HOME OWNERSHIP IS INCREASING: Home purchase loans to Native Americans roughly tripled to 45,375 in 2004, up from 14,844 the previous year, according to the latest data from the Home Mortgage Disclosure Act, says New Mexico Business Daily in Realtor magazine. Although the numbers do not distinguish between financing arranged within tribal communities as opposed to outside of reservations, the National American Indian Housing Council suspects that Native communities likely are not experiencing "proportionally higher gains." Native Americans still lag the nation in terms of home ownership. According to Fannie Mae, 41 percent of reservation households are homeowners, significantly lower than the national rate of 68 percent. Home Mortgage Disclosure Act statistics show that more than half of American Indian mortgage applicants were turned down for financing in 2004, compared with 42 percent of prospective white borrowers.

YOU TOO CAN BE A HAPPY GRIM REAPER: Buying properties from the estate of a deceased person can be a great opportunity for a real estate professional looking for bargain investments, suggests Inman News. Often these properties are sold by the probate court in order to pay the deceased's debts or to settle an estate among several out-of-town heirs. They are a bargain because the local real estate market often doesn't get wind of their availability, according to James G. Banks, author of "Creating Wealth Through Probate." Find probate properties by reading obituary and legal notices and by checking probate court public files, Inman counsels, saying the best deal is to buy from estate executors, often at big discount because they want a quick, easy sale. Warning: Generally, the property is sold as is because the executor is in no position to know the condition of the property. If there turn out to be defects, the buyer has little recourse.

FORECLOSURES CAN BE ANOTHER ROUTE TO A BARGAIN: Rising interest rates and a cooling housing market are whetting the appetite of real-estate bargain hunters and fueling interest in Web sites that list homes in, or near, foreclosure, notes the Wall Street Journal. Economists expect delinquencies and foreclosures to increase from today's historically low levels. Nationwide, the percentage of home loans on which payments were past due fell to 4.41 percent on a seasonally adjusted basis in the first quarter after rising to 4.70 percent in the fourth quarter of 2005, according to the Mortgage Bankers Association. A variety of Web sites have sprung up to cater to home buyers and investors looking to purchase properties in or nearing foreclosure. You can browse the Web sites at no charge, but getting complete access requires a weekly or monthly fee, typically $40 to $50 a month. The federal government operates its own site, www.homesales.gov, which is free and provides information about foreclosed properties being sold by the Federal Housing Administration, the Veterans Administration and the U.S. Department of Agriculture. The Journal says novices should approach the foreclosure process - and the Web sites that sell foreclosure listings - with care. Finding a good buy on a foreclosed house requires hard work and can carry significant risks. Critics say that Web sites selling foreclosure listings often contain outdated information or listings on houses that aren't ready for sale; some try to direct would-be buyers to partners with whom they have a financial relationship or to seminars and other products.

A TIDY POTENTIAL GAIN FOR BOB NEWHART: He and his wife Virginia are selling their French country home in Bel Air, Calif. For $22 million, according to the Los Angeles Times, reports the Residential Specialist magazine. The couple bought the home for $4.2 million in 1990; it has 92,000 square feet, encompassing five bedrooms, six and a half baths, five fireplaces, terraces, gardens, a pool and an executive office. And that ain't no laughing matter.

HOME SALES IN NEW ORLEANS HAVE BEEN SURGING: In a market spurred by speculators and bargain hunters, an extraordinarily large number of houses in the flood-ravaged metropolitan area are being sold, according to real estate analysts, who say volume and sales prices exceed levels before Hurricane Katrina, according to the New York Times. The higher prices are largely owing to an increase in value in suburban areas, many of which were not heavily flooded, or in dry areas of New Orleans. But flooded houses in the city are being bought as well, often at deep discounts of as much as $50 a square foot less than they would have sold for before the hurricane. "We have a stronger housing market than before," said Wade R. Ragas, professor emeritus of finance at the University of New Orleans and the president of a local consulting firm, Real Property Associates. "There is renovation activity in every ZIP code of Orleans Parish," Dr. Ragas added, "but the strongest buying activity is, in general, closest to where it did not flood or where it was under two feet of water." Across the nine-parish region that includes New Orleans, 7,506 single-family homes were sold between January and the end of last month, compared with 6,449 in the same period last year, according to statistics from the New Orleans Metropolitan Association of Realtors and the Gulf South Real Estate Information Network. The average price so far this year is $221,244, compared with $193,097 in the same period last year.

