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The Culpeper numbers showed a healthy jump in sales year over year. I've been wondering what made up those numbers and so decided to do some additional analysis.
38 out of those 57 sales were foreclosures. That's two thirds of those sales.
While an increase in sales and a decrease in inventory always qualifies as good news, this probably doesn't warrant throwing a party to celebrate the end of the real estate downturn.
What this means is that two thirds of those homes sold at very steeply discounted prices. Here are a couple of examples:
This home was purchased brand new in October of 2005 for $345,000. It sold in June as a foreclosure for $149,000.
This home was purchased new in November of 2006 for $448,000. It sold in June as a foreclosure for $230,100.
Those are discounts of 57% and 48%. I analyzed 10 of these foreclosure sales. The average discount from the original sales price was 48.8%.
If your the guy who lives next door and you want to sell your home, how do you compete? Most homeowners can't or won't sell their home for half of what they bought it.
So, yes, it's good news that more homes are selling and inventory is shrinking. If they sell all the foreclosures, there's less downward pressure on pricing.
But right now, if you have to sell, be prepared to price your home very, very aggressively. The competition is based on price and it's vicious!
One quick note, I'll be in the Wildwood Forest subdivision in Amissville this Saturday afternoon from 1 to 3 p.m. If you've got a question on the real estate market in general, your home in particular or just want me to look into my crystal ball, let me know. I'm bringing free cloth shopping bags for everyone I talk to. Give me a call at 540-270-2742 if you'd like to chat while I'm in the neighborhood!
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