Friday, April 1, 2011

27% of Virginia Home Sales Are "Distressed"

A "distressed" home sale is a foreclosure or "short sale," where the bank agrees to take less than what is owed on the mortgage.  Typically, distressed sales have "discounted" pricing, +/-17% shortsales, +/- 28% foreclosures.

There is no reliable published monthly data on how many homes listed in the Charlottesville Area MLS are "distressed,"  and no transparent public monthly (nor quarterly) data on how many sell.  The most transparent local data appeared October 2010 , when The Daily Progress, the newspaper for Central VA, reported that foreclosures had increased 225% y/y.

A quick check of any of The Hook's weekly auction page shows the number of foreclosures remains steady, and is happening at all price points.

A "Deal"--?
You can find foreclosure listings at many places on the 'net (see below).  A reader pointed out that a scan of Fannie Mae's Homepath will show that some of the Charlottesville/Albemarle foreclosures are listed, at least initially, with comparable "traditional market" asking prices.

So if the price isn't  dramatically "discounted," what's the "advantage" to buying a Homepath property?  Several.  The lowball offer goes to a government entity, not to an "underwater" individual.  And:  a quick closing, FHA financing,  plus down payment can be as little as 3.5%.  And there's also no appraisal to get in the way of closing.  The Homepath listings do tend to go under contract more rapidly than "traditional" sales; the listing's status appears on the website.

Links
For bank-owned properties, see Fannie Mae Homepath and  RealtyTrac (subscription required) as well as this linkfest for bank-owned properties.

Share of Distressed Sales By State - Copyright KCM Blog

The KCM Blog reported on the number of distressed sales by state. 

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