Also known as distressed properties, everyone has no doubt heard of them. There are many aspects to these sales. In a nutshell, a short sale is where the seller still legally owns the property but has asked the bank (which has agreed) to allow a sale whereby the bank will get less than the original loan. A foreclosure is where the owner has formally defaulted and ceded ownership to the bank, unless the property is sold at auction (rare). Foreclosures sell much faster as the bank is the only party involved and is motivated to get rid of its inventory. Falls Church City has been fortunate there have been few distressed sales the past few years. Here’s a summary of what has happened.
[box type=”download”] *2010:
- 5 total (2 foreclosure, 3 short sale)
- 4% of total sales (142)
- Days on Market: 35 (foreclosure) and 41 (short sale)
- Vs. Tax Assessed Value: 10% above (foreclosure); 8% below (short sale)[/box]
[box type=”download”] *2011:
- 13 total (6 foreclosure, 7 short sale)
- 6% of total sales (206)
- Days on Market: 95 (foreclosure) and 197 (short sale)
- Vs. Tax Assessed Value: 5% below foreclosure; 4% below short sale[/box]
[box type=”download”] *2012:
As of early March, there were no active short sales or foreclosures in Falls Church. Four short sales are currently under contract. Three of them are condos (The Madison, 2 in The Byron). The one detached property is 622 Laura Drive listed at $450K. As for foreclosures, 128 Rees Place sold February 9th for $690K–5% above the 2011 tax assessment. There was no seller subsidy and it went under contract in just two days. That hardly counts as a distressed sale given how fast it sold and how little the sellers had to give up. 705 Randolph Street began as a regular sale last July but soon thereafter became a short sale. As a short sale, it was listed at $545K (2% below 2011 TA) but did sell and was withdrawn last month.
So the good news is we’ve had very few distressed sales the past several years, and they have had very little (if any) affect on our overall market. In fact several sales from both years saw their tax assessments go up. That can’t be said for most neighborhoods outside of Falls Church City. [/box]