A friend emailed me an interesting article from the Washingon Post yesterday entitled “Improving Housing Market Stirs Hope.” She said:

I think it’s the first time I’ve heard a real estate agent actually connecting the resolution with our foreclosure rate – at least in print.

I know we have batted this issue around on the blog before and that the Smutster has speculated that PWC is a real real estate forerunner, but is this a different note from MSM?

According to the Washington Post:

Residential sales in Prince William County are up, and home prices are stabilizing — positive changes, county officials said, for a locality once dubbed the epicenter of the region’s foreclosure crisis.

“We’re cautiously optimistic,” said Christopher E. Martino, county finance director, who spoke to county supervisors Tuesday. “The rate of foreclosure activity has decreased substantially, activity has picked up and our inventory is declining.”

Through May, county officials had recorded 1,514 foreclosures, down from 2,319 recorded for the same period last year. Martino said the county had about 6,500 foreclosures last year.

Real estate experts said several factors were to blame for the rise in foreclosures last year, including unscrupulous lending practices and the county’s anti-illegal immigration policies, which drove away some Hispanics.

Martino said the county was also growing faster and had more affordable housing, which created momentum before the housing market collapsed nationwide.

The market turnaround “is obviously good news,” said Corey A. Stewart (R-At Large), chairman of the Board of County Supervisors. “A couple of us said Prince William would be the first in and the first out. Now there is . . . finite data that we are coming out of the housing recession.”

Many of us have questioned why Prince William County was hit so much sooner and so much harder compared to other nearby jurisdictions by foreclosures. We held top superlative honors for a fairly long time in Virginia.

What do our contributors think? How does it help us if houses sell for 1/3 of what they were worth 2 years ago? Does that run our property values down even more? Did the Immigration Resolution help bring us quicker and harder to many of the ugly aspects of the housing crisis? Some of our politicians and blogger seemed to want it both ways in the past. They wanted to claim responsibility for cleaning up PWC with the Immigration Resolution and at the same time blame the immigrant community, specifically ‘illegals’ for our foreclosure problems. Which is it? What say you?

21 Thoughts to “Is Our Housing Hope Stirring?”

  1. Censored bybvbl

    I haven’t looked for any data to back this up, but I think PWC and Loudoun County had more open, buildable land and affordable housing than Fairfax or Arlington. I’m guessing that there were more sales in PWC and LoCo, and thus more room for mortgage fraud or subprime loans. Throw into the mix a lot of first time buyers who may be unfamiliar with conventional loans, much less adjustable ones, and the outcome is fairly predictable. Mortgage money was pushed at buyers – afterall, the loan officers didn’t have to make the payments.

    I would tend to listen to what real estate sales people are saying because they may be hearing opinions from actual sellers/buyers. Of course, they may temper their opinions to promote sales, just as some politicians temper theirs to avoid taking responsibility for the atmosphere they created in the county. I imagine a hostile social environment made it easier to walk away from an upside-down mortgage.

    I think a healthy sales price should be a reflection of income. In other words, the median sales price should be affordable to the median income buyer. We were way beyond that and that’s why all the creative financing came into play – to keep the merry-go-round moving.

  2. ShellyB

    Real Estate agents know why we were hit so much sooner and so much harder than the rest of the country with the foreclosure crisis. Unfortunately, a lot of home buyers know it too. The question they are asking is: “am I willing to live in a county with a bad reputation for racial intolerance in order to pay less money for the same home?”

    What bugs me is the thought that this very question is going to keep my home value down while the same home in a neighboring county will be appreciating.

  3. food for thought

    It may have had some impact, but I am somewhat suspicious of the Post’s citing “real estate experts,” without naming said experts. That could be anything from an actual expert to the reporter having a casual conversation with a realtor talking about anecdotal information. If there were truly and “expert” with good information, I suspect he/she would have been directly quoted. But I tend to be skeptical about most things.

    To the extent someone would leave a home and let it go into foreclosure based on the resolution, you have to wonder how “invested” such a person really was. Were they really walking away from an investment with equity, or were they walking away from an ARM that was likely to lead to foreclosure anyway? I would imagine that if there was an impact, the probablity of leaving would be inversely proportional to the amount of equity in the home. In other words, if someone was truly invested, even if such person were undocumented, he/she would be much more likely to lay low and ride out the storm to protect his her investment. If, on the other hand, someone “owned” a home on paper, but had no equity and was on some kind of funky lending instrument, why not just walk away–you’ve got nothing to lose.

    The real issue is, regardless of the impact of the resolution, the lending system provided too much reward and not enough risk to homeownership. When times got tough, whether due to local politics or economic hardship/job loss, people left.

