Currently the MRIS data shows that the number of new listings in our area is down. This chart shows Prince William County inventory for Feb 2009 as compared to Feb 2008.
Okay this should be good news. However along with every set of data comes the back story.
In the case of lower inventory some of that back story has to do with foreclosure listings. Last fall Freddie Mac along with other lenders put a moratorium on new foreclosure proceedings until the economic stimulus packages worked their way through Congress. Only those properties that had already been through the foreclosure process made their way to the MLS and not even all of those have been listed.
For example one agent in my office who handles Freddie Mac foreclosures has just now received the go ahead to list a few of the properties that had been through the foreclosure process last October and November. Even more interesting is that in one case the owner of the property is still living in the property five months after the foreclosure. A quick look through RealtyTrac.com shows a few hundred properties with the title transfers to a lender, yet none of them have made it to the market. A recent Friday Washington Post showed close to 300 Trustee Sales at the PW Courthouse alone and those properties haven’t hit the market yet either.
At some point many of those properties that have been in a holding pattern for the last three to five months will make their way to the spring market. Add to those the properties where tenants have been living with their lender landlords and you begin to see when the foreclosure moratorium is lifted that we could have a huge influx of new foreclosures on the market.
Hopefully the lenders are looking at the impact of how unleashing all of these listings at one time could devastate an already fragile Prince William County market. If they don’t consider a staggered release of this pent up inventory we could be facing another significant drop in prices, creating even more problems for those sellers in the middle of trying to refinance their homes.