Friday, December 28, 2007

Northern VA Foreclosure Market

We didn't have many property foreclosures from 2000 to 2005. The local Northern VA real estate market was booming and any homeowner that got behind in mortgage payments could just put their home up for sale and find a buyer in days, settle fairly quickly and get a check for their earned equity.

The local market began to change in the summer of 2005 and those unfortunate homeowners that entered home ownership from 2004 to 2006 did so at the top of the market. They paid top dollar and home values have been sliding downward ever since. We had a decent rebound (leveling off) in January to March of 2007 and home sales were better than usual for the dead of winter. Since March of 2007 values have not been sliding ... the loss of value is better described as plummeting. In the 9 months from March to December 2007 the loss of property value has probably ranged from 1% to 2% per month on average.

I can't claim that I saw the foreclosure market coming ... at least not to the substantial degree that we are currently experiencing. But, I did foresee a substantial increase in foreclosure listings and distressed property sales. During early 2006 I began making contact with various Banks in hopes of generating some foreclosure listings. In 2006 I accepted and completed over 130 Broker Price Opinions (BPO's) in an attempt to generate Banking contacts and eventually VA REO listings. REO stands for Real Estate Owned and Bank's call foreclosure properties REO. Broker Price Opinions are a very detailed Competitive Market Analysis that Bank's order for their distressed properties and they pay a local Agent/Broker generally a $50-100 fee for the BPO preparation.

For me, 2006 and 2007 have turned out to be quite an education in the foreclosure market. I had a little experience from back in the early 1990's but the robust market in Northern Virginia the past 10 years pretty much wiped out any opportunity to work a niche market of foreclosure properties.


Real Estate Information

Labels: , ,


At 7:33 AM, Blogger HcoRealEstate said...

This comment has been removed by the author.


Post a Comment

<< Home