Loudoun County Real Estate Statistics and News

42% of Loudoun County Real Estate Sales are Distressed

 I just completed an analysis of the real estate transactions for 2009 for the entire 10th Congressional District. I was asked to do this by one of the candidates that will be running for this seat later in the year, Jeff Barnett. We had a lengthy conversation about the state of the real estate market in Loudoun County as well as other parts of the congressional district. It seems that Loudoun County is a good barometer for this distrct.

With 4767 transactions in 2009, Loudoun County represents about 27% of the market. And with 42% of the transactions being either short sales or foreclosures, this is very close to the 43% distressed sales rate for the district. In 2009, 4605 homes were sold by banks via real estate agents and 3017 homes were sold short by agents in the 10th Congressional District. 

 And there is really no reason to believe these numbers will get any better any time soon. Banks continue to control the flow of properties they are willing to put on the market. And the banks refuse to offer permanent loan modifications to homeowners in any significant amounts. 

In fact, they seem to be trying to prevent loan modifications by telling the Obama administration that the homeowners are not sending in all the information. The truth is probably the banks are telling the homeowners to fax in the documents and then they banks just delete them from the queues. I have had this happen to me many many times and every bank does it.  And it seems no one from the administration is checking to see if what the banks is saying is true.  But then again why would they since Obama was one of the biggest recipients of campaign funding from these very banks.  But I digress.

Here is a link to a breakdown of all the zip codes within the 10th Congressional District.

Download Real Estate Sales Analysis - 10th District

Short Sale Tax Implications for Homeowners

One of the most asked questions I get from homeowners selling their homes short is regarding the tax implications of the short sale.  Up until now I haven't had a very good answer or a direction to point a homeowner regarding this topic.  Now I do.

The Internal Revenue Service publication that handles this exact situation is Publication 4681.  The name of it is Cancelled Debts, Foreclosures, Repossessions and Abandonments.  Although it doesn't say short sales, a short sale is a cancelled debt.

In a short sale of a house, the cancelled debt is the difference between what is owed and what the bank gets at settlement.  When the bank agrees to this loss and the homeowner does not have to repay it, they will almost certainly report the cancelled debt to the IRS.  The question is does the homeowner now have to report the cancelled debt as income on their tax return.   Prior to 2007, the answer was yes but Congress changed the code and now the answer is a little more complex.

Here is an easy to understand explanation of what the publication says:

If the loans were the original loans on the property and the house is your primary residence, you do not have to claim the cancelled debt as income.  

If you refinance the loans and used any excess money to improve the home (and you can prove it) than you do not have to claim the difference as income.

If you used your house as an ATM and took money out to buy a car, vacations, clothes, pay off other credit cards, etc, than you will have to claim the amount that you took out that wasn't used directly to improve the property as income.

If the house is not your primary residence, than you might have to claim it as income but that is much trickier and you should consult an accountant.

This is just an explanation of what the publication says and is not accounting or tax advice and you should always consult a tax professional if you have any questions.  

But IRS Publication 4681 is definitely a publication you should consult concerning the tax implications of a short sale.

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.

An Example Of Real Estate Investing Gone Bad

During the boom market, many people and investors jumped at the opportunity to buy new construction in Loudoun County with the hopes of flipping the property(ies) in the future for a profit. After all, many thought that the boom would never end.

Well, many got burned.

One such example is the owner of three of the homes in the Villages of Waxpool subdivision in Ashburn.

They bought three properties from the builder for a total amount of $3,403,708 in 2005.

These three properties are now all on the market almost 3 years later as "short-sales" for a total amount of $2,490,664. If they get the full asking price, they will have lost $913,044. And that's if the bank/lender approves the short-sale, which doesn't happen often.

This just goes to show that you need to do your homework before making any such decisions and perhaps not go at it alone.

Short-Sale Town Home In Broadlands - $70K Below Assessed Value

This 3 bedroom, 2.55 bathroom town home in Broadlands (Ashburn), Virginia is currently listed for $300,000, which is $70K less than its assessed value. It's a short-sale.

It has 2100 sq ft of finished space; a one car garage; corian countertops and ceramic tile floors in the kitchen; hardwood floors on the main level; a deck and a fenced yard.

Based on it's great overall condition and comps, this town home makes for a great primary residence or investment opportunity.

For more pictures, a virtual tour or other information about this or any other property, contact us.

Listed by Exit All Star Realty - 5966 Richmond Hwy Alexandria, VA 22303

Looking For A Complete List Of Foreclosures In Loudoun County?

Yes, Loudoun Foreclosures is primarily focused on the best foreclosures/REOs, short-sale and other great deals in Loudoun County. But if you are looking for a complete list of such properties in Loudoun County and/or the surrounding areas such as Fairfax, Arlington or Prince William counties, contact us and we will provide that to you. We have access to all foreclosure/REO and short-sale properties currently available as well as an inside scoop on those that may not be on the market yet, but are coming soon.

We also have the inside scoop on builder inventory both, "build from dirt" and "spec". This includes knowing about new homes/lots that have had deals fall through on them and will be back on the market as "specs" in the near future.

If you are looking for stats, data or resources on the Loudoun County real estate market in general, check out Loudoun Stats. If there is any other information we can provide you, please let us know.

Short-Sale - Town House in Ashburn $42K Below Assessed Value

This 3 level, 5 bedroom, 3.5 bath town home in Ashburn is listed for $280,000. It's assessed at $322,500. The property is just under 1500 square feet with a finished basement, hot tub and a deck. It backs to common area and is very close to ammenities. Short-sale.

Listed by Realty Resource - 338 Elden St Herndon, VA 20170

Lowest Priced Single Family Home In Sterling - Short Sale

This property just came on the market yesterday and is the lowest priced single family home in Sterling, Virginia at $199,900. It's a 4 bedroom, 2 full bath rambler on .23 acres. It has a new roof, new windows, new pergo floors and new carpet.

The assessed value is $382,600. Comparable sales, including short-sales and foreclosures, range from $275K to the low $300Ks.

Listed by Premium Realty 8321 Old Courthouse Rd Vienna, VA 22182 

Best Deal in Potomac Lakes, Cascades

Just came across this awesome deal in the Potomac Lakes/Cascades area of Sterling.  It is a 4 bedroom, 3.5 bath single family home on .22 acres.  It has over 3500 finished square feet on 3 levels.  It was built in 1994.  The assessed value is $569,400.  The last comparable sale in the neighborhood was a slighly smaller house on a slightly smaller lot and the list price was $535,000.   The price for this house is $475,000.  This will be sold in the next week.