Article on Short-Sales in Loudoun Times-Mirror

The Loudoun Times-Mirror ran a story today entitled "The Skinny on Short-Sales". The article, written by Jason Jacks, goes over what a short-sale is, their pros and cons and how many there are in Loudoun County. I had the privilege of being interviewed for the story (thank you Jason), but it seems that I may have been misunderstood when going over the statistics.

In the article, I was quoted as saying, "about 30 percent of the sales [he's now seeing] involve distressed properties, with about half of those being short sales." That is incorrect.

Here's what the numbers show…

Almost two-thirds of all homes sold in Loudoun County are distressed properties (foreclosures/bank-owned and short-sales).

Short-sales make up almost 15 percent of all properties sold in Loudoun County and that number is steadily increasing.

Why are short-sales making up a greater and greater percentage of the homes sold in Loudoun County? I wrote a post about that over at LoudounForeclosures.com just the other day – "Percentage of Short-Sales Being Approved Increasing". Check it out when you have a chance.

Thank you again to Jason and the Loudoun Times-Mirror and sorry for the confusion.

No “Summer Slump” For Loudoun County Real Estate In 2008

Many people talk about the July/August "Summer Slump" and how Loudoun County home sales "mysteriously" drop. Well, there's been some truth to that in years past. But not this year. In fact, 2008 had one of the most fast paced residential real estate buying summers in recent years.

To show you what I'm talking about, let's look at a comparison of the summer of 2007 and this summer (2008)…

In 2007, we did see a bit of the "summer slump", specifically in July and August. Here's a graph showing the number of new listings coming on the market (supply) and the number of homes selling/going under contract (demand):

  

As you can see from the graph, the rate of new listings coming on the market stayed fairly steady only dropping 7.5 percent from June '07 to August '07. But buyer demand dropped 26 percent from June '07 to August '07, which is a significant amount. A significant drop in buyer demand compared to only a slight drop in inventory levels is one of the main reasons why prices decline. And a drop in prices is exactly what happened during the summer of 2007.

Now let's look at what happened this summer:

This graph tells a completely different story. The rate of new listings coming on the market dropped 13 percent, nearly double that of 2007. This meant less new (and existing) inventory on the market. Looking at the number of solds, it's clear that buyer demand actually increased from June to July and was still higher in August than it was in June.

So what does this mean to buyers and sellers?

For sellers, it means:

• Less competition
• More negotiating power
• Higher chance of selling faster if priced correctly

For buyers, it means:

• Fewer homes to choose from
• Less negotiating power when it comes to price
• Higher chance of competing/multiple offers on the properties that are "deals"

If you're a seller who was waiting for this year's "Summer Slump" to be over before listing their property, you missed a great opportunity. With many sellers waiting until the "fall market" to sell their property, it'll be interesting to see what happens with inventory levels and buyer demand this month and next.

Related Articles

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

Loudoun Real Estate Inventory Levels Well Below National Average

Demand For Distressed Properties Outpaces Supply For First Time

Loudoun County Home Sales Statistics – Year-To-Date; 2008 vs 2007

Here are the home sales statistics for Loudoun County year-to-date (1/1 – 3/10), 2008 versus 2007. Please note that "solds" means homes that went under contract. This is more accurate than looking at the number of homes that settled because it allows you to see when buyers are actually purchasing homes versus when they’re settling on them.

Here’s the graph (click to enlarge):

Here are the statistics spelled out:

• January 2008 saw a 42 percent drop in home sales over January 2007
• February 2008 saw a 16 percent drop in home sales over February 2007
• March (through 3/10) saw a 17 percent drop in home sales over March 2007 (through 3/10)