January 15-21 2007; A week in real estate

While we've had a dramatic change in the weather here in Northern Virginia in the last week home buyer traffic continues hold steady. Now Sunday (21st) wasn't exactly the best time to hold an Open House the advent of a couple of inches of snow didn't improve the chances of finding a buyer. Saturday was fine enough that buyers did stop by some of the homes we have listed.

Most of this week was spent dealing with pre-foreclosure and foreclosed property. I do a lot of market analyses for companies setting the price for the foreclosure sale at the courthouse steps. Most of these involve a "drive-by" evaluation plus the use of comparative sales and actively listed properties to set a price. If the price set by the holder of the mortgage isn't met by a buyer on the steps then the financing company buys back the property. The property is then placed with a real estate agent who handles evicting the occupants (if necessary) changes the locks, cleans up the property and places it for sale at a fair market value or such a price as will recover the outstanding money.

This week I had a property in Manassas that seemed to be occupied and where I posted the usual notice about the foreclosure. I got phone call from an English speaking friend of the occupants who were totally blind sided by the foreclosure notice. They had been paying the owner their rent and had no idea he wasn't paying the mortgage. It seems that the owner had left town (or the country) and hadn't been making payments on his mortgage. Now usually I can offer a "cash for keys" program to the occupants to get them out and not have to deal with rekeying the locks and cleaning the home up. In this case the occupants are undocumented so the "cash for keys" program can't be used (the IRS requires anyone getting money in this situation provide a W-9 with a taxpayer ID number to report the income). So I have to ask these people to leave and find somewhere else to live. I can't get them in to a normal rental through another real estate agent as most owners want to have a credit check done on potential renters. We'll see what happens when they are supposed to leave (27th).

I've been sending out end-of-year market reports to my database of people. For 2005 the initial single family home numbers show that in Prince William County we had 3121 active listing at the end of December 2006 compared with 2370 actives at the end of 2005, an increase of just over 30%. Single family home sales show much the same trend with 6442 sales in all of 2006 compared to 10485 for all of 2005, about 38% down over 2005. Closer in to Washington DC, in Fairfax County, the single family home numbers show 3681 listings active compared to  2756 in December 2005, just over 33% higher. Single family home sales are similar to those in Prince William County, 12175 for 2006 compared to 17527, around 30% down over 2005.

The end of year numbers give us a county wide absorption rate of about 8 months which is between a buyers market and a sellers market with a slight tilt towards buyers. Six months supply of housing is usually determined to be a balanced market.

The good thing I do see in these statistics is that the average and median single family home prices haven't dropped in Prince William County. The average increasing from $438,006 to $441,923 during 2006 and teh median moving from $398,950 to $399,000 in the same period. However compared to 2004 to 2005 where the average went from $344,331 to $438,006 the price change has been a shock to most homeowners.