Winchester-Frederick County, VA Third Quarter Real Estate Market Report – 2017

Winchester-Frederick County, VA Third Quarter Real Estate Market Report – 2017

The Winchester-Frederick County, VA third quarter real estate market for 2017 showed continued growth and stability. The numbers that need to be up are up and the numbers that should be down are down. That’s good news for buyers and sellers.

Winchester-Frederick County, VA Third Quarter Real Estate Market Report – Up Numbers

For sellers, the average price of a three bedroom 2 bath home has climbed consistently for the past five years. The current average price is $279290. That is a 17% increase from the 2013 average sales price of $233113. For sellers, that’s a welcome change from the difficult days of the recession.

The number of home sales is consistent with the past five years. The number of home sales in the third quarter of 2017 was 452. The average over the past five years is 456. Where the real change in the local real estate market can be seen is when you look back to the recession and follow the recovery as it unfolded.

Winchester-Frederick County, VA Third Quarter Real Estate Market Report – Where we’ve been.

The recession did not take full effect until 2009. In 2009, third quarter home sales were 378 and Winchester-Frederick County, VA Third Quarter Real Estate Market Report - 201751% of those sales were distressed properties (foreclosures and short sales). It took an average of 93 days for a home to get to closing. The average home sale was $199640. Compare that to the same period in 2007 and you see that home values dropped 37%. An average home sale in the third quarter of 2007 was $315968.

Shift forward to 2017 and home values have not recovered to that 2007 point, but they have reached a true market value and not the inflated value of 2007. Current market values are now off 12% from the same period in 2007. That gives you some sense of the how inflated prices had risen in the pre-recession years. The current market values have increased in a steady pattern since 2013.

Winchester-Frederick County, VA Third Quarter Real Estate Market Report – Steady improvements

Third quarter price increases rose 4.5% in 2014, 4.4% in 2015, 5% in 2016 and 3.6% in 2017. Third quarter numbers are still being calculated nationwide, but the second quarter numbers give us a glimpse into the nationwide market stability and how it compares to our local market. The second quarter price increases came in at 6.2%. The Winchester-Frederick County third quarter real estate market is right in line with the majority of the nation.

With a steady, and healthy, increase in home values, and a radical drop in distressed properties since the worst days of the recession, it is easy to say the Winchester-Frederick County, VA real estate market is strong a vibrant. There is little concern or worry about bubbles looming on the horizon.

It is a good time to buy, and it is a good time to sell. Interest rates are still at historical lows and homes that are ready to sell, sell quickly and for values near their list price. A 1% – 2% sale discount is common, and discounts exceeding those numbers may show that a property was overpriced for the current market environment at the time of list.

When you’re ready to buy your dream home on the Winchester-Frederick County, VA real estate market, give Cornerstone Business Group, Inc., a call. We are your local sales pros. And, we can do the same when time comes to list your amazing home. Gives us a call, and let’s make something great happen.

 

Winchester Distressed Properties Are No Longer Distressing

Winchester Distressed Properties Are No Longer Distressing

The good news for the Winchester-Frederick County, VA real estate market just keeps rolling in. It’s safe to say that Winchester distressed properties are no longer distressing most home-owners. What is a distressed property? A distressed property can be a short sale or a foreclosure (or REO, real estate owned).

Winchester Distressed Properties Are No Longer DistressingA short sale is a property the lender gives the home-owner permission to sell below the current loan balance. Many homeowners who bought in the pre-recession years, bought their homes at a premium price. For instance, a home that sold for $400,000 in 2006 lost value during the recession, and owners who carried those mortgages found themselves in trouble in 2008 and beyond.

Winchester distressed properties: What are they?

The Winchester real estate market lost an average of 33% in the fall of 2008, and soon after, Winchester distressed properties shot up. That $400,000 home was now worth $280,000 – $300,000. That left the home-owner with a debt of up to $100,000 beyond his home’s value which was no longer backed by his real estate. That scenario is where the often used real estate term, “under-water” originated. In that case, the owner was drowning in his mortgage debt because he owned more than the home was worth.

