This month in West Savage, the number of pending and closed homes is most noteworthy. 2008 and 2009 each saw approximately 10 pending and/or closed properties in the month of October, with the typical fall uptick. This month, shockingly, we have two – one pending and one closed, both in The Pointe. With tantalizing interest rates, slow sales might appear to be a mystery, but the deficiency in the buyer pool (bought on by foreclosures, short equity sales, economic concerns and tightening credit) sheds light on the slowdown.
More big news this week….Bank of America (BOA) announced a nationwide moratorium on foreclosures on Friday, October 8. Other banks are expected to follow suit. BOA cites sloppy foreclosure documents and the failure of foreclosure processors to do their due diligence in properly reviewing information, potentially resulting in invalid foreclosures on some homes. It didn’t take long for this topic to raise ire: Many (not all) foreclosures in the market occurred because underwater homeowners voluntarily walked away from their homes, and now, it is expected that many foreclosed-on homeowners will be filing lawsuits against their lenders. For those currently in the process of being foreclosed on, this moratorium will allow non-paying homeowners to remain in their homes longer, most likely delaying the inevitable.
What will this moratorium mean for the future of our real estate market? It’s too early to tell, but much will depend on how many banks follow suit, and in what volume foreclosed homes are listed on the market in the future. Buyers of foreclosed homes may find that the process of completing the purchase either cannot happen, or they simply will not wait around to find out when and if it can. In the short term, we’ll see a decline in foreclosure inventory, which may temporarily relieve traditional sellers of significant downward price competition. How long this window will remain open is unknown. First-time homebuyers may sit tight and rent, waiting for “the floodgates” to open in the future, if they believe they will get a better price by doing so. Ongoing posts on this topic will continue at WestSavageBlog.com.
Single family/townhome inventory in Savage remains steady. Our West Savage absorption rate is 9.17. That means if zero new homes come on the market, it will take 9.17 months to sell our existing inventory. Coming into winter, that number may rise. Or…it may fall with the foreclosure moratorium.
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