Tuesday, May 25, 2010

Roanoke Real Estate Market, Are We At The Bottom?

Here is an interesting article published about the Roanoke real estate market that was published in USA Today.

Close to Home: Sales spring to life in Roanoke, Va.

I completely disagree with this prediction.

And I find it interesting how USA Today says Roanoke "avoided the housing bubble" and go on to say since the bubble home prices in Roanoke "dropped about 18% to 20%." They really should consider economic education requirements prior to hiring writers and editors. It may have not popped dramatically as it did in some areas, but it did pop and it's popping is the sole reason I can easily buy houses for a few thousand dollars.

And I heard Richard Limroth say the exact same thing over a year ago that he said in that article... "I think we have hit bottom". The reality is that he is not considering some very important variables that can not be written off. Foreclosures may be down slightly but short sales are up significantly. Another thing that is up are deeds in lieu of foreclosure. Therefore, the market is still over-saturated with a glut of property. It all comes down to supply and demand.

Also, the governments decision to not renew the first time home buyer program will have an effect to some degree.

And the next wave is commercial property which has already started. The commercial property sales companies in Roanoke have significantly more listed property than they did a year ago.

We will have to see how the HAFA program turns out which took effect on April 5th. The problems I see with it related to investors is that it allows anyone who is not upside down on their property to give it back to the bank by deed in lieu of foreclosure. Which is basically saying here's the keys, I can no longer pay. This will make it so there are significantly less subject to's or "equity trades" available because it will eliminate the houses that have equity with owners who can no longer pay their mortgage.....which is a significant source of non MLS deals.


Post a Comment


Real Estate Investors of Virginia. Copyright 2009 All Rights Reserved