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Prince William Real Estate Outperforms Again
By Greg L | 11 July 2008 | Local Economy | 22 Comments
The upswing in residential sales continues for June, with the Prince William County area leading the Northern Virginia region for the sixth straight month. Prince William County sales in June were up 82% over 2007, Manassas Park City sales were up by 116%, and Manassas City sales were up a huge 178%. The Prince William County area as a whole registered a 91% increase in the number of residential sales, topping the 69% increase seen in May 2008 over May 2007. The number of homes active in the Prince William real estate market decreased in June for the third month in a row, turning an important corner, while the region as a whole saw a disappointing 5% decrease in sales.
The market recovery isn’t quite here yet as prices are still declining, but the conditions that contribute to price declines are improving. Again this month, those areas formerly burdened with residential overcrowding are showing some of the most dramatic jumps in residential sales (for example, zip code 20109 had a 339% jump in sales in June). As inventories continue to decrease towards manageable levels, bringing supply and demand into balance, we should see price some stabilization in the near future.
A few notes, from observations on websites focused on the local real estate market:
- Buyers are cherry-picking the properties in good condition, and often shunning those requiring major renovations because there are so many choices available. With the lower-quality properties remaining on the market, it puts downward pricing pressure on the market as a whole.
- There are continuing subprime Option ARM resets coming up through October, which could keep a supply of new foreclosures entering the market over the summer and fall. Despite the current rate of foreclosures which remains high, inventories are declining. The number of rate reset induced foreclosures may be declining.
- Affordability is helping drive demand to Prince William County, and potential buyers are more than ever able to identify where the deals are. Many single family houses in Prince William are selling at price levels that are result in mortgage payments on par with rental prices for apartments closer in to D.C., notwithstanding the tax advantages.
- Not showing up in the statistics, but the continuing difference between the performance of Prince William, and Fairfax County which registered only a 2.11% increase in month-over-month sales is anecdotally a result of the Rule of Law Resolution. People don’t make long-term investments in communities where long-term investments are comparitively risky.
In the end, if we continue to see inventory declines as we have been, the value erosion in Prince William real estate is going to end pretty soon. We’re doing much better than surrounding jurisdictions, and continue to lead this recovery.
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I wonder when the hysterical housewives, or “fat broads” as others call them, will admit that when you compare PWC to the surrounding area, the only thing that could possibly account for a faster real estate recovery is the Rule of Law resolution.
I doubt they will. They like to have it both ways. They cite a higher than average forclosure rate earlier this year as caused by the resolution, but won’t admit the resolution is a main contributor to the regions fastest recovery rate. It is so simple to see. The illegals leave.The owners can no longer pay the note, without the income generated by their boarding house. Their homes get foreclosed on. These homes are purchased by legal residents and citizens who want to live in an area on the way back up.
Take a drive in the western end of the county. Neighborhoods have dramatically improved. Even most of the houses for sale don’t look to bad. Compare this to the same time last year. And yes, others can say what they want to, but HSM did have a hand in this.
Who are the new buyers? I hope they are not future flophouse proprietors. All I can say is that they have a herculean task with clean-up and repairs.
I live in the city of Manassas. In my neighborhood, there have been 2 houses in foreclosure for 2 years. Before that, they both had cut-and-run tenants living in them and one was a boarding house for day laborers. With persistence in neighbors calling the city to take a closer look at what potentially was going on here and clear evidence in one case, we are happy to report our street is cleaning up. We also believe the Rule of Law Resolution that came forward and was passed unanimously in PWC along with our city council support of the 287(g), this resulted in house abandonment and leaselords walking away. They have both sold within the last 6 months to homeowners who immediately became assets to the neighborhood.
Oh, you ask “who are the new buyers”? I personally know several young couple, even single first time home buyers that are certainly not “flop-house” owners. What’s particularly interesting is that these young people are buying foreclosed homes from banks, homes that are in serious disrepair…with multiple make-shift walls (to create 8 - 9 sleeping rooms) at very low prices.
