Stubborn sellers of homes in Hampton Roads finally began to give in somewhat to get deals done in the oversupplied market in July, according to data from the Virginia Association of Realtors.
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The sharp dip in property values that forced Prince William County, Va., into its first spending decrease in 15 years this spring is now lasting longer than officials anticipated - and is looming over preparations for next year’s budget.
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More people in the state are having trouble paying their Virginia mortgage loans.
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“Under Assessment!”
“Bargain in the city!”
“Best deal out there!”
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In an increasingly common scenario in the Central Virginia housing market, on Tuesday attorney John G. LaFratta stood on the steps of the Albemarle County Courthouse to auction off a foreclosed property.
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A much-anticipated recovery in Greater Washington’s housing market could face its next challenge from tighter mortgage lending restrictions.
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Misery loves company.
In this case, the company is the Loudoun County Virginia housing market, which is still sharing in the continued slump that has enveloped much of the nation.
When former Suffolk, Va., City Manager Steve Herbert proposed lowering the property tax rate by a lower-than expected 7 cents last year, it led to a tax revolt that ousted two City Council members, spawned a region-wide campaign against climbing real estate taxes and cost Herbert his job.
Owners in Hampton Roads have a much lower percentage of subprime mortgages than the national average - and those riskier customers in the region are meeting their payments better than most of the country.However, the market still has a growing number of subprime mortgage defaults. The percentage of Hampton Roads subprime loans at least 60 days late rose from 4.5 percent at the end of 2005 to 7 percent at the end of 2006.Overall, about 10 percent of mortgages in Hampton Roads are subprime, compared with almost 15 percent nationally.According to First American LoanPerformance, the main provider of regional Virginia mortgage data to the industry, about 7 percent of those subprime mortgages in Hampton Roads were 60 days behind at the end of 2006. The national average was about 12 percent.”Mortgage markets are regional and tied to regional customers,” said Bob Visisni, vice president of marketing at First American. He mentioned how a mortgage market is linked to a region’s home price appreciation, the economy and employment trends.Any significant reduction in credit availability could reduce the number of people looking to become new homeowners. If the market also added mortgage-related sales and foreclosures, the trends could stop a real estate market pickup that some people have predicted for Hampton Roads.The general consensus among real estate watchers has been that Hampton Roads is poised to increase the numbers of home sales in 2007 as Virginia home prices stagnate.Perry Pilgrim, principal broker for Abbitt Realty in Hampton, thinks that the market will continue a recent upward turn in 2007.”I believe that very strongly,” Pilgrim said. “We’ve got a pent-up demand from last quarter.”However, the increase of troubled loans might translate into more foreclosures in 2007. Adam White, a Virginia Beach attorney who serves as a trustee for foreclosures, said he had seen a big increase in the past year.”I have never seen an environment like the one we are currently in,” he said, “with the rate of defaults and the volume of foreclosures. This is as bad as I’ve seen it in 18 years, and I think it’s going to get worse.”Mounting concerns about the bad credit home loan market came into sharp focus last week. The Mortgage Bankers Association announced that subprime foreclosures were escalating. Subprime lender New Century Financial was defunded and is under investigation by a grand jury and securities regulators.New Century has at least seven locations in Virginia, including one in Williamsburg and two in Virginia Beach. The Virginia State Corporation Commission, or SCC, is monitoring the subprime problems.The company has stopped making any loans, including those that it was in the progress of making. The SCC works with people and the mortgage company in these situations to get upfront fees back and find another lender, said Joe Face, director of the SCC’s financial bureau.Click here to read the rest of this Daily Press article.
During February, 45 new single-family homes were on the market in northern Isle of Wight, Va., with prices as high as $1.25 million.
The average price was nearly $550,000.
Not one county employee - not even the Isle of Wight County administrator, who makes $124,323 a year - could afford to buy an average priced house, if he or she were the household’s sole wage earner, a recent report suggests.
“Certainly, we’ve identified there’s a deficiency of affordable housing,” said Beverly Walkup, the county’s director of planning and zoning.
A shortage of affordable homes is a growing concern in many parts of the Virginia housing market, but especially in places like Isle of Wight, York and James City counties, where high-income families are now coming to live.
The Isle of Wight figures come from a report by David Rusk of the Innovative Housing Institute in Baltimore.
Rusk is working with the county’s affordable housing task force, which will come up with a policy that the county can use in evaluating affordable housing in new developments. The group will meet on Friday.
Of the 309 houses on the market throughout Isle of Wight as of February 1, only 11 percent - or 35 homes - could be obtained with a Virginia mortgage with a family possessing the median income of $60,300. In Isle of Wight, median home prices have risen nearly 16 percent from 2005-2006.
The out-of-county workers average a 44-mile round trip, and 337 of them drive from North Carolina. Commuters spend about $1,100 a year on gas, “money better invested in an home equity-creating property rather than going out the tailpipe,” the report stated.
The report includes these affordable housing recommendations:
SOURCE: Hampton Roads Daily Press