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 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)

Zillow’s Quarterly Home Value Report For Loudoun County

Zillow just released their Quarterly Home Value Report for the Washington, DC metro area, including Loudoun County. It’s interesting to compare this to other reports regarding the Washington, DC metroa area as a whole, as well as 2008 assessments from the Loudoun County Assessor’s Office, which may have used a variety of methods to calculate values.

4th Quarter 2007 (October-December 2007)

County	Home Type	"Zindex"	Quarter over Quarter Change	Year over Year Change	5 Year Annualized Change	10 Year Annualized Change
Loudoun County	All Homes	$418,022	-6.6%	-11.1%	5.1%	8.1%
Loudoun	Average Home	$330,393	-8.8%	-10.7%	5.4%	7.9%
Loudoun	Single Family Residence	$440,777	-6.2%	-10.6%	4.9%	7.8%
Loudoun	Single Family Residence, Small Size	$311,992	-7.2%	-8.8%	6.1%	8.8%
Loudoun	Single Family Residence, Medium Size	$343,888	-7.3%	-10.1%	6.1%	8.2%
Loudoun	Single Family Residence, Large Size	$514,764	-5.8%	-6.7%	5.1%	7.8%
Loudoun	Single Family Residence, Extra Large Size	$768,953	-4.9%	-2.8%	4.0%	6.1%
Loudoun	Condominium	$266,226	-8.5%	-14.2%	7.9%	10.1%
Loudoun	Condominium, Small Size	$199,393	-7.0%	-9.3%	10.0%	10.4%
Loudoun	Condominium, Medium Size	$264,137	-6.5%	-9.8%	7.5%	9.9%
Loudoun	Condominium, Large Size	$424,590	-6.7%	-13.5%	4.8%	6.6%

Related Articles:

Loudoun County Market Values – Leesburg Statistics

Loudoun County Market Values – Sterling Statistics

Loudoun County Market Values – Ashburn Statistics

New Listings Per Month – Loudoun County – Feb ’07 to Feb ’08

Here is a chart showing the number of new listings per month in Loudoun County from February 2007 to February 2008 (click on chart to enlarge). The chart includes "relists", which are listings that were previously withdrawn off the market and have been later "relisted" with the same or new agent/broker.

Notice the downward trend for most of 2007 with a spike up in January 2008. In order for the market (values) to stabilize, we need to see a continued overall trend down.

Related Articles:

"Loudoun County Foreclosure/REO Listings Set To Jump In January"

“Subprime Lending – Loudoun County Impacts Report”

We just got our hands on a report entitled "Subprime Lending – Loudoun County Impacts Report", which was reviewed at the Loudoun County Board of Supervisors meeting yesterday (Feb 20).  The report covers things such as reduced housing demand; reduced prices and slower homebuilding; and the impact on specific neighborhoods within Loudoun County.

To read the full article and review the actual report in its’ entirety, click here.

Loudoun County Real Estate Market Inventory – January 2008 vs 2007

Here’s a look at the number of new listings in Loudon County this past December and January as compared to the previous December and January:

• There were 896 properties listed in December 2007 versus 791 listed in December 2006, an increase of 22 percent
• There were 1218 properties listed in January 2008 versus 1271 listed in January 2007, a decrease of 4 percent

In order for the market to start rebounding, we need to see inventory go down or buyer activity pick up. Best case scenario would be to see both of those to happen at the same time.

We’ll post the first half February numbers later this week.

D

Thursday Poll: Testing Your Knowledge About Loudoun County Foreclosures, REO and Short-Sales

With so much talk about foreclosures, REO and short-sales in Loudoun County and the US in general, let’s test everyone’s knowledge (or at least guesswork). Here’s this week’s Thursday Poll:

We’ll share the answer to this question with you in next week’s Thursday Poll so make sure to check back then or subscribe to our RSS feed to get it sent to you directly.

Dulles Area Association Of Realtors September Loudoun County Homes Sales Data Dismal

According to the Dulles Area Association of Realtors housing numbers (and everyone you ask for that matter), Loudoun County home sales volume and median prices were down in September. And not just by a little – by 30 percent from the previous month. Loudoun County had 411 homes sell in August compared to 288 in September. This is a 24 percent decrease from September 2006 in which Loudoun County had 383 homes sell.

Some other statistics:

• September saw a sales-price-to-list price of 92 percent, the second lowest all year (February was the lowest at 91.38%)
• average Days On Market increased to 111, though it was still not as high as Januray at 138
• median price decreased to $425,500, but still not as low as January at $419,500
• inventory has remained about the same since June hovering inbetween 3700 and 3800

With all this talk about slowing sales, lower prices, interest rates and the "mortgage crisis", it’s interesting to see what people’s reactions are. To share your reactions with us and see what other’s reactions are to all this, check out this poll about the future of Loudoun County home prices and this poll about the Fed’s rate cut we have going on here at Loudoun Stats, as well as this poll over at The Washington Post’s LoudounExtra.com regarding the effect on consumers.

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