Short Sales and Foreclosures in Fredericksburg Virginia Area

Jul 21

adminCaroline County, City of Fredericksburg, King George County, Spotsylvania County, Stafford County , , , , , , , No Comments

Data Derived On 21 July 2010

A few minutes ago I spoke with a financial advisor who works in the same office building as I do.  He informed me that this afternoon, after the Chairman of the Federal Reserve gave a speech, the stock market plummeted.  He said “Sometimes people should keep their mouth shut.”  Since I did not hear the speech, I cannot quote what the Chairman said but, apparently, it did not sound good to the ears of stock traders.

Recently, a learned real estate market guru made a statement that the best thing that could happen to our economy was for the banks, and other lien holders, to get rid of all the foreclosures.  That may be sage advice but what would be the impact on local real estate markets?

My area of interest is the Fredericksburg Virginia real estate market; this includes the following: City of Fredericksburg, Stafford County, Spotsylvania County, King George County, and Caroline County.  In general these jurisdictions are located midway between Washington DC and Richmond VA.

There are 188 foreclosure properties for sale in our MLS.  72 are in Spotsylvania County, 65 in Stafford County, 24 in Caroline County, 18 in King George County, and 9 in the City of Fredericksburg.  Recent census data indicates that the populations of those places (from largest to smallest) are Stafford, Spotsylvania, Caroline, King George, and Fredericksburg.

There are some 300 short sales in those same jurisdictions.  I believe that one could accurately predict that at least half of those homes will eventually end up in foreclosure.  I base this on observing that sellers (those owners who feel unable to keep up making their monthly mortgage payments) are trying to sell at what they feel is a reasonable market value but the lien holder(s) see it from a different perspective.  They are trying to get as close to the amount owed them as they can.  Often this works against both because the market value of a home is predicated on recent sales (which includes all distressed properties).  The recent sales prices are slow to get in to the hands of those making decisions on what is the market price of a specific property.  Could it be an endless circle?