The Washington Post has a story on rising local home foreclosures. A graph provided by the GMU Center for Regional Analysis shown on the first page shows that defaults are most pronounced in Prince William, Loudoun, Stafford, and Prince George's counties.
This was a curious line in the fourth paragraph:
"The Washington region, once considered immune to the unfolding mortgage crisis, has experienced a surge of loans gone bad in recent months."
Once considered immune? By whom?
Maybe this guy, who's definitely changed his tune on Prince William County:
At the opposite end of the spectrum are Prince William and Loudoun counties, where 262 and 219 out of every 10,000 households, respectively, were in foreclosure, said John McClain, the center's deputy director.
"In those counties, there were plenty of people engaged in speculative activity in addition to all the folks who were overextending to buy a house," McClain said. "There were so many new housing units for sale in that area that people were buying and flipping, buying and flipping."
10 comments:
Strangely Fairfax is holding right there with Arlington. I have no idea why, its a traffic nightmare every time I venture out that way.
Doug said...
"Strangely Fairfax is holding right there with Arlington. I have no idea why, its a traffic nightmare every time I venture out that way."
Fairfax was well established long before this recent boom. The areas experiencing temporary price retreats are of course the "new" areas ... i.e., the areas at the edge of expansion (either through development or redevelopment.) Sellers in these areas demanded a premium over and above the real value of the area based on what value "would be" if the boom had continued on. But it didn't, and new buyers know not to pay for that which isn't materializing. Fairfax is long established. There wasn't any pricing "in anticipation of what was coming" going on in Fairfax. Buyers and seller knew what was there then and what will be there next year ... irrespective of whether the boom had continued or not.
"Strangely Fairfax is holding right there with Arlington."
I suspect it's the schools. Fairfax has some of the best schools in the nation, and perhaps people are willing to live farther out in ordet to have access to those schools.
That said, 2008 will be the year Fairfax, Arlington and Alexandria all see "temporary price retreats". And by temporary I mean for 8-10 years.
Older (pre 1980) or less desirable properties in Fairfax have fallen 20--25% from 2005 levels. Many other decent properties have lost about 10-15%.
These published stats often mask such declines.
Though the fall in Fairfax has been slower than in Loudoun or Prince William, the trend is pretty clear. It may become flatter in the spring, but will continue to fall later this year and next year.
As for Arlington, those neighborhoods where one can walk to Metrorail are doing just fine, judging from recent sales. There was an open house yesterday in our neighborhood for a small 3BR house, on the market for 649K. There were TONS of people looking at it; the parked cars were actually an obstacle to traffic. I eavesdropped on some of those interested (while ignoring the real estate agents); everal people seemed determined to submit offers.
Just goes to prove what I've been saying: if a house is walkable to Metrorail in Arlington, it's going to command sustained interest from potential buyers.
lance said...
"Fairfax was well established long before this recent boom. The areas experiencing temporary price retreats are of course the "new" areas ... i.e., the areas at the edge of expansion (either through development or redevelopment.)"
I've lived in PW County for 25+ years. The price run up around here was recent, but people 'out here' have been commuting to DC for decades. PWC's slug system and solid bus system are recent improvements, but even before HOV extended past Springfield, people down this way have made do.
doug: if you think traffic in Fairfax is bad, stay out of PWC.
"There was an open house yesterday in our neighborhood for a small 3BR house, on the market for 649K. There were TONS of people looking at it; "
$649K strikes me as pricey but I realize that's about what folks are asking for condo's, like this dandy 2/1 for $530K.
House? $649K?
Condo? $530K?
doug,
According to Harriet's other posting, which follows this one, inventory in Fairfax county is almost at 10 months, which is where PWC and Loudon were last year. Arlington and Alexandria City are still below 7 months, where Fairfax was last year. The correction is moving in from the exurbs.
If this continues, you will see increased foreclosures in Fairfax in the near future.
Stafford County signing on for a moment.
Stafford RE pros still want me to believe that prices will start going up in 2008... that they've fallen are they are going to.
But, from what I've read here, our prices increased 150% from 2000 to 2006 (prices prior to 00-01 were not at double-digit increases).
And, I can get a similar sized home in PWC and have a shorter commute for less money.
I don't think our exerb has come anywhere close to hitting bottom yet (still dealing with denial... from banks and builders). Now, when those builders of the $850,000 McMansions 20 minutes from I-95 start selling for closer to $500,000 -- I might change my mind :D
By the way: the SFH in Arlington's Waverly Hills I mentioned a few days ago? The one priced at 649K, walkable to Metro, had a jammed open house?
It's under contract!
As I've noted many times: houses in Arlington that are walkable to Metrorail are doing just fine in the current situation.
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