Decrease in Loudoun County Short-Sale, Foreclosure/Bank-Owned Properties For Sale

The number of Loudoun County short-sale and foreclosure/bank-owned properties for sale has decreased significantly over the past few years. This is an important fact because it speaks to the health of the overall real estate market in Loudoun County. As you may know, the less the number and percentage of short-sale and foreclosure/bank-owned properties for sale, the better the real estate market typically is in general.

So here are the numbers…

• The number of new short-sales listings in Loudoun County went down by 42% from 2009 to 2011
• The number of foreclosure/bank-owned properties in Loudoun County went down by 53% during the same time.

And here it is broken down by year…

2009

• Short-sales made up 19.2% of all properties listed for sale in Loudoun County
• Foreclosure/bank-owned properties made up 9.6% of all properties listed for sale in Loudoun County

2010

• Short-sales made up 14.6% of all properties listed for sale in Loudoun County
• Foreclosure/bank-owned properties made up 6.3% off all properties listed for sale in Loudoun County

2011

• Short-sales made up 11.1% of all properties listed for sale in Loudoun County
• Foreclosure/bank-owned properties made up 4.5% of all properties listed for sale in Loudoun County

These are refreshing numbers to see after the chaos of a market we’ve had in the latter part of the last decade. These numbers and trends along with other local real estate market statistics and “street reports” backs-up the sentiment that the worst is behind us and that the local market has and is continuing to improve.

Short Sales 20% of Loudoun County Homes For Sale

Short-sales make up 20 percent of Loudoun County homes for sale. As in, for every five “For Sale” signs you see, one of them is a short-sale.

What does that mean in regards to the Loudoun County housing market?

First, let’s go back to August 2009… In a post entitled, “Short-Sales Wear the Crown in Loudoun County”, I ran the numbers and the percentage of short-sales to total homes for sale in Loudoun County was the same - 20%.

Based on a comparison of August 2009 and today, it means things are not getting worse. But they’re not getting better either.

It also means that buyers should know exactly what they’re getting themselves into when buying  a home in the area and have a real estate agent that is experienced in short-sales and can walk them through every step of the process.

When will see a decline in short-sales and a return to a “normal” market?

Once the general economy stabilizes and prices go up. Many people are underwater on their homes and can’t afford to come to the settlement table with a check for $20K, $50K or even $200K+. This means that their options are to 1) stay in the home until prices appreciate and/or they have the money to cover the loss, 2) let the property go into foreclosure or 3) try to negotiate a short-sale with the bank(s).

For more information about short-sales, check out the “Short-Sales and Distressed Properties” section of Loudoun Foreclosures or click here to contact me with your specific question.

Buyers/Sellers: What Does Few Foreclosure/Bank-Owned Properties on the Market Mean To You?

The other day, I talked about how few foreclosure/bank-owned properties there are on the market in Loudoun County and Northern Virginia (click here if you missed the post). But what does having only a very few foreclosure/bank-owned properties on the market really mean for Loudoun/Northern Virginia home buyers and sellers?

Buyers

• If you would like to settle quickly, your only options are traditional resales and foreclosure/bank-owned properties. Either can typically settle within 3 to 6 weeks (less if cash offer) of when the contract is accepted and ratified
• Since there are so few foreclosure/bank-owned properties, the overwhelming majority of properties you’ll see will be traditional resales
• Traditional resales are typically in better condition and require less work than foreclosure/bank-owned properties, but you’ll pay more for them up-front in the purchase price
• If you have the time (3 to 6+ months) and patience and want to spend less money up front, but don’t mind doing some work to the property, then you may want to consider a short-sale
• If you’re trying to take advantage of the first-time home buyer tax credit, you’re looking at only foreclosure/bank-owned properties and traditional resale (click here for more information on what I mean by that)

Sellers

• If you are a home owner selling your home as a traditional resale (not a short-sale), you’re in a great position
• When there were a lot of foreclosure/bank-owned properties on the market, buyers who needed to settle quickly could choose from a foreclosure/bank-owned property or a traditional resale. Now…their options are pretty much limited to traditional resales, which is good for you

CLICK HERE TO SEARCH FOR LOUDOUN FORECLOSURE/BANK-OWNED PROPERTIES

Foreclosure, Bank-Owned, Short-Sale Properties Bulk of Loudoun Home Sales

Foreclosure, bank-owned and short-sale properties make up over half of total home sales in Loudoun County. This has been the case for some time now and will most likely continue through at least the end of 2009, if not longer.

A few things I’ve noticed…

1. The percentage of foreclosure/bank-owned properties to total sales has decreased. This probably has to do with the foreclosure moratoriums that were in place from the end of 2008 to March 31 of this year.
2. The percentage of short-sale properties to total sales has increased. This is due to banks becoming more willing to accept short-sales and because more sellers are trying to take the short-sale route rather than being foreclosed on.
3. The increase in short-sales has left more home buyers frustrated than every before. The short-sale process is long, requires a lot of patience and has less chance for success than a foreclosure/bank-owned and traditional sale.

We should start seeing more foreclosures come on the market now that the foreclosure moratoriums have been lifted and Fannie/Freddie and other banks are back at it foreclosing on delinquent borrowers. In one way, this is a good thing because it will give home buyers more straight-forward and less stressful inventory to choose from. In another way, more foreclosures on the market could be bad because it could put downward pressure on prices. It all depends on the rate at which banks release all their foreclosure properties on to the market.

Loudoun Foreclosure, Bank-Owned, Short-Sale Market Statistics - April 2009

Here’s a look at Loudoun County foreclosure/bank-owned and short-sale market statistics for April 2009:

Total Sales/Buyer Demand 

• The number of foreclosure/bank-owned and short-sale property sales in April 2009 were almost exactly the same as in March 2009 (325 vs 323)
• April 2009 sales were up 29 percent over April 2008

Inventory/Supply

• April 2009 had 273 new foreclosure/bank-owned and short-sale listings come on the market versus 289 in March 2009, a decrease of almost 6 percent (In comparison, April 2008 saw a 23 percent increase in listings from March 2008)
• April 2009 had 273 new listings come on the market versus 360 in April 2008, a decrease of  24 percent

Translation…

Buyer demand for foreclosure/bank-owned and short-sale properties has increased tremendously from last year. But the rate of new inventory/listings on the market is way down. This means more buyers competing over fewer properties which has lead to price stabilization and many multiple/competing offer situations.

Click here for more on Loudoun’s housing market conditions and how they affect you as a home owner, seller or buyer.