Foreclosures In Loudoun County Up 1000 Percent

"Foreclosure" is becoming a more commonly used term in Loudoun County and the DC metro by the minute. It’s front page news (today’s edition of The Washington Post) and the topic of conversation during many weekend bbq’s throughout Loudoun County. Why? Because foreclosures are up 1000 percent in Loudoun County; 400 percent in Fairfax County; 300 percent in Montgomery County and the list goes on… The effect can be seen and felt by all that live in the county as well as the entire region.

So what is the effect on you as an individual/consumer? Well here’s a short list to start off with:

1. Your neighbor’s home which is being foreclosed on looks awful, needs maintenance and TLC and is making your entire neighborhood less desireable.
2. Your property value is threatened because not all potential buyers realize that foreclosures don’t get the full/same weight as a "comp" as non-foreclosure sales.
3. Your ability as a buyer to obtain financing has just decreased and the types of loans available to you has diminished while the necessary credit scores to obtain a loan and interest rates have risen.
4. Your future tax rate is potentially threatened because the county loses money on taxes and utilities for every house that is in foreclosure and the county has to make the money up somehow (or cut services).

Though the number of foreclosures has risen tenfold, it’s a small number when compared to the number of overall sales in the county. And there are some many active ones still on the market because banks aren’t beat up enough to negotiate much on the sales prics.

Historically, foreclosures are associated with job losses, high unemployment and recessions. But this time around, it’s primarily (sub-prime) financing. But this wave of sub-prime financing will not last forever. Lenders have already become much more stringent when it comes to loan options and approvals. This will diminish the potential for situations like we’re in in the future. Once we get through this (probably another 12 months), we’ll see the foreclosure rate get back down to "normal".

Once this wave of foreclosures ends and we get back to normal, you’ll be able to

• celebrate because the "abandoned house" was finally bought and renovated by the new owner
• not worry as much about buyers trying to use foreclosures as "comps" like they used to
• obtain better financing options as lenders breathe a sigh of relief and the wounds start to heal
• have a leg to stand on when arguing with the county about using foreclosures as a scapegoat for "losing revenue" and raising taxes and/or cutting services

About a year to go – anyone have a time machine handy?

Related Reading:

Loudoun County Foreclosure Update – April 2007

Foreclosures, Pre-Foreclosures, Bank Owned and Short Sales in Eastern Loudoun County

Are You In Over Your Head?

Will Home Prices Go Up or Down in Loudoun County?

A recent post on washingtonpost.com asked peoples opinion of whether or not house prices will go down?  A few people voiced their opinions and posted comments.  Here is a poll to give us your opinion of what you think will happen to prices in the next 12 months.

Increase In Virginia Grantor’s Tax And The Rest Of The Northern Virginia Transportation Plan

As some of you may or may not know, the Virginia General Assembly is increasing the Grantor’s Tax as part of the Northern Virginia Transportation Plan passed last March. Currently, the Grantor’s Tax is $1 per $1000 of the sales price or assessed value, whichever is greater. The Virginia General Assembly approved an increase from $1 to $5 per $1000 effective July 1, 2007. The latest news is that they are delaying the increase until September 1, 2007 and may only be raising it to $4 per $1000.

As a seller of a $400,000 property in Virginia, the new rate of $5 per $1000 means an increase from $400 to $2,000. Even if the lesser amount of $4 per $1000 goes into effect, the amount would be $1,600, an increase of $1,200.

But wait, there’s more…

According to NVAR, here are some other things included in the plan:

• 2 percent increase in the rental car tax
• 2 percent increase in the hotel/motel occupancy tax
• $10 increase in the vehicle safety inspection fee
• 1 percent initial vehicle registration fee (for new car purchases or those moving into the region)
• 5 percent sales tax on auto repairs
• $10 regional auto registration fee

In addition, the authority may choose to implement the following optional revenues:

• Annual commercial real estate fee of up to 25 cents per $100
• $10 local car registration fee
• Commercial/residential impact fee (amount to be determined)

This seems to be quite a topic of discussion as seen in recent (and most likely future) media coverage in Loudoun County as well as the rest of Virginia. At this point, no one knows the exact date when the increase will go into effect nor the size of the increase.  But we will keep a close eye on this and will continue chatting with title companies, settlement attorneys and others to get the latest updates. As soon as we know more, we’ll let you know.

Further Reading:

Home Sellers To Pay Most For New Roads – by Jason Jacks of Loudoun Times Mirror

Virginia HB3202

Northern Virginia Transportation Alliance

Resources (other than real estate) For Loudoun County, Virginia

For those of you living in Loudoun County and selling or buying within, you probably already know what Loudoun County has to offer. But if you’re relocating to the area, you may not. And being that the numbers, stats and data this blog routinely covers are not the only deciding factor when it comes to moving to Loudoun County, here is a list of additional resources to help you with your decision or give you new ideas on things to do or places to check out on the weekends.

• Official visitor web site for Loudoun County, Virginia – covers everything from shopping and dining to wine festivals and fairs, even a wedding guide. The guides are available in hard copy or pdf files.
• Loudoun County, Virginia – Wikipedia – includes a history and background of Loudoun County and is loaded with links to other resources.
• Loudoun County Public Schools – Kindergarten through 12th. Includes school boundaries, stats, etc.
• Dulles South Online – online portal for news, information and listings for Loudoun County Dulles Region (Dulles South) businesses, organizations and residents, focusing mainly on economic, public policy and community development topics and issues.
• Loudoun County Government Site – Covers everything from transportation and taxes to utilites and art/cultural events.
• Loudoun County Communities/Home Owners Associations – links to all the communities/HOAs in Loudoun (on the Loudoun County government site).
• W&OD Trail – a trail going from Arlington, VA to Purcellville, VA used for biking, walking, roller blading, etc. The setting for numerous charity events during the spring, summer and fall.
• Loudoun County Public Library – available to all residents of Loudoun County. Used by local businesses and residents for various seminars throughout the year.
• For a map of Loudoun County and surrounding areas, check out MSN Live’s mapping feature. Just input a particular city within Loudoun County (i.e. Ashburn, Virginia) at the top of the page and zoom in or out from there. Definitely check out the Bird’s Eye View feature (located immediately to the right of the zoom feature on the left side of the map) to get a clear view down to even the car in driveway of a house.

Hope that this is of use to those of you contemplating moving to the area or those who are already here, but haven’t had the time to really check out what’s going on in the county. And if there is something that you are looking for, but can’t find through the sources listed above, please let us know and we’ll find it for you.