Loudoun County Real Estate Statistics and News

Short Sale Question #3 - How Does a Short Sale Affect your Credit?

2009-07-15T10:49:45-04:00

The most frequently asked question I get from home sellers is regarding the impact of a short sale on their credit score. Here is my answer....

Keep in mind that credit scores, credit ratings agencies, banks and other creditors are always changing their criteria, minimum requirements and other factors. The impact of short sales to credit scores is and will continue to change.

Short Sale Question #2 - What is the biggest mistake sellers make when selling short?

2009-07-14T12:44:28-04:00

The short sale is a completely different real estate transaction than any other. There is nothing normal about the process and the banks involvement and complete lack of any rationality make it a very difficult transaction. So make sure you don't make the biggest mistake of them all......

If you get a chance, come to a short sale forum being moderated by Congressman Frank Wolf. You have to sign up through the Dulles Area Association of Real Estate in order to get in. Space is limited.

Part 1 of Short Sale Questions - Why Sell Your House Short?

2009-07-13T14:23:24-04:00

As part of a continuing trend in the real estate market here in Loudoun County, short sales continue to become a bigger part of the overall marketplace on a monthly basis. And with the current trend in prices and banks unwilling to reduce the principal amounts on loans, short sales will continue to gain market share as the only alternative for many homeowners who do not want to foreclose but have to sell.

Renae Merle of the Washington Post wrote an article about short sales in this weekend's real estate section. She called me on several occasions to discuss short sales and what was happening to homeowners and what banks were doing. She also asked a lot of questions that many homeowners have asked me regarding short sales.

Many of these questions are asked over and over again so I have made videos of the most frequently asked questions regarding short sales. Here is the first in the series. I am also going to make a video of my Short Sale Presentation that I recently gave at the Dulles Home Fair. If you would like to get that video, please drop me a line and I will send it to you. It is about an hour long and covers everything about selling and buying short sales.

A special thanks to Pam Bhamrah of the Complete Home Team of Market Advantage Real Estate.

7/15/09 UPDATE: I fixed the video and now it matches the post. Sorry about that.

Will Loudoun County Home Prices Continue to Rise?

2009-06-24T10:11:40-04:00

So far in 2009, the median sales price of a home sold in Loudoun County has continued to steadily rise. Below is a chart illustrating this price appreciation.

Since hitting a low in January, the median sales price has continued to rise.

This rise in price is most likely a function of the moratorium on foreclosures that began at the end of 2008 combined with less than normal listing activity during the spring season.

The real question is will these prices continue to rise, hold steady at these levels or drop back down.

Recent developments suggest that the median sales prices will most likely move back down in the short term and languish for the foreseeable future. The reasons for this are threefold:

1. Interest Rate Runup - Interest rates have recently run up to the 5.5% level after having held below 5% for most of the year. This will cause some buyers to hold off making a purchase and might cause some homeowners who wanted to refinance to consider selling instead.

2. Moratorium on Foreclosures Lifted - The six month moratorium has been lifted on foreclosures so the shadow inventory of abandoned homes is set to start hitting the market very soon. We are already seeing an increase in those listings in Loudoun.

3. Talk of $15,000 tax credit - Any buyer on the fence about buying is more than likely going to wait and see if they will be getting a $15,000 tax credit when they purchase.

Right now, nothing is positive for the real estate market from an economic standpoint. And with President Obama focused on health care reform and green technology, states continue to face bankruptcy caused by the real estate crisis and the problems haven't been addressed. Just kicked down the road.

Is a Scandal Coming to Loudoun County?

2009-06-19T08:58:07-04:00

Although it has not been verified yet, the Loudoun Independent wrote the following article yesterday:

Report Alleges FBI Investigation into County Land Purchases

The investigation has something to do with a real estate purchase, or should I say, a failed purchase.

It seems that Northern Virginia scandals might not be limited to the Prince William County Government:

PWC Planning Office Sexual Harassment Scandal

Prince William County Bid Rigging Scandal

With massive budgets and more power than they deserve, it is not surprising that these types of scandals occur. It is just sad at the complete lack of morals or ethics of our leaders in government.

$1Million Listings Just Aren't Selling in Loudoun County

2009-06-17T09:29:27-04:00

If you have a house listed in Loudoun County over $1Million than you have some serious obstacles to overcome. The chart below breaks down the absorption levels by price for Loudoun County Real Estate.

It is also interesting to note the low levels of inventory all the way up to $600,000. This is because of the availability of loans up to $625,000 that are FHA insurable.