Distressed properties came in waves. The first wave of distressed properties came by way of foreclosure. Many families who were dependent on two incomes were reduced to one income as the economy and the real estate values contracted. They were followed by investors who over-extended themselves, and finally, those owners who were hanging on by their fingernails lost their battle in 2009 through 2013. That opened the door to a wave of short sales.

All Winchester-Frederick County distressed properties have declined over the past three years, but the most recent news is the best. Of the current pending sales (homes under contract), only 8.7% are distressed properties. This is a place where an interesting phenomena has taken place. Up until this year, foreclosures have always been the primary source of distressed properties, but in June of 2017, short sales are leading that group of Winchester distressed properties at 6.2% of that total. Foreclosures make up the rest at 2.5%. That number is likely to return to higher foreclosures as short sales continue to fall, but both categories are on the decline.

Winchester distressed properties: By the numbers

There are 289 pending sales in the Winchester-Frederick County, VA real estate market. Of those, there are 15 short sales and 7 foreclosures. If you know how the numbers unfold, you can decide whether this is a time to panic or is it the natural progression of a market on the move.

Of the 15 short sales that are pending, 77% (13) were homes purchased before 2008. Winchester Distressed Properties Are No Longer DistressingBecause of the inflated home values before the recession, those properties would be prime candidates for an under-water mortgage. The highest number of short sales also corresponds to highest home sale prices immediately before the recession (2007). The remaining 13% of Winchester distressed properties (2) were purchased after the recession began.

The reason there so many short sales pending in June 2017 is because of the way short sales progress. Before a home-owner can qualify to do a short sale, she must communicate with her bank that she can no longer afford her home and she needs to do something. The home-owner has a few options. None are very good, but she can allow the home to be foreclosed, or offer a deed in lieu of foreclosure or she can begin a short sale.

Winchester distressed properties: How short sales work

A short sale is only possible if the bank agrees to allow the home-owner to sell the property below the loan balance. When the bank agrees, the home is listed and buyers can make offers. Once a buyer makes an offer, the seller can accept the offer, but that does not mean that the property will ever go to closing. The bank also has to agree to the offer. This is where the third part approval is needed a second time in the sale. It’s also traditional real estate sale practices and timelines disappear.

A bank may take 3 months to 6 months to 18 months to accept the buyer’s offer. Even though the seller has already said, “Yes,” to the buyer’s offer, the bank has to sign off on it. Of the pending short sales, 6 of those properties were listed in 2016. Only 9 were listed this year (2017). Some of those short sales have been under contract for months waiting for “third-party approval.”

The bank will hire local real estate agents to assess the property to make sure the list price is a fair price, and they will compare the buyer offer to that assessment. If there is a large gap, they bank will likely turn it down, and that can come after 90 days, or more, of waiting. A short sale is not a good property for someone who has to move quickly. Once the bank has accepted the buyer’s offer, then the process of a traditional sale begins. Home inspections are scheduled, earnest money deposits are deposited, title searches are conducted and the process begins to move toward closing.

Winchester Distressed Properties Are No Longer DistressingThere are 15 short sales pending in June 2017, but they are more likely a sign that the market is doing a little housekeeping after the recession. If the balance of the homes under short sale contracts had been purchased in 2013 and beyond, I would be concerned. Since they are pre-recession purchases, they’re showing that real estate prices were over-inflated, buyers were over extended and the market was in deep need of a correction.

Another reason not to panic over the June 2017 numbers is that there are 535 active listings on the Winchester-Frederick County, VA real estate market. Of that number, only 3.8% are distressed properties. That’s a negligible number compared to where the market has been in the past decade. Only .01% of those distressed properties are short sales. The Winchester distressed properties are no longer distressing home-owners, and that’s good news for everyone in the Winchester-Frederick County, VA real estate market.

 

 

 

What type of home buyer are you?

What type of home buyer are you?