THE SAN DIEGO UNION-TRIBUNE HAS AGENTS' NUMBER: From the newspaper come these pearls from classified advertising: "As you enter through the gate, up the gentle meandering drive, you know you have reached a special place;" and "Picture yourself at the center of downtown excitement. Catching afternoon rays on a sun deck high above the trees. Watching the sun set over the bay;" and "Right in the heart of our dynamic city, but radiating tranquility and serenity, this expansive estate is located in a lush canyon with views of downtown and the bay." The newspaper also unearthed this gem for a property in Newton, Mass.: "HOUSE IS UNINHABITABLE AND UNSAFE TO ENTER. Get it quick before it sells." Yeah, don't waste a minute.

WHAT GOES UP COULD COME DOWN: Homeowners who are considering adding a second-floor laundry room should plan carefully: Water damage or structural problems may result if the project is done haphazardly, notes Consumer Reports in Realtor magazine. Experts say owners should hire an architect and possibly a structural engineer to plan the space to ensure that the house will support the extra weight and vibrations of a washer and dryer. To prevent water damage, the owner may want to install a floor drain and an electronic shutoff valve, which automatically stops the flow of water when it senses a leak, thus preventing floods. Also, it's smart to install dedicated electrical and gas lines. This can be the most expensive part of the job. Finally, choose appliances that are quiet and efficient. Do your research to find out which models in your price range rank highest with consumers.

MAYBE THE GRASS ISN'T GREENER: Americans are very satisfied with their neighborhoods, according to 2005 American Housing Survey microdata released by the U.S. Census Bureau and the Department of Housing and Urban Development. The survey also reveals that the median value of a new home (built in the last four years) was $236,864; monthly housing costs were $809 last year. Among the anonymous and self-reported findings were 2005 statistics on a wide range of housing topics. On a scale of 1 (worse) to 10 (best), the percentage of householders who rated their neighborhood an 8 or above (70.4 percent) was up about 1 percentage point from 2003, the last time these data were collected. The median home value rose from $140,201 in 2003 to $165,344 in 2005. The median value of a newly built home also increased over the period, from $186,939. The percentage of householders who reported crime in their neighborhoods rose from 14.6 percent in 2003 to 15.1 percent in 2005. And this vital fact: 62 percent of the nation's 6.9 million mobile homes were single-wide, with the remainder being double-wide or larger. Jealous?

KOREANS ARE FLOCKING TO U.S. REAL ESTATE INVESTMENTS: Although home sales are slowing in some U.S. cities and economists are forecasting softer price appreciation, wealthy Koreans believe now is the perfect time to buy American residential real estate, reports the Wall Street Journal. They are betting that the U.S. dollar will strengthen, causing the value of their U.S. holdings to appreciate when converted into Korean currency, and that even slower home-price appreciation in the U.S. will continue to beat returns in Korea, where high taxes on real-estate profits discourage speculation. Although there are no data for residential real estate specifically, Korean direct investment in North America in the first three months of this year was more than $570 million, nearly half the $1.27 billion total for all of last year, according to the Bank of Korea. It includes corporate investment in stocks and bonds, commercial real estate and infrastructure. "In the eyes of many Koreans, America is the safest place to invest," says Ahn Sang Moh, an agent at New Star Realty & Management in New York, a Korean-American real-estate firm with clients in Korea.

THERE MUST BE A REASON THEY CALL IT 'BLACK GOLD': The mountain getaway of Saudi Prince Bandar is up for sale for $135 million, which could set a U.S. record for a real estate transaction, according to published reports, notes the Association Press. Real estate agent Joshua Saslove told the Aspen Times for a story Tuesday that Bandar's 15-bedroom, 16-bathroom, 56,000-square foot mountain palace - complete with a racquetball court, indoor pool and outdoor water features - is up for sale because the prince is too busy to enjoy it. The property also includes several smaller homes. Bandar has been developing it since the 1980s. Bandar has been busy leading his country's security council and spending a lot of time in Washington, Saslove said. Bandar was also the Saudi ambassador to the United States from 1983 to 2005.

LOAN VOLUME HOLDS STEADY, BUT ARMS SHARE SLIDES: For the week ended July 7, the Mortgage Bankers Association says mortgage loan application volume edged up 1.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, however, activity decreased 29.1 compared with the previous week and 36.3 percent compared with the same week one year earlier. Purchase applications increased by 2.6 percent from the previous week, and refinancings declined by 1.6 percent. The refinance share of mortgage activity slipped to 34.0 percent of total applications from 35.0 percent, while the adjustable-rate mortgage (ARM) share of activity fell to 28.7 percent of total applications.

