Putting Loudoun’s Housing Market into Perspective

You've seen the latest Loudoun County housing supply and demand numbers and statistics, but without anything to comapare them to, it's hard to put the Loudoun County housing market into perspective. So that's what we're going to do right now…

To recap, Loudoun County has 3.8 months worth of supply on the market and sales were up almost 50 percent in February 2009 over February 2008.

Now let's take a look at some other counties/cities in Virginia…

Prince William County

• 5.22 months supply on the market
• Sales were up 34 percent in February 2009 over February 2008

Stafford County

• 7.38 months supply on the market
• Sales were up 33 percent in February 2009 versus February 2008

Spotsylvania County

• 10.23 months supply on the market
• Sales were up 24 percent in February 2009 versus February 2008

Fredericksburg City

• 13.08 months supply on the market
• Sales were down 8.3 percent in February 2009 versus February 2008

Orange County

• 16.65 months supply on the market
• Sales were down 18 percent in February 2009 versus February 2008

In addition, a recent article in the Wall Street Journal talks about how Northern Virginia's housing market - Loudoun, Fairfax, Arlington, Alexandria - is ahead of DC's and MD's housing market including when it comes to a housing recovery.

Imagine seeing homes sit on the market almost 2 to 4+ times as long as they are now and seeing demand (sales) and prices still decreasing rapidly?

Loudoun's housing market doesn't look too shabby when you put it into perspective, does it…

Thank you to Sarah Stelmok for the statistics on neighboring areas.

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 Real Estate Market Statistics - July 2008

Wondering how the Loudoun County real estate market is doing and what the statistics are? Curious as to how it did last month and how it compares to last month/last year? Well, there’s good news… The Loudoun County real estate market is continuing to improve with inventory going down and buyer demand increasing. Check out the statistics:

Supply/Inventory

• The number of homes/listings that came on the market in July 2008 was 673. This is a 5 percent decrease from the number of homes that came on the market June 2008 (673 versus 709).
• The number of homes that came on the market in July 2008 was 26 percent less than the number of homes that came on the market in July 2007 (673 versus 907). This is a big year over year improvement and indicates continued strengthening in the Loudoun real estate market.

Demand

• The number of homes that went under contract (aka sold) in July 2008 was 550, which is the same number of homes that sold in June 2008. This is a key statistic because July is usually slower than June when it comes to buyer activity and shows that buyer demand is still strong.
• The number of homes that sold in July 2008 was 35 percent higher than the number of homes that sold in July 2007 (550 versus 358). This shows a substantial year over year improvement that has been the general trend in Loudoun County so far this year.

These statistics show that the Loudoun County real estate market is continuing to improve with lower inventory and higher buyer demand.

Next month, August, is typically one of the slowest months in real estate so we should see a "seasonal" slow down in buyer demand. But then again…that’s what they say about July too and July showed no slow down in buyer activity whatsoever.

Related Articles

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

Loudoun County Real Estate Market Looking Up! (Come Check Out The Stastistics)

Loudoun Real Estate Inventory Levels Well Below National Average

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

Much like the 2nd Qtr statistics, the Loudoun County real estate market statistics for the first half of 2008 vs 2007 show signs of improvement and stabilization in the market. As some have pointed out, not everything is rosy. But it’s definitely a step in the right direction.

Here are the numbers…

New Listings (supply)

• The number of new listings that came on the market the first half of ‘07 - 5691
• The number of new listings that came on the market the first half of ‘08 - 5050
• That’s a decrease of 11 percent

Homes Sold (demand)

• The number of homes that sold* during the first half of ‘07 - 2644
• The number of homes that sold* during the first half of ‘08 - 2845
• That’s an increase of 8 percent

The Loudoun County real estate market has been improving as the year has gone on. Hopefully, this trend continues into the 3rd quarter and the rest of the year.

Loudoun County Real Estate Market Looking Up! (Come Check Out The Statistics)

The Loudoun County real estate market is looking up! Yes, folks…that’s correct. Loudoun County’s 2nd quarter 2008 real estate market statistics show a vast improvement over 2nd Qtr 2007. And the first half of 2008 statistics show a vast improvement over the first half of 2007 (click here for that post).

New Listings (supply)

• The number of new listings that came on the market in the 2nd Qtr of ‘07 - 3013
• The number of new listings that came on the market in the 2nd Qtr of ‘08 - 2546
• That’s a decrease of 16 percent

Homes Sold (demand)

• The number of homes that sold* during the 2nd Qtr of ‘07 - 1300
• The number of homes that sold* during the 2nd Qtr of ‘08 - 1757
• That’s an increase of 35 percent

As you can see, inventory is down and demand is up. And to add to the good news, the inventory/supply level of homes in Loudoun County is well below the national average. The Loudoun County real estate market has continued to look up as the year has progressed with clear signs of strengthening throughout.

Update: Made some changes to the numbers based on a miscalculation. But they’re actually better than previously thought.

Related Articles

Foreclosures/REO and Short-Sales Selling Like Hot Cakes - LoudounForeclosures.com

Loudoun County Real Estate Inventory Down, Buyer Demand Up

Here’s an analysis of the Loudoun County real estate market 2008 YTD versus the same period 2007, specifically supply and demand (aka inventory and buyer demand).

