Foreclosures Spur Real Estate Market
Thursday, June 19, 2008
The number of foreclosures in Prince William County rose last month to the highest point this year, while low housing prices kept the real estate market active.
According to the Land Records Office of the county's Circuit Court, foreclosures increased 24 percent in May from April. The court recorded 797 trustee sales in May, the second-highest number of any month since the county's foreclosure numbers started climbing two years ago. In December, there were 862 foreclosures, the highest level since 2002.
"If you look at the forecast for recovery in Prince William, it's not going to be over in '08," said Jill Landsman of the Northern Virginia Association of Realtors, referring to the surge in foreclosures. "It will spill over into '09."
"That's terrible for the struggling homeowner, but good for the prospective buyer," she said.
Declining home prices have led to increased real estate activity in the county, Landsman said. Sales of single-family homes rose 89 percent in May, compared with a year ago.
Margaret Ireland, associate broker with Weichert Realtors in Manassas, said her sales were up for the past six weeks, helped in part by foreclosed properties in the Manassas area of the county, as well as in the cities of Manassas and Manassas Park.
"A lot of these are first-time home buyers that may feel that finally, we have reached the bottom of our pricing and now it's time to buy," Ireland said.
As sales prices have inched lower, she said, multiple contracts placed on one property have become more common recently.
Dave Sinclair, financial analyst for Prince William, said real estate agents "are correct that there are more sales than there are new foreclosures entering the pipeline, but if there is one thing we can stress, it's that this is the first step on the long road to recovery for Prince William County."
Sinclair said he does not expect prices to stabilize before next spring at the earliest, although 12 to 18 months is more likely.
The end might not yet be in sight, however, for foreclosures. As mortgage companies deal with more foreclosed properties, "there's going to be a whole new wave" of homes on the market, Ireland predicted.
This is no surprise for the analysts, who said they have anticipated the situation for about 18 months. The analysts said they expect that the fallout from the sub-prime loan crunch to continue to add to the number of foreclosed properties for at least the next three months.