They are then, investing work and money to restore these homes to their original design condition. What an opportunity and wonderful project for young, first time home buyers — in a few years, their efforts will yield significant rewards!
Oh, and I forgot to mention how Home Depot and Lowes benefit from these projects as well….
More good new for all of you in PWC. You 100% did the right thing. It is good to see that Americans can make a difference in their own lives when needed. I commend you all for restoring your freedom and civilty to your communities.
Hmmm…if traffic would improve a bit, I might move back up there!
I am recent first time homebuyer in Manassas Park. With high gas prices, the VRE is the key to real estate stabilization in the area. Richmond screwed that up this past week.
I gather 2 undisputed facts from this statistical info, (from a third party mind you.)
1. Your resolution is now a year old.
2. This type of increase is in your area ONLY.
Congratulations!
With so many foreclosures to choose from, buyers are in a great position. At previously unbelievable prices they can buy a foreclosure in good shape or they can get an even steeper discount on a fixer upper. The ones I’ve met have mostly been working young families who previously would have had to go all the way to Bealeton or beyond to afford a single family home. Also at least 3 young teachers at our elementary school, who rented a place together, have all bought foreclosure Bristow townhouses near each other and are excited about being homeowners.
The banks have started paying people to leave (I know, it is ridiculous to think of paying someone who hasn’t paid their mortgage). The bank goes in and instead of just kicking out the owner, they offer $1000-$1500 CASH if the owner will move out and leave the place clean (that is when the owners get the cash). Since most of these owners are cash strapped, they jump on the chance and it also saves the bank the money from doing the fix up work to sell the house. I think it is completely lame that the banks would reward people who didn’t pay their bills, but I guess the newer waves of foreclosures will be in even better shape.
the fatties are too busy lookin’ for a cause to support and they really need to take their blinders off (they might see jenny craig that way!). The resolution is but part of the big game, the 287g program and the economy have a lot to do with it.
The thing is, the more houses that are bought = more money pumped into the local economy for home improvement. 2 birds with one stone - improved neighborhoods and improved economy. On anti-bvbl and WaPo, they’d never admit that. Of course, all of the defenders on anti live in neighborhoods where they haven’t been affected by illegals and believe that by simply picking up trash in your neighborhood all will be resolved!
P.S. for a really good laugh, go read Katherine Gotthardt’s ideas for immigration reform. http://luxuriouschoices.blogspot.com/2008/07/my-revised-immigration-plan.html
She is clearly insane and out of touch
Crisis Deepens as Big Bank Fails
IndyMac Seized
In Largest Bust
In Two Decades
By DAMIAN PALETTA and DAVID ENRICH
July 12, 2008; Page A1
IndyMac Bank, a prolific mortgage specialist that helped fuel the housing boom, was seized Friday by federal regulators, in the third-largest bank failure in U.S. history.
IndyMac is the biggest mortgage lender to go under since a fall in housing prices and surge in defaults began rippling through the economy last year — and it likely won’t be the last. Banking regulators are bracing for a slew of failures over the next year as analysts say housing prices have yet to bottom out.
http://online.wsj.com/article/SB121581435073947103.html?mod=hpp_us_whats_news
Pay close attention to the last sentence there.
Small Banks’ Reckoning Day Is Coming
Billions in Troubled Construction Loans
Promise to Pose Test for Regional Lenders
http://online.wsj.com/article/SB121494953423420859.html
Bank losses from credit crisis may run to $1,600bn, warns Bridgewater
By Ambrose Evans-Pritchard
Last Updated: 1:59am BST 08/07/2008
Bridgewater Associates has issued an apocalyptic warning to clients that bank losses from the worldwide credit crisis may reach $1,600bn (£800bn), four times official estimates and enough to pose a grave risk to the financial system.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/08/cnbridge108.xml
Fannie, Freddie Tumble on Bailout Concern, UBS Cut (Update2)
http://www.bloomberg.com/apps/news?pid=20601087&refer=&sid=aefOxE9thfw8
BIS slams central banks, warns of worse crunch to come
The central bankers’ bank renews fear of second depression, writes Ambrose Evans-Pritchard
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/30/ccbis130.xml
You thought the housing crisis was bad? You ain’t seen nothing yet.