Here are the supply/inventory numbers:

• The number of listings that came on the market 2008 YTD is 4544.
• This is a 10 percent drop from the same period in 2007, which had 5074 listings come on the market

Here are the sold/buyer demand numbers:

• The number of homes that have sold* in 2008 YTD is 2491.
• This is a 5 percent increase from the same period in 2007, which had 2358 homes sell*
• The big jump in buyer demand came in May (check out the May figures here)

*by contract date

What the numbers tell us:

• The rate of new inventory coming on the market has decreased while buyer demand has increased
• This is good news for the Loudoun County real estate market and we should all hope that this trend continues
• This goes along with a previous observation that the Loudoun County real estate market is showing signs of strengthening (check out the post about that here)

These numbers confirm what buyers and I are noticing and experiencing first-hand while out in the field. We’re seeing fewer choices and increased competition from other buyers. The properties that are priced well are getting picked up pretty quickly. The really good deals are getting offers within within a week or two of being on the market. Many of the great deals are getting multiple offers.

I will be posting the Loudoun County inventory and buyer demand numbers and analysis by zip code over the next few days. Stay tuned…

Loudoun County Home Buyer Demand Up 19 Percent in May

Loudoun County saw home buyer demand jump 19 percent in May 2008 over May 2007. May 2007 had 520 properties go under contract while May 2008 had 640 properties go under contract. Increased home buyer demand is one of the key factors necessary for a turn-around in the Loudoun County real estate market.

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"Loudoun County Real Estate Market Showing Continued Signs Of Strengthening"

Loudoun County Real Estate Market Showing Continued Signs Of Strengthening

Yes, folks…you read that correctly. The Loudoun County real estate market is showing continued signs of strengthening.

And here’s the proof:

1) The rate of new properties coming on the market is decreasing (supply).

• From May 1 to May 23, 2008, Loudoun County had 770 new properties/listings come on the market. That’s an average of 33 new listings per day. That’s down from 924 new listings during the same time last year, which came out to 40 new listings per day. That’s an 18 percent decrease in  the rate of new inventory from this time last year. (Remember, less supply/inventory is key to a stable and balanced market)
• The pace of new listings in May (33 per day) is down from last month (April), which saw an average of 36 new listings per day come on the market. That’s an 8 percent decrease in the rate of new inventory from last month.

2) Buyers are increasing in numbers and making a move after sitting on the sidelines (demand).

• So far this month, we’ve had 490 properties go under contract. This is an average of 21 per day. During the same time last year, we saw 404 homes go under contract (18 per day). That’s an increase of almost 17 percent in the number of homes that are selling this year versus last year.
• Also, last month (April ‘08) saw an increase of 38 percent in the number of homes that went under contract as compared to April 2007 ( 655 in April ‘08 versus 481 in April ‘07)

3) The percentage of total listings that are foreclosure/bank-owned and short-sale properties has stabilized.

• For the post with details about that, click here.

That’s less supply, higher demand and stabilization in the distressed property area - a winning combination.

So you see, it’s actually getting better, not worse. The worse is over with prices having already come down 20 to 40+ percent from the peak in August 2005. "The sky is falling mentality" that is prevelant today should have been around last year and in 2006 when it really was falling. But it’s not the case today.

-Danilo

Short-Sales Becoming A Popular Option In Loudoun County

An ever increasing number of properties listed for sale in Loudoun County these days are "short-sales". It used to be that most were bank-owned and some were short-sales. Nowadays, it’s about 50/50. It seems that home owners are viewing a short-sale as a possible option "out" now more than ever before.

But what affect do short-sales have on buyers and the Loudoun County real estate market?

Many of the emails and calls I get from buyers are in regards to a property they think "is a great deal". But it’s a short-sale. Yes, they can be a great deal. But they’re not your typical real estate transaction.

• Has the seller already contacted their bank and started the negotiation process?
• Have they submitted all of the necessary paperwork?
• Was it completed correcty?
• If there is more than one lender/bank involved, have all parties been contacted?
• If there is a second (or third) lender/bank, is there a good chance that they’ll agree to basically walk with nothing?
• Are there outstanding judgments or other liens against the property?
• Does the buyer have 2, 3 or even up to 6 months to wait for an answer?
• Does the buyer have the time and money to make all the necessary repairs on their own (short-sales are always sold "as is")?

In many instances, the answer to at least some of these questions is "no". Well, the answer has to be "yes" to all of them in order for a short-sale to have a decent chance of actually selling/closing. Otherwise, the buyer may be dissapointed at the negative outcome and/or be homeless because they had to be out of the current residence and don’t have a new place to call "home".

Another thing I’ve noticed is that many of the short-sales seem like they’re not as bad off as they lead the bank and public to believe. They have a new Mercedes parked out front, 2 or more top-of-the line plasmas inside, a high-end surround-sound system in the family room or basement, lots of cool new computers and tech gadgets (that aren’t cheap), they just got back from a vacation in the Caribbean, etc.

One thing to remember is that the bank will audit the borrower to the Nth degree. If they find that the borrower is not in extreme financial hardship or has spent their money on non-essential things (see above paragraph), they will most likely reject a short-sale. This leaves you, the buyer, without a home and up to several months of your time wasted while waiting for a response.

Overall, short-sales are giving many buyers a false sense 0f "I can get a great deal and without many headaches". That’s not entirely true. Unless you have a lot of time, patience and energy to deal with a short-sale, stick with bank-owned properties, relocation company owned properties and "regular" resales.

-Danilo

Loudoun County Foreclosure/REO Market Makes International Headlines

The situation regarding foreclosures in Loudoun County made international headlines by being featured in a story in The Economist entitled "Foreclosures In America; Searching For Plan B" (this week’s issue).

(Cross post from our sister blog, Loudoun Foreclosures)

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