Several forces have been in place the during the month of December that will more than likely contribute to a considerable increase in the number of foreclosure/REO listings in Loudoun County in January.
Banks have been working very hard on getting contracts ratified and closed before the end of the year. All their manpower was spent working during the first two weeks on ratifying contracts and the last two weeks on closing the deals so they can book them in the 4th quarter. Because of this, they have almost completely neglected new listings and assets. Come January, they will switch back to getting houses onto the market.
Many asset managers have taken off one, if not two weeks at the end of the year. Trying to get them to return a call or an email has been almost impossible. During this past week, they won't even give counter offers on houses that aren't settling this year. Look for management to light a fire under them to get the files that have been sitting on their desks for months off the books.
Foreclosure listings have steadily increased every month up until December. All indications are that this upward trend will start again in January and continue for the forseeable future. Foreclosures and new filings continue to increase at a torrid pace. The slowdown in December is very temporary.
Loss mitigation cases continue to increase. This is the first sign of problems with loans. In the past 2 weeks, I have received 15 new cases that are in various stages of deliquency. This is twice the number as the previous 3 months. And the homeowners are no more willing to work with the lenders now than before. They have pretty much given in to the market conditions and are willing to walk away from their homes.
These four factors will more than likely lead to an increase in inventory, continued suppression of prices and a prolonged decrease in buyer sentiment during the first half of next year.