By Danny Schechter
While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy.
http://www.lacitybeat.com/cms/story/detail/house_of_cards/7181/
Could Freddie and Fannie be fini?
ON YOUR STREET: Intervention by feds may have huge impact on homeowners and taxpayers
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/12/BU0N11NSTF.DTL
Links to the data would be helpful. As someone who spends a fair amount of time in the buying and selling of real estate in Northern Virginia, my gut feeling is that PW is not enjoying a huge counter-cyclical surge in anything right now other than perhaps some opportunistic snatching up of foreclosed or otherwise distressed properties. That may cause some spikes in number of sales, but I can’t really tell from the post what you’re relying on for your optimistic outlook.
Does it really matter NoVA Scout?
It might not matter if there hadn’t been a post on the subject. But, if you look to the top of the thread, you’ll see that there was one. How could it not matter?
Greg is reporting triple-figure percentage increases in sales and suggesting that these numbers, compared with surrounding jurisdictions, bespeak unique phenomena in Prince William. The data came from somewhere, and we know he knows how to put links in his posts. For all I know, he may be right, but I sure can’t find anything that permits me to understand what those data mean (if they are accurate). I don’t see it anecdotally in my flitting around the local real estate markets (including PWC) and they are such extraordinary numbers in isolation, that one would expect there would be front-page articles about this phenomenal counter-cyclality in all the major national publications if there were some statistical validity to this. (If there were two home sales in Zip Code xxxxx in May 2007 and 6 in May 2008, one might say with accuracy there was a 300% increase, but at those numbers, it may not be substantively significant. May 2007 may not be an appropriate baseline in any event, particularly if there were 30 sales in the immediately-preceding five year periods for the same months). Greg offers us hope that PWC is onto something (not clear what from the post) that could, if applied nationally, pull us all out of the muck. Let’s figure out what it is.
Facts matter. Analysis matters. I worked for a while for a government agency whose main product, despite its reputation for more dramatic activity, was analysis of data. When active human minds see numerical conclusions, they like to know what went into them.
For inactive minds, you may be right, 3I, - it doesn’t matter.
Houses in PWC are now great bargains, I recently (June 23) bought a TH, that 2 years ago sold for $370k for $185k, mostly investors/speculators buying these foreclosures at bargain basement prices. Of course there is a downside,: dramatically reduces the value of nearly every home in PWC…but that only matters if you’re buying or selling. 58% of the listings in PWC are foreclosures, nearly 7,000 homes on the market, it’s a real glut of homes. According to the PWC RA there is about 9 months worth of homes on the market, compared to 2 years ago when there was less than a 30 day supply. So there is good news and bad news, if you are an investor/speculator it’s good news, if you are a legitimate homeowner trying to sell your home…you are screwed.
Many houses in Manassas City are being sold by the owners for 80,000 to 120,000 dollars less than what they bought them for. I presume they want some money before a foreclosure happens.
NoVA Scout said on 13 Jul 2008 at 12:39 pm:
Links to the data would be helpful. As someone who spends a fair amount of time in the buying and selling of real estate in Northern Virginia, my gut feeling is that PW is not enjoying a huge counter-cyclical surge in anything right now other than perhaps some opportunistic snatching up of foreclosed or otherwise distressed properties. That may cause some spikes in number of sales, but I can’t really tell from the post what you’re relying on for your optimistic outlook.
Here you go:
http://www.mris.com/reports/stats/
It would be very interesting to see what impact the Sub-Prime loans to Illegal Aliens had on the defaults and housing crises that started the unraveling of the whole Economy! I expect, just like our Declining standard of living, Bankrupt Hospitals, Failing Schools, Welfare costs, Crowded prisons, Destroyed communities, and trashed Constitution and the Rule of Law, it played a big part or at the very least, it added lots of fuel to the fire.