Loudoun Foreclosure Property Auctions Not a Hit With Buyers

Though Loudoun foreclosure/bank-owned properties are selling like hot cakes on the open market, foreclosure auctions are like ghost-towns. Few attend foreclosure auctions and the ones that do attend rarely make a bid.

Why? For the same reason regular properties that are up for sale just sit on the market…they're overpriced. And even if the price seems right, people are skeptical about bidding because they can't always inspect the property in person prior to bidding.

There's a great article in the Washington Business Journal that helps explain the situation in more detail. Here's an excerpt:

Many investors, who make up the bulk of active bidders at auctions, say the banks are asking too much for the homes. So far this year, 748,381 homes—or 46% of the foreclosures—have gone into the possession of the banks as real-estate owned, or REOs, because no bidders were interested in them at auction.

Individual buyers looking for deals at auctions will likely not find one, says Foreclosures.com President Alexis McGee. Making it harder for individuals: it is generally not possible to examine the properties in person before buying them and buyers must have money with them to make a down payment on the home.

Back in April, ABC7 News (WJLA) interviewed me for a story on this very subject. Funny thing is, the same is true now as it was then.

The only good thing is that banks are starting to "get it" when it comes to how they price their bank-owned properties on the open market, which is evident by the increasingly high number of bank-owned property sales in Loudoun County and the DC metro area in general.

Demand For Distressed Properties Outpaces Supply For First Time

The foreclosure/bank-owned and short-sale portion of the Loudoun County real estate market has been steadily improving over the last 6 months. But last month brought some of the best news we've had in a long time - demand outpaced supply!

For the first time since the market turned, there have been more distressed properties sell than new ones come on the market in a one month period. August had 326 distressed properties sell versus 306 new ones come on the market.

Here's a graph showing new listings (supply) versus solds (buyer demand) for 2008 (click to enlarge):

 

Notice that in January, the number of new listings was more than double the amount of solds. Since then, the number of solds has been steadily increasing. The number of solds in August was more than double those in January.

As for inventory, there was a spike in new distressed property listings last spring, but it's back down to the 300 per month level.

This is very good news for not only the foreclosure/bank-owned and short-sale property market, but the Loudoun County real estate market in general. The key ingredients to a stabilization of the market is lower inventory and higher demand, which is what we're seeing across the board in Loudoun County.

Related Articles

No "Summer Slump" For Loudoun County Real Estate In 2008

Loudoun County Real Estate Market Statistics - 1st Half 2008 vs 2007

Loudoun Real Estate Inventory Levels Well Below National Average

In Case You Didn’t Know About LoudounScene.com…

In case some of you did not know, I also write a sister blog - LoudounScene.com - that covers the general Loudoun County real estate scene, market statistics and more. If you haven't checked it out yet, please do so when you have a moment. Would love to hear your feedback and comments about either/both.

Thanks!

Danilo

A Must Read For Loudoun County Real Estate Investors

If you’re a real estate investor or home buyer looking for investment opportunities in Loudoun County, you should check out the post I wrote earlier today regarding Sterling Park over at LoudounScene.com. It talks about how prices in Sterling Park are at rock bottom compared to several years ago and how Loudoun County is campaigning to clean-up the area - a winning long-term real estate investment formula.

In addition, the FHA is lifting it’s 90-day waiting period on "flipped" properties meaning you have more immediate access to a greater buyer pool than before (click here to read more about that).

Loudoun County Foreclosure/Bank-Owned and Short-Sale Property Sales Up 300 Percent

The number of foreclosure/bank-owned and short-sale property sales in Loudoun County in 2008 is up 300 percent over 2007.

• 1134 of the total sales in Loudoun County from January 1, 2008 through May 31, 2008 were foreclosure/bank-owned or short-sale properties
• 341 of the total sales in Loudoun County from January 1, 2007 through May 31, 2007 were foreclosure/bank-owned or short-sale properties

Leading the way in sales of foreclosure/bank-owned and short-sale properties is Sterling Park due to the abundance of those types of properties.

How To Find Out About Some Of The Best Deals In Loudoun County

Up until recently, some of the best deals in Loudoun County were being posted here on this blog. Many of you emailed or called asking for more information about the properties or to see them in person. Well, unfortunately, I can no longer continue posting those. Based on rules and regulations that govern all Realtors, posting about a property that is listed by another agent/broker is considered "advertising" and is not allowed.

But, there is a solution! You can receive my top picks of properties for sale in Loudoun County via email. If you request the information to be sent to you, then it’s no longer "advertising".

Here’s how you do it…

Insert your email address and first name into the form below and then click "Submit". A thank you page will pop-up stating that you will receive a confirmation email shortly. Just click on the link in the confirmation email and you will start receiving the best deals in Loudoun County immediately.

Please note…your email address, name or personal information will never be sold or provided to third parties. You will not receive any emails other than the best deals in Loudoun County. You will not be harrassed by sales emails or emails trying to solicit your business. It’s completely up to you if/when you wish to initiate contact with me.

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