What type of home buyer are you? It is important that you answer that question before getting too involved in a home search.
There are three basic types of home sales. Each one can have advantages and disadvantages.

 Fair Market Sales

  • Typically the easiest to find, financ
  • Can tend to be overpriced, but not always.  Can be negotiated with many sellers
  • Most Realtors are well versed in the fair market process
  • Properties are often not vacant
  • Owner impact on the property will be more obvious
  • Owner may be willing to make repairs
  • Owner may be willing to add closing costs

 Foreclosures

  • Easy to find in today’s market
  • Financing may be hindered by property condition – may require a renovation What type of home buyer are you?loan
  • May be damaged by previous owner – or may need more repairs due to previous owner’s inability to keep the property up during their financial struggle
  • REO companies do not like to do repairs – normally sold “as is” – may do system repairs due to necessity
  • Prices tend to be lower because it’s a foreclosurewww.
  • More room for price negotiation than short sales
  • Closing is about the same as Fair Market once a contract is ratified
  • REO companies may be willing to add closing costs
  • REO companies want things to move swiftly once the contract is ratified – they don’t like contingencies
  • Buyer may be subject to per Diem fees if he/she is responsible for a delayed closing
  • Not all Realtors are familiar with the REO process, but it is easier to learn on the job

 Short Sales

  • Easy to find in the current market
  • Listing price may not have been approved by the lender prior to listing
  • Will require more time to secure contract acceptance and ratification – can be as long as 3-6 months, and beyond.  There are signs that banks are finally accepting the inevitable and are processing short sales more quickly.
  • Just because a seller says yes to a purchase offer doesn’t mean that the buyer has a good contract.  The third party may not accept the buyer’s offer.  Then Buying a Short Sale in Winchester VAagain, the third party may counter the offer.
  • The buyer cannot fall in love with the property.  There are numerous things that can go wrong.  Advise the buyer not to fall in love with anything that can’t love him/her back.
  • Financing is similar to fair market financing
  • If the buyer has the time, patience and money to buy, it can be a great option.  Many short sales are equal to and/or lower than foreclosure prices.
  • Not a good choice if time is a factor
  • Houses tend to be in better condition
  • The short sale company will almost never do repairs.
  • Short sale companies do not like any contingencies
  • Short sale companies almost never offer closing costs
  • Short sale companies may try to change the rules at the last minute affecting Realtor compensation and seller contributions to the sale
  • Not always vacant
  • Not all Realtors are familiar with the short sale process – this can hinder the entire process

All three types of purchase should be considered when looking at homes for any, and all buyers.  The buyer’s circumstances may be more of a consideration than the type of home purchased. Regardless of the type of home buyer you are, Cornerstone Business Group, Inc. can help you find the right house at the right price. Give your Cornerstone Business Group, Inc., agent a call today. We are your local real estate sales pros.

What type of home buyer are you?

Winchester, VA Real Estate Sales Report – October 2015

The Winchester, VA real estate market continued its upward trajectory in October 2015.ChartGo (2) Home sales increased 4% over September 2015. The real jump is from October 2014. There was a 16% increase over the same period one year ago. In like manner, September 2015 also had a 16% jump over September 2014.

The number of Winchester, VA homes sold in October 2015 came in at 156 which included 12% distressed property sales (foreclosures and short sales). The number of distressed sales has stayed consistent since August 2015. August, September and October all saw 11-12% distressed properties sales. That number is also consistent with August, September and October 2014 with a 12% average of distressed property sales.

The average sale price in October 2015 was $256596. That is a 16% jump in value over October 2014. There was a slight pull back in sales price of 4% from September 2015. The days on the market for October averaged 76 where September 2015 averaged 74. That is not a significant change. There are some shifting in numbers between 2014 and 2015. There are no radical negative shifts in number of sales, distressed properties or days on the market. That’s good news for the local real estate market.

When you are ready to list your home, or buy a new home in the Winchester, VA real estate market, give your Cornerstone Business Group, Inc., agent a call. We are you local real estate sales pros.