Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
**Updated with 2008 Q1 **So let's see where everyone stands on when DC Metro area median house price will rebound. What's the DC Metro Area?Per wikipediahttp://en.wikipedia.org/wiki/Washington_Metropolitan_Area(approx 30 square miles around DC)What's a rebound? 2 Quarters of postive growth in the Median DC Metro SFH Home Price.So pick the quarter and just give a brief statement as to why. Harriet said she would maybe put a link on the web site with the poll.Prices will be taken from National Assoc. of Realtors web site.Dc Metro 2007 Quarter Recap:I - 427.5 k II - 455.3 k III - 437.6 k IV - 400.l k2008 I -371.8 kCurrent PicksSteve - 2009 QIVDoug - 2013 QIIIjoel and sonia - 2009 QIVwannabuy - 2010 QIIIWilliam - 2010 QItedk - 2010 QIIIgt - 2010 QIIIXpovos - 2012 QIIImillion - 2010 QIIIbas_madone52 - 2008 QIVjustin - 2012 QI
2 people, 2 foreclosures.http://www.washingtonpost.com/wp-dyn/content/article/2008/05/14/AR2008051403698_pf.htmlhttp://www.reuters.com/articlePrint?articleId=USN0952458820080511
John: great washingtonpost read. I loved it! local real estate investor Keith Thai, was struggling to close a short sale on this house he had bought for $1.2 million. It was in near-perfect condition with unscuffed white walls and shiny granite countertops. The tub in the downstairs bathroom had never been used -- and still had the original stickers -- even after renters had been living there for more than a year. Doman ran her hands along the wrought-iron banisters and sighed. "This is nice," she said.But the bank didn't approve the short sale, and Thai's house fell into foreclosure. So did Thai's 10 other high-end properties, including his own Ashburn home."I feel like a loser," Thai said, putting his head in his hands. YOU ARE A LOSER! HAHAAH
So... why don't the banks approve the short sales? Clearly they're not. Plenty of anecdotal evidence that a short sale takes three times longer on average than a normal sale to close.Time is money. Particularly if (as most of us believe) the market is continuing to degenerate.What is the motivation of the banks to hold on to a property that is losing money rather than bite the bullet and get it done with. Do they want to lose money? Or is this simply a case of 'we can't admit that we're losing money'?
Xpovos said... “What is the motivation of the banks to hold on to a property that is losing money rather than bite the bullet and get it done with?”Mortgage Insurance?
"What is the motivation of the banks to hold on to a property that is losing money rather than bite the bullet and get it done with. Do they want to lose money? Or is this simply a case of 'we can't admit that we're losing money'?"I honestly think they are simply overwhelmed and dont know how to handle them all. They dont have enough underwriters in place in their loss mitigation departments to say "yes this is a good price" or "no we should hold on to this one" etc. Worst of all, when a place goes to foreclosure (often due to their inactivity), the banks end up spending alot more on trustees fees publication fees and the like than they would via the short sale. It makes the attorneys who do the foreclosure happy, but it really doesnt help anyone in the long run.
But, crt, when are banks going to catch up to reality? The short sale that we put an offer on in February is STILL ongoing (our offer expired, but both the seller's agent and our agent are still trying to keep us hoping they'll eventually get back to us). Last word? The first bank had hired a "professional negotiator" who would be calling us any day now. That was two weeks ago. We were the only offer the house got this whole spring. The previous owners moved out in early March. Now we're just waiting for our earnest money to be returned to us.We're renting again, so we'll just be watching to see when the house comes back as a foreclosure. In fact, there were several short sales we avoided because they were short sales that we expect to see as foreclosures sometime late fall/early 2009, because nothing has happened with them. "The banks are completely overwhelmed" is what we keep hearing, too, but when will they turn the corner and create efficient departments to manage this burden, for their own survival?
"The banks are completely overwhelmed" is what we keep hearing, too, but when will they turn the corner and create efficient departments to manage this burden, for their own survival?"I wish I knew Tabitha. I am a bit removed from this since most of the loan officers I know work on the commercial side (not residential where all the disruption is) However, from what I can tell, the banks are split between 2 theories on how this plays out. The first is, "the short sales will soon run their course, it isnt necessary to ramp up hirng, since this is only temporary, the govt will help us out", etc. The second is, "this is a long term thing, we need to get a team together to figure out how to handle these short sales and process them more efficently." I do think more banks are coming to the realization that this is a long term phenomenon they need to deal with, but it really is a "bank by bank" phenomenon. Incidentally, whenever you hear something like "professional negotiator" rest assured they have no idea what they are doing. They are just trying to string you along until they get their act together, but they really dont know when that will be either.
I would also comment that banks can't just double the size of a department. You have to have managers, and HR postings, and job interviews.Before you can even do that you have to have some idea of the volume of work you're servicing.Then you have to figure out who's department will handle it, how much money has to be spent on new hires versus how much of a loss their work can mitigate.Then you have to actually place the job listings and line up interviews.Add on top of this that handling real estate and property is not a core function a bank would necessarily have any expertise in.Red tape and bureaucracy cousins of death and taxes...My $0.02
Tabitha - kinda stale now but re: your comment the other day"But there is a new wave of inventory that might dwarf anything seen over the past 8 years, once this year's foreclosure numbers are known."I looked into this a bit today, apparently PWC isnt the only county experiencing flat or declining inventory, it is happening in a bunch of bubble markets all across the country. The west coast blogs are all in a frenzy over this and they even have a name for it "hidden" or "phantom" inventory. They make a respectable case for it all hitting the market and possibly causing another wave of price drops. However, I am still not convinced in that I think a large portion of that Foreclosure market was once in the inventory pipeline (either as desperate sellers, short sales, whatever) - meaning once it does come "back in" all it will do is put the inventory back where it would be had it not left in the first place. To illustrate my point, lets look at 2 markets around here Loudon & Alexandria. The biggest difference between them is Loudon has been hit hard by REO's & foreclosures, while Alexandria has not. For example if you look on this site, Alexandria currently has 46 foreclosures (5% of its total inventory) while Loudon has 535 foreclosures (17% of its total inventory). Now, if there was a bunch of hidden inventory that had been taken out of Loudon's inventory and waiting to hit it again, I think its reasonable to expect to see sickly Loudon county inventory diverging quite a bit from healthy Alexandria. However, take a look at this graph:http://www.recharts.com/nova/nova.htmlAs you can see for the past 3 years, the track of Alexandria & Loudon are nearly identical! In fact, most of the big markets around here more or less track each other in lockstep regardless of how healthy or sickly they are. One thing to note is that Alexandria inventory has increased 16% from the beginning of the year (716 vs. 835) whereas Loudon has only increased 2% (3009 vs. 3061). You can make the case that Loudon would have increased more like Alexandria "but for" the hidden inventory. However if thats the case and if you add back in the missing 14% from Loudon inventory, all you have is 3490 units versus the 3061 being reported today. I will say, PWC is a unique market because of the huge disruptions caused by the crackdown on all the illegal immigrants. This group more than any other was likely to walk away without even trying to sell. Thus, you can certtainly say, PWC has more hidden inventory than Loudon. However, if you compare a good market versus a bad market inventory, it doesnt look like enough of it is being hidden to make a sizeable difference.
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