Foreclosure Sales: Light At The End Of The Tunnel?
RENEE MONTAGNE, host:
One industry is showing a bit of life - housing. In some areas hard hit by foreclosures, sales have more than doubled from a year ago. That has people asking whether those markets have finally bottomed out. NPR's Tamara Keith has this report from Prince William County, Virginia.
TAMARA KEITH: Prince William County, Virginia, is an outer Washington, D.C., suburb. There's a saying in real estate. Drive until you can afford it. Well, for many people, this is where the car stopped.
Mr. NELSON MATEO (Realtor): No matter which direction you look, you're going to be seeing "For Sale" signs.
KEITH: Realtor Nelson Mateo points out that many of these "For Sale" signs are the result of foreclosures. His client today, a single mom with three boys, wants to find a home that's priced less than $150,000. Mateo says that should be possible, even though just a few years ago this area had nothing anywhere near that price range. He hasn't seen a market this active since 2005. Some homes are getting multiple offers. Prices are actually getting bid up.
Mr. MATEO: It's a buyer's market, but it's a competitive buyer's market. Good properties, they come into the market. They last only a couple of days and they're gone.
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Automated Voice Prompt: Left turn ahead onto Grifton Street(ph). Then in one tenth of a mile...
KEITH: We pull up to a brick, Cape Cod style house - three bedrooms, three bathrooms. It's a foreclosure. It sold a couple of years ago for $410,000. Today it's on the market for 144,000.
Unidentified Boy: Hey, mom, I found the kitchen.
KEITH: The house is in good shape.
Mr. MATEO: This house is not going to last. Not at this price and this condition.
KEITH: And that sense of urgency is relatively new. Mateo says it started over the summer. Buyers came back to Prince William County largely because home prices had dropped well into bargain territory. He says most of his clients are first-time buyers or investors. And while mortgage lending is still very tight, people are getting loans.
Mr. JOHN MCCLAIN (Senior Fellow and Deputy Director, Center for Regional Analysis, George Mason University): Prices have gone down far enough that they're now more affordable. And the people who can qualify to get those loans are getting them, and they're buying.
KEITH: John McClain is a senior fellow at the Center for Regional Analysis at George Mason University. He says home sales in Prince William County were up nearly threefold this October, compared to last year. And he says the decline in prices showed signs of slowing down.
Mr. MCCLAIN: Maybe we've seen the bottom, or maybe we're seeing the bottom in the summer and early fall of 2008. We'll have to watch it and see. It's only one month, and that doesn't mean a trend.
KEITH: It certainly doesn't. There are still big outstanding questions about how many more foreclosures may be coming, about how the economic downturn and job losses will affect the appetite to buy, and about the availability of mortgages. But still, some see reasons to be encouraged. Jed Smith is an economist with the National Association of Realtors. He says Prince William County isn't the only area seeing a dramatic resurgence in sales. He lists Las Vegas, Miami, San Diego, and Sacramento.
Dr. JED SMITH (Managing Director of Quantitative Research, National Association of Realtors): The market really won't take off until we start to see some favorable signs like decreasing inventory, people coming back. And yes, these are sales at lower prices, but they're sales that get inventory off of the market. So I think we're certainly setting the stage for a recovery.
KEITH: Back at the Cape Cod home in Prince William County, realtor Nelson Mateo looks around the bare house and smiles. His client has found her dream home.
Mr. MATEO: This house is going to be gone fast. So it's practically the first-come, first served. But you've got to put a very good offer. So that's what we intend to do, put in an aggressive offer, and let's take it from there.
KEITH: As we pulled away from the house, another realtor pulled up to show it. But Mateo's aggressive offer was enough. Two days later, his client was in contract to buy the house at $10,000 over asking. Tamara Keith, NPR News, Washington.