Distressed Property and Foreclosed Tax Deed Sales Up in Virginia Area- By: Bilk Albers
A large percentage of total home sales for some areas of Virginia in January 2011 were accounted for by foreclosed, distressed and tax deed sales. Total housing sales were up for the month, but the percentage accounted for by distressed homes was a high record for single month sales for some local markets.
Richmond foreclosures remain high, but in Hampton Roads, a new record was set. Almost 40% of total housing units sold in the area in January 2011 were distressed or foreclosed. The percentage was the highest ever recorded for Hampton for a single month. The huge amount of foreclosed properties helped push the volume of sales for January 2011.
Virginia foreclosures for sale are not as high compared with other states, but areas like Hampton are seeing more and more distressed properties accounting for home sales. Last month, South Hampton Roads had a total of 677 foreclosed properties sold, representing a rise of 21.5% from the same 2010 month. However, when compared with December 2010, the figure was down 18.9%.
Around 39% of housing units sold in January 2011 were accounted for by foreclosed tax deed sales and distressed residential properties. The figure was up from the 26% posted in January 2010. Despite the increase in total home sales, housing market analysts stated that the residential property market is still weak. They claimed that figures from last year were largely inflated by the federal government's tax credit program, which made it harder to draw conclusions from year-over-year comparisons.
Meanwhile, prices for foreclosures and existing dwellings declined by 7.5% in January 2011 to $185,000 when compared with December 2010 prices. When held against January 2010 figures, prices declined by 4.6%. As of January 2011, the region is sitting on an inventory of unsold properties worth 10 months of supply. In terms of the length of time that properties remain unsold after entering the for-sale market, the average was 105 days.
Local realtors stated that prices will not recover until the number of distressed and foreclosed tax deed sales is cut down. For the rest of 2011, realtors are expecting more foreclosed homes to enter the market as lenders resume cases stalled by the moratorium in the fourth quarter.
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