Foreclosures Nearly Triple In Virginia Since July '07

Last Month's Rate 10th Highest in U.S.

Foreclosures in Virginia nearly tripled last month compared with July 2007, with Northern Virginia accounting for more than half of the foreclosures.

The number of Loudoun County homes in some stage of foreclosure rose from 378 to 581, up 54 percent, according to RealtyTrac, which monitors filings throughout the country. Loudoun's foreclosure rate, one of every 169 house, was the second highest in Virginia.

Prince William County continued to have the highest rate, with one of every 103 houses in a state of foreclosure, including default notices, auction sales and bank repossessions.

Fairfax County's rate was one of every 226 houses. Arlington County's rate was much lower, with one of every 1,357 houses in foreclosure.

Virginia had 5,745 foreclosure filings last month and the 10th-highest rate in the country last month, RealtyTrac reported. The number of homes in the United States facing foreclosure in July jumped 55 percent from the year before.

"Bank repossessions . . . continued to be the fastest-growing segment of foreclosure activity in July," James J. Saccacio, chief executive officer of RealtyTrac, said in a statement. "The sharp rise in [bank repossessions], combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale."

There is a silver lining in some areas of Northern Virginia. Home sales in Prince William have increased sharply, as sizable price decreases have attracted first-time buyers and investors who want to take advantage of the deals, according to the Virginia Association of Realtors.

The median sales price of a home in Prince William last month was $214,000, compared with $354,450 in July 2007, according to Metropolitan Regional Information Systems. Nearly 550 more homes were sold last month than in the previous July.

In Loudoun, the number of houses sold last month increased only 9 percent compared to July 2007, from 478 to 519. But the number of pending sales in the second quarter of 2008 was 37 percent higher than in the second quarter of last year, which might indicate the start of a rebound in the county's housing market, according to a report by the Virginia Realtors group.

The median home sales price in Loudoun decreased 20 percent in July from the same month a year ago, from $440,000 to $350,000. Houses were on the market for an average of 109 days, up from 94 days in July 2007.

The median price in Fairfax was down about 17 percent, with little effect on the number of homes being sold.

Experts said the housing market will not fully recover until foreclosures are absorbed.

The report from the Virginia Association of Realtors pointed to "dramatic" differences between Northern Virginia and other parts of the state, which have not experienced such steep drops in home prices. The association said it expects regional sales activity "to widen in the next quarter before the overall housing market edges back toward equilibrium."

Virginia is almost like two different states, said Rick Sharga, senior vice president of RealtyTrac. "Northern Virginia tends to behave a little differently because of its proximity to the Beltway," he said.

Having the 10th highest foreclosure rate in the country isn't so terrible, Sharga said, because the rates in the top six states, including California and Florida, are much worse.

"It's not a catastrophe in the making," he said. Sharga predicts an improvement in the local housing market by early next year.

"After the election in November, there will be an influx of new jobs, regardless of who takes office," he said.