Is it a good time for sellers to sell in the Washington DC area? That depends on the home owner’s situation and on why they need to sell. For some, they might be upside down on their mortgage and need to move and not understand that a short sale may be an option. For these sellers it is important that they do their research on short sales and when interviewing agents, ask what experience that they have in selling short sales in VA, DC, or MD.
Gauging if it is a good time to sell depends on a home owner’s individual situation. Factors such as location, when the home was purchased, and why the seller needs to sell are all considered. Some areas such as North Arlington, VA have had less of a decline as other areas. In general there are two real estate markets in the area; one inside of the beltway and one outside of the beltway. Prices remained the highest in DC, Arlington, and Alexandria, VA and in Montgomery county, MD. The further that you get outside of the beltway, the more significant prices have dropped.
In regards to when the best time to sell, it is best to analyze where we are and what factors might effect the future. After a decline in prices over the past few years, it seems that buyer and seller expectations are finding a balance which has provided a sort of stabilization (at least for the time being).
There are many factors that might impact prices in the future. BRAC will transfer from 14,000 to 19,000 jobs to Ft Belvoir by the end of 2011. This will likely have a positive impact on home prices, but it is difficult to predict by how much. For example, prices of properties along the beltway have not been greatly increased by the completion of the mixing bowl and the Wilson Bridge (yet these major projects have GREATLY improved the quality of life for those residence). Major companies such as Northrop Grumman are negotiating to move their headquarters to the area by summer of 2011. There are many contributing factors to home prices to include, the media, the government, the economy, as well as micro-economic factors such as BRAC and infrastructure improvements. Often these pull against each other and contradict one another.
In my opinion, mortgage interest rates will either remain the same or rise over the next 12 months. (As I am not an economist, I base this opinion mostly on logic as currently, mortgage interest rates are at near all time lows, and do not seem to be getting any lower; therefore, could only stay the same or rise). If rates do increase, this certainly would allow for less people to qualify. In addition and perhaps more importantly, the standards for people qualifying for loans continues to get tighter which increasingly makes it harder to obtain a loan.
As is always the case with real estate, it is impossible to predict the future (refer to predictions during 2005 for proof of this statement). It is only possible to acknowledge the real factors that are occuring or soon will happen. Best of luck to all that are selling!
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Many people are walking away from their mortgage in a strategic default so that they can save money by not paying their mortgage during the long foreclosure process. This is happening so often that banks are changing their strategies. Recently, Bank of America changed its loan modification program
The longest that we have seen a home owner remain in a home while not paying their mortgage was about 2 years. This long time was a result of both an apparent strategic default from the prior home owner and a delayed time in an eviction. Around Thanksgiving 2008 we were asked by a bank to sell a property that had recently been foreclosed on. We assume that it was anywhere from 6 months to a year prior to the bank hiring us that the former homeowner did not pay their mortgage. It took until March of 2010 for the bank to evict the former owner and now we have been managing extensive repairs that are costing the bank more than $30,000. We hope to have the repairs completed and have the property on the market in the next month or so and to sell it as soon as possible.
We often have conversations with homeowners that are upside down on their mortgage and decide to stop making their mortgage payments despite their ability to continue to do so. This happens mostly when the homeowner anticipates that a foreclosure is more beneficial than waiting for the home to regain value. Mostly the home owners believe that a strategic default will serve them well. Many times the homeowners approach these conversations without thought as to the long term impacts that a foreclosure may have on them.
When the home owner has a valid financial hardship, they probably qualify for a short sale instead of doing the foreclosure. As Virginia and Maryland are considered recourse states, lenders can pursue a deficiency of the balance of the loans after a foreclosure. When home owners do a successful short sale, most times the bank will forgive any deficiency.
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