LoCo Market Update: February 2009

I’ve been scouring the data from our local multiple listing service (the Metropolitan Regional Information Systems, Inc, for those keeping track).  And I’m not kidding when I say scouring.  It’s not enough anymore to just pull a count of “active listings on the market” for the county; or “under contract” listings when you have to account for “short sales”.  (If you click on that, you can read an earlier post I wrote that talks about what those are, exactly.)

As of tonight, removing the generic builder listings for new home communities (which don’t represent a specific home), there are 1406 homes for sale in Loudoun County.  Of those, 868 are identified as single family detached homes, 398 are marketed as townhomes, and 140 are everything else (typically condos or duplexes).  Of those active listings, 327 are identified as “subject to 3rd party approval/short sale”.

Looking at the number of homes that have gone under contract in the last 30 days shows 468 homes, which puts the absorption rate for Loudoun County at 3 months on the button.  (The absorption rate is the amount of time, in months, that it would take for the current inventory of homes to go under contract at the rate at which contracts are coming in.)

Here’s something to look at, though…of those 468 contracts, 98 are “third party approval contingent”…which means they are short sales that are now waiting for lender approval for the sale to take place.  Which, if you read my post on short sales, means they are not necessarily going to close. The lender may not approve of the offer.

(Are you starting to see why it’s hard to put your arms around the market data? Add to that the fact that sometimes agents don’t check the ‘short sale’ box on the listing, and only put it in the comments section.  And some lenders require that properties remain ‘active’ during the third party approval process, too, so some active listings already have multiple offers on them, and the lenders will continue to take more offers while they consider the situation. This is why it’s hard to look at housing statistics on a regional or national level and make any sense of the data.)

I’m sure this is even more confusing for the average home buyer or seller than it is for the agents.  Here’s a short recap:

• An ‘under contract’ listing may not actually close, if the short sale lender doesn’t approve
• An ‘active listing’ may have offers on it but still be marketed as the lender considers the short sale
• 20 percent of ‘under contract’ listings in Loudoun are hinging on lender approval, and if they are rejected, those buyers have to start over from scratch, because you can’t make two offers at the same time
• 23 percent of active listings in Loudoun are “short sale/third party approval”

It’s hard, even on a county level, to get a feel for what is happening, when there is uncertainty regarding listings (active ‘short sales’ may not be saleable at their market value), and uncertainty regarding contracts (under contract short sales may or may not close). So if you are thinking about buying or selling, talk to an agent that is experienced in your market area~~meaning your county, your city, or your neighborhood.  They will have the most specific knowledge and information about what is happening with the local market, and can look at your goals and advise you of what your best options may be.

Questions? Please leave a comment here, or call me, or email me. That’s what I’m here for!

Cheers,

Heather