I received a recent email from one of my REO clients telling me that their company has just lifted their self imposed foreclosure moratorium. This is the same information that I have also received from two other REO clients. All of which have said "enjoy the break," the floodgates of foreclosure inventory is going to open soon. My current marketplace's inventory is very low and the shortfall has caused a recent rebound to local prices over the past 90 days. Multiple offers per property is standard and values are escalating above their asking prices. Due to the recent jump in prices, we are seeing issues with appraisals not quite coming up to the new market pricing. First time buyers are starting to worry that they won't be able to find a property in time to enjoy their $8000 tax credit. Interest rates are ticking upward. What does all this mean?
My opinion is that we will have a large inventory surge here in Northern Virginia. On the lower end of the price point, $300,000 and under, the supply will be snapped up by ample demand. The predominant buyers under $300,000 are first timer buyers eligible for the $8000 tax credit. These buyers will be anxious to take advantage of this market's offerings and incentives. Interest rates will fluctuate; however, they will remain relatively low. I have heard complaints from buyers this week that they wanted a sub 5% interest rate, and were angry with recent quotes in the low to mid 5% range. This is still an amazing rate and buyers should embrace this opportunity to lock in under 6%. This will be a great opportunity for the ready, willing and able first time buyer. If you are a first time buyer, make sure that you are ready to go. You will need a pre-approval in hand for your traditional financing as well as a pre-approval ready for a 203k renovation loan. Many REO assets coming to market will be in as-is condition and will need work to qualify for traditional and Government financing. The FHA203k loan will give the REO buyer the opportunity to facilitate necessary repairs and improvements to the as-is property. Call me with questions!
Higher priced and luxury homes will continue to have a harder time selling. First time home buyers will not have the purchasing power necessary to step into higher priced homes and many would be step up buyers are frightened or unable to move up. This tier of the market will lag. I am anticipating continued price corrections in the higher priced homes. The best bargains will be seen at the higher end and luxury homes. Those that can buy will buy and will pick up some amazing values.
Northern Virginia REALTOR®
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