Jumbo loans are very expensive and continue to be a market that has few participants.

This will continue into the foreseeable future. Bad for the sellers but good for buyers if you can afford it. A house that could have sold for $1Million in 2006 can be bought for $650,000 today.

Loudoun County Short Sales and Foreclosures Breakdown

2009-06-16T09:20:12-04:00

On Saturday I gave a presentation on the state of the real estate market at the Dulles Home Fair. I am going to publish those charts here and include commentary on the ones that are the most interesting. The first charts are the complete sales, pending sales and active listings in Loudoun County since May 1st broken down by type of listing - short sale, foreclosure or organic.

The first chart shows the listings that have come on the market since 5/1 and the breakdown by type. The slowdown in foreclosure activity is obvious with only 13% of the listings. This is signficantly less than the 40% we were seeing before the foreclosure moratorium.

The pending sales data shows that current contract activity has been moving from the foreclosure market to the short sale market. This is also a function of the moratorium on short sales. 54% of all contracts are written on distressed properties.

And the final chart are the settled transactions since 5/1. This shows two important trends. First, that 23% of the solds are short sales. Just 9 months ago this number was closer to 5%.

The moratorium on foreclosures allowed the banks to assign more resources to their short sale departments, thereby allowing a better success rate for those sellers that had to go the short sale route.

The second trend is the difference in the total amount of sales versus the number of contracts being written. There are 40% less homes that actual settle versus contract written. This is a much bigger number than we have seen the last 10+ years. The length of time to settlement has been significantly increased by the short sale transactions and it is showing up in pending settlement backlogs.

As of today 1321 homes are under contract but have yet to settle. To give you some perspective, there are only 1113 homes for sale in all of Loudoun County.

1st Annual Dulles Home Fair Open to the Public

2009-06-03T12:02:56-04:00

The 1st Annual Dulles Home Fair will take place on June 13th at the Embassy Suites on Waxpool Road. The Dulles Area Association of Realtors holds their Expo the day before and this year a second day was added just for the benefit of the public. I encourage anyone interested in real estate topics come to the fair.

I have been fortunate enough to be selected to present twice on Saturday. The first presentation is on short sales, both for buyers and sellers. I will explain in detail the short sale process including setting expectations for all parties involved, how to work with banks, how to document the process correctly, and what not to do so that you don't end up in foreclosure. I will also explain the process from the buyers perspective including how to get the best deals and why short sales are great opportunities.

I have also been asked to present on the state of the real estate market in Loudoun County. This will be a graph filled presentations with lots of good charts and graphics that will not be your typical boring power point presentation.

Here is a link to the schedule for the Consumer Day on Saturday the 13th.

It is free and it should be very informative.

Short Sales Are 34% of Total Sales in Loudoun County

2009-05-18T11:23:23-04:00

One huge change in the real estate market in Loudoun County has been the proliferation of short sale activity during the first half of this year. For the month of May 34% of all the listings that have gone under contract were listed as short sales. This compares to 21% of the listings being marketed as foreclosures/REOs.

This is a complete shift in the marketplace and represents two things, a willingness of banks to work with homeowners on getting rid of underwater properties and a moratorium on foreclosures that lasted 6 months.

Less than 6 months ago short sale listings were shunned by a lot of buyers and buyers agents who had become frustrated at the slow responses from the banks. Many short sale approvals were taking up to 6 months just to get a counter offer. These frustrated buyers and agents focused on foreclosures as those properties were getting quick responses from the banks.

A couple of factors have contributed to the shift in sentiment regarding short sales. The biggest change has been banks assigning more resources to their short sale departments. This has led to a shortening of the response time to 30-45 days. Also, there has been an effort by many of the more active agents in Loudoun County to take on the short sales. The standardization of short sale processing by listing agents has given more confidence in the marketplace that a short sale will be approved by all parties and settle in a timely fashion.

I have personally listed and sold 6 short sales in the past 9 months and have 3 other properties set to close in the next 30 days. The process has been time consuming in terms of follow up and communication between all parties but the effort has been worth it because the bank avoids a foreclosure, the seller is relieved of a large financial burden and the buyer is getting a very good deal.

Bike to Work Day 2009

2009-05-14T12:46:53-04:00

Friday May 15th, 2009 is Bike to Work Day. Although I do not actually have an office that I need to bike to, I will use my bike exclusively for transportation tomorrow. Hopefully you can do the same.