Loudoun County Real Estate Statistics and News

Will Loudoun County Home Prices Continue to Rise?

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?

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

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

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

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

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

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.

Loudoun County Real Estate Prices Continue Upward Trend in 2009

Contrary to what you read and hear regarding real estate prices on a national level, prices in Loudoun County have been trending upward during the first four months of 2009.  The following graphs shows the prices of resale homes in Loudoun County have risen 8% from the December levels.

There is also a significant uptick in April prices which is exactly the opposite of what occured in April of last year when prices dropped 19,772 from March levels.  The April numbers are an estimate based on the current list price of the 352 homes already sold in April and a 97% sales price to list price which has been the rate for the last 6 months. 

 

And while this is definitely an encouraging trend, I anticipate the prices will start to move down again because of the recent lift on the foreclosure moratorium that has kept hundreds of foreclosure properties off the market during the last six months.  Look for those levels to increase going forward. 

And unlike others who report foreclosures levels dropping dramatically, I don't think this will be the case going forward as the economy continues to shed jobs.  Prices here will fare better than anywhere else in the country but will probably languish as the overhang of supply from abandoned and vacant houses hover over the marketplace.

Big News Story for Loudoun County

The past couple of weeks have been filled with high profile news story regarding Loudoun County that will have an impact on real estate and homeowners.  There are plenty of big headlines that look pretty impressive (but really aren't) and a some others that don't seem all that impressive but really.  Let's take a look.

Raytheon to consolidate 1,500 jobs in Loudoun County.

This looks pretty impressive on the surface.  And some other reports put the number of jobs at 2000.  But a closer look shows that Raytheon is consolidating 3 offices in Fairfax County and moving them all to the AOL campus that has been shedding jobs for years.  The real story is that only 100 new jobs will be created over the next 3 years.  Although we like to get any new jobs in the current environment, the headlines are very misleading.  33 new jobs a year is barely a blip on the radar.

Loudoun County Tax Rate Increased to $1.245.

Now this was definitely news and has been for some time.  We all anticipated the increase but we didn't know how high it would be.  Initially the county officials were asking for $1.29 so it could have been worse.  But it is still the highest rate in the state.  But the interesting thing I take from this story is the bi-partisan atmosphere the budget created.  Read the comments section to the post and you will see what I mean.  And this is not just for our county, it is state wide, country wide and a huge bi-partisan issue in our federal government.  The election of President Obama was initially hailed as a vote for partisanship but that has never happened and in fact the partisanship in America is worse, if you ask me.

Case in point is this piece of news that has flown below the radar - N.Va. snubbed in first round of road funding  The fact that Northern Virginia doesn't get the lions share of any funding for transportation is beyond me.  We only contribute the majority of the tax dollars that fund the rest of the state but when we need money to help with our roads, we get nothing.  Pretty amazing.  Politicians at work.  But I guess nothing should surprise me since Tim Geithner was a self-confessed tax evader and was rewarded with running the IRS from his position as Treasury Secretary.

Short Sales are Working in Loudoun County

Short sales are a highly talked about and written about topic in the current market because a lot of homeowners owe more than their homes are worth.  This is especially true in Loudoun County because of the tremendous run up in prices followed by a sharp decline in home values in the last 2 and a half years.

And what was once an almost impossible task now represents over 10% of the transactions in our area.  Banks have become increasingly willing to avoid foreclosures as long as owners are willing to communicate with the banks and navigate their frustrating and seemingly backwards short sale process.

The three keys to a successful short sale are a realistic expectation in the buyers mind, knowledge of the process and requirements and a tenacious follow up with the banks.  And truth be told most agents are not equipt to handle these sales or willing to do what is necessary.  Therefore you must choose your agent wisely and experience is absolute mandatory.

But as a homeowner you must not give up and you must not just let the banks foreclose.  That is absolutely the worst thing you could possibly do.