admin — Sat, 11 Jul 2009 20:46:59 +0000

I posted the following on a real estate website in answer to the question: Is buying a home in Williamsburg in the 23185 zipcode a good idea?

Written 6/24/2009: Williamsburg VA:

I feel that lending practices were far to easy before the economic problems. Overcorrection and making it difficult to get a mortgage isn’t the answer. Sales fall apart and sellers and buyers both are unhappy. People can’t move to the new job or they do and let the house go into foreclosure. It has a very far reaching effect on people & the economy. In Williamsburg, we have been somewhat insulated from the worst of the economic crisis. Having a strong military and government job sector certainly hasn’t hurt us. The shipyard is still going strong and the College of William & Mary continues to be a large local employer.

Curious if the stats would bear this out, I went to the Williamsburg MLS and pulled some figures.

Here’s the stats for the past three months in the 23185 zipcode from the Williamsburg MLS. Homes are selling for an average of 94% of list price. I don’t think 20-30% is going to be a realistic starting point.

3-24-2009 to 6-24-2009
103 homes, townhomes and condos sold over the last three months in 23185.
Average list to sale price is 94%
Average list to sold (days on market) 144 days
Average price (sold): $334,901
Average cost per sqft (sold): $145.46

Same period in 2007
Average list to sale price is 97%
Average days on market: 82
Average cost per sqft: $159.33

Same period in 2005
Average list to sale price is 99%
Average days on market is 61
Average cost per sqft is $149.04

Some distressed properties, usually foreclosures, can be had for less but they will generally require fixing up and the bank will rarely agree to do any repairs. Foreclosures are all in the Multiple Listing Service as well. The biggest variance on list to sale price is found in the high end market. Right now we are the market in homes under 300K is doing really well.

In the last month or so we’ve had multiple offers on a few homes under 225K, which I haven’t seen that in awhile. The $8000 down payment from the government may be helping. First time home buyers are not generally buying the 500K homes. The under 300K segment increase would make sense.

I heard today that some in Congress are trying to get the mortgage guidelines relaxed a bit. I believe the banks have the money to loan but the Fed credit requirements right now are pretty restrictive. Whether thats right or wrong I’ll leave it to others to decide. The housing market is the engine of the American economy and it needs to get moving again for all of our sakes.

The ‘Days on Market’ at 144 is of concern but from what I’ve seen this year alone, I would say the tightening of the mortgage guidelines has a lot to do with it. Every week we see people who are otherwise well qualified be denied at the last minute by an underwriter who has once again been given new stricter federal guidelines.

Post from: REO / BPO Real Estate Services - SE Virginia

Government incompetence in lending guidelines fuel foreclosure crisis

admin — Fri, 01 May 2009 23:52:47 +0000

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No end in sight for housing foreclosure crisis

Link above goes to an interesting article on “The Hill”. The Alt-A and Option ARM mortgage defaults are starting to happen

Troy Deierling, REO Network Agent

now. Predictions are that this will be bigger than the sub-prime fiasco we are just now emerging from.

One thing that is apparent, this new wave of REO property will be on higher end homes. It’s not fair but maybe this will get the government to finally do something substantive about the mortgage problem. I can tell you from experience that the bailout money going to the banks is not flowing out again in any meaningful way for buyers.

The Feds have done the usual over reaction as well and tightened down lending guidelines so hard that it is VERY difficult to get buyers qualified. Ask any mortgage officer or Realtor. Deals are falling apart all the time due to overzealous underwriting guidelines.

So, to sum up…. We have banks being given money by the government, the government issuing lender guidelines that make it difficult to lend the money and a housing market that continues to sink with growing foreclosures.

If buyers can’t get mortgages, this mortgage meltdown will not be over anytime soon.

Regards,

“When did entering a REO listing in the MLS become ‘marketing’?”
Licensed in the Commonwealth of Virginia
©2009 Troy Deierling

Post from: REO / BPO Real Estate Services - SE Virginia

Government incompetence in lending guidelines fuel foreclosure crisis

REO / BPO Real Estate Services - SE Virginia » reo listing

Government incompetence in lending guidelines fuel foreclosure crisis