  4. Censored bybvbl

    Thehousingbubbleblog has a thread on the collapse of markets in a few states and how fraud worked to run up the prices, often overnight, on many houses. In looking at some neighborhoods in PWC, the same pattern often appears. So the run-up in price may have been based on theft from the banks as well as market demand. It’s just another factor to consider when trying to establish what should be a fair price for housing.

  5. Poor Richard

    The direction of the housing market in the PWC area before the “bust”
    could not have been sustained – resolution or no resolution. It
    hit here hard because this area had the most affordable housing
    in NOVA,thus it attracted the largest number of immigrants – many
    undocumented – and real estate sharks ready to prey on them.
    Parts of Fairfax along Rt.1 and Loudoun’s Sugarland Run area
    (no resolution in Fairfax or LoCo) followed much the same route
    as Woodbridge, Westgate,etc. — for the same economic and demographic
    BVBL and this blog both make too much of the “resolution”- if
    for different reasons.

  6. ShellyB

    I see. So you guys are saying that the Resolution may have accelerated PWC becoming Home Foreclosure Capitol. But it would have happened eventually anyway. At least we are coming out of it now.

  7. Moon-howler

    And perhaps you are right, Poor Richard. Remember though, were it not for the Immigration Resolution, this blog probably would not exist. On the other hand, I do not feel that immigration is our only focus and that we do vary our topics.

    How many people would be willing to say that the immigration resolution had absolutely nothing to do with our real estate situation in this county and in the cities? While I certainly do not blame the resolution for the entire mess, I do think the resolution and the climate in this county had some impact on our real estate market.

  8. Last Best Hope

    When you accelerate prior to impact, it means more damage. I think there is a consensus that the immigration hullabaloo added to the economic challenges our county has been facing. It was the worst possible time to have something like this happen.

    Remember, many of the homes we lost to foreclosure were not owed by the inhabitants but rented to them. The owners who went into foreclosure not afraid of the police; they were afraid of the economic impacts of the Resolution, including their inability to rent out the homes they owned.


  9. Poor Richard

    Yo Tony, gotta love Jersey –

    “If nothing else it is nice to see that people of many ethnic
    and religious backgrounds can work together to allegedly bribe
    and cheat. You’ve got Syrian Jews, your Italian-Americans and
    Afro-Americans, your Latinos … an equal opportunity racket.”
    NYT (7-24-2009)

    And did local governments push resolutions? NOOO – they joined in!

  10. Moon-howler

    Poor Richard, you left out Kidney Man, he was just a match-maker, sweet talking needy people in Irael out of a kidney for 10k and reselling the kidney for 160k.

    Brings a new meaning to Matchmaker matchmaker. GR has made up a song about it.

  11. anony

    I can only speak to the few neighborhoods that I am in frequently and know very well. With that said, almost 100% of the foreclosures in these low to mid-income neighborhoods were occupied by minorities of one nationality or another (I don’t know who was an owner and who was not). These same homes are now slowly being purchased and improved. The new neighbors are almost entirely minorities. In fact, the neighborhoods were predominantly Latino before the foreclosures. Now that the homes are being purchased again, they remain predominantly Latino.

  12. Moon-howler

    Anony, does that mean we have come full circle?

  13. hello

    ! ! ! ! OFF TOPIC ALERT ! ! ! ! I don’t know who (if any) of you pay attention to soccer but the U.S. plays Mexico this Sunday in NY in the CONCACAF Gold Cup Tournament finals. It’s a must see!!! Go U.S.A.!

  14. hello

    If your interested it’s going to be on Univision at 3PM! GOOOOOOOOL! Go U.S.A!

  15. anony

    I don’t know that it means we’ve come full circle or that perhaps we never really moved in the first place.

    My opinion of the debate and debacle on both sides of the issue has always been that it was all but “a tale told by an idiot, full of sound and fury, signifying nothing.”

  16. JustinT

    The irony will be that the Gospel Greg bottom sippers will continue to assume most minorities are “illegals.” The homes were foreclosed upon, then bank owned, then sold to bargain hunters, then rented to people who look, act, and speak like recent immigrants often look, act, in speak: what Gospel Greg would call an “invasion.” The chief difference is now the average Gospel Greg bottom sipper’s home has lost half it’s value.

    I’d laugh, but this whole thing has screwed my family too.

  17. Moon-howler

    Lead on McDuff, Anony. Care to elaborate?

  18. Moon-howler

    More than half, Justin T, I am sorry to say.

  19. hello

    “am I willing to live in a county with a bad reputation for racial intolerance in order to pay less money for the same home?”

    Then move…

  20. Moon-howler

    Not everyone is at liberty to move.

  21. chris c

    Corey was right, first in and first out. The “Illegal Resolution” did help. Let’s hope and pray that legal minorities are purchasing those homes. Everyone knows that it’s illegal for an illegal to purchase or rent a home according to Federal Law of course, but everyone knows that here and doesn’t care. LOL

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