ENGINEERED DECKING MAY OR MAY NOT BE FOR YOU: The latest engineered decking materials claim to offer the rich look of a tropical hardwood deck with less maintenance and easier installation, observes the Wall Street Journal. The faux materials cost about the same as hardwoods such as ipe, cumaru (no, we couldn't make this up) and other exotic species. But some come closer than others to looking like the real thing. In the past several years, the popularity of composite decking materials - that is, those made of wood mixed with plastics or other materials - has grown. According to a survey on building materials from the National Association of Home Builders Research Center, 14 percent of products used for decking remodeling and repair in 2004 were composite material, up from 8.9 percent in 2002. Manufacturers say their new composite materials won't splinter, warp or rot. However, building experts point out most tropical hardwoods are rot and water-resistant anyway, and composites can still gray with age.

BUT WILL THERE BE ENOUGH TO GO AROUND: Take the day off Tuesday for a cooking demonstration by Tania Mercer, who will show how plants grown on the Botanic Garden terrace can be used in cooking. What could be better than sautéed nettles? She will hold forth for free from noon to 1:30 p.m., and, yes, look for her on the terrace at 245 First St. SW. Details: 202-226-8038.

INTERNET LENDER'S TACTICS ARE QUESTIONED: A lawsuit against one of the Web's premier sites to shop for a mortgage underlines the difficulty consumers can have in locating reliable financial information online, says the Wall Street Journal. The lawsuit is against Bankrate, the financial publisher behind the popular bankrate.com site that draws millions of visitors yearly through partnerships with Yahoo!, AOL and other top online companies. Bankrate provides advice, loan calculators and articles on financial topics. It supplies interest-rate data to eight of America's 10 largest newspapers, and it caters to lenders, who compete to attract borrowers by posting their deals on bankrate.com. But the company's reliability as a consumer tool is being challenged in the lawsuit filed by a former advertiser that accuses the company of allowing its Web site to become a haven for "bait-and-switch" loan pitches. Testimony and internal company documents filed with the court show Bankrate has fielded hundreds of complaints about mortgage lenders who fail to deliver the rates they advertise; one lender told a Bankrate employee a consumer would need "a direct pipeline to God" to qualify for its advertised rate. The legal battle, which began in 2002, is scheduled to come to trial this fall. Bankrate says the lawsuit is "factually and legally without merit."

RATES FALL FOR THE FIRST TIME IN FIVE WEEKS: The 30-year fixed-rate mortgage (FRM) averaged 6.74 percent, down from last week's 6.79 percent and up from last year's 5.66 percent, according to Freddie Mac. The 15-year FRM this week was 6.37 percent, down from 6.44 percent. A year ago, it averaged 5.25 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 6.33 percent this week, versus 6.39 percent last week and 5.15 percent a year ago. One-year Treasury-indexed ARMs averaged 5.75 percent this week, down from 5.83 percent last week. At this time last year, it was 4.39 percent. "June's employment report caught financial markets off guard. In response, long-term bond yields eased a bit this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Combined with the financial market's expectation of only one more rate hike by the Federal Reserve this year, upward pressure on long-term rates eases considerably. This should keep mortgage rates relatively stable for the foreseeable future."

STUDY FINDS MARYLAND HOME PRICES TOO HIGH FOR MANY: First-time home buyers who thought the cooling market would make housing in Maryland more affordable have so far been disappointed, according a study reported by the Washington Post. The study, by the Maryland Association of Realtors, found that surging home prices in the past five years outstripped more modest wage gains. That means in May, housing affordability in Maryland hit its lowest point since 2001 - a trend mirrored throughout the region. In May, the typical first-time buyer in Maryland earned $35,159, or 42.6 percent of the income necessary to buy a starter home costing $267,753. It has become more difficult to afford that home because the median salary climbed only 5 percent between May 2005 and May 2006, but the median home price rose 10 percent, according to the study. In 2001, the typical first-time buyer had 80 percent of the income necessary to buy a starter home, mostly because prices were so much lower, the trade group said. Then came the sharp run-up in prices, spawned by surging demand and an increase in nontraditional mortgages that allow people to stretch their budgets.

TIPTOE THROUGH THE LILLIES: More than 75 varieties of them, as well as lotuses, will be blooming at the annual Waterlily Festival at Kenilworth Park and Aquatic Gardens on Saturday. Running 11 a.m. to 2 p.m. at 1550 Anacostia Ave. NE, the free event also features Asian dance troupes, puppet shoes, nature videos, tours and workshops. More info: 202-426-6905.