Short Sale Statistics for Northern Virginia

I got to wondering today whether more short sales are closing and thought I would share some interesting data I found. All data is per MRIS as of today.

Number of active listings designated "potential" short sales in NoVA* = 607 (# in Arlington = 57)

Number of short sales that have closed in NoVA in past 30 days = 199 (# in Arlington = 7)

Close Price to Last List Price Ratio for Short Sales that Closed = $302,258/$306,505 = 98.6%

Average Days on Market (Property) of Short Sales that Closed = 83 (Highest was 631 days). Note this represents the number of days until they got an offer, NOT the number of days that it took for the bank to approve the transaction. A quick look at the listings that closed in the past 30 days showed "contract dates" of as far back as November 2008, but most seemed to have been put under contract in the March-April-May 2009 timeframe, meaning about 3 month waiting period for bank approval and settlement. As a point of comparison, "regular" contracts tend to settle about 30-45 days after the contract date.

* NoVA = Arlington, Alexandria, Fairfax, Fairfax City, Falls Church City

I have to say that I was surprised that so many short sales closed in the past 30 days. I went back for a few months to spot check and the average seems to be roughly 200-250 closing each month going back to this Spring. This data leads me to believe that not only are banks approving more and more short sales, but they've gotten more efficient at that approval process.

Buyers, short sales are certainly not without their own risks, delays, and headaches, but maybe it's time to put them back on your shopping list.

State of the Washington, DC, Real Estate Market - August 2009

Summer has been surprisingly busy this year in the DC real estate world. Here's the latest:

Buyers are in a race against the clock to claim the $8000 tax credit by November 30, which has spurred activity in lower price ranges ($500k-ish and below) dramatically.

Northern Virginia inventory, in particular, is significantly lower than past years - check out this inventory graph, and the surprising uptick in average sales price just below it. There is still a lack of "good" inventory out there, resulting in a lot of very frustrated buyers who are moving quickly and at full price when they see something they like that is priced right. At least half of the offers I've written the past few months (and there were a lot) were competing against other buyers and, even with very solid terms, often losing to others with equally solid terms.

The lack of new construction in the area is also adding to the inventory drop. As this article notes, condo prices are down, driving sales up. But this little bit in the middle is particularly intriguing: "Because the number of projects set to deliver inside the Beltway will drop to near zero, Leisch said prices will rise sharply between 2010 and 2011."

Even with buyers jumping to write offers, it's important to structure the contracts to protect yourself. I was quoted in this Express article last month about creating "safety nets" for buyers.

In related news, and adding frustration to the market for both buyers and sellers, there are continuing challenges with appraisals, as noted in this WSJ article.

I'm hosting a free first time home buyer class at Arlington Central Library on Tuesday, August 18 at 7:15 pm. This month is really the latest that a buyer should start their search if they hope to make the November 30 deadline. If you or a colleague would like to attend, please email me to register so I can reserve a seat.

As always, please let me know if I can do anything to help you or your friends with your real estate needs.

North Arlington (Orange Line) Condo Update - July 2009

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

Source: MRIS as of date of blog post. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

	1 BR Units	2BR Units
ACTIVE LISTINGS as of July 28
Average List Price	$346,294	$539,837
Number of Active Listings	36	58
Average Property DOM(P) – Actives	43	65
SOLD LISTINGS for June 2009
Average Sold Price for Previous Month (does not include seller subsidies)	$339,569	$449,818
Number of Sold Listings in Previous Month	29	21
Average Property DOM(P) - Solds	34	30

North Arlington (Orange Line) Condo Market Update - May/June 2009

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

Source: MRIS as of date of blog post. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

	1 BR Units	2BR Units
ACTIVE LISTINGS as of June 14
Average List Price	$337,281	$531,998
Number of Active Listings	42	57
Average Property DOM(P) – Actives	49	56
SOLD LISTINGS for May 2009
Average Sold Price for Previous Month (does not include seller subsidies)	$297,923	$482,669
Number of Sold Listings in Previous Month	24	24
Average Property DOM(P) - Solds	53	47

State of the DC Area Real Estate Market: June 2009

The Spring market is hopping, but some recent changes are making it difficult to predict what's around the corner. Here's what's going on in the local real estate world:

Interest Rates Jump: Mortgage rates took a significant jump in the past few weeks. The short story is that optimism about the economy combined with fears about inflation are pushing rates up. But if you want the long story, you can read more about the relationship between the bond markets and MBS markets here.

Foreclosures and short sales continue to be a very active segment. Banks have finally figured out that the trick to selling foreclosures quickly is to price them ridiculously low and get a bidding war going. It's not uncommon to have dozens of offers in during the first few days for entry-level price points ($200-300k). Short sales continue to be a source of frustration for buyers, as noted in this good NPR story.

The area's inventory remains flat (Arlington and DC) to declining (NoVA)

--check out the significant decline in Northern Virginia inventory here.

Case-Shiller is still reporting significant price declines year-over-year, but here's a good article explaining why, if you read the data more carefully, the news is much less ominous.

New Appraisal Code Scuttles Deals: The new Home Valuation Code of Conduct was implemented in May, and is wreaking havoc with deals. This Code created intermediaries to manage the appraisal process, and some argue that quality has dropped. Many appraisals are coming in low, opening the door to a secondary round of price negotiations in many transactions.

Monetization of Tax Credit: Of significant note to first time buyers is the emergence of programs that will allow a buyer to "monetize" the $8000 tax credit. VHDA has developed a program to structure a second trust of $8000 with no principal or interest payments due during the first 12 months. Details are still evolving, but it is expected that a buyer could use this $8000 second trust as part of their downpayment.

If you are a first time buyer hoping to take advantage of the $8000 tax credit - start your search NOW! The lack of "good" inventory may make it difficult to find something that fits your needs and your price range. Settlements must occur by November 30 to file for the credit, and with the current volume of lending and refinancing banks are backed up. No doubt this backlog will increase for both lenders and settlement companies as we approach November 30 - plan ahead! Contact me to start your search - I'd love to help you!

And finally, just for fun: For all you Arlingtonians and those who want to be an Arlingtonian -- check out this rap.

As always, please let me know if I can do anything to help you or your friends with your real